BELOIT, Wis., Feb. 8, 2016
/PRNewswire/ -- Regal Beloit Corporation (NYSE: RBC) today
reported fourth quarter 2015 diluted loss per share of ($0.43), including (i) a goodwill impairment of
$58.1 million, net of tax, or
$1.30 per share, related to
China and oil & gas
operations, and (ii) a $12.8 million
charge, or $0.29 per share, for the
wind down of its Venezuelan operations. Fourth quarter 2015
adjusted diluted earnings per share* were $1.17. Sales for the full year 2015 were a record
$3.5 billion, an increase of 8% from
2014.
Key financial results for the fourth quarter 2015 included:
- Sales of $774 million were flat
compared to the prior year with sales increases from the PTS
acquisition of 16.5% offset by (i) organic sales declines of 14.0%,
approximately half of which was related to the negative effect of
five less shipping days in the fourth quarter versus the prior
year, and (ii) a negative 2.7% foreign currency translation.
- Adjusted operating profit of $79.5
million increased 32% from the prior year and represented an
adjusted operating profit margin of 10.3%, an increase of 250 basis
points from the prior year. GAAP operating loss was ($14.1) million.
- Adjusted diluted earnings per share of $1.17 represented a 43% increase from the prior
year.
- Free cash flow was 169% of adjusted net income and the Company
paid down $77 million of debt.
Fourth quarter 2015 segment highlights versus the prior year
fourth quarter included:
- Commercial and Industrial Systems Segment net sales were
$371 million, down 18%. Sales were
largely impacted by five fewer shipping days, weakness in oil &
gas, a slowdown in the industrial markets in China and a negative 3.7% foreign currency
translation. Despite these challenges, adjusted operating profit
margin increased 480 basis points to 9.5%, due primarily to the
simplification initiative, cost controls, a LIFO benefit and lower
bad debt expenses compared to the prior year.
- Climate Solutions Segment net sales were $210 million, down 18%. Sales were unfavorably
impacted by five fewer shipping days, the SEER 13 pre-build, the
effect of contractual two-way material price formulas, warmer
weather in the North American market and a negative 1.5% foreign
currency translation. Even with the lower sales, adjusted operating
profit margin increased 130 basis points to 13.2%, due primarily to
the benefits of the simplification initiative and cost
controls.
- Power Transmission Solutions Segment net sales increased 182%
to $193 million, driven primarily by
acquisition growth of $128 million.
Sales were negatively impacted by five fewer shipping days, weak
oil & gas and agricultural end markets, slower demand in the
distribution channel, and a negative 0.6% foreign currency
translation.
*This earnings release includes non-GAAP financial
measures. Descriptions of why we believe these non-GAAP
measures are useful and reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP measures are included
with this earnings release.
"At the beginning of 2015, we set out two key goals:
improve operating margins in our legacy businesses and successfully
integrate the PTS acquisition," said Regal Chairman and CEO
Mark Gliebe. "We accomplished
both of these goals with better-than-expected results. We achieved
a 150 basis point year-over-year adjusted operating profit margin
improvement for the year, resulting in a 24% increase in adjusted
EPS, and we exceeded our PTS synergy targets both in terms of
dollars and timing.
"While we faced difficult end markets in the fourth
quarter, we were pleased to deliver a 250 basis point
year-over-year improvement in adjusted operating profit margin,
increase adjusted EPS by 43%, and generate free cash flow of 169%
of adjusted net income, which we used to pay down $77 million of debt."
2016 Outlook
"As we look ahead to 2016, we do not yet see a catalyst that
changes the challenging industrial environment. We expect
continued weakness in our end markets to put pressure on our sales
throughout 2016, although the second half should provide more
favorable year over year comparisons.
"Our simplification initiative is at full stride and
delivering synergy benefits which will help offset the top line
challenges. We expect 2016 adjusted diluted earnings per share to
be in the range of $4.80 to $5.20,"
continued Mr. Gliebe.
