Timken Reports Third-Quarter Results

* Cost controls and working-capital management drive third-quarter earnings and
cash flow
* Company increases full-year earnings estimate
* Needle Roller Bearings business sale on track for year-end completion

CANTON, Ohio--(Business Wire)--
The Timken Company (NYSE: TKR) today reported sales of $763.6 million for the
third quarter of 2009, a decrease of 43 percent over the same period a year ago.
The sales decline reflects weaker demand in many of the company`s end markets
and lower surcharges, partially offset by improved pricing. Sales for all
periods exclude the results of the Needle Roller Bearings business, accounted
for as "discontinued operations." 

The company incurred a third-quarter loss of $50.1 million, or $0.52 per share,
including a loss of $30.8 million, or $0.32 per share, from the Needle Roller
Bearings business. The company`s continuing operations incurred a loss of $19.3
million, or $0.20 per share, in the third quarter, compared with income of
$123.9 million, or $1.28 per diluted share, a year ago. 

Excluding special items, net income was $5.2 million, or $0.05 per share, for
the third quarter, including a loss of $2.3 million, or $0.03 per share, from
discontinued operations. Income from the company`s continuing operations for the
third quarter was $7.5 million, or $0.08 per share, excluding special items,
compared with $129.2 million, or $1.34 per diluted share, in the prior year.
Earnings reflect lower sales volume and manufacturing utilization, reduced
surcharges and lower LIFO (last-in, first-out accounting) income. These items
were partially offset by cost reductions, improved pricing and lower material
costs compared with a year ago. 

Special items, net of tax, in the third quarter of 2009 amounted to $55.4
million of expense, compared with $5.5 million in the same period last year.
Special items in the third quarter of 2009 included manufacturing
rationalization, impairment and restructuring charges, the largest being a
$25.1-million impairment, net of tax, associated with the pending sale of the
Needle Roller Bearings business.

         Table 1: Third-Quarter 2009 Earnings Per Share                                                                            
                                              As Reported                                   Adjusted (a)                       
         Continuing Operations                $          (0.20      )                     $          0.08                  
         Discontinued Operations                         (0.32      )                                (0.03      )          
         Total Earnings Per Share             $          (0.52      )                     $          0.05                  
                                                                                                                           
         (a): "Adjusted" earnings per share exclude the impact of impairment and                                                   
         restructuring, manufacturing rationalization/reorganization and special charges                                           
         and credits.                                                                                                              


"This quarter`s performance is more about how we`re managing the business than a
shift in marketplace trends," said James W. Griffith, Timken president and chief
executive officer. "Without the benefit of improved volume, we`re yielding
better results from structural changes we`ve made, in part from our Project
O.N.E. and portfolio management initiatives." 

In recent months, the company also:

* Signed an agreement to sell the assets of its Needle Roller Bearings business
to JTEKT Corporation, for which Timken will receive approximately $330 million,
subject to certain closing conditions; 
* Announced plans to streamline its distribution footprint by consolidating its
Ohio and South Carolina distribution centers into a new facility; 
* Entered into a three-year, $500-million unsecured Senior Credit Facility,
replacing a previous facility set to expire in June 2010; 
* Completed a $250-million public offering of 6.00% unsecured Senior Notes due
2014, proceeds of which will be used to repay the company`s 5.75% notes due
February 15, 2010; 
* Expanded its ability to offer engineered steel solutions in Asia through
collaboration with Daido Steel Co. Ltd.; and 
* Reached a tentative four-year labor agreement with the United Steelworkers
union, covering approximately 2,300 associates in Canton, Ohio.

The company continues to maintain a strong balance sheet with ample liquidity.
Total debt was $800.9 million as of Sept. 30, 2009, or 33.5 percent of capital.
Net debt at Sept. 30, 2009, was $169.9 million, or 9.6 percent of capital,
compared with $490.5 million, or 22.8 percent, as of Dec. 31, 2008. During the
quarter the company generated cash from operating activities of $170.9 million,
driven primarily by inventory reductions.