Timken Company (The)

Good morning. My name is Emily and I will be your conference operator today. At this time, I would like to welcome everyone to Timken's fourth quarter earnings release conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star, then the number two on your telephone keypad. Thank you. Mr. Frontapple, you may begin your conference.

Thank you, operator, and welcome everyone to our fourth quarter 2025 earnings conference call. This is Neil Frontapple, Vice President of Investor Relations for the Timken Company. We appreciate you joining us today. Before we begin our remarks this morning, I want to point out that we have posted presentation materials on the company's website that we will reference as part of today's review of the quarterly results. You can also access this material through the download feature on the Earnings Call webcast link. With me today are the Timken Company's President and CEO, Lucian Baldea, and Mike DeCenza, our Chief Financial Officer. We will have opening comments this morning from both Lucian and Mike before we open up the call for your questions. During the Q&A, I would ask that you please limit your questions to one question and one follow-up at a time. to allow everyone a chance to participate. During today's call, you may hear forward-looking statements related to our future financial results, plans, and business operations. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in today's press release and in our reports filed with the SEC, which are available on the Timken.com website. We have included reconciliations between non-GAAP financial information and its GAAP equivalent in the press release and presentation materials. Today's call is copyrighted by the Timken Company, and without express written consent, we prohibit any use, recording, or transmission of any portion of the call. Finally, note that we are planning to host an investor day on Wednesday, May 20th in New York City, so we hope that you will join us either virtually or in person. Please stay tuned for more details. With that, I would like to thank you for your interest in the Timken Company, and I will now turn the call over to Lucian.

Thanks, Neil, and good morning, everyone. We appreciate your interest in Timken and for joining us today. I would like to start by thanking our Timken team for their hard work and resilience. While 2025 presented a challenging market environment, our team executed with discipline, and we finished the year strong. Turning to our results in the fourth quarter, we achieved adjusted earnings per share of $1.14, which exceeded the high end of our guidance range. Total sales in the fourth quarter were up 3.5% from last year. Organic revenue was up more than 1%. It was driven by higher pricing and volume growth in the industrial motion segment. We increased free cash flow to $141 million, enabling us to return $36 million of cash to shareholders and reduce debt by more than $100 million during the fourth quarter. The company ended the year with a strong balance sheet with net leverage at only two times, enabling us to continue our balanced approach to capital allocation. Mike will take you through the details of our 2026 outlook, but we expect to generate organic revenue growth, strong free cash flow, and higher margins. Overall, we expect adjusted ETS to increase around 8% at the midpoint of the guidance range. We see encouraging order activity across several industrial markets, and our backlog at the end of 2025 was up from the prior year. These trends support our expectation that customer demand will improve compared to 2025 and our outlook for organic sales to be up 2%. This reflects higher pricing and modest volume growth, given the volatility of the ongoing trade situation. Despite macro uncertainty, our team is operating with urgency to execute our strategic initiatives and fulfill our commitment to delivering stronger performance in 2026. We're making good progress on our near-term strategic initiatives, including the 80-20 portfolio work. Over time, we expect to exit underperforming businesses and prioritize our focus and resources on actions that will have the greatest impact to company margins and growth. Based on early results from this work, we have decided to extend the 80-20 discipline across our entire enterprise. This will include simplification of the portfolio and process optimization. While we are still early in the process, it has become clear that applying this 80-20 approach more comprehensively will be a major driver of value creation. I am very excited about the potential, but please keep in mind that it will take some time for the benefit to flow through to the bottom line. As we shared last quarter, I see plenty of opportunity to raise Timken's organic growth trajectory by focusing on the fastest growing verticals and regions. We will also continue to integrate acquisitions and drive synergies through global expansion of our acquired business. To support this objective, we recently announced targeted strategic leadership appointments to better align the organization with our primary growth drivers and serve customers more comprehensively as one Timken. New positions include a chief technology officer, vice president of marketing, and regional president. These additions to our leadership team directly support our growth strategy and will fuel innovation, strengthen commercial execution, and position us to capture greater share in key markets, verticals, and regions. Together, we're energized by the many opportunities ahead to leverage Timken's strength and create new ways to drive improved performance. With that, let me turn over the call to Mike for a more detailed review of the results and outlook. Mike?