08/01/2024 | Press release | Distributed by Public on 08/01/2024 04:49
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) | ||||||||
Unaudited | ||||||||
(Dollars in Millions, Except per Share Data) | ||||||||
Three Months Ended | Six Months Ended | |||||||
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
|||||
Net Sales | $ | 1,547.6 | $ | 1,768.6 | $ | 3,095.3 | $ | 2,992.7 |
Cost of Sales | 976.6 | 1,204.8 | 1,971.2 | 2,030.8 | ||||
Gross Profit | 571.0 | 563.8 | 1,124.1 | 961.9 | ||||
Operating Expenses | 394.3 | 412.2 | 792.0 | 741.4 | ||||
(Gain) Loss on Sale of Businesses | (17.2) | - | 4.3 | - | ||||
Total Operating Expenses | 377.1 | 412.2 | 796.3 | 741.4 | ||||
Income from Operations | 193.9 | 151.6 | 327.8 | 220.5 | ||||
Interest Expense | 101.7 | 116.4 | 207.1 | 211.8 | ||||
Interest Income | (5.0) | (5.1) | (8.1) | (37.0) | ||||
Other Expense (Income), Net | 0.3 | (2.8) | 0.6 | (4.2) | ||||
Income before Taxes | 96.9 | 43.1 | 128.2 | 49.9 | ||||
Provision for Income Taxes | 33.9 | 9.9 | 44.8 | 22.2 | ||||
Net Income | 63.0 | 33.2 | 83.4 | 27.7 | ||||
Less: Net Income Attributable to Noncontrolling Interests | 0.5 | 1.1 | 1.1 | 1.5 | ||||
Net Income Attributable to Regal Rexnord Corporation | $ | 62.5 | $ | 32.1 | $ | 82.3 | $ | 26.2 |
Earnings Per Share Attributable to Regal Rexnord Corporation: | ||||||||
Basic | $ | 0.94 | $ | 0.48 | $ | 1.24 | $ | 0.40 |
Assuming Dilution | $ | 0.94 | $ | 0.48 | $ | 1.23 | $ | 0.39 |
Cash Dividends Declared Per Share | $ | 0.35 | $ | 0.35 | $ | 0.70 | $ | 0.70 |
Weighted Average Number of Shares Outstanding: | ||||||||
Basic | 66.5 | 66.3 | 66.5 | 66.2 | ||||
Assuming Dilution | 66.8 | 66.6 | 66.8 | 66.6 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Unaudited | ||||
(Dollars in Millions) | ||||
Jun 30, 2024 | Dec 31, 2023 | |||
ASSETS | ||||
Current Assets: | ||||
Cash and Cash Equivalents | $ | 510.4 | $ | 574.0 |
Trade Receivables, Less Allowances of $31.5 million and $30.3 million in 2024 and 2023, Respectively | 892.0 | 921.6 | ||
Inventories | 1,309.9 | 1,274.2 | ||
Prepaid Expenses and Other Current Assets | 269.0 | 245.6 | ||
Assets Held for Sale | 20.6 | 368.6 | ||
Total Current Assets | 3,001.9 | 3,384.0 | ||
Net Property, Plant and Equipment | 970.1 | 1,041.2 | ||
Operating Lease Assets | 157.7 | 172.8 | ||
Goodwill | 6,496.8 | 6,553.1 | ||
Intangible Assets, Net of Amortization | 3,869.4 | 4,083.4 | ||
Deferred Income Tax Benefits | 36.6 | 33.8 | ||
Other Noncurrent Assets | 75.2 | 69.0 | ||
Noncurrent Assets Held for Sale | - | 94.1 | ||
Total Assets | $ | 14,607.7 | $ | 15,431.4 |
LIABILITIES AND EQUITY | ||||
Current Liabilities: | ||||
Accounts Payable | $ | 574.4 | $ | 549.4 |
Dividends Payable | 23.3 | 23.2 | ||
Accrued Compensation and Employee Benefits | 186.8 | 198.7 | ||
Accrued Interest | 85.6 | 85.1 | ||
Other Accrued Expenses | 316.1 | 325.2 | ||
Current Operating Lease Liabilities | 36.4 | 37.2 | ||
Current Maturities of Long-Term Debt | 4.3 | 3.9 | ||
Liabilities Held for Sale | - | 103.7 | ||
Total Current Liabilities | 1,226.9 | 1,326.4 | ||
Long-Term Debt | 5,764.9 | 6,377.0 | ||
Deferred Income Taxes | 934.3 | 1,012.7 | ||
Pension and Other Post Retirement Benefits | 117.4 | 120.4 | ||
Noncurrent Operating Lease Liabilities | 124.4 | 132.2 | ||
Other Noncurrent Liabilities | 71.9 | 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, 66.5 million and 66.3 million Shares Issued and Outstanding for 2024 and 2023, Respectively | 0.7 | 0.7 | ||
