BELOIT, Wis., May 6, 2019 /PRNewswire/ -- Regal Beloit
Corporation (NYSE: RBC) reported first quarter 2019 diluted
earnings per share of $1.99, up 52%
from the prior year. First quarter 2019 adjusted diluted earnings
per share* were $1.43, up 13% from
the prior year.
Key financial results for the first quarter 2019 included:
- Total net sales of $853.8 million
decreased 2.8% from the prior year and included a negative 1.7%
impact from foreign currency, a negative 4.0% impact from the
businesses divested/to be exited, and a positive 3.9% impact from
acquisitions. The result was a negative organic sales growth rate
of 1.0%.
- Income from operations was $120.6
million or 14.1% of net sales, up 410 basis points from
prior year. Adjusted income from operations was $91.2 million or 11.0% of adjusted net sales, up
60 basis points from prior year.
- Debt decreased $91.8 million from
$1,307.1 million at the end of 2018
to $1,215.3 million. Net debt
decreased $107.5 million from
$1,058.5 million at the end of 2018
to $951.0 million.
- Debt to EBITDA was 2.3, down from 2.7 at the end of 2018. Net
debt to adjusted EBITDA was 1.8, down from 2.0 at the end of
2018.
First quarter 2019 segment results versus the prior year first
quarter included:
- Commercial and Industrial Systems Segment net sales were
$380.3 million, a decrease of 8.1%.
Acquisitions had a positive impact of 8.3%, businesses divested/to
be exited had a negative 8.0% impact, and foreign currency had a
negative 2.1% impact. The result was a negative organic sales
growth rate of 6.3% as strength in commercial HVAC and North
American industrial markets was more than offset by the timing on
large power generation projects—expected to ship in the second half
of 2019, weakness in China, and
weakness in the North American pool pump market. Operating margin
was 14.1%. Excluding net adjustments of $30.7 million, adjusted operating margin was 6.0%
of adjusted net sales.
- Climate Solutions Segment net sales were $263.3 million, an increase of 1.3%. The
businesses divested/to be exited had a negative 1.1% impact, and
foreign currency had a negative 1.2% impact. The result was an
organic sales growth rate of 3.6% driven by strength in North
American residential HVAC and commercial refrigeration, partially
offset by weakness in international markets. Operating margin was
14.8%. Adjusted operating margin was 15.7% of adjusted net
sales.
- Power Transmission Solutions Segment net sales were
$210.2 million, an increase of 2.6%.
The businesses divested/to be exited had a 0.6% impact, and foreign
currency had a negative 1.4% impact. The result was a positive
organic sales growth rate of 3.4% driven by increased demand in
distribution, metals, and oil & gas markets, partially offset
by weakness in agriculture and beverage markets. Operating margin
was 13.4%. Including net adjustments of $1.3
million, adjusted operating margin was 14.4% of adjusted net
sales.
*This earnings release includes non-GAAP financial
measures. Descriptions of why we believe these non-GAAP
measures are useful and reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP measures are included
with this earnings release.
"The first quarter was a solid start to the year for Regal.
We were able to increase adjusted operating margin by 60 basis
points and drive adjusted EPS up 13%, overcoming slight market
headwinds specifically in our C&I business" said Regal CEO
Louis Pinkham.
2019 Outlook
"We are reaffirming our adjusted diluted earnings per share
guidance of $6.15 to $6.55, which would make 2019 another record year
for earnings," continued Mr. Pinkham.
The Company forecasts 2019 GAAP diluted earnings per share of
$6.68 to $7.08. The difference between the GAAP diluted
earnings per share guidance and the adjusted diluted earnings per
share guidance relates to expected restructuring and related costs
of $0.18 per share, gain on
businesses divested and assets to be exited of $0.74 per share, net income from businesses to be
divestedexited of $0.05 per share,
and remaining CEO transition costs of $0.08 per share.
The Company's 2019 guidance excludes the sales and earnings from
a number of businesses that have been or are expected to be
divested or exited. The divestiture or exit of some of these
businesses has not been previously disclosed. Please see the table
in the appendix for details.
Conference Call
Regal will hold a conference call to discuss the earnings
release at 9:00 am CDT (10:00 am EDT) on Tuesday,
May 7, 2019. To listen to the live audio and view the
presentation during the call, please visit Regal's Investors
website: http://investors.regalbeloit.com. To listen by phone or to
ask the presenters a question, dial 1.888.317.6003 (U.S. callers)
or +1.412.317.6061 (international callers) and enter 7903361# when
prompted.
A webcast replay will be available at the link above, and a
telephone replay will be available at 1.877.344.7529 (U.S. callers)
or +1.412.317.0088 (international callers), using a replay access
code of 10130611#. Both will be accessible until August 6, 2019.
About the Company
Regal Beloit Corporation (NYSE: RBC) is a leading manufacturer
of electric motors and controls, power generation products and
power transmission products serving customers throughout the world.
