Timken Reports First-Quarter 2017 Results; Raises Full-Year Outlook

— Reports sales of $704 million in the first quarter, up almost 3% from the same period last year
— Generates earnings per diluted share of $0.48 on a GAAP basis, with adjusted earnings per diluted share of $0.55
— Raises 2017 outlook; now expects 2017 GAAP earnings of $2.15 to $2.25 per diluted share and adjusted earnings of $2.35 to $2.45 per diluted share

NORTH CANTON, Ohio, April 26, 2017 /PRNewswire/ — The Timken Company (NYSE: TKR; www.timken.com), a global leader in bearings and mechanical power transmission products, today reported first-quarter 2017 sales of $703.8 million, up 2.9 percent from the same period a year ago. The results reflect increased industrial distribution and off-highway demand, as well as the benefit of acquisitions, partially offset by lower rail, wind energy and aerospace shipments.

In the first quarter, Timken posted net income of $38.2 million or $0.48 per diluted share, versus net income of $65.9 million or $0.82 per diluted share for the same period a year ago. The year-ago period included CDSOA1income of approximately $31 million after-tax. The year-over-year change in net income also reflects the impact of higher volume, improved manufacturing performance and lower restructuring charges, partially offset by unfavorable price/mix and a pension mark-to-market remeasurement charge in the quarter.

Excluding special items (detailed in the attached tables), adjusted net income in the first quarter of 2017 was $43.7 million or $0.55 per diluted share, up from $39.9 million or $0.50 per diluted share for the same period in 2016. The increase in adjusted net income reflects the impact of higher volume and improved manufacturing performance, partially offset by unfavorable price/mix. The company generated cash from operations of $46.7 million and free cash flow of $27.4 million in the first quarter.

“We had a solid start to the year, with stronger demand in sectors like industrial distribution and off-highway,” said Richard G. Kyle, Timken president and chief executive officer. “We responded well to the increase in demand, improved operating margins and generated solid cash flow, while continuing to advance our strategy across the globe.”

Recently, the company:

  • Added to its mechanical power transmission product portfolio with the acquisition of Torsion Control Products, Inc., a manufacturer of engineered torsional couplings, which complements the Lovejoy acquisition made last year; and
  • Returned $28 million in capital to shareholders in the first quarter through the repurchase of 185,000 shares and the payment of its 379th consecutive quarterly dividend.

First-Quarter Segment Results

Mobile Industries reported first-quarter sales of $383 million, roughly flat compared to the same period a year ago, with increased demand in the mining and agriculture sectors offset by softness in rail and aerospace.

Earnings before interest and taxes (EBIT) in the quarter were $30.8 million or 8 percent of sales, compared with EBIT of $32 million or 8.4 percent of sales for the same period a year ago. The decrease in EBIT primarily reflects unfavorable price/mix in the quarter partially offset by favorable currency.

Excluding special items (detailed in the attached tables), adjusted EBIT in the quarter was $36.6 million or 9.6 percent of sales, compared with $37.7 million or 9.8 percent of sales in the first quarter last year.

Process Industries sales of $320.8 million for the first quarter were up 6.6 percent from the same period a year ago, driven primarily by increased industrial distribution demand, higher marine revenue and the benefit of acquisitions, partially offset by lower revenue in wind energy and services.

EBIT for the quarter was $43 million or 13.4 percent of sales, compared with EBIT of $33.8 million or 11.2 percent of sales for the same period a year ago. The increase in EBIT was driven by the impact of higher volume, improved manufacturing performance, lower SG&A expenses and the benefit of acquisitions, partially offset by unfavorable price/mix. In addition to these operating factors, year-on-year results were also impacted by lower restructuring charges in the quarter.

Excluding special items (detailed in the attached tables), adjusted EBIT in the quarter was $44.2 million or 13.8 percent of sales, compared with $37.4 million or 12.4 percent of sales in the first quarter last year.

2017 Outlook

“Encouraged by our start to the year, we are raising our revenue and earnings outlook, with the expectation that markets sustain their recent improvements,” said Kyle. “We are confident in our ability to generate solid bottom-line growth in 2017.”

