REGAL REXNORD REPORTS THIRD QUARTER 2024 FINANCIAL RESULTS
Regal Rexnord (NYSE: RRX) reported Q3 2024 results with sales of $1,477.4 million, down 10.4% year-over-year. The company achieved record adjusted gross margin of 38.4% and adjusted EBITDA margin of 22.8%. GAAP net income was $73.0 million, with adjusted diluted EPS of $2.49, up 18.6%. The company paid down $114 million of debt in Q3 and updated its 2024 guidance, lowering adjusted EPS range to $9.15-$9.45 from $9.40-$9.80, citing weaker factory automation and general commercial demand.
Regal Rexnord (NYSE: RRX) ha riportato i risultati del terzo trimestre 2024 con vendite di $1,477.4 milioni, in calo del 10.4% rispetto all'anno precedente. L'azienda ha raggiunto un margine lordo rettificato record del 38.4% e un margine EBITDA rettificato del 22.8%. L'utile netto secondo i principi contabili GAAP è stato di $73.0 milioni, con un utile per azione diluito rettificato di $2.49, in aumento del 18.6%. L'azienda ha ridotto il debito di $114 milioni nel Q3 e ha aggiornato le previsioni per il 2024, abbassando l'intervallo dell'EPS rettificato a $9.15-$9.45 rispetto a $9.40-$9.80, citando una domanda più debole nell'automazione industriale e in generale nel commercio.
Regal Rexnord (NYSE: RRX) informó los resultados del tercer trimestre de 2024, con ventas de $1,477.4 millones, lo que representa una disminución del 10.4% en comparación con el año anterior. La compañía logró un margen bruto ajustado récord del 38.4% y un margen EBITDA ajustado del 22.8%. La ganancia neta según los principios contables GAAP fue de $73.0 millones, con un EPS diluido ajustado de $2.49, un aumento del 18.6%. La empresa redujo $114 millones de deuda en el tercer trimestre y actualizó su guía para 2024, bajando el rango de EPS ajustado a $9.15-$9.45 desde $9.40-$9.80, citando una debilidad en la automatización industrial y en la demanda comercial en general.
레갈 렉스노드 (NYSE: RRX)는 2024년 3분기 실적을 보고했으며, 매출은 14억 7,740만 달러로 전년 대비 10.4% 감소했습니다. 이 회사는 조정된 총이익률 38.4%의 기록을 달성했고, 조정된 EBITDA 마진 22.8%을 기록했습니다. GAAP 기준 순이익은 7,300만 달러였으며, 조정된 희석 주당순이익(EPS)은 2.49달러로 18.6% 증가했습니다. 회사는 Q3에 1억 1,400만 달러의 부채를 갚았으며, 2024년 가이드를 업데이트하면서 조정된 EPS 범위를 9.40-9.80달러에서 9.15-9.45달러로 낮추었으며, 이는 공장 자동화와 일반 상업 수요의 감소를 언급했습니다.
Regal Rexnord (NYSE: RRX) a publié ses résultats du troisième trimestre 2024, avec des ventes de 1 477,4 millions de dollars, en baisse de 10,4 % par rapport à l'année précédente. L'entreprise a atteint un marge brute ajustée record de 38,4 % et un marge EBITDA ajustée de 22,8 %. Le résultat net selon les normes GAAP était de 73,0 millions de dollars, avec un BPA ajusté dilué de 2,49 dollars, en hausse de 18,6 %. L'entreprise a réduit sa dette de 114 millions de dollars au troisième trimestre et a mis à jour ses prévisions pour 2024, abaissant la fourchette de BPA ajusté à 9,15-9,45 dollars contre 9,40-9,80 dollars, évoquant une demande plus faible dans l'automatisation industrielle et la demande commerciale générale.
Regal Rexnord (NYSE: RRX) berichtete über die Ergebnisse des dritten Quartals 2024 mit einem Umsatz von 1.477,4 Millionen USD, was einem Rückgang von 10,4% im Jahresvergleich entspricht. Das Unternehmen erzielte einen rekordverdächtigen angepassten Bruttogewinn von 38,4% und eine angepasste EBITDA-Marge von 22,8%. Der GAAP-Nettoeinkommen betrug 73,0 Millionen USD, mit einem angepassten verwässerten EPS von 2,49 USD, was einem Anstieg von 18,6% entspricht. Im dritten Quartal zahlte das Unternehmen 114 Millionen USD Schulden zurück und aktualisierte seine Prognose für 2024, indem es die Spanne für das angepasste EPS von 9,40-9,80 USD auf 9,15-9,45 USD senkte, was auf eine schwächere Nachfrage in der Fabrikautomation und allgemein im Handelsbereich hinweist.
