EX-99.1 2 l31193aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
SEGMENT RESULTS

BUSINESS SEGMENTS
                                                 
   
(Thousands of U.S. dollars) (Unaudited)   1Q 2007     2Q 2007     3Q 2007     4Q 2007     YEAR 2007     YEAR 2006  
 
 
                                                
Mobile Industries Segment
                                                
Net sales to external customers
   $ 609,455     $ 632,497     $ 586,736     $ 597,972     $ 2,426,660     $ 2,412,087  
Adjusted earnings before interest and taxes (EBIT) (1)
     20,888       24,616       10,401       (5,186 )     50,719       31,404  
Adjusted EBIT Margin (1)
     3.4 %     3.9 %     1.8 %     -0.9 %     2.1 %     1.3 %
 
                                                
Process Industries Segment
                                                
Net sales to external customers
   $ 248,867     $ 265,747     $ 260,062     $ 306,232     $ 1,080,908     $ 973,748  
Intersegment sales
     366       485       600       358       1,809       1,997  
     
Total net sales
   $ 249,233     $ 266,232     $ 260,662     $ 306,590     $ 1,082,717     $ 975,745  
Adjusted earnings before interest and taxes (EBIT) (1)
     27,064       38,359       33,414       43,955       142,792       124,948  
Adjusted EBIT Margin (1)
     10.9 %     14.4 %     12.8 %     14.3 %     13.2 %     12.8 %
 
                                                
Aerospace and Defense Segment
                                                
Net sales to external customers
   $ 73,714     $ 74,370     $ 70,429     $ 94,848     $ 313,361     $ 259,695  
Adjusted earnings before interest and taxes (EBIT) (1)
     6,509       4,183       425       10,612       21,729       18,085  
Adjusted EBIT Margin (1)
     8.8 %     5.6 %     0.6 %     11.2 %     6.9 %     7.0 %
 
                                                
Total Bearings and Power Transmission Group
                                                
Net sales to external customers
   $ 932,036     $ 972,614     $ 917,227     $ 999,052     $ 3,820,929     $ 3,645,530  
Intersegment sales
     366       485       600       358       1,809       1,997  
     
Total net sales
   $ 932,402     $ 973,099     $ 917,827     $ 999,410     $ 3,822,738     $ 3,647,527  
Adjusted earnings before interest and taxes (EBIT) (1)
     54,461       67,158       44,240       49,381       215,240       174,437  
Adjusted EBIT Margin (1)
     5.8 %     6.9 %     4.8 %     4.9 %     5.6 %     4.8 %
 
                                                
Steel Group
                                                
Net sales to external customers
   $ 352,477     $ 376,617     $ 344,012     $ 341,985     $ 1,415,091     $ 1,327,835  
Intersegment sales
     37,815       34,152       37,100       37,448       146,515       144,424  
     
Total net sales
   $ 390,292     $ 410,769     $ 381,112     $ 379,433     $ 1,561,606     $ 1,472,259  
Adjusted earnings before interest and taxes (EBIT) (1)
     65,526       65,888       52,278       47,475       231,167       226,772  
Adjusted EBIT Margin (1)
     16.8 %     16.0 %     13.7 %     12.5 %     14.8 %     15.4 %
 
                                                
Unallocated corporate expense
   $ (16,228 )   $ (17,526 )   $ (14,370 )   $ (17,726 )   $ (65,850 )   $ (66,880 )
Intergroup eliminations (expense) income (2)
   $ (1,124 )   $ (367 )   $ (279 )   $ 1,297     $ (473 )   $ 3,582  
 
                                                
Consolidated
                                                
Net sales to external customers
   $ 1,284,513     $ 1,349,231     $ 1,261,239     $ 1,341,037     $ 5,236,020     $ 4,973,365  
Adjusted earnings before interest and taxes (EBIT) (1)
   $ 102,635     $ 115,153     $ 81,869     $ 80,427     $ 380,084     $ 337,911  
Adjusted EBIT Margin (1)
     8.0 %     8.5 %     6.5 %     6.0 %     7.3 %     6.8 %
(1) EBIT is defined as operating income plus other income (expense). EBIT Margin is EBIT as a percentage of net sales. EBIT and EBIT margin on a segment basis exclude certain special items set forth above. EBIT and EBIT Margin are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. Management believes that reporting EBIT and EBIT Margin best reflect the performance of the company’s business segments and EBIT disclosures are responsive to investors.
(2) Intergroup eliminations represent intergroup profit or loss between the Steel Group and the Bearings and Power Transmission Group.

 

 

SEGMENT RESULTS

BUSINESS SEGMENTS
Reconciliation of GAAP Income from Continuing Operations before Income Taxes
 This reconciliation is provided as additional relevant information about the company’s performance. Management believes Consolidated adjusted earnings before interest and taxes (EBIT) and Total Bearings and Power Transmission Group adjusted EBIT are more representative of the company’s performance and therefore useful to investors. Management also believes that it is appropriate to compare GAAP Income from Continuing Operations before Income Taxes to Consolidated adjusted EBIT in light of special items related to impairment and restructuring and manufacturing rationalization/reorganization costs, Continued Dumping and Subsidy Offset Act (CDSOA) receipts, and gain/loss on the sale of non-strategic assets.
                                                 
   
(Thousands of U.S. dollars) (Unaudited)   1Q 2007     2Q 2007     3Q 2007     4Q 2007     YEAR 2007     YEAR 2006  
 
 
                                                
Income from Continuing Operations before Income Taxes
   $ 67,986     $ 89,717     $ 56,309     $ 68,245     $ 282,257     $ 254,234  
 
                                                
Pre-tax reconciling items:
                                                
Interest expense
     9,644       10,080       10,698       12,262       42,684       49,387  
Interest (income)
     (1,955 )     (1,200 )     (2,381 )     (1,509 )     (7,045 )     (4,605 )
 
                                                
Manufacturing rationalization/reorganization expenses - cost of products sold
     11,843       10,721       5,382       3,330       31,276       18,476  
Manufacturing rationalization/reorganization expenses — SG&A
     1,330       648       852       415       3,245       5,917  
Loss (gain) on divestiture
     354       (38 )     152       60       528       64,271  
Impairment and restructuring
     13,776       7,254       11,840       7,508       40,378       44,881  
Special items — other (income) expense
     (343 )     (2,029 )     (983 )     (9,884 )     (13,239 )     (94,650 )
 
                                                
           
Consolidated adjusted earnings before interest and taxes (EBIT)
   $ 102,635     $ 115,153     $ 81,869     $ 80,427     $ 380,084     $ 337,911  
             
 
                                                
Steel Group adjusted earnings before interest and taxes (EBIT)
     (65,526 )     (65,888 )     (52,278 )     (47,475 )     (231,167 )     (226,772 )
Unallocated corporate expense
     16,228       17,526       14,370       17,726       65,850       66,880  
Intergroup eliminations expense / income
     1,124       367       279       (1,297 )     473       (3,582 )
 
                                                
           
Total Bearings and Power Transmission Group adjusted earnings before interest and taxes (EBIT)
   $ 54,461     $ 67,158     $ 44,240     $ 49,381     $ 215,240     $ 174,437