Conference Call
Management will hold a conference call to discuss the earnings
release at 9:00 AM CST (10:00 AM EST) on February
9, 2016. Individuals who would like to participate by
phone should dial 888-317-6003 and enter 9009396 when
prompted. International callers should dial 412-317-6061 and
enter 9009396 when prompted. To view the presentation during
the call, please follow this link to Regal's Investors page:
http://investors.regalbeloit.com/phoenix.zhtml?c=116222&p=irol-presentations.
To listen to the live audio and view the presentation via the
internet, please go to:
https://www.webcaster4.com/Webcast/Page/747/12847.
A telephone replay of the call will be available through
May 10, 2016, at 877-344-7529,
conference ID 10079299. International callers should call
412-317-0088 using the same conference ID. A webcast replay
will be available until May 10, 2016,
and can be accessed at
http://investors.regalbeloit.com/phoenix.zhtml?c=116222&p=irol-calendarPast.
About the Company
Regal Beloit Corporation is a leading manufacturer of electric
motors, electrical motion controls, power generation and power
transmission products serving markets throughout the world. Regal
Beloit is headquartered in
Beloit, Wisconsin, and has
manufacturing, sales and service facilities throughout the United States, Canada, Mexico, Europe and Asia. Regal Beloit's common stock is a component of the
S&P Mid Cap 400 Index and the Russell 1000 Index.
CAUTIONARY STATEMENT
The following is a cautionary statement made under the Private
Securities Litigation Reform Act of 1995: With the exception of
historical facts, the statements contained in this press release
may be forward looking statements. Forward-looking statements
represent our management's judgment regarding future events.
In many cases, you can identify forward-looking statements by
terminology such as "may," "will," "plan," "expect,"
"anticipate," "estimate," "believe," or "continue" or the negative
of these terms or other similar words. Actual results and
events could differ materially and adversely from those contained
in the forward-looking statements due to a number of factors,
including: uncertainties regarding our ability to execute our
restructuring plans within expected costs and timing; increases in
our overall debt levels as a result of the acquisition of the Power
Transmission Solutions ("PTS") business from Emerson Electric Co.,
or otherwise and our ability to repay principal and interest on our
outstanding debt; actions taken by our competitors and our ability
to effectively compete in the increasingly competitive global
electric motor, power generation and mechanical motion control
industries; our ability to develop new products based on
technological innovation and the marketplace acceptance of new and
existing products; fluctuations in commodity prices and raw
material costs; our dependence on significant customers; issues and
costs arising from the integration of acquired companies and
businesses such as the PTS acquisition, including the timing and
impact of purchase accounting adjustments; unanticipated costs or
expenses we may incur related to product warranty issues; currency
devaluations, non-payment of receivables, governmental restrictions
such as price and margin controls, or other difficult operating
conditions relating to our doing business in Venezuela; our dependence on key suppliers and
the potential effects of supply disruptions; infringement of our
intellectual property by third parties, challenges to our
intellectual property, and claims of infringement by us of third
party technologies; product liability and other litigation, or the
failure of our products to perform as anticipated, particularly in
high volume applications; economic changes in global markets where
we do business, such as reduced demand for the products we sell,
currency exchange rates, inflation rates, interest rates,
recession, foreign government policies and other external factors
that we cannot control; unanticipated liabilities of acquired
businesses; effect on earnings of any significant impairment of
goodwill or intangible assets; cyclical downturns affecting the
global market for capital goods; difficulties associated with
managing foreign operations; and other risks and uncertainties
including but not limited to those described in Item 1A-Risk
Factors of the Company's Annual Report on Form 10-K filed on
March 4, 2015 and from time to time
in our reports filed with U.S. Securities and Exchange Commission.
