Timken Reports 2006 Results, Strong Outlook for 2007

Timken Reports 2006 Results, Strong Outlook for 2007 The Timken Company today announced sales of $5.0 billion for 2006, up 3 percent from a year ago. Sales exclude Latrobe Steel, which the company sold in December and has accounted for as discontinued operations. Timken benefited from strength in global industrial markets, partially offset by declines in demand from the company's North American automotive customers during the second half of 2006. Net income per diluted share was $2.36, including earnings of $0.49 per diluted share from discontinued operations, which reflects the operations of Latrobe Steel and the gain on its sale. Income from continuing operations was $176.4 million, or $1.87 per diluted share, down from $233.7 million or $2.52 per diluted share in 2005. Excluding the impact of special items, Timken generated 2006 adjusted net income of $2.48 per diluted share, which included earnings of $0.35 per diluted share from discontinued operations. On a continuing operations basis, the company earned income of $200.8 million or $2.13 per diluted share, excluding special items, compared to $206.9 million or $2.24 per diluted share in 2005. These special items included disbursements received under the Continued Dumping and Subsidy Offset Act (CDSOA), which were more than offset by losses on divestitures and charges related to restructuring, rationalization and goodwill impairment. Outlook The company expects earnings per diluted share for 2007 from continuing operations, excluding special items, to be $2.50 to $2.70 for the year and $0.50 to $0.60 for the first quarter, compared to $2.13 and $0.62, respectively, for the same periods in 2006. Timken anticipates global industrial markets will remain strong, and targeted investments in Industrial bearing capacity are expected to become operational throughout the year. The company expects improved Automotive performance compared to the second half of 2006 as it benefits from its operating improvement initiatives. In addition, the Steel Group is anticipated to continue performing at a high level of profitability.