BELOIT, Wis., Aug. 8, 2016
/PRNewswire/ -- Regal Beloit Corporation (NYSE: RBC) today reported
second quarter 2016 diluted earnings per share of $1.26. Second quarter 2016 adjusted diluted
earnings per share* were $1.14.
Key financial results for the second quarter 2016 included:
- Total net sales of $838.6 million
decreased 11.0% from the prior year and included a negative 1.0%
foreign currency translation impact and a negative 0.2% divestiture
impact.
- Operating profit of $91.4 million
decreased 11.4% from the prior year benefitting from the gain on
sale of the Mastergear business. Adjusted operating profit of
$81.5 million decreased 27.5% from
the prior year. These decreases were primarily driven by lower
volume partially offset by benefits from the Simplification
initiative and cost controls.
- The diluted earnings per share of $1.26 included a $0.14 gain on the divestiture of the Mastergear
business in the quarter.
- Free cash flow was 175% of net income benefiting from a
$45.4 million decrease in inventory,
and the Company paid down $92.6
million of debt.
Second quarter 2016 segment results versus the prior year second
quarter included:
- Commercial and Industrial Systems Segment net sales were
$394.7 million, down 10.5%. The
majority of the decrease was from the impact of depressed oil &
gas and power generation activity, the impact of contractual
two-way material price formulas and weak China industrial markets. Foreign currency had
a negative 1.6% translation impact. Operating profit margin
decreased to 6.4%. Adjusted operating profit margin decreased to
6.5%. These decreases were due primarily to lower volume.
- Climate Solutions Segment net sales were $254.5 million, down 11.0%. Sales were
unfavorably impacted by a continued decline in Middle East HVAC
demand, the impact of contractual two-way material price formulas
and a slower start to the cooling season in the North American
residential HVAC market. Foreign currency had a negative 0.7%
translation impact. Operating profit margin decreased to 14.2%.
Adjusted operating profit margin decreased to 14.4%. These
decreases were due primarily to lower volume which was partially
offset by the benefits of the Simplification initiative and cost
controls.
- Power Transmission Solutions Segment net sales decreased 11.9%
to $189.4 million. Sales were
negatively impacted by weak oil & gas, metals, and agricultural
end markets. The Mastergear divestiture had a negative 0.9% impact.
Foreign currency had a negative 0.2% translation impact. Operating
profit margin increased to 16.0% benefitting from the gain on the
divestiture. Adjusted operating profit margin decreased to 10.1%,
due primarily to lower volume which was partially offset by
acquisition synergies and cost controls.
*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.
"Our results for the second quarter were generally in line
with our expectations. Sales were down due to the ongoing
challenges in oil & gas, the weak global industrial end
markets, and a slow start to the summer cooling season," said Regal
Chairman and CEO Mark Gliebe.
"Despite the weaker sales, we generated free cash flow of 175% of
net income, which contributed to a $93
million debt reduction in the quarter."
2016 Outlook
"We expect our second half organic sales to be down low
single digits from prior year, which is meaningfully better than
our first half results. We expect better performance in our
Climate businesses and easier comparisons in our oil & gas
businesses. Further, we expect our second half earnings to be
stronger than the first due to a favorable price/cost impact and
incremental savings from our Simplification and cost control
initiatives. Even with this second half earnings improvement,
our end markets are not improving as much as we anticipated earlier
in the year.
"Accordingly, we have revised our guidance for 2016 adjusted
diluted earnings per share to $4.35 to
$4.55," continued Mr. Gliebe.
Conference Call
Regal will hold a conference call to discuss the earnings
release at 9:00 AM CDT (10:00 AM EDT) on August
9, 2016. Individuals who would like to participate by
phone should dial 888-317-6003 and enter 7043189 when
prompted. International callers should dial 412-317-6061 and
enter 7043189 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://services.choruscall.com/links/rbc160809TQKwf28s.
A telephone replay of the call will be available through
August 16, 2016, at 877-344-7529,
conference ID 10089907. International callers should call
412-317-0088 using the same conference ID. A webcast replay
will be available until January 9,
2017, and can be accessed at
http://investors.regalbeloit.com/phoenix.zhtml?c=116222&p=irol-calendarPast.
About the Company
Regal Beloit Corporation (NYSE: RBC) is a leading manufacturer
of electric motors, electrical motion controls, power generation
and power transmission products serving markets throughout the
world. The company is comprised of three business
segments: Commercial and Industrial Systems, Climate Solutions
and Power Transmission Solutions. Regal is headquartered in
Beloit, Wisconsin, and has
manufacturing, sales and service facilities throughout the United States, Canada, Mexico, Europe and Asia. 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," "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 PTS, including the timing and impact of purchase
accounting adjustments; prolonged declines in oil and gas up stream
capital spending; 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; 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 2, 2016 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
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
|
|
Six Months
Ended
|
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2, 2016
|
|
Jul
4, 2015
|
Net Sales
|
|
$
|
838.6
|
|
|
$
|
942.2
|
|
|
$
|
1,656.8
|
|
|
$
|
1,853.9
|
|
Cost of
Sales
|
|
615.7
|
|
|
690.8
|
|
|
1,216.5
|
|
|
1,381.6
|
|
Gross
Profit
|
|
222.9
|
|
|
251.4
|
|
|
440.3
|
|
|
472.3
|
|
Operating
Expenses
|
|
131.5
|
|
|
148.2
|
|
|
279.6
|
|
|
305.5
|
|
Income From
Operations
|
|
91.4
|
|
|
103.2
|
|
|
160.7
|
|
|
166.8
|
|
Interest
Expense
|
|
14.8
|
|
|
16.4
|
|
|
29.8
|
|
|
30.0
|
|
Interest
Income
|
|
1.2
|
|
|
0.9
|
|
|
2.3
|
|
|
2.1
|
|
Income Before
Taxes
|
|
77.8
|
|
|
87.7
|
|
|
133.2
|
|
|
138.9
|
|
Provision for Income
Taxes
|
|
19.4
|
|
|
22.8
|
|
|
32.1
|
|
|
36.1
|
|
Net Income
|
|
58.4
|
|
|
64.9
|
|
|
101.1
|
|
|
102.8
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
|
1.8
|
|
|
2.1
|
|
|
2.9
|
|
|
3.6
|
|
Net Income
Attributable to Regal Beloit Corporation
|
|
$
|
56.6
|
|
|
$
|
62.8
|
|
|
$
|
98.2
|
|
|
$
|
99.2
|
|
Earnings Per Share
Attributable to Regal Beloit Corporation:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.27
|
|
|
$
|
1.40
|
|
|
$
|
2.20
|
|
|
$
|
2.22
|
|
Assuming
Dilution
|
|
$
|
1.26
|
|
|
$
|
1.39
|
|
|
$
|
2.19
|
|
|
$
|
2.20
|
|
Cash Dividends
Declared
|
|
$
|
0.24
|
|
|
$
|
0.23
|
|
|
$
|
0.47
|
|
|
$
|
0.45
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
44.7
|
|
|
44.8
|
|
|
44.7
|
|
|
44.8
|
|
Assuming
Dilution
|
|
45.0
|
|
|
45.2
|
|
|
45.0
|
|
|
45.1
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
Unaudited
|
(Dollars in
Millions)
|
|
|
|
Jul
2,
2016
|
|
Jan
2, 2016
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
271.5
|
|
|
$
|
252.9
|
|
Trade Receivables,
less Allowances of $12.2 million
in 2016 and $11.3 million in 2015
|
|
522.5
|
|
|
