REGAL REXNORD REPORTS THIRD QUARTER 2024 FINANCIAL RESULTS
MILWAUKEE, Nov. 4, 2024 /PRNewswire/ -- Regal Rexnord Corporation (NYSE: RRX)
3Q Highlights
- GAAP Diluted EPS Of $1.09, Adjusted Diluted EPS* Of $2.49, Up 18.6% Versus PY
- Paid Down $114 Million Of Gross Debt In 3Q, $733 Million Year-To-Date. On Track To Pay Down ~$900 Million Of Debt In The Year. Net Debt/Adjusted EBITDA (Including Synergies)* Of ~3.6x
- Adjusted Free Cash Flow* Of $125.5 Million
- Sales Of $1,477.4 Million, Down 10.4% Versus PY; Down 2.7% On An Organic* Basis
- GAAP Gross Margin Of 37.7%; Adjusted Gross Margin* A Record 38.4%
- GAAP Net Income Of $73.0 Million Versus PY GAAP Net Loss Of $(138.6) Million
- Adjusted EBITDA* Of $337.0 Million Versus PY Of $330.0 Million**
- Adjusted EBITDA Margin* A Record 22.8%, Up 110 Basis Points Versus PY**
- Synergies Of $27 Million; On Track To Deliver $90 Million In The Year
- 3Q Orders Up 2.5% Versus PY
CEO Louis Pinkham commented, "Our team's controllable execution was strong in the third quarter, most evident in healthy adjusted gross and EBITDA margin gains, and clear signs of market outgrowth in our largest and highest-margin segment, Industrial Powertrain Solutions. As a Company, we delivered record adjusted gross margins of 38.4%, providing clear line of sight to our goal of 40% exiting 2025. A record high adjusted EBITDA margin of 22.8% was up 110 basis points versus prior year and aligned with our goal of 25% exiting 2025. And finally, adjusted EPS was up 18.6% versus prior year, a clear inflection point for Regal Rexnord."
Mr. Pinkham continued, "Our strong margin performance occurred despite top line performance that fell short of our targets. The shortfall occurred mainly in our AMC segment, primarily due to heightened caution among many of our customers, and in our PES segment, primarily due to weakness in the general commercial market and in commercial HVAC outside the U.S., along with higher than anticipated residential HVAC demand acceleration and an associated lag in our supply chain ramping. Encouragingly, enterprise orders in 3Q were up 2.5%, and we now expect modestly positive organic growth in the fourth quarter."
Mr. Pinkham concluded, "Despite some persistent near-term market headwinds, we see significant value creation opportunities before us, driven by the many initiatives we discussed at our September 17th investor day to accelerate organic growth and further expand our margins."
*Non-GAAP Financial Measurement, See Appendix for Reconciliation |
**Excludes 2023 results of the Industrial Systems operating segment, as the industrial motors and generators businesses that comprised a majority of this operating segment were divested effective April 30, 2024. |
Guidance
The Company is updating its annual guidance for 2024 GAAP Diluted Earnings per Share to a range of $3.27 to $3.57 from $3.70 to $4.10 previously, and for Adjusted Diluted Earnings per Share to a range of $9.15 to $9.45 from $9.40 to $9.80 previously. The change primarily reflects weaker factory automation demand in the Automation & Motion Control segment and weaker general commercial demand in the Power Efficiency Solutions segment.
Segment Performance
Segment results for the third quarter of this year versus the third quarter of the prior year are summarized below:
- Automation & Motion Control net sales were $401.6 million, a decrease of 4.3%, or a decrease of 4.1% on an organic basis. Results reflect strength in the food & beverage, aerospace & defense, data center, and medical markets, net of weakness in discrete automation. Adjusted EBITDA margin was 21.8% of adjusted net sales*.
- Industrial Powertrain Solutions net sales were $644.2 million, an increase of 0.5%, or an increase of 0.8% on an organic basis. Results reflect strength in energy, aerospace & defense, and metals & mining, plus benefits from cross-selling synergies, net of weakness in alternative energy and machinery/off-highway markets. Adjusted EBITDA margin was a record 26.8% of adjusted net sales.
- Power Efficiency Solutions net sales were $431.6 million, a decrease of 6.4%, or a decrease of 6.2% on an organic basis. The decline primarily reflects weakness in the general commercial market and in commercial HVAC outside the U.S., along with higher than anticipated residential HVAC demand acceleration and an associated lag in our supply chain ramping. Adjusted EBITDA margin was 17.8% 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, November 5, 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 7461486# 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 4015747#. Both replays will be accessible for three months after the earnings call.
Supplemental Materials
Supplemental materials and additional information for the quarter ended September 30, 2024, will be accessible before the conference call on November 5, 2024 on Regal Rexnord's Investor website: https://investors.regalrexnord.com. The Company intends to disseminate important information about the Company to its investors on the Investors section of its website: https://investors.regalrexnord.com. Investors are advised to look at Regal Rexnord's website for future important information about the Company. The content of the Company's website is not incorporated by reference into this document or any other report or document Regal Rexnord files with the Securities and Exchange Commission ("SEC").
