BELOIT, Wis., May 1, 2012 /PRNewswire/ -- Regal Beloit
Corporation (NYSE: RBC) today reported financial results for the
first quarter ended March 31,
2012. Net sales of $807.9
million increased 21.9% compared to $662.7 million for the first quarter of
2011. Diluted earnings per share were $1.16 for the first quarter of 2012 compared to
diluted earnings per share of $0.99
for the first quarter of 2011.
"We were pleased to see growth in our North American
commercial and industrial, mechanical and global Unico businesses,
which helped offset the weakness in HVAC and China. Our diverse operations and
our successful acquisition strategy helped us to continue to
deliver sales and earnings growth. Overall, our businesses
performed as we expected plus we had an additional earnings lift
from the gain on an asset sale and lower income tax expense,"
commented Mr. Mark Gliebe, Chairman
and Chief Executive Officer. "Also, in the first quarter we were
excited to close the Milwaukee Gear acquisition, expanding our
presence in oil and gas."
NET
SALES
|
|
(In
millions)
|
|
|
Three
Months Ended
|
|
|
March
31,
|
|
April
2,
|
|
%
|
|
|
2012
|
|
2011
|
|
Change
|
Net
Sales
|
|
$
807.9
|
|
$
662.7
|
|
21.9%
|
|
|
|
|
|
|
|
Net Sales
by Segment:
|
|
|
|
|
|
|
Electrical segment
|
|
731.4
|
|
594.3
|
|
23.1%
|
Mechanical segment
|
|
76.5
|
|
68.4
|
|
11.9%
|
Electrical segment net sales in the first quarter 2012 included
$194.6 million from the businesses
acquired within the last twelve months ("acquired
businesses"). Excluding the acquired businesses, North
American residential HVAC motor net sales declined 30.2%, resulting
from (i) the difficult comparison to the 17.9% net sales
increase experienced in the first quarter of 2011, (ii) a drop in
consumer demand for residential HVAC equipment and (iii) the
adverse mix impact of the R22 dry ship conversion. North
American commercial and industrial motor net sales increased 7.0%
for the first quarter 2012 compared to the first quarter of 2011,
excluding the divested business.
Mechanical segment net sales for the first quarter included
$8.4 million from the acquired
business. Excluding the impact of the acquired business,
Mechanical segment sales in North
America increased 8.7%, which helped offset weakness in
mechanical sales in Europe and
Asia.
First quarter 2012 net sales to regions outside the United States increased 13.2% compared to
first quarter 2011 and represented 34.2% of total net
sales. Sales of high efficiency products were 18.1% of
net sales. The impact of foreign currency exchange rates
decreased total net sales by 0.6% for the first quarter 2012
compared to the first quarter 2011.
GROSS
PROFIT
|
|
(In
millions)
|
|
|
Three
Months Ended
|
|
|
March
31,
|
|
April
2,
|
|
|
2012
|
|
2011
|
Gross
Profit
|
|
$
197.6
|
|
$
164.8
|
As
a percentage of net sales
|
|
24.5%
|
|
24.9%
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
Electrical segment
|
|
$
178.8
|
|
$
145.6
|
As a percentage of net
sales
|
|
24.4%
|
|
24.5%
|
Mechanical segment
|
|
$
18.8
|
|
$
19.2
|
As a percentage of net
sales
|
|
24.5%
|
|
28.1%
|
The reduction in the gross profit percentage was primarily
driven by softer HVAC motor sales and the mix impact of the R22 dry
ship conversion. In the Mechanical segment, cost of goods
sold included approximately $0.5
million of inventory purchase accounting adjustments related
to the Milwaukee Gear acquisition.
OPERATING EXPENSES
|
|
(In
millions)
|
|
|
|
Three
Months Ended
|
|
|
|
March
31,
|
|
April
2,
|
|
|
|
2012
|
|
2011
|
|
Operating
Expenses
|
|
$
118.5
|
|
$
100.7
|
|
As
a percentage of net sales
|
|
14.7%
|
|
15.2%
|
|
|
|
|
|
|
|
Operating
Expenses by Segment:
|
|
|
|
|
|
Electrical segment
|
|
$
109.5
|
|
$
90.1
|
|
As a percentage of net
sales
|
|
15.0%
|
|
15.2%
|
|
Mechanical segment
|
|
$
9.0
|
|
$
10.6
|
|
As a percentage of net
sales
|
|
11.8%
|
|
15.5%
|
|
|
|
|
|
|
|
First quarter 2012 operating expenses included $25.2 million from the acquired businesses and an
offsetting gain of $1.3 million on
the sale of surplus real estate from a closed facility. First
quarter 2012 included $0.1 million of
acquisition related expenses compared to $6.6 million in 2011.
