RBC RBC Bearings Incorporated

REGAL-BELOIT Reports 52% Increase in First Quarter Earnings Per Share BELOIT, Wis., April 28 /PRNewswire-FirstCall/ -- REGAL-BELOIT CORPORATION (NYSE:RBC) today announced its first quarter 2005 financial results. Net income in the first quarter of 2005 was $12.3 million, a 78% increase from $6.9 million reported in the first quarter of 2004. Earnings per share were $.41 for the first quarter as compared to $.27 in the comparable period of 2004. This was an increase of 52% after the impact of 5.3 million additional shares outstanding. The added shares were a result of the shares issued to General Electric as part of the consideration paid for the acquisition of the HVAC Motors and Capacitors business and the dilutive effect of the Company's April 2004 convertible senior subordinated debt offering. First quarter net sales of the Company increased 107.1% to $337.8 million from $163.1 million in the first quarter of 2004. Excluding the impact of the Commercial AC Motors and HVAC Motors and Capacitors acquisitions of 2004, sales were $182.8 million, an increase of 12.1%. The Company continued to see strong demand throughout the Company's markets. Sales in the Electrical segment, excluding the impact of the acquisitions, increased 15.5%. Sales in the Mechanical segment increased 3.6%. Income from operations increased 108.9% to $25.9 million from $12.4 million reported for the first quarter of 2004. Income from operations as a percent of net sales for the first quarter of 2005 was 7.7%, as compared to the 7.6% reported in the first quarter last year. The Company's operations continued to be impacted by raw material inflation in the first quarter of 2005, which offset price increases and productivity improvements. The Company's long-term debt increased to $563.6 million at the end of the first quarter of 2005 from $547.4 million at the end of the fourth quarter of 2004. The increase was primarily due to an increase in working capital requirements to support the strong sales volume and higher levels of capital spending. "We are extremely pleased with the performance of our Company in the first quarter," said Henry W. Knueppel, President and CEO. "Our legacy electrical businesses achieved improved performance on solid revenue growth and the results from the acquisitions were strong and consistent with our previously announced guidance. While raw material costs continue to be a concern, we are confident in our ability to continue to execute our strategic initiatives and improve the margins of our businesses. The increase in the quarterly dividend announced this morning is another demonstration of our confidence in our ability to deliver strong financial results." "Earnings for the second quarter are projected to be in a range of $.60 - $.64 per share using the first quarter's average diluted shares," Knueppel added. "This guidance reflects the somewhat seasonal nature of the sales of the HVAC motor business and reflects our continued confidence in our legacy businesses and the earnings guidance previously provided for the acquisitions." REGAL-BELOIT will be holding a telephone conference call pertaining to this news release at 10:00 AM CDT (11:00 AM EDT) on Thursday, April 28, 2005. Interested parties should call 866-868-1282, referencing the REGAL-BELOIT conference call, access code 11540848. A replay of the call will be available through May 6, 2005 at 877-213-9653, access code 11540848. 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 GE; 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; 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 Except Per (Unaudited) Share Data Three Months Ended March 31, March 30, 2005 2004 Net Sales $337,823 $163,084 Cost of Sales 269,379 124,897 Gross Profit 68,444 38,187 Operating Expenses 42,579 25,743 Income From Operations 25,865 12,444 Interest Expense 5,454 1,327 Interest Income 48 3 Income Before Income Taxes and Minority Interest 20,459 11,120 Provision For Income Taxes 7,642 4,003 Income Before Minority Interest 12,817 7,117 Minority Interest in Income, Net of Tax 531 257 Net Income $12,286 $6,860 Per Share of Common Stock: Earnings Per Share $0.42 $0.27 Earnings Per Share - Assuming Dilution $0.41 $0.27 Cash Dividends Declared $0.12 $0.12 Average Number of Shares Outstanding 29,033,901 25,041,559 Average Number of Shares - Assuming Dilution 30,244,393 25,278,192 CONDENSED BALANCE SHEETS In Thousands of Dollars (Unaudited) (Audited) March 31, December 31, 2005 2004 Assets Current Assets: Cash and Cash Equivalents $28,882 $31,275 Receivables, less reserves of $2,396 in 2005 and $2,376 in 2004 201,092 176,941 Inventories 245,594 246,816 Other Current Assets 24,273 19,887 Total Current Assets 499,841 474,919 Net Property, Plant and Equipment 256,397 253,673 Goodwill 552,972 544,440 Purchased Intangible Assets, Net 50,002 52,058 Other Noncurrent Assets 26,062 26,962 Total Assets $1,385,274 $1,352,052 Liabilities and Shareholders' Investment Current Liabilities $204,509 $195,209 Long-Term Debt 563,572 547,350 Other Noncurrent Liabilities 72,434 71,314 Shareholders' Investment 544,759 538,179 Total Liabilities and Shareholders' Investment $1,385,274 $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 Electrical Segment Three Months Ended Three Months Ended March 31, March 30, March 31, March 30, 2005 2004 2005 2004 Net Sales $48,601 $46,898 $289,222 $116,186 Income From Operations $2,738 $2,745 $23,127 $9,699 REGAL-BELOIT CORPORATION 1st QUARTER ENDING March 31 March 30 2005 2004 (In thousands of dollars, except per share data) Net Sales $337,823 $163,084 Net Income $12,286 $6,860 Per Share of Common Stock: Earnings Per Share $.42 $0.27 Earnings Per Share - Assuming Dilution $.41 $0.27 Average Number of Shares Outstanding 29,033,901 25,041,559 Average Number of Shares - Assuming Dilution 30,244,393 25,278,192 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. 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 Web site: http://www.regal-beloit.com/

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