BELOIT, Wis., April 30, 2013 /PRNewswire/ -- Regal Beloit
Corporation (NYSE: RBC) today reported financial results for the
first quarter 2013. Net sales for the first quarter 2013 were
$778.2 million compared to
$807.9 million for the first quarter
of 2012. Net Income for the first quarter 2013 was
$50.7 million compared to
$49.9 million for the first quarter
of 2012. Diluted earnings per share for the first quarter
2013 were $1.09 compared to
$1.16 for the first quarter of 2012,
reflecting the higher share count.
"In the first quarter of 2013, Regal's end markets
were mixed. While the U.S. residential market grew in
line with expectations, the U.S. commercial and industrial markets
did not perform as well as we had expected earlier in the year.
Our North American HVAC sales were up 3.5% in the
quarter and sales in our Unico business remained strong," said
Regal Chairman and CEO Mark
Gliebe. "In spite of the top line challenges the
teams executed well on our synergy and simplification initiatives,
allowing us to maintain operating margins," continued
Mark Gliebe.
ADJUSTED DILUTED EARNINGS PER
SHARE*
|
|
Three
Months Ended
|
|
|
Mar 30, 2013
|
|
Mar 31, 2012
|
GAAP
Diluted Earnings Per Share
|
|
$
|
1.09
|
|
|
$
|
1.16
|
|
Purchase
Accounting Costs
|
|
—
|
|
|
0.01
|
|
Restructuring Costs
|
|
0.01
|
|
|
—
|
|
Gain on
Disposal of Real Estate
|
|
—
|
|
|
(0.02)
|
|
Retroactive Tax Credit
|
|
(0.02)
|
|
|
—
|
|
Adjusted
Diluted Earnings Per Share
|
|
$
|
1.08
|
|
|
$
|
1.15
|
|
*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.
NET
SALES
|
|
(Dollars
In Millions)
|
|
|
Three
Months Ended
|
|
|
Mar
30,
2013
|
|
Mar
31,
2012
|
|
%
Change
|
Net
Sales
|
|
$778.2
|
|
$
807.9
|
|
(3.7)%
|
|
|
|
|
|
|
|
Net Sales
by Segment:
|
|
|
|
|
|
|
Electrical
segment
|
|
711.0
|
|
731.4
|
|
(2.8)%
|
Mechanical
segment
|
|
67.2
|
|
76.5
|
|
(12.2)%
|
Electrical segment net sales in the first quarter 2013 included
$4.6 million from businesses acquired
within the last year. North American residential HVAC net
sales increased 3.5% for the first quarter 2013 compared to the
first quarter of 2012. Excluding the impact of the acquired
businesses, North American commercial and industrial motor net
sales decreased 6.7% for the same period.
Mechanical segment net sales for the first quarter 2013 included
$3.4 million from the businesses
acquired within the last year. Excluding the impact of
the acquired and divested businesses, Mechanical segment net sales
in North America decreased
6.9%.
First quarter 2013 net sales to regions outside the United States decreased 6.8% compared to
first quarter of 2012 and represented 33.6% of total net
sales. The impact of foreign currency exchange rates
decreased total net sales by 0.8% and international sales by 2.4%
for the first quarter 2013 compared to the first quarter of
2012.
In the first quarter 2013, sales of high efficiency products
grew 3.5% from the first quarter of 2012 and represented 19.6% of
net sales.
GROSS
PROFIT
|
|
(Dollars
in millions)
|
|
|
Three
Months Ended
|
|
|
Mar
30,
2013
|
|
Mar
31,
2012
|
Gross
Profit
|
|
$199.5
|
|
$197.6
|
As a percentage of net
sales
|
|
25.6
%
|
|
24.5
%
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
Electrical
segment
|
|
$181.3
|
|
$178.8
|
As a percentage of net
sales
|
|
25.5
%
|
|
24.4
%
|
Mechanical
segment
|
|
$
18.2
|
|
$
18.8
|
As a percentage of net
sales
|
|
27.1
%
|
|
24.5
%
|
First quarter 2013 gross profit included $0.5 million of restructuring expenses, reported
in the Electrical segment cost of sales. For the Mechanical
segment, first quarter 2012 gross profit included $0.5 million purchase accounting adjustments from
the acquired business.
