BELOIT, Wis., May 11, 2015 /PRNewswire/ -- Regal Beloit
Corporation (NYSE: RBC) today reported a first quarter 2015 diluted
earnings per share of $0.81.
First quarter 2015 adjusted diluted earnings per share* were
$1.21.
Key highlights for the first quarter 2015 financial results
versus the prior year first quarter include:
- Total net sales grew 14% to $912
million driven by organic growth of 1%, net acquisition
growth of 16% and a decline due to foreign currency translation of
3%.
- Adjusted operating profit of $89
million represented an adjusted operating profit margin of
9.8%, an increase of 40 basis points from the prior year.
- Adjusted diluted earnings per share of $1.21 represented a 16% increase from the prior
year.
First quarter 2015 segment highlights versus the prior year
first quarter include:
- Power Transmission Solutions Segment net sales increased 179%
to $175 million, driven by
acquisition growth of $107 million
(or 170%), organic growth of 10%, and a negative foreign currency
translation impact of 1%. Adjusted operating profit margin
increased to 11.4% from 9.8% in the prior year, driven by higher
volume, benefits from the simplification initiative and the PTS
acquisition.
- Commercial and Industrial Systems Segment net sales increased
1% to $456 million driven by organic
growth of 1%, acquisition growth of 5%, and a negative foreign
currency translation impact of 5%. North American motor sales
grew modestly, partially offset by weakness in oil and gas and
China. Adjusted operating profit margin was 8.0% versus 8.5%
in the prior year, due primarily to the decline in oil and gas
volume and the negative impact of foreign currency.
- Climate Solutions Segment net sales decreased 2% to
$280 million, driven primarily by
negative foreign currency translation with relatively flat organic
growth. Net sales were negatively impacted by the SEER 13
pre-build as expected, partially offset by strength in the
Middle East and India.
Adjusted operating profit margin increased to 11.6% from 10.7% in
the prior year, due to the benefits of our 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.
"Regal had a strong start to the year with first quarter 2015
sales up 14% and adjusted earnings up 16% compared to the prior
year. In spite of headwinds from the weakness in oil and gas, the
SEER 13 pre-build and softness in the China markets, we delivered organic growth of
1%," said Regal Chairman and CEO Mark
Gliebe. "The integration of PTS, which we acquired in
the quarter, is on track and the business performed in line with
our expectations. We are also on track and seeing increased
benefits from our simplification initiative."
2015 Outlook
"As we progress through the year, we expect continued
headwinds from foreign currency translation, upstream oil and gas
markets and the SEER 13 pre-build. Additionally, as we exited
February, our North American orders slowed and continued at a
similar pace through April. Our self help simplification
initiative, as well as synergies from the PTS acquisition will help
to offset these challenges throughout the year. We expect
2015 adjusted diluted earnings per share to be in the range of
$5.45 to $5.75, which would represent
a 26% to 33% increase over the prior year," continued Mr.
Gliebe.
Conference Call
Management will hold a conference call to discuss the earnings
release at 9:00 AM CDT (10:00 AM EDT) on Monday,
May 11, 2015. Individuals who would like to
participate by phone should dial 888-317-6003 and enter 8902082
when prompted. International callers should dial 412-317-6061
and enter 8902082 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=102194.
A telephone replay of the call will be available through
August 11, 2015, at 877-344-7529,
conference ID 10064572. International callers should call
412-317-0088 using the same conference ID. A webcast replay
will be available until August 11,
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=102194.
About the Company
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: 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 March 4, 2015 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
|
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
Net Sales
|
|
$ 911.7
|
|
$ 801.2
|
Cost of
Sales
|
|
690.8
|
|
606.8
|
Gross
Profit
|
|
220.9
|
|
194.4
|
Operating
Expenses
|
|
157.3
|
|
124.7
|
Income From
Operations
|
|
63.6
|
|
69.7
|
Interest
Expense
|
|
13.6
|
|
10.4
|
Interest
Income
|
1.2
|
|
1.7
|
Income Before
Taxes
|
|
51.2
|
|
61.0
|
Provision for Income
Taxes
|
|
13.3
|
|
16.0
|
Net Income
|
|
37.9
|
|
45.0
|
Less: Net Income
Attributable to Noncontrolling Interests
|
|
1.5
|
|
1.2
|
Net Income
Attributable to Regal Beloit Corporation
|
|
$ 36.4
|
|
$ 43.8
|
Earnings Per Share
Attributable to Regal Beloit Corporation:
|
Basic
|
|
$ 0.81
|
|
$ 0.97
|
Assuming
Dilution
|
|
$ 0.81
|
|
$ 0.96
|
Cash Dividends
Declared
|
|
$ 0.22
|
|
$ 0.20
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
Basic
|
|
44.7
|
|
45.1
|
Assuming
Dilution
|
|
45.1
|
|
45.4
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
Unaudited
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Apr 4,
2015
|
|
Jan 3,
2015
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$ 229.7
|
|
$ 334.1
|
Trade Receivables,
less Allowances
of
$11.9 million in 2015 and $11.6 million in 2014
|
|
582.5
|
|
447.5
|
Inventories
|
|
784.1
|
|
691.7
|
Prepaid Expenses and
Other Current Assets
|
|
128.1
|
|
111.7
|
Deferred Income Tax
Benefits
|
|
76.2
|
|
67.0
|
Total Current
Assets
|
|
1,800.6
|
|
1,652.0
|
Net Property, Plant,
Equipment and Noncurrent Assets
|
|
3,166.9
|
|
1,755.6
|
Total
Assets
|
|
$ 4,967.5
|
|
$ 3,407.6
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
Payable
|
|
$ 390.2
|
|
$ 312.2
|
Other Accrued
Expenses
|
|
259.8
|
|
240.7
|
Current Maturities of
Debt
|
|
71.3
|
|
8.4
|
Total Current
Liabilities
|
|
721.3
|
|
561.3
|
|
|
|
|
|
Long-Term
Debt
|
|
1,875.6
|
|
625.4
|
Other Noncurrent
Liabilities
|
|
380.8
|
|
241.6
|
Equity:
|
|
|
|
|
Total Regal Beloit
Corporation Shareholders' Equity
|
|
1,945.5
|
|
1,934.4
|
Noncontrolling
Interests
|
|
44.3
|
|
44.9
|
Total
Equity
|
|
1,989.8
|
|
1,979.3
|
Total Liabilities and
Equity
|
|
$ 4,967.5
|
|
$ 3,407.6
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
|
|
Unaudited
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
|
$ 37.9
|
|
$ 45.0
|
Adjustments to
reconcile net income and changes in assets and liabilities (net of
acquisitions) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
35.9
|
|
32.8
|
Excess
tax benefits from share-based compensation
|
|
(0.7)
|
|
(1.0)
|
Loss on
disposition of assets, net
|
|
0.1
|
|
0.1
|
Share-based compensation expense
|
|
3.0
|
|
2.7
|
Loss on
Venezuela currency devaluation
|
|
1.5
|
|
—
|
Change
in operating assets and liabilities, net of acquisitions
|
|
(60.2)
|
|
(33.8)
|
Net cash provided by
operating activities
|
|
17.5
|
|
45.8
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Additions to property, plant, and equipment
|
|
(21.2)
|
|
(22.3)
|
Net
sales of investment securities
|
|
4.3
|
|
6.5
|
Business
acquisitions, net of cash acquired
|
|
(1,392.5)
|
|
(77.3)
|
Additions of equipment on operating leases
|
|
—
|
|
(1.6)
|
Proceeds
from sale of assets
|
|
1.3
|
|
—
|
Net cash used in
investing activities
|
|
(1,408.1)
|
|
(94.7)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Net
borrowings under revolving credit facility
|
|
76.5
|
|
—
|
Net
proceeds from short-term borrowings
|
|
2.3
|
|
0.4
|
Proceeds
from long-term debt
|
|
1,250.0
|
|
—
|
Repayments of long-term debt
|
|
(15.7)
|
|
(0.1)
|
Dividends paid to shareholders
|
|
(9.8)
|
|
(9.0)
|
Proceeds
from the exercise of stock options
|
|
3.0
|
|
0.6
|
Excess
tax benefits from share-based compensation
|
|
0.7
|
|
1.0
|
Distributions to noncontrolling interest
|
|
(0.3)
|
|
—
|
Purchase
of subsidiary shares from noncontrolling interest
|
|
(0.8)
|
|
—
|
Financing fees paid
|
|
(17.8)
