BELOIT, Wis., Feb. 17, 2015 /PRNewswire/ -- Regal Beloit
Corporation (NYSE: RBC) today reported a fourth quarter 2014
diluted loss per share of ($2.61),
which included a charge of $3.27 per
share for goodwill and long-lived asset impairments. Fourth
quarter adjusted diluted earnings per share* were $0.82, which included (i) a negative $0.22 per share impact from a charge to accounts
receivable related to the Company's Venezuela operations, partially offset by (ii)
an $0.11 per share net benefit of
LIFO and other inventory reserves. The net effect of these two
items was an adverse impact of $0.11
per share.
Key highlights for the fourth quarter 2014 financial results
versus the year-ago period include:
- Total net sales grew 7% to $776
million driven by organic growth of 3%, acquisition growth
of 5% and a foreign currency translation decline of 1%.
- Adjusted operating profit margin was relatively flat at
7.8%.
- Net cash provided by operating activities increased 7%.
Fourth quarter segment highlights versus the year-ago period
include:
- Power Transmission net sales increased 13% to $68 million driven by strength in North America partially offset by weakness in
EMEA. Adjusted operating profit margins increased from 11.0%
to 12.3% primarily driven by leverage on higher volumes.
- Commercial and Industrial Systems net sales increased 5% to
$451 million. Acquisition
growth of 8% was partially offset by a 2% decrease from foreign
currency translation. North American motor sales grew
mid-single digits but were offset by weakness in oil and gas and
Asia Pacific. Adjusted operating profit margins decreased
from 7.8% to 4.7% due primarily to the charge to accounts
receivable related to our Venezuela operations.
- Climate Solutions net sales increased 9% to $256 million due to positive market conditions
and the SEER 13 pre-build. Adjusted operating profit margins
increased from 7.2% to 11.9% due to leverage on higher volumes, net
favorable LIFO and other inventory reserve adjustments and
improvements from the simplification initiative.
*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.
"Recent changes in the global environment resulting from
rapidly declining oil prices led us to further reduce our exposure
in Venezuela, clouding what was
otherwise a quarter operationally in line with our guidance," said
Regal Chairman and CEO Mark
Gliebe. "We experienced strong organic growth in key
end markets and we started to see benefits from our simplification
initiative. At the end of the year, we announced the
transformational acquisition of Emerson's PTS business which will
significantly contribute to 2015 earnings. Two weeks ago, we closed
on the acquisition and quickly began our integration."
2015 Outlook
"We are executing on the three-year plan we laid out for
investors in December 2014. Current business conditions give
us confidence in our North American operations but unfavorable
currency translation, uncertainty in Europe and a decline in oil and gas
investments will be headwinds in 2015. Despite these
challenges, we continue to expect our margin improvement
initiatives will enable us to achieve the first year targets for
our legacy businesses that we communicated in December. We
expect 2015 adjusted diluted earnings per share to be in the range
of $5.45 to $5.85, which includes
accretion from the PTS acquisition," continued Mr. Gliebe.
Conference Call
Management will hold a conference call to discuss the earnings
release at 9:00 AM CST (10:00 AM EST) on Tuesday,
February 17, 2015. Individuals who would like to
participate by phone should dial 888-317-6003 and enter 3880424
when prompted. International callers should dial 412-317-6061
and enter 3880424 when prompted. 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=101366.
A telephone replay of the call will be available through
May 18, 2015, at 877-344-7529,
conference ID 10058928. International callers should call
412-317-0088 using the same conference ID. A webcast replay
will be available until May 18, 2015,
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=101366.
Regal Beloit Corporation is a leading manufacturer of electric
motors, electrical motion controls, power transmission and power
generation products serving markets throughout the world.