- Record adjusted gross margin of 38.4%
- Record adjusted EBITDA margin of 22.8%, up 110 basis points
- Adjusted diluted EPS increased 18.6% to $2.49
- Debt reduction of $114 million in Q3, $733 million year-to-date
- Orders up 2.5% versus prior year
- Sales declined 10.4% to $1,477.4 million
- Organic sales decreased 2.7%
- Lowered full-year 2024 adjusted EPS guidance to $9.15-$9.45 from $9.40-$9.80
- Weakness in factory automation and general commercial demand
- Supply chain challenges in residential HVAC segment
Insights
The Q3 results present a mixed picture with notable strengths in operational efficiency despite revenue challenges. Sales declined 10.4% to
The guidance reduction for FY2024 adjusted EPS to
Segment performance reveals important market dynamics. The Industrial Powertrain Solutions segment shows resilience with positive organic growth and record margins, benefiting from strength in energy, aerospace & defense and mining sectors. However, the Automation & Motion Control segment faces headwinds in discrete automation, while Power Efficiency Solutions struggles with commercial HVAC markets outside the U.S. and supply chain constraints in residential HVAC.
The
3Q Highlights
- GAAP Diluted EPS Of
, Adjusted Diluted EPS* Of$1.09 , Up$2.49 18.6% Versus PY - Paid Down
Of Gross Debt In 3Q,$114 Million Year-To-Date. On Track To Pay Down$733 Million ~ Of Debt In The Year. Net Debt/Adjusted EBITDA (Including Synergies)* Of ~3.6x$900 Million - Adjusted Free Cash Flow* Of
$125.5 Million - Sales Of
, Down$1,477.4 Million 10.4% Versus PY; Down2.7% On An Organic* Basis - GAAP Gross Margin Of
37.7% ; Adjusted Gross Margin* A Record38.4% - GAAP Net Income Of
Versus PY GAAP Net Loss Of$73.0 Million $(138.6) Million - Adjusted EBITDA* Of
Versus PY Of$337.0 Million **$330.0 Million - Adjusted EBITDA Margin* A Record
22.8% , Up 110 Basis Points Versus PY** - Synergies Of
; On Track To Deliver$27 Million In The Year$90 Million - 3Q Orders Up
2.5% Versus PY
CEO Louis Pinkham commented, "Our team's controllable execution was strong in the third quarter, most evident in healthy adjusted gross and EBITDA margin gains, and clear signs of market outgrowth in our largest and highest-margin segment, Industrial Powertrain Solutions. As a Company, we delivered record adjusted gross margins of
Mr. Pinkham continued, "Our strong margin performance occurred despite top line performance that fell short of our targets. The shortfall occurred mainly in our AMC segment, primarily due to heightened caution among many of our customers, and in our PES segment, primarily due to weakness in the general commercial market and in commercial HVAC outside the
Mr. Pinkham concluded, "Despite some persistent near-term market headwinds, we see significant value creation opportunities before us, driven by the many initiatives we discussed at our September 17th investor day to accelerate organic growth and further expand our margins."
*Non-GAAP Financial Measurement, See Appendix for Reconciliation |
**Excludes 2023 results of the Industrial Systems operating segment, as the industrial motors and generators businesses that comprised a majority of this operating segment were divested effective April 30, 2024. |
Guidance
The Company is updating its annual guidance for 2024 GAAP Diluted Earnings per Share to a range of
Segment Performance
Segment results for the third quarter of this year versus the third quarter of the prior year are summarized below:
- Automation & Motion Control net sales were
, a decrease of$401.6 million 4.3% , or a decrease of4.1% on an organic basis. Results reflect strength in the food & beverage, aerospace & defense, data center, and medical markets, net of weakness in discrete automation. Adjusted EBITDA margin was21.8% of adjusted net sales*. - Industrial Powertrain Solutions net sales were
, an increase of$644.2 million 0.5% , or an increase of0.8% on an organic basis. Results reflect strength in energy, aerospace & defense, and metals & mining, plus benefits from cross-selling synergies, net of weakness in alternative energy and machinery/off-highway markets. Adjusted EBITDA margin was a record26.8% of adjusted net sales. - Power Efficiency Solutions net sales were
, a decrease of$431.6 million 6.4% , or a decrease of6.2% on an organic basis. The decline primarily reflects weakness in the general commercial market and in commercial HVAC outside theU.S. , along with higher than anticipated residential HVAC demand acceleration and an associated lag in our supply chain ramping. Adjusted EBITDA margin was17.8% of adjusted net sales.