We create a better tomorrow by developing and responsibly producing
energy-efficient products and systems.
Our company is comprised of three operating segments: Commercial
and Industrial Systems, Climate Solutions and Power Transmission
Solutions. Regal is headquartered in Beloit, Wisconsin and has manufacturing, sales
and service facilities worldwide. For more information, visit
RegalBeloit.com.
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 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," "expect," "intend," "estimate," "forecast,"
"anticipate," "believe," "should," "project" or "plan" or the
negative of these terms or other similar words. These
forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties, assumptions and other
factors, some of which are beyond our control, which could cause
actual results to differ materially from those expressed or implied
by such forward-looking statements, including but not limited to:
uncertainties regarding our ability to execute our restructuring
plans within expected costs and timing; actions taken by our
competitors and our ability to effectively compete in the
increasingly competitive global electric motor, drives and
controls, power generation and power transmission industries; our
ability to develop new products based on technological innovation,
such as the Internet of Things, and marketplace acceptance of new
and existing products, including products related to technology not
yet adopted or utilized in certain geographic locations in which we
do business; fluctuations in commodity prices and raw material
costs; our dependence on significant customers; risks associated
with global manufacturing; issues and costs arising from the
integration of acquired companies and businesses and the timing and
impact of purchase accounting adjustments; our overall debt levels
and our ability to repay principal and interest on our outstanding
debt; prolonged declines in one or more markets we serve, such as
heating, ventilation, air conditioning, refrigeration, power
generation, oil and gas, unit material handling or water heating;
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, government policies,
including policy changes affecting taxation, trade, tariffs,
immigration, customs, border actions and the like, and other
external factors that we cannot control; product liability and
other litigation, or claims by end users, government agencies or
others that our products or our customers' applications failed to
perform as anticipated, particularly in high volume applications or
where such failures are alleged to be the cause of property or
casualty claims; unanticipated liabilities of acquired businesses;
unanticipated adverse effects or liabilities from business exits or
divestitures; 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; effects on earnings of any significant
impairment of goodwill or intangible assets; losses from failures,
breaches, attacks or disclosures involving our information
technology infrastructure and data; cyclical downturns affecting
the global market for capital goods; 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
with the U.S. Securities and Exchange Commission on February 26, 2019 and from time to time in other
filed reports. 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 release 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 INCOME
|
|
|
Unaudited
|
|
|
|
|
(Amounts in Millions,
Except per Share Data)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
Net Sales
|
|
$
|
853.8
|
|
|
$
|
878.8
|
|
Cost of
Sales
|
|
619.2
|
|
|
643.9
|
|
Gross
Profit
|
|
234.6
|
|
|
234.9
|
|
Operating
Expenses
|
|
104.0
|
|
|
146.7
|
|
Impairments
|
|
10.0
|
|
|
—
|
|
Total Operating
Expenses
|
|
114.0
|
|
|
146.7
|
|
Income from
Operations
|
|
120.6
|
|
|
88.2
|
|
Other Expenses,
net
|
|
0.1
|
|
|
0.4
|
|
Interest
Expense
|
|
13.6
|
|
|
13.0
|
|
Interest
Income
|
|
1.1
|
|
|
0.2
|
|
Income before
Taxes
|
|
108.0
|
|
|
75.0
|
|
Provision for Income
Taxes
|
|
21.2
|
|
|
15.7
|
|
Net Income
|
|
86.8
|
|
|
59.3
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
|
0.9
|
|
|
0.9
|
|
Net Income
Attributable to Regal Beloit Corporation
