CLOSED ON SALE OF INDUSTRIAL SYSTEMS BUSINESS, COMPLETING
PLANNED STRATEGIC PORTFOLIO TRANSFORMATION, WITH NET PROCEEDS TO BE
USED FOR DEBT REDUCTION
ANNOUNCED UPDATED BUSINESS PURPOSE TO ALIGN WITH TRANSFORMED
BUSINESS PORTFOLIO
We Create A Better Tomorrow With
Sustainable Solutions That Power, Transmit & Control
Motion
MILWAUKEE, May 6, 2024
/PRNewswire/ -- Regal Rexnord Corporation (NYSE: RRX)
1Q Highlights
- GAAP Diluted EPS Of $0.30,
Adjusted Diluted EPS* Of $2.00
- Adjusted Free Cash Flow* Of $64.6
Million; On Track To Full Year Outlook Of $700 Million
- Paid Down $135.0 Million Of Gross
Debt
- Sales Of $1,547.7 Million, Up
26.4% Versus PY, Down 7.5% On A Pro Forma Organic Basis
- GAAP Gross Margin Of 35.7%; Adjusted Gross Margin* Of 36.5%
Versus PY Of 33.5% On A Pro Forma Basis*
- GAAP Net Income Of $20.4 Million
Versus PY GAAP Net Loss Of $(5.5)
Million
- Adjusted EBITDA* Of $317.4
Million Versus PY Of $327.1
Million On A Pro Forma Basis*
- Adjusted EBITDA Margin* Of 20.5%, Up 100 Basis Points Versus PY
On A Pro Forma Basis*
- Synergies Of $26 Million; On
Track To Deliver $90 Million In The
Year
CEO Louis Pinkham commented,
"The first quarter marked a strong start to the year for Regal
Rexnord on several fronts. Our team delivered adjusted gross
margins of 36.5% or 37.4% without Industrial Systems, well on our
path to 40%, as well as 100 basis points of adjusted EBITDA margin
expansion on a pro forma, year-over-year basis, with particularly
solid performance in IPS. Cash flow was strong considering normal
seasonality, keeping us firmly on track to meet our $700 million free cash flow goal for 2024. And we
made steady progress on our many lean, 80/20 and new product
development initiatives. We did confront further market headwinds
in the quarter, particularly in our PES segment, but our IPS and
AMC segments both saw improving order momentum as the quarter
unfolded. While orders were down in the first quarter versus prior
year, book-to-bill was positive for the first time in four
quarters."
Mr. Pinkham continued, "As previously communicated, we also
recently closed on selling the Industrial Systems business,
concluding a series of highly intentional, strategic M&A
transactions - Rexnord PMC, Altra, and Industrial Systems - that
have created a much stronger portfolio for our future. Our
go-forward portfolio is characterized by roughly 50% exposure to
secular markets, higher RD&E investment and product vitality
than at any point in our history, and gross margins that evidence a
widened competitive moat. In short, we now have a more durable
portfolio, servicing more durable markets, well-positioned to
deliver faster and more profitable growth."
Mr. Pinkham concluded, "Looking ahead, we continue to remain
cautiously optimistic that market headwinds confronting our PES
segment and our factory automation business within AMC will abate
in the second half of 2024. In the meantime, our team remains
focused on executing our many value creation opportunities -
M&A cost and growth synergies, free cash flow acceleration and
debt reduction, and a robust pipeline of new product launches, to
name just a few. With so many value creation levers before us, I
remain extremely excited about Regal Rexnord's future."
Guidance
The Company is updating its annual guidance for 2024 GAAP
Diluted Earnings per Share to a range of $3.97 to $4.77 and
for Adjusted Diluted Earnings per Share to a range of $9.60 to $10.40.
The change reflects impacts tied to closing the sale of the
Industrial Systems business.
Segment Performance
Segment results versus the prior year are summarized below:
- Automation & Motion Control net sales were $400.2 million, an increase of 96.9%, or a
decrease of 4.5% on a pro forma organic basis*. Results reflect the
Altra acquisition plus strength in the medical, data center, and
aerospace markets, net of continued weakness in the discreet
factory automation and food & beverage end markets. Adjusted
EBITDA margin was 22.5% of adjusted net sales*.
- Industrial Powertrain Solutions net sales were $643.4 million, an increase of 55.3%, or a
decrease of 1.0% on a pro forma organic basis*. Results reflect the
Altra acquisition, plus strength in general industrial and energy
markets, net of weakness in the alternative energy, construction
equipment, and agriculture markets. Adjusted EBITDA margin was
25.8% of adjusted net sales*.
- Power Efficiency Solutions net sales were $385.3 million, a decrease of 17.9%, or a
decrease of 17.8% on an organic basis*. The decline primarily
reflects continued weakness in North
America residential HVAC markets, particularly in heating
products. Adjusted EBITDA margin was 13.2% of adjusted net
sales*.
- Industrial Systems net sales were $118.8
million, a decrease of 13.3%, or a decrease of 12.6% on an
organic basis. Adjusted EBITDA margin was 8.6% of adjusted net
sales*.
As previously disclosed, with the sale of the Industrial Systems
business, effective May 1, 2024, the
Company is comprised of three operating segments: Industrial
Powertrain Solutions, Power Efficiency Solutions, and Automation
& Motion Control.
|
*Non-GAAP Financial
Measurement, See Appendix for Reconciliation
|
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, May 7, 2024. 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 2519845# 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 1762778#. Both replays will be accessible for three months
after the earnings call.
About Regal Rexnord
Regal Rexnord's 30,000 associates around the
world help create a better tomorrow by providing sustainable
solutions that power, transmit and control motion. The Company's
electric motors and air moving subsystems provide the power to
create motion. A portfolio of highly engineered power transmission
components and subsystems efficiently transmits motion to power
industrial applications. The Company's automation offering,
comprised of controllers, drives, precision motors, and
actuators, controls motion in applications ranging from factory
automation to precision tools used in
surgical applications.
The Company's end markets benefit from meaningful secular demand
tailwinds, and include factory automation, food & beverage,
aerospace, medical, data center, warehouse, alternative energy,
residential and commercial buildings, general industrial,
construction, metals and mining, and agriculture.