Conference Call
Regal Rexnord will hold a conference call to discuss this earnings release at 9:00 AM CT (10:00 AM ET) on Tuesday, November 5, 2024. To listen to the live audio and view the presentation during the call, please visit Regal Rexnord's Investor website: https://investors.regalrexnord.com. To listen by phone or to ask the presenters a question, dial 1.877.264.6786 (
A webcast replay will be available at the link above, and a telephone replay will be available at 1.877.344.7529 (
Supplemental Materials
Supplemental materials and additional information for the quarter ended September 30, 2024, will be accessible before the conference call on November 5, 2024 on Regal Rexnord's Investor website: https://investors.regalrexnord.com. The Company intends to disseminate important information about the Company to its investors on the Investors section of its website: https://investors.regalrexnord.com. Investors are advised to look at Regal Rexnord's website for future important information about the Company. The content of the Company's website is not incorporated by reference into this document or any other report or document Regal Rexnord files with the Securities and Exchange Commission ("SEC").
About Regal Rexnord
Regal Rexnord's 30,000 associates around the world help create a better tomorrow by providing sustainable solutions that power, transmit and control motion. The Company's electric motors and air moving subsystems provide the power to create motion. A portfolio of highly engineered power transmission components and subsystems efficiently transmits motion to power industrial applications. The Company's automation offering, comprised of controllers, drives, precision motors, and actuators, controls motion in applications ranging from factory automation to precision tools used in surgical applications.
The Company's end markets benefit from meaningful secular demand tailwinds, and include factory automation, food & beverage, aerospace, medical, data center, warehouse, alternative energy, residential and commercial buildings, general industrial, construction, metals and mining, and agriculture.
Regal Rexnord is comprised of three operating segments: Industrial Powertrain Solutions, Power Efficiency Solutions, and Automation & Motion Control. Regal Rexnord is headquartered in
Forward Looking Statements
All statements in this communication, other than those relating to historical facts, are "forward-looking statements." Forward-looking statements can generally be identified by their use of terms such as "anticipate," "believe," "confident," "estimate," "expect," "intend," "plan," "may," "will," "project," "forecast," "would," "could," "should," and similar expressions, including references to assumptions. Forward-looking statements are not guarantees of future performance and are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such statements. Forward-looking statements include, but are not limited to, statements about expected market or macroeconomic trends, future strategic plans and future financial and operating results. Important factors that could cause actual results to differ materially from those presented or implied in the forward-looking statements in this communication include, without limitation: the possibility that the Company may be unable to achieve expected benefits, synergies and operating efficiencies in connection with the sale of the Industrial Motors and Generators businesses, the acquisition of Altra Industrial Motion Corp. ("Altra Transaction"), and the merger with the Rexnord Process & Motion Control business (the "Rexnord PMC business") within the expected time-frames or at all and to successfully integrate Altra Industrial Motion Corp. ("Altra") and the Rexnord PMC business; the Company's substantial indebtedness as a result of the Altra Transaction and the effects of such indebtedness on the Company's financial flexibility; the Company's ability to achieve its objectives on reducing its indebtedness on the desired timeline; dependence on key suppliers and the potential effects of supply disruptions; fluctuations in commodity prices and raw material costs; any unforeseen changes to or the effects on liabilities, future capital expenditures, revenue, expenses, synergies, indebtedness, financial condition, losses and future prospects; unanticipated operating costs, customer loss and business disruption; the Company's ability to retain key executives and employees; uncertainties regarding our ability to execute restructuring plans within expected costs and timing; challenges to the tax treatment that was elected with respect to the merger with the Rexnord PMC business and related transactions; actions taken by competitors and their ability to effectively compete in the increasingly competitive global electric motor, drives and controls, power generation and power transmission industries; our ability to develop new products based on