The company now expects 2017 revenue to be up 5 to 6 percent in total versus 2016. Within its segments, the company estimates full-year 2017:

  • Mobile Industries’ sales to be up 2-3 percent, driven primarily by improved demand in the off-highway and heavy truck sectors and the benefit of acquisitions, partially offset by continued weakness in the rail sector.
  • Process Industries’ sales to be up 9-10 percent, reflecting growth across most end-market sectors and the benefit of acquisitions, offset partially by unfavorable currency.

Timken now anticipates 2017 earnings per diluted share to range from $2.15 to $2.25 for the full year on a GAAP basis, which does not include the impact of any potential mark-to-market pension remeasurement adjustments in the fourth quarter.

The company expects 2017 adjusted earnings per diluted share to range from $2.35 to $2.45.

Recast of 2016 Earnings for Change in Accounting Principle

In the first quarter of 2017, Timken implemented a change in accounting principle for pension and OPEB costs. Prior to 2017, the Company amortized actuarial gains and losses into earnings over time. Under the new principle, the company will recognize actuarial gains and losses as a mark-to-market remeasurement gain or loss when they occur rather than amortizing them to earnings over time. In addition, the Company has changed its accounting policy for measuring the market-related value of plan assets from a calculated amount (based on a smoothing of asset returns) to fair value. As a result of these changes, 2016 earnings have been recast to make the company’s results comparable year-over-year. First-quarter 2016 earnings have been recast from $0.78 to $0.82 per diluted share. First-quarter 2016 adjusted earnings have been recast from $0.46 to $0.50 per diluted share. More information on the 2016 impact of this change in accounting principle can be found in the Form 8-K filed by the company on April 24, 2017.

Conference Call Information

Timken will host a conference call today at 11 a.m. Eastern Time to review its financial results. Presentation materials will be available online in advance of the call for interested investors and securities analysts.

Conference Call:

Wednesday, April 26, 2017

11:00 a.m. Eastern Time

Live Dial-In: 877-545-1407 or 719-325-4795

(Call in 10 minutes prior to be included.)

Conference ID: Timken’s 1Q Earnings Call

Conference Call Replay:

Replay Dial-In available through May 10, 2017:

888-203-1112 or 719-457-0820

Replay Passcode: 1748373

Live Webcast:

http://investors.timken.com

About The Timken Company

The Timken Company (NYSE: TKR; www.timken.com) engineers, manufactures and markets bearings, gear drives, belts, chain, couplings, and related products, and offers a spectrum of powertrain rebuild and repair services. The leading authority on tapered roller bearings, Timken today applies its deep knowledge of metallurgy, tribology and mechanical power transmission across a variety of bearings and related systems to improve reliability and efficiency of machinery and equipment all around the world. The company’s growing product and services portfolio features many strong industrial brands including Timken®, Fafnir®, Philadelphia Gear®, Drives®, Lovejoy® and Interlube™. Known for its quality products and collaborative technical sales model, Timken posted $2.7 billion in sales in 2016. With more than 14,000 employees operating from 28 countries, Timken makes the world more productive and keeps industry in motion.

Certain statements in this release (including statements regarding the company’s forecasts, estimates plans and expectations) that are not historical in nature are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the statements related to expectations regarding the company’s future financial performance, including information under the heading “Outlook,” are forward-looking.

The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including: the finalization of the company’s financial statements for the first quarter of 2017; the company’s ability to respond to the changes in its end markets that could affect demand for the company’s products; unanticipated changes in business relationships with customers or their purchases from the company; changes in the financial health of the company’s customers, which may have an impact on the company’s revenues, earnings and impairment charges; fluctuations in raw material and energy costs; the impact of changes to the company’s accounting methods; weakness in global or regional economic conditions and capital markets; fluctuations in currency valuations; changes in the expected costs associated with product warranty claims; the ability to achieve satisfactory operating results in the integration of acquired companies; the impact on operations of general economic conditions; fluctuations in customer demand; the impact on the company’s pension obligations due to changes in interest rates, investment performance and other tactics designed to reduce risk; the company’s ability to complete and achieve the benefits of announced plans, programs, initiatives, and capital investments; and retention of U.S. Continued Dumping and Subsidy Offset Act distributions. Additional factors are discussed in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2016, quarterly reports on Form 10-Q and current reports on Form 8-K. Except as required by the federal securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