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 expected market or macroeconomic trends, 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 our 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; our 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 sustainability 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; prolonged declines in one or more markets; risks associated with excess or obsolete inventory charges including related write-offs or write-downs; 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 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, net sales excluding Industrial, adjusted gross margin, net debt, EBITDA, adjusted EBITDA, adjusted EBITDA excluding Industrial, adjusted EBITDA (including synergies), interest coverage ratio, interest coverage ratio (including synergies), adjusted EBITDA margin, adjusted EBITDA margin excluding Industrial, 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" 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 (LOSS) |
||||||||
Unaudited |
||||||||
(Dollars in Millions, Except per Share Data) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||
Net Sales |
$ 1,477.4 |
$ 1,649.8 |
$ 4,572.7 |
$ 4,642.5 |
||||
Cost of Sales |
921.1 |
1,107.6 |
2,892.3 |
3,138.4 |
||||
Gross Profit |
556.3 |
542.2 |
1,680.4 |
1,504.1 |
||||
Operating Expenses |
382.2 |
388.9 |
1,172.7 |
1,127.9 |
||||
Goodwill Impairment |
— |
57.3 |
— |
57.3 |
||||
Asset Impairments |
— |
3.7 |
1.5 |
6.1 |
||||
Loss on Sale of Businesses |
— |
112.7 |
4.3 |
112.7 |
||||
Total Operating Expenses |
382.2 |
562.6 |
1,178.5 |
1,304.0 |
||||
Income (Loss) from Operations |
174.1 |
(20.4) |
501.9 |
200.1 |
||||
Interest Expense |
98.0 |
111.5 |
305.1 |
323.3 |
||||
Interest Income |
(5.1) |
(3.5) |
(13.2) |
(40.5) |
||||
Other (Income) Expense, Net |
(0.2) |
(2.5) |
0.4 |
(6.7) |
||||
Income (Loss) before Taxes |
81.4 |
(125.9) |
209.6 |
(76.0) |
||||
Provision for Income Taxes |
8.4 |
12.7 |
53.2 |
34.9 |
||||
Net Income (Loss) |
73.0 |
(138.6) |
156.4 |
(110.9) |
||||
Less: Net Income Attributable to Noncontrolling Interests |
0.3 |
0.9 |
1.4 |
2.4 |
||||
Net Income (Loss) Attributable to Regal Rexnord Corporation |
$ 72.7 |
$ (139.5) |
$ 155.0 |
$ (113.3) |
||||
Earnings (Loss) Per Share Attributable to Regal Rexnord Corporation: |
||||||||
Basic |
$ 1.09 |
$ (2.10) |
$ 2.33 |
$ (1.71) |
||||
Assuming Dilution |
$ 1.09 |
$ (2.10) |
$ 2.32 |
$ (1.71) |
||||
Cash Dividends Declared Per Share |
$ 0.35 |
$ 0.35 |
$ 1.05 |
$ 1.05 |
||||
Weighted Average Number of Shares Outstanding: |
||||||||
Basic |
66.4 |
66.3 |
66.4 |
66.3 |
||||
Assuming Dilution |
66.7 |
66.3 |
66.8 |
66.3 |
||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
Unaudited |
||||
(Dollars in Millions) |
||||
Sep 30, 2024 |
Dec 31, 2023 |
|||
ASSETS |
||||
Current Assets: |
||||
Cash and Cash Equivalents |
$ 458.6 |
$ 574.0 |
||
Trade Receivables, Less Allowances of $32.3 million and $30.3 million in 2024 and 2023, |
855.8 |
921.6 |
||
Inventories |
1,324.5 |
1,274.2 |
||
Prepaid Expenses and Other Current Assets |
285.4 |
245.6 |
||
Assets Held for Sale |
31.2 |
368.6 |
||
Total Current Assets |
2,955.5 |
3,384.0 |
||
Net Property, Plant and Equipment |
961.9 |
1,041.2 |
||
Operating Lease Assets |
153.3 |
172.8 |
||
Goodwill |
6,557.3 |
6,553.1 |
||
Intangible Assets, Net of Amortization |
3,824.5 |
4,083.4 |
||
Deferred Income Tax Benefits |
37.0 |
33.8 |
||
Other Noncurrent Assets |
69.5 |
69.0 |
||
Noncurrent Assets Held for Sale |
— |
94.1 |
||
Total Assets |
$ 14,559.0 |
$ 15,431.4 |
||
LIABILITIES AND EQUITY |
||||
Current Liabilities: |
||||
Accounts Payable |
$ 553.2 |
$ 549.4 |
||
Dividends Payable |
23.2 |
23.2 |
||
Accrued Compensation and Employee Benefits |
177.8 |
198.7 |
||
Accrued Interest |
90.8 |
85.1 |
||
Other Accrued Expenses |
318.0 |
325.2 |
||
Current Operating Lease Liabilities |
37.1 |
37.2 |
||
Current Maturities of Long-Term Debt |
4.7 |
3.9 |
||
Liabilities Held for Sale |
3.8 |
103.7 |
||
Total Current Liabilities |
1,208.6 |
1,326.4 |
||
Long-Term Debt |
5,654.6 |
6,377.0 |
||
Deferred Income Taxes |
907.3 |
1,012.7 |
||
Pension and Other Post Retirement Benefits |
109.2 |
120.4 |
||