All subsequent written and oral forward-looking statements
attributable to us or to persons acting on our behalf are expressly
qualified in their entirety by the applicable cautionary
statements. The forward-looking statements included in this
presentation are made only as of their respective dates, and we
undertake no obligation to update these statements to reflect
subsequent events or circumstances.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
(Amounts in Millions,
Except per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
Net Sales
|
|
$
|
773.5
|
|
|
$
|
775.6
|
|
|
$
|
3,509.7
|
|
|
$
|
3,257.1
|
|
Cost of
Sales
|
|
553.7
|
|
|
587.5
|
|
|
2,576.5
|
|
|
2,459.8
|
|
Gross
Profit
|
|
219.8
|
|
|
188.1
|
|
|
933.2
|
|
|
797.3
|
|
Operating
Expenses
|
|
154.0
|
|
|
140.2
|
|
|
600.5
|
|
|
516.3
|
|
Goodwill
Impairment
|
|
79.9
|
|
|
118.5
|
|
|
79.9
|
|
|
119.5
|
|
Asset Impairments and
Other, Net
|
|
—
|
|
|
40.0
|
|
|
—
|
|
|
40.0
|
|
Total Operating
Expenses
|
|
233.9
|
|
|
298.7
|
|
|
680.4
|
|
|
675.8
|
|
Income (Loss) From
Operations
|
|
(14.1)
|
|
|
(110.6)
|
|
|
252.8
|
|
|
121.5
|
|
Interest
Expense
|
|
15.1
|
|
|
8.6
|
|
|
60.2
|
|
|
39.1
|
|
Interest
Income
|
|
1.2
|
|
|
2.5
|
|
|
4.3
|
|
|
7.9
|
|
Income (Loss) Before
Taxes
|
|
(28.0)
|
|
|
(116.7)
|
|
|
196.9
|
|
|
90.3
|
|
Provision for
(Benefit from) Income Taxes
|
|
(9.4)
|
|
|
(0.9)
|
|
|
48.4
|
|
|
54.2
|
|
Net Income
(Loss)
|
|
(18.6)
|
|
|
(115.8)
|
|
|
148.5
|
|
|
36.1
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
|
0.7
|
|
|
0.7
|
|
|
5.2
|
|
|
5.1
|
|
Net Income
(Loss) Attributable to Regal Beloit Corporation
|
|
$
|
(19.3)
|
|
|
$
|
(116.5)
|
|
|
$
|
143.3
|
|
|
$
|
31.0
|
|
Earnings (Loss) Per
Share Attributable to Regal Beloit Corporation:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.43)
|
|
|
$
|
(2.61)
|
|
|
$
|
3.21
|
|
|
$
|
0.69
|
|
Assuming
Dilution
|
|
$
|
(0.43)
|
|
|
$
|
(2.61)
|
|
|
$
|
3.18
|
|
|
$
|
0.69
|
|
Cash Dividends
Declared
|
|
$
|
0.23
|
|
|
$
|
0.22
|
|
|
$
|
0.91
|
|
|
$
|
0.86
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
44.7
|
|
|
44.7
|
|
|
44.7
|
|
|
45.0
|
|
Assuming
Dilution
|
|
44.7
|
|
|
44.7
|
|
|
45.1
|
|
|
45.3
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
Unaudited
|
|
|
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
252.9
|
|
|
$
|
334.1
|
|
Trade Receivables,
less Allowances
of $11.3 million in 2015 and $11.6 million in
2014
|
|
461.9
|
|
|
447.5
|
|
Inventories
|
|
775.0
|
|
|
691.7
|
|
Prepaid Expenses and
Other Current Assets
|
|
145.4
|
|
|
111.2
|
|
Total Current
Assets
|
|
1,635.2
|
|
|
1,584.5
|
|
|
|
|
|
|
Net Property, Plant,
Equipment and Noncurrent Assets
|
|
2,938.0
|
|
|
1,754.8
|
|
Total
Assets
|
|
$
|
4,573.2
|
|
|
$
|
3,339.3
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
Payable
|
|
$
|
336.2
|
|
|
$
|
312.2
|
|
Other Accrued
Expenses
|
|
270.3
|
|
|
240.7
|
|
Current Maturities of
Debt
|
|
6.3
|
|
|
7.8
|
|
Total Current
Liabilities
|
|
612.8
|
|
|
560.7
|
|
|
|
|
|
|
Long-Term
Debt
|
|
1,715.6
|
|
|
624.7
|
|
Other Noncurrent
Liabilities
|
|
262.0
|
|
|
174.6
|
|
Equity:
|
|
|
|
|
Total Regal Beloit
Corporation Shareholders' Equity