|
|
$
|
85.9
|
|
|
$
|
58.4
|
|
Earnings Per Share
Attributable to Regal Beloit Corporation:
|
|
|
|
|
Basic
|
|
$
|
2.01
|
|
|
$
|
1.32
|
|
Assuming
Dilution
|
|
$
|
1.99
|
|
|
$
|
1.31
|
|
Cash Dividends
Declared Per Share
|
|
$
|
0.28
|
|
|
$
|
0.26
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
Basic
|
|
42.8
|
|
|
44.2
|
|
Assuming
Dilution
|
|
43.1
|
|
|
44.5
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
Unaudited
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Mar 30,
2019
|
|
Dec 29,
2018
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
264.3
|
|
|
$
|
248.6
|
|
Trade Receivables,
less Allowances of $8.7 Million in 2019 and $13.3 Million in
2018
|
|
545.9
|
|
|
551.9
|
|
Inventories
|
|
803.8
|
|
|
767.2
|
|
Prepaid Expenses and
Other Current Assets
|
|
222.5
|
|
|
250.0
|
|
Total Current
Assets
|
|
1,836.5
|
|
|
1,817.7
|
|
|
|
|
|
|
Net Property, Plant,
Equipment and Noncurrent Assets
|
|
2,869.4
|
|
|
2,806.1
|
|
Total
Assets
|
|
$
|
4,705.9
|
|
|
$
|
4,623.8
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
Payable
|
|
$
|
429.6
|
|
|
$
|
424.8
|
|
Other Accrued
Expenses
|
|
244.8
|
|
|
258.2
|
|
Current Maturities of
Debt
|
|
2.1
|
|
|
0.5
|
|
Total Current
Liabilities
|
|
676.5
|
|
|
683.5
|
|
|
|
|
|
|
Long-Term
Debt
|
|
1,213.2
|
|
|
1,306.6
|
|
Other Noncurrent
Liabilities
|
|
372.2
|
|
|
295.2
|
|
Equity:
|
|
|
|
|
Total Regal Beloit
Corporation Shareholders' Equity
|
|
2,414.9
|
|
|
2,310.5
|
|
Noncontrolling
Interests
|
|
29.1
|
|
|
28.0
|
|
Total
Equity
|
|
2,444.0
|
|
|
2,338.5
|
|
Total Liabilities and
Equity
|
|
$
|
4,705.9
|
|
|
$
|
4,623.8
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
|
|
|
Unaudited
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net Income
|
|
$
|
86.8
|
|
|
$
|
59.3
|
|
Adjustments to
Reconcile Net Income and Changes in Assets and Liabilities (Net of
Acquisitions and Divestitures) to Net Cash Provided by Operating
Activities:
|
|
|
|
|
Depreciation and
Amortization
|
|
34.3
|
|
|
34.8
|
|
Loss on Disposal of
Assets
|
|
0.1
|
|
|
0.2
|
|
(Gain) Loss on
Business Divested and Assets to be Exited
|
|
(31.2)
|
|
|
—
|
|
Share-Based
Compensation Expense
|
|
4.3
|
|
|
3.4
|
|
Change in Operating
Assets and Liabilities
|
|
(76.0)
|
|
|
(55.2)
|
|
Net Cash Provided by
Operating Activities
|
|
18.3
|
|
|
42.5
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Additions to
Property, Plant and Equipment
|
|
(20.2)
|
|
|
(19.3)
|
|
Proceeds Received
from Sales of Property, Plant and Equipment
|
|
—
|
|
|
0.3
|
|
Net Sales of
Investment Securities
|
|
—
|
|
|
0.5
|
|
Proceeds Received
from Disposal of Businesses
|
|
119.4
|
|
|
—
|
|
Net Cash Provided by
(Used in) Investing Activities
|
|
99.2
|
|
|
(18.5)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Net (Repayments)
Borrowings Under Revolving Credit Facility
|
|
(69.6)
|
|
|
41.0
|
|
Net Borrowings
(Repayments) from Short-Term Borrowings
|
|
1.6
|
|
|
(0.4)
|
|
Repayments of
Long-Term Debt
|
|
(24.1)
|
|
|
(0.1)
|
|
Dividends Paid to
Shareholders
|
|
(12.0)
|
|
|
(11.5)
|
|
Repurchase of Common
Stock
|
|
—
|
|
|
(26.0)
|
|
Distributions to
Noncontrolling Interest
|
|
(0.3)
|
|
|
—
|
|
Shares Surrendered
for Taxes
|
|
(1.6)
|
|
|
(0.9)
|
|
Net Cash (Used in)
Provided by Financing Activities
|
|
(106.0)
|
|
|
2.1
|
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH EQUIVALENTS
|
|
4.2
|
|
|
4.2
|
|
Net Increase in Cash
and Cash Equivalents
|
|
15.7
|
|
|
30.3
|
|
Cash and Cash
Equivalents at Beginning of Period
|
|
248.6
|
|
|
139.6
|
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
264.3
|
|
|
$
|
169.9
|
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Commercial &
Industrial
Systems
|
|
Climate
Solutions
|
|
Power
Transmission
Solutions
|
|
Total
Regal
|
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
Net Sales
|
|
$
|
380.3
|
|
|
$
|
414.0
|
|
|
$
|
263.3
|
|
|
$
|
259.9
|
|
|
$
|
210.2
|
|
|
$
|
204.9
|
|
|
$
|
853.8
|
|
|
$
|
878.8
|
|
Net Sales for
Businesses Divested/to be Exited
|
|
—
|
|
|
(33.5)
|
|
|
(15.5)
|
|
|
(18.0)
|
|
|
(5.6)
|
|
|
(4.3)
|
|
|
(21.1)
|
|
|
(55.8)
|
|
Adjusted Net
Sales*
|
|
$
|
380.3
|
|
|
$
|
380.5
|
|
|
$
|
247.8
|
|
|
$
|
241.9
|
|
|
$
|
