BELOIT,
Wis., July 31, 2023 /PRNewswire/ -- Regal
Rexnord Corporation (NYSE: RRX)
Second Quarter Highlights
- Strong Free Cash Flow* Of $176.3
Million; Net Debt To Normalized Adjusted EBITDA* Reduced To
3.86
- Sales Up 31.1% Versus PY
- GAAP Net Income Decreased $110
Million Versus PY To $33.2
Million; Adjusted EBITDA* Increased 34% Versus PY To
$379.7 Million, And Adjusted EBITDA
Margin* Increased 50bps Versus PY To 21.5%
- GAAP Diluted EPS Of $0.48 And
Adjusted Diluted EPS* Of $2.56, Ahead
Of Expectations
- Now Expect GAAP Diluted EPS In A Range Of $2.69 To $3.09 And
Adjusted Diluted EPS* In A Range Of $10.20 To $10.60;
The Mid-Point Reduction Primarily Factors Higher Depreciation &
Interest Expense
- Raising Expectation For Free Cash Flow, Now Over $650 Million In 2023
CEO Louis Pinkham commented,
"Our second quarter results exceeded our targets, reflecting the
hard work and strong execution of our Regal Rexnord team and the
effectiveness of our 80/20 and RBS initiatives. Notable progress on
working capital resulted in very strong free cash flow generation
and enabled further debt reduction. We also saw healthy growth in
the majority of our businesses that were not subject to temporary
destocking headwinds, and achieved strong adjusted gross and EBITDA
margin expansion. I am particularly pleased with the growth we saw
in AMC, indicative of our secular market exposure and
differentiated products and technology."
"I am also extremely excited about early positive momentum
working with our new colleagues from Altra to accelerate profitable
growth. Both integration and cost synergy activities are off to a
strong start, and teams are identifying a robust pipeline of
cross-marketing and other sales synergies. Meanwhile, Rexnord PMC
synergies continue to accrue as planned. Our sizable M&A
synergies help provide clear line of sight to our goals for
approximately 25% adjusted EBITDA margins, approximately 40% gross
margins and sales growth at 50% above end market rates through the
cycle."
Mr. Pinkham concluded, "As I look ahead to the remainder of
2023, I am enthusiastic about the tremendous value creation
opportunities before us. While some of our end markets are
experiencing lingering destocking headwinds and demand uncertainty,
our teams continue to manage the performance of the business in a
disciplined manner. Our strategic focus remains on executing our
many growth acceleration, margin expansion and cash flow
improvement drivers, which I am confident will create significant
value for our key stakeholders."
Guidance
The Company is updating its 2023 annual guidance. GAAP diluted
earnings per share is now expected to be in a range of $2.69 to $3.09, compared to $2.74 to $3.64
previously. Adjusted diluted earnings per share is now expected to
be in a range of $10.20 to
$10.60, compared to $10.20 to $11.10
previously. The updated adjusted EPS outlook holds the bottom end
of the prior range and lowers the former mid-point by $0.25, primarily to factor higher depreciation
expense, in part related to the Altra transaction, and higher net
interest expense tied to higher benchmark interest rates. The high
end of the range comes down to reflect lower confidence in the pace
of recovery in certain PES and Industrial segment end markets in
the second half.
*Non-GAAP Financial Measurement, See Appendix for
Reconciliation
Segment Performance
All prior periods identified in this release have been recast to
reflect the new segment structure established at first quarter 2023
related to closing the Altra acquisition, and provide comparison to
the comparable period.
Second quarter 2023 segment results versus the prior year are
summarized below:
- Automation & Motion Control net sales were $473.1 million, an increase of 143.7% or an
increase of 4.0% on a pro forma organic basis*. Results reflect
the Altra acquisition plus strength in most markets served,
especially aerospace, medical and data center. Adjusted EBITDA
margin* was 25.3% of adjusted net sales*.
- Industrial Powertrain Solutions segment net sales were
$698.7 million, an increase of 65.5%
or an increase of 0.6% on a pro forma organic basis. Results
reflect the Altra acquisition, plus strength in energy,
metals/mining and marine markets, net of weakness in the
agriculture market and impacts from the timing of renewable energy
projects. Adjusted EBITDA margin was 23.6% of adjusted net
sales.
- Power Efficiency Solutions net sales were $460.1 million, a decrease of 22.7% or a decrease
of 22.2% on an organic basis. The decline reflects general weakness
in global residential HVAC markets, particularly in the U.S.,
and weakness in China, along with
channel destocking in the U.S. Adjusted EBITDA margin was 18.6% of
adjusted net sales.
- Industrial Systems net sales were $136.7
million, a decrease of 0.8% or an increase of 1.2% on an
organic basis. Results reflect strength in power generation
projects and energy markets, offset by weakness in China, along with North America industrial
distributor destocking. Adjusted EBITDA margin was 7.1% of
adjusted net sales.
Conference Call
Regal Rexnord will hold a conference call to discuss this
earnings release at 9:00 AM CT
(10:00 AM ET) on Tuesday, August 1, 2023. To listen to the live
audio and view the presentation during the call, please visit Regal
Rexnord's Investor website: https://investors.regalrexnord.com. To
listen by phone or to ask the presenters a question, dial
1.877.264.6786 (U.S. callers) or +1.412.317.5177 (international
callers) and enter 5404611# when prompted.
A webcast replay will be available at the link above, and a
telephone replay will be available at 1.877.344.7529 (U.S. callers)
or +1.412.317.0088 (international callers), using a replay access
code of 2051490#. Both replays will be accessible for three months
after the earnings call.
About Regal Rexnord
Regal Rexnord Corporation is a global leader in the engineering
and manufacturing of factory automation sub-systems, industrial
powertrain solutions, automation and mechanical power transmission
components, electric motors and electronic controls, air moving
products, and specialty electrical components and systems, serving
customers around the world. Through longstanding technology
leadership and an intentional focus on producing more
energy-efficient products and systems, Regal Rexnord helps create a
better tomorrow – for its customers and for the planet.
Regal Rexnord is comprised of four operating segments:
Automation & Motion Control, Industrial Powertrain Solutions,
Power Efficiency Solutions and Industrial Systems. Regal Rexnord is
headquartered in Beloit, Wisconsin
and has manufacturing, sales, and service facilities worldwide. For
more information, visit RegalRexnord.com.
