Regal Rexnord Corporation · NYSE:RRX
Regal Rexnord — Regal Beloit — Q3 2013 Earnings Presentation
23 slides from Regal Rexnord's earnings presentation, Oct 28, 2013
Slide 1: Third Quarter 2013 Earnings Conference Call
R Regal lBBeloit l it Corporation C ti Third Quarter 2013 Earnings Conference Call October 29, 29 2013 Mark Gliebe Jon Schlemmer Chairman and Chief Operating Officer Chief Executive Officer Chuck Hinrichs John Perino Vice President Vice President Chief Financial Officer Investor Relations
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 Forward-looking management’s s judgment regarding future events. events In many cases, cases you can i
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 disclose adjusted dil t d earnings diluted i per share h (EPS) adjusted (EPS), dj t d gross profit, fit adjusted dj t d gross profit fit as a p
Slide 4: Agenda
Agenda Opening p g Comments Mark Gliebe Financial Update Chuck Hinrichs Operations Update Jon Schlemmer S Summary M k Gliebe Mark Gli b Q&A All p4
Slide 5: Opening Comments – 3rd Quarter
Opening Comments – 3rd Quarter Operating Performance within Guidance and Earnings at Top End of Guidance – North American C&I Motors Down Slightly – Power Generation Growth – China Better than Expected, Expected Australia and India Challenged – North American Residential HVAC Declined 3.6% – Mecha
Slide 6: Opening Comments – 4th Quarter Outlook
Opening Comments – 4th Quarter Outlook Typical Residential HVAC Seasonality – Customer Dynamics Continue – Strength in Non-HVAC Residential North American C&I Motors Sales Flat to Slightly Down Strength in Power Generation Modest Growth in China C&I Markets Stabilized and Residential Tailw
Slide 7: 3rd Quarter 2013 Financial Results
3rd Quarter 2013 Financial Results ADJUSTED DILUTED EARNINGS PER SHARE* Three Months Ended Nine Months Ended Sep 28, Sep 29, Sep 28, Sep 29, 2013 2012 2013 2012 GAAP Diluted Earnings Per Share $ 1.16 $ 1.29 $ 3.38 $ 3.94 Restructuring Costs 0.02 0.08 0.05 0.09 Gain on Disposal of Real Estate − − − (
Slide 8: 3rd Quarter 2013 Financial Results
3rd Quarter 2013 Financial Results Sales of $768 Million, Down 1.5% from Prior Year – Currency Exchange Rates Reduced Total Net Sales by 1 1.1% 1% and International Sales by 3.4% – Two Way Material Price Formulas Gross Margin of 25.6% – Impacted by Foreign Currency and Price Pressures – Includes
Slide 9: Financial Results
Financial Results Capital Expenditures Effective Tax Rate (ETR) $18.2 Million 21.6% ETR in 3Q Q 2013 reflecting g discrete item ~ $90 Million for FY 2013 ~18% ETR in 4Q 2013 after discrete benefit ~ 27% ETR for 1H 2014 Free Cash Flow Balance Sheet at Sept. p 28,, 2013 $65 Million FCF*
Slide 10: 4th Quarter 2013 Guidance
4th Quarter 2013 Guidance GAAP EPS Guidance of $0.77 to $0.85 Adjusted EPS Guidance of $0.82 to $0.90 - After Adding Back $0.05 of Restructuring Charges Includes Lower ETR of 18% Excludes Impact of Cemp Acquisition - EPS Dilutive $0.01 - $0.02 due to PAA EPS Guidance Shows Solid Improvemen
Slide 11: End Market Update
End Market Update Residential HVAC Sales Down 3.6% – Organizational Changes to Drive Organic Growth and Acceptance of New Technologies – Non-HVAC Residential Up 4% International Sales Increased 2.7% with Currency Headwind of 3 3.4% 4% – High Single Digit Sales Growth in China – Organic Growth in
Slide 12: End Market Update
End Market Update Mechanical Revenues Down – Weakness in Oil and Gas – Declining Australia Demand – Improvements in Power Transmission Orders C&I Motors Order Trends Stabilized – Down Less than 1% Excluding Impact of the Divested Motor Business – Expect Similar Performance in 4th Quarter p 12
Slide 13: Power Generation Growth
Power Generation Growth Regal Switchgear Installed Stand-By Power Units Using Inside the Data Center Regal Generators Installed Outside the Data Center p 13
Slide 14: Accelerating New Products
Accelerating New Products New Product Launches 14 New Products Launched in Q3 21% Energy Efficient Products Represent 21.5% of Total Sales p 14
Slide 15: V-Green Energy Efficient Pool Motors
V-Green Energy Efficient Pool Motors V-Green 270 V-Green 165 Launched 2011 Launched 2013 Large Pools Small Residential Pools p 15
Slide 16: Actual V-Green Motor Installation
Actual V-Green Motor Installation 85% Reduction in Energy, Saving Over $300 a Month! p 16
Slide 17: Cemp Overview
Cemp Overview Construzione Electrici Motori Paderno Specializes in Flameproof Motors for Hazardous Areas Sales by y End-Market Based in Milan, Italy Chemicals 5% Mining $ $35M Annual Revenue 10% Full Range of Product is ATEX and IEC-Ex Certified Marine 20% Applications Include Oil & Oil &
Slide 18: Cemp Products and Applications
Cemp Products and Applications Flameproof Motors Accretive Earnings Per Share $0.08 $0.05 $0.06 $0.03 2014 2015 p 18
Slide 19: Simplification Update
Simplification Update Continuing Manufacturing Simplification Plans – Announced Closure of Springfield, Springfield Missouri Motor Facility – Drive Efficiencies in Both Cost and Lead Times Savings g Spread p Over 2014 and 2015 Total Annualized Savings Expected to be $15M p 19
Slide 20: Closing Comments
Closing Comments Operating Performance in Line with Guidance With Tax Benefit, Results at High End of Guidance Gross Margin Progress Year to Date Strong Free Cash Flow at 114% Simplification on Track with More to Come New Products Contributing Cemp C A Acquisition i iti A Accretive ti
Slide 21: Questions and Answers
REGAL Questions and Answers
Slide 22: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations ADJUSTED DILUTED EARNINGS PER SHARE* Three Months Ended Nine Months Ended Sep 28, Sep 29, Sep 28, Sep 29, 2013 2012 2013 2012 GAAP Diluted Earnings Per Share $ 1.16 $ 1.29 $ 3.38 $ 3.94 Purchase Accounting Costs — — — 0.01 Restructuring Costs 0.02 0.08 0.05 0.09 Gai
Slide 23: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations EBITDA Reconciliation Dollars in Millions Q 2012 4Q 1Q Q 2013 2Q Q 2013 3Q Q 2013 LTM Net Income $29.9 $49.5 $51.1 $52.6 $183.1 Plus: Minority Interest 1.0 1.2 2.5 1.9 6.6 Plus: Taxes 5.7 15.3 17.9 15.0 53.9 Pl Plus: IInterest t t Expense E 10.9 10.6 10.7 10.6 42.8