Noncurrent Operating Lease Liabilities |
122.6 |
132.2 |
||
Other Noncurrent Liabilities |
70.9 |
77.2 |
||
Noncurrent Liabilities Held for Sale |
— |
20.4 |
||
Equity: |
||||
Regal Rexnord Corporation Shareholders' Equity: |
||||
Common Stock, $0.01 par value, 150.0 million Shares Authorized, 66.2 million and 66.3 |
0.7 |
0.7 |
||
Additional Paid-In Capital |
4,652.0 |
4,646.2 |
||
Retained Earnings |
2,026.5 |
1,979.8 |
||
Accumulated Other Comprehensive Loss |
(206.1) |
(282.4) |
||
Total Regal Rexnord Corporation Shareholders' Equity |
6,473.1 |
6,344.3 |
||
Noncontrolling Interests |
12.7 |
20.8 |
||
Total Equity |
6,485.8 |
6,365.1 |
||
Total Liabilities and Equity |
$ 14,559.0 |
$ 15,431.4 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW |
||||||||
Unaudited |
||||||||
(Dollars in Millions) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
Sep 30, 2024 |
Sep 30, 2023 |
Sep 30, 2024 |
Sep 30, 2023 |
|||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net Income (Loss) |
$ 73.0 |
$ (138.6) |
$ 156.4 |
$ (110.9) |
||||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating |
||||||||
Depreciation |
40.6 |
53.9 |
122.6 |
131.7 |
||||
Amortization |
86.8 |
87.0 |
260.0 |
222.7 |
||||
Goodwill Impairment |
— |
57.3 |
— |
57.3 |
||||
Asset Impairments |
— |
3.7 |
1.5 |
6.1 |
||||
Loss on Assets Held for Sale |
— |
112.7 |
4.3 |
112.7 |
||||
Noncash Lease Expense |
10.8 |
11.9 |
33.0 |
31.6 |
||||
Share-Based Compensation Expense |
8.3 |
12.9 |
26.9 |
49.1 |
||||
Financing Fee Expense |
3.2 |
2.9 |
9.4 |
29.8 |
||||
Benefit from Deferred Income Taxes |
(35.2) |
(35.2) |
(89.0) |
(89.4) |
||||
Other Non-Cash Changes |
1.8 |
2.3 |
6.5 |
5.6 |
||||
Change in Operating Assets and Liabilities, Net of Acquisitions and Divestitures |
||||||||
Receivables |
44.1 |
(13.2) |
27.3 |
29.2 |
||||
Inventories |
(8.5) |
52.0 |
(54.3) |
206.7 |
||||
Accounts Payable |
(24.2) |
(14.4) |
0.7 |
(18.7) |
||||
Other Assets and Liabilities |
(45.9) |
(8.5) |
(109.1) |
(149.5) |
||||
Net Cash Provided by Operating Activities |
154.8 |
186.7 |
396.2 |
514.0 |
||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Additions to Property, Plant and Equipment |
(29.3) |
(25.2) |
(80.2) |
(88.7) |
||||
Business Acquisitions, Net of Cash Acquired |
— |
— |
— |
(4,870.2) |
||||
Proceeds Received from Sale of Businesses, Net of Cash Transferred |
— |
— |
374.8 |
— |
||||
Proceeds Received from Sales of Property, Plant and Equipment |
— |
0.2 |
1.3 |
6.3 |
||||
Net Cash (Used in) Provided by Investing Activities |
(29.3) |
(25.0) |
295.9 |
(4,952.6) |
||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Borrowings Under Revolving Credit Facility |
381.0 |
389.0 |
1,316.2 |
1,801.3 |
||||
Repayments Under Revolving Credit Facility |
(373.2) |
(487.5) |
(1,380.5) |
(2,213.8) |
||||
Proceeds from Short-Term Borrowings |
— |
5.6 |
— |
34.7 |
||||
Repayments of Short-Term Borrowings |
— |
(5.4) |
— |
(38.2) |
||||
Proceeds from Long-Term Borrowings |
— |
— |
— |
5,532.9 |
||||
Repayments of Long-Term Borrowings |
(122.1) |
(88.2) |
(668.4) |
(624.7) |
||||
Dividends Paid to Shareholders |
(23.3) |
(23.2) |
(69.9) |
(69.6) |
||||
Shares Surrendered for Taxes |
(1.1) |
(2.3) |
(12.4) |
(11.5) |
||||
Proceeds from the Exercise of Stock Options |
0.3 |
1.6 |
4.1 |
3.1 |
||||
Financing Fees Paid |
— |
— |
— |
(51.1) |
||||
Repurchase of Common Stock |
(50.0) |
— |
(50.0) |
— |
||||
Distributions to Noncontrolling Interests |
— |
— |
— |
(8.4) |
||||
Net Cash (Used in) Provided By Financing Activities |
(188.4) |
(210.4) |
(860.9) |
4,354.7 |
||||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS |
12.9 |
(12.1) |
(6.1) |
(5.8) |
||||
Net (Decrease) Increase in Cash and Cash Equivalents |
(50.0) |
(60.8) |
(174.9) |
(89.7) |
||||
Cash and Cash Equivalents at Beginning of Period (a) |
510.4 |
659.6 |
635.3 |
688.5 |
||||
Cash and Cash Equivalents at End of Period (b) |
$ 460.4 |
$ 598.8 |
$ 460.4 |
$ 598.8 |
||||
(a) Includes cash and cash equivalents in Assets Held for Sale of $61.3 Million at December 31, 2023. |
||||||||
(b) Includes cash and cash equivalents in Assets Held for Sale of $1.8 Million and $58.2 Million at September 30, 2024 and September 30, 2023, respectively. |
||||||||