|
|
1,937.3
|
|
|
1,934.4
|
|
Noncontrolling
Interests
|
|
45.5
|
|
|
44.9
|
|
Total
Equity
|
|
1,982.8
|
|
|
1,979.3
|
|
Total Liabilities and
Equity
|
|
$
|
4,573.2
|
|
|
$
|
3,339.3
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
Unaudited
|
(Dollars in
Millions)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(18.6)
|
|
|
$
|
(115.8)
|
|
|
$
|
148.5
|
|
|
$
|
36.1
|
|
Adjustments to
reconcile net income (loss) and changes in assets and liabilities
(net of acquisitions) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
39.3
|
|
|
35.1
|
|
|
159.4
|
|
|
138.7
|
|
Excess tax benefits
from share-based compensation
|
|
—
|
|
|
(0.1)
|
|
|
(1.3)
|
|
|
(1.3)
|
|
Goodwill
impairment
|
|
79.9
|
|
|
118.5
|
|
|
79.9
|
|
|
119.5
|
|
Asset impairment and
other, net
|
|
—
|
|
|
40.0
|
|
|
—
|
|
|
40.0
|
|
Loss (gain) on
disposal of assets, net
|
|
0.6
|
|
|
(10.5)
|
|
|
2.4
|
|
|
(12.1)
|
|
Share-based
compensation expense
|
|
3.3
|
|
|
3.4
|
|
|
13.9
|
|
|
11.9
|
|
Loss on sale of
consolidated joint venture
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
Loss on Venezuela
currency devaluation
|
|
—
|
|
|
10.4
|
|
|
1.5
|
|
|
10.4
|
|
Change in operating
assets and liabilities, net of acquisitions
|
|
9.4
|
|
|
(9.9)
|
|
|
(23.2)
|
|
|
(46.9)
|
|
Net cash provided by
operating activities
|
|
113.9
|
|
|
71.1
|
|
|
381.1
|
|
|
298.2
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
|
(26.8)
|
|
|
(23.1)
|
|
|
(92.2)
|
|
|
(83.6)
|
|
Net (purchases) sales
of investment securities
|
|
(4.1)
|
|
|
8.0
|
|
|
(9.8)
|
|
|
(1.9)
|
|
Business
acquisitions, net of cash acquired
|
|
(0.7)
|
|
|
—
|
|
|
(1,401.4)
|
|
|
(128.2)
|
|
Additions of
equipment on operating leases
|
|
—
|
|
|
(0.1)
|
|
|
—
|
|
|
(4.6)
|
|
Proceeds from sale of
consolidated joint venture
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.9
|
|
Proceeds from sale of
assets
|
|
8.0
|
|
|
12.4
|
|
|
15.8
|
|
|
12.5
|
|
Net cash used in
investing activities
|
|
(23.6)
|
|
|
(2.6)
|
|
|
(1,487.6)
|
|
|
(204.9)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net (repayments)
borrowings under revolving credit facility
|
|
(13.0)
|
|
|
(43.0)
|
|
|
(14.0)
|
|
|
17.0
|
|
Net proceeds
(repayments) from short-term borrowings
|
|
(4.1)
|
|
|
0.5
|
|
|
(0.6)
|
|
|
0.2
|
|
Proceeds from
long-term debt
|
|
—
|
|
|
—
|
|
|
1,250.0
|
|
|
—
|
|
Repayments of
long-term debt
|
|
(60.1)
|
|
|
(0.3)
|
|
|
(132.3)
|
|
|
(150.4)
|
|
Dividends paid to
shareholders
|
|
(10.3)
|
|
|
(9.8)
|
|
|
(40.2)
|
|
|
(37.8)
|
|
Payments of
contingent consideration
|
|
—
|
|
|
(5.3)
|
|
|
—
|
|
|
(13.9)
|
|
Proceeds from the
exercise of stock options
|
|
0.3
|
|
|
0.1
|
|
|
4.1
|
|
|
0.9
|
|
Excess tax benefits
from share-based compensation
|
|
—
|
|
|
0.1
|
|
|
1.3
|
|
|
1.3
|
|
Repurchase of common
stock
|
|
—
|
|
|
—
|
|
|
(12.0)
|
|
|
(35.0)
|
|
Distributions to
noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.3)
|
|
Purchase of
subsidiary shares from noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(1.4)
|
|
|
—
|
|
Financing fees
paid
|
|
(0.2)
|
|
|
—
|
|
|
(18.0)
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
|
(87.4)
|
|
|
(57.7)
|
|
|
1,036.6
|