Additional Paid-In Capital | 4,656.4 | 4,646.2 | ||
Retained Earnings | 2,015.5 | 1,979.8 | ||
Accumulated Other Comprehensive Loss | (316.7) | (282.4) | ||
Total Regal Rexnord Corporation Shareholders' Equity | 6,355.9 | 6,344.3 | ||
Noncontrolling Interests | 12.0 | 20.8 | ||
Total Equity | 6,367.9 | 6,365.1 | ||
Total Liabilities and Equity | $ | 14,607.7 | $ | 15,431.4 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | ||||||||
Unaudited | ||||||||
(Dollars in Millions) | ||||||||
Three Months Ended | Six Months Ended | |||||||
Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 63.0 | $ | 33.2 | $ | 83.4 | $ | 27.7 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities (Net of Acquisitions and Divestitures): | ||||||||
Depreciation | 40.5 | 47.6 | 82.0 | 77.8 | ||||
Amortization | 86.5 | 89.4 | 173.2 | 135.7 | ||||
(Gain) Loss on Sale of Businesses | (17.2) | - | 4.3 | - | ||||
Noncash Lease Expense | 10.9 | 12.0 | 22.2 | 19.7 | ||||
Share-Based Compensation Expense | 9.5 | 14.5 | 18.6 | 36.2 | ||||
Financing Fee Expense | 3.1 | 3.9 | 6.2 | 26.9 | ||||
Benefit from Deferred Income Taxes | (23.4) | (44.0) | (53.8) | (54.2) | ||||
Other Non-Cash Changes | 4.8 | 5.4 | 6.2 | 5.7 | ||||
Change in Operating Assets and Liabilities, Net of Acquisitions and Divestitures | ||||||||
Receivables | (64.5) | 10.7 | (16.8) | 42.4 | ||||
Inventories | 2.0 | 107.6 | (45.8) | 154.7 | ||||
Accounts Payable | 10.4 | 14.0 | 24.9 | (4.3) | ||||
Other Assets and Liabilities | 32.7 | (73.2) | (63.2) | (141.0) | ||||
Net Cash Provided by Operating Activities | 158.3 | 221.1 | 241.4 | 327.3 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Additions to Property, Plant and Equipment | (32.4) | (44.8) | (50.9) | (63.5) | ||||
Business Acquisitions, Net of Cash Acquired | - | (17.3) | - | (4,870.2) | ||||
Proceeds Received from Sale of Businesses, Net of Cash Transferred | 374.8 | - | 374.8 | - | ||||
Proceeds Received from Sales of Property, Plant and Equipment | 0.3 | - | 1.3 | 6.1 | ||||
Net Cash Provided by (Used in) Investing Activities | 342.7 | (62.1) | 325.2 | (4,927.6) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Borrowings Under Revolving Credit Facility | 440.1 | 519.0 | 935.2 | 1,412.3 | ||||
Repayments Under Revolving Credit Facility | (440.5) | (1,086.8) | (1,007.3) | (1,726.3) | ||||
Proceeds from Short-Term Borrowings | - | 15.0 | - | 29.1 | ||||
Repayments of Short-Term Borrowings | - | (16.9) | - | (32.8) | ||||
Proceeds from Long-Term Borrowings | - | - | - | 5,532.9 | ||||
Repayments of Long-Term Borrowings | (480.5) | (35.7) | (546.3) | (536.5) | ||||
Dividends Paid to Shareholders | (23.3) | (23.2) | (46.6) | (46.4) | ||||
Shares Surrendered for Taxes | (0.6) | (1.0) | (11.3) | (9.2) | ||||
Proceeds from the Exercise of Stock Options | 0.3 | 0.6 | 3.8 | 1.5 | ||||
Financing Fees Paid | - | (1.1) | - | (51.1) | ||||
Distributions to Noncontrolling Interests | - | (8.4) | - | (8.4) | ||||
Net Cash (Used in) Provided By Financing Activities | (504.5) | (638.5) | (672.5) | 4,565.1 | ||||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | (8.5) | (4.2) | (19.0) | 6.3 | ||||
Net (Decrease) Increase in Cash and Cash Equivalents | (12.0) | (483.7) | (124.9) | (28.9) | ||||
Cash and Cash Equivalents at Beginning of Period | 522.4 | 1,143.3 | 635.3 | 688.5 | ||||
Cash and Cash Equivalents at End of Period | $ | 510.4 | $ | 659.6 | $ | 510.4 | $ | 659.6 |