Regal is headquartered in Beloit,
Wisconsin, and has manufacturing, sales and service
facilities throughout the United
States, Canada,
Mexico, Europe and Asia. Regal'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: uncertainties regarding our ability to execute our
restructuring plans within expected costs and timing; increases in
our overall debt levels as a result of the acquisition of the Power
Transmission Solutions ("PTS") business from Emerson Electric Co.,
or otherwise and our ability to repay principal and interest on our
outstanding debt; 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 such as the PTS acquisition, including the timing and
impact of purchase accounting adjustments; unanticipated costs or
expenses we may incur related to product warranty issues; currency
devaluations, non-payment of receivables, governmental restrictions
such as price and margin controls, or other difficult operating
conditions relating to our doing business in Venezuela; 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; effect on earnings of any
significant impairment of goodwill or intangible assets; 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 26, 2014
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 INCOME
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
(Amounts in Millions,
Except per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
Net Sales
|
|
$ 775.6
|
|
$ 727.3
|
|
$ 3,257.1
|
|
$ 3,095.7
|
Cost of
Sales
|
|
587.5
|
|
549.3
|
|
2,459.8
|
|
2,312.5
|
Gross
Profit
|
|
188.1
|
|
178.0
|
|
797.3
|
|
783.2
|
Operating
Expenses
|
|
140.2
|
|
124.8
|
|
516.3
|
|
494.2
|
Goodwill
Impairment
|
|
116.9
|
|
76.3
|
|
117.9
|
|
76.3
|
Asset Impairments and
Other, Net
|
|
41.6
|
|
4.7
|
|
41.6
|
|
4.7
|
Total Operating
Expenses
|
|
298.7
|
|
205.8
|
|
675.8
|
|
575.2
|
Income (Loss) From
Operations
|
|
(110.6)
|
|
(27.8)
|
|
121.5
|
|
208.0
|
Interest
Expense
|
|
8.6
|
|
10.5
|
|
39.1
|
|
42.4
|
Interest
Income
|
|
2.5
|
|
1.8
|
|
7.9
|
|
4.9
|
Income (Loss) Before
Taxes
|
|
(116.7)
|
|
(36.5)
|
|
90.3
|
|
170.5
|
Provision for
(Benefit from) Income Taxes
|
|
(0.9)
|
|
(3.7)
|
|
54.2
|
|
44.5
|
Net Income
(Loss)
|
|
(115.8)
|
|
(32.8)
|
|
36.1
|
|
126.0
|
Less: Net Income
Attributable to Noncontrolling
Interests
|
|
0.7
|
|
0.4
|
|
5.1
|
|
6.0
|
Net Income (Loss)
Attributable to Regal Beloit Corporation
|
|
$ (116.5)
|
|
$ (33.2)
|
|
$ 31.0
|
|
$ 120.0
|
Earnings (Loss) Per
Share Attributable to Regal Beloit Corporation:
|
|
|
|
|
|
|
|
Basic
|
|
$ (2.61)
|
|
$ (0.74)
|
|
$ 0.69
|
|
$ 2.66
|
Assuming
Dilution
|
|
$ (2.61)
|
|
$ (0.74)
|
|
$ 0.69
|
|
$ 2.64
|
Cash Dividends
Declared
|
|
$ 0.22
|
|
$ 0.20
|
|
$ 0.86
|
|
$ 0.79
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
44.7
|
|
45.1
|
|
45.0
|
|
45.0
|
Assuming
Dilution
|
|
44.7
|
|
45.1
|
|
45.3
|
|
45.4
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
Unaudited
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$ 334.1
|
|
$ 466.0
|
Trade Receivables,
less Allowances
