Timken Co 8-K, filed Apr 6, 2023
Timken Co (TKR)
8-K
2023-04-06
For: 2023-04-06
View Original
Added on
April 10, 2026
About this 8-K
Timken Co filed this 8-K on April 6, 2023.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): | |||||
THE TIMKEN CO MPANY
(Exact name of registrant as specified in its charter)
Commission file number: 1-1169
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
The Timken Company (the “Company”) has implemented a change to its management structure and now operates under two new segments: Engineered Bearings and Industrial Motion. Beginning with the first quarter of 2023, the Company will report its financial results utilizing these two segments.
Attached as Exhibit 99.1 to this Current Report on Form 8-K are the following financial schedules, which contain unaudited financial information presented as if the Company had reported its results utilizing the two new segments during the respective periods:
•Segment Sales and EBITDA for 2022 (quarterly and annual),
•Segment Sales and EBITDA for 2018 through 2021 (annual only),
•Reconciliation for Adjusted Segment EBITDA and margin for 2022 (quarterly and annual), and
•Reconciliation for Adjusted Segment EBITDA and margin for 2018 through 2021 (annual only).
The financial schedules are being furnished as additional information that the Company believes may be useful to investors. There are no changes to unallocated corporate expense or consolidated EBITDA for any of the periods presented as a result of the change in segments.
This information shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
| 99.1 | Segment Financial Information for The Timken Company dated April 6, 2023 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE TIMKEN COMPANY | |||||
| By: | /s/ Philip D. Fracassa | ||||
| Philip D. Fracassa | |||||
| Executive Vice President and Chief Financial Officer | |||||
Date: April 6, 2023 | |||||
EXHIBIT INDEX
| Exhibit No. | Description | |||||||
| Segment Financial Information for The Timken Company dated April 6, 2023 | ||||||||
| Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||||||
| BUSINESS SEGMENTS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (Dollars in millions) | Three Months Ended March 31, 2022 | Three Months Ended June 30, 2022 | Three Months Ended September 30, 2022 | Three Months Ended December 31, 2022 | Twelve Months Ended December 31, 2022 | ||||||||||||
| Engineered Bearings | |||||||||||||||||
| Net sales | $ | 772.4 | $ | 798.3 | $ | 779.7 | $ | 742.2 | $ | 3,092.6 | |||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) (1) | $ | 168.3 | $ | 167.5 | $ | 150.4 | $ | 129.6 | $ | 615.8 | |||||||
EBITDA Margin (1) | 21.8 | % | 21.0 | % | 19.3 | % | 17.5 | % | 19.9 | % | |||||||
| Industrial Motion | |||||||||||||||||
| Net sales | $ | 352.2 | $ | 355.4 | $ | 356.7 | $ | 339.8 | $ | 1,404.1 | |||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) (1) | $ | 62.4 | $ | 65.1 | $ | 34.9 | $ | 60.4 | $ | 222.8 | |||||||
EBITDA Margin (1) | 17.7 | % | 18.3 | % | 9.8 | % | 17.8 | % | 15.9 | % | |||||||
(1) EBITDA is defined as operating income plus other income (expense) and excluding depreciation and amortization. EBITDA and EBITDA Margin are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. | |||||||||||||||||
1 | ||
| BUSINESS SEGMENTS | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (Dollars in millions) | Twelve Months Ended December 31, 2021 | Twelve Months Ended December 31, 2020 | Twelve Months Ended December 31, 2019 | Twelve Months Ended December 31, 2018 | ||||||||||
| Engineered Bearings | ||||||||||||||
| Net sales | $ | 2,815.1 | $ | 2,324.7 | $ | 2,657.7 | $ | 2,675.5 | ||||||
EBITDA (1) | $ | 513.4 | $ | 461.7 | $ | 535.0 | $ | 505.8 | ||||||
EBITDA Margin (1) | 18.2 | % | 19.9 | % | 20.1 | % | 18.9 | % | ||||||
| Industrial Motion | ||||||||||||||
| Net sales | $ | 1,317.8 | $ | 1,188.5 | $ | 1,132.2 | $ | 905.3 | ||||||
EBITDA (1) | $ | 233.0 | $ | 213.7 | $ | 216.5 | $ | 172.1 | ||||||
EBITDA Margin (1) | 17.7 | % | 18.0 | % | 19.1 | % | 19.0 | % | ||||||
(1) EBITDA is defined as operating income plus other income (expense) and excluding depreciation and amortization. EBITDA and EBITDA Margin are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. | ||||||||||||||
2 | ||
| Reconciliation of segment EBITDA, after adjustments, to segment EBITDA, and segment EBITDA, after adjustments, as a percentage of sales to segment EBITDA as a percentage of sales: | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| The following reconciliation is provided as additional relevant information about the Company's Engineered Bearings and Industrial Motion segment performance deemed useful to investors. Management believes that non-GAAP measures of adjusted EBITDA and adjusted EBITDA margin for the segments are useful to investors as they are representative of each segment's core operations and are used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. | ||||||||||||||||||||||||||||||||
| Engineered Bearings | ||||||||||||||||||||||||||||||||
| (Dollars in millions) | Three Months Ended March 31, 2022 | Percentage to Net Sales | Three Months Ended June 30, 2022 | Percentage to Net Sales | Three Months Ended September 30, 2022 | Percentage to Net Sales | Three Months Ended December 31, 2022 | Percentage to Net Sales | Twelve Months Ended December 31, 2022 | Percentage to Net Sales | ||||||||||||||||||||||
| EBITDA | $ | 168.3 | 21.8 | % | $ | 167.5 | 21.0 | % | $ | 150.4 | 19.3 | % | $ | 129.6 | 17.5 | % | $ | 615.8 | 19.9 | % | ||||||||||||
Impairment, restructuring and reorganization charges (1) | 1.0 | 0.6 | 1.1 | 1.7 | 4.4 | |||||||||||||||||||||||||||
Russia-related charges (2) | 4.6 | 8.4 | 2.3 | 0.3 | 15.6 | |||||||||||||||||||||||||||
Acquisition-related charges (3) | — | — | — | 6.2 | 6.2 | |||||||||||||||||||||||||||
(Gain) loss on divestitures and sale of real estate (4) | — | 0.1 | — | (3.6) | (3.5) | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 173.9 | 22.5 | % | $ | 176.6 | 22.1 | % | $ | 153.8 | 19.7 | % | $ | 134.2 | 18.1 | % | $ | 638.5 | 20.7 | % | ||||||||||||
| Industrial Motion | ||||||||||||||||||||||||||||||||
| (Dollars in millions) | Three Months Ended March 31, 2022 | Percentage to Net Sales | Three Months Ended June 30, 2022 | Percentage to Net Sales | Three Months Ended September 30, 2022 | Percentage to Net Sales | Three Months Ended December 31, 2022 | Percentage to Net Sales | Twelve Months Ended December 31, 2022 | Percentage to Net Sales | ||||||||||||||||||||||
| EBITDA | $ | 62.4 | 17.7 | % | $ | 65.1 | 18.3 | % | $ | 34.9 | 9.8 | % | $ | 60.4 | 17.8 | % | $ | 222.8 | 15.9 | % | ||||||||||||
Impairment, restructuring and reorganization charges (1) | 0.6 | 1.5 | 31.0 | 2.0 | 35.1 | |||||||||||||||||||||||||||
Acquisition-related charges (3) | 0.4 | 1.0 | 2.1 | 1.4 | 4.9 | |||||||||||||||||||||||||||
Loss (gain) on divestitures and sale of real estate (4) | — | (0.2) | — | 0.8 | 0.6 | |||||||||||||||||||||||||||
| Tax indemnification and related items | — | — | — | 0.3 | 0.3 | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 63.4 | 18.0 | % | $ | 67.4 | 19.0 | % | $ | 68.0 | 19.1 | % | $ | 64.9 | 19.1 | % | $ | 263.7 | 18.8 | % | ||||||||||||
(1) Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives; and (iv) impairment of assets held for sale. Impairment, restructuring and reorganization charges for 2022 included $29.3 million related to the sale of ADS. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company’s core operations. | ||||||||||||||||||||||||||||||||
(2) Russia-related charges include impairments or allowances recorded against certain property, plant and equipment, inventory and trade receivables to reflect the current impact of Russia's invasion of Ukraine (and associated sanctions) on the Company's operations. In addition to impairments and allowances recorded, the Company recorded a loss on the divestiture of its Timken Russia business during the third quarter of 2022. Refer to Russia Operations in Management Discussion and Analysis within the Company's annual report on Form 10-K for additional information. | ||||||||||||||||||||||||||||||||
(3) The acquisition-related charges represent the inventory step-up impact of the acquisitions. | ||||||||||||||||||||||||||||||||
(4) Represents the net gain resulting from divestitures and the sale of real estate. | ||||||||||||||||||||||||||||||||
3 | ||
| Reconciliation of segment EBITDA, after adjustments, to segment EBITDA, and segment EBITDA, after adjustments, as a percentage of sales to segment EBITDA as a percentage of sales: | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| The following reconciliation is provided as additional relevant information about the Company's Engineered Bearings and Industrial Motion segment performance deemed useful to investors. Management believes that non-GAAP measures of adjusted EBITDA and adjusted EBITDA margin for the segments are useful to investors as they are representative of each segment's core operations and are used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. | ||||||||||||||||||||||||||
| Engineered Bearings | ||||||||||||||||||||||||||
| (Dollars in millions) | Twelve Months Ended December 31, 2021 | Percentage to Net Sales | Twelve Months Ended December 31, 2020 | Percentage to Net Sales | Twelve Months Ended December 31, 2019 | Percentage to Net Sales | Twelve Months Ended December 31, 2018 | Percentage to Net Sales | ||||||||||||||||||
| EBITDA | $ | 513.4 | 18.2 | % | $ | 461.7 | 19.9 | % | $ | 535.0 | 20.1 | % | $ | 505.8 | 18.9 | % | ||||||||||
Impairment, restructuring and reorganization charges (1) | 9.1 | 16.1 | 4.9 | 5.3 | ||||||||||||||||||||||
Acquisition-related charges (2) | 1.3 | 0.1 | 0.1 | 1.1 | ||||||||||||||||||||||
Property losses (recoveries) and related expenses (3) | — | (5.5) | 7.6 | — | ||||||||||||||||||||||
Gain on divestitures and sale of real estate (4) | — | — | (4.5) | — | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 523.8 | 18.6 | % | $ | 472.4 | 20.3 | % | $ | 543.1 | 20.4 | % | $ | 512.2 | 19.1 | % | ||||||||||
| Industrial Motion | ||||||||||||||||||||||||||
| (Dollars in millions) | Twelve Months Ended December 31, 2021 | Percentage to Net Sales | Twelve Months Ended December 31, 2020 | Percentage to Net Sales | Twelve Months Ended December 31, 2019 | Percentage to Net Sales | Twelve Months Ended December 31, 2018 | Percentage to Net Sales | ||||||||||||||||||
| EBITDA | $ | 233.0 | 17.7 | % | $ | 213.7 | 18.0 | % | $ | 216.5 | 19.1 | % | $ | 172.1 | 19.0 | % | ||||||||||
Impairment, restructuring and reorganization charges (1) | 5.2 | 9.2 | 3.7 | 0.2 | ||||||||||||||||||||||
Acquisition-related charges (2) | — | 3.0 | 9.7 | 10.0 | ||||||||||||||||||||||
Loss (gain) on divestitures and sale of real estate (4) | — | (0.4) | — | 0.8 | ||||||||||||||||||||||
| Tax indemnification and related items | 0.2 | 0.3 | — | — | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 238.4 | 18.1 | % | $ | 225.8 | 19.0 | % | $ | 229.9 | 20.3 | % | $ | 183.1 | 20.2 | % | ||||||||||
(1) Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives; and (iv) impairment of assets held for sale. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company’s core operations. | ||||||||||||||||||||||||||
(2) The acquisition-related charges represent the inventory step-up impact of the acquisitions. | ||||||||||||||||||||||||||
(3) Represents property loss and related expenses during the period presented (net of insurance recoveries received in 2020) resulting from property loss that occurred during the first quarter of 2019 at one of the Company's warehouses in Knoxville, Tennessee and during the third quarter of 2019 at one of the Company's warehouses in Yantai, China. | ||||||||||||||||||||||||||
(4) Represents the net gain resulting from divestitures and the sale of real estate. | ||||||||||||||||||||||||||
4 | ||