OPERATING EXPENSES
|
|
(Dollars
in millions)
|
|
|
Three
Months Ended
|
|
|
Mar
30,
2013
|
|
Mar
31,
2012
|
Operating
Expenses
|
|
$
123.6
|
|
$118.5
|
As a percentage of net
sales
|
|
15.9
%
|
|
14.7
%
|
|
|
|
|
|
Operating
Expenses by Segment
|
|
|
|
|
Electrical
segment
|
|
$
114.0
|
|
$109.5
|
As a percentage of net
sales
|
|
16.0
%
|
|
15.0
%
|
Mechanical
segment
|
|
$
9.6
|
|
$
9.0
|
As a percentage of net
sales
|
|
14.3
%
|
|
11.8
%
|
Electrical segment operating expenses for the first quarter 2013
included restructuring expenses of $0.4
million and $0.6 million
incremental operating expenses from the acquired businesses.
Mechanical segment operating expenses for the first quarter 2013
included an incremental $0.3 million
from the acquired business. For the first quarter of 2012,
Mechanical segment operating expenses included a $1.3 million gain from the sale of surplus real
estate.
INCOME
FROM OPERATIONS
|
|
(Dollars
in millions)
|
|
|
Three
Months Ended
|
|
|
Mar
30,
2013
|
|
Mar
31,
2012
|
Income
from Operations
|
|
$
75.9
|
|
$
79.1
|
As a percentage of net
sales
|
|
9.8
%
|
|
9.8
%
|
|
|
|
|
|
Income
from Operations by Segment
|
|
|
|
|
Electrical
segment
|
|
$
67.3
|
|
$
69.4
|
As a percentage of net
sales
|
|
9.5
%
|
|
9.5
%
|
Mechanical
segment
|
|
$
8.6
|
|
$
9.7
|
As a percentage of net
sales
|
|
12.8
%
|
|
12.7
%
|
The effective tax rate for the first quarter 2013 was 23.2%
compared to 26.3% for the first quarter 2012. The decrease was
driven primarily by completion of the tax integration of the EPC
acquisition and the retroactive reinstatement of the R&D tax
credit.
Interest expense was down $1.2
million compared to the first quarter 2012 due to a decline
in average outstanding debt.
For the first quarter 2013, net cash provided by operating
activities was $66.0 million. For the
first quarter 2012, net cash provided by operating activities was
$68.5 million. Cash on hand at
March 30, 2013 was $411.9 million, an increase of $36.6 million from year end 2012. For the first
quarter 2013, free cash flow* represented 91.7% of net
income.
"As we look to the second quarter, sluggish demand in
our North American commercial and industrial markets is impacting
both our electrical and mechanical segments. To a lesser
extent, we are anticipating unfavorable market dynamics in the HVAC
channel. We expect diluted earnings per share for the
second quarter of 2013 to be $1.17 to
$1.25. Adding back $0.02
of restructuring charges, adjusted diluted earnings per share are
expected to be $1.19 to
$1.27," continued Mark
Gliebe.
Regal management will hold a conference call to discuss the
earnings release at 9:00 AM CDT
(10:00 AM EDT) on Wednesday, May 1, 2013. Individuals who
would like to participate by phone should dial 800-860-2442,
referencing Regal. International callers should dial
412-858-4600, referencing Regal. To view the presentation
during the call, please follow this link to Regal's Investors
page:
http://investors.regalbeloit.com/phoenix.zhtml?c=116222&p=irol-presentations.
To listen to the live audio and view the presentation via the
internet, please go to:
http://www.videonewswire.com/event.asp?id=93537.
A telephone replay of the call will be available through
August 1, 2013, at 877-344-7529,
conference ID 10027841. International callers should call
412-317-0088 using the same conference ID. A webcast replay
will be available until August 1,
2013, and can be accessed at
http://investors.regalbeloit.com/phoenix.zhtml?c=116222&p=irol-calendarPast or
at http://www.videonewswire.com/event.asp?id=93537.
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(A) filed on March
26, 2013 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 per Share Data)
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
Mar
30,
2013
|
|
Mar
31,
2012
|
Net
Sales
|
|
$
778.2
|
|
$
807.9
|
Cost of
Sales
|
|
578.7
|
|
610.3
|
Gross
Profit
|
|
199.5
|
|
197.6
|
Operating
Expenses
|
|
123.6
|
|
118.5
|
Income
From Operations
|
|
75.9
|
|
79.1
|
Interest
Expense
|
|
10.6
|
|
11.8
|
Interest
Income
|
|
0.7
|
|
0.4
|
Income
Before Taxes
|
|
66.0
|
|
67.7
|
Provision
For Income Taxes
|
|
15.3
|
|
17.8
|
Net
Income
|
|
50.7
|
|
49.9
|
Less: Net
Income Attributable to Noncontrolling
Interests, net of tax
|
|
1.2
|
|
1.2
|
Net Income
Attributable to Regal Beloit Corporation
|
|
$
49.5
|
|
$
48.7
|
Earnings
Per Share Attributable to Regal Beloit Corporation:
|
Basic
|
|
$
1.10
|
|
$
1.17
|
Assuming
Dilution
|
|
$
1.09
|
|
$
1.16
|
Cash
Dividends Declared
|
|
$
0.19
|
|
$
0.18
|
Weighted
Average Number of Shares Outstanding:
|
|
|
|
|
Basic
|
|
45.0
|
|
41.6
|
Assuming
Dilution
|
|
45.3
|
|
42.0
|
SEGMENT
INFORMATION
|
Unaudited
|
(Dollars
In Millions)
|
|
|
Electrical Segment
|
|
Mechanical Segment
|
|
|
Three
Months Ended
|
|
|
Mar
30,
2013
|
|
Mar
31,
2012
|
|
Mar
30,
2013
|
|
Mar
31,
2012
|
Net
Sales
|
|
$
711.0
|
|
$731.4
|
|
$
67.2
|
|
$
76.5
|
Income
from Operations
|
|
67.3
|
|
69.4
|
|
8.6
|
|
9.7
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
Unaudited
|
|
|
|
|
(Dollars
in Millions)
|
|
|
|
|
|
|
Mar
30,
2013
|
|
Dec
29,
2012
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and
Cash Equivalents
|
|
$
411.9
|
|
$
375.3
|
Trade
Receivables, less Allowances
of $10.8 million in 2013 and $10.2 million in
2012
|
|
509.3
|
|
446.0
|
Inventories
|
|
573.1
|
|
557.0
|
Prepaid
Expenses and Other Current Assets
|
|
113.4
|
|
112.9
|
Deferred
Income Tax Benefits
|
|
45.0
|
|
48.7
|
Total
Current Assets
|
|
1,652.7
|
|
1,539.9
|
|
|
|
|
|
Property,
Plant, Equipment and Noncurrent Assets
|
|
2,025.7
|
|
2,029.2
|
Total
Assets
|
|
$
3,678.4
|
|
$
3,569.1
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
Payable
|
|
328.0
|
|
251.8
|
Other
Accrued Expenses
|
|
205.7
|
|
218.3
|
Current
Maturities of Debt
|
|
67.7
|
|
63.8
|
Total
Current Liabilities
|
|
601.4
|
|
533.9
|
|
|
|
|
|
Long-Term
Debt
|
|
754.5
|
|
754.7
|
Other
Noncurrent Liabilities
|
|
279.6
|
|
284.0
|
Equity:
|
|
|
|
|
Total
Regal Beloit Corporation Shareholders' Equity
|
|
1,999.0
|
|
1,953.4
|
Noncontrolling Interests
|
|
43.9
|
|
43.1
|
Total
Equity
|
|
2,042.9
|
|
1,996.5
|
Total
Liabilities and Equity
|
|
$
3,678.4
|
|
$
3,569.1
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOW
|
Unaudited
|
(Dollars
in Millions)
|
|
|
Three
Months Ended
|
|
|
Mar
30,
2013
|
|
Mar
31,
2012
|
CASH FLOWS
FROM OPERATING ACTIVITIES:
|
|
|
|
|
Net
income
|
|
$
50.7
|
|
$
49.9
|
Adjustments to reconcile net income and changes in
assets and liabilities (net of acquisitions) to net cash provided