of $11.6 million in 2014 and $11.5 million in
2013
|
|
447.5
|
|
463.8
|
Inventories
|
|
691.7
|
|
618.7
|
Prepaid Expenses and
Other Current Assets
|
|
109.4
|
|
130.6
|
Deferred Income Tax
Benefits
|
|
67.0
|
|
46.8
|
Total Current
Assets
|
|
1,649.7
|
|
1,725.9
|
Net Property, Plant,
Equipment and Noncurrent Assets
|
|
1,757.9
|
|
1,917.6
|
Total
Assets
|
|
$ 3,407.6
|
|
$ 3,643.5
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
Payable
|
|
$ 312.2
|
|
$ 304.6
|
Other Accrued
Expenses
|
|
240.7
|
|
237.9
|
Current Maturities of
Debt
|
|
8.4
|
|
158.4
|
Total Current
Liabilities
|
|
561.3
|
|
700.9
|
|
|
|
|
|
Long-Term
Debt
|
|
625.4
|
|
609.0
|
Other Noncurrent
Liabilities
|
|
241.6
|
|
231.2
|
Equity:
|
|
|
|
|
Total Regal Beloit
Corporation Shareholders' Equity
|
|
1,934.4
|
|
2,056.2
|
Noncontrolling
Interests
|
|
44.9
|
|
46.2
|
Total
Equity
|
|
1,979.3
|
|
2,102.4
|
Total Liabilities and
Equity
|
|
$ 3,407.6
|
|
$ 3,643.5
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$ (115.8)
|
|
$ (32.8)
|
|
36.1
|
|
$ 126.0
|
Adjustments to
reconcile net income (loss) and changes in assets
and liabilities (net of acquisitions) to net cash provided by
operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
35.1
|
|
33.4
|
|
138.7
|
|
128.5
|
Excess tax
benefits from share-based compensation
|
|
(0.1)
|
|
(0.1)
|
|
(1.3)
|
|
(0.8)
|
Goodwill
impairment
|
|
116.9
|
|
76.3
|
|
117.9
|
|
76.3
|
Asset
impairment and other, net
|
|
41.6
|
|
4.7
|
|
41.6
|
|
4.7
|
Loss on
disposition of assets, net
|
|
1.4
|
|
1.9
|
|
1.8
|
|
2.0
|
Share-based
compensation expense
|
|
3.4
|
|
3.1
|
|
11.9
|
|
11.4
|
Loss on sale
of consolidated joint venture
|
|
—
|
|
—
|
|
1.9
|
|
—
|
Loss on
Venezuela currency devaluation
|
|
10.4
|
|
—
|
|
10.4
|
|
3.6
|
Gain on
disposal of real estate
|
|
(11.9)
|
|
—
|
|
(13.9)
|
|
—
|
Change in
operating assets and liabilities, net of acquisitions
|
|
(9.9)
|
|
(20.0)
|
|
(46.9)
|
|
(46.7)
|
Net cash provided by
operating activities
|
|
71.1
|
|
66.5
|
|
298.2
|
|
305.0
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Additions to
property, plant, and equipment
|
|
(23.1)
|
|
(17.3)
|
|
(83.6)
|
|
(82.7)
|
Net sales
(purchases) of investment securities
|
|
8.0
|
|
1.0
|
|
(1.9)
|
|
0.7
|
Business
acquisitions, net of cash acquired
|
|
—
|
|
(32.0)
|
|
(128.2)
|
|
(38.4)
|
Additions of
equipment on operating leases
|
|
(0.1)
|
|
(4.7)
|
|
(4.6)
|
|
(8.3)
|
Proceeds
received from disposal of real estate
|
|
11.5
|
|
—
|
|
11.5
|
|
—
|
Grants
received for capital expenditures
|
|
—
|
|
—
|
|
—
|
|
1.6
|
Proceeds from
sale of consolidated joint venture
|
|
0.2
|
|
—
|
|
0.9
|
|
—
|
Proceeds from
sale of assets
|
|
0.9
|
|
—
|
|
1.0
|
|
1.7
|
Net cash used in
investing activities
|
|
(2.6)
|
|
(53.0)
|
|
(204.9)
|
|
(125.4)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net
(repayments) borrowings under revolving credit facility
|
|
(43.0)
|
|
—
|
|
17.0
|
|
—
|
Net proceeds
(repayments) of short-term borrowings
|
|
0.5
|
|
(1.5)
|
|
0.2
|
|
(0.5)
|