Regal Rexnord is comprised of three operating segments:
Industrial Powertrain Solutions, Power Efficiency Solutions, and
Automation & Motion Control. Regal Rexnord is headquartered in
Milwaukee, Wisconsin and has
manufacturing, sales and service facilities worldwide. For more
information, including a copy of our Sustainability Report, visit
RegalRexnord.com.
Forward Looking Statements
All statements in this communication, other than those relating
to historical facts, are "forward-looking statements."
Forward-looking statements can generally be identified by their use
of terms such as "anticipate," "believe," "confident," "estimate,"
"expect," "intend," "plan," "may," "will," "project," "forecast,"
"would," "could," "should," and similar expressions, including
references to assumptions. Forward-looking statements are not
guarantees of future performance and are subject to a number of
assumptions, risks and uncertainties, many of which are beyond our
control, which could cause actual results to differ materially from
such statements. Forward-looking statements include, but are not
limited to, statements about future strategic plans and future
financial and operating results. Important factors that could cause
actual results to differ materially from those presented or implied
in the forward-looking statements in this communication include,
without limitation: the possibility that the Company may be unable
to achieve expected benefits, synergies and operating efficiencies
in connection with the sale of the Industrial Motors and Generators
businesses, the acquisition of Altra Industrial Motion Corp.
("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 Industrial Motion Corp. ("Altra") and the Rexnord PMC
business; the Company's substantial indebtedness as a result of the
Altra Transaction and the effects of such indebtedness on the
Company's financial flexibility; the Company'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; unanticipated operating costs, customer loss and
business disruption; the Company's ability to retain key executives
and employees; 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; 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 artificial intelligence, and
marketplace acceptance of new and existing products; dependence on
significant customers and distributors; 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 ongoing
geopolitical conflicts; 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; economic changes in global markets, such as
reduced demand for products, currency exchange rates, inflation
rates, interest rates, recession, government policies, including
policy changes affecting taxation, trade, tariffs, immigration,
customs, border actions and the like, and other external factors
that the Company 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; unanticipated liabilities of acquired businesses;
unanticipated adverse effects or liabilities from business exits or
divestitures; the Company'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 the
Company'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 laws and regulations; and other
factors that can be found in our filings with the Securities and
Exchange Commission ("SEC"), including our most recent periodic
reports filed on Form 10-K and Form 10-Q, which are available on
our Investor Relations website. Forward-looking statements are
given only as of the date of this communication and we disclaim any
obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as required by law.
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 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, adjusted gross
margin, pro forma adjusted gross margin, net debt, EBITDA, adjusted
EBITDA, pro forma EBITDA, pro forma adjusted EBITDA, adjusted
EBITDA (including synergies), interest coverage ratio, interest
coverage ratio (including synergies), adjusted EBITDA margin, gross
debt/adjusted EBITDA, net debt/adjusted EBITDA, net debt/adjusted
EBITDA (including synergies),adjusted cash flows from operations,
adjusted free cash flow, 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 the other non-GAAP measures disclosed 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. This release also includes non-GAAP
forward-looking information. The Company believes that a
quantitative reconciliation of this forward-looking information to
the most comparable financial measure calculated and presented in
accordance with GAAP cannot be made available without unreasonable
efforts. A reconciliation of this non-GAAP financial measure would
require the Company to predict the timing and likelihood of future
restructurings and other charges. Neither these forward-looking
measures, nor their probable significance, can be quantified with a
reasonable degree of accuracy. Accordingly, a reconciliation of the
most directly comparable forward-looking GAAP measure is not
provided.
In addition to these non-GAAP measures, we use the term "organic
sales growth" and "pro forma 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. "Pro forma organic sales" refers to "organic
sales" giving effect to the acquisition of Altra. 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.
The assumptions and related pro forma adjustments in the
selected financial information presented within this release are
consistent with those presented in the Company's Current Reports on
Form 8-K filed on June 5, 2023 and
September 8, 2023 giving effect to
the acquisition of Altra and related transactions and are inclusive
of the measurement period adjustments included in the Company's
Annual Report on Form 10-K for the fiscal year ended December, 31
2023 on file with the SEC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
|
|
|
Unaudited
|
|
|
|
|
|
(Dollars in Millions,
Except per Share Data)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Net Sales
|
|
$
1,547.7
