RBC RBC Bearings Incorporated

Earnings Per Share Increases 64% BELOIT, Wis., Nov. 3 /PRNewswire-FirstCall/ -- REGAL-BELOIT CORPORATION (NYSE:RBC) today announced financial results for the third quarter of 2005. Net income in the third quarter of 2005 was $18.5 million, a 107.4% increase from $8.9 million reported in the third quarter of 2004. For the first nine months of 2005, net income increased 110.3% to $49.2 million from $23.4 for the same period of 2004. Earnings per share were $.59, an increase of 64% over the third quarter of 2004. Year to date earnings per share were $1.62, an increase of 72% versus the comparable period of 2004. Sales in the third quarter increased 78.4% to $345.9 million from $193.9 million reported in the third quarter of 2004. Incremental sales attributable to the Commercial AC motor and HVAC motor and capacitor acquisitions of 2004 were $145.0 million in the quarter ended September 28, 2005. Sales in the Electrical segment increased 106.3% including the sales attributable to the acquired businesses. Sales of motor products in the legacy divisions increased 9.1%. Sales in the Mechanical segment decreased 1.6%, reflecting, in part, the impact of the sale of the Illinois Gear business in May 2005. Year to date sales of the Company of $1.1 billion reflect an increase of 96.9% as compared to the $534.6 million reported for the same period in 2004. Sales attributed to acquired businesses for this period were $477.6 million. Income from operations was $34.6 million, a 121.8% increase over the $15.6 million reported for the third quarter of 2004, which included a $1.0 million after-tax gain on the sale of real estate located in the U.K. For the first nine months of 2005, income from operations was $96.3 million as compared to $42.2 million for the same period of 2004. The gross profit margin for the third quarter of 2005 was 22.1%, which was an increase over the second quarter and consistent with the gross profit margin in the third quarter of 2004. The Company also benefited by a one-time refund of income tax payments to one of our Chinese joint ventures. This refund reduced taxes for the quarter by $.6 million. The Company's long-term debt decreased to $448.9 million at the end of the third quarter of 2005 from $536.9 million at the end of the second quarter of 2005. The reduction in debt was due to a strong operating cash performance as well as the completion of a successful follow-on stock offering on August 11, 2005. "While the third quarter brought added raw material inflation challenges, I am very pleased with our overall results and the continued progress we are making on our strategic initiatives," said Henry W. Knueppel, President and CEO. "We are committed to achieving improved financial results through capitalizing on market opportunities and improving operating margins." "We are expecting earnings for the fourth quarter to be in the range of $.48 to $.52 per share based on a strong sales environment, particularly in the HVAC business," Knueppel added. "Full year earnings will therefore be in the range of $2.10 to $2.14 per share. We continue to be pleased with the performance of the acquisitions and improvements in our legacy businesses and are confident that significant opportunities continue to exist." REGAL-BELOIT will be holding a telephone conference call pertaining to this news release at 1:30 PM CST (2:30 PM EST) on Thursday, November 3, 2005. Interested parties should call 866-868-1109, access code 13112775. A replay of the call will be available through November 11, 2005 at 877-213-9653, access code 13112775. REGAL-BELOIT CORPORATION is a leading manufacturer of mechanical and electrical motion control and power generation products serving markets throughout the world. REGAL-BELOIT is headquartered in Beloit, Wisconsin, and has manufacturing, sales, and service facilities throughout North America, and in Mexico, Europe and Asia. CAUTIONARY STATEMENT The following is a cautionary statement made under the Private Securities Litigation Reform Act of 1995: With the exception of historical facts, the statements contained in this press release may be forward looking statements. Forward-looking statements represent our management's judgment regarding future events. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of factors, including: unexpected issues and costs arising from the integration of acquired companies and businesses, such as our recent acquisitions of the HVAC motors and capacitors businesses and the Commercial AC motors business from General Electric Company; marketplace acceptance of our recent acquisitions, including the loss of, or a decline in business from, any significant customers; unanticipated fluctuations in commodity prices and raw material costs and issues affecting our ability to pass increased costs on to our customers; cyclical downturns affecting the markets for capital goods; substantial increases in interest rates that impact the cost of our outstanding debt; the impact of capital market transactions that the Company may effect; unanticipated costs associated with litigation matters; the success of our management in increasing sales and maintaining or improving the operating margins of our businesses; actions taken by our competitors; difficulties in staffing and managing foreign operations; our ability to satisfy various covenant requirements under our credit facility; and other risks and uncertainties described from time to time in our reports filed with U.S. Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the applicable cautionary statements. The forward-looking statements included in this press release are made only as of the date of this release, and we undertake no obligation to update these statements to reflect subsequent events or circumstances. STATEMENTS OF INCOME In Thousands of Dollars (Unaudited) Three Months Ended Nine Months Ended September 28, September 28, September 28, September 28, 2005 2004 2005 2004 Net Sales $345,894 $193,888 $1,052,485 $ 534,624 Cost of Sales 269,296 150,944 827,643 412,652 Gross Profit 76,598 42,944 224,842 121,972 Operating Expenses 41,990 27,353 128,560 79,763 Income From Operations 34,608 15,591 96,282 42,209 Interest Expense 5,706 1,722 17,053 4,558 Interest Income 309 55 385 87 Income Before Taxes & Minority Interest 29,211 13,924 79,614 37,738 Provision For Income Taxes 9,771 4,435 28,408 12,996 Income Before Minority Interest 19,440 9,489 51,206 24,742 Minority Interest in Income, Net of Tax 923 562 1,958 1,326 Net Income $ 18,517 $8,927 $49,248 $23,416 Per Share of Common Stock: Earnings Per Share $.62 $.37 $1.68 $.95 Earnings Per Share - Assuming Dilution $.59 $.36 $1.62 $.94 Cash Dividends Declared $.13 $.12 $.38 $.36 Average Number of Shares Outstanding 29,912,633 24,456,271 29,339,151 24,647,965 Average Number of Shares - Assuming Dilution 31,234,336 24,724,845 30,399,710 24,893,397 CONDENSED BALANCE SHEETS In Thousands of Dollars ASSETS (Unaudited) (Audited) Current Assets: Sept. 28, 2005 Dec. 31, 2004 Cash and Cash Equivalents $ 27,872 $31,275 Receivables, less Allowance for Doubtful Accounts of $2,866 in 2005 and $2,376 in 2004 182,280 176,941 Inventories 229,090 246,816 Other Current Assets 36,747 19,887 Total Current Assets 475,989 474,919 Net Property Plant and Equipment 248,232 253,673 Goodwill 561,700 544,440 Purchased Intangible Assets, Net 47,270 52,058 Other Noncurrent Assets 22,868 26,962 Total Assets $1,356,059 $ 1,352,052 Liabilities and Shareholders' Investment Current Liabilities $187,969 $195,209 Long-Term Debt 448,858 547,350 Other Noncurrent Liabilities 88,783 71,314 Shareholders' Investment 630,449 538,179 Total Liabilities and Shareholders' Investment $1,356,059 $ 1,352,052 NOTES TO FINANCIAL STATEMENTS 1. Certain footnotes and other information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted from these statements, and therefore these statements should be read in conjunction with the Company's 2004 Annual Report and Securities and Exchange Commission filings. 2. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the year. Certain items, such as income taxes, LIFO charges and various other accruals, are included in these statements based on estimates for the entire year. SEGMENT INFORMATION In Thousands of Dollars (Unaudited) Mechanical Segment Three Months Ended Nine Months Ended Sept. 28, Sept. 28, Sept. 28, Sept. 28, 2005 2004 2005 2004 Net Sales $ 49,318 $ 50,119 $149,465 $148,159 Income from Operations $5,061 $5,021 $10,936 $11,655 Electrical Segment Three Months Ended Nine Months Ended Sept. 28, Sept. 28, Sept. 28, Sept. 28, 2005 2004 2005 2004 Net Sales $296,576 $143,769 $903,020 $386,465 Income from Operations $29,547 $10,570 $85,346 $30,554 REGAL-BELOIT CORPORATION (unaudited) 3 Months Ended 9 Months Ended September 28, September 28, September 28, September 28, 2005 2004 2005 2004 (In thousands of dollars) Net Sales $345,894 $193,888 $1,052,485 $534,624 Net Income $18,517 $8,927 $49,247 $23,416 Per Share of Common Stock: Earnings Per Share $.62 $.37 $1.68 $.95 Earnings Per Share- Assuming Dilution $.59 $.36 $1.62 $.94 Average Number of Shares Outstanding $29,912,663 $24,456,271 $29,339,151 $24,647,965 Average Number of Shares-Assuming Dilution $31,234,336 $24,724,845 $30,399,710 $24,893,397 REGAL-BELOIT CORPORATION is a leading manufacturer of mechanical and electrical motion control and power generation products serving markets throughout the world. REGAL-BELOIT is headquartered in Beloit, Wisconsin, and has manufacturing, sales, and service facilities throughout the North America, and in Mexico, Europe and Asia. DATASOURCE: REGAL-BELOIT CORPORATION CONTACT: Dave Barta, Chief Financial Officer, +1-608-364-8808, ext. 106, or Ken Kaplan, Treasurer & Secretary, +1-608-364-8808, ext. 104, both of REGAL-BELOIT CORPORATION

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