Repayments of
long-term debt
|
|
(0.3)
|
|
(0.1)
|
|
(150.4)
|
|
(55.9)
|
Dividends paid
to shareholders
|
|
(9.8)
|
|
(9.0)
|
|
(37.8)
|
|
(35.1)
|
Payments of
contingent consideration
|
|
(5.3)
|
|
—
|
|
(13.9)
|
|
—
|
Proceeds from
the exercise of stock options
|
|
0.1
|
|
(0.8)
|
|
0.9
|
|
1.5
|
Excess tax
benefits from share-based compensation
|
|
0.1
|
|
0.1
|
|
1.3
|
|
0.8
|
Repurchase of
common stock
|
|
—
|
|
—
|
|
(35.0)
|
|
—
|
Distribution
to noncontrolling interest
|
|
—
|
|
—
|
|
(0.3)
|
|
—
|
Purchase of
subsidiary shares from noncontrolling interest
|
|
—
|
|
—
|
|
—
|
|
(1.7)
|
Net cash used in by
financing activities
|
|
(57.7)
|
|
(11.3)
|
|
(218.0)
|
|
(90.9)
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH
EQUIVALENTS
|
|
(4.0)
|
|
1.1
|
|
(7.2)
|
|
2.0
|
Net increase
(decrease) in cash and cash equivalents
|
|
6.8
|
|
3.3
|
|
(131.9)
|
|
90.7
|
Cash and cash
equivalents at beginning of period
|
|
327.3
|
|
462.7
|
|
466.0
|
|
375.3
|
Cash and cash
equivalents at end of period
|
|
$ 334.1
|
|
$ 466.0
|
|
$ 334.1
|
|
$ 466.0
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
Net Sales
|
|
$ 451.2
|
|
$ 431.2
|
|
$ 256.2
|
|
$ 235.9
|
|
$ 68.2
|
|
$ 60.2
|
|
775.6
|
|
727.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
(18.7)%
|
|
(8.5)%
|
|
2.8 %
|
|
6.1 %
|
|
(49.1)%
|
|
(9.1)%
|
|
(14.2)%
|
|
(3.8)%
|
Adjusted Operating
Margin Percentage
|
|
4.7 %
|
|
7.8 %
|
|
11.9 %
|
|
7.2 %
|
|
12.3 %
|
|
11.0 %
|
|
7.8 %
|
|
7.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth
|
|
(1.9)%
|
|
|
|
9.2 %
|
|
|
|
14.0 %
|
|
|
|
3.0 %
|
|
|
Acquisitions, Net
Divestitures
|
|
8.1 %
|
|
|
|
—%
|
|
|
|
—%
|
|
|
|
4.8 %
|
|
|
Foreign Currency
Impact
|
|
(1.6)%
|
|
|
|
(0.6)%
|
|
|
|
(0.6)%
|
|
|
|
(1.2)%
|
|
|
|
|
Twelve Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
Net Sales
|
|
$ 1,856.1
|
|
$ 1,746.6
|
|
$ 1,134.8
|
|
$ 1,098.6
|
|
$ 266.2
|
|
$ 250.5
|
|
$ 3,257.1
|
|
$ 3,095.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
1.8 %
|
|
4.7 %
|
|
8.8 %
|
|
9.9 %
|
|
(4.4)%
|
|
6.7 %
|
|
3.7 %
|
|
6.7 %
|
Adjusted Operating
Margin Percentage
|
|
7.8 %
|
|
8.8 %
|
|
11.7 %
|
|
10.3 %
|
|
11.3 %
|
|
11.6 %
|
|
9.4 %
|
|
9.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth
|
|
(0.2)%
|
|
|
|
3.5 %
|
|
|
|
6.3 %
|
|
|
|
1.6 %
|
|
|
Acquisitions, Net
Divestitures
|
|
7.4 %
|
|
|
|
—%
|
|
|
|
—%
|
|
|
|
4.2 %
|
|
|
Foreign Currency
Impact
|
|
(0.9)%
|
|
|
|
(0.2)%
|
|
|
|
—%
|
|
|
|
(0.6)%
|
|
|
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 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. 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. In addition, since our
management often uses these non-GAAP financial measures to manage
and evaluate our business, make operating decisions, and forecast
our future results, we believe disclosing these measures helps
investors evaluate our business in the same manner as management.
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 forward
looking) and adjusted operating profit margin.