|
|
$
1,224.1
|
|
Cost of
Sales
|
|
994.6
|
|
826.0
|
|
Gross Profit
|
|
553.1
|
|
398.1
|
|
Operating
Expenses
|
|
397.7
|
|
329.2
|
|
Loss on Assets Held for
Sale
|
|
21.5
|
|
—
|
|
Total Operating
Expenses
|
|
419.2
|
|
329.2
|
|
Income from
Operations
|
|
133.9
|
|
68.9
|
|
Interest
Expense
|
|
105.4
|
|
95.4
|
|
Interest
Income
|
|
(3.1)
|
|
(31.9)
|
|
Other Expense (Income),
Net
|
|
0.3
|
|
(1.4)
|
|
Income before
Taxes
|
|
31.3
|
|
6.8
|
|
Provision for Income
Taxes
|
|
10.9
|
|
12.3
|
|
Net Income
(Loss)
|
|
20.4
|
|
(5.5)
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
|
0.6
|
|
0.4
|
|
Net Income (Loss)
Attributable to Regal Rexnord Corporation
|
|
$
19.8
|
|
$
(5.9)
|
|
Earnings (Loss) Per
Share Attributable to Regal Rexnord Corporation:
|
|
|
|
|
|
Basic
|
|
$
0.30
|
|
$
(0.09)
|
|
Assuming
Dilution
|
|
$
0.30
|
|
$
(0.09)
|
|
Cash Dividends Declared
Per Share
|
|
$
0.35
|
|
$
0.35
|
|
Weighted Average Number
of Shares Outstanding:
|
|
|
|
|
|
Basic
|
|
66.4
|
|
66.2
|
|
Assuming
Dilution
|
|
66.8
|
|
66.6
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Mar 31,
2024
|
|
Dec 31, 2023
|
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
465.3
|
|
$
574.0
|
|
Trade Receivables, Less
Allowances of $29.3 million and $30.3 million in 2024 and 2023,
Respectively
|
|
828.1
|
|
921.6
|
|
Inventories
|
|
1,319.1
|
|
1,274.2
|
|
Prepaid Expenses and
Other Current Assets
|
|
275.9
|
|
245.6
|
|
Assets Held for
Sale
|
|
377.2
|
|
368.6
|
|
Total Current
Assets
|
|
3,265.6
|
|
3,384.0
|
|
Net Property, Plant and
Equipment
|
|
994.0
|
|
1,041.2
|
|
Operating Lease
Assets
|
|
166.0
|
|
172.8
|
|
Goodwill
|
|
6,506.2
|
|
6,553.1
|
|
Intangible Assets, Net
of Amortization
|
|
3,965.8
|
|
4,083.4
|
|
Deferred Income Tax
Benefits
|
|
37.0
|
|
33.8
|
|
Other Noncurrent
Assets
|
|
70.7
|
|
69.0
|
|
Noncurrent Assets Held
for Sale
|
|
68.5
|
|
94.1
|
|
Total Assets
|
|
$
15,073.8
|
|
$
15,431.4
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
Payable
|
|
$
566.1
|
|
$
549.4
|
|
Dividends
Payable
|
|
23.3
|
|
23.2
|
|
Accrued Compensation
and Employee Benefits
|
|
154.0
|
|
198.7
|
|
Accrued
Interest
|
|
92.6
|
|
85.1
|
|
Other Accrued
Expenses
|
|
282.6
|
|
325.2
|
|
Current Operating Lease
Liabilities
|
|
36.1
|
|
37.2
|
|
Current Maturities of
Long-Term Debt
|
|
3.9
|
|
3.9
|
|
Liabilities Held for
Sale
|
|
89.9
|
|
103.7
|
|
Total Current
Liabilities
|
|
1,248.5
|
|
1,326.4
|
|
Long-Term
Debt
|
|
6,242.0
|
|
6,377.0
|
|
Deferred Income
Taxes
|
|
966.9
|
|
1,012.7
|
|
Pension and Other Post
Retirement Benefits
|
|
114.7
|
|
120.4
|
|
Noncurrent Operating
Lease Liabilities
|
|
129.4
|
|
132.2
|
|
Other Noncurrent
Liabilities
|
|
76.9
|
|
77.2
|
|
Noncurrent Liabilities
Held for Sale
|
|
19.9
|
|
20.4
|
|
Equity:
|
|
|
|
|
|
Regal Rexnord
Corporation Shareholders' Equity:
|
|
|
|
|
|
Common Stock, $0.01 par
value, 150.0 million Shares Authorized, 66.5 million and 66.3
million Shares
Issued and Outstanding for 2024 and 2023, Respectively
|
|
0.7
|
|
0.7
|
|
Additional Paid-In
Capital
|
|
4,647.2
|
|
4,646.2
|
|
Retained
Earnings
|
|
1,976.3
|
|
1,979.8
|
|
Accumulated Other
Comprehensive Loss
|
|
(369.7)
|
|
(282.4)
|
|
Total Regal Rexnord
Corporation Shareholders' Equity
|
|
6,254.5
|
|
6,344.3
|
|
Noncontrolling
Interests
|
|
21.0
|
|
20.8
|
|
Total Equity
|
|
6,275.5
|
|
6,365.1
|
|
Total Liabilities and
Equity
|
|
$
15,073.8
|
|
$
15,431.4
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Mar 31,
2024
|
|
Mar 31, 2023
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net Income
(Loss)
|
|
$
20.4
|
|
$
(5.5)
|
|
Adjustments to
Reconcile Net Income (Loss) to Net Cash Provided by Operating
Activities (Net of Acquisitions and Divestitures):
|
|
|
|
|
|
Depreciation
|
|
41.5
|
|
30.2
|
|
Amortization
|
|
86.7
|
|
46.3
|
|
Loss on Assets Held for
Sale
|
|
21.5
|
|
—
|
|
Noncash Lease
Expense
|
|
11.3
|
|
7.7
|
|
Share-Based
Compensation Expense
|
|
9.1
|
|
21.7
|
|
Financing Fee
Expense
|
|
3.1
|
|
23.0
|
|
Benefit from Deferred
Income Taxes
|
|
(30.4)
|
|
(10.2)
|
|
Other Non-Cash
Changes
|
|
1.4
|
|
0.3
|
|
Change in Operating
Assets and Liabilities, Net of Acquisitions and
Divestitures
|
|
|
|
|
|
Receivables
|
|
47.7
|
|
31.7
|
|
Inventories
|
|
(47.8)
|
|
47.1
|
|
Accounts
Payable
|
|
14.5
|
|
(18.3)
|
|
Other Assets and
Liabilities
|
|
(95.9)
|
|
(67.8)
|
|
Net Cash Provided by
Operating Activities
|
|
83.1
|
|
106.2
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Additions to Property,
Plant and Equipment
|
|
(18.5)
|
|
(18.7)
|
|
Business Acquisitions,
Net of Cash Acquired
|
|
—
|
|
(4,852.9)
|
|
Proceeds Received from
Sales of Property, Plant and Equipment
|
|
1.0
|
|
6.1
|
|
Net Cash Used in
Investing Activities
|
|
(17.5)
|
|
(4,865.5)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Borrowings Under
Revolving Credit Facility
|
|
495.1
|
|
893.3
|
|
Repayments Under
Revolving Credit Facility
|
|
(566.8)
|
|
(639.5)
|
|
Proceeds from
Short-Term Borrowings
|
|
—
|
|
14.1
|
|
Repayments of
Short-Term Borrowings
|
|
—
|
|
(15.9)
|
|
Proceeds from Long-Term
Borrowings
|
|
—
|
|
5,532.9
|
|
Repayments of Long-Term
Borrowings
|
|
(65.8)
|
|
(500.8)
|
|
Dividends Paid to
Shareholders
|
|
(23.3)
|
|
(23.2)
|
|
Shares Surrendered for
Taxes
|
|
(10.7)
|
|
(8.2)
|
|
Proceeds from the
Exercise of Stock Options
|
|
3.5
|
|
0.9
|
|
Financing Fees
Paid
|
|
—
|
|
(50.0)
|
|
Net Cash (Used in)
Provided By Financing Activities
|
|
(168.0)
|
|
5,203.6
|
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH EQUIVALENTS
|
|
(10.5)
|
|
10.5
|
|
Net (Decrease) Increase
in Cash and Cash Equivalents
|
|
(112.9)
|
|
454.8
|
|
Cash and Cash
Equivalents at Beginning of Period
|
|
635.3
|
|
688.5
|
|
Cash and Cash
Equivalents at End of Period (a)
|
|
$
522.4
|
|
$
1,143.3
|
|
|
|
(a)
|
The three months ended
March 31, 2024 amount includes $57.1 Million cash and cash
equivalents included in Assets Held for Sale.