462.0
|
|
Inventories
|
|
711.4
|
|
|
775.0
|
|
Prepaid Expenses and
Other Current Assets
|
|
131.4
|
|
|
145.3
|
|
Total Current
Assets
|
|
1,636.8
|
|
|
1,635.2
|
|
|
|
|
|
|
Net Property, Plant,
Equipment and Noncurrent Assets
|
|
2,903.8
|
|
|
2,956.5
|
|
Total
Assets
|
|
$
|
4,540.6
|
|
|
$
|
4,591.7
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
Payable
|
|
$
|
341.4
|
|
|
$
|
336.2
|
|
Other Accrued
Expenses
|
|
254.8
|
|
|
270.3
|
|
Current Maturities of
Debt
|
|
3.6
|
|
|
6.3
|
|
Total Current
Liabilities
|
|
599.8
|
|
|
612.8
|
|
|
|
|
|
|
Long-Term
Debt
|
|
1,610.5
|
|
|
1,715.6
|
|
Other Noncurrent
Liabilities
|
|
280.4
|
|
|
280.5
|
|
Equity:
|
|
|
|
|
Total Regal Beloit
Corporation Shareholders' Equity
|
|
2,012.0
|
|
|
1,937.3
|
|
Noncontrolling
Interests
|
|
37.9
|
|
|
45.5
|
|
Total
Equity
|
|
2,049.9
|
|
|
1,982.8
|
|
Total Liabilities and
Equity
|
|
$
|
4,540.6
|
|
|
$
|
4,591.7
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
Unaudited
|
(Dollars in
Millions)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
58.4
|
|
|
$
|
64.9
|
|
|
$
|
101.1
|
|
|
$
|
102.8
|
|
Adjustments to
reconcile net income and changes in assets and liabilities (net of
acquisitions) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
38.9
|
|
|
42.2
|
|
|
79.0
|
|
|
78.1
|
|
Excess tax expense
(benefits) from share-based compensation
|
|
0.1
|
|
|
(0.5)
|
|
|
0.1
|
|
|
(1.2)
|
|
Loss on disposal of
assets, net
|
|
0.4
|
|
|
0.6
|
|
|
1.0
|
|
|
0.7
|
|
Gain on disposal of
business
|
|
(11.6)
|
|
|
—
|
|
|
(11.6)
|
|
|
—
|
|
Share-based
compensation expense
|
|
3.8
|
|
|
4.1
|
|
|
7.1
|
|
|
7.1
|
|
Loss on Venezuela
currency devaluation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
Change in operating
assets and liabilities, net of acquisitions
|
|
26.1
|
|
|
6.9
|
|
|
(2.4)
|
|
|
(53.3)
|
|
Net cash provided by
operating activities
|
|
116.1
|
|
|
118.2
|
|
|
174.3
|
|
|
135.7
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Additions to
Property, Plant and Equipment
|
|
(16.8)
|
|
|
(23.5)
|
|
|
(31.7)
|
|
|
(44.7)
|
|
Net sales (purchases)
of investment securities
|
|
6.2
|
|
|
(12.1)
|
|
|
4.5
|
|
|
(7.8)
|
|
Business
acquisitions, net of cash acquired
|
|
—
|
|
|
(8.0)
|
|
|
—
|
|
|
(1,400.5)
|
|
Proceeds from sale of
assets
|
|
0.1
|
|
|
6.5
|
|
|
0.1
|
|
|
7.8
|
|
Proceeds from sale of
business
|
|
25.0
|
|
|
—
|
|
|
25.0
|
|
|
—
|
|
Net cash provided by
(used in) investing activities
|
|
14.5
|
|
|
(37.1)
|
|
|
(2.1)
|
|
|
(1,445.2)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net (repayments)
borrowings under revolving credit facility
|
|
(11.0)
|
|
|
(40.5)
|
|
|
22.0
|
|
|
36.0
|
|
Net (repayments)
proceeds from short-term borrowings
|
|
(6.5)
|
|
|
2.5
|
|
|
(6.7)
|
|
|
4.8
|
|
Proceeds from
long-term debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,250.0
|
|
Repayments of
long-term debt
|
|
(75.1)
|
|
|
(15.7)
|
|
|
(125.2)
|
|
|
(31.4)
|
|
Dividends paid to
shareholders
|
|
(10.3)
|
|
|
(9.9)
|
|
|
(20.5)
|
|
|
(19.7)
|
|
Proceeds from the
exercise of stock options
|
|
—
|
|
|
0.7
|
|
|
0.5
|
|
|
3.7
|
|
Excess tax benefits
(expense) from share-based compensation
|
|
(0.1)
|
|
|
0.5
|
|
|
(0.1)
|
|
|
1.2
|
|
Distributions to
noncontrolling interest
|
|
(0.3)
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.3)
|
|
Purchase of
subsidiary shares from noncontrolling interest
|
|
—
|
|
|
(0.4)
|
|
|
(19.6)
|
|
|
(1.2)
|
|
Financing fees
paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.8)
|
|
Net cash (used in)
provided by financing activities
|
|
(103.3)
|
|
|
(62.8)
|
|
|
(149.9)
|
|
|
1,225.3
|
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH EQUIVALENTS
|
|
(4.9)
|
|
|
(0.4)
|
|
|
(3.7)
|
|
|
(2.3)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
22.4
|
|
|
17.9
|
|
|
18.6
|
|
|
(86.5)
|
|
Cash and cash
equivalents at beginning of period
|
|
249.1
|
|
|
229.7
|
|
|
252.9
|
|
|
334.1
|
|
Cash and cash
equivalents at end of period
|
|
$
|
271.5
|
|
|
$
|
247.6
|
|
|
$
|
271.5
|
|
|
$
|
247.6
|
|
SEGMENT
INFORMATION
|
Unaudited
|
(Dollars In
Millions)
|
|
|
|
Three Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
Net Sales
|
|
$
|
394.7
|
|
|
$
|
441.0
|
|
|
$
|
254.5
|
|
|
$
|
286.1
|
|
|
$
|
189.4
|
|
|
$
|
215.1
|
|
|
$
|
838.6
|
|
|
$
|
942.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
6.4
|
%
|
|
9.4
|
%
|
|
14.2
|
%
|
|
15.3
|
%
|
|
16.0
|
%
|
|
8.4
|
%
|
|
10.9
|
%
|
|
11.0
|
%
|
Adjusted Operating
Margin Percentage*
|
|
6.5
|
%
|
|
9.9
|
%
|
|
14.4
|
%
|
|
15.2
|
%
|
|
10.1
|
%
|
|
11.8
|
%
|
|
9.7
|
%
|
|
11.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth
|
|
(9.0)
|
%
|
|
(6.9)
|
%
|
|
(10.4)
|
%
|
|
(4.1)
|
%
|
|
(10.9)
|
%
|
|
(1.7)
|
%
|
|
(9.8)
|
%
|
|
(5.5)
|
%
|
Acquisitions, Net of
Divestitures
|
|
—
|
%
|
|
2.0
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(0.9)
|
%
|
|
219.8
|
%
|
|
(0.2)
|
%
|
|
18.7
|
%
|
Foreign Currency
Impact
|
|
(1.6)
|
%
|
|
(3.0)
|
%
|
|
(0.7)
|
%
|
|
(1.7)
|
%
|
|
(0.2)
|
%
|
|
(1.3)
|
%
|
|
(1.0)
|
%
|
|
(2.4)
|
%
|
SEGMENT
INFORMATION
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
Net Sales
|
|
$
|
772.3
|
|
|
$
|
897.4
|
|
|
$
|
494.3
|
|
|
$
|
566.5
|
|
|
$
|
390.2
|
|
|
$
|
390.0
|
|
|
$
|
1,656.8
|
|
|
$
|
1,853.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
6.1
|
%
|
|
8.3
|
%
|
|
12.3
|
%
|
|
13.6
|
%
|
|
13.6
|
%
|
|
3.8
|
%
|
|
9.7
|
%
|
|
9.0
|
%
|
Adjusted Operating
Margin Percentage*
|
|
6.2
|
%
|
|
8.9
|
%
|
|
12.6
|
%
|
|
13.4
|
%
|
|
10.8
|
%
|
|
11.6
|
%
|
|
9.2
|
%
|
|
10.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth
|
|
(12.2)
|
%
|
|
(3.3)
|
%
|
|
(11.9)
|
%
|
|
(2.2)
|
%
|
|
(8.5)
|
%
|
|
3.9
|
%
|
|
(11.3)
|
%
|
|
(2.4)
|
%
|
Acquisitions, Net of
Divestitures
|
|
—
|
%
|
|
3.4
|
%
|
|
—
|
%
|
|
—
|
%
|
|
8.7
|
%
|
|
196.1
|
%
|
|
1.8
|
%
|
|
17.4
|
%
|
Foreign Currency
Impact
|
|
(1.7)
|
%
|
|
(3.9)
|
%
|
|
(0.8)
|
%
|
|
(1.5)
|
%
|
|
(0.2)
|
%
|
|
(1.3)
|
%
|
|
(1.1)
|
%
|
|
(2.8)
|
%
|
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
projected), adjusted operating profit, adjusted operating profit
margin, free cash flow and free cash flow as a percentage of net
income attributable to Regal Beloit Corporation.