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 less the amount of sales
attributable to any divested businesses ("acquisition sales"), and
(ii) the impact of foreign currency translation. The impact of
foreign currency translation is determined by translating the
respective period's sales (excluding acquisition sales) using the
same 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. We 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
|
|
Twelve Months
Ended
|
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
GAAP Diluted Earnings
(Loss) Per Share
|
|
$
|
(2.61)
|
|
|
$
|
(0.74)
|
|
|
$
|
0.69
|
|
|
$
|
2.64
|
|
Goodwill
Impairment1
|
|
2.56
|
|
|
1.55
|
|
|
2.55
|
|
|
1.55
|
|
Asset Impairments and
Other, Net1
|
|
0.71
|
|
|
0.10
|
|
|
0.70
|
|
|
0.10
|
|
Venezuelan Currency
Devaluation2
|
|
0.15
|
|
|
—
|
|
|
0.15
|
|
|
—
|
|
Purchase Accounting
and Transaction Costs
|
|
0.09
|
|
|
0.02
|
|
|
0.14
|
|
|
0.02
|
|
Restructuring
Costs
|
|
0.03
|
|
|
0.04
|
|
|
0.18
|
|
|
0.09
|
|
Gain on Disposal of
Real Estate3
|
|
(0.20)
|
|
|
—
|
|
|
(0.23)
|
|
|
—
|
|
Loss on Divestiture
Bankruptcy4
|
|
0.09
|
|
|
—
|
|
|
0.09
|
|
|
—
|
|
Loss on Sale of Joint
Venture
|
|
—
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
Tax Benefit
Attributable to Prior Year
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.04)
|
|
Adjusted Diluted
Earnings Per Share
|
|
$
|
0.82
|
|
|
$
|
0.97
|
|
|
$
|
4.31
|
|
|
$
|
4.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED OPERATING
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
GAAP Income (Loss)
from Operations
|
|
$
|
(84.2)
|
|
|
$
|
(36.7)
|
|
|
$
|
7.1
|
|
|
$
|
14.4
|
|
|
$
|
(33.5)
|
|
|
$
|
(5.5)
|
|
|
$
|
(110.6)
|
|
|
$
|
(27.8)
|
|
Goodwill
Impairment1
|
|
99.7
|
|
|
64.2
|
|
|
6.1
|
|
|
—
|
|
|
11.1
|
|
|
12.1
|
|
|
116.9
|
|
|
76.3
|
|
Asset Impairments and
Other, Net1
|
|
—
|
|
|
4.7
|
|
|
15.4
|
|
|
—
|
|
|
26.2
|
|
|
—
|
|
|
41.6
|
|
|
4.7
|
|
Venezuelan Currency
Devaluation2
|
|
10.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.4
|
|
|
—
|
|
Purchase Accounting
and Transaction Costs
|
|
0.7
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
|
5.1
|
|
|
1.6
|
|
Restructuring
Costs
|
|
0.4
|
|
|
—
|
|
|
1.8
|
|
|
2.7
|
|
|
0.2
|
|
|
—
|
|
|
2.4
|
|
|
2.7
|
|
Gain on Disposal of
Real Estate3
|
|
(11.9)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.9)
|
|
|
—
|
|
Loss on Divestiture
Bankruptcy4
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|
—
|
|
Adjusted Income from
Operations
|
|
$
|
21.4
|
|
|
$
|
33.8
|
|
|
$
|
30.4
|
|
|
$
|
17.1
|
|
|
$
|
8.4
|
|
|
$
|
6.6
|
|
|
$
|
60.2
|
|
|
$
|
57.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Margin
%
|
|
|
(18.7)%
|
|
|
|
(8.5)%
|
|
|
|
2.8%
|
|
|
|
6.1%
|
|
|
|
(49.1)%
|
|
|
|
(9.1)%
|
|
|
|
(14.2)%
|
|
|
|
(3.8)%
|
|
Adjusted Operating
Margin %
|
|
|
4.7%
|
|
|
|
7.8%
|
|
|
|
11.9%
|
|
|
|
7.2%
|
|
|
|
12.3%
|
|
|
|
11.0%
|
|
|
|
7.8%
|
|
|
|
7.9%
|
|
ADJUSTED OPERATING
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
|
Jan 3,
2015
|
|
Dec 28,
2013
|
GAAP Income (Loss)
from Operations
|
|
$
|
33.6
|
|
|
$
|
81.9
|
|
|
$
|
99.6
|
|
|