|
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Industrial
Powertrain
Solutions
|
|
Power Efficiency
Solutions
|
|
Automation &
Motion Control
|
|
Industrial
Systems
|
|
Total Regal
Rexnord
|
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Net Sales
|
|
$
643.4
|
|
$
414.4
|
|
$
385.3
|
|
$
469.5
|
|
$
400.2
|
|
$
203.2
|
|
$
118.8
|
|
$
137.0
|
|
$
1,547.7
|
|
$
1,224.1
|
|
Adjusted Net
Sales
|
|
$
643.4
|
|
$
414.4
|
|
$
385.3
|
|
$
469.5
|
|
$
400.2
|
|
$
203.2
|
|
$
118.8
|
|
$
137.0
|
|
$
1,547.7
|
|
$
1,224.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Operating
Margin
|
|
12.8 %
|
|
6.3 %
|
|
7.4 %
|
|
9.7 %
|
|
10.0 %
|
|
(2.6) %
|
|
(14.2) %
|
|
2.0 %
|
|
8.7 %
|
|
5.6 %
|
|
Adjusted Operating
Margin
|
|
14.3 %
|
|
16.6 %
|
|
9.7 %
|
|
10.7 %
|
|
10.4 %
|
|
9.0 %
|
|
7.7 %
|
|
3.7 %
|
|
11.7 %
|
|
11.6 %
|
|
Adjusted
EBITDA
Margin %
|
|
25.8 %
|
|
29.3 %
|
|
13.2 %
|
|
13.7 %
|
|
22.5 %
|
|
23.0 %
|
|
8.6 %
|
|
6.7 %
|
|
20.5 %
|
|
19.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of
Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth
|
|
(3.4) %
|
|
1.3 %
|
|
(17.8) %
|
|
(15.9) %
|
|
(1.5) %
|
|
11.7 %
|
|
(12.6) %
|
|
8.0 %
|
|
(9.6) %
|
|
(4.1) %
|
|
Acquisitions
|
|
58.7 %
|
|
— %
|
|
— %
|
|
— %
|
|
98.1 %
|
|
— %
|
|
— %
|
|
— %
|
|
36.1 %
|
|
— %
|
|
Foreign
Currency
Impact
|
|
— %
|
|
(1.8) %
|
|
(0.1) %
|
|
(1.3) %
|
|
0.3 %
|
|
(1.4) %
|
|
(0.7) %
|
|
(3.2) %
|
|
(0.1) %
|
|
(1.7) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED DILUTED
EARNINGS PER SHARE
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
GAAP Earnings (Loss)
Per Share
|
|
$
0.30
|
|
$
(0.09)
|
|
Intangible
Amortization
|
|
0.98
|
|
0.53
|
|
Restructuring and
Related Costs (a)
|
|
0.19
|
|
0.07
|
|
Share-Based
Compensation Expense (b)
|
|
0.11
|
|
0.31
|
|
Impairments and Exit
Related Costs
|
|
0.01
|
|
—
|
|
Loss on Assets Held for
Sale (c)
|
|
0.32
|
|
—
|
|
Gain on Sale of
Assets
|
|
(0.01)
|
|
(0.01)
|
|
Transaction and
Integration Related Costs (d)
|
|
0.09
|
|
1.31
|
|
Discrete Tax
Items
|
|
0.01
|
|
0.10
|
|
Adjusted Diluted
Earnings Per Share
|
|
$
2.00
|
|
$
2.22
|
|
|
|
(a)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset charges.
|
|
(b)
|
Includes the impact
related to the accelerated vesting of awards for certain former
Altra employees in the first quarter 2023.
|
|
(c)
|
The three months ended
March 31, 2024 reflects the loss on assets held for sale of $21.5
million related to the sale of the industrial motors and generators
businesses.
|
|
(d)
|
For 2024, primarily
relates to (1) legal, professional service, and rebranding costs
associated with the sale of the industrial motors and generators
businesses and (2) legal, professional service and integration
costs associated with the Altra Transaction. 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 integration and (2) legal and professional service costs
associated with the sale of the industrial motors and generators
businesses.
|
|
2024 ADJUSTED ANNUAL
GUIDANCE
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
Minimum
|
|
Maximum
|
|
2024 GAAP Diluted EPS
Annual Guidance
|
|
$
3.97
|
|
$
4.77
|
|
Intangible
Amortization
|
|
4.00
|
|
4.00
|
|
Restructuring and
Related Costs (a)
|
|
0.58
|
|
0.58
|
|
Share-Based
Compensation Expense
|
|
0.51
|
|
0.51
|
|
Operating Lease Asset
Step Up
|
|
0.01
|
|
0.01
|
|
Impairments and Exit
Related Costs
|
|
0.01
|
|
0.01
|
|
Loss on Assets Held for
Sale
|
|
0.32
|
|
0.32
|
|
Gain on Sale of
Assets
|
|
(0.01)
|
|
(0.01)
|
|
Transaction and
Integration Related Costs (b)
|
|
0.20
|
|
0.20
|
|
Discrete Tax
Items
|
|
0.01
|
|
0.01
|
|
2024 Adjusted Diluted
EPS Annual Guidance
|
|
$
9.60
|
|
$
10.40
|
|
|
|
(a)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset charges.
|
|
(b)
|
Primarily relates to
(1) legal, professional service and integration costs associated
with the Altra Transaction and (2) legal, professional service, and
rebranding costs associated with the sale of the industrial motors
and generators businesses.