1 Represents funds received by the company under the U.S. Continued Dumping and Subsidy Offset Act (CDSOA).

Media Relations:
234.262.3514
mediarelations@timken.com

Investor Relations:
Jason Hershiser
234.262.7101
jason.hershiser@timken.com

Source: The Timken Company

Yanmar Expands Holdings in International Tractors Ltd (Sonalika Tractors)

Yanmar Holdings Co., Ltd. (“Yanmar”) and Development Bank of Japan Inc. (“DBJ”) have acquired an additional interest in leading India tractor manufacturer International Tractors Limited.

Yanmar first invested in ITL in 2005, and has provided ITL with technical guidance in the past. Seeking now to significantly increase sales in India, the world’s largest tractor market, Yanmar has boosted its holdings in the company, acquiring additional ITL stock as a joint investment using the “specified investment business” scheme provided by DBJ.

Going forward, Yanmar will continue to actively provide agricultural solutions in agrarian countries the world over, towards further enriching people’s lives and lifestyles.

<About YANMAR>

With beginnings in Osaka, Japan in 1912, YANMAR was the first ever to succeed in making a compact diesel engine of a practical size in 1933. Moving on, with industrial diesel engines as the cornerstone of the enterprise, YANAMR has continued to expand its product range, services, and expertise to deliver total solutions as an industrial equipment manufacturer. As a provider of small and large engines, agricultural machinery and facilities, construction equipment, energy systems, marine, machine tools, and components — YANAMR’s global business operations span seven domains.
On land, at sea, and in the city, YANMAR’s Mission of “providing sustainable solutions focused on the challenges customers face, in food production and harnessing power, thereby enriching people’s lives for all our tomorrows,” stands testament to YANMAR’s determination to providing us with “A SUSTAINABLE FUTURE.” For more information, visit YANMAR CO., LTD. at its global website at https://www.yanmar.com/global/about/.

Press Release

Yokohama Rubber Establishes New Internal Unit to Strengthen Involvement in Motorsports

YOKOHAMA_black_logo

Tokyo—The Yokohama Rubber Co., Ltd., announced today that it will dissolve its subsidiary, Yokohama Motorsports International Co., Ltd. (YMI), dedicated to motorsports activities effective on June 30, 2017, and transfer the subsidiary’s operations to a new internal Motorsports Department that will be established on May 1.

YMI was established in April 2013 to promote and supervise YOKOHAMA’s motorsports activities, including the development and supply of tires for motor racing competitions. Since its establishment, the subsidiary has contributed to a diverse range of motorsports events by supplying YOKOHAMA tires, including many competitions that have adopted YOKOHAMA tires as their control tire, such as the Japanese SUPER FORMULA Championship series, GT Asia, the Sepang 12 Hours endurance race, the All-Japan Formula 3 Championship Series, and the FIA World Touring Car Championship (WTCC), and many other racing series, including SUPER GT races. Given the Company’s plans to further expand and broaden its motorsports activities around the world, it was decided that an internal organization would be better able to effectively supervise and coordinate these important activities. Hence, the subsidiary is being dissolved and replaced by an internal organization, the Motorsports Department.

Yokohama Rubber’s worldwide motorsports activities contribute to the globalization of the Company’s tire business and greater recognition of the YOKOHAMA brand. It also promotes the growth, development and revitalization of the motorsports market and the automobile industry as a whole.

Outline of subsidiary being dissolved

(1) Name: Yokohama Motorsports International Co., Ltd.
(2) Head office: 36-11, Shimbashi 5-chome, Minato-ku, Tokyo
(3) Representative Director: Yoshiaki Abe
(4) Business: Planning, development, design, and sales of tires for racing competitions; Planning and management of promotions for motorsports activities
(5) Capital: ¥10 million
(6) Date established: April 1, 2013
(7) Shareholders: Yokohama Rubber Co., Ltd. 100%

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SUZUKI, TOSHIBA and DENSO reached basic agreement to establish joint venture company for production of automotive lithium-ion battery packs in India

SUZUKI MOTOR CORPORATION (SUZUKI), TOSHIBA CORPORATION (TOSHIBA) and DENSO CORPORATION (DENSO) have reached basic agreement on establishing a joint venture company for production of automotive lithium-ion battery packs in India, and signed the agreement.