Forward Looking Statements
This release contains forward-looking statements, within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, which reflect Regal Rexnord's current estimates,
expectations and projections about Regal Rexnord's future results,
performance, prospects and opportunities. Such forward-looking
statements may include, among other things, statements about the
acquisition of Altra Industrial Motion Corp. ("Altra"), the
benefits and synergies of the acquisition of Altra (the "Altra
Transaction"), future opportunities for Regal Rexnord and any other
statements regarding Regal Rexnord's future operations, anticipated
economic activity, business levels, credit ratings, future
earnings, planned activities, anticipated growth, market
opportunities, strategies, competition and other expectations and
estimates for future periods. Forward-looking statements
include statements that are not historical facts and can be
identified by forward-looking words such as "anticipate,"
"believe," "confident," "estimate," "expect," "intend," "plan,"
"may," "will," "project," "forecast," "would," "could," "should,"
and similar expressions. These forward-looking statements are based
upon information currently available to Regal Rexnord and are
subject to a number of risks, uncertainties, and other factors that
could cause Regal Rexnord's performance, prospects or opportunities
to differ materially from those expressed in, or implied by, these
forward-looking statements. Important factors that could cause
Regal Rexnord's actual results to differ materially from the
results referred to in the forward-looking statements Regal Rexnord
makes in this release include: Regal Rexnord's substantial
indebtedness as a result of the Altra Transaction and the effects
of such indebtedness on Regal Rexnord's financial flexibility;
after the Altra Transaction; Regal Rexnord's ability to achieve its
objectives on reducing its indebtedness on the desired timeline;
dependence on key suppliers and the potential effects of supply
disruptions; fluctuations in commodity prices and raw material
costs; any unforeseen changes to or the effects on liabilities,
future capital expenditures, revenue, expenses, synergies,
indebtedness, financial condition, losses and future prospects; the
possibility that Regal Rexnord may be unable to achieve expected
benefits, synergies and operating efficiencies in connection with
the Altra Transaction, and the merger with the Rexnord Process
& Motion Control business (the "Rexnord PMC business") within
the expected time-frames or at all and to successfully integrate
Altra and the Rexnord PMC business; expected or targeted future
financial and operating performance and results; operating costs,
customer loss and business disruption (including, without
limitation, difficulties in maintaining relationships with
employees, customers, clients or suppliers) being greater than
expected following the Altra Transaction or our merger with the
Rexnord PMC business; Regal Rexnord's ability to retain key
executives and employees; the continued financial and operational
impacts of and uncertainties relating to the COVID-19 pandemic on
customers and suppliers and the geographies in which they operate;
uncertainties regarding the ability to execute restructuring plans
within expected costs and timing; challenges to the tax treatment
that was elected with respect to the merger with the Rexnord PMC
business and related transactions; requirements to abide by
potentially significant restrictions with respect to the tax
treatment of the merger with the Rexnord PMC business which could
limit Regal Rexnord's ability to undertake certain corporate
actions that otherwise could be advantageous; actions taken by
competitors and their ability to effectively compete in the
increasingly competitive global electric motor, drives and
controls, power generation and power transmission industries; the
ability to develop new products based on technological innovation,
such as the Internet of Things, and marketplace acceptance of new
and existing products, including products related to technology not
yet adopted or utilized in geographic locations in which Regal
Rexnord does business; dependence on significant customers;
seasonal impact on sales of products into HVAC systems and other
residential applications; risks associated with climate change and
uncertainty regarding our ability to deliver on our climate
commitments and/or to meet related investor, customer and other
third party expectations relating to our sustainability efforts;
risks associated with global manufacturing, including risks
associated with public health crises and political, societal or
economic instability, including instability caused by the conflict
between Russia and Ukraine; issues and costs arising from the
integration of acquired companies and businesses and the timing and
impact of purchase accounting adjustments; prolonged declines in
one or more markets, such as heating, ventilation, air
conditioning, refrigeration, power generation, oil and gas, unit
material handling, water heating and aerospace; economic changes in
global markets, such as reduced demand for products, currency
exchange rates, inflation rates, interest rates, banking crises,
recession, government policies, including policy changes affecting
taxation, trade, tariffs, immigration, customs, border actions and
the like, and other external factors that Regal Rexnord cannot
control; product liability, asbestos and other litigation, or
claims by end users, government agencies or others that products or
customers' applications failed to perform as anticipated,
particularly in high volume applications or where such failures are
alleged to be the cause of property or casualty
claims; unanticipated liabilities of acquired businesses;
unanticipated adverse effects or liabilities from business exits or
divestitures, including in connection with our evaluation of
strategic alternatives for the global motors and generators portion
of our Industrial Systems operating segment; Regal Rexnord's
ability to identify and execute on future M&A opportunities,
including significant M&A transactions; the impact of any such
M&A transactions on Regal Rexnord's results, operations and
financial condition, including the impact from costs to execute and
finance any such transactions; unanticipated costs or expenses that
may be incurred related to product warranty issues; infringement of
intellectual property by third parties, challenges to intellectual
property, and claims of infringement on third party technologies;
effects on earnings of any significant impairment of goodwill;
losses from failures, breaches, attacks or disclosures involving
information technology infrastructure and data; costs and
unanticipated liabilities arising from rapidly evolving data
privacy laws and regulations; cyclical downturns affecting the
global market for capital goods; and other risks and uncertainties
including, but not limited, to those described in Regal Rexnord's
Annual Report on Form 10-K on file with the Securities and Exchange
Commission (the "SEC") and from time to time in other filed reports
including Regal Rexnord's Quarterly Reports on Form 10-Q. For a
more detailed description of the risk factors associated with Regal
Rexnord, please refer to Part I, Item 1A - Risk Factors in Regal
Rexnord's Annual Report on Form 10-K for the fiscal year ended
December 31, 2022 on file with the
SEC and subsequent SEC filings. Shareholders, potential investors,
and other readers are urged to consider these factors in evaluating
the forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking
statements included in this release are made only as of the date of
this release and Regal Rexnord undertakes no obligation to update
any forward-looking information contained in this release or with
respect to the announcements described herein to reflect subsequent
events or circumstances.
Non-GAAP Measures
(Unaudited)
(Dollars in Millions, Except per Share Data)
We prepare our financial statements in accordance with
accounting principles generally accepted in the United States of America ("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. 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, adjusted income from
operations, adjusted operating margin, adjusted net sales, net
debt, EBITDA, adjusted EBITDA, proforma EBITDA, proforma adjusted
EBITDA, normalized adjusted EBITDA, adjusted EBITDA margin,
adjusted net income attributable to Regal Rexnord, adjusted cash
flows from operations, free cash flow, free cash flow as a
percentage of adjusted net income attributable to Regal Rexnord (or
free cash flow conversion), adjusted income before taxes, adjusted
provision for income taxes and adjusted effective tax rate. 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. Our management primarily uses adjusted
income from operations and adjusted operating margin to help us
manage and evaluate our business and make operating decisions,
while adjusted diluted earnings per share, net debt, EBITDA,
adjusted EBITDA, proforma EBITDA, proforma adjusted EBITDA,
normalized adjusted EBITDA, adjusted EBITDA margin, adjusted net
sales, adjusted net income attributable to Regal Rexnord, adjusted
cash flows from operations, free cash flow, free cash flow as a
percentage of adjusted net income attributable to Regal Rexnord,
adjusted income before taxes, adjusted provision for income taxes
and adjusted effective tax rate are primarily used to help us
evaluate our business and forecast our future results. Accordingly,
we believe disclosing and reconciling each of these measures helps
investors evaluate our business in the same manner as
management.