SEGMENT INFORMATION |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Dollars in Millions) |
||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||
Industrial |
Power |
Automation & |
Industrial |
Total Regal |
||||||||||||||||
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||||||||
Net Sales |
$ 644.2 |
$ 640.7 |
$ 431.6 |
$ 461.3 |
$ 401.6 |
$ 419.8 |
$ — |
$ 128.0 |
$ 1,477.4 |
$ 1,649.8 |
||||||||||
Adjusted Net Sales |
$ 644.2 |
$ 640.7 |
$ 431.6 |
$ 461.3 |
$ 401.6 |
$ 419.8 |
$ — |
$ 128.0 |
$ 1,477.4 |
$ 1,649.8 |
||||||||||
GAAP Operating Margin |
13.1 % |
6.1 % |
13.6 % |
14.1 % |
7.7 % |
10.3 % |
— % |
(131.2) % |
11.8 % |
(1.2) % |
||||||||||
Adjusted Operating Margin |
15.4 % |
9.3 % |
14.7 % |
16.3 % |
9.6 % |
12.0 % |
— % |
4.2 % |
13.6 % |
11.5 % |
||||||||||
Adjusted EBITDA Margin % |
26.8 % |
21.7 % |
17.8 % |
19.7 % |
21.8 % |
24.0 % |
— % |
7.2 % |
22.8 % |
20.6 % |
||||||||||
Components of Net Sales: |
||||||||||||||||||||
Organic Sales Growth |
0.8 % |
(6.2) % |
(6.2) % |
(19.1) % |
(4.1) % |
5.5 % |
— % |
(13.2) % |
(2.7) % |
(10.8) % |
||||||||||
Acquisitions |
— % |
59.1 % |
— % |
— % |
— % |
112.5 % |
— % |
— % |
— % |
34.9 % |
||||||||||
Foreign Currency Impact |
(0.3) % |
1.3 % |
(0.2) % |
0.1 % |
(0.2) % |
— % |
— % |
(0.3) % |
(0.2) % |
0.4 % |
||||||||||
Nine Months Ended |
||||||||||||||||||||
Industrial |
Power |
Automation & |
Industrial |
Total Regal |
||||||||||||||||
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||||||||
Net Sales |
$ 1,963.1 |
$ 1,753.8 |
$ 1,227.8 |
$ 1,390.9 |
$ 1,224.0 |
$ 1,096.1 |
$ 157.8 |
$ 401.7 |
$ 4,572.7 |
$ 4,642.5 |
||||||||||
Adjusted Net Sales |
$ 1,963.1 |
$ 1,753.8 |
$ 1,227.8 |
$ 1,390.9 |
$ 1,224.0 |
$ 1,096.1 |
$ 157.8 |
$ 401.7 |
$ 4,572.7 |
$ 4,642.5 |
||||||||||
GAAP Operating Margin |
13.1 % |
6.0 % |
10.8 % |
12.2 % |
9.2 % |
7.9 % |
0.2 % |
(40.4) % |
11.0 % |
4.3 % |
||||||||||
Adjusted Operating Margin |
14.8 % |
11.9 % |
12.5 % |
14.1 % |
10.4 % |
12.5 % |
7.0 % |
4.0 % |
12.7 % |
12.0 % |
||||||||||
Adjusted EBITDA Margin % |
26.2 % |
24.2 % |
15.8 % |
17.3 % |
22.2 % |
24.3 % |
8.3 % |
7.0 % |
21.7 % |
20.7 % |
||||||||||
Components of Net Sales: |
||||||||||||||||||||
Organic Sales Growth |
(1.6) % |
(2.1) % |
(11.4) % |
(19.1) % |
(6.2) % |
8.0 % |
(11.0) % |
(1.8) % |
(6.2) % |
(8.0) % |
||||||||||
Acquisitions |
13.9 % |
42.2 % |
— % |
. |
18.2 % |
84.7 % |
— % |
— % |
10.0 % |
25.5 % |
||||||||||
Foreign Currency Impact |
(0.3) % |
(0.3) % |
(0.3) % |
(0.6) % |
(0.3) % |
(0.7) % |
(0.8) % |
(1.8) % |
(0.3) % |
(0.6) % |
||||||||||
.
ADJUSTED DILUTED EARNINGS PER SHARE |
||||||||
Unaudited |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||
GAAP Diluted Earnings (Loss) Per Share |
$ 1.09 |
$ (2.10) |
$ 2.32 |
$ (1.71) |
||||
Intangible Amortization |
0.98 |
0.99 |
2.95 |
2.53 |
||||
Restructuring and Related Costs (a) |
0.22 |
0.21 |
0.60 |
0.46 |
||||
Share-Based Compensation Expense (b) |
0.11 |
0.15 |
0.34 |
0.64 |
||||
Impairments and Exit Related Costs |
— |
0.04 |
0.02 |
0.07 |
||||
Inventory and Operating Lease Asset Step Up |
— |
0.10 |
0.01 |
0.60 |
||||
Loss on Sale of Businesses (c) |
— |
1.69 |
0.06 |
1.69 |
||||
Goodwill Impairment |
— |
0.86 |
— |
0.86 |
||||
Gain on Sale of Assets |
— |
— |
(0.01) |
— |
||||
Transaction and Integration Related Costs (d) |
0.09 |
0.13 |
0.24 |
1.60 |
||||
Discrete Tax Items (e) |
— |
0.03 |
0.25 |
0.13 |
||||
Adjusted Diluted Earnings Per Share |
2.49 |
2.10 |
6.78 |
6.87 |
||||
(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) |
Reflects the loss related to the sale of the industrial motors and generators businesses. |
(d) |
For 2024, primarily relates to (1) legal, professional service, rebranding and IT carve-out 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 (2) legal and professional service costs associated with the sale of the industrial motors and generators businesses. |
(e) |
Primarily relates to capital gains taxes and deferred income tax remeasurement related to the industrial motors and generators sale for the nine months ended September 30, 2024. |
2024 ADJUSTED ANNUAL GUIDANCE |
||||
Unaudited |
||||
Minimum |
Maximum |
|||
2024 GAAP Diluted EPS Annual Guidance |