204.6
|
|
|
$
|
200.6
|
|
|
$
|
832.7
|
|
|
$
|
823.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Margin
|
|
14.1
|
%
|
|
7.0
|
%
|
|
14.8
|
%
|
|
12.4
|
%
|
|
13.4
|
%
|
|
13.1
|
%
|
|
14.1
|
%
|
|
10.0
|
%
|
Adjusted Operating
Margin*
|
|
6.0
|
%
|
|
7.1
|
%
|
|
15.7
|
%
|
|
12.9
|
%
|
|
14.4
|
%
|
|
13.6
|
%
|
|
11.0
|
%
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth*
|
|
(6.3)
|
%
|
|
4.6
|
%
|
|
3.6
|
%
|
|
5.0
|
%
|
|
3.4
|
%
|
|
9.2
|
%
|
|
(1.0)
|
%
|
|
5.8
|
%
|
Acquisitions
|
|
8.3
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
3.9
|
%
|
|
—
|
%
|
Businesses
Divested/to be Exited
|
|
(8.0)
|
%
|
|
1.0
|
%
|
|
(1.1)
|
%
|
|
(1.2)
|
%
|
|
0.6
|
%
|
|
(0.4)
|
%
|
|
(4.0)
|
%
|
|
—
|
%
|
Foreign Currency
Impact
|
|
(2.1)
|
%
|
|
3.0
|
%
|
|
(1.2)
|
%
|
|
1.1
|
%
|
|
(1.4)
|
%
|
|
2.2
|
%
|
|
(1.7)
|
%
|
|
2.2
|
%
|
NON-GAAP MEASURES AND OTHER DEFINITIONS
Unaudited
(Dollars in Millions, Except per Share Data)
We prepare financial statements in accordance with accounting
principles generally accepted in the
United States of America ("GAAP"). We also periodically
disclose certain financial measures in our quarterly earnings
releases, on investor conference calls, and in investor
presentations and similar events that may be considered "non-GAAP"
financial measures. 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.
In this earnings release, we disclose the following non-GAAP
financial measures, and we reconcile these measures in the tables
below to the most directly comparable GAAP financial measures:
adjusted diluted earnings per share (both historical and
projected), adjusted income from operations, adjusted operating
margin, adjusted net sales, net debt, adjusted EBITDA, adjusted net
income attributable to Regal Beloit Corporation, free cash flow,
adjusted income before taxes, adjusted provision for income taxes,
adjusted effective tax rate, net sales from ongoing business,
adjusted income from operations of ongoing business, ongoing
business adjusted operating margin and adjusted diluted earnings
per share for ongoing business. We believe that these non-GAAP
financial measures are useful measures for providing investors with
additional information regarding our results of operations and for
helping investors understand and compare our operating results
across accounting periods and compared to our peers. Our management
primarily uses adjusted income from operations and adjusted
operating margin to help us manage and evaluate our business and
make operating decisions, while adjusted diluted earnings per
share, net debt, adjusted EBITDA, adjusted net sales, adjusted net
income attributable to Regal Beloit Corporation, free cash flow,
adjusted income before taxes, adjusted provision for income taxes,
adjusted effective tax rate, net sales from ongoing business,
adjusted income from operations of ongoing business, ongoing
business adjusted operating margin and adjusted diluted earnings
per share for ongoing business are primarily used to help us
evaluate our business and forecast our future results. Accordingly,
we believe disclosing and reconciling each of these measures helps
investors evaluate our business in the same manner as
management.
In addition to these non-GAAP measures, we also use the term
"organic sales" to refer to GAAP sales from existing operations
excluding sales from acquired businesses recorded prior to the
first anniversary of the acquisition ("net sales from business
acquired") and excluding sales from business divested/to be exited
("net sales from business divested/to be exited") recorded prior to
the first anniversary of the exit and excluding the impact of
foreign currency translation. The impact of foreign currency
translation is determined by translating the respective period's
organic sales using the currency exchange rates that were in effect
during the prior year periods. We use the term "organic sales
growth" to refer to the increase in our sales between periods that
is attributable to organic sales. For further clarification, we may
use the term "acquisition growth" to refer to the increase in our
sales between periods that is attributable to acquisition
sales.