In addition to these non-GAAP measures, we use the term "organic
sales growth" to refer to the increase in our sales between periods
that is attributable to organic sales. "Organic sales" refers to
GAAP sales from existing operations excluding any sales from
acquired businesses recorded prior to the first anniversary of the
acquisition and excluding any sales from business divested/to be
exited recorded prior to the first anniversary of the exit and
excluding the impact of foreign currency translation. The impact of
foreign currency translation is determined by translating the
respective period's organic sales using the currency exchange rates
that were in effect during the prior year periods.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
(Dollars in Millions,
Except per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
Net Sales
|
|
$
1,768.6
|
|
$ 1,349.4
|
|
$
2,992.7
|
|
$ 2,647.9
|
Cost of
Sales
|
|
1,204.8
|
|
915.9
|
|
2,030.8
|
|
1,792.5
|
Gross Profit
|
|
563.8
|
|
433.5
|
|
961.9
|
|
855.4
|
Operating
Expenses
|
|
412.2
|
|
238.6
|
|
741.4
|
|
490.6
|
Income from
Operations
|
|
151.6
|
|
194.9
|
|
220.5
|
|
364.8
|
Interest
Expense
|
|
116.4
|
|
13.4
|
|
211.8
|
|
22.4
|
Interest
Income
|
|
(5.1)
|
|
(0.8)
|
|
(37.0)
|
|
(1.9)
|
Other Income,
Net
|
|
(2.8)
|
|
(1.5)
|
|
(4.2)
|
|
(2.8)
|
Income before
Taxes
|
|
43.1
|
|
183.8
|
|
49.9
|
|
347.1
|
Provision for Income
Taxes
|
|
9.9
|
|
40.6
|
|
22.2
|
|
76.8
|
Net Income
|
|
33.2
|
|
143.2
|
|
27.7
|
|
270.3
|
Less: Net Income
Attributable to Noncontrolling Interests
|
|
1.1
|
|
1.2
|
|
1.5
|
|
2.7
|
Net Income Attributable
to Regal Rexnord Corporation
|
|
$
32.1
|
|
$
142.0
|
|
$
26.2
|
|
$
267.6
|
Earnings Per Share
Attributable to Regal Rexnord Corporation:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.48
|
|
$
2.13
|
|
$
0.40
|
|
$
3.99
|
Assuming
Dilution
|
|
$
0.48
|
|
$
2.12
|
|
$
0.39
|
|
$
3.96
|
Cash Dividends Declared
Per Share
|
|
$
0.35
|
|
$
0.35
|
|
$
0.70
|
|
$
0.68
|
Weighted Average Number
of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
66.3
|
|
66.8
|
|
66.2
|
|
67.1
|
Assuming
Dilution
|
|
66.6
|
|
67.1
|
|
66.6
|
|
67.5
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
Unaudited
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Jun 30,
2023
|
|
Dec 31, 2022
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
659.6
|
|
$
688.5
|
Trade Receivables, Less
Allowances
of
$26.4 million in 2023 and $30.9 million in
2022
|
|
1,013.9
|
|
797.4
|
Inventories
|
|
1,576.1
|
|
1,336.9
|
Prepaid Expenses and
Other Current Assets
|
|
225.4
|
|
177.7
|
Total Current
Assets
|
|
3,475.0
|
|
3,000.5
|
|
|
|
|
|
Net Property, Plant,
Equipment and Noncurrent Assets
|
|
12,382.8
|
|
7,268.4
|
Total Assets
|
|
$
15,857.8
|
|
$
10,268.9
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
Payable
|
|
$
678.5
|
|
$
497.7
|
Other Accrued
Expenses
|
|
630.0
|
|
470.7
|
Current Maturities of
Debt
|
|
72.6
|
|
33.8
|
Total Current
Liabilities
|
|
1,381.1
|
|
1,002.2
|
|
|
|
|
|
Long-Term
Debt
|
|
6,609.7
|
|
1,989.7
|
Other Noncurrent
Liabilities
|
|
1,430.1
|
|
854.4
|
Equity:
|
|
|
|
|
Total Regal Rexnord
Corporation Shareholders' Equity
|
|
6,410.3
|
|
6,388.2
|
Noncontrolling
Interests
|
|
26.6
|
|
34.4
|
Total Equity
|
|
6,436.9
|
|
6,422.6
|
Total Liabilities and
Equity
|
|
$
15,857.8
|
|
$
10,268.9
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
Jun 30,
2023
|
|
Jun 30, 2022
|
|
Jun 30,
2023
|
|
Jun 30, 2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
33.2
|
|
$
143.2
|
|
$
27.7
|
|
$
270.3
|
Adjustments to
Reconcile Net Income and Changes in Assets and
Liabilities
(Net of Acquisitions
and Divestitures) to Net Cash Provided by Operating
Activities:
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization
|
|
137.0
|
|
78.4
|
|
213.5
|
|
156.3
|
Noncash Lease
Expense
|
|
12.0
|
|
10.7
|
|
19.7
|
|
20.6
|
Share-Based
Compensation Expense
|
|
14.5
|
|
4.9
|
|
36.2
|
|
11.2
|
Financing Fee
Expense
|
|
3.9
|
|
0.5
|
|
26.9
|
|
1.4
|
Benefit from Deferred
Income Taxes
|
|
(44.0)
|
|
(21.3)
|
|
(54.2)
|
|
(41.0)
|
Other Non-Cash
Changes
|
|
5.4
|
|
(1.4)
|
|
5.7
|
|
(1.7)
|
Change in Operating
Assets and Liabilities
|
|
59.1
|
|
(104.2)
|
|
51.8
|
|
(312.2)
|
Net Cash Provided by
Operating Activities
|
|
221.1
|
|
110.8
|
|
327.3
|
|
104.9
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Additions to Property,
Plant and Equipment
|
|
(44.8)
|
|
(19.2)
|
|
(63.5)
|
|
(32.6)
|
Proceeds Received from
Sales of Property, Plant and Equipment
|
|
—
|
|
4.1
|
|
6.1
|
|
5.5
|
Business Acquisitions,
Net of Cash Acquired
|
|
(17.3)
|
|
—
|
|
(4,870.2)
|
|
(35.0)
|
Net Cash Used in
Investing Activities
|
|
(62.1)
|
|
(15.1)
|
|
(4,927.6)
|
|
(62.1)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net Repayments Under
Revolving Credit Facility
|
|
(567.8)
|
|
(395.0)
|
|
(314.0)
|
|
(176.7)
|
Net Repayments of
Short-Term Borrowings
|
|
(1.9)
|
|
(0.1)
|
|
(3.7)
|
|
(2.0)
|
Proceeds from Long-Term
Borrowings
|
|
—
|
|
500.0
|
|
5,532.9
|
|
1,536.8
|
Repayments of Long-Term
Borrowings
|
|
(35.7)
|
|
(0.9)
|
|
(536.5)
|
|
(1,108.4)
|
Dividends Paid to
Shareholders
|
|
(23.2)
|
|
(22.0)
|
|
(46.4)
|
|
(44.3)
|
Proceeds from the
Exercise of Stock Options
|
|
0.6
|
|
1.6
|
|
1.5
|
|
3.4
|
Repurchase of Common
Stock
|
|
—
|
|
(69.8)
|
|
—
|
|
(184.0)
|
Shares Surrendered for
Taxes
|
|
(1.0)
|
|
(5.3)
|
|
(9.2)
|
|
(8.1)
|
Financing Fees
Paid
|
|
(1.1)
|
|
(2.0)
|
|
(51.1)
|
|
(6.5)
|
Distributions to
Noncontrolling Interest
|
|
(8.4)
|
|
—
|
|
(8.4)
|
|
—
|
Net Cash (Used In)
Provided by Financing Activities
|
|
(638.5)
|
|
6.5
|
|
4,565.1
|
|
10.2
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH EQUIVALENTS
|
|
(4.2)
|
|
(24.4)
|
|
6.3
|
|
(23.3)
|
Net (Decrease)
Increase in Cash and Cash Equivalents
|
|
(483.7)
|
|
77.8
|
|
(28.9)
|
|
29.7
|
Cash and Cash
Equivalents at Beginning of Period
|
|
1,143.3
|
|
624.7
|
|
688.5
|
|
672.8
|
Cash and Cash
Equivalents at End of Period
|
|
$
659.6
|
|
$
702.5
|
|
$
659.6
|
|
$
702.5
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Industrial
Powertrain
Solutions
|
|
Power Efficiency
Solutions
|
|
Automation
&
Motion
Control
|
|
Industrial
Systems
|
|
Total
Regal
Rexnord
|
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
Net Sales
|
|
$
698.7
|
|
$
422.1
|
|
$
460.1
|
|
$
595.4
|
|
$
473.1
|
|
$
194.1
|
|
$
136.7
|
|
$
137.8
|
|
$
1,768.6
|
|
$
1,349.4
|
Adjusted Net
Sales
|
|
$
698.7
|
|
$
422.1
|
|
$
460.1
|
|
$
595.4
|
|
$
473.1
|
|
$
194.1
|
|
$
136.7
|
|
$
137.8
|
|
$
1,768.6
|
|
$
1,349.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Margin
|
|
5.8 %
|
|
16.3 %
|
|
13.0 %
|
|
14.4 %
|
|
10.3 %
|
|
11.4 %
|
|
2.2 %
|
|
13.0 %
|
|
8.6 %
|
|
14.4 %
|
Adjusted Operating
Margin*
|
|
11.6 %
|
|
15.9 %
|
|
15.3 %
|
|
14.5 %
|
|
14.4 %
|
|
13.9 %
|
|
4.0 %
|
|
13.1 %
|
|
12.7 %
|
|
14.7 %
|
Adjusted EBITDA Margin
%
|
|
23.6 %
|
|
26.9 %
|
|
18.6 %
|
|
16.8 %
|
|
25.3 %
|
|
24.5 %
|
|
7.1 %
|
|
15.9 %
|
|
21.5 %
|
|
21.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of
Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic
Sales
Growth
|
|
(1.4) %
|
|
4.2 %
|
|
(22.2) %
|
|
14.7 %
|
|
6.9 %
|
|
11.4 %
|
|
1.2 %
|
|
10.5 %
|
|
(9.1) %
|
|
11.8 %
|
Acquisitions
|
|
67.3 %
|
|
138.7 %
|
|
— %
|
|
— %
|
|
137.7 %
|
|
228.8 %
|
|
— %
|
|
— %
|
|
40.9 %
|
|
42.2 %
|
Foreign Currency
Impact
|
|
(0.4) %
|
|
(1.0) %
|
|
(0.6) %
|
|
(1.6) %
|
|
(0.8) %
|
|
(5.0) %
|
|
(2.0) %
|
|
(2.7) %
|
|
(0.7) %
|
|
(1.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
Industrial
Powertrain
Solutions
|
|
Power
Efficiency
Solutions
|
|
Automation
&
Motion
Control
|
|
Industrial
Systems
|
|
Total
Regal
Rexnord
|
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
Net Sales
|
|
$
1,113.1
|
|
$
838.4
|
|
$
929.6
|
|
$
1,162.6
|
|
$
676.3
|
|
$
378.4
|
|
$
273.7
|
|
$
268.5
|
|
$
2,992.7
|
|
$
2,647.9
|
Adjusted Net
Sales
|
|
$
1,113.1
|
|
$
838.4
|
|
$
929.6
|
|
$
1,162.6
|
|
$
676.3
|
|
$
378.4
|
|
$
273.7
|
|
$
268.5
|
|
$
2,992.7
|
|
$
2,647.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Margin
|
|
5.9 %
|
|
13.7 %
|
|
11.3 %
|
|
16.4 %
|
|
6.4 %
|
|
9.1 %
|
|
2.1 %
|
|
9.2 %
|
|
7.4 %
|
|
13.8 %
|
Adjusted Operating
Margin
|
|
13.5 %
|
|
15.7 %
|
|
13.0 %
|
|
16.4 %
|
|
12.8 %
|
|
11.3 %
|
|
3.9 %
|
|
9.3 %
|
|
12.3 %
|
|
14.8 %
|
Adjusted EBITDA Margin
%
|
|
25.7 %
|
|
26.6 %
|
|
16.2 %
|
|
18.9 %
|
|
24.6 %
|
|
22.4 %
|
|
6.9 %
|
|
12.3 %
|
|
20.8 %
|
|
21.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth
|
|
(0.1) %
|
|
5.5 %
|
|
(19.1) %
|
|
17.1 %
|
|
9.2 %
|
|
13.8 %
|
|
4.5 %
|
|
9.4 %
|
|
(6.6) %
|
|
13.5 %
|
Acquisitions
|
|
33.9 %
|
|
142.0 %
|
|
— %
|
|
— %
|
|
70.6 %
|
|
238.5 %
|
|
— %
|
|
— %
|
|
20.8 %
|
|
43.6 %
|
Foreign Currency
Impact
|
|
(1.1) %
|
|
(0.8) %
|
|
(0.9) %
|
|
(1.2) %
|
|
(1.1) %
|
|
(3.6) %
|
|
(2.6) %
|
|
(2.0) %
|
|
(1.2) %
|
|
(1.4) %
|
ADJUSTED DILUTED
EARNINGS PER SHARE
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
GAAP Diluted Earnings
Per Share
|
|
$
0.48
|
|
$
2.12
|
|
$
0.39
|
|
$
3.96
|
Intangible
Amortization
|
|
1.02
|
|
0.53
|
|
1.54
|
|
1.05
|
Transaction and Related
Costs (a)
|
|
0.16
|
|
0.01
|
|
1.48
|
|
0.05
|
Inventory Step
Up
|
|
0.50
|
|
0.06
|
|
0.50
|
|
0.10
|
Share-Based
Compensation Expense (b)
|
|
0.18
|
|
0.08
|
|
0.49
|
|
0.14
|
Restructuring and
Related Costs (c)
|
|
0.18
|
|
(0.01)
|
|
0.25
|
|
0.18
|
Discrete Tax
Items
|
|
0.01
|
|
—
|
|
0.10
|
|
—
|
Impairments and Exit
Related Costs
|
|
0.03
|
|
—
|
|
0.03
|
|
—
|
Gain on Sale of
Assets
|
|
—
|
|
(0.03)
|
|
(0.01)
|
|
(0.04)
|
Adjusted Diluted
Earnings Per Share
|
|
$
2.56
|
|
$
2.76
|
|
$
4.77
|
|
$
5.44
|
|
(a)
|
For 2023, primarily
relates to (1) legal, professional service, severance, certain
other employee compensation and financing costs and incremental
net
interest expense on new
debt associated with the Altra Transaction and (2) legal and
professional service costs associated with the strategic review
of
the Industrial Systems
operating segment. For 2022, primarily relates to legal and
professional service costs associated with the merger with
the
Rexnord PMC business
and acquisition of the Arrowhead business.
|
(b)
|
Includes the impact
related to the accelerated vesting of awards for certain former
Altra employees in the first quarter 2023.
|
(c)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset
charges.