INCOME
FROM OPERATIONS
|
|
(In
millions)
|
|
|
Three
Months Ended
|
|
|
March
31,
|
|
April
2,
|
|
|
2012
|
|
2011
|
Income
from Operations
|
|
$
79.1
|
|
$
64.1
|
As
a percentage of net sales
|
|
9.8%
|
|
9.7%
|
|
|
|
|
|
Income
from Operations by Segment:
|
|
|
|
Electrical segment
|
|
$
69.4
|
|
$
55.5
|
As a percentage of net
sales
|
|
9.5%
|
|
9.3%
|
Mechanical segment
|
|
$
9.7
|
|
$
8.6
|
As a percentage of net
sales
|
|
12.7%
|
|
12.6%
|
|
|
|
|
|
The effective tax rate for the first quarter 2012 was 26.3%
compared to 31.2% for the first quarter 2011 driven primarily by
the world wide distribution of income and the reduction of a non-US
tax item of $1.4 million.
Free cash flow was $48.7 million,
an increase of $20.2 million from the
prior year. Free cash for the first quarter of 2012 was
100.0% of net income.
"Entering the second quarter, we announced a 5.6% increase in
our quarterly dividend per share, which represents the seventh
increase in the last eight years and which expresses our
confidence," commented Mr. Gliebe. "Our China business is seeing a modest increase in
orders as compared to the prior quarter, and our HVAC business is
starting to experience the normal seasonal build. However, we
expect HVAC revenues to be down in the second quarter versus prior
year as we continue to experience the negative mix impact resulting
from the R22 conversion. We also expect continued strong
performance from our commercial and industrial, mechanical and
Unico business. Our earnings guidance for the second quarter
of 2012 is $1.42 to $1.48 per share,"
continued Mr. Gliebe.
Regal Beloit will hold a
conference call at 10:00 AM CDT
(11:00 AM EDT) on Wednesday, May 2, 2012, to discuss the earnings
release. To listen to the call and view the presentation
slides via the internet, please go to http://www.regalbeloit.com/
or at: http://www.videonewswire.com/event.asp?id=86575.
Individuals who would like to participate by phone should dial
866-524-3160, referencing Regal Beloit. International callers
should dial 412-317-6760, referencing Regal Beloit.
A telephone replay of the call will be available through
August 2, 2012, at 877-344-7529,
conference ID 10013126. International callers should call
412-317-0088 using the same conference ID. A webcast replay
will be available until August 2,
2012, and can be accessed at
http://www.regalbeloit.com/rbceventspresentations.htm or at
http://www.videonewswire.com/event.asp?id=86575.
Regal Beloit Corporation is a leading manufacturer of electric
motors, mechanical and electrical motion controls 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 United
States, Canada,
Mexico, Europe and Asia. Regal Beloit's common
stock is a component of the S&P Mid Cap 400 Index and the
Russell 2000 Index.
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.
In many cases, you can identify forward-looking statements by
terminology such as "may," "will," "plan," "expect,"
"anticipate," "estimate," "believe," or "continue" or the negative
of these terms or other similar words. Actual results and
events could differ materially and adversely from those contained
in the forward-looking statements due to a number of factors,
including: actions taken by our competitors and our ability to
effectively compete in the increasingly competitive global electric
motor, power generation and mechanical motion control industries;
our ability to develop new products based on technological
innovation and the marketplace acceptance of new and existing
products; fluctuations in commodity prices and raw material costs;
our dependence on significant customers; issues and costs arising
from the integration of acquired companies and businesses,
including the timing and impact of purchase accounting adjustments;
unanticipated costs or expenses we may incur related to product
warranty issues; our dependence on key suppliers and the potential
effects of supply disruptions; infringement of our intellectual
property by third parties, challenges to our intellectual property,
and claims of infringement by us of third party technologies;
increases in our overall debt levels as a result of acquisitions or
otherwise and our ability to repay principal and interest on our
outstanding debt; product liability and other litigation, or the
failure of our products to perform as anticipated, particularly in
high volume applications; economic changes in global markets where
we do business, such as reduced demand for the products we sell,
currency exchange rates, inflation rates, interest rates,
recession, foreign government policies and other external factors
that we cannot control; unanticipated liabilities of acquired
businesses; cyclical downturns affecting the global market for
capital goods; difficulties associated with managing foreign
operations; and other risks and uncertainties including but not
limited to those described in Item 1A-Risk Factors of the Company's
Annual Report on Form 10-K filed on February
29, 2012 and 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 presentation are made
only as of their respective dates, and we undertake no obligation
to update these statements to reflect subsequent events or
circumstances.
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS
|
|
|
Unaudited
|
|
|
|
|
(Dollars
in Millions, Except Cash Dividends Declared and Per Share
Data)
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
March
31,
|
|
April
2,
|
|
|
2012
|
|
2011
|
Net
Sales
|
|
$
807.9
|
|
$
662.7
|
Cost of
Sales
|
|
610.3
|
|
497.9
|
Gross Profit
|
|
197.6
|
|
164.8
|
Operating
Expenses
|
|
118.5
|
|
100.7
|
Income From Operations
|
|
79.1
|
|
64.1
|
Interest
Expense
|
|
11.8
|
|
5.1
|
Interest
Income
|
|
0.4
|
|
0.3
|
Income Before Taxes & Noncontrolling Interests
|
|
67.7
|
|
59.3
|
Provision
For Income Taxes
|
|
17.8
|
|
18.5
|
Net
Income
|
|
49.9
|
|
40.8
|
Less: Net
Income Attributable to Noncontrolling
Interests, net of tax
|
|
1.2
|
|
2.0
|
Net Income Attributable to Regal Beloit
Corporation
|
|
$
48.7
|
|
$
38.8
|
Earnings
Per Share Attributable to Regal Beloit Corporation:
|
|
|
|
|
Basic
|
|
$
1.17
|
|
$
1.01
|
Assuming Dilution
|
|
$
1.16
|
|
$
0.99
|
Cash
Dividends Declared
|
|
$
0.18
|
|
$
0.17
|
Weighted
Average Number of Shares Outstanding (in millions):
|
|
|
Basic
|
|
41.6
|
|
38.6
|
Assuming Dilution
|
|
42.0
|
|
39.1
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
Dollars in
Millions
|
|
|
|
|
|
|
|
|
|
|
Mechanical Segment
|
|
Electrical Segment
|
|
|
Three
Months Ended
|
|
Three
Months Ended
|
|
|
March
31,
|
|
April
2,
|
|
March
31,
|
|
April
2,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Net
Sales
|
|
$
76.5
|
|
$
68.4
|
|
$
731.4
|
|
$
594.3
|
Income
from Operations
|
|
9.7
|
|
8.6
|
|
69.4
|
|
55.5
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
(Dollars
in Millions, Except Per Share Data)
|
|
|
(Unaudited)
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2012
|
|
2011
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
164.2
|
|
$
142.6
|
Trade Receivables, less Allowances
of $12.6 in 2012 and $13.6 million in
2011
|
|
508.7
|
|
424.2
|
Inventories
|
|
590.6
|
|
575.8
|
Prepaid Expenses and Other Current Assets
|
|
115.2
|
|
99.9
|
Deferred Income Tax Benefits
|
|
30.6
|
|
48.6
|
Total
Current Assets
|
|
1,409.3
|
|
1,291.1
|
|
|
|
|
|
Property,
Plant, Equipment and Noncurrent Assets
|
|
2,058.2
|
|
1,975.4
|
Total
Assets
|
|
$
3,467.5
|
|
$
3,266.5
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts Payable
|
|
$
308.4
|
|
$
249.4
|
Other Accrued Expenses
|
|
228.7
|
|
265.1
|
Current Maturities of Debt
|
|
15.2
|
|
10.0
|
Total
Current Liabilities
|
|
552.3
|
|
524.5
|
|
|
|
|
|
Long-Term
Debt
|
|
971.0
|
|
909.2
|
Other
Noncurrent Liabilities
|
|
258.6
|
|
256.4
|
Equity:
|
|
|
|
|
Total
Regal Beloit Corporation Shareholders' Equity
|
|
1,643.4
|
|
1,535.9
|
Noncontrolling
Interests
|
|
42.2
|
|
40.5
|
Total Equity
|
|
1,685.6
|
|
1,576.4
|
Total
Liabilities and Equity
|
|
$
3,467.5
|
|
$
3,266.5
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOW
|
|
|
|
Unaudited
|
|
|
|
|
|
Dollars in
Millions
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
March
31,
|
|
April
2,
|
|
|
|
2012
|
|
2011
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
Net
income
|
|
$
49.9
|
|
$
40.8
|
|
Adjustments to reconcile net income to net cash
provided
by operating activities (net of acquisitions):
|
|
|
|
|
|
Depreciation and amortization
|
|
30.9
|
|
21.6
|
|
Excess tax
benefits from share-based compensation
|
|
(0.6)
|
|
(0.4)
|
|
(Gain)loss
on disposition of property, net