$ 3.27 |
$ 3.57 |
||
Intangible Amortization |
3.94 |
3.94 |
||
Restructuring and Related Costs (a) |
0.82 |
0.82 |
||
Share-Based Compensation Expense |
0.46 |
0.46 |
||
Operating Lease Asset Step Up |
0.01 |
0.01 |
||
Impairments and Exit Related Costs |
0.02 |
0.02 |
||
Loss on Sale of Businesses |
0.06 |
0.06 |
||
Gain on Sale of Assets |
(0.01) |
(0.01) |
||
Transaction and Integration Related Costs (b) |
0.33 |
0.33 |
||
Discrete Tax Items |
0.25 |
0.25 |
||
2024 Adjusted Diluted EPS Annual Guidance |
$ 9.15 |
$ 9.45 |
(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, rebranding and IT carve-out 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. |
ADJUSTED EBITDA |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Dollars in Millions) |
||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||
Industrial |
Power Efficiency |
Automation & |
Industrial |
Total Regal |
||||||||||||||||
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||||||||
GAAP Income (Loss) from |
$ 84.5 |
$ 39.4 |
$ 58.6 |
$ 65.0 |
$ 31.0 |
$ 43.1 |
$ — |
$ (167.9) |
$ 174.1 |
$ (20.4) |
||||||||||
Restructuring and Related Costs (a) |
9.0 |
6.7 |
3.5 |
8.7 |
6.6 |
2.5 |
— |
(0.1) |
19.1 |
17.8 |
||||||||||
Inventory and Operating Lease |
0.2 |
7.1 |
— |
— |
— |
1.7 |
— |
— |
0.2 |
8.8 |
||||||||||
Impairments and Exit Related |
— |
1.3 |
— |
1.5 |
— |
0.5 |
— |
0.4 |
— |
3.7 |
||||||||||
Loss on Sale of Businesses (b) |
— |
— |
— |
— |
— |
— |
— |
112.7 |
— |
112.7 |
||||||||||
Goodwill Impairment |
— |
— |
— |
— |
— |
— |
— |
57.3 |
— |
57.3 |
||||||||||
Transaction and Integration |
5.2 |
4.8 |
1.5 |
— |
1.0 |
2.7 |
— |
3.0 |
7.7 |
10.5 |
||||||||||
Adjusted Income from Operations |
$ 98.9 |
$ 59.3 |
$ 63.6 |
$ 75.2 |
$ 38.6 |
$ 50.5 |
$ — |
$ 5.4 |
$ 201.1 |
$ 190.4 |
||||||||||
Amortization |
$ 50.9 |
$ 50.5 |
$ 2.0 |
$ 2.1 |
$ 33.9 |
$ 34.2 |
$ — |
$ 0.2 |
$ 86.8 |
$ 87.0 |
||||||||||
Depreciation |
18.9 |
21.8 |
9.4 |
9.8 |
12.3 |
11.9 |
— |
2.9 |
40.6 |
46.4 |
||||||||||
Share-Based Compensation |
4.0 |
6.4 |
1.7 |
2.9 |
2.6 |
3.1 |
— |
0.5 |
8.3 |
12.9 |
||||||||||
Other Income, Net |
— |
0.9 |
0.1 |
0.7 |
0.1 |
0.7 |
— |
0.2 |
0.2 |
2.5 |
||||||||||
Adjusted EBITDA(d) |
$ 172.7 |
$ 138.9 |
$ 76.8 |
$ 90.7 |
$ 87.5 |
$ 100.4 |
$ — |
$ 9.2 |
$ 337.0 |
$ 339.2 |
||||||||||
GAAP Operating Margin % |
13.1 % |
6.1 % |
13.6 % |
14.1 % |
7.7 % |
10.3 % |
— % |
(131.2) % |
11.8 % |
(1.2) % |
||||||||||
Adjusted Operating Margin % |
15.4 % |
9.3 % |
14.7 % |
16.3 % |
9.6 % |
12.0 % |
— % |
4.2 % |
13.6 % |
11.5 % |
||||||||||
Adjusted EBITDA Margin % |
26.8 % |
21.7 % |
17.8 % |
19.7 % |
21.8 % |
24.0 % |
— % |
7.2 % |
22.8 % |
20.6 % |
||||||||||
(a) |
Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line exits and other asset charges. |
||
(b) |
Reflects the loss related to the sale of the industrial motors and generators businesses. |
||
(c) |
For 2024, primarily relates to (1) legal, professional service, rebranding and IT carve-out 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 (2) legal and professional service costs associated with the sale of the industrial motors and generators businesses. |
||
(d) |
Adjusted EBITDA and Adjusted EBITDA Margin % Excluding Industrial for the three months ended September 2023 is calculated as follows: |
||
Sep 30, 2023 |
|||
Total Regal Rexnord Adjusted EBITDA |
339.2 |
||
Less: Industrial Systems Adjusted EBITDA |
9.2 |
||
Adjusted EBITDA excluding Industrial Systems |
330.0 |
||
Total Regal Rexnord Net Sales |
1,649.8 |
||
Less: Industrial Systems Net Sales |
128.0 |
||
Net Sales excluding Industrial Systems |
1,521.8 |
||
Adjusted EBITDA Margin % excluding Industrial Systems |
21.7 % |
Nine Months Ended |
||||||||||||||||||||
Industrial |
Power and |
Automation & |
Industrial |
Total Regal |
||||||||||||||||
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||||||||
GAAP Income (Loss) from |
$ 256.4 |
$ 105.5 |
$ 132.2 |
$ 170.2 |
$ 113.0 |
$ 86.5 |
$ 0.3 |
$ (162.1) |
$ 501.9 |
$ 200.1 |
||||||||||
Restructuring and Related Costs (a) |
20.3 |
10.1 |
18.6 |
24.1 |
11.8 |
5.0 |
3.1 |
0.8 |
53.8 |
40.0 |
||||||||||
Inventory and Operating Lease |
0.9 |
38.7 |
— |
— |
— |
14.2 |
— |
— |
0.9 |
52.9 |