|
|
(218.0)
|
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH EQUIVALENTS
|
|
(4.6)
|
|
|
(4.0)
|
|
|
(11.3)
|
|
|
(7.2)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(1.7)
|
|
|
6.8
|
|
|
(81.2)
|
|
|
(131.9)
|
|
Cash and cash
equivalents at beginning of period
|
|
254.6
|
|
|
327.3
|
|
|
334.1
|
|
|
466.0
|
|
Cash and cash
equivalents at end of period
|
|
$
|
252.9
|
|
|
$
|
334.1
|
|
|
$
|
252.9
|
|
|
$
|
334.1
|
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
Net Sales
|
|
$
|
370.7
|
|
|
$
|
451.2
|
|
|
$
|
210.3
|
|
|
$
|
256.2
|
|
|
$
|
192.5
|
|
|
$
|
68.2
|
|
|
$
|
773.5
|
|
|
$
|
775.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
(16.1)%
|
|
|
(18.7)%
|
|
|
13.7%
|
|
|
2.8%
|
|
|
8.7%
|
|
|
(49.1)%
|
|
|
(1.8)%
|
|
|
(14.2)%
|
|
Adjusted Operating
Margin Percentage*
|
|
9.5%
|
|
|
4.7%
|
|
|
13.2%
|
|
|
11.9%
|
|
|
8.7%
|
|
|
12.3%
|
|
|
10.3%
|
|
|
7.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth
|
|
(14.0)%
|
|
|
(1.9)%
|
|
|
(16.5)%
|
|
|
9.2%
|
|
|
(5.1)%
|
|
|
14.0%
|
|
|
(14.0)%
|
|
|
3.0%
|
|
Acquisitions, Net of
Divestitures
|
|
(0.2)%
|
|
|
8.1%
|
|
|
—%
|
|
|
—%
|
|
|
188.0%
|
|
|
—%
|
|
|
16.4%
|
|
|
4.8%
|
|
Foreign Currency
Impact
|
|
(3.7)%
|
|
|
(1.6)%
|
|
|
(1.5)%
|
|
|
(0.6)%
|
|
|
(0.6)%
|
|
|
(0.6)%
|
|
|
(2.7)%
|
|
|
(1.2)%
|
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
Net Sales
|
|
$
|
1,694.9
|
|
|
$
|
1,856.1
|
|
|
$
|
1,041.2
|
|
|
$
|
1,134.8
|
|
|
$
|
773.6
|
|
|
$
|
266.2
|
|
|
$
|
3,509.7
|
|
|
$
|
3,257.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
3.2%
|
|
|
1.8%
|
|
|
14.1%
|
|
|
8.8%
|
|
|
6.8%
|
|
|
(4.4)%
|
|
|
7.2%
|
|
|
3.7%
|
|
Adjusted Operating
Margin Percentage*
|
|
9.1%
|
|
|
7.8%
|
|
|
13.9%
|
|
|
11.7%
|
|
|
10.7%
|
|
|
11.3%
|
|
|
10.9%
|
|
|
9.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales
Growth
|
|
(6.3)%
|
|
|
(0.2)%
|
|
|
(6.7)%
|
|
|
3.5%
|
|
|
(1.1)%
|
|
|
6.3%
|
|
|
(6.0)%
|
|
|
1.6%
|
|
Acquisitions, Net of
Divestitures
|
|
1.5%
|
|
|
7.4%
|
|
|
—%
|
|
|
—%
|
|
|
192.6%
|
|
|
—%
|
|
|
16.6%
|
|
|
4.2%
|
|
Foreign Currency
Impact
|
|
(3.9)%
|
|
|
(0.9)%
|
|
|
(1.6)%
|
|
|
(0.2)%
|
|
|
(1.0)%
|
|
|
—%
|
|
|
(2.8)%
|
|
|
(0.6)%
|
|
NON-GAAP MEASURES AND OTHER DEFINITIONS
Unaudited
(Dollars in Millions)
We prepare financial statements in accordance with accounting
principles generally accepted in the
United States ("GAAP"). We also periodically disclose
certain financial measures in our quarterly earnings releases, on
investor conference calls, and in investor presentations and
similar events that may be considered "non-GAAP" financial
measures. We believe that these non-GAAP financial measures are
useful measures for providing investors with additional information
regarding our results of operations and for helping investors
understand and compare our operating results across accounting
periods and compared to our peers. In addition, since our
management often uses these non-GAAP financial measures to manage
and evaluate our business, make operating decisions, and forecast
our future results, we believe disclosing these measures helps
investors evaluate our business in the same manner as management.
This additional information is not meant to be considered in
isolation or as a substitute for our results of operations prepared
and presented in accordance with GAAP.
In this earnings release, we disclose the following non-GAAP
financial measures, and we reconcile these measures in the tables
below to the most directly comparable GAAP financial measures:
adjusted diluted earnings per share (both historical and
projected), adjusted operating profit, adjusted operating profit
margin, free cash flow and free cash flow as a percentage of
adjusted net income. Adjusted net income represents net income
attributable to Regal Beloit Corporation, adjusted to exclude
non-cash items of Goodwill Impairment, Asset Impairments and Other,
Net, and the Venezuelan Asset Write Down.
In addition to these non-GAAP measures, we also use the term
"organic sales" to refer to GAAP sales from existing operations
excluding sales from acquired businesses recorded prior to the
first anniversary of the acquisition less the amount of sales
attributable to any divested businesses ("acquisition sales"), and
the impact of foreign currency translation. The impact of foreign
currency translation is determined by translating the respective
period's sales (excluding acquisition sales) using the same
currency exchange rates that were in effect during the prior year
periods. We use the term "organic sales growth" to refer to the
increase in our sales between periods that is attributable to
organic sales. We use the term "acquisition growth" to refer to the
increase in our sales between periods that is attributable to
acquisition sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED DILUTED
EARNINGS PER SHARE
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
Diluted Earnings
(Loss) Per Share
|
|
$
|
(0.43)
|
|
|
$
|
(2.61)
|
|
|
$
|
3.18
|
|
|
$
|
0.69
|
|
Goodwill Impairment
1
|
|
1.30
|
|
|
2.60
|
|
|
1.29
|
|
|
2.59
|
|
Asset Impairments and
Other, Net
|
|
—
|
|
|
0.67
|
|
|
—
|
|
|
0.66
|
|
Venezuelan Asset
Write Down
|
|
0.29
|
|
|
—
|
|
|
0.28
|
|
|
—
|
|
Purchase Accounting
and Transaction Costs
|
|
—
|
|
|
0.09
|
|
|
0.47
|
|
|
0.14
|
|
Restructuring
Costs
|
|
0.06
|
|
|
0.03
|
|
|
0.13
|
|
|
0.18
|
|
Venezuelan Currency
Devaluation
|
|
—
|
|
|
0.15
|
|
|
0.02
|
|
|
0.15
|
|
Gain on Disposal of
Real Estate
|
|
(0.05)
|
|
|
(0.20)
|
|
|
(0.04)
|
|
|
(0.23)
|
|
Loss on Divestiture
Bankruptcy
|
|
—
|
|
|
0.09
|
|
|
—
|
|
|
0.09
|
|
Loss on Sale of Joint
Venture
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.04
|
|
Adjusted Diluted
Earnings Per Share
|
|
$
|
1.17
|
|
|
$
|
0.82
|
|
|
$
|
5.33
|
|
|
$
|
4.31
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Goodwill impairment
is subject to finalization.