technological innovation, such as the Internet of Things and artificial intelligence, and marketplace acceptance of new and existing products; dependence on significant customers and distributors; risks associated with climate change and uncertainty regarding our ability to deliver on our sustainability commitments and/or to meet related investor, customer and other third party expectations relating to our sustainability efforts; risks associated with global manufacturing, including risks associated with public health crises and political, societal or economic instability, including instability caused by ongoing geopolitical conflicts; issues and costs arising from the integration of acquired companies and businesses; prolonged declines in one or more markets; risks associated with excess or obsolete inventory charges including related write-offs or write-downs; economic changes in global markets, such as reduced demand for products, currency exchange rates, inflation rates, interest rates, recession, government policies, including policy changes affecting taxation, trade, tariffs, immigration, customs, border actions and the like, and other external factors that the Company cannot control; product liability, asbestos and other litigation, or claims by end users, government agencies or others that products or customers' applications failed to perform as anticipated; unanticipated liabilities of acquired businesses; unanticipated adverse effects or liabilities from business exits or divestitures; the Company's ability to identify and execute on future M&A opportunities, including significant M&A transactions; the impact of any such M&A transactions on the Company's results, operations and financial condition, including the impact from costs to execute and finance any such transactions; unanticipated costs or expenses that may be incurred related to product warranty issues; infringement of intellectual property by third parties, challenges to intellectual property, and claims of infringement on third party technologies; effects on earnings of any significant impairment of goodwill; losses from failures, breaches, attacks or disclosures involving information technology infrastructure and data; costs and unanticipated liabilities arising from rapidly evolving laws and regulations; and other factors that can be found in our filings with the SEC, including our most recent periodic reports filed on Form 10-K and Form 10-Q, which are available on our Investor Relations website. Forward-looking statements are given only as of the date of this communication and we disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Measures
(Unaudited)
(Dollars in Millions, Except per Share Data)
We prepare our financial statements in accordance with accounting principles generally accepted in
In this release, we disclose the following non-GAAP financial measures, and we reconcile these measures in the tables below to the most directly comparable GAAP financial measures: adjusted diluted earnings per share, adjusted income from operations, adjusted operating margin, adjusted net sales, net sales excluding Industrial, adjusted gross margin, net debt, EBITDA, adjusted EBITDA, adjusted EBITDA excluding Industrial, adjusted EBITDA (including synergies), interest coverage ratio, interest coverage ratio (including synergies), adjusted EBITDA margin, adjusted EBITDA margin excluding Industrial, gross debt/adjusted EBITDA, net debt/adjusted EBITDA, net debt/adjusted EBITDA (including synergies),adjusted cash flows from operations, adjusted free cash flow, adjusted income before taxes, adjusted provision for income taxes, and adjusted effective tax rate. We believe that these non-GAAP financial measures are useful measures for providing investors with additional information regarding our results of operations and for helping investors understand and compare our operating results across accounting periods and compared to our peers. Our management primarily uses adjusted income from operations and adjusted operating margin to help us manage and evaluate our business and make operating decisions, while the other non-GAAP measures disclosed are primarily used to help us evaluate our business and forecast our future results. Accordingly, we believe disclosing and reconciling each of these measures helps investors evaluate our business in the same manner as management. This release also includes non-GAAP forward-looking information. The Company believes that a quantitative reconciliation of this forward-looking information to the most comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts. A reconciliation of this non-GAAP financial measure would require the Company to predict the timing and likelihood of future restructurings and other charges. Neither these forward-looking measures, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of the most directly comparable forward-looking GAAP measure is not provided.