||||||||||
Impairments and Exit Related |
0.2 |
1.6 |
0.2 |
1.5 |
1.1 |
2.6 |
— |
0.4 |
1.5 |
6.1 |
||||||||||
Loss on Sale of Businesses (b) |
— |
— |
— |
— |
— |
— |
4.3 |
112.7 |
4.3 |
112.7 |
||||||||||
Goodwill Impairment |
— |
— |
— |
— |
— |
— |
— |
57.3 |
— |
57.3 |
||||||||||
Gain on Sale of Assets |
— |
— |
— |
— |
(0.8) |
(0.6) |
— |
— |
(0.8) |
(0.6) |
||||||||||
Transaction and Integration |
12.5 |
53.3 |
3.0 |
— |
2.3 |
29.2 |
3.4 |
6.9 |
21.2 |
89.4 |
||||||||||
Adjusted Income from Operations |
$ 290.3 |
$ 209.2 |
$ 154.0 |
$ 195.8 |
$ 127.4 |
$ 136.9 |
$ 11.1 |
$ 16.0 |
$ 582.8 |
$ 557.9 |
||||||||||
Amortization |
$ 151.1 |
$ 132.0 |
$ 6.2 |
$ 6.3 |
$ 102.5 |
$ 83.8 |
$ 0.2 |
$ 0.6 |
$ 260.0 |
$ 222.7 |
||||||||||
Depreciation |
59.6 |
56.3 |
28.1 |
29.1 |
35.2 |
29.6 |
0.4 |
9.2 |
123.3 |
124.2 |
||||||||||
Share-Based Compensation |
12.6 |
25.0 |
5.6 |
7.7 |
7.3 |
14.7 |
1.4 |
1.7 |
26.9 |
49.1 |
||||||||||
Other (Expense) Income, Net |
(0.2) |
2.5 |
(0.1) |
2.0 |
(0.1) |
1.6 |
— |
0.6 |
(0.4) |
6.7 |
||||||||||
Adjusted EBITDA |
$ 513.4 |
$ 425.0 |
$ 193.8 |
$ 240.9 |
$ 272.3 |
$ 266.6 |
$ 13.1 |
$ 28.1 |
$ 992.6 |
$ 960.6 |
||||||||||
GAAP Operating Margin % |
13.1 % |
6.0 % |
10.8 % |
12.2 % |
9.2 % |
7.9 % |
0.2 % |
(40.4) % |
11.0 % |
4.3 % |
||||||||||
Adjusted Operating Margin % |
14.8 % |
11.9 % |
12.5 % |
14.1 % |
10.4 % |
12.5 % |
7.0 % |
4.0 % |
12.7 % |
12.0 % |
||||||||||
Adjusted EBITDA Margin % |
26.2 % |
24.2 % |
15.8 % |
17.3 % |
22.2 % |
24.3 % |
8.3 % |
7.0 % |
21.7 % |
20.7 % |
||||||||||
(a) |
Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line exits and other asset charges. |
(b) |
Reflects the loss related to the sale of the industrial motors and generators businesses. |
(c) |
For 2024, primarily relates to (1) legal, professional service, rebranding and IT carve-out 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 (2) legal and professional service 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 |
Nine Months Ended |
|||||||
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||
Net Income (Loss) |
$ 73.0 |
$ (138.6) |
$ 156.4 |
$ (110.9) |
||||
Plus: Income Taxes |
8.4 |
12.7 |
53.2 |
34.9 |
||||
Plus: Interest Expense |
98.0 |
111.5 |
305.1 |
323.3 |
||||
Less: Interest Income |
(5.1) |
(3.5) |
(13.2) |
(40.5) |
||||
Plus: Depreciation |
40.6 |
46.4 |
123.3 |
124.2 |
||||
Plus: Amortization |
86.8 |
87.0 |
260.0 |
222.7 |
||||
EBITDA |
301.7 |
115.5 |
884.8 |
553.7 |
||||
Plus: Restructuring and Related Costs (a) |
19.1 |
17.8 |
53.8 |
40.0 |
||||
Plus: Share-Based Compensation Expense (b) |
8.3 |
12.9 |
26.9 |
49.1 |
||||
Plus: Inventory and Operating Lease Asset Step Up |
0.2 |
8.8 |
0.9 |
52.9 |
||||
Plus: Impairments and Exit Related Costs |
— |
3.7 |
1.5 |
6.1 |
||||
Plus: Loss on Sale of Businesses (c) |
— |
112.7 |
4.3 |
112.7 |
||||
Plus: Goodwill Impairment |
— |
57.3 |
— |
57.3 |
||||
Less: Gain on Sale of Assets |
— |
— |
(0.8) |
(0.6) |
||||
Plus: Transaction and Integration Related Costs (d) |
7.7 |
10.5 |
21.2 |
89.4 |
||||
Adjusted EBITDA |
$ 337.0 |
$ 339.2 |
$ 992.6 |
$ 960.6 |
||||
(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) |
Reflects the loss related to the sale of the industrial motors and generators businesses. |
(d) |
For 2024, primarily relates to (1) legal, professional service, rebranding and IT carve-out 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 (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 |
||
Sep 30, 2024 |
||
Net Income |
$ 213.0 |
|
Plus: Income Taxes |
71.0 |
|
Plus: Interest Expense |
412.8 |
|
Less: Interest Income |
(16.3) |
|
Plus: Depreciation |
164.8 |
|
Plus: Amortization |
345.1 |
|
EBITDA |
$ 1,190.4 |
|
Plus: Restructuring and Related Costs (a) |
98.2 |
|
Plus: Share-Based Compensation Expense |
36.0 |
|
Plus: Inventory and Operating Lease Asset Step Up |
2.5 |
|
Plus: Impairments and Exit Related Costs |
5.0 |
|
Less: Gain on Sale of Businesses (b) |
(20.7) |
|
Less: Gain on Sale of Assets |
(0.8) |
|
Plus: Transaction and Integration Related Costs (c) |
28.5 |
|
Adjusted EBITDA* (d) |
$ 1,339.1 |
|
Current Maturities of Long-Term Debt |
$ 4.7 |
|
Long-Term Debt |
5,654.6 |
|
Total Gross Debt |
$ 5,659.3 |
|
Cash and Cash Equivalents (e) |
(460.4) |
|
Net Debt |
$ 5,198.9 |
|
Gross Debt/Adjusted EBITDA |
4.23 |
|
Net Debt/Adjusted EBITDA (d) |
3.88 |
|
Interest Coverage Ratio (d) |
3.38 |
(a) |
Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line exits and other asset charges. |
|
(b) |
Reflects the net gain recorded related to the sale of the industrial motors and generators businesses over the last twelve months. |
|
(c) |
Primarily relates to (1) legal, professional service, and integration costs associated with the Altra Transaction and (2) legal, professional service, rebranding and IT carve-out 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 impact of the synergies the Company expects to realize within 18 months is as follows: |
|
Adjusted EBITDA |
$ 1,339.1 |
|
Synergies to be Realized Within 18 months |
100.0 |
|
Adjusted EBITDA (including synergies) |
$ 1,439.1 |
|
Net Debt/Adjusted EBITDA (including synergies) |
3.61 |
|
Interest Expense |
$ 412.8 |
|
Interest Income |
(16.3) |
|
Net Interest Expense |
$ 396.5 |
|
Interest Coverage Ratio(1) |
3.38 |
|
Interest Coverage Ratio (including synergies)(2) |
3.63 |
|
(1) Computed as Adjusted EBITDA/Net Interest Expense |
||
(2) Computed as Adjusted EBITDA (including synergies)/Net Interest Expense |
||
(e) |
This amount includes $1.8 Million cash and cash equivalents included in Assets Held for Sale. |
|
ADJUSTED FREE CASH FLOW |
||||||||
Unaudited |
||||||||
(Dollars in Millions) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||
Net Cash Provided by Operating Activities |
$ 154.8 |
$ 186.7 |
$ 396.2 |
$ 514.0 |
||||
Payments for Certain Acquisition Costs (Net of Tax of $11.4 Million in 2023) (a) |
— |
— |
— |
86.9 |
||||
Payments for Certain Costs to Sell Businesses (Net of Tax of $1.7 Million in |
— |
— |
10.5 |
— |
||||
Adjusted Cash Flows from Operations |
154.8 |
186.7 |
406.7 |
600.9 |
||||
Additions to Property Plant and Equipment |
(29.3) |
(25.2) |
(80.2) |
(88.7) |
||||
Adjusted Free Cash Flow |
$ 125.5 |
$ 161.5 |
$ 326.5 |
$ 512.2 |
||||
(a) |
Reflects the payment of Regal Rexnord's and Altra's advisor success fees. |
(b) |
Reflects the payment of Regal Rexnord's advisor success fees and income taxes paid related to the sale of the industrial motors and generators businesses. |
ADJUSTED EFFECTIVE TAX RATE |
|||||||
Unaudited |
|||||||
(Dollars in Millions) |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
Sep 30, |
Sep 30, |
Sep 30, |
Sep 30, |
||||
Income (Loss) before Taxes |
$ 81.4 |
$ (125.9) |
$ 209.6 |
$ (76.0) |
|||
Provision for Income Taxes |
8.4 |
12.7 |
53.2 |
34.9 |
|||
Effective Tax Rate |
10.3 % |
(10.1) % |
25.4 % |
(45.9) % |
|||
Income (Loss) before Taxes |
$ 81.4 |
$ (125.9) |
$ 209.6 |
$ (76.0) |
|||
Intangible Amortization |
86.8 |
87.0 |
260.0 |
222.7 |
|||
Restructuring and Related Costs (a) |
19.1 |
17.8 |
53.8 |
40.0 |
|||
Share-Based Compensation Expense (b) |
8.3 |
12.9 |
26.9 |
49.1 |
|||
Inventory and Operating Lease Asset Step Up |
0.2 |
8.8 |
0.9 |
52.9 |
|||
Impairments and Exit Related Costs |
— |
3.7 |
1.5 |
6.1 |
|||
Loss on Sale of Businesses (c) |
— |
112.7 |
4.3 |
112.7 |
|||
Goodwill Impairment |
— |
57.3 |
— |
57.3 |
|||
Gain on Sale of Assets |
— |
— |
(0.8) |
(0.6) |
|||
Transaction and Integration Related Costs (d) |
7.7 |
10.5 |
21.2 |
128.7 |
|||
Adjusted Income before Taxes* |
$ 203.5 |
$ 184.8 |
$ 577.4 |
$ 592.9 |
|||
Provision for Income Taxes |
$ 8.4 |
$ 12.7 |
$ 53.2 |
$ 34.9 |
|||
Tax Effect of Intangible Amortization |
21.1 |
21.1 |
63.2 |
54.1 |
|||
Tax Effect of Restructuring and Related Costs |
4.6 |
3.8 |
13.2 |
9.7 |
|||
Tax Effect of Share-Based Compensation Expense |
1.0 |
2.6 |
4.6 |
6.3 |
|||
Tax Effect of Inventory and Operating Lease Asset Step Up |
— |
2.1 |
0.2 |
12.7 |
|||
Tax Effect of Impairments and Exit Related Costs |
— |
0.9 |
0.4 |
1.5 |
|||
Tax Effect of Gain on Sale of Assets |
— |
— |
(0.2) |
(0.1) |
|||
Tax Effect of Transaction and Integration Related Costs |
1.8 |
2.0 |
5.0 |
21.8 |
|||
Discrete Tax Items |
— |
(1.4) |
(16.3) |
(8.2) |
|||
Adjusted Provision for Income Taxes* |
$ 36.9 |
$ 43.8 |
$ 123.3 |
$ 132.7 |
|||
Adjusted Effective Tax Rate* |
18.1 % |
23.7 % |
21.4 % |
22.4 % |
|||
(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) |
Reflects the loss related to the sale of the industrial motors and generators businesses. |
(d) |
For 2024, primarily relates to (1) legal, professional service, rebranding and IT carve-out 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 (2) legal and professional service costs associated with the sale of the industrial motors and generators businesses. |
(e) |
Primarily relates to capital gains taxes and deferred income tax remeasurement related to the industrial motors and generators sale for the nine months ended September 30, 2024. |
ORGANIC SALES GROWTH |
||||||||||
Unaudited |
||||||||||
(Dollars in Millions) |
||||||||||
Three Months Ended |
||||||||||
Industrial |
Power and |
Automation & |
Industrial |
Total Regal |
||||||
Net Sales Three Months Ended Sep 30, 2024 |
$ 644.2 |
$ 431.6 |
$ 401.6 |
$ — |
$ 1,477.4 |
|||||
Impact from Foreign Currency Exchange |
1.8 |
1.1 |
1.0 |
— |
3.9 |
|||||
Organic Sales Three Months Ended Sep 30, |
$ 646.0 |
$ 432.7 |
$ 402.6 |
$ — |
$ 1,481.3 |
|||||
Net Sales Three Months Ended Sep 30, 2023 |
$ 640.7 |
$ 461.3 |
$ 419.8 |
$ 128.0 |
$ 1,649.8 |
|||||
Net Sales from Businesses Divested |
— |
— |
— |
(128.0) |
(128.0) |
|||||
Adjusted Net Sales Three Months Ended Sep |
$ 640.7 |
$ 461.3 |
$ 419.8 |
$ — |
$ 1,521.8 |
|||||
Three Months Ended Sep 30, 2024 Net Sales |
0.5 % |
(6.4) % |
(4.3) % |
— % |
(2.9) % |
|||||
Three Months Ended Sep 30, 2024 Organic |
0.8 % |
(6.2) % |
(4.1) % |
— % |
(2.7) % |
|||||
Nine Months Ended |
||||||||||
Industrial |
Power and |
Automation & |
Industrial |
Total Regal |
||||||
Net Sales Nine Months Ended Sep 30, 2024 |
$ 1,963.1 |
$ 1,227.8 |
$ 1,224.0 |
$ 157.8 |
$ 4,572.7 |
|||||
Net Sales from Businesses Acquired |
(243.2) |
— |
(199.3) |
— |
(442.5) |
|||||
Impact from Foreign Currency Exchange |
5.5 |
4.3 |
3.8 |
1.4 |
15.0 |
|||||
Organic Sales Nine Months Ended Sep 30, |
$ 1,725.4 |
$ 1,232.1 |
$ 1,028.5 |
$ 159.2 |
$ 4,145.2 |
|||||
Net Sales Nine Months Ended Sep 30, 2023 |
$ 1,753.8 |
$ 1,390.9 |
$ 1,096.1 |
$ 401.7 |
$ 4,642.5 |
|||||
Net Sales from Businesses Divested |
— |
— |
— |
(222.9) |
(222.9) |
|||||
Adjusted Net Sales Nine Months Ended Sep |
$ 1,753.8 |
$ 1,390.9 |
$ 1,096.1 |
$ 178.8 |
$ 4,419.6 |
|||||
Nine Months Ended Sep 30, 2024 Net Sales |
11.9 % |
(11.7) % |
11.7 % |
(11.7) % |
3.5 % |
|||||
Nine Months Ended Sep 30, 2024 Organic |
(1.6) % |
(11.4) % |
(6.2) % |
(11.0) % |
(6.2) % |
|||||
ADJUSTED GROSS MARGIN |
||||||||||
Unaudited |
||||||||||
(Dollars in Millions) |
||||||||||
Three Months Ended |
||||||||||
September 30, 2024 |
||||||||||
Industrial |
Power and |
Automation & |
Industrial |
Total Regal |
||||||
Net Sales |
$ 644.2 |
$ 431.6 |
$ 401.6 |
$ — |
$ 1,477.4 |
|||||
Gross Margin |
$ 268.0 |
$ 131.8 |
$ 156.5 |
$ — |
$ 556.3 |
|||||
Restructuring and Related Costs (a) |
4.2 |
2.9 |
3.6 |
— |
10.7 |
|||||
Operating Lease Asset Step Up |
0.2 |
— |
— |
— |
0.2 |
|||||
Adjusted Gross Margin |
$ 272.4 |
$ 134.7 |
$ 160.1 |
$ — |
$ 567.2 |
|||||
Gross Margin % |
41.6 % |
30.5 % |
39.0 % |
— % |
37.7 % |
|||||
Adjusted Gross Margin % |
42.3 % |
31.2 % |
39.9 % |
— % |
38.4 % |
|||||
(a) |
Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line exits and other asset charges. |
ADJUSTED GROSS MARGIN |
||||||||||
Unaudited |
||||||||||
(Dollars in Millions) |
||||||||||
Nine Months Ended |
||||||||||
September 30, 2024 |
||||||||||
Industrial |
Power and |
Automation & |
Industrial |
Total Regal |
||||||
Net Sales |
$ 1,963.1 |
$ 1,227.8 |
$ 1,224.0 |
$ 157.8 |
$ 4,572.7 |
|||||
Gross Margin |
$ 803.3 |
$ 352.3 |
$ 485.6 |
$ 39.2 |
$ 1,680.4 |
|||||
Restructuring and Related Costs (a) |
11.8 |
16.9 |
5.7 |
1.1 |
35.5 |
|||||
Operating Lease Asset Step Up |
0.9 |
— |
— |
— |
0.9 |
|||||
Adjusted Gross Margin |
$ 816.0 |
$ 369.2 |
$ 491.3 |
$ 40.3 |
$ 1,716.8 |
|||||
Gross Margin % |
40.9 % |
28.7 % |
39.7 % |
24.8 % |
36.7 % |
|||||
Adjusted Gross Margin % |
41.6 % |
30.1 % |
40.1 % |
25.5 % |
37.5 % |
|||||
(a) |
Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line exits and other asset charges. |
SOURCE Regal Rexnord Corporation
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