|
|
ADJUSTED
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Industrial
Powertrain
Solutions
|
|
Power Efficiency
Solutions
|
|
Automation &
Motion Control
|
|
Industrial
Systems
|
|
Total Regal
Rexnord
|
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
GAAP Income (Loss) from
Operations
|
|
$
82.1
|
|
$
25.9
|
|
$
28.5
|
|
$
45.4
|
|
$
40.2
|
|
$
(5.2)
|
|
$
(16.9)
|
|
$ 2.8
|
|
$
133.9
|
|
$
68.9
|
|
Restructuring and
Related Costs (a)
|
|
4.9
|
|
0.8
|
|
8.3
|
|
4.7
|
|
2.0
|
|
0.5
|
|
2.0
|
|
0.2
|
|
17.2
|
|
6.2
|
|
Operating Lease Asset
Step Up
|
|
0.3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.3
|
|
—
|
|
Impairments and Exit
Related Costs
|
|
0.2
|
|
—
|
|
0.2
|
|
—
|
|
0.1
|
|
—
|
|
—
|
|
—
|
|
0.5
|
|
—
|
|
Loss on Assets Held for
Sale (b)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
21.5
|
|
—
|
|
21.5
|
|
—
|
|
Gain on Sale of
Assets
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.8)
|
|
(0.6)
|
|
—
|
|
—
|
|
(0.8)
|
|
(0.6)
|
|
Transaction and
Integration Related Costs (c)
|
|
4.4
|
|
42.0
|
|
0.5
|
|
—
|
|
0.3
|
|
23.5
|
|
2.6
|
|
2.1
|
|
7.8
|
|
67.6
|
|
Adjusted Income from
Operations
|
|
$
91.9
|
|
$
68.7
|
|
$
37.5
|
|
$
50.1
|
|
$
41.8
|
|
$
18.2
|
|
$ 9.2
|
|
$ 5.1
|
|
$
180.4
|
|
$ 142.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
$
50.0
|
|
$
29.8
|
|
$ 2.1
|
|
$ 2.1
|
|
$
34.4
|
|
$
14.2
|
|
$ 0.2
|
|
$ 0.2
|
|
$
86.7
|
|
$
46.3
|
|
Depreciation
|
|
20.2
|
|
11.8
|
|
9.5
|
|
9.6
|
|
11.5
|
|
5.5
|
|
0.3
|
|
3.3
|
|
41.5
|
|
30.2
|
|
Share-Based
Compensation Expense (d)
|
|
4.3
|
|
10.6
|
|
2.0
|
|
2.0
|
|
2.3
|
|
8.6
|
|
0.5
|
|
0.5
|
|
9.1
|
|
21.7
|
|
Other (Expense) Income,
Net
|
|
(0.1)
|
|
0.5
|
|
(0.1)
|
|
0.6
|
|
(0.1)
|
|
0.2
|
|
—
|
|
0.1
|
|
(0.3)
|
|
1.4
|
|
Adjusted
EBITDA
|
|
$
166.3
|
|
$ 121.4
|
|
$
51.0
|
|
$
64.4
|
|
$
89.9
|
|
$
46.7
|
|
$
10.2
|
|
$ 9.2
|
|
$
317.4
|
|
$ 241.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Margin
%
|
|
12.8 %
|
|
6.3 %
|
|
7.4 %
|
|
9.7 %
|
|
10.0 %
|
|
(2.6) %
|
|
(14.2) %
|
|
2.0 %
|
|
8.7 %
|
|
5.6 %
|
|
Adjusted Operating
Margin %
|
|
14.3 %
|
|
16.6 %
|
|
9.7 %
|
|
10.7 %
|
|
10.4 %
|
|
9.0 %
|
|
7.7 %
|
|
3.7 %
|
|
11.7 %
|
|
11.6 %
|
|
Adjusted EBITDA Margin
%
|
|
25.8 %
|
|
29.3 %
|
|
13.2 %
|
|
13.7 %
|
|
22.5 %
|
|
23.0 %
|
|
8.6 %
|
|
6.7 %
|
|
20.5 %
|
|
19.7 %
|
|
|
|
(a)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset charges.
|
|
(b)
|
The three months ended
March 31, 2024 reflects the loss on assets held for sale of $21.5
million related to the sale of the industrial motors and generators
businesses.
|
|
(c)
|
Primarily relates to
(1) legal, professional service and integration costs associated
with the Altra Transaction and (2) legal, professional service, and
rebranding costs associated with the sale of the industrial motors
and generators businesses.
|
|
(d)
|
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
|
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Net Income
(Loss)
|
|
$
20.4
|
|
$
(5.5)
|
|
Plus: Income
Taxes
|
|
10.9
|
|
12.3
|
|
Plus: Interest
Expense
|
|
105.4
|
|
95.4
|
|
Less: Interest
Income
|
|
(3.1)
|
|
(31.9)
|
|
Plus:
Depreciation
|
|
41.5
|
|
30.2
|
|
Plus:
Amortization
|
|
86.7
|
|
46.3
|
|
EBITDA
|
|
261.8
|
|
146.8
|
|
Plus: Restructuring and
Related Costs (a)
|
|
17.2
|
|
6.2
|
|
Plus: Share-Based
Compensation Expense (b)
|
|
9.1
|
|
21.7
|
|
Plus: Operating Lease
Asset Step Up
|
|
0.3
|
|
—
|
|
Plus: Impairments and
Exit Related Costs
|
|
0.5
|
|
—
|
|
Plus: Loss on Assets
Held for Sale (c)
|
|
21.5
|
|
—
|
|
Less: Gain on Sale of
Assets
|
|
(0.8)
|
|
(0.6)
|
|
Plus: Transaction and
Integration Related Costs (d)
|
|
7.8
|
|
67.6
|
|
Adjusted
EBITDA
|
|
$
317.4
|
|
$
241.7
|
|
|
|
(a)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset charges.
|
|
(b)
|
Includes the impact
related to the accelerated vesting of awards for certain former
Altra employees in the first quarter 2023.
|
|
(c)
|
The three months ended
March 31, 2024 reflects the loss on assets held for sale of $21.5
million related to the sale of the industrial motors and generators
businesses.