In addition to these non-GAAP measures, we use the term "organic sales growth" to refer to the increase in our sales between periods that is attributable to organic sales. "Organic sales" refers to GAAP sales from existing operations excluding any sales from acquired businesses recorded prior to the first anniversary of the acquisition and excluding any sales from business divested/to be exited recorded prior to the first anniversary of the exit and excluding the impact of foreign currency translation. The impact of foreign currency translation is determined by translating the respective period's organic sales using the currency exchange rates that were in effect during the prior year periods.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) | ||||||||
Unaudited | ||||||||
(Dollars in Millions, Except per Share Data) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
Sep 30, | Sep 30, | Sep 30, | Sep 30, | |||||
Net Sales | $ 1,477.4 | $ 1,649.8 | $ 4,572.7 | $ 4,642.5 | ||||
Cost of Sales | 921.1 | 1,107.6 | 2,892.3 | 3,138.4 | ||||
Gross Profit | 556.3 | 542.2 | 1,680.4 | 1,504.1 | ||||
Operating Expenses | 382.2 | 388.9 | 1,172.7 | 1,127.9 | ||||
Goodwill Impairment | — | 57.3 | — | 57.3 | ||||
Asset Impairments | — | 3.7 | 1.5 | 6.1 | ||||
Loss on Sale of Businesses | — | 112.7 | 4.3 | 112.7 | ||||
Total Operating Expenses | 382.2 | 562.6 | 1,178.5 | 1,304.0 | ||||
Income (Loss) from Operations | 174.1 | (20.4) | 501.9 | 200.1 | ||||
Interest Expense | 98.0 | 111.5 | 305.1 | 323.3 | ||||
Interest Income | (5.1) | (3.5) | (13.2) | (40.5) | ||||
Other (Income) Expense, Net | (0.2) | (2.5) | 0.4 | (6.7) | ||||
Income (Loss) before Taxes | 81.4 | (125.9) | 209.6 | (76.0) | ||||
Provision for Income Taxes | 8.4 | 12.7 | 53.2 | 34.9 | ||||
Net Income (Loss) | 73.0 | (138.6) | 156.4 | (110.9) | ||||
Less: Net Income Attributable to Noncontrolling Interests | 0.3 | 0.9 | 1.4 | 2.4 | ||||
Net Income (Loss) Attributable to Regal Rexnord Corporation | $ 72.7 | $ (139.5) | $ 155.0 | $ (113.3) | ||||
Earnings (Loss) Per Share Attributable to Regal Rexnord Corporation: | ||||||||
Basic | $ 1.09 | $ (2.10) | $ 2.33 | $ (1.71) | ||||
Assuming Dilution | $ 1.09 | $ (2.10) | $ 2.32 | $ (1.71) | ||||
Cash Dividends Declared Per Share | $ 0.35 | $ 0.35 | $ 1.05 | $ 1.05 | ||||
Weighted Average Number of Shares Outstanding: | ||||||||
Basic | 66.4 | 66.3 | 66.4 | 66.3 | ||||
Assuming Dilution | 66.7 | 66.3 | 66.8 | 66.3 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Unaudited | ||||
(Dollars in Millions) | ||||
Sep 30, 2024 | Dec 31, 2023 | |||
ASSETS | ||||
Current Assets: | ||||
Cash and Cash Equivalents | $ 458.6 | $ 574.0 | ||
Trade Receivables, Less Allowances of | 855.8 | 921.6 | ||
Inventories | 1,324.5 | 1,274.2 | ||
Prepaid Expenses and Other Current Assets | 285.4 | 245.6 | ||
Assets Held for Sale | 31.2 | 368.6 | ||
Total Current Assets | 2,955.5 | 3,384.0 | ||
Net Property, Plant and Equipment | 961.9 | 1,041.2 | ||
Operating Lease Assets | 153.3 | 172.8 | ||
Goodwill | 6,557.3 | 6,553.1 | ||
Intangible Assets, Net of Amortization | 3,824.5 | 4,083.4 | ||
Deferred Income Tax Benefits | 37.0 | 33.8 | ||
Other Noncurrent Assets | 69.5 | 69.0 | ||
Noncurrent Assets Held for Sale | — | 94.1 | ||
Total Assets | $ 14,559.0 | $ 15,431.4 | ||
LIABILITIES AND EQUITY | ||||
Current Liabilities: | ||||
Accounts Payable | $ 553.2 | $ 549.4 | ||
Dividends Payable | 23.2 | 23.2 | ||
Accrued Compensation and Employee Benefits | 177.8 | 198.7 | ||
Accrued Interest | 90.8 | 85.1 | ||
Other Accrued Expenses | 318.0 | 325.2 | ||
Current Operating Lease Liabilities | 37.1 | 37.2 | ