BELOIT, Wis., April 30 /PRNewswire-FirstCall/ -- Regal Beloit
Corporation (NYSE:RBC) today reported financial results for the
first quarter ended March 31, 2007. Strong performances by our
industrial businesses offset a weak residential HVAC market. The
residential HVAC market experienced record year-over-year decline
driven by the weak housing market and a comparison to a strong 2006
industry performance which was the result of the 13 SEER
legislation that went into effect in January of 2006. The Company's
initiatives continued to gain traction and had a significant impact
on the Company's performance. New products and acquisition growth
fueled sales growth, while Lean Six Sigma helped support operating
margins. Net sales increased 5.1% to $418.6 million from $398.3
million in the first quarter of 2006. In the Electrical segment,
sales increased 6.2% as industrial motor and generator sales
increases of 20% and 24% respectively, offset a 14% decline in
residential HVAC revenues. Motors sales growth was also aided by
$17.9 million of sales attributed to the Sinya motor business
acquired in the second quarter of 2006. Sales in the Mechanical
segment were down 2.1% from the prior year period; however, the
sale of substantially all of the assets of the Company's cutting
tools business in May 2006 reduced segment sales by approximately
$4.7 million for the quarter. The gross profit margin for the first
quarter of 2007 was 23.2% as compared to the 23.4% reported for the
first quarter of 2006. The reduction was a result of continued
increases in material costs and lower liquidations in our HVAC
business. Material cost increases were partially offset by higher
selling prices and productivity improvements. Income from
operations was $47.3 million or 11.3% of sales, an 8.5% increase
over the $43.6 million or 11.0% of sales reported for the first
quarter of 2006. Net income in the first quarter of 2007 was $26.8
million, a 12.7% increase from $23.8 million reported in the first
quarter of 2006. Diluted earnings per share increased 11.1% to $.80
as compared to $.72 for the first quarter of 2006. "We are pleased
with our results for the first quarter, especially considering the
most challenging residential HVAC market in decades and the
continued material cost pressures," commented Henry W. Knueppel,
Chairman and CEO, "The two-thirds of our business that is
commercial and industrial performed well during the quarter. While
we are not expecting the HVAC market to strengthen significantly in
the second quarter, we remain confident in our future as evidenced
by the recent 7.1% increase in our quarterly dividend. We expect
the EPS for the second quarter to be in the range of $.99 to
$1.06." Regal Beloit will be holding a conference call to discuss
first quarter financial results at 1:30 PM CDT (2:30 PM EDT) today.
Interested parties should call 800-288-8960, access code 871624. A
replay of the call will be available through May 14, 2007 at
800-475-6701, access code 871624. 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 United
States, Canada, Mexico, Europe and Asia. CAUTIONARY STATEMENT This
news release contains "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995.
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: -- economic changes in global markets
where we do business, such as currency exchange rates, inflation
rates, interest rates, recession, foreign government policies and
other external factors that we cannot control; -- unanticipated
fluctuations in commodity prices and raw material costs; --
cyclical downturns affecting the global market for capital goods;
-- unexpected issues and costs arising from the integration of
acquired companies and businesses; -- marketplace acceptance of new
and existing products including the loss of, or a decline in
business from, any significant customers; -- the impact of capital
market transactions that we may effect; the availability and
effectiveness of our information technology systems; --
unanticipated costs associated with litigation matters; actions
taken by our competitors; -- difficulties in staffing and managing
foreign operations; -- 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 28, 2007 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 news release are made only as of their respective
dates, and we undertake no obligation to update these statements to
reflect subsequent events or circumstances. See also Item 1A - Risk
Factors in the Company's Annual Report on Form 10-K filed on
February 28, 2007. STATEMENTS OF INCOME In Thousands of Dollars
(Unaudited) Three Months Ended March 31, April 1, 2007 2006 Net
Sales $ 418,646 $ 398,326 Cost of Sales 321,419 305,046 Gross
Profit 97,227 93,280 Operating Expenses 49,896 49,662 Income From
Operations 47,331 43,618 Interest Expense 5,066 4,795 Interest
Income 89 120 Income Before Taxes & Minority Interest 42,354
38,943 Provision For Income Taxes 14,690 14,342 Income Before
Minority Interest 27,664 24,601 Minority Interest in Income, Net of
Tax 851 813 Net Income $ 26,813 $ 23,788 Per Share of Common Stock:
Earnings Per Share $ .87 $ .77 Earnings Per Share - Assuming
Dilution $ .80 $ .72 Cash Dividends Declared $ .14 $ .13 Average
Number of Shares Outstanding 30,814,312 30,700,533 Average Number
of Shares - Assuming Dilution 33,547,519 32,957,209 CONDENSED
BALANCE SHEETS In Thousands of Dollars ASSETS (Unaudited) (Audited)
Current Assets: March 31, December 30, 2007 2006 Cash and Cash
Equivalents $ 43,086 $ 36,520 Receivables and Other Current Assets
299,511 257,510 Inventories 269,488 275,138 Total Current Assets
612,085 569,168 Net Property, Plant and Equipment 273,024 268,880
Goodwill 546,187 546,152 Other Noncurrent Assets 50,910 53,359
Total Assets $1,482,206 $1,437,559 Liabilities and Shareholders'
Investment Accounts Payable $ 120,377 $ 108,050 Commercial Paper
Borrowings 49,125 49,000 Other Current Liabilities 108,735 101,871
Long-Term Debt 323,542 323,946 Other Noncurrent Liabilities 105,597
104,717 Shareholders' Investment 774,830 749,975 Total Liabilities
and Shareholders' Investment $1,482,206 $1,437,559 SEGMENT
INFORMATION In Thousands of Dollars (Unaudited) Mechanical Segment
Electrical Segment Three Months Ended Three Months Ended March 31,
April 1, March 31, April 1, 2007 2006 2007 2006 Net Sales $51,846
$52,961 $366,800 $345,365 Income from Operations $6,326 $3,707
$41,005 $39,911 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS In
Thousands of Dollars (Unaudited) Three Months Ended March 31, 2007
April 1, 2006 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $
26,813 $ 23,788 Adjustments to reconcile net income to net cash
provided by operating activities; net of effect of acquisitions
Depreciation and amortization 9,883 8,115 Minority interest 851 813
Excess tax benefit from stock-based compensation (3,310) (450) Loss
(gain) on sale of assets 8 (8) Stock-based compensation expense 865
867 Change in assets and liabilities, net (24,703) (35,377) Net
cash provided by used in operating activities 10,407 (2,252) CASH
FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and
equipment (12,163) (7,257) Purchases of short-term investments --
(4,225) Business acquisitions, net of cash acquired (565) (565)
Sale of property, plant and equipment -- 5,207 Net cash (used) in
investing activities (12,728) (6,840) CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from short-term borrowing 9,200 -- Payments of
long-term debt (225) (197) Net (repayments) borrowings under
revolving credit facility (200) 3,500 Proceeds from commercial
paper borrowings, net 125 5,000 Dividends paid to shareholders
(4,345) (3,985) Proceeds from the exercise of stock options 747
1,363 Excess tax benefits from stock-based compensation 3,310 450
Net cash provided by financing activities 8,612 6,131 EFFECT OF
EXCHANGE RATE ON CASH 275 (66) Net increase (decrease) in cash and
cash equivalents 6,566 (3,027) Cash and cash equivalents at
beginning of period 36,520 32,747 Cash and cash equivalents at end
of period $ 43,086 $ 29,720 DATASOURCE: Regal Beloit Corporation
CONTACT: David A. Barta, Vice President, Chief Financial Officer of
Regal Beloit Corporation, +1-608-361-7405 Web site:
http://www.regal-beloit.com/
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