|
ADJUSTED OPERATING
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
Income (Loss) from
Operations
|
|
$
|
(59.7)
|
|
|
$
|
(84.2)
|
|
|
$
|
28.9
|
|
|
$
|
7.1
|
|
|
$
|
16.7
|
|
|
$
|
(33.5)
|
|
|
$
|
(14.1)
|
|
|
$
|
(110.6)
|
|
Goodwill Impairment
1
|
|
79.9
|
|
|
99.7
|
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|
11.1
|
|
|
79.9
|
|
|
118.5
|
|
Asset Impairments and
Other, Net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.8
|
|
|
—
|
|
|
26.2
|
|
|
—
|
|
|
40.0
|
|
Venezuelan Asset
Write Down
|
|
12.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.8
|
|
|
—
|
|
Purchase Accounting
and Transaction Costs
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
|
5.1
|
|
Restructuring
Costs
|
|
2.1
|
|
|
0.4
|
|
|
2.2
|
|
|
1.8
|
|
|
—
|
|
|
0.2
|
|
|
4.3
|
|
|
2.4
|
|
Venezuelan Currency
Devaluation
|
|
—
|
|
|
10.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.4
|
|
Gain on Disposal of
Real Estate
|
|
—
|
|
|
(11.9)
|
|
|
(3.4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.4)
|
|
|
(11.9)
|
|
Loss on Divestiture
Bankruptcy
|
|
—
|
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
Adjusted Income from
Operations
|
|
$
|
35.1
|
|
|
$
|
21.4
|
|
|
$
|
27.7
|
|
|
$
|
30.4
|
|
|
$
|
16.7
|
|
|
$
|
8.4
|
|
|
$
|
79.5
|
|
|
$
|
60.2
|
|
GAAP Operating Margin
%
|
|
(16.1)%
|
|
(18.7)%
|
|
13.7%
|
|
2.8%
|
|
8.7%
|
|
(49.1)%
|
|
(1.8)%
|
|
|
(14.2)%
|
|
Adjusted Operating
Margin %
|
|
9.5%
|
|
4.7%
|
|
13.2%
|
|
11.9%
|
|
8.7%
|
|
12.3%
|
|
10.3%
|
|
|
7.8%
|
|
|
|
1.
|
Goodwill impairment
is subject to finalization.
|
ADJUSTED OPERATING
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
Commercial &
Industrial Systems
|
|
Climate
Solutions
|
|
Power Transmission
Solutions
|
|
Total
Regal
|
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
Income from
Operations
|
|
$
|
53.9
|
|
|
$
|
33.6
|
|
|
$
|
146.7
|
|
|
$
|
99.6
|
|
|
$
|
52.2
|
|
|
$
|
(11.7)
|
|
|
$
|
252.8
|
|
|
$
|
121.5
|
|
Goodwill Impairment
1
|
|
79.9
|
|
|
100.7
|
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|
11.1
|
|
|
79.9
|
|
|
119.5
|
|
Asset Impairments and
Other, Net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.8
|
|
|
—
|
|
|
26.2
|
|
|
—
|
|
|
40.0
|
|
Purchase Accounting
and Transaction Costs
|
|
—
|
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
29.8
|
|
|
4.4
|
|
|
29.8
|
|
|
8.4
|
|
Venezuelan Asset
Write Down
|
|
12.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.8
|
|
|
—
|
|
Restructuring
Costs
|
|
6.8
|
|
|
1.6
|
|
|
1.5
|
|
|
11.4
|
|
|
0.6
|
|
|
0.2
|
|
|
8.9
|
|
|
13.2
|
|
Venezuelan Currency
Devaluation
|
|
1.5
|
|
|
10.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
10.4
|
|
Gain on Disposal of
Real Estate
|
|
—
|
|
|
(13.9)
|
|
|
(3.4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.4)
|
|
|
(13.9)
|
|
Loss on Sale of Joint
Venture
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
Loss on Divestiture
Bankruptcy
|
|
—
|
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
Adjusted Income from
Operations
|
|
$
|
154.9
|
|
|
$
|
144.6
|
|
|
$
|
144.8
|
|
|
$
|
132.5
|
|
|
$
|
82.6
|
|
|
$
|
30.2
|
|
|
$
|
382.3
|
|
|
$
|
307.3
|
|
GAAP Operating Margin
%
|
|
3.2%
|
|
1.8%
|
|
14.1%
|
|
8.8%
|
|
6.8%
|
|
(4.4)%
|
|
7.2%
|
|
|
3.7%
|
|
Adjusted Operating
Margin %
|
|
9.1%
|
|
7.8%
|
|
13.9%
|
|
11.7%
|
|
10.7%
|
|
11.3%
|
|
10.9%
|
|
|
9.4%
|
|
|
|
1.