ADJUSTED DILUTED
EARNINGS PER SHARE
|
|
Three Months
Ended
|
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
GAAP Diluted Earnings
Per Share
|
|
$
|
1.99
|
|
|
$
|
1.31
|
|
Restructuring and
Related Costs
|
|
0.04
|
|
|
0.03
|
|
(Gain) Loss on
Business Divested and Assets to be Exited
|
|
(0.59)
|
|
|
—
|
|
Net Income from
Businesses Divested/to be Exited
|
|
(0.04)
|
|
|
(0.08)
|
|
CEO Transition
Costs
|
|
0.03
|
|
|
—
|
|
Adjusted Diluted
Earnings Per Share
|
|
$
|
1.43
|
|
|
$
|
1.26
|
|
2019 ADJUSTED
ANNUAL GUIDANCE
|
|
Minimum
|
|
Maximum
|
2019 Diluted EPS
Annual Guidance
|
|
$
|
6.68
|
|
|
$
|
7.08
|
|
Restructuring and
Related Costs
|
|
0.18
|
|
|
0.18
|
|
(Gain) Loss on
Businesses Divested and Assets to be Exited
|
|
(0.74)
|
|
|
(0.74)
|
|
Net Income from
Businesses Divested/to be Exited
|
|
(0.05)
|
|
|
(0.05)
|
|
CEO Transition
Costs
|
|
0.08
|
|
|
0.08
|
|
2019 Adjusted Diluted
EPS Annual Guidance
|
|
$
|
6.15
|
|
|
$
|
6.55
|
|
ADJUSTED INCOME
FROM OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Commercial
&
Industrial
Systems
|
|
Climate
Solutions
|
|
Power
Transmission
Solutions
|
|
Total
Regal
|
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
GAAP Income from
Operations
|
|
$
|
53.5
|
|
|
$
|
29.1
|
|
|
$
|
38.9
|
|
|
$
|
32.3
|
|
|
$
|
28.2
|
|
|
$
|
26.8
|
|
|
$
|
120.6
|
|
|
$
|
88.2
|
|
Restructuring and
Related Costs
|
|
2.1
|
|
|
1.3
|
|
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
2.3
|
|
|
1.7
|
|
Purchase Accounting
and Transaction Costs
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
(Gain) Loss on
Business Divested and Assets to be Exited
|
|
(33.6)
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
(31.2)
|
|
|
—
|
|
Operating (Income)
Loss from Businesses Divested/to be Exited
|
|
—
|
|
|
(3.3)
|
|
|
(1.9)
|
|
|
(1.6)
|
|
|
(0.3)
|
|
|
0.4
|
|
|
(2.2)
|
|
|
(4.5)
|
|
CEO Transition
Costs
|
|
0.7
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
Adjusted Income from
Operations
|
|
$
|
22.8
|
|
|
$
|
27.1
|
|
|
$
|
38.9
|
|
|
$
|
31.1
|
|
|
$
|
29.5
|
|
|
$
|
27.2
|
|
|
$
|
91.2
|
|
|
$
|
85.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Margin
%
|
|
14.1%
|
|
7.0%
|
|
14.8%
|
|
12.4%
|
|
13.4%
|
|
13.1%
|
|
14.1
|
%
|
|
10.0
|
%
|
Adjusted Operating
Margin %
|
|
6.0%
|
|
7.1%
|
|
15.7%
|
|
12.9%
|
|
14.4%
|
|
13.6%
|
|
11.0
|
%
|
|
10.4
|
%
|
DEBT TO
EBITDA
|
|
|
|
Last Twelve
Months
|
|
|
|
|
Mar 30,
2019
|
|
Dec 29,
2018
|
Net Income
|
|
$
|
263.3
|
|
|
$
|
235.8
|
|
Interest
Expense
|
|
|
|
55.8
|
|
|
55.2
|
|
Interest
Income
|
|
|
|
(2.8)
|
|
|
(1.9)
|
|
Taxes
|
|
|
|
61.9
|
|
|
56.4
|
|
Depreciation and
Amortization
|
|
|
|
141.9
|
|
|
142.4
|
|
EBITDA
|
|
|
|
$
|
520.1
|
|
|
$
|
487.9
|
|
Restructuring and
Related Costs
|
|
|
|
8.3
|
|
|
7.7
|
|
Purchase Accounting
and Transactions Costs
|
|
|
|
5.5
|
|
|
5.4
|
|
Impairment and Exit
Related Costs
|
|
|
|
44.9
|
|
|
34.9
|
|
CEO Transition
Costs
|
|
|
|
5.4
|
|
|
3.8
|
|
Operating Income from
Businesses Divested/to be Exited
|
|
|
|
(17.3)
|
|
|
(19.6)
|
|
Gain on Sale of
Assets
|
|
|
|
(2.2)
|
|
|
(2.2)
|
|
Gain on Divestiture
