The Timken Company reported record 2003 sales of $3.8 billion, a 49 percent increase from the prior year. Excluding the impact of the February 2003 acquisition of The Torrington Company, sales grew about 8 percent, including 3 percent related to foreign currency translation. Timken achieved 2003 net income of $36.5 million, compared with $38.7 million for the prior year.
In commenting on 2003 results, James Griffith, president and CEO, said: "2003 was a pivotal year for The Timken Company. Our $840 million strategic acquisition of Torrington was accretive to earnings and added $1 billion in new sales. We leveraged our balance sheet higher to purchase Torrington with debt peaking at more than $1 billion during the year, but we have since reduced this level by nearly $300 million. While we were disappointed in our 2003 earnings performance, the year ended with signs of improvement. We will continue to focus on returns to our shareholders by providing better value to our customers, as we grow opportunities and synergies created by the acquisition. Our actions in 2003 set the course for improved performance and created a solid foundation for our future."
For the quarter ended December 31, sales were a record $1.0 billion, an increase of 58 percent from a year ago. Excluding the impact of Torrington, sales grew approximately 10 percent, including 4 percent related to foreign currency translation.
Fourth quarter 2003 net income was $22.5 million. Excluding special items, the company reported adjusted fourth quarter net income of $23.3 million versus $12.0 million a year ago.
Despite challenging market conditions, Steel Group 2003 sales, including inter-segment sales, were $1.0 billion, up 5 percent from 2002. The increase reflected penetration gains in industrial markets and increased demand from automotive and industrial customers. The group recorded a loss of $6 million in 2003 versus EBIT of $32.5 million in 2002.
Steel Group performance in 2003 was negatively impacted by extremely high costs for scrap steel, natural gas and alloys.