|
|
(d)
|
For 2024, primarily
relates to (1) legal, professional service, and rebranding costs
associated with the sale of the industrial motors and generators
businesses and (2) legal, professional service and integration
costs associated with the Altra Transaction. For 2023, primarily
relates to (1) legal, professional service, and certain other
employee compensation costs associated with the Altra Transaction
and integration and (2) legal and professional service costs
associated with the sale of the industrial motors and generators
businesses.
|
|
DEBT TO
EBITDA
|
|
|
|
Unaudited
|
|
|
|
(Dollars in
Millions)
|
Last Twelve
Months
|
|
|
Mar 31,
2024
|
|
Net
Loss
|
|
$
(28.4)
|
|
Plus: Income
Taxes
|
|
51.3
|
|
Plus: Interest
Expense
|
|
441.0
|
|
Less: Interest
Income
|
|
(14.8)
|
|
Plus:
Depreciation
|
|
177.0
|
|
Plus:
Amortization
|
|
348.2
|
|
EBITDA
|
|
$
974.3
|
|
Plus: Restructuring and
Related Costs (a)
|
|
95.4
|
|
Plus: Share-Based
Compensation Expense
|
|
45.6
|
|
Plus: Inventory and
Operating Lease Asset Step Up
|
|
54.8
|
|
Plus: Impairments and
Exit Related Costs
|
|
10.1
|
|
Plus: Loss on Assets
Held for Sale (b)
|
|
109.2
|
|
Plus: Goodwill
Impairment
|
|
57.3
|
|
Less: Gain on Sale of
Assets
|
|
(0.8)
|
|
Plus: Transaction and
Integration Related Costs (c)
|
|
36.9
|
|
Adjusted
EBITDA*(d)
|
|
$
1,382.8
|
|
|
|
|
Current Maturities of
Long-Term Debt
|
|
$
3.9
|
|
Long-Term
Debt
|
|
6,242.0
|
|
Total Gross
Debt
|
|
$
6,245.9
|
|
Cash
(e)
|
|
(522.4)
|
|
Net
Debt
|
|
$
5,723.5
|
|
|
|
|
Gross Debt/Adjusted
EBITDA
|
|
4.52
|
|
|
|
|
Net Debt/Adjusted
EBITDA (d)
|
|
4.14
|
|
|
|
|
Interest Coverage Ratio
(d)
|
|
3.24
|
|
|
|
(a)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset charges. Includes $19.3 Million of accelerated
depreciation.
|
|
(b)
|
Reflects the loss on
assets held for sale of $109.2 million related to the sale of the
industrial motors and generators businesses.
|
|
(c)
|
Primarily relates to
(1) legal, professional service, and certain other employee
compensation costs associated with the Altra Transaction and
integration and (2) legal, professional service, and rebranding
costs associated with the sale of the industrial motors and
generators businesses.
|
|
(d)
|
Synergies expected to
be realized in the future are included in the calculation of EBITDA
that serves as the basis for financial covenant compliance for
certain of the Company's debt. The Company expects to realize
synergies of $115 million within 18 months. The impact of the
synergies is as follows:
|
|
|
|
|
Adjusted
EBITDA
|
$
1,382.8
|
|
Altra Synergies to be
Realized Within 24 months
|
115.0
|
|
Adjusted EBITDA
(including synergies)
|
$
1,497.8
|
|
|
|
|
Net Debt/Adjusted
EBITDA (including synergies)
|
3.82
|
|
|
|
|
Interest
Expense
|
$
441.0
|
|
Interest
Income
|
(14.8)
|
|
Net Interest
Expense
|
$
426.2
|
|
|
|
|
Interest Coverage
Ratio(1)
|
3.24
|
|
Interest Coverage Ratio
(including synergies)(2)
|
3.51
|
|
|
|
|
(1) Computed as
Adjusted EBITDA/Net Interest Expense
|
|
(2) Computed as
Adjusted EBITDA (including synergies)/Net Interest
Expense
|
|
|
|
|
(e)
|
This amount includes
$57.1 Million cash and cash equivalents included in Assets Held for
Sale.
|
|
ADJUSTED FREE CASH
FLOW
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Net Cash Provided by
Operating Activities
|
|
$
83.1
|
|
$
106.2
|
|
Payments for Certain
Acquisition Costs (Net of Tax of $11.4 Million in 2023)
(a)
|
|
—
|
|
86.9
|
|
Adjusted Cash Flows
from Operations
|
|
83.1
|
|
193.1
|
|
Additions to Property
Plant and Equipment
|
|
(18.5)
|
|
(18.7)
|
|
Adjusted Free Cash
Flow
|
|
$
64.6
|
|
$
174.4
|
|
|
|
|
|
|
(a)
|
Reflects the payment of
Regal Rexnord's and Altra's advisor success fees.
|
|
ADJUSTED EFFECTIVE
TAX RATE
|
|
|
|
|
Unaudited
|
|
|
|
|
(Dollars in
Millions)
|
Three Months
Ended
|
|
Mar 31,
2024
|
|
Mar 31,
2023
|
|
Income before
Taxes
|
$
31.3
|
|
$
6.8
|
|
Provision for Income
Taxes
|
10.9
|
|
12.3
|
|
Effective Tax
Rate
|
34.8 %
|
|
180.9 %
|
|
|
|
|
|
Income before
Taxes
|
$
31.3
|
|
$
6.8
|
|
Intangible
Amortization
|
86.7
|
|
46.3
|
|
Restructuring and
Related Costs (a)
|
17.2
|
|
6.2
|
|
Share-Based
Compensation Expense (b)
|
9.1
|
|
21.7
|
|
Operating Lease Asset
Step Up
|
0.3
|
|
—
|
|
Impairments and Exit
Related Costs
|
0.5
|
|
—
|
|
Loss on Assets Held for
Sale (c)
|
21.5
|
|
—
|
|
Gain on Sale of
Assets
|
(0.8)
|
|
—
|
|
Transaction and
Integration Related Costs (d)
|
7.8
|
|
105.8
|
|
Adjusted Income before
Taxes*
|
$
173.6
|
|
$
186.2
|
|
|
|
|
|
Provision for Income
Taxes
|
$
10.9
|
|
$
12.3
|
|
Tax Effect of
Intangible Amortization
|
21.0
|
|
11.4
|
|
Tax Effect of
Restructuring and Related Costs
|
4.1
|
|
1.6
|
|
Tax Effect of
Share-Based Compensation Expense
|
2.1
|
|
1.2
|
|
Tax Effect of Operating
Lease Asset Step Up
|
0.1
|
|
—
|
|
Tax Effect of
Impairments and Exit Related Costs
|
0.1
|
|
—
|
|
Tax Effect of Gain on
Sale of Assets
|
(0.1)
|
|
(0.1)
|
|
Tax Effect of
Transaction and Integration Related Costs
|
1.9
|
|
18.3
|
|
Discrete Tax
Items
|
(0.6)
|
|
(6.5)
|
|
Adjusted Provision for
Income Taxes*
|
$
39.5
|
|
$
38.2
|
|
|
|
|
|
Adjusted Effective Tax
Rate*
|
22.8 %
|
|
20.5 %
|
|
(a)
|
Relates to costs
associated with actions taken for employee reductions, facility
consolidations and site closures, product line exits and other
asset charges.