of Business
|
|
|
|
(41.2)
|
|
|
—
|
|
Adjusted
EBITDA
|
|
|
|
$
|
523.5
|
|
|
$
|
517.9
|
|
|
|
|
|
|
|
|
Current Maturities of
Long-Term Debt
|
|
|
|
$
|
2.1
|
|
|
$
|
0.5
|
|
Long-Term
Debt
|
|
|
|
1,213.2
|
|
|
1,306.6
|
|
Total Gross
Debt
|
|
|
|
$
|
1,215.3
|
|
|
$
|
1,307.1
|
|
Cash
|
|
|
|
(264.3)
|
|
|
(248.6)
|
|
Net
Debt
|
|
|
|
$
|
951.0
|
|
|
$
|
1,058.5
|
|
|
|
|
|
|
|
|
Gross
Debt/EBITDA
|
|
|
|
2.3
|
|
|
2.7
|
|
Gross Debt/Adjusted
EBITDA
|
|
|
|
2.3
|
|
|
2.5
|
|
|
|
|
|
|
|
|
Net
Debt/EBITDA
|
|
|
|
1.8
|
|
|
2.2
|
|
Net Debt/Adjusted
EBITDA
|
|
|
|
1.8
|
|
|
2.0
|
|
FREE CASH
FLOW
|
|
Three Months
Ended
|
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
Net Cash Provided by
Operating Activities
|
|
$
|
18.3
|
|
|
$
|
42.5
|
|
Additions to Property
Plant and Equipment
|
|
(20.2)
|
|
|
(19.3)
|
|
Free Cash
Flow
|
|
$
|
(1.9)
|
|
|
$
|
23.2
|
|
ADJUSTED EFFECTIVE
TAX RATE
|
|
Three Months
Ended
|
|
|
Mar 30,
2019
|
|
Mar 31,
2018
|
Income before
Taxes
|
|
$
|
108.0
|
|
|
$
|
75.0
|
|
Provision for Income
Taxes
|
|
21.2
|
|
|
15.7
|
|
Effective Tax
Rate
|
|
19.6
|
%
|
|
20.9
|
%
|
|
|
|
|
|
Income before
Taxes
|
|
$
|
108.0
|
|
|
$
|
75.0
|
|
(Gain) Loss on
Business Divested and Assets to be Exited
|
|
(31.2)
|
|
|
—
|
|
Adjusted Income
before Taxes
|
|
$
|
76.8
|
|
|
$
|
75.0
|
|
|
|
|
|
|
Provision for Income
Taxes
|
|
$
|
21.2
|
|
|
$
|
15.7
|
|
Tax Effect Business
Divested and Assets to be Exited
|
|
(5.3)
|
|
|
—
|
|
Adjusted Provision
for Income Taxes
|
|
$
|
15.9
|
|
|
$
|
15.7
|
|
|
|
|
|
|
Adjusted Effective
Tax Rate
|
|
20.7
|
%
|
|
20.9
|
%
|
ORGANIC SALES
GROWTH
|
|
Three Months
Ended
|
|
|
Commercial
&
Industrial
Systems
|
|
Climate
Solutions
|
|
Power
Transmission
Solutions
|
|
Total
Regal
|
Net Sales Three
Months Ended Mar 30, 2019
|
|
$
|
380.3
|
|
|
$
|
263.3
|
|
|
$
|
210.2
|
|
|
$
|
853.8
|
|
Net Sales from
Business Acquired
|
|
(31.7)
|
|
|
—
|
|
|
—
|
|
|
(31.7)
|
|
Net Sales from
Businesses Divested/to be Exited
|
|
—
|
|
|
(15.5)
|
|
|
(5.6)
|
|
|
(21.1)
|
|
Impact from Foreign
Currency Exchange Rates
|
|
8.1
|
|
|
2.9
|
|
|
2.8
|
|
|
13.8
|
|
Organic Sales Three
Months Ended Mar 30, 2019
|
|
$
|
356.7
|
|
|
$
|
250.7
|
|
|
$
|
207.4
|
|
|
$
|
814.8
|
|
|
|
|
|
|
|
|
|
|
Net Sales Three
Months Ended Mar 31, 2018
|
|
$
|
414.0
|
|
|
$
|
259.9
|
|
|
$
|
204.9
|
|
|
$
|
878.8
|
|
Net Sales from
Businesses Divested/to be Exited
|
|
(33.5)
|
|
|
(18.0)
|
|
|
(4.3)
|
|
|
(55.8)
|
|
Adjusted Net Sales
Three Months Ended Mar 31, 2018
|
|
$
|
380.5
|
|
|
$
|
241.9
|
|
|
$
|
200.6
|
|
|
$
|
823.0
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
Mar 30, 2019 Organic Sales Growth %
|
|
(6.3)
|
%
|
|
3.6
|
%
|
|
3.4
|
%
|
|
(1.0)
|
%
|
Three Months Ended
Mar 30, 2019 Net Sales Growth %
|
|
(8.1)
|
%
|
|
1.3
|
%
|
|
2.6
|
%
|
|
(2.8)
|
%
|
The following tables outline by quarter and full year the 2018
net sales and income from operations, and the full year adjusted
diluted earnings per share, illustrating the impact of businesses
divested and to be exited, which can be used to compare to Regal's
2019 guidance and actual performance.
