Adjusted financial results include adjusted net income of  US$25.2 million, or US$0.55 of adjusted earnings per diluted share (EPS) ,  compared to second-quarter 2013 adjusted net income of US$20.4 million, or US$0.44 adjusted EPS.
 
"We successfully completed the spinoff of TimkenSteel, and began our journey as an independent company with a strong financial position.  In the second quarter, our results demonstrate our ability to drive shareholder value by selling into more profitable niche markets and leveraging our manufacturing capabilities with strong structural performance," said Ward J. "Tim" Timken, Jr., chairman, CEO and president. "We also continued to invest for growth, with the announcement of a US$40 million continuous heat-treat facility that will expand our opportunity to create customized steels for some of the most demanding applications in markets with solid long-term potential."
 
SECOND-QUARTER 2014 FINANCIAL SUMMARY
Second-quarter net sales were up US$88 million or 25% year over year.

• Ship tons were approximately 289,000, an increase of 21.4% from the second quarter of the prior year.
• Growth in net sales was driven primarily by strong volumes in the energy and industrial market sectors, including surcharges of US$24.4 million.

Adjusted EBIT of US$39.4 million is a 25% increase compared to the same period a year ago.

• Melt utilization of 76% represents a 23% increase over the prior year.
• Second-quarter adjusted EBIT was favorable compared to the prior-year second quarter, primarily due to higher sales volume, manufacturing utilization, and a lower LIFO charge, partially offset by costs associated with the timing of inventory reduction and asset and inventory adjustments at separation.

SECOND-QUARTER BUSINESS SEGMENT RESULTS
Industrial and Mobile Segment

• Net sales of US$254.7 million represent a 13.7% increase over the second quarter of the prior year, including higher surcharges of US$9.2 million, driven by stronger demand in the industrial market sector and slightly offset by lower automotive shipments.  
• Second-quarter EBIT margin of 8.2% was lower than prior-year margin of 11.3% due to unfavorable inventory change and physical inventory adjustments offsetting favorable volume, mix and manufacturing leverage.  

Energy and Distribution Segment

• Net sales of US$187.5 million represent a 44.1% increase over the second quarter of the prior year, including higher surcharges of US$15.2 million, driven primarily by continued growth in demand in the energy end markets coupled with strength in the distribution channel. 
• Second-quarter EBIT margin of 16.6% is higher than prior-year second-quarter margin of 14.8%, driven by volume increases, favorable mix, and strong manufacturing leverage, partially offset by unfavorable inventory change and physical inventory adjustments. 

OUTLOOK

• We project 2014 sales growth of 20–25% over full-year 2013 driven by strength in our end markets and supported by additional crews at several of our facilities.
• Second-half 2014 capital spending is forecasted at approximately US$100-105 million.
• We expect to launch the jumbo vertical bloom caster in the third quarter.  The caster will begin to ramp up in the second half with the benefits expected in 2015.
• We expect second-half 2014 improvement in manufacturing to partially offset annual shutdown maintenance and caster ramp-up costs for a net impact of US$2-4 million.
• We anticipate LIFO expense of US$14–18 million in second half 2014 compared to US$2 million in the first half.

 

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TimkenSteel , creates tailored steel products and services for demanding applications, helping customers push the bounds of what's possible within their industries. The company reaches around the world in its customers' products and leads North America in large alloy steel bars (6"+) and seamless mechanical tubing made of its special bar quality steel, as well as supply chain and steel services. Operating from six countries, TimkenSteel posted sales of US$1.4 billion in 2013.