In India, higher attention is being paid to environment, and new CO2 standards for automobiles is planned to be introduced.  In the Indian automotive market where compact cars are the mainstream models, introduction of sustainable technology suitable for such affordable cars is required.  The battery pack manufacturing joint venture by the three companies will realize stable supply of lithium-ion battery packs in India in the course of promoting sustainable cars in the country and will contribute to “Make in India” initiative by the Indian Government.

The joint venture company will be established within 2017 and shall move to manufacturing phase at earliest possible timing.  The initial capital expenditure will be 20 billion Japanese yen.  The joint venture company will be capitalized at 2 billion Japanese yen, with the planned participation ratio of SUZUKI 50%, TOSHIBA 40% and DENSO 10% respectively.

Establishment of the joint venture company will be further examined in details by the three companies, and subject to approval by respective authorities in accordance with applicable competition laws.

Source Link

DENSO and IBIDEN to Collaborate on Developing Powertrains

KARIYA (Japan) ― Global automotive supplier DENSO Corporation and electronics and ceramics company IBIDEN Co., Ltd. have today formed a capital and business alliance to jointly develop the next-generation vehicle exhaust system. This collaboration will combine IBIDEN’s advantages in high-performance ceramic materials with DENSO’s advantages in developing products as systems to synergistically develop high-performance yet simple and low-cost vehicle exhaust systems. DENSO will acquire the treasury stock of IBIDEN through a third-party allocation. In addition, to respond to an increasingly diverse range of powertrains, DENSO and IBIDEN will consider collaboration in the area of vehicle electrification to make vehicle electrification more efficient.

As international regulations on vehicle exhaust emissions become more strict, internal combustion engines must be more efficient and the exhaust systems improved. This capital and business alliance will enable the two companies to pool their accumulated technological strengths to speed up the development of high-performance vehicle exhaust systems for internal combustion engines, including gasoline, diesel, hybrid, and plug-in hybrid engines.

DENSO has developed and provided systems components to better control the intake, power, and exhaust events in the operating cycle of gasoline and diesel engines. Meanwhile, IBIDEN has focused on its ceramic business and developed high-performance ceramic materials, such as for diesel particulate filters (DPF), for the exhaust system of diesel engines.

The two companies will develop eco-friendly products that improve fuel efficiency and reduce exhaust emissions, thus helping to preserve the global environment.

About DENSO Corporation

DENSO Corp., headquartered in Kariya, Aichi prefecture, Japan, is a leading global automotive supplier of advanced technology, systems and components in the areas of thermal, powertrain control, electronics and information and safety. Its customers include all the world’s major carmakers. Worldwide, the company has more than 200 subsidiaries and affiliates in 38 countries and regions (including Japan) and employs more than 150,000 people. Consolidated global sales for the fiscal year ending March 31, 2016, totaled US$40.2 billion. Last fiscal year, DENSO spent 8.8 percent of its global consolidated sales on research and development. DENSO common stock is traded on the Tokyo and Nagoya stock exchanges. For more information, go to www.denso.com

About IBIDEN Co., LTD.

IBIDEN Co., Ltd. is a Japanese company with more than 100 years history. The IBIDEN Group consists of 37 subsidiaries and 3 affiliates. IBIDEN Group is managing businesses centering around electronics and ceramics. In the electronics business, the company designs and manufactures plastic packages and printed-wiring boards that are used for personal computers and smart phones as well as contributing to the development of telecommunication equipment which the world is expecting. In the ceramics business, IBIDEN produces Diesel Particulate Filters (DPF) that purifies the exhaust gas of diesel cars, and also produces graphite specialty products used for semiconductor and solar cell manufacturing devices. IBIDEN designs and manufactures the products that reduce the global-environmental load with long-established ceramic technologies. For more information, visit their website www.ibiden.com

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DENSO and Toshiba to Collaborate on IoT-based Manufacturing, Advanced Driver Assistance, Automated Driving, and Others

KARIYA, TOKYO (Japan) – DENSO Corporation and Toshiba Corporation today announced that the two companies have begun talks to enhance collaborations in the fields of Internet of Things (IoT)-based manufacturing, advanced driver assistance, automated driving, and others.