|
|
Commercial
&
Industrial
Systems
|
|
Climate
Solutions
|
|
Power
Transmission
Solutions
|
|
Total
Regal
|
|
|
|
|
|
|
|
|
|
Fiscal 2018 First
Quarter Schedule for Ongoing Business
|
|
|
|
|
|
|
|
|
Net Sales Three
Months Ended March 31, 2018
|
|
$
|
414.0
|
|
|
$
|
259.9
|
|
|
$
|
204.9
|
|
|
$
|
878.8
|
|
Net Sales from
Businesses Divested/to be Exited
|
|
(33.5)
|
|
|
(18.0)
|
|
|
(4.3)
|
|
|
(55.8)
|
|
Net Sales from
Ongoing Business
|
|
$
|
380.5
|
|
|
$
|
241.9
|
|
|
$
|
200.6
|
|
|
$
|
823.0
|
|
|
|
|
|
|
|
|
|
|
GAAP Income from
Operations Three Months Ended March 31, 2018
|
|
$
|
29.1
|
|
|
$
|
32.3
|
|
|
$
|
26.8
|
|
|
$
|
88.2
|
|
Restructuring and
Related Costs
|
|
1.3
|
|
|
0.4
|
|
|
—
|
|
|
1.7
|
|
Income from
Operations of Businesses Divested/to be Exited
|
|
(3.3)
|
|
|
(1.6)
|
|
|
0.4
|
|
|
(4.5)
|
|
Adjusted Income from
Operations of Ongoing Business
|
|
$
|
27.1
|
|
|
$
|
31.1
|
|
|
$
|
27.2
|
|
|
$
|
85.4
|
|
|
|
|
|
|
|
|
|
|
Ongoing Business
Adjusted Operating Margin %
|
|
7.1
|
%
|
|
12.9
|
%
|
|
13.6
|
%
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
|
Fiscal 2018 Second
Quarter Schedule for Ongoing Business
|
|
|
|
|
|
|
|
|
Net Sales Three
Months Ended June 30, 2018
|
|
$
|
469.0
|
|
|
$
|
277.3
|
|
|
$
|
213.4
|
|
|
$
|
959.7
|
|
Net Sales from
Businesses Divested/to be Exited
|
|
(33.6)
|
|
|
(19.2)
|
|
|
(5.6)
|
|
|
(58.4)
|
|
Net Sales from
Ongoing Business
|
|
$
|
435.4
|
|
|
$
|
258.1
|
|
|
$
|
207.8
|
|
|
$
|
901.3
|
|
|
|
|
|
|
|
|
|
|
GAAP Income from
Operations Three Months Ended June 30, 2018
|
|
$
|
30.5
|
|
|
$
|
44.0
|
|
|
$
|
25.1
|
|
|
$
|
99.6
|
|
Restructuring and
Related Costs
|
|
0.7
|
|
|
0.7
|
|
|
0.1
|
|
|
1.5
|
|
Purchase Accounting
and Transaction Costs
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|
5.1
|
|
Income from
Operations of Businesses Divested/to be Exited
|
|
(3.0)
|
|
|
(2.1)
|
|
|
(0.3)
|
|
|
(5.4)
|
|
Adjusted Income from
Operations of Ongoing Business
|
|
$
|
33.3
|
|
|
$
|
42.6
|
|
|
$
|
24.9
|
|
|
$
|
100.8
|
|
|
|
|
|
|
|
|
|
|
Ongoing Business
Adjusted Operating Margin %
|
|
7.6
|
%
|
|
16.5
|
%
|
|
12.0
|
%
|
|
11.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
&
Industrial
Systems
|
|
Climate
Solutions
|
|
Power
Transmission
Solutions
|
|
Total
Regal
|
|
|
|
|
|
|
|
|
|
Fiscal 2018 Third
Quarter Schedule for Ongoing Business
|
|
|
|
|
|
|
|
|
Net Sales Three
Months Ended September 29, 2018
|
|
$
|
462.3
|
|
|
$
|
255.4
|
|
|
$
|
207.7
|
|
|
$
|
925.4
|
|
Net Sales from
Businesses Divested/to be Exited
|
|
(34.7)
|
|
|
(13.3)
|
|
|
(4.8)
|
|
|
(52.8)
|
|
Net Sales from
Ongoing Business
|
|
$
|
427.6
|
|
|
$
|
242.1
|
|
|
$
|
202.9
|
|
|
$
|
872.6
|
|
|
|
|
|
|
|
|
|
|
GAAP Income from
Operations Three Months Ended September 29, 2018
|
|
$
|
35.3
|
|
|
$
|
6.0
|
|
|
$
|
28.1
|
|
|
$
|
69.4
|
|
Restructuring and
Related Costs
|
|
1.9
|
|
|
0.3
|
|
|
0.1
|
|
|
2.3
|
|
Purchase Accounting
and Transaction Costs
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Impairment and Exit
Related Costs
|
|
—
|
|
|
34.9
|
|
|
—
|
|
|
34.9
|
|
Income from
Operations of Businesses Divested/to be Exited
|
|
(3.0)
|
|
|
(1.5)
|
|
|
(0.3)
|
|
|
(4.8)
|
|
Adjusted Income from
Operations of Ongoing Business
|
|
$
|
34.4
|
|
|