$
|
109.2
|
|
|
$
|
(11.7)
|
|
|
$
|
16.9
|
|
|
$
|
121.5
|
|
|
$
|
208.0
|
|
Goodwill
Impairment1
|
|
100.7
|
|
|
64.2
|
|
|
6.1
|
|
|
—
|
|
|
11.1
|
|
|
12.1
|
|
|
117.9
|
|
|
76.3
|
|
Asset Impairments and
Other, Net1
|
|
—
|
|
|
4.7
|
|
|
15.4
|
|
|
—
|
|
|
26.2
|
|
|
—
|
|
|
41.6
|
|
|
4.7
|
|
Venezuelan Currency
Devaluation2
|
|
10.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.4
|
|
|
—
|
|
Purchase Accounting
and Transaction Costs
|
|
4.0
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
|
8.4
|
|
|
1.6
|
|
Restructuring
Costs
|
|
1.6
|
|
|
2.2
|
|
|
11.4
|
|
|
4.0
|
|
|
0.2
|
|
|
—
|
|
|
13.2
|
|
|
6.2
|
|
Gain on Disposal of
Real Estate3
|
|
(13.9)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.9)
|
|
|
—
|
|
Loss on Divestiture
Bankruptcy4
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|
—
|
|
Loss on Sale of Joint
Venture
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
Adjusted Income from
Operations
|
|
$
|
144.6
|
|
|
$
|
154.6
|
|
|
$
|
132.5
|
|
|
$
|
113.2
|
|
|
$
|
30.2
|
|
|
$
|
29.0
|
|
|
$
|
307.3
|
|
|
$
|
296.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Margin
%
|
|
|
1.8%
|
|
|
|
4.7%
|
|
|
|
8.8%
|
|
|
|
9.9%
|
|
|
|
(4.4)%
|
|
|
|
6.7%
|
|
|
|
3.7%
|
|
|
|
6.7%
|
|
Adjusted Operating
Margin %
|
|
|
7.8%
|
|
|
|
8.8%
|
|
|
|
11.7%
|
|
|
|
10.3%
|
|
|
|
11.3%
|
|
|
|
11.6%
|
|
|
|
9.4%
|
|
|
|
9.6%
|
|
_______________________________
1
|
In the course of
conducting its annual goodwill impairment analysis for 2014,
management concluded that impairment expenses of $116.9 million for
goodwill and $41.6 million for long-lived assets were required in
the fourth quarter due primarily to the sharp decline in the price
of oil and other commodities. The after-tax impact was $3.27
per share. These amounts are subject to
finalization.
|
|
|
2
|
Effective January 3,
2015, the Company changed the exchange rate it applies to Bolivar
denominated transactions from 6.3 to 51.0 per U.S. dollar, which is
in line with the SICAD II exchange rate resulting in a $10.4
million devaluation charge. Management believes that this devalued
rate best represents the economics of the Company's business
activity in Venezuela as of that date.
|
|
|
3
|
Represents gain on
the sale of a facility in China that was recently relocated to a
new plant in Wuxi.
|
|
|
4
|
In the fourth quarter
of 2014, the company that purchased the divested pool and spa motor
business from the Company in 2011 filed for bankruptcy resulting in
accounts receivable and inventory write offs totaling $6.3 million,
of which $1.5 million was recorded in cost of goods sold and $4.8
million was recorded in operating expense.
|
RECONCILIATION OF
2015 ADJUSTED ANNUAL GUIDANCE
|
|
Minimum
|
|
Maximum
|
2015 GAAP EPS Annual
Guidance
|
|
$
|
4.91
|
|
|
$
|
5.31
|
|
Restructuring
|
|
0.21
|
|
|
0.21
|
|
Purchase Accounting
and Transaction Costs
|
|
0.33
|
|
|
0.33
|
|
2015 Adjusted EPS
Annual Guidance
|
|
$
|
5.45
|
|
|
$
|
5.85
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/regal-beloit-corporation-announces-fourth-quarter-2014-financial-results-300036792.html
SOURCE Regal Beloit Corporation