SEGMENT INFORMATION | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Industrial Powertrain Solutions | Power Efficiency Solutions | Automation & Motion Control | Industrial Systems | Total Regal Rexnord | ||||||||||||||||
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
|||||||||||
Net Sales | $ | 675.5 | $ | 698.7 | $ | 410.9 | $ | 460.1 | $ | 422.2 | $ | 473.1 | $ | 39.0 | $ | 136.7 | $ | 1,547.6 | $ | 1,768.6 |
Adjusted Net Sales | $ | 675.5 | $ | 698.7 | $ | 410.9 | $ | 460.1 | $ | 422.2 | $ | 473.1 | $ | 39.0 | $ | 136.7 | $ | 1,547.6 | $ | 1,768.6 |
GAAP Operating Margin |
13.3 | % | 5.8 | % | 11.0 | % | 13.0 | % | 9.9 | % | 10.3 | % | 44.1 | % | 2.2 | % | 12.5 | % | 8.6 | % |
Adjusted Operating Margin | 14.7 | % | 11.6 | % | 12.9 | % | 15.3 | % | 11.1 | % | 14.4 | % | 4.9 | % | 4.0 | % | 13.0 | % | 12.7 | % |
Adjusted EBITDA Margin % |
25.8 | % | 23.6 | % | 16.1 | % | 18.6 | % | 22.5 | % | 25.3 | % | 7.4 | % | 7.1 | % | 21.9 | % | 21.5 | % |
Components of Net Sales: |
||||||||||||||||||||
Organic Sales Growth | (2.8) | % | (1.4) | % | (10.1) | % | (22.2) | % | (10.0) | % | 6.9 | % | (5.5) | % | 1.2 | % | (6.9) | % | (9.1) | % |
Acquisitions | - | % | 67.3 | % | - | % | - | % | - | % | 137.7 | % | - | % | - | % | - | % | 40.9 | % |
Foreign Currency Impact |
(0.5) | % | (0.4) | % | (0.5) | % | (0.6) | % | (0.8) | % | (0.8) | % | (1.2) | % | (2.0) | % | (0.6) | % | (0.7) | % |
Six Months Ended | ||||||||||||||||||||
Industrial Powertrain Solutions | Power Efficiency Solutions | Automation & Motion Control | Industrial Systems | Total Regal Rexnord | ||||||||||||||||
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
|||||||||||
Net Sales | $ | 1,318.9 | $ | 1,113.1 | $ | 796.2 | $ | 929.6 | $ | 822.4 | $ | 676.3 | $ | 157.8 | $ | 273.7 | $ | 3,095.3 | $ | 2,992.7 |
Adjusted Net Sales | $ | 1,318.9 | $ | 1,113.1 | $ | 796.2 | $ | 929.6 | $ | 822.4 | $ | 676.3 | $ | 157.8 | $ | 273.7 | $ | 3,095.3 | $ | 2,992.7 |
GAAP Operating Margin |
13.0 | % | 5.9 | % | 9.2 | % | 11.3 | % | 10.0 | % | 6.4 | % | 0.2 | % | 2.1 | % | 10.6 | % | 7.4 | % |
Adjusted Operating Margin | 14.5 | % | 13.5 | % | 11.4 | % | 13.0 | % | 10.8 | % | 12.8 | % | 7.0 | % | 3.9 | % | 12.3 | % | 12.3 | % |
Adjusted EBITDA Margin % |
25.8 | % | 25.7 | % | 14.7 | % | 16.2 | % | 22.5 | % | 24.6 | % | 8.3 | % | 6.9 | % | 21.2 | % | 20.8 | % |
Components of Net Sales: |
||||||||||||||||||||
Organic Sales Growth | (3.0) | % | (0.1) | % | (14.0) | % | (19.1) | % | (7.5) | % | 9.2 | % | (11.0) | % | 4.5 | % | (8.1) | % | (6.6) | % |
Acquisitions | 21.8 | % | 33.9 | % | - | % | - | % | 29.5 | % | 70.6 | % | - | % | - | % | 15.3 | % | 20.8 | % |
Foreign Currency Impact |
(0.3) | % | (1.1) | % | (0.3) | % | (0.9) | % | (0.4) | % | (1.1) | % | (0.8) | % | (2.6) | % | (0.4) | % | (1.2) | % |
ADJUSTED DILUTED EARNINGS PER SHARE | ||||||||
Unaudited | ||||||||
Three Months Ended | Six Months Ended | |||||||
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
|||||
GAAP Earnings Per Share | $ | 0.94 | $ | 0.48 | $ | 1.23 | $ | 0.39 |
Intangible Amortization | 0.98 | 1.02 | 1.96 | 1.54 | ||||
Restructuring and Related Costs (a)
|
0.20 | 0.18 | 0.39 | 0.25 | ||||
Share-Based Compensation Expense (b)
|
0.12 | 0.18 | 0.23 | 0.49 | ||||
Impairments and Exit Related Costs | 0.01 | 0.03 | 0.02 | 0.03 | ||||
Inventory and Operating Lease Asset Step Up | - | 0.50 | 0.01 | 0.50 | ||||
(Gain) Loss on Sale of Businesses (c)
|
(0.26) | - | 0.06 | - | ||||
Gain on Sale of Assets | - | - | (0.01) | (0.01) | ||||