|
|
(b)
|
Includes the impact
related to the accelerated vesting of awards for certain former
Altra employees in the first quarter 2023.
|
|
(c)
|
The three months ended
March 31, 2024 reflects the loss on assets held for sale of $21.5
million related to the sale of the industrial motors and generators
businesses.
|
|
(d)
|
For 2024, primarily
relates to (1) legal, professional service, and rebranding costs
associated with the sale of the industrial motors and generators
businesses and (2) legal, professional service and integration
costs associated with the Altra Transaction. 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 integration and (2) legal and professional service costs
associated with the sale of the industrial motors and generators
businesses.
|
|
ORGANIC SALES
GROWTH
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Industrial
Powertrain
Solutions
|
|
Power Efficiency
Solutions
|
|
Automation &
Motion Control
|
|
Industrial
Systems
|
|
Total Regal
Rexnord
|
|
Net Sales Three Months
Ended Mar 31, 2024
|
|
$
643.4
|
|
$
385.3
|
|
$
400.2
|
|
$
118.8
|
|
$
1,547.7
|
|
Net Sales from
Businesses Acquired
|
|
(243.2)
|
|
—
|
|
(199.3)
|
|
—
|
|
(442.5)
|
|
Impact from Foreign
Currency Exchange Rates
|
|
0.1
|
|
0.7
|
|
(0.8)
|
|
0.9
|
|
0.9
|
|
Organic Sales Three
Months Ended Mar 31, 2024
|
|
$
400.3
|
|
$
386.0
|
|
$
200.1
|
|
$
119.7
|
|
$
1,106.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales Three Months
Ended Mar 31, 2023
|
|
$
414.4
|
|
$
469.5
|
|
$
203.2
|
|
$
137.0
|
|
$
1,224.1
|
|
Adjusted Net Sales
Three Months Ended Mar 31, 2023
|
|
$
414.4
|
|
$
469.5
|
|
$
203.2
|
|
$
137.0
|
|
$
1,224.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended Mar
31, 2024 Organic Sales Growth %
|
|
(3.4) %
|
|
(17.8) %
|
|
(1.5) %
|
|
(12.6) %
|
|
(9.6) %
|
|
Three Months Ended Mar
31, 2024 Net Sales Growth %
|
|
55.3 %
|
|
(17.9) %
|
|
96.9 %
|
|
(13.3) %
|
|
26.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
PRO FORMA ORGANIC
SALES GROWTH (INCLUDING ALTRA)
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Industrial
Powertrain
Solutions
|
|
Power Efficiency
Solutions
|
|
Automation &
Motion Control
|
|
Industrial
Systems
|
|
Total Regal
Rexnord
|
|
Net Sales Three Months
Ended Mar 31, 2024
|
|
$
643.4
|
|
$
385.3
|
|
$
400.2
|
|
$
118.8
|
|
$
1,547.7
|
|
Impact from Foreign
Currency Exchange Rates
|
|
(0.9)
|
|
0.7
|
|
0.8
|
|
0.9
|
|
1.5
|
|
Pro Forma Organic Sales
Three Months Ended Mar 31, 2024
|
|
$
642.5
|
|
$
386.0
|
|
$
401.0
|
|
$
119.7
|
|
$
1,549.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales Three Months
Ended Mar 31, 2023
|
|
$
414.4
|
|
$
469.5
|
|
$
203.2
|
|
$
137.0
|
|
$
1,224.1
|
|
Net Sales from
Businesses Acquired
|
|
234.5
|
|
—
|
|
216.6
|
|
—
|
|
451.1
|
|
Pro Forma Adjusted Net
Sales Three Months Ended Mar 31, 2023
|
|
$
648.9
|
|
$
469.5
|
|
$
419.8
|
|
$
137.0
|
|
$
1,675.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended Mar
31, 2024 Pro Forma Organic Sales Growth %
|
|
(1.0) %
|
|
(17.8) %
|
|
(4.5) %
|
|
(12.6) %
|
|
(7.5) %
|
|
Three Months Ended Mar
31, 2024 Pro Forma Net Sales Growth %
|
|
(0.8) %
|
|
(17.9) %
|
|
(4.7) %
|
|
(13.3) %
|
|
(7.6) %
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED GROSS
MARGIN
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
Three Months
Ended
|
|
|
March 31,
2024
|
|
|
Industrial
Powertrain
Solutions
|
|
Power Efficiency
Solutions
|
|
Automation &
Motion Control
|
|
Industrial
Systems
|
|
Total Regal
Rexnord
|
|
Net Sales
|
|
$
643.4
|
|
$
385.3
|
|
$
400.2
|
|
$
118.8
|
|
$
1,547.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
$
264.8
|
|
$
99.3
|
|
$
159.9
|
|
$
29.1
|
|
$
553.1
|
|
Restructuring and
Related Costs (a)
|
|
2.2
|
|
7.3
|
|
0.6
|
|
1.6
|
|
11.7
|
|
Operating Lease Asset
Step Up
|
|
0.3
|
|
—
|
|
—
|
|
—
|
|
0.3
|
|
Adjusted Gross
Margin
|
|
$
267.3
|
|
$
106.6
|
|
$
160.5
|
|
$
30.7
|
|
$
565.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
%
|
|
41.2 %
|
|
25.8 %
|
|
40.0 %
|
|
24.5 %
|
|
35.7 %
|
|
Adjusted Gross Margin
%
|
|
41.5 %
|
|
27.7 %
|
|
40.1 %
|
|
25.8 %
|
|
36.5 %
|
|
|
|
(a)
|
Relates to costs
associated with actions taken for facility consolidations and site
closures, product line exits and other asset charges.