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
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
|
|
Six Months
Ended
|
|
|
Jul
2, 2016
|
|
Jul
4, 2015
|
|
Jul
2, 2016
|
|
Jul
4, 2015
|
Diluted Earnings Per
Share
|
|
$
|
1.26
|
|
|
$
|
1.39
|
|
|
$
|
2.19
|
|
|
$
|
2.20
|
|
Purchase Accounting
and Transaction Costs
|
|
—
|
|
|
0.11
|
|
|
—
|
|
|
0.47
|
|
Restructuring and
Related Costs
|
|
0.02
|
|
|
0.03
|
|
|
0.04
|
|
|
0.05
|
|
Venezuelan Currency
Devaluation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
Gain on Disposal of
Business
|
|
(0.14)
|
|
|
—
|
|
|
(0.14)
|
|
|
—
|
|
Adjusted Diluted
Earnings Per Share
|
|
$
|
1.14
|
|
|
$
|
1.53
|
|
|
$
|
2.09
|
|
|
$
|
2.74
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED OPERATING
INCOME
|
|
|
|
Three Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
Income from
Operations
|
|
$
|
25.1
|
|
|
$
|
41.5
|
|
|
$
|
36.1
|
|
|
$
|
43.7
|
|
|
$
|
30.2
|
|
|
$
|
18.0
|
|
|
$
|
91.4
|
|
|
$
|
103.2
|
|
Purchase Accounting
and Transaction Costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
|
7.1
|
|
Restructuring and
Related Costs
|
|
0.7
|
|
|
2.0
|
|
|
0.5
|
|
|
(0.1)
|
|
|
0.5
|
|
|
0.2
|
|
|
1.7
|
|
|
2.1
|
|
Gain on Disposal of
Business
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.6)
|
|
|
—
|
|
|
(11.6)
|
|
|
—
|
|
Adjusted Income from
Operations
|
|
$
|
25.8
|
|
|
$
|
43.5
|
|
|
$
|
36.6
|
|
|
$
|
43.6
|
|
|
$
|
19.1
|
|
|
$
|
25.3
|
|
|
$
|
81.5
|
|
|
$
|
112.4
|
|
GAAP Operating Margin
%
|
|
6.4
|
%
|
|
9.4
|
%
|
|
14.2
|
%
|
|
15.3
|
%
|
|
|
16.0
|
%
|
|
8.4
|
%
|
|
|
10.9
|
%
|
|
11.0
|
%
|
Adjusted Operating
Margin %
|
|
6.5
|
%
|
|
9.9
|
%
|
|
14.4
|
%
|
|
15.2
|
%
|
|
10.1
|
%
|
|
11.8
|
%
|
|
|
9.7
|
%
|
|
11.9
|
%
|
ADJUSTED OPERATING
INCOME
|
|
|
|
Six Months
Ended
|
|
|
Commercial
&
Industrial
Systems
|
|
Climate
Solutions
|
|
Power
Transmission
Solutions
|
|
Total
Regal
|
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
Income from
Operations
|
|
$
|
46.8
|
|
|
$
|
74.8
|
|
|
$
|
60.7
|
|
|
$
|
77.1
|
|
|
$
|
53.2
|
|
|
$
|
14.9
|
|
|
$
|
160.7
|
|
|
$
|
166.8
|
|
Purchase Accounting
and Transaction Costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29.8
|
|
|
—
|
|
|
29.8
|
|
Restructuring and