Transaction and Integration Related Costs (d)
|
0.06 | 0.16 | 0.15 | 1.48 | ||||
Discrete Tax Items (e)
|
0.24 | 0.01 | 0.25 | 0.10 | ||||
Adjusted Diluted Earnings Per Share | $ | 2.29 | $ | 2.56 | $ | 4.29 | $ | 4.77 |
(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 June 30, 2024 reflects the gain on sale of businesses of $17.2 million, while the six months ended June 30, 2024 reflects the loss on sale of businesses of $4.3 million 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) | For 2024, primarily relates to the industrial motors and generators sale, including capital gains taxes and deferred income tax remeasurement. |
2024 ADJUSTED ANNUAL GUIDANCE | ||||
Unaudited | ||||
Minimum | Maximum | |||
2024 GAAP Diluted EPS Annual Guidance | $ | 3.70 | $ | 4.10 |
Intangible Amortization | 3.92 | 3.92 | ||
Restructuring and Related Costs (a)
|
0.68 | 0.68 | ||
Share-Based Compensation Expense | 0.51 | 0.51 | ||
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)
|
0.26 | 0.26 | ||
Discrete Tax Items | 0.25 | 0.25 | ||
2024 Adjusted Diluted EPS Annual Guidance | $ | 9.40 | $ | 9.80 |
(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 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 |
ADJUSTED EBITDA | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Industrial Powertrain Solutions | Power Efficiency Solutions | Automation & Motion Control | Industrial Systems | Total Regal Rexnord | ||||||||||||||||
Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | |||||||||||
GAAP Income from Operations | $ | 89.8 | $ | 40.2 | $ | 45.1 | $ | 59.8 | $ | 41.8 | $ | 48.6 | $ | 17.2 | $ | 3.0 | $ | 193.9 | $ | 151.6 |
Restructuring and Related Costs (a)
|
6.4 | 2.6 | 6.8 | 10.7 | 3.2 | 2.0 | 1.1 | 0.7 | 17.5 | 16.0 | ||||||||||
Inventory and Operating Lease Asset Step Up | 0.4 | 31.6 | - | - | - | 12.5 | - | - | 0.4 | 44.1 | ||||||||||
Impairments and Exit Related Costs | - | 0.3 | - | - | 1.0 | 2.1 | - | - | 1.0 | 2.4 | ||||||||||
Gain on Sale of Businesses (b)
|
- | - | - | - | - | - | (17.2) | - | (17.2) | - | ||||||||||
Transaction and Integration Related Costs (c)
|
2.9 | 6.5 | 1.0 | - | 1.0 | 3.0 | 0.8 | 1.8 | 5.7 | 11.3 | ||||||||||
Adjusted Income from Operations* | $ | 99.5 | $ | 81.2 | $ | 52.9 | $ | 70.5 | $ | 47.0 | $ | 68.2 | $ | 1.9 | $ | 5.5 | $ | 201.3 | $ | 225.4 |
Amortization | $ | 50.2 | $ | 51.7 | $ | 2.1 | $ | 2.1 | $ | 34.2 | $ | 35.4 | $ | - | $ | 0.2 | $ | 86.5 | $ | 89.4 |
Depreciation | 20.5 | 22.7 | 9.2 | 9.7 | 11.4 | 12.2 | 0.1 | 3.0 | 41.2 | 47.6 | ||||||||||
Share-Based Compensation Expense | 4.3 | 8.0 | 1.9 | 2.8 | 2.4 | 3.0 | 0.9 | 0.7 | 9.5 | 14.5 | ||||||||||
Other (Expense) Income, Net | (0.1) | 1.1 | (0.1) | 0.7 | (0.1) | 0.7 | - | 0.3 | (0.3) | 2.8 | ||||||||||
Adjusted EBITDA (d)
|
$ | 174.4 | $ | 164.7 | $ | 66.0 | $ | 85.8 | $ | 94.9 | $ | 119.5 | $ | 2.9 | $ | 9.7 | $ | 338.2 | $ | 379.7 |
GAAP Operating Margin % | 13.3% | 5.8% | 11.0% | 13.0% | 9.9% | 10.3% | 44.1% | 2.2% | 12.5% | 8.6% | ||||||||||
Adjusted Operating Margin % | 14.7% | 11.6% | 12.9% | 15.3% | 11.1% | 14.4% | 4.9% | 4.0% | 13.0% | 12.7% | ||||||||||
Adjusted EBITDA Margin % | 25.8% | 23.6% | 16.1% | 18.6% | 22.5% | 25.3% | 7.4% | 7.1% | 21.9% | 21.5% |
(a) | Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line exits and other asset charges. | |||
(b) | Reflects the gain on sale of businesses of $17.2 million 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 June 2024 and June 2023 is calculated as follows: | |||
Jun 30, 2024 | Jun 30, 2023 | |||
Total Regal Rexnord Adjusted EBITDA | 338.2 | 379.7 | ||
Less: Industrial Systems Adjusted EBITDA | 2.9 | 9.7 | ||
Adjusted EBITDA excluding Industrial Systems | 335.3 | 370.0 | ||
Total Regal Rexnord Net Sales | 1,547.6 | 1,768.6 | ||
Less: Industrial Systems Net Sales | 39.0 | 136.7 | ||
Net Sales excluding Industrial Systems | 1,508.6 | 1,631.9 | ||
Adjusted EBITDA Margin % excluding Industrial Systems | 22.2 | % | 22.7 | % |
Six Months Ended | ||||||||||||||||||||
Industrial Powertrain Solutions | Power and Efficiency Solutions | Automation & Motion Control | Industrial Systems | Total Regal Rexnord | ||||||||||||||||
Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | |||||||||||
GAAP Income from Operations | $ | 171.9 | $ | 66.1 | $ | 73.6 | $ | 105.2 | $ | 82.0 | $ | 43.4 | $ | 0.3 | $ | 5.8 | $ | 327.8 | $ | 220.5 |
Restructuring and Related Costs (a)
|
11.3 | 3.4 | 15.1 | 15.4 | 5.2 | 2.5 | 3.1 | 0.9 | 34.7 | 22.2 | ||||||||||
Inventory and Operating Lease Asset Step Up | 0.7 | 31.6 | - | - | - | 12.5 | - | - | 0.7 | 44.1 | ||||||||||
Impairments and Exit Related Costs | 0.2 | 0.3 | 0.2 | - | 1.1 | 2.1 | - | - | 1.5 | 2.4 | ||||||||||
Loss on Sale of Businesses (b)
|
- | - | - | - | - | - | 4.3 | - | 4.3 | - | ||||||||||
Gain on Sale of Assets | - | - | - | - | (0.8) | (0.6) | - | - | (0.8) | (0.6) | ||||||||||
Transaction and Integration Related Costs (c)
|
7.3 | 48.5 | 1.5 | - | 1.3 | 26.5 | 3.4 | 3.9 | 13.5 | 78.9 | ||||||||||
Adjusted Income from Operations | $ | 191.4 | $ | 149.9 | $ | 90.4 | $ | 120.6 | $ | 88.8 | $ | 86.4 | $ | 11.1 | $ | 10.6 | $ | 381.7 | $ | 367.5 |
Amortization | $ | 100.2 | $ | 81.5 | $ | 4.2 | $ | 4.2 | $ | 68.6 | $ | 49.6 | $ | 0.2 | $ | 0.4 | $ | 173.2 | $ | 135.7 |
Depreciation | 40.7 | 34.5 | 18.7 | 19.3 | 22.9 | 17.7 | 0.4 | 6.3 | 82.7 | 77.8 | ||||||||||
Share-Based Compensation Expense (d)
|
8.6 | 18.6 | 3.9 | 4.8 | 4.7 | 11.6 | 1.4 | 1.2 | 18.6 | 36.2 | ||||||||||
Other (Expense) Income, Net | (0.2) | 1.6 | (0.2) | 1.3 | (0.2) | 0.9 | - | 0.4 | (0.6) | 4.2 | ||||||||||
Adjusted EBITDA | $ | 340.7 | $ | 286.1 | $ | 117.0 | $ | 150.2 | $ | 184.8 | $ | 166.2 | $ | 13.1 | $ | 18.9 | $ | 655.6 | $ | 621.4 |
GAAP Operating Margin % | 13.0% | 5.9% | 9.2% | 11.3% | 10.0% | 6.4% | 0.2% | 2.1% | 10.6% | 7.4% | ||||||||||
Adjusted Operating Margin % | 14.5% | 13.5% | 11.4% | 13.0% | 10.8% | 12.8% | 7.0% | 3.9% | 12.3% | 12.3% | ||||||||||
Adjusted EBITDA Margin % | 25.8% | 25.7% | 14.7% | 16.2% | 22.5% | 24.6% | 8.3% | 6.9% | 21.2% | 20.8% |
(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 on sale of businesses of $4.3 million 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 | Six Months Ended | |||||||
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
|||||
Net Income | $ | 63.0 | $ | 33.2 | $ | 83.4 | $ | 27.7 |
Plus: Income Taxes | 33.9 | 9.9 | 44.8 | 22.2 | ||||
Plus: Interest Expense | 101.7 | 116.4 | 207.1 | 211.8 | ||||
Less: Interest Income | (5.0) | (5.1) | (8.1) | (37.0) | ||||
Plus: Depreciation | 41.2 | 47.6 | 82.7 | 77.8 | ||||
Plus: Amortization | 86.5 | 89.4 | 173.2 | 135.7 | ||||
EBITDA | 321.3 | 291.4 | 583.1 | 438.2 | ||||
Plus: Restructuring and Related Costs (a)
|
17.5 | 16.0 | 34.7 | 22.2 | ||||
Plus: Share-Based Compensation Expense (b)
|
9.5 | 14.5 | 18.6 | 36.2 | ||||
Plus: Inventory and Operating Lease Asset Step Up | 0.4 | 44.1 | 0.7 | 44.1 | ||||
Plus: Impairments and Exit Related Costs | 1.0 | 2.4 | 1.5 | 2.4 | ||||
Plus: (Gain) Loss on Sale of Businesses (c)
|
(17.2) | - | 4.3 | - | ||||
Less: Gain on Sale of Assets | - | - | (0.8) | (0.6) | ||||
Plus: Transaction and Integration Related Costs (d)
|
5.7 | 11.3 | 13.5 | 78.9 | ||||
Adjusted EBITDA | $ | 338.2 | $ | 379.7 | $ | 655.6 | $ | 621.4 |
(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) | The three months ended June 30, 2024 reflects the gain on sale of businesses of $17.2 million, while the six months ended June 30, 2024 reflects the loss on sale of businesses of $4.3 million 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 | ||
Jun 30, 2024 | ||
Net Income | $ | 1.4 |
Plus: Income Taxes | 75.3 | |
Plus: Interest Expense | 426.3 | |
Less: Interest Income | (14.7) | |
Plus: Depreciation | 170.6 | |
Plus: Amortization | 345.3 | |
EBITDA | $ | 1,004.2 |
Plus: Restructuring and Related Costs (a)
|
96.9 | |
Plus: Share-Based Compensation Expense | 40.6 | |
Plus: Inventory and Operating Lease Asset Step Up | 11.1 | |
Plus: Impairments and Exit Related Costs | 8.7 | |
Plus: Loss on Sale of Businesses (b)
|
92.0 | |
Plus: Goodwill Impairment | 57.3 | |
Less: Gain on Sale of Assets | (0.8) | |
Plus: Transaction and Integration Related Costs (c)
|
31.3 | |
Adjusted EBITDA*(d)
|
$ | 1,341.3 |
Current Maturities of Long-Term Debt | $ | 4.3 |
Long-Term Debt | 5,764.9 | |
Total Gross Debt | $ | 5,769.2 |
Cash | (510.4) | |
Net Debt | $ | 5,258.8 |
Gross Debt/Adjusted EBITDA | 4.30 | |
Net Debt/Adjusted EBITDA (d)
|
3.92 | |
Interest Coverage Ratio (d)
|
3.26 |
(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 on sale of businesses of $92.0 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, 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 Company expects to realize synergies of $110 million within 18 months. The impact of the synergies is as follows: | |
Adjusted EBITDA | $ | 1,341.3 |
Synergies to be Realized Within 18 months | 110.0 | |
Adjusted EBITDA (including synergies) | $ | 1,451.3 |
Net Debt/Adjusted EBITDA (including synergies) | 3.62 | |
Interest Expense | $ | 426.3 |
Interest Income | (14.7) | |
Net Interest Expense | $ | 411.6 |
Interest Coverage Ratio(1)
|
3.26 | |
Interest Coverage Ratio (including synergies)(2)
|
3.53 | |
(1) Computed as Adjusted EBITDA/Net Interest Expense | ||
(2) Computed as Adjusted EBITDA (including synergies)/Net Interest Expense |
ADJUSTED FREE CASH FLOW | |||||||
Unaudited | |||||||
(Dollars in Millions) | |||||||
Three Months Ended | Six Months Ended | ||||||
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
||||
Net Cash Provided by Operating Activities | $ | 158.3 | 221.1 | $ | 241.4 | $ | 327.3 |
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 2024) (b)
|
10.5 | - | 10.5 | - | |||
Adjusted Cash Flows from Operations | 168.8 | 221.1 | 251.9 | 414.2 | |||
Additions to Property Plant and Equipment | (32.4) | (44.8) | (50.9) | (63.5) | |||
Adjusted Free Cash Flow | $ | 136.4 | 176.3 | $ | 201.0 | $ | 350.7 |
(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 | Six Months Ended | |||||||
Jun 30, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
|||||
Income before Taxes | $ | 96.9 | $ | 43.1 | $ | 128.2 | $ | 49.9 |
Provision for Income Taxes | 33.9 | 9.9 | 44.8 | 22.2 | ||||
Effective Tax Rate | 35.0 | % | 22.9 | % | 34.9 | % | 44.5 | % |
Income before Taxes | $ | 96.9 | 43.1 | 128.2 | 49.9 | |||
Intangible Amortization | 86.5 | 89.4 | 173.2 | 135.7 | ||||