|
Goodwill impairment
is subject to finalization.
|
FREE CASH FLOW
RECONCILIATION
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
Net Cash Provided by
Operating Activities
|
|
$
|
113.9
|
|
|
$
|
71.1
|
|
|
$
|
381.1
|
|
|
$
|
298.2
|
|
Additions to Property
Plant and Equipment
|
|
(26.8)
|
|
|
(23.1)
|
|
|
(92.2)
|
|
|
(83.6)
|
|
Free Cash
Flow
|
|
$
|
87.1
|
|
|
$
|
48.0
|
|
|
$
|
288.9
|
|
|
$
|
214.6
|
|
Free Cash Flow as a
Percentage of Adjusted Net Income
|
|
168.8%
|
|
|
161.6%
|
|
|
134.9%
|
|
|
120.4%
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
ADJUSTED NET
INCOME
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
|
Jan 2,
2016
|
|
Jan 3,
2015
|
GAAP Net Income
(Loss) Attributable to Regal Beloit Corporation
|
|
$
|
(19.3)
|
|
|
$
|
(116.5)
|
|
|
$
|
143.3
|
|
|
$
|
31.0
|
|
Goodwill Impairment
1
|
|
79.9
|
|
|
118.5
|
|
|
79.9
|
|
|
119.5
|
|
Asset Impairments and
Other, Net
|
|
—
|
|
|
40.0
|
|
|
—
|
|
|
40.0
|
|
Venezuelan Asset
Write Down
|
|
12.8
|
|
|
—
|
|
|
12.8
|
|
|
—
|
|
Tax Effect from
Goodwill Impairment and Asset Impairments and Other, Net
|
|
(21.8)
|
|
|
(12.3)
|
|
|
(21.8)
|
|
|
(12.3)
|
|
Adjusted Net
Income
|
|
$
|
51.6
|
|
|
$
|
29.7
|
|
|
$
|
214.2
|
|
|
$
|
178.2
|
|
|
|
1.
|
Goodwill impairment
is subject to finalization.
|
RECONCILIATION OF
2016 ADJUSTED ANNUAL GUIDANCE
|
|
Minimum
|
|
Maximum
|
2016 EPS Annual
Guidance
|
|
$
|
4.66
|
|
|
$
|
5.06
|
|
Restructuring
|
|
0.14
|
|
|
0.14
|
|
2016 Adjusted EPS
Annual Guidance
|
|
$
|
4.80
|
|
|
$
|
5.20
|
|
ORGANIC
GROWTH
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Jan 2,
2016
|
|
Jan 2,
2016
|
Net Sales
|
|
$
|
773.5
|
|
|
$
|
3,509.7
|
|
Net Sales from
Businesses Acquired
|
|
(128.2)
|
|
|
(552.5)
|
|
Impact from Foreign
Currency Exchange Rates
|
|
20.7
|
|
|
92.0
|
|
Net Sales from
Businesses Divested
|
|
1.0
|
|
|
11.5
|
|
Adjusted Net
Sales
|
|
$
|
667.0
|
|
|
$
|
3,060.7
|
|
|
|
|
|
|
Net Sales Three and
Twelve Months Ended January 3, 2015
|
|
$
|
775.6
|
|
|
$
|
3,257.1
|
|
|
|
|
|
|
Organic Growth
%
|
|
(14.0)%
|
|
|
(6.0)%
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/regal-beloit-corporation-announces-fourth-quarter-and-full-year-2015-financial-results-300216917.html
SOURCE Regal Beloit Corporation