|
|
—
|
Net cash provided by
(used in) financing activities
|
|
1,288.1
|
|
(7.1)
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH EQUIVALENTS
|
|
(1.9)
|
|
(3.6)
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
(104.4)
|
|
(59.6)
|
Cash and cash
equivalents at beginning of period
|
|
334.1
|
|
466.0
|
Cash and cash
equivalents at end of period
|
|
$ 229.7
|
|
$ 406.4
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
Net Sales
|
|
$ 456.4
|
|
$ 453.5
|
|
$ 280.4
|
|
$ 285.1
|
|
$ 174.9
|
|
$ 62.6
|
|
$ 911.7
|
|
$ 801.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
7.3 %
|
|
8.2 %
|
|
11.9 %
|
|
9.2 %
|
|
(1.8)%
|
|
9.8 %
|
|
7.0 %
|
|
8.7 %
|
Adjusted Operating
Margin Percentage*
|
|
8.0 %
|
|
8.5 %
|
|
11.6 %
|
|
10.7 %
|
|
11.4 %
|
|
9.8 %
|
|
9.8 %
|
|
9.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth
|
|
0.5 %
|
|
|
|
(0.3)%
|
|
|
|
9.9 %
|
|
|
|
0.9 %
|
|
|
Acquisitions, Net
Divestitures
|
|
5.0 %
|
|
|
|
—%
|
|
|
|
170.3 %
|
|
|
|
16.1 %
|
|
|
Foreign Currency
Impact
|
|
(4.8)%
|
|
|
|
(1.4)%
|
|
|
|
(1.3)%
|
|
|
|
(3.3)%
|
|
|
NON-GAAP MEASURES AND OTHER DEFINITIONS
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
|
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
GAAP Diluted Earnings
Per Share
|
|
$
|
0.81
|
|
|
$
|
0.96
|
|
Purchase Accounting
and Transaction Costs
|
|
0.36
|
|
|
0.02
|
|
Restructuring
Costs
|
|
0.02
|
|
|
0.06
|
|
Venezuelan Currency
Devaluation
|
|
0.02
|
|
|
—
|
|
Adjusted Diluted
Earnings Per Share
|
|
$
|
1.21
|
|
|
$
|
1.04
|
|
|
|
|
|
|
ADJUSTED OPERATING
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
|
Apr 4,
2015
|
|
Mar 29,
2014
|
GAAP Income (Loss)
from Operations
|
|
$
|
33.3
|
|
$
|
37.2
|
|
$
|
33.4
|
|
$
|
26.3
|
|
$
|
(3.1)
|
|
$
|
6.2
|
|
$
|
63.6
|
|
$
|
69.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase Accounting
and Transaction Costs
|
|
—
|
|
1.3
|
|
—
|
|
—
|
|
22.7
|
|
—
|
|
22.7
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
Costs
|
|
1.9
|
|
0.1
|
|
(1.0)
|
|
4.1
|
|
0.3
|
|
—
|
|
1.2
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venezuelan Currency
Devaluation1
|
|
1.5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.5
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Income from
Operations
|
|
$
|
36.7
|
|
$
|
38.6
|
|
$
|
32.4
|
|
$
|
30.4
|
|
$
|
19.9
|
|
$
|
6.2
|
|
$
|
89.0
|
|
$
|
75.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Margin
%
|
|
7.3%
|
|
8.2%
|
|
11.9%
|
|
9.2%
|
|
(1.8)%
|
|
9.8%
|
|
7.0%
|
|
|
8.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Margin %
|
|
8.0%
|
|
8.5%
|
|
11.6%
|
|
10.7%
|
|
11.4%
|
|
9.8%
|
|
9.8%
|
|
|
9.4%
|
RECONCILIATION OF
2015 ADJUSTED ANNUAL GUIDANCE
|
|
Minimum
|
|
Maximum
|
2015 GAAP EPS Annual
Guidance
|
|
$
|
4.80
|
|
|
$
|
5.10
|
|
Purchase Accounting
and Transaction Costs
|
|
0.47
|
|
|
0.47
|
|
Restructuring
|
|
0.16
|
|
|
0.16
|
|
Venezuelan Currency
Devaluation1
|
|
0.02
|
|
|
0.02
|
|
2015 Adjusted EPS
Annual Guidance
|
|
$
|
5.45
|
|
|
$
|
5.75
|
|
|
_______________________________
|
1 Although
the financial currency of Regal Beloit operations in Venezuela is
the U.S. dollar, a portion of the transactions are denominated in
local currency. Effective January 3, 2015, Regal Beloit began
applying the SICAD II exchange rate of 52 Venezuelan Bolivares per
U.S. dollar to re-measure local currency and balances into U.S.
dollars. During the first quarter of 2015, the Venezuelan
government announced changes to its exchange rate system that
included the launch of a new, market -based system known as the
SIMADI. The Company adopted the SIMADI rate after its introduction.
The SIMADI exchange rate was approximately 193 Venezuelan Bolivares
to the U.S. dollar as of April 4, 2015. Adopting the SIMADI
resulted in a $1.5 million pretax devaluation charge during the
first quarter 2015.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/regal-beloit-corporation-announces-first-quarter-2015-financial-results-300080710.html
SOURCE Regal Beloit Corporation