Slide 1: 1st Quarter 2011 Earnings Call
1st Quarter 2011 Earnings CallMay 3, 2011 Welcome!
Slide 2: Cautionary Statement
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'
Slide 3: Mark Gliebe, Chief Executive Officer
2 Mark GliebeChief Executive Officer
Slide 4: Agenda
Agenda Mark Gliebe, CEO - Opening CommentsChuck Hinrichs, CFO - Financial UpdateJon Schlemmer, COO - Products, Markets & Operations UpdateMark Gliebe - 2nd Quarter Outlook & Current View of EPC TransactionQuestions & AnswersMark Gliebe - Closing Comments 3
Slide 5: Opening Comments
Opening Comments Improving Economy and 2010 Acquisitions Benefited SalesCommodity Inflation ContinuesAcquisition Related Expenses also Pressured MarginsHVAC First Quarter Demand Strong and Inventories at Desired LevelsSuccessfully Completed Ramu Acquisition 4
Slide 6: Chuck Hinrichs, Chief Financial Officer
5 Chuck HinrichsChief Financial Officer
Slide 7: Financial Update: Sales Growth and Commodity Costs
6 Sales Growth - up 31% in 1Q11$91 million from Acquired CompaniesPrice Increase Realizations Financial Update Gross Profit Commodity Costs IncreasingPrice Increases Lag 1Q 2010 1Q 2010 1Q 2011 1Q 2011 % Change % Change 2Q 2010 2Q 2010 2Q 2011 E % Change Copper Spot Cost per lb. $3.27 $3.27 $4.39 $4
Slide 8: Financial Update
7 Financial Update Capital Expenditures$27.7 million in 1Q11 2011 capital expenditures up to $90 million D&A $21.6 million in 1Q11 Income Tax Rate1Q11 ETR of 31.2% 2011 ETR of 31 - 32% Acquisition Related Costs$7 million in 1Q11$5 million incremental from 1Q10 Balance Sheet as of 4/2/11 Cash of $260
Slide 9: Jon Schlemmer, Chief Operating Officer
8 Jon Schlemmer Chief Operating Officer
Slide 10: Operations Update
Operations Update Sales Up 31%Strong Mechanical Sales GrowthStrong Asia Based Sales GrowthNorth American Commercial and Industrial Sales up 13%North American HVAC Sales Up 18%Price Increases Helping to Offset Commodity Inflation 9
Slide 11: EPC Update
EPC Update HSR Second Request Received Feb 4, 2011Continuing to Work Cooperatively Through the ProcessExcellent Cultural FitFinance and IT Integration Planning ProceedingRemaining Integration Efforts in Other Functional Areas Awaiting Closing 10
Slide 12: Ramu Acquisition
Ramu Acquisition Acquisition Closed April 5, 2011Start Up Company Focused on Development of Switched Reluctance Motor TechnologyProvides Energy Efficiency Without the Need for Permanent MagnetsProfessor Ramu and his Team of Engineers Joining Regal Beloit 11
Slide 13: Frame PMAC Motor
48 Frame PMAC Motor 48 Frame PMAC Motor Technology Similar to ECMPremium Efficiency LevelsRadial Flux Design Delivers High Torque and Increased Power DensityWide Range of Applications Where Induction Motors are Used 12
Slide 14: New High Speed ECM
New High Speed ECM New High Speed ECM 13 Operating Ranges of 200 to 1800 RPMDelivers 80% EfficiencyUniquely Suited for Niche applications such as:Commercial Kitchen Exhaust Small Duct High Velocity Systems
Slide 15: Summary Comments, Jon Schlemmer
Summary Comments 14 Jon Schlemmer Chief Operating Officer
Slide 16: Mark Gliebe, Chief Executive Officer
15 Mark GliebeChief Executive Officer
Slide 17: 2Q Outlook
2Q Outlook 2Q Margins Challenged by Commodity InflationExecution Plans:New ProductsProductivity EffortsExecuting SynergiesContributions from Acquisitions 16
Slide 18: EPC Update
EPC Update In HSR ReviewTransaction Anticipated to Close in 2nd QuarterStrong Engagement Between TeamsEPC Business Performed Well in 1Q 17
Slide 19: Financial Impact of EPC Purchase
Financial Impact of EPC Purchase Other Than Pre-Closing Transaction Costs, No EPC Impact Included in Guidance Additional Financial Information Will Be Provided After ClosingPurchase Accounting AdjustmentsInventory Fair Value Step-upCommodity / Currency Hedge ValuationsGoodwill / Intangible Assets Al
Slide 20: Henry Knueppel Retirement
Henry Knueppel Retirement Henry Knueppel to Retire After 32 Years of ServiceSix Years as CEOTSR Greater Than 100%Thank You Henry! 20
Slide 21: Thank You!
—=S=REGAL BEL Gi. Thank You! j