by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
31.6
|
|
30.9
|
Excess tax
benefits from share-based compensation
|
|
(0.6)
|
|
(0.6)
|
Gain on
disposition of property, net
|
|
—
|
|
(1.3)
|
Share-based compensation expense
|
|
2.3
|
|
2.1
|
Change in
assets and liabilities
|
|
(18.0)
|
|
(12.5)
|
Net cash
provided by operating activities
|
|
66.0
|
|
68.5
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES:
|
|
|
|
|
Additions
to property, plant, and equipment
|
|
(20.6)
|
|
(19.8)
|
Purchase
of investment securities
|
|
(7.6)
|
|
—
|
Sales of
investment securities
|
|
7.4
|
|
—
|
Business
acquisitions, net of cash acquired
|
|
(6.0)
|
|
(93.0)
|
Proceeds
from sale of assets
|
|
—
|
|
2.3
|
Net cash
used in investing activities
|
|
(26.8)
|
|
(110.5)
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES:
|
|
|
|
|
Borrowings
under revolving credit facility
|
|
—
|
|
155.5
|
Repayments
under revolving credit facility
|
|
—
|
|
(93.5)
|
Proceeds
from short-term borrowings
|
|
16.3
|
|
6.0
|
Repayments
of short-term borrowings
|
|
(12.5)
|
|
(0.9)
|
Repayments
of long-term debt
|
|
(0.1)
|
|
(0.1)
|
Dividends
paid to shareholders
|
|
(8.5)
|
|
(7.5)
|
Proceeds
from the exercise of stock options
|
|
1.2
|
|
1.7
|
Excess tax
benefits from share-based compensation
|
|
0.6
|
|
0.6
|
Net cash
(used in) provided by financing activities
|
|
(3.0)
|
|
61.8
|
|
|
|
|
|
EFFECT OF
EXCHANGE RATES ON CASH
|
|
0.4
|
|
1.8
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
|
36.6
|
|
21.6
|
Cash and
cash equivalents at beginning of period
|
|
375.3
|
|
142.6
|
Cash and
cash equivalents at end of period
|
|
$
411.9
|
|
$
164.2
|
NON-GAAP MEASURES
Unaudited
(Dollars in Millions Except Per Share Data)
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, adjusted income from
operations, 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.
ADJUSTED DILUTED EARNINGS PER
SHARE*
|
|
Three
Months Ended
|
|
|
Mar 30,
2013
|
|
Mar 31,
2012
|
GAAP Gross
Profit
|
|
$
199.5
|
|
$
197.6
|
Purchase
Accounting Costs
|
|
—
|
|
0.5
|
Restructuring Costs
|
|
0.5
|
|
—
|
Adjusted
Gross Profit
|
|
$
200.0
|
|
$
198.1
|
|
|
|
|
|
Adjusted
Gross Profit as a Percentage of Net Sales
|
|
25.7
%
|
|
24.5
%
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
Mar 30,
2013
|
|
Mar 31,
2012
|
GAAP
Income from Operations
|
|
$
75.9
|
|
$
79.1
|
Acquisition Costs and Purchase Accounting
Costs
|
|
—
|
|
0.5
|
Restructuring Costs
|
|
0.9
|
|
—
|
Gain on
Disposal of Real Estate
|
|
—
|
|
(1.3)
|
Adjusted
Income from Operations
|
|
$
76.8
|
|
$
78.3
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
Mar 30,
2013
|
|
Mar 31,
2012
|
GAAP Net
Cash Provided by Operating Activities
|
|
$
66.0
|
|
$
68.5
|
Additions
to Property Plant and Equipment
|
|
$
(20.6)
|
|
$
(19.8)
|
Free Cash
Flow
|
|
$
45.4
|
|
$
48.7
|
Free Cash
Flow as a Percentage of Net Income Attributable to Regal
Beloit
|
|
91.7
%
|
|
100.0
%
|
SOURCE Regal Beloit Corporation