|
|
(1.3)
|
|
0.2
|
|
Share-based compensation expense
|
|
2.1
|
|
1.8
|
|
Change in
assets and liabilities
|
|
(12.5)
|
|
(7.8)
|
|
Net cash
provided by operating activities
|
|
68.5
|
|
56.2
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
Additions
to property, plant and equipment
|
|
(19.8)
|
|
(27.7)
|
|
Sales of
investment securities
|
|
-
|
|
56.0
|
|
Business
acquisitions, net of cash acquired
|
|
(93.0)
|
|
(8.6)
|
|
Proceeds
from sale of assets
|
|
2.3
|
|
-
|
|
Net cash
provided by (used in) investing activities
|
|
(110.5)
|
|
19.7
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
Borrowings
under revolving credit facility
|
|
155.5
|
|
-
|
|
Repayments
under revolving credit facility
|
|
(93.5)
|
|
-
|
|
Net
proceeds under revolving credit facility
|
|
-
|
|
2.8
|
|
Proceeds
from short-term borrowings
|
|
6.0
|
|
-
|
|
Repayments
of short-term borrowings
|
|
(0.9)
|
|
-
|
|
Net
proceeds of short-term borrowings
|
|
-
|
|
10.0
|
|
Payments
of long-term debt
|
|
(0.1)
|
|
(0.1)
|
|
Dividends
paid to shareholders
|
|
(7.5)
|
|
(6.5)
|
|
Proceeds
from the exercise of stock options
|
|
1.7
|
|
0.6
|
|
Excess tax
benefits from share-based compensation
|
|
0.6
|
|
0.4
|
|
Net cash
provided by financing activities
|
|
61.8
|
|
7.2
|
|
|
|
|
|
|
|
EFFECT
OF EXCHANGE RATES ON CASH
|
|
1.8
|
|
1.8
|
|
|
|
|
|
|
|
Net increase in cash and cash
equivalents
|
|
21.6
|
|
84.9
|
|
Cash and cash equivalents at beginning
of period
|
|
142.6
|
|
174.5
|
|
Cash and cash equivalents at end of
period
|
|
$
164.2
|
|
$
259.4
|
|
|
|
|
|
|
|
NON-GAAP MEASURES
|
Unaudited
|
Dollars in
Millions
|
|
We prepare
financial statements in accordance with accounting principles
generally accepted in the United States (GAAP). We also disclose
adjusted diluted earnings per share (EPS), adjusted gross profit,
adjusted gross profit as a percentage of net sales, free cash flow
and free cash flow as a percentage of net income attributable to
Regal Beloit Corporation (collectively, "non-GAAP financial
measures"). We use these measures in our internal performance
reporting and for reports to the Board of Directors. We also
periodically disclose certain of these measures in our quarterly
earnings releases, on investor conference calls, and in investor
presentations and similar events. We believe that these non-GAAP
financial measures are useful measures for providing investors with
additional insight into our operating performance. This additional
information is not meant to be considered in isolation or as a
substitute for our results of operations prepared and presented in
accordance with GAAP. Free cash flow is defined as net cash
provided by operating activities less additions to property, plant
and equipment.
|
|
|
|
First
Qtr.
|
|
First
Qtr.
|
|
|
|
2012
|
|
2011
|
|
GAAP Net
Cash Provided by Operating Activities
|
|
$
68.5
|
|
$
56.2
|
|
Additions
to Property Plant and Equipment
|
|
(19.8)
|
|
(27.7)
|
|
Free Cash
Flow
|
|
$
48.7
|
|
$
28.5
|
|
Free Cash
Flow as a Percentage of Net Income
Attributable to Regal Beloit
|
|
100.0%
|
|
73.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[*] This earnings release includes non-GAAP financial measures.
Schedules that reconcile these non-GAAP financial measures to the
most comparable GAAP figures are included with this earnings
release.
SOURCE Regal Beloit Corporation