|
|
PRO FORMA ADJUSTED
GROSS MARGIN
|
|
|
|
Unaudited
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2023
|
|
Pro Forma Net
Sales
|
|
$
1,675.2
|
|
|
|
|
Pro Forma Gross
Margin
|
|
$
554.9
|
|
Pro Forma Restructuring
and Related Costs (a)
|
|
6.8
|
|
Pro Forma Adjusted
Gross Margin
|
|
$
561.7
|
|
|
|
|
Pro Forma Gross Margin
%
|
|
33.1 %
|
|
Pro Forma Adjusted
Gross Margin %
|
|
33.5 %
|
|
|
|
(a)
|
Relates to costs
associated with actions taken for facility consolidations and site
closures, product line exits and other asset charges.
|
|
PRO FORMA ADJUSTED
GROSS MARGIN
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
The following pro forma
adjusted gross margin has been prepared in accordance with Article
11 of Regulation S-X in order to give effect to the Altra
Transaction as if it had occurred on January 2, 2022, the first day
of Regal Rexnord's fiscal year 2022.
|
|
|
|
|
|
|
Regal Rexnord
Three
Months Ended March 31, 2023
|
Altra January 1,
2023
to March 27, 2023
|
Transaction
Accounting
Adjustment - Altra
Transaction(2)
|
Pro forma
Combined
|
|
Gross Margin
|
398.1
|
162.2
|
(5.4)
|
554.9
|
|
Restructuring and
Related Costs(1)
|
5.6
|
1.2
|
—
|
6.8
|
|
Adjusted Gross
Margin
|
403.7
|
163.4
|
(5.4)
|
561.7
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents
restructuring and related costs in Cost of Sales.
|
|
(2) Represents
incremental depreciation expense relating to the step-up in fair
value of Property, Plant and Equipment in Cost of Sales.
|
|
PRO FORMA NET INCOME
TO ADJUSTED EBITDA
|
|
Unaudited
|
|
|
(Dollars in
Millions)
|
|
|
|
Three Months
Ended
|
|
Mar 31,
2023
|
|
Pro Forma Net
Sales
|
$
1,675.2
|
|
Pro Forma Adjusted
Net Sales
|
$
1,675.2
|
|
|
|
Pro Forma Net
Loss
|
$
(37.6)
|
|
Plus: Income
Taxes
|
4.5
|
|
Plus: Interest
Expense
|
127.7
|
|
Less: Interest
Income
|
(2.7)
|
|
Plus:
Depreciation
|
46.0
|
|
Plus:
Amortization
|
87.1
|
|
Pro Forma
EBITDA
|
225.0
|
|
Plus: Restructuring and
Related Costs
|
7.6
|
|
Plus: Share-Based
Compensation Expense
|
25.3
|
|
Plus: Loss on Assets
Held for Sale and Gain on Sale of Assets
|
(0.6)
|
|
Plus: Transaction and
Integration Related Costs
|
69.8
|
|
Pro Forma Adjusted
EBITDA
|
$
327.1
|
|
|
|
Pro Forma Adjusted
EBITDA Margin %
|
19.5 %
|
|
|
|
PRO FORMA NET
LOSS
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
The following pro forma
net (loss) income has been prepared in accordance with Article 11
of Regulation S-X in order to give effect to the Altra Transaction
and related debt financing as if they had occurred on January 2,
2022, the first day of Regal Rexnord's fiscal year 2022.
|
|
|
|
|
|
|
|
Regal Rexnord
Three Months
Ended March 31, 2023
|
Altra January 1,
2023 to March 27, 2023
|
Transaction
Accounting
Adjustments -
Altra
Transaction
(Note 1)
|
Transaction
Accounting
Adjustments -
Debt Financing
(Note 2)
|
Pro forma
Combined
|
|
Net (Loss)
Income
|
(5.5)
|
31.4
|
(12.0)
|
(51.5)
|
(37.6)
|
|
|
|
|
|
|
|
Note 1 - Pro forma
Transaction Accounting Adjustments - Altra
Transaction
|
|
|
|
|
Property, Plant and
Equipment Depreciation Step Up(1)
|
$
(6.7)
|
|
|
|
Incremental Charge in
Amortization of Intangible Assets(2)
|
(28.0)
|
|
|
|
Removal of Historical
Altra Interest Expense(3)
|
15.3
|
|
|
|
Tax Impact
|
|
|
7.4
|
|
|
|
|
|
(12.0)
|
|
|
|
|
|
|
|
|
|
(1) Adjustment for
incremental depreciation expense relating to the estimated
preliminary step-up in fair value of Property, Plant and
Equipment
|
|
(2) Adjustment for
incremental amortization expense relating to the estimated
preliminary fair value of intangible assets recognized in the Altra
Transaction
|
|
(3) Adjustment to
remove interest expense related to the Altra debt that was settled
in connection with the Altra Transaction
|
|
|
|
|
|
|
|
Note 2 - Pro forma
Transaction Accounting Adjustments - Debt Financing
|
|
|
|
New Interest Expense on
Debt Financing(4)
|
$
(31.8)
|
|
|
Removal of Interest
Income(5)
|
(29.4)
|
|
|
Tax Impact
|
|
|
|
9.7
|
|
|
|
|
|
(51.5)
|
|
|
|
|
|
|
|
|
(4) Adjustment to
recognize interest expense on the new debt related to the Altra
Transaction
|
|
(5) Adjustment to
remove interest income associated with income earned on the
investment of the proceeds of the debt financing prior to the close
of the Altra Transaction during the three months ended March 31,
2023
|
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content:https://www.prnewswire.com/news-releases/regal-rexnord-reports-first-quarter-2024-financial-results-302137221.html
SOURCE Regal Rexnord Corporation