The collaborations aim to combine DENSO’s high level of technology and manufacturing capability accumulated through its experience in the automotive market and Toshiba’s image recognition, IoT, artificial intelligence (AI), and software development technologies, in order to increase the competitiveness to make it through the paradigm shift that is taking place in the automotive industry.

In the fields of advanced driver assistance and automated driving, DENSO and Toshiba have jointly developed AI technologies used in image recognition systems. Moreover, the two companies have worked together in a wide range of areas including the development of automotive lithium-ion battery packs and software for ECUs used in automotive components.

DENSO and Toshiba will collaborate more closely in fields where they can share their visions and speed up the development of technology.

Press Release

GS Yuasa’s Large-scale Lithium-ion Storage Battery System Installed at Cochrane Coal-fired Power Plant in Chile

GS Yuasa Corporation (Tokyo Stock Exchange: 6674; “GS Yuasa”) announced today that its lithium-ion storage battery system was delivered to the Cochrane coal-fired power plant*1 in Chile and its installation was completed in January 2017.

■The full-view of the lithium-ion storage battery system:
The lithium-ion storage battery system uses lithium-ion battery cells made by Lithium Energy Japan*2 (President: Ryoichi Okuyama; Head office: Ritto city, Shiga; “LEJ”) and has a maximum output of 20MW. It was installed as a spinning reserve*3 to output a certain amount of the plant’s power generation capacity instantaneously and supports the power plant.

This is the first project in which lithium-ion batteries made in Japan were adopted for the world’s largest storage battery system on a commercial basis.

The role of large-scale lithium-ion batteries is expected to grow further in the future to provide standby power at power plants and as a measure to stabilize power system amid increasing use of renewable energy. GS Yuasa will combine its technological capabilities built on years of experience with the mass production technology of LEJ to support the global shift towards clean energy.

*1 A power plant with power generation capacity of net 472,000 kW and gross 532,000 kW built by AES Gener (President: Javier Giorgio; Head office: Santiago, Chile), Chile’s second largest power supplier in terms of power generation capacity, and Mitsubishi Corporation in the suburb of Mejillones, Region II of the northern Chile.

*2 A company which develops, manufactures and sales large-scale lithium-ion batteries, which is jointly operated by GS Yuasa and Mitsubishi Corporation (President: Takehiko Kakiuchi; Head office: Chiyoda-ku, Tokyo;).

*3 Spinning Reserve: In some regions of Republic of Chile, power producers are required to set aside a certain amount of generation capacity as spinning reserve.

[Features of lithium-ion storage battery system]
1) Compatible with high-voltage DC (900 V level) PCS (power conditioner).
2) Installed with an integrated battery management unit (BMU) that manages multiple banks (15 in parallel, 3,600 cells).
3) Voltage and storage battery capacity can be easily customized by combining multiple modules in series or parallel and can be built into a large scale storage battery system.
4) Container-based independent control enables maintenance work without stopping the entire system.
5) Remote monitoring system continuously monitors the condition of lithium-ion batteries.

[Background]
GS Yuasa received the order from Parker Hannifin Corporation (President: Thomas L. Williams; Head office: Ohio, the U.S.; “Parker”), which has been given the contract for the entire storage battery system of the power plant, through Mitsubishi Corporation, the main contractor.

LEJ manufactured the lithium-ion battery cells, GS Yuasa constructed the module and storage battery control system and Parker developed the overall lithium-ion storage battery system. They were put into ten 40 ft. containers and finally installed in the plot adjacent to the power plant.

Outline of lithium-ion storage battery system
Module format LIM50EN-12 (12 cell module)
Number of batteries (cells) 36,000(20 module in series × 15 in parallel × 10 containers)
Capacity (kWh) 6,750*4 (675 × 10 containers)
Nominal voltage (V) 900

*4 Product of nominal capacity (Ah) and nominal voltage (V).

■The LIM50EN series industrial-use lithium-ion battery module

Press Release