Related Costs
|
|
0.8
|
|
|
3.9
|
|
|
1.8
|
|
|
(1.1)
|
|
|
0.5
|
|
|
0.5
|
|
|
3.1
|
|
|
3.3
|
|
Venezuelan Currency
Devaluation
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
Gain on Disposal of
Business
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.6)
|
|
|
—
|
|
|
(11.6)
|
|
|
—
|
|
Adjusted Income from
Operations
|
|
$
|
47.6
|
|
|
$
|
80.2
|
|
|
$
|
62.5
|
|
|
$
|
76.0
|
|
|
$
|
42.1
|
|
|
$
|
45.2
|
|
|
$
|
152.2
|
|
|
$
|
201.4
|
|
GAAP Operating Margin
%
|
|
6.1
|
%
|
|
8.3
|
%
|
|
12.3
|
%
|
|
13.6
|
%
|
|
13.6
|
%
|
|
3.8
|
%
|
|
9.7
|
%
|
|
9.0
|
%
|
Adjusted Operating
Margin %
|
|
6.2
|
%
|
|
8.9
|
%
|
|
12.6
|
%
|
|
13.4
|
%
|
|
10.8
|
%
|
|
11.6
|
%
|
|
9.2
|
%
|
|
10.9
|
%
|
FREE CASH FLOW
RECONCILIATION
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
|
Jul
2,
2016
|
|
Jul
4, 2015
|
Net Cash Provided by
Operating Activities
|
|
$
|
116.1
|
|
|
$
|
118.2
|
|
|
$
|
174.3
|
|
|
$
|
135.7
|
|
Additions to Property
Plant and Equipment
|
|
(16.8)
|
|
|
(23.5)
|
|
|
(31.7)
|
|
|
(44.7)
|
|
Free Cash
Flow
|
|
$
|
99.3
|
|
|
$
|
94.7
|
|
|
$
|
142.6
|
|
|
$
|
91.0
|
|
Free Cash Flow as a
Percentage of Net Income Attributable to Regal Beloit
Corporation
|
|
175.4
|
%
|
|
150.8
|
%
|
|
145.2
|
%
|
|
91.7
|
%
|
RECONCILIATION OF
2016 ADJUSTED ANNUAL GUIDANCE
|
|
Minimum
|
|
Maximum
|
2016 EPS Annual
Guidance
|
|
$
|
4.32
|
|
|
$
|
4.52
|
|
Restructuring and
Related Costs
|
|
0.20
|
|
|
0.20
|
|
Gains on Disposals of
Businesses
|
|
(0.17)
|
|
|
(0.17)
|
|
2016 Adjusted EPS
Annual Guidance
|
|
$
|
4.35
|
|
|
$
|
4.55
|
|
ORGANIC
GROWTH
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
Jul
2,
2016
|
|
Jul
2,
2016
|
Net Sales
|
|
$
|
838.6
|
|
|
$
|
1,656.8
|
|
Net Sales from
Businesses Acquired
|
|
—
|
|
|
(35.9)
|
|
Net Sales from
Businesses Divested
|
|
2.0
|
|
|
2.0
|
|
Impact from Foreign
Currency Exchange Rates
|
|
9.3
|
|
|
21.2
|
|
Adjusted Net
Sales
|
|
$
|
849.9
|
|
|
$
|
1,644.1
|
|
|
|
|
|
|
Net Sales Ended July
4, 2015
|
|
$
|
942.2
|
|
|
$
|
1,853.9
|
|
Organic Growth
%
|
|
(9.8)
|
%
|
|
(11.3)
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/regal-beloit-corporation-announces-second-quarter-2016-financial-results-300310680.html
SOURCE Regal Beloit Corporation