Restructuring and Related Costs (a)
|
17.5 | 16.0 | 34.7 | 22.2 | ||||
Share-Based Compensation Expense (b)
|
9.5 | 14.5 | 18.6 | 36.2 | ||||
Inventory and Operating Lease Asset Step Up | 0.4 | 44.1 | 0.7 | 44.1 | ||||
Impairments and Exit Related Costs | 1.0 | 2.4 | 1.5 | 2.4 | ||||
(Gain) Loss on Sale of Businesses (c)
|
(17.2) | - | 4.3 | - | ||||
Gain on Sale of Assets | - | - | (0.8) | (0.6) | ||||
Transaction and Integration Related Costs (d)
|
5.7 | 12.4 | 13.5 | 118.2 | ||||
Adjusted Income before Taxes* | $ | 200.3 | $ | 221.9 | $ | 373.9 | $ | 408.1 |
Provision for Income Taxes | 33.9 | 9.9 | 44.8 | 22.2 | ||||
Tax Effect of Intangible Amortization | 21.1 | 21.6 | 42.1 | 33.0 | ||||
Tax Effect of Restructuring and Related Costs | 4.5 | 4.3 | 8.6 | 5.9 | ||||
Tax Effect of Share-Based Compensation Expense | 1.5 | 2.5 | 3.6 | 3.7 | ||||
Tax Effect of Inventory and Operating Lease Asset Step Up | 0.1 | 10.6 | 0.2 | 10.6 | ||||
Tax Effect of Impairments and Exit Related Costs | 0.3 | 0.6 | 0.4 | 0.6 | ||||
Tax Effect of (Gain) Loss on Sale of Businesses | - | - | - | - | ||||
Tax Effect of Gain on Sale of Assets | - | - | (0.2) | (0.1) | ||||
Tax Effect of Transaction and Integration Related Costs | 1.3 | 1.5 | 3.2 | 19.8 | ||||
Discrete Tax Items (e)
|
(15.7) | (0.3) | (16.3) | (6.8) | ||||
Adjusted Provision for Income Taxes* | $ | 47.0 | $ | 50.7 | $ | 86.4 | $ | 88.9 |
Adjusted Effective Tax Rate* | 23.5 | % | 22.8 | % | 23.1 | % | 21.8 | % |
(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 June 30, 2024 reflects the gain on sale of businesses of $17.2 million, while the six months ended June 30, 2024 reflects the loss on sale of businesses of $4.3 million 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) | For 2024, primarily relates to the industrial motors and generators sale, including capital gains taxes and deferred income tax remeasurement. |
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 Jun 30, 2024 | $ | 675.5 | $ | 410.9 | $ | 422.2 | $ | 39.0 | $ | 1,547.6 |
Impact from Foreign Currency Exchange Rates | 3.6 | 2.5 | 3.6 | 0.5 | 10.2 | |||||
Organic Sales Three Months Ended Jun 30, 2024 | $ | 679.1 | $ | 413.4 | $ | 425.8 | $ | 39.5 | $ | 1,557.8 |
Net Sales Three Months Ended Jun 30, 2023 | $ | 698.7 | $ | 460.1 | $ | 473.1 | $ | 136.7 | $ | 1,768.6 |
Net Sales from Businesses Divested | - | - | - | (94.9) | (94.9) | |||||
Adjusted Net Sales Three Months Ended Jun 30, 2023 | $ | 698.7 | $ | 460.1 | $ | 473.1 | $ | 41.8 | $ | 1,673.7 |
Three Months Ended Jun 30, 2024 Organic Sales Growth % (a)
|
(2.8) | % | (10.1) | % | (10.0) | % | (5.5) | % | (6.9) | % |
Three Months Ended Jun 30, 2024 Net Sales Growth % | (3.3) | % | (10.7) | % | (10.8) | % | (6.6) | % | (7.5) | % |
(a) The three months ended June 30, 2024 Organic Sales Growth % Excluding Industrial is calculated as follows: | ||||||||||
Total Regal Rexnord | Industrial Systems | Total Regal Rexnord less Industrial Systems | ||||||||
Net Sales Three Months Ended Jun 30, 2024 | $ | 1,547.6 | $ | 39.0 | $ | 1,508.6 | ||||
Impact from Foreign Currency Exchange Rates | 10.2 | 0.5 | 9.7 | |||||||
Organic Sales Three Months Ended Jun 30, 2024 | $ | 1,557.8 | $ | 39.5 | $ | 1,518.3 | ||||
Net Sales Three Months Ended Jun 30, 2023 | $ | 1,768.6 | $ | 136.7 | $ | 1,631.9 | ||||
Net Sales from Businesses Divested | (94.9) | (94.9) | - | |||||||
Adjusted Net Sales Three Months Ended Jun 30, 2023 | $ | 1,673.7 | $ | 41.8 | $ | 1,631.9 | ||||
Three Months Ended Jun 30, 2024 Organic Sales Growth % | (6.9) | % | (5.5) | % | (7.0) | % | ||||
Six Months Ended | ||||||||||
Industrial Powertrain Solutions | Power Efficiency Solutions | Automation & Motion Control | Industrial Systems | Total Regal Rexnord | ||||||
Net Sales Six Months Ended Jun 30, 2024 | $ | 1,318.9 | $ | 796.2 | $ | 822.4 | $ | 157.8 | $ | 3,095.3 |
Net Sales from Businesses Acquired | (243.2) | - | (199.3) | - | (442.5) | |||||
Impact from Foreign Currency Exchange Rates | 3.7 | 3.2 | 2.8 | 1.4 | 11.1 | |||||
Organic Sales Six Months Ended Jun 30, 2024 | $ | 1,079.4 | $ | 799.4 | $ | 625.9 | $ | 159.2 | $ | 2,663.9 |
Net Sales Six Months Ended Jun 30, 2023 | $ | 1,113.1 | $ | 929.6 | $ | 676.3 | $ | 273.7 | $ | 2,992.7 |
Net Sales from Businesses Divested | - | - | - | (94.9) | (94.9) | |||||
Adjusted Net Sales Six Months Ended Jun 30, 2023 | $ | 1,113.1 | $ | 929.6 | $ | 676.3 | $ | 178.8 | $ | 2,897.8 |
Six Months Ended Jun 30, 2024 Organic Sales Growth % | (3.0) | % | (14.0) | % | (7.5) | % | (11.0) | % | (8.1) | % |
Six Months Ended Jun 30, 2024 Net sales Growth % | 18.5 | % | (14.4) | % | 21.6 | % | (11.7) | % | 6.8 | % |
ADJUSTED GROSS MARGIN | ||||||||||
Unaudited | ||||||||||
(Dollars in Millions) | ||||||||||
Three Months Ended | ||||||||||
June 30, 2024 | ||||||||||
Industrial Powertrain Solutions | Power Efficiency Solutions | Automation & Motion Control | Industrial Systems | Total Regal Rexnord | ||||||
Net Sales | $ | 675.5 | $ | 410.9 | $ | 422.2 | $ | 39.0 | $ | 1,547.6 |
Gross Margin | $ | 270.5 | $ | 121.2 | $ | 169.2 | $ | 10.1 | $ | 571.0 |
Restructuring and Related Costs (a)
|
5.4 | 6.7 | 1.5 | (0.5) | 13.1 | |||||
Operating Lease Asset Step Up | 0.4 | - | - | - | 0.4 | |||||
Adjusted Gross Margin (b)
|
$ | 276.3 | $ | 127.9 | $ | 170.7 | $ | 9.6 | $ | 584.5 |
Gross Margin % | 40.0 | % | 29.5 | % | 40.1 | % | 25.9 | % | 36.9 | % |
Adjusted Gross Margin % | 40.9 | % | 31.1 | % | 40.4 | % | 24.6 | % | 37.8 | % |
(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 following table reflects Adjusted Gross Margin of the Company for the three months ended June 30, 2024 Excluding Industrial: |
Total Regal Rexnord | Industrial Systems | Total Regal Rexnord less Industrial Systems | ||||
Net Sales | $ | 1,547.6 | $ | 39.0 | $ | 1,508.6 |
Gross Margin | $ | 571.0 | $ | 10.1 | $ | 560.9 |
Restructuring and Related Costs (a)
|
13.1 | (0.5) | 13.6 | |||
Operating Lease Asset Step Up | 0.4 | - | 0.4 | |||
Adjusted Gross Margin | $ | 584.5 | $ | 9.6 | $ | 574.9 |
Gross Margin % | 36.9 | % | 25.9 | % | 37.2 | % |
Adjusted Gross Margin % | 37.8 | % | 24.6 | % | 38.1 | % |
Six Months Ended | ||||||||||
June 30, 2024 | ||||||||||
Industrial Powertrain Solutions | Power Efficiency Solutions | Automation & Motion Control | Industrial Systems | Total Regal Rexnord | ||||||
Net Sales | $ | 1,318.9 | $ | 796.2 | $ | 822.4 | $ | 157.8 | $ | 3,095.3 |
Gross Margin | $ | 535.3 | $ | 220.5 | $ | 329.1 | $ | 39.2 | $ | 1,124.1 |
Restructuring and Related Costs (a)
|
7.6 | 14.0 | 2.1 | 1.1 | 24.8 | |||||
Operating Lease Asset Step Up | 0.7 | - | - | - | 0.7 | |||||
Adjusted Gross Margin | $ | 543.6 | $ | 234.5 | $ | 331.2 | $ | 40.3 | $ | 1,149.6 |
Gross Margin % | 40.6 | % | 27.7 | % | 40.0 | % | 24.8 | % | 36.3 | % |
Adjusted Gross Margin % | 41.2 | % | 29.5 | % | 40.3 | % | 25.5 | % | 37.1 | % |
(a) | Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line exits and other asset charges. |