|
2023 ADJUSTED ANNUAL
GUIDANCE
|
|
Minimum
|
|
Maximum
|
2023
GAAP Diluted EPS Annual
Guidance
|
|
$
2.69
|
|
$
3.09
|
Intangible
Amortization
|
|
3.60
|
|
3.60
|
Transaction and Related
Costs (a)
|
|
1.55
|
|
1.55
|
Restructuring and
Related Costs (b)
|
|
0.85
|
|
0.85
|
Share-Based
Compensation Expense (c)
|
|
0.80
|
|
0.80
|
Inventory Step
Up
|
|
0.59
|
|
0.59
|
Discrete Tax
Items
|
|
0.10
|
|
0.10
|
Impairments and Exit
Related Costs
|
|
0.03
|
|
0.03
|
Gain on Sales of
Assets
|
|
(0.01)
|
|
(0.01)
|
2023
Adjusted Diluted EPS Annual
Guidance
|
|
$
10.20
|
|
$
10.60
|
|
(a)
|
For 2023, primarily
relates to (1) legal, professional service, severance, certain
other employee compensation and financing costs and incremental
net
interest expense on new
debt associated with the Altra Transaction and (2) legal and
professional service costs associated with the strategic review
of
the Industrial Systems
operating segment. For 2022, primarily relates to legal and
professional service costs associated with the
merger with
the Rexnord PMC business and acquisition of the Arrowhead
business.
|
(b)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset
charges.
|
(c)
|
Includes the impact
related to the accelerated vesting of awards for certain former
Altra employees in the first quarter 2023.
|
|
|
Three Months
Ended
|
ADJUSTED
EBITDA
|
|
Industrial
Powertrain
Solutions
|
|
Power Efficiency
Solutions
|
|
Automation
&
Motion
Control
|
|
Industrial
Systems
|
|
Total
Regal
Rexnord
|
(Dollars in
Millions)
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
GAAP Income from
Operations
|
|
$
40.2
|
|
$
68.8
|
|
$
59.8
|
|
$
86.0
|
|
$
48.6
|
|
$
22.2
|
|
$ 3.0
|
|
$
17.9
|
|
$
151.6
|
|
$ 194.9
|
Transaction and Related
Costs (a)
|
|
6.5
|
|
0.9
|
|
—
|
|
—
|
|
3.0
|
|
0.4
|
|
1.8
|
|
—
|
|
11.3
|
|
1.3
|
Inventory Step
Up
|
|
31.6
|
|
4.7
|
|
—
|
|
—
|
|
12.5
|
|
1.3
|
|
—
|
|
—
|
|
44.1
|
|
6.0
|
Restructuring and
Related Costs (b)
|
|
2.6
|
|
(4.6)
|
|
10.7
|
|
0.3
|
|
2.0
|
|
3.0
|
|
0.7
|
|
0.2
|
|
16.0
|
|
(1.1)
|
Impairments and Exit
Related
Costs
|
|
0.3
|
|
—
|
|
—
|
|
—
|
|
2.1
|
|
—
|
|
—
|
|
—
|
|
2.4
|
|
—
|
Gain on Sale of
Assets
|
|
—
|
|
(2.6)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.6)
|
Adjusted Income from
Operations*
|
|
$
81.2
|
|
$
67.2
|
|
$
70.5
|
|
$
86.3
|
|
$
68.2
|
|
$
26.9
|
|
$ 5.5
|
|
$
18.1
|
|
$
225.4
|
|
$ 198.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
$
51.7
|
|
$
31.0
|
|
$ 2.1
|
|
$ 2.1
|
|
$
35.4
|
|
$
13.2
|
|
$ 0.2
|
|
$ 0.2
|
|
$
89.4
|
|
$
46.5
|
Depreciation
|
|
22.7
|
|
13.1
|
|
9.7
|
|
9.7
|
|
12.2
|
|
5.7
|
|
3.0
|
|
3.4
|
|
47.6
|
|
31.9
|
Share-Based
Compensation
Expense
|
|
8.0
|
|
1.9
|
|
2.8
|
|
1.5
|
|
3.0
|
|
1.5
|
|
0.7
|
|
—
|
|
14.5
|
|
4.9
|
Other Income,
Net
|
|
1.1
|
|
0.5
|
|
0.7
|
|
0.6
|
|
0.7
|
|
0.2
|
|
0.3
|
|
0.2
|
|
2.8
|
|
1.5
|
Adjusted
EBITDA
|
|
$
164.7
|
|
$ 113.7
|
|
$
85.8
|
|
$ 100.2
|
|
$
119.5
|
|
$
47.5
|
|
$ 9.7
|
|
$
21.9
|
|
$
379.7
|
|
$ 283.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Margin
%
|
|
5.8 %
|
|
16.3 %
|
|
13.0 %
|
|
14.4 %
|
|
10.3 %
|
|
11.4 %
|
|
2.2 %
|
|
13.0 %
|
|
8.6 %
|
|
14.4 %
|
Adjusted Operating
Margin %
|
|
11.6 %
|
|
15.9 %
|
|
15.3 %
|
|
14.5 %
|
|
14.4 %
|
|
13.9 %
|
|
4.0 %
|
|
13.1 %
|
|
12.7 %
|
|
14.7 %
|
Adjusted EBITDA Margin
%
|
|
23.6 %
|
|
26.9 %
|
|
18.6 %
|
|
16.8 %
|
|
25.3 %
|
|
24.5 %
|
|
7.1 %
|
|
15.9 %
|
|
21.5 %
|
|
21.0 %
|
|
(a)
|
For 2023, primarily
relates to (1) legal, professional service, and certain other
employee compensation costs associated with the Altra Transaction
and (2)
legal and professional
service costs associated with the strategic review of the
Industrial Systems operating segment. For 2022,
primarily relates to legal
and professional
service costs associated with the merger with the Rexnord PMC
business and acquisition of the Arrowhead business.
|
(b)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset charges.
|
|
|
Six Months
Ended
|
ADJUSTED
EBITDA
|
|
Industrial
Powertrain
Solutions
|
|
Power
Efficiency
Solutions
|
|
Automation
&
Motion
Control
|
|
Industrial
Systems
|
|
Total
Regal
Rexnord
|
(Dollars in
Millions)
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
|
Jun
30,
2023
|
|
Jun 30,
2022
|
GAAP Income from
Operations
|
|
$
66.1
|
|
$ 115.1
|
|
$
105.2
|
|
$ 190.4
|
|
$
43.4
|
|
$
34.5
|
|
$ 5.8
|
|
$
24.8
|
|
$
220.5
|
|
$
364.8
|
Transaction and Related
Costs (a)
|
|
48.5
|
|
2.9
|
|
—
|
|
—
|
|
26.5
|
|
1.4
|
|
3.9
|
|
—
|
|
78.9
|
|
4.3
|
Inventory Step
Up
|
|
31.6
|
|
6.5
|
|
—
|
|
—
|
|
12.5
|
|
2.5
|
|
—
|
|
—
|
|
44.1
|
|
9.0
|
Restructuring and
Related Costs (b)
|
|
3.4
|
|
9.8
|
|
15.4
|
|
1.3
|
|
2.5
|
|
4.5
|
|
0.9
|
|
0.3
|
|
22.2
|
|
15.9
|
Impairments and Exit
Related Costs
|
|
0.3
|
|
—
|
|
—
|
|
—
|
|
2.1
|
|
—
|
|
—
|
|
—
|
|
2.4
|
|
—
|
Gain on Sale of
Assets
|
|
—
|
|
(2.6)
|
|
—
|
|
(0.7)
|
|
(0.6)
|
|
—
|
|
—
|
|
—
|
|
(0.6)
|
|
(3.3)
|
Adjusted Income from
Operations
|
|
$
149.9
|
|
$ 131.7
|
|
$
120.6
|
|
$ 191.0
|
|
$
86.4
|
|
$
42.9
|
|
$
10.6
|
|
$
25.1
|
|
$
367.5
|
|
$
390.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
$
81.5
|
|
$
60.8
|
|
$ 4.2
|
|
$ 4.3
|
|
$
49.6
|
|
$
28.3
|
|
$ 0.4
|
|
$ 0.4
|
|
$
135.7
|
|
$
93.8
|
Depreciation
|
|
34.5
|
|
25.9
|
|
19.3
|
|
19.6
|
|
17.7
|
|
10.3
|
|
6.3
|
|
6.7
|
|
77.8
|
|
62.5
|
Share-Based
Compensation
Expense (c)
|
|
18.6
|
|
4.1
|
|
4.8
|
|
3.9
|
|
11.6
|
|
2.7
|
|
1.2
|
|
0.5
|
|
36.2
|
|
11.2
|
Other Income,
Net
|
|
1.6
|
|
0.9
|
|
1.3
|
|
1.2
|
|
0.9
|
|
0.4
|
|
0.4
|
|
0.3
|
|
4.2
|
|
2.8
|
Adjusted
EBITDA
|
|
$
286.1
|
|
$ 223.4
|
|
$
150.2
|
|
$ 220.0
|
|
$
166.2
|
|
$
84.6
|
|
$
18.9
|
|
$
33.0
|
|
$
621.4
|
|
$
561.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Margin
%
|
|
5.9 %
|
|
13.7 %
|
|
11.3 %
|
|
16.4 %
|
|
6.4 %
|
|
9.1 %
|
|
2.1 %
|
|
9.2 %
|
|
7.4 %
|
|
13.8 %
|
Adjusted Operating
Margin %
|
|
13.5 %
|
|
15.7 %
|
|
13.0 %
|
|
16.4 %
|
|
12.8 %
|
|
11.3 %
|
|
3.9 %
|
|
9.3 %
|
|
12.3 %
|
|
14.8 %
|
Adjusted EBITDA Margin
%
|
|
25.7 %
|
|
26.6 %
|
|
16.2 %
|
|
18.9 %
|
|
24.6 %
|
|
22.4 %
|
|
6.9 %
|
|
12.3 %
|
|
20.8 %
|
|
21.2 %
|
|
(a)
|
For 2023, primarily
relates to (1) legal, professional service, and certain other
employee compensation costs associated with the Altra Transaction
and (2)
legal and professional
service costs associated with the strategic review of the
Industrial Systems operating segment. For 2022,
primarily relates to legal
and professional
service costs associated with the merger with the Rexnord PMC
business and acquisition of the Arrowhead business.
|
(b)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset charges.
|
(c)
|
Includes the impact
related to the accelerated vesting of awards for certain former
Altra employees in the first quarter 2023.
|
NET INCOME TO
ADJUSTED EBITDA
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
Net Income
|
|
$
33.2
|
|
$
143.2
|
|
$
27.7
|
|
$
270.3
|
Plus: Income
Taxes
|
|
9.9
|
|
40.6
|
|
22.2
|
|
76.8
|
Plus: Interest
Expense
|
|
116.4
|
|
13.4
|
|
211.8
|
|
22.4
|
Less: Interest
Income
|
|
(5.1)
|
|
(0.8)
|
|
(37.0)
|
|
(1.9)
|
Plus:
Depreciation
|
|
47.6
|
|
31.9
|
|
77.8
|
|
62.5
|
Plus:
Amortization
|
|
89.4
|
|
46.5
|
|
135.7
|
|
93.8
|
EBITDA*
|
|
291.4
|
|
274.8
|
|
438.2
|
|
523.9
|
Plus: Transaction and
Related Costs (a)
|
|
11.3
|
|
1.3
|
|
78.9
|
|
4.3
|
Plus: Inventory Step
Up
|
|
44.1
|
|
6.0
|
|
44.1
|
|
9.0
|
Plus: Share-Based
Compensation Expense (c)
|
|
14.5
|
|
4.9
|
|
36.2
|
|
11.2
|
Plus: Restructuring and
Related Costs (b)
|
|
16.0
|
|
(1.1)
|
|
22.2
|
|
15.9
|
Plus: Impairments and
Exit Related Costs
|
|
2.4
|
|
—
|
|
2.4
|
|
—
|
Less: Gain on Sale of
Assets
|
|
—
|
|
(2.6)
|
|
(0.6)
|
|
(3.3)
|
Adjusted
EBITDA
|
|
$
379.7
|
|
$
283.3
|
|
$
621.4
|
|
$
561.0
|
|
(a)
|
For 2023, primarily
relates to (1) legal, professional service, and certain other
employee compensation costs associated with the Altra Transaction
and (2)
legal and professional
service costs associated with the strategic review of the
Industrial Systems operating segment. For 2022,
primarily relates to legal
and professional
service costs associated with the merger with the Rexnord PMC
business and acquisition of the Arrowhead business.
|
(b)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset charges.
|
(c)
|
Includes the impact
related to the accelerated vesting of awards for certain former
Altra employees in the first quarter 2023.
|
DEBT TO
EBITDA
|
|
|
|
Last
Twelve
Months
|
|
|
|
|
Jun 30,
2023
|
Proforma Net Income
(d)
|
|
|
|
$
120.7
|
Plus: Income
Taxes
|
|
|
|
26.9
|
Plus: Interest
Expense
|
|
|
|
479.1
|
Less: Interest
Income
|
|
|
|
(11.1)
|
Plus:
Depreciation
|
|
|
|
186.6
|
Plus:
Amortization
|
|
|
|
347.3
|
Proforma
EBITDA*
|
|
|
|
$
1,149.5
|
Plus: Transaction and
Related Costs (a)
|
|
|
|
111.1
|
Plus: Restructuring and
Related Costs (b)
|
|
|
|
72.3
|
Plus: Share-Based
Compensation Expense (c)
|
|
|
|
58.2
|
Plus: Inventory Step
Up
|
|
|
|
40.6
|
Plus: Impairments and
Exit Related Costs
|
|
|
|
8.2
|
Less: Gain on Sale of
Assets
|
|
|
|
(0.6)
|
Proforma Adjusted
EBITDA*
|
|
|
|
$
1,439.3
|
Altra Synergies
Expected to be Realized Within 24 Months
|
|
|
|
120.0
|
Normalized Adjusted
EBITDA
|
|
|
|
$
1,559.3
|
|
|
|
|
|
Current Maturities of
Long-Term Debt
|
|
|
|
$
72.6
|
Long-Term
Debt
|
|
|
|
6,609.7
|
Total Gross
Debt
|
|
|
|
$
6,682.3
|
Cash
|
|
|
|
(659.6)
|
Net
Debt
|
|
|
|
$
6,022.7
|
|
|
|
|
|
Gross Debt/Normalized
Adjusted EBITDA
|
|
|
|
4.29
|
|
|
|
|
|
Net Debt/Normalized
Adjusted EBITDA
|
|
|
|
3.86
|
|
(a)
|
For 2023, primarily
relates to (1) legal, professional service, and certain other
employee compensation costs associated with the Altra Transaction
and
(2) legal and
professional service costs associated with the strategic review of
the Industrial Systems operating segment. For 2022,
primarily relates to
legal and professional
service costs associated with the merger with the Rexnord PMC
business and acquisition of the Arrowhead business.
|
(b)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset
charges.
|
(c)
|
Includes the impact
related to the accelerated vesting of awards for certain former
Altra employees in the first quarter 2023.
|
(d)
|
Includes Altra
results.
|
FREE CASH
FLOW
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
Net Cash Provided by
Operating Activities
|
|
$
221.1
|
|
$
110.8
|
|
$
327.3
|
|
$
104.9
|
Payments for Certain
Acquisition Costs (Net of Tax of $11.4 Million)
(a)
|
|
—
|
|
—
|
|
86.9
|
|
—
|
Adjusted Cash Flows
from Operations*
|
|
221.1
|
|
110.8
|
|
414.2
|
|
104.9
|
Additions to Property
Plant and Equipment
|
|
(44.8)
|
|
(19.2)
|
|
(63.5)
|
|
(32.6)
|
Free Cash
Flow
|
|
$
176.3
|
|
$
91.6
|
|
$
350.7
|
|
$
72.3
|
|
|
|
|
|
|
|
|
|
GAAP Net Income
Attributable to Regal Rexnord Corporation
|
|
$
32.1
|
|
$
142.0
|
|
$
26.2
|
|
$
267.6
|
Certain Acquisition
Costs (Net of Tax of $5.9 Million) (b)
|
|
—
|
|
—
|
|
32.3
|
|
—
|
Write-Off of Bridge
Facility Costs (Net of Tax of $4.1 Million)
|
|
—
|
|
—
|
|
13.0
|
|
—
|
Impairments (Net of Tax
of $0.6 Million)
|
|
1.8
|
|
—
|
|
1.8
|
|
—
|
Adjusted Net Income
Attributable to Regal Rexnord Corporation*
|
|
$
33.9
|
|
$
142.0
|
|
$
73.3
|
|
$
267.6
|
|
|
|
|
|
|
|
|
|
Free Cash Flow as a
Percentage of Adjusted Net Income Attributable to Regal Rexnord
Corporation*
|
|
520.1 %
|
|
64.5 %
|
|
478.4 %
|
|
27.0 %
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Reflects the payment of
Regal Rexnord's and Altra's advisor success fees.
|
(b)
|
Reflects the charge
related to Regal Rexnord's advisor success fees.
|
ADJUSTED EFFECTIVE
TAX RATE
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
Jun 30,
2023
|
|
Jun 30,
2022
|
|
|
|
|
|
|
|
|
Income before
Taxes
|
$
43.1
|
|
$
183.8
|
|
$
49.9
|
|
$
347.1
|
Provision for Income
Taxes
|
9.9
|
|
40.6
|
|
22.2
|
|
76.8
|
Effective Tax
Rate
|
22.9 %
|
|
22.1 %
|
|
44.5 %
|
|
22.1 %
|
|
|
|
|
|
|
|
|
Income before
Taxes
|
$
43.1
|
|
$
183.8
|
|
$
49.9
|
|
$
347.1
|
Intangible
Amortization
|
89.4
|
|
46.5
|
|
135.7
|
|
93.8
|
Transaction and Related
Costs (a)
|
12.4
|
|
1.3
|
|
118.2
|
|
4.3
|
Inventory Step
Up
|
44.1
|
|
6.0
|
|
44.1
|
|
9.0
|
Share-Based
Compensation Expense (c)
|
14.5
|
|
4.9
|
|
36.2
|
|
11.2
|
Restructuring and
Related Costs (b)
|
16.0
|
|
(1.1)
|
|
22.2
|
|
15.9
|
Impairments and Exit
Related Costs
|
2.4
|
|
—
|
|
2.4
|
|
—
|
Gain on Sales of
Assets
|
—
|
|
(2.6)
|
|
(0.6)
|
|
(3.3)
|
Adjusted Income before
Taxes*
|
$
221.9
|
|
$
238.8
|
|
$
408.1
|
|
$
478.0
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes
|
$
9.9
|
|
$
40.6
|
|
$
22.2
|
|
$
76.8
|
Tax Effect of
Intangible Amortization
|
21.6
|
|
11.2
|
|
33.0
|
|
23.0
|
Tax Effect of
Transaction and Related Costs
|
1.5
|
|
0.3
|
|
19.8
|
|
1.0
|
Tax Effect of Inventory
Step Up
|
10.6
|
|
1.5
|
|
10.6
|
|
2.1
|
Tax Effect of
Share-Based Compensation Expense
|
2.5
|
|
(0.7)
|
|
3.7
|
|
1.5
|
Tax Effect from
Restructuring and Related Costs
|
4.3
|
|
(0.1)
|
|
5.9
|
|
4.0
|
Tax Effect from
Impairments and Exit Related Costs
|
0.6
|
|
—
|
|
0.6
|
|
—
|
Tax Effect of Gain on
Sales of Assets
|
—
|
|
(0.6)
|
|
(0.1)
|
|
(0.8)
|
Discrete Tax
Items
|
(0.3)
|
|
—
|
|
(6.8)
|
|
—
|
Adjusted Provision for
Income Taxes*
|
$
50.7
|
|
$
52.2
|
|
$
88.9
|
|
$
107.6
|
|
|
|
|
|
|
|
|
Adjusted Effective Tax
Rate*
|
22.8 %
|
|
21.9 %
|
|
21.8 %
|
|
22.5 %
|
|
(a)
|
For 2023, primarily
relates to (1) legal, professional service, severance, certain
other employee compensation and financing costs and incremental
net
interest expense on new
debt associated with the Altra Transaction and (2) legal and
professional service costs associated with the strategic review
of
the Industrial Systems
operating segment. For 2022, primarily relates to legal and
professional service costs associated with the merger with the
Rexnord PMC business and acquisition of the Arrowhead
business.
|
(b)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset
charges.
|
(c)
|
Includes the impact
related to the accelerated vesting of awards for certain former
Altra employees in the first quarter 2023.
|
ORGANIC SALES
GROWTH
|
|
Three Months
Ended
|
|
|
June 30,
2023
|
|
|
Industrial
Powertrain
Solutions
|
|
Power
Efficiency
Solutions
|
|
Automation
&
Motion
Control
|
|
Industrial
Systems
|
|
Total
Regal
Rexnord
|
Net Sales Three Months
Ended Jun 30,
2023
|
|
$
698.7
|
|
$
460.1
|
|
$
473.1
|
|
$
136.7
|
|
$ 1,768.6
|
Net Sales from
Businesses Acquired
|
|
(284.1)
|
|
—
|
|
(267.3)
|
|
—
|
|
(551.4)
|
Impact from Foreign
Currency Exchange Rates
|
|
1.5
|
|
3.3
|
|
1.6
|
|
2.7
|
|
9.1
|
Organic Sales Three
Months Ended Jun
30, 2023
|
|
$
416.1
|
|
$
463.4
|
|
$
207.4
|
|
$
139.4
|
|
$ 1,226.3
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales Three Months
Ended Jun 30,
2022
|
|
$
422.1
|
|
$
595.4
|
|
$
194.1
|
|
$
137.8
|
|
$ 1,349.4
|
Adjusted Net Sales
Three Months
Ended Jun 30,
2022
|
|
$
422.1
|
|
$
595.4
|
|
$
194.1
|
|
$
137.8
|
|
$ 1,349.4
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended Jun
30, 2023
Organic Sales Growth
%
|
|
(1.4) %
|
|
(22.2) %
|
|
6.9 %
|
|
1.2 %
|
|
(9.1) %
|
Three Months Ended Jun
30, 2023 Net
Sales Growth
%
|
|
65.5 %
|
|
(22.7) %
|
|
143.7 %
|
|
(0.8) %
|
|
31.1 %
|
|
|
|
|
|
|
|
|
|
|
|
ORGANIC SALES
GROWTH
|
|
Six Months
Ended
|
|
|
June 30,
2023
|
|
|
Industrial
Powertrain
Solutions
|
|
Power
Efficiency
Solutions
|
|
Automation
&
Motion
Control
|
|
Industrial
Systems
|
|
Total
Regal
Rexnord
|
Net Sales Six Months
Ended Jun 30,
2023
|
|
$ 1,113.1
|
|
$
929.6
|
|
$
676.3
|
|
$
273.7
|
|
$ 2,992.7
|
Net Sales from
Businesses Acquired
|
|
(284.1)
|
|
—
|
|
(267.3)
|
|
—
|
|
(551.4)
|
Impact from Foreign
Currency Exchange
Rates
|
|
8.9
|
|
10.9
|
|
4.2
|
|
6.9
|
|
30.9
|
Organic Sales Six
Months Ended Jun 30, 2023
|
|
$
837.9
|
|
$
940.5
|
|
$
413.2
|
|
$
280.6
|
|
$ 2,472.2
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales Six Months
Ended Jun 30,
2022
|
|
$
838.4
|
|
$ 1,162.6
|
|
$
378.4
|
|
$
268.5
|
|
$ 2,647.9
|
Adjusted Net Sales Six
Months Ended
Jun 30, 2022
|
|
$
838.4
|
|
$ 1,162.6
|
|
$
378.4
|
|
$
268.5
|
|
$ 2,647.9
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended Jun
30, 2023 Organic
Sales Growth
%
|
|
(0.1) %
|
|
(19.1) %
|
|
9.2 %
|
|
4.5 %
|
|
(6.6) %
|
Six Months Ended Jun
30, 2023 Net
Sales Growth
%
|
|
32.8 %
|
|
(20.0) %
|
|
78.7 %
|
|
1.9 %
|
|
13.0 %
|
PRO FORMA ORGANIC
SALES
GROWTH
(INCLUDING ALTRA)
|
|
Three Months
Ended
|
|
|
|
|
June 30,
2023
|
|
|
|
|
Industrial
Powertrain
Solutions
|
|
Power
Efficiency
Solutions
|
|
Automation
&
Motion
Control
|
|
Industrial
Systems
|
|
Total Regal
Rexnord
|
|
Net Sales Three Months
Ended Jun 30, 2023
|
|
$
698.7
|
|
$
460.1
|
|
$
473.1
|
|
$
136.7
|
|
$
1,768.6
|
|
Impact from Foreign
Currency Exchange Rates
|
|
2.0
|
|
3.3
|
|
5.0
|
|
2.7
|
|
13.0
|
|
Pro Forma Organic Sales
Three Months Ended Jun 30, 2023
|
|
$
700.7
|
|
$
463.4
|
|
$
478.1
|
|
$
139.4
|
|
$
1,781.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales Three Months
Ended Jun 30, 2022
|
|
$
422.1
|
|
$
595.4
|
|
$
194.1
|
|
$
137.8
|
|
$
1,349.4
|
|
Net Sales from
Businesses Acquired
|
|
252.9
|
|
—
|
|
245.2
|
|
—
|
|
498.1
|
|
Pro Forma Adjusted Net
Sales Three Months Ended Jun 30, 2022
|
|
$
675.0
|
|
$
595.4
|
|
$
439.3
|
|
$
137.8
|
|
$
1,847.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended Jun
30, 2023 Pro Forma Organic Sales Growth %
|
|
0.6 %
|
(a)
|
(22.2) %
|
|
4.0 %
|
(a)
|
1.2 %
|
|
(5.7) %
|
(a)
|
Three Months Ended Jun
30, 2023 Pro Forma Net Sales Growth %
|
|
0.3 %
|
(b)
|
(22.7) %
|
|
2.9 %
|
(b)
|
(0.8) %
|
|
(6.4) %
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Amounts adjusted to reflect pro forma
organic sales growth adjusted for an immaterial amount of Altra
revenue from the acquisition date to March 31,
2023, which was reflected in the Company's results for the quarter
ended June 30, 2023.
|
|
(b) Amounts adjusted to reflect pro forma net sales
growth adjusted for an immaterial amount of Altra revenue from the
acquisition date to March 31, 2023,
which was reflected in the Company's results for the quarter
ended June 30, 2023.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRO FORMA ORGANIC
SALES
GROWTH
(INCLUDING ALTRA)
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2023
|
|
|
|
|
Industrial
Powertrain
Solutions
|
|
Power
Efficiency
Solutions
|
|
Automation
&
Motion
Control
|
|
Industrial
Systems
|
|
Total
Regal
Rexnord
|
|
Net Sales Six Months
Ended Jun 30,
2023
|
|
$
1,113.1
|
|
$
929.6
|
|
$
676.3
|
|
$
273.7
|
|
$
2,992.7
|
|
Net Sales from
Businesses Acquired
|
|
234.4
|
|
—
|
|
216.7
|
|
—
|
|
451.1
|
|
Impact from Foreign
Currency Exchange
Rates
|
|
15.2
|
|
10.9
|
|
14.5
|
|
6.9
|
|
47.5
|
|
Pro Forma Organic Sales
Six Months
Ended
Jun 30, 2023
|
|
$
1,362.7
|
|
$
940.5
|
|
$
907.5
|
|
$
280.6
|
|
$
3,491.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales Six Months
Ended Jun 30,
2022
|
|
$
838.4
|
|
$
1,162.6
|
|
$
378.4
|
|
$
268.5
|
|
$
2,647.9
|
|
Net Sales from
Businesses Acquired (a)
|
|
504.8
|
|
—
|
|
463.6
|
|
—
|
|
968.4
|
|
Pro Forma Adjusted Net
Sales Six
Months Ended Jun
30, 2022
|
|
$
1,343.2
|
|
$
1,162.6
|
|
$
842.0
|
|
$
268.5
|
|
$
3,616.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended Jun
30, 2023 Pro
Forma Organic Sales
Growth
|
|
1.5 %
|
(b)
|
(19.1) %
|
|
7.8 %
|
(b)
|
4.5 %
|
|
(3.5) %
|
(b)
|
Six Months Ended Jun
30, 2023 Pro
Forma Net Sales Growth
%
|
|
0.3 %
|
(c)
|
(20.0) %
|
|
6.1 %
|
(c)
|
1.9 %
|
|
(4.8) %
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Excludes the revenues from Altra's Jacobs
Vehicle Systems business, which was sold in April
2022.
|
|
(b)
Amounts adjusted to reflect pro forma
organic sales growth.
|
|
(c)
Amounts adjusted to reflect pro forma net
sales growth.
|
|
View original
content:https://www.prnewswire.com/news-releases/newly-transformed-regal-rexnord-reports-strong-second-quarter-2023-financial-results-three-months-in-altra-integration--synergy-realization-going-very-well-301889635.html
SOURCE Regal Rexnord Corporation