Slide 1: Fourth Quarter 2019 Earnings Conference Call
4Q February 4, 2020 Fourth Quarter 2019 Earnings CONFERENCE CALL Louis Pinkham Rob Rehard Rob Cherry Chief Executive Officer Vice President Vice President Chief Financial Officer Investor Relations
Slide 2: 4Q 2019 Non-GAAP Financial Measures
4Q 2019 NON-GAAP FINANCIAL MEASURES We prepare financial statements in accordance with accounting principles generally accepted percentage of adjusted net income attributable to Regal Beloit Corporation, adjusted income in the United States (“GAAP”). We also periodically disclose certain financial m
Slide 3: Adjusted Diluted Earnings Per Share
4Q 2019 APPENDIX ADJUSTED DILUTED EARNINGS PER SHARE Three Months Ended Twelve Months Ended Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 GAAP Diluted Earnings Per Share $ 0.89 $ 1.28 $ 5.66 $ 5.26 Restructuring and Related Costs 0.33 0.04 0.57 0.13 Purchase Accounting and Transaction Costs —
Slide 4: Adjusted Income from Operations
4Q 2019 APPENDIX Three Months Ended Power Commercial Transmission ADJUSTED INCOME FROM OPERATIONS Systems Industrial Systems Climate Solutions Solutions Total Regal (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 2019 2018 201
Slide 5: Adjusted Net Sales
4Q 2019 APPENDIX Three Months Ended Commercial Power Transmission ADJUSTED NET SALES Systems Industrial Systems Climate Solutions Solutions Total Regal (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 2019 2018 2019 2018 2019 2
Slide 6: Adjusted Effective Tax Rate
4Q 2019 APPENDIX ADJUSTED EFFECTIVE TAX RATE Three Months Ended Twelve Months Ended (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 Income before Taxes $ 51.3 $ 75.3 $ 303.8 $ 292.2 Provision for Income Taxes 13.7 18.8 61.2 56.4 Effective Tax Rate 26.7% 25.0% 20.1% 19.3% In
Slide 7: Free Cash Flow
4Q 2019 APPENDIX Three Months Twelve Months FREE CASH FLOW Ended Ended (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 Net Cash Provided by Operating Activities $ 137.3 $ 112.4 $ 408.5 $ 362.7 Additions to Property Plant and Equipment (15.1) (18.4) (92.4) (77.6) Free Cash F
Slide 8: Organic Sales Growth
4Q 2019 APPENDIX ORGANIC SALES GROWTH Three Months Ended (Dollars in Millions) Power Commercial Industrial Climate Transmission Systems Systems Solutions Solutions Total Regal Net Sales Three Months Ended Dec 28, 2019 $ 202.0 $ 138.0 $ 206.4 $ 191.8 $ 738.2 Net Sales from Business Divested/to be Exi
Slide 9: Total Gross Debt/EBITDA
4Q 2019 APPENDIX TOTAL GROSS DEBT/EBITDA TOTAL GROSS DEBT/ADJUSTED EBITDA (Dollars in Millions) (Dollars in Millions) LTM Dec 28, LTM Dec 28, 2019 2019 Net Income $ 242.6 Net Income $ 242.6 Plus: Taxes 61.2 Plus: Taxes 61.2 Plus: Interest Expense Plus: Interest Expense 53.0 53.0 Less: Interest Incom
Slide 10: Total Net Debt/EBITDA
4Q 2019 APPENDIX TOTAL NET DEBT/EBITDA TOTAL NET DEBT/ADJUSTED EBITDA (Dollars in Millions) (Dollars in Millions) LTM Dec 28, LTM Dec 28, 2019 2019 Net Income $ 242.6 Net Income $ 242.6 Plus: Taxes 61.2 Plus: Taxes 61.2 Plus: Interest Expense 53.0 Plus: Interest Expense 53.0 Less: Interest Income (5
Slide 11: Operating Leverage - Total Regal
4Q 2019 APPENDIX OPERATING LEVERAGE-TOTAL REGAL Three Months Ended Twelve Months Ended (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 Change 2019 2018 Change GAAP Income from Operations $ 61.7 $ 89.8 $ (28.1) $ 351.1 $ 347.0 $ 4.1 Adjusted Income from Operations $ 77.5 $ 87.2 $ (9.7
Slide 12: Operating Leverage - Commercial Systems
4Q 2019 APPENDIX OPERATING LEVERAGE-COMMERCIAL SYSTEMS Three Months Ended Twelve Months Ended (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 Change 2019 2018 Change GAAP Income from Operations $ 7.9 $ 27.7 $ (19.8) $ 103.1 $ 102.2 $ 0.9 Adjusted Income from Operations $ 15.1 $ 23.6
Slide 13: Fiscal 2018 First Quarter Schedule for Ongoing Business
4Q 2019 APPENDIX The following tables outline the first and second quarter 2018 net sales and income from operations illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance. Power Commercial Industrial Climate Tran
Slide 14: Fiscal 2018 Third Quarter Schedule for Ongoing Business
4Q 2019 APPENDIX The following tables outline the third and fourth quarter 2018 net sales and income from operations illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance. Power Commercial Industrial Climate Tran
Slide 15: Fiscal 2018 Full Year Schedule for Ongoing Business
4Q 2019 APPENDIX The following tables outline the full year 2018 net sales and income from operations, and the full year adjusted diluted earnings per share, illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance.
Slide 16: Fiscal 2019 First Quarter Schedule for Ongoing Business
4Q 2019 APPENDIX The following tables outline the first and second quarter 2019 net sales and income from operations illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance. Power Commercial Industrial Climate Tran
Slide 17: Fiscal 2019 Third Quarter Schedule for Ongoing Business
4Q 2019 APPENDIX The following tables outline the third and fourth quarter 2019 net sales and income from operations illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance. Power Commercial Industrial Climate Tran
Slide 18: Fiscal 2019 Twelve Months Ended for Ongoing Business
4Q 2019 APPENDIX The following tables outline the full year 2019 net sales and income from operations, and the full year adjusted diluted earnings per share, illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal’s 2020 guidance and actual performance.
Slide 19: Shipping Days
4Q 2019 APPENDIX Shipping 1Q 2Q 3Q 4Q FY Days 2014 63 63 63 64 253 2015 64 63 64 59 250 2016 64 64 63 60 251 2017 64 63 63 60 250 2018 63 64 63 61 251 2019 63 63 63 61 250 2020 63 63 63 64 253 Regal operates on a 52/53 week fiscal year ending on the Saturday closest to December 31 Fiscal Years 2