Regal Rexnord Corporation · NYSE:RRX
Regal Rexnord — Regal Beloit — Q1 2015 Earnings Presentation
22 slides from Regal Rexnord's earnings presentation, May 11, 2015
Slide 1: First Quarter 2015 Earnings Conference Call
Regal Beloit Corporation First Quarter 2015 Earnings Conference Call May 11, 2015 Mark Gliebe Jon Schlemmer Chairman and Chief Operating Of f icer Chief Executive Of f icer Chuck Hinrichs John Perino Vice President Vice President Chief Financial Of f icer Financial Planning & Analysis and Investor R
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our management’s judgment regarding future events. In many cases, you can identify forward-looking statements by term
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures We prepare financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). We also periodically disclose certain financial measures that may be considered “non- GAAP” financial measures. We believe that these non-GAAP financ
Slide 4: Agenda
Agenda Opening Comments Mark Gliebe Financial Update Chuck Hinrichs Segment Update Jon Schlemmer Mark Gliebe Summary Mark Gliebe Q&A All p4
Slide 5: Opening Comments – 1st Quarter Results
Opening Comments – 1st Quarter Results > Strong Start to the Year − $1.21 Adjusted EPS* Represents 16% Increase Over Prior Year − Revenues Up 14% (16% Acquisitions, 1% Organic, (3%) Currency) > Climate Solutions - Organic Growth was Flat − Strength in India and the Middle East − 13 SEER Pre-Build an
Slide 6: Opening Comments – 1st Quarter Results (PTS Integration)
Opening Comments – 1st Quarter Results PTS Integration on Track > 24 of 26 Sites have a Green Status > Synergies on Track > Customer Feedback Positive > Marketing PTS as Part of One Regal p6
Slide 7: Opening Comments – 1st Quarter Results
Opening Comments – 1st Quarter Results > Adjusted Operating Margin* Improved 40 bps − Simplification Benefits Contributing − PTS Acquisition was Accretive > Capital Allocation − Bias is to Pay Down Debt > Increased Quarterly Dividend to $0.23 / Share − 11th Time We Increased the Dividend in Last 12
Slide 8: Looking Forward
Looking Forward > Orders Softened Through the First Quarter > 2015 Headwinds − Upstream Oil & Gas End Markets Weak − SEER 13 Pre-Build Creates an Air Pocket for the Year − Strengthening US Dollar / Currency Translation > 2015 Adjusted Diluted EPS* Guidance of $5.45 - $5.75 > Focus for 2015 − Deliver
Slide 9: 1st Quarter 2015 Financial Results
1st Quarter 2015 Financial Results > Sales of $912 Million, Up 14% from Prior Year – Organic Growth of 1% – Net Acquisition Growth of 16% – Foreign Currency Translation Decline of 3% Adjusted Operating Profit Margin* of 9.8% – Contribution of Simplification Benefits – PTS Acquisition Accretion > Adj
Slide 10: 1st Quarter 2015 Financial Results
1st Quarter 2015 Financial Results ADJUSTED DILUTED EARNINGS PER SHARE Three Months Ended Apr 4, Mar 29, 2015 2014 GAAP Diluted Earnings Per Share $ 0.81 $ 0.96 Purchase Accounting and Transaction Costs 0.36 0.02 Restructuring Costs 0.02 0.06 Venezuelan Currency Devaluation 0.02 — Adjusted Diluted E
Slide 11: 1Q 2015 Key Financial Metrics
1Q 2015 Key Financial Metrics Capital Expenditures Effective Tax Rate (ETR) > $21 Million in 1Q 2015 > 26% ETR in 1Q 2015 > $105 Million Expected in FY 2015 > Includes Tax Synergy from PTS Acquisition Balance Sheet at April 4, 2015 Free Cash Flow* > Total Debt of $1,947 Million > ($4) Million in 1Q
Slide 12: 2015 Guidance
2015 Guidance > GAAP EPS Guidance of $4.80 to $5.10 > Adjusted EPS* Guidance of $5.45 to $5.75 − $0.47 of PTS Purchase Accounting Adjustments and Transaction Costs − $0.16 of Restructuring Charges − $0.02 Venezuela Devaluation in 1Q 2015 > Key Assumptions − 26% Effective Tax Rate (ETR) − Headwinds f
Slide 13: Commercial & Industrial Systems
Commercial & Industrial Systems > Sales $456 Million, Up 1% − (5%) Currency, 5% Acquisition, 1% Organic − Strength in Global Power Gen and North America Motors − Weakness in Oil & Gas and China − Strength in Distribution, Commercial HVAC and General Industries − Order Rates Softened Through the Firs
Slide 14: Scaling Up ECM Technology to Address New Markets
Commercial & Industrial Systems 4 HP SyMax Scaling Up ECM Technology to Address New Markets p 14
Slide 15: Climate Solutions
Climate Solutions > Sales $280 Million, Down 1.6% − (1.4%) Currency, Relatively Flat Organic Sales − North America Sales Down Slightly Due to SEER 13 Pre- Build, Two-Way Material Price Formulas and Lower Demand on Heating Products − Strength in Middle East and India > Adj Operating Margin* 11.6% of
Slide 16: Power Transmission Solutions
Power Transmission Solutions > Sales $175 Million, Up 179% − 170% Acquisition, 10% Organic, (1%) Currency − Closed on PTS Acquisition End of January, $107 Sales in the First Quarter − Headwinds from Oil & Gas and Currency − PTS Integration On Track − Strong Sales Performance in Legacy PTS > Adj Oper
Slide 17: Summary Comments
Summary Comments > Sales Up 14% with Organic Growth in Two Segments > Organic Growth Despite Headwinds > Operations Performed in Line with Expectations > Adjusted Operating Profit Margin Up 40 Basis Points > PTS Integration and Synergies On Track > Capital Allocation – Near Term Bias to Pay Down Deb
Slide 18: Questions and Answers
REGAL Questions and Answers
Slide 19: Appendix Adjusted Diluted EPS
Appendix Adjusted Diluted EPS ADJUSTED DILUTED EARNINGS PER SHARE Three Months Ended Apr 4, Mar 29, 2015 2014 GAAP Diluted Earnings Per Share $ 0.81 $ 0.96 Purchase Accounting and Transaction Costs 0.36 0.02 Restructuring Costs 0.02 0.06 Venezuelan Currency Devaluation 0.02 — Adjusted Diluted Earnin
Slide 20: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations ADJUSTED INCOME FROM OPERATIONS Three Months Ended Power Transmission Dollars in Millions C&I Segment Climate Segment Segment Total Regal Apr 4, Mar 29, Apr 4, Mar 29, Apr 4, Mar 29, Apr 4, Mar 29, 2015 2014 2015 2014 2015 2014 2015 2014 GAAP Income (Loss) from Oper
Slide 21: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations FREE CASH FLOW Three Months Ended Dollars in Millions Apr 4, Mar 29, 2015 2014 GAAP Net Cash Provided by Operating Activities $ 17.5 $ 45.8 Additions to Property Plant and Equipment (21.2) (22.3) Free Cash Flow $ (3.7) $ 23.5 RECONCILIATION OF 2015 ADJUSTED ANNUAL G
Slide 22: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations Three Months ORGANIC GROWTH Ended Apr 4, 2015 Net Sales $ 911.7 Net Sales from Businesses Acquired (133.2) Impact from Foreign Currency Exchange Rates 26.3 Incremental Sales from Joint Venture Sold 3.9 Adjusted Net Sales $ 808.7 Net Sales Three Months Ended March 29