$
|
39.7
|
|
|
$
|
27.9
|
|
|
$
|
102.0
|
|
|
|
|
|
|
|
|
|
|
Ongoing Business
Adjusted Operating Margin %
|
|
8.0
|
%
|
|
16.4
|
%
|
|
13.8
|
%
|
|
11.7
|
%
|
|
|
|
|
|
|
|
|
|
Fiscal 2018 Fourth
Quarter Schedule for Ongoing Business
|
|
|
|
|
|
|
|
|
Net Sales Three
Months Ended December 29, 2018
|
|
$
|
436.7
|
|
|
$
|
232.2
|
|
|
$
|
212.8
|
|
|
$
|
881.7
|
|
Net Sales from
Businesses Divested/to be Exited
|
|
(35.6)
|
|
|
(11.2)
|
|
|
(5.2)
|
|
|
(52.0)
|
|
Net Sales from
Ongoing Business
|
|
$
|
401.1
|
|
|
$
|
221.0
|
|
|
$
|
207.6
|
|
|
$
|
829.7
|
|
|
|
|
|
|
|
|
|
|
GAAP Income from
Operations Three Months Ended December 29, 2018
|
|
$
|
32.1
|
|
|
$
|
33.3
|
|
|
$
|
24.4
|
|
|
$
|
89.8
|
|
Restructuring and
Related Costs
|
|
1.7
|
|
|
0.4
|
|
|
0.1
|
|
|
2.2
|
|
Purchase Accounting
and Transaction Costs
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Gain on Sale of
Assets
|
|
(1.5)
|
|
|
(0.7)
|
|
|
—
|
|
|
(2.2)
|
|
CEO Transition
Costs
|
|
1.8
|
|
|
1.1
|
|
|
0.9
|
|
|
3.8
|
|
Income from
Operations of Businesses Divested/to be Exited
|
|
(3.0)
|
|
|
(1.6)
|
|
|
(0.3)
|
|
|
(4.9)
|
|
Adjusted Income from
Operations of Ongoing Business
|
|
$
|
31.2
|
|
|
$
|
32.5
|
|
|
$
|
25.1
|
|
|
$
|
88.8
|
|
|
|
|
|
|
|
|
|
|
Ongoing Business
Adjusted Operating Margin %
|
|
7.8
|
%
|
|
14.7
|
%
|
|
12.1
|
%
|
|
10.7
|
%
|
|
|
|
Commercial
&
Industrial
Systems
|
|
Climate
Solutions
|
|
Power
Transmission
Solutions
|
|
Total
Regal
|
|
|
|
|
|
|
|
|
|
Fiscal 2018 Full
Year Schedule for Ongoing Business
|
|
|
|
|
|
|
|
|
Net Sales Twelve
Months Ended December 29, 2018
|
|
$
|
1,782.0
|
|
|
$
|
1,024.8
|
|
|
$
|
838.8
|
|
|
$
|
3,645.6
|
|
Net Sales from
Businesses Divested/to be Exited
|
|
(137.4)
|
|
|
(61.7)
|
|
|
(19.9)
|
|
|
(219.0)
|
|
Net Sales from
Ongoing Business
|
|
$
|
1,644.6
|
|
|
$
|
963.1
|
|
|
$
|
818.9
|
|
|
$
|
3,426.6
|
|
|
|
|
|
|
|
|
|
|
GAAP Income from
Operations Twelve Months Ended December 29, 2018
|
|
$
|
127.0
|
|
|
$
|
115.6
|
|
|
$
|
104.4
|
|
|
$
|
347.0
|
|
Restructuring and
Related Costs
|
|
5.6
|
|
|
1.8
|
|
|
0.3
|
|
|
7.7
|
|
Purchase Accounting
and Transaction Costs
|
|
5.4
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
Gain on Sale of
Assets
|
|
(1.5)
|
|
|
(0.7)
|
|
|
—
|
|
|
(2.2)
|
|
CEO Transition
Costs
|
|
1.8
|
|
|
1.1
|
|
|
0.9
|
|
|
3.8
|
|
Impairment and Exit
Related Costs
|
|
—
|
|
|
34.9
|
|
|
—
|
|
|
34.9
|
|
Income from
Operations of Businesses Divested/to be Exited
|
|
(12.3)
|
|
|
(6.8)
|
|
|
(0.5)
|
|
|
(19.6)
|
|
Adjusted Income from
Operations of Ongoing Business
|
|
$
|
126.0
|
|
|
$
|
145.9
|
|
|
$
|
105.1
|
|
|
$
|
377.0
|
|
|
|
|
|
|
|
|
|
|
Ongoing Business
Adjusted Operating Margin %
|
|
7.7
|
%
|
|
15.1
|
%
|
|
12.8
|
%
|
|
11.0
|
%
|
2018 ADJUSTED
DILUTED EARNINGS PER SHARE FOR ONGOING BUSINESS
|
|
Twelve Months
Ended
December 29, 2018
|
|
|
|
Adjusted Diluted
Earnings Per Share
|
|
|
|
$
|
6.00
|
|
Earnings Per Share
from Businesses Divested/to be Exited
|
|
|
|
(0.28)
|
|
Adjusted Diluted
Earnings Per Share for Ongoing Business
|
|
|
|
$
|
5.72
|
|
View original
content:http://www.prnewswire.com/news-releases/regal-beloit-corporation-announces-first-quarter-2019-financial-results-300844548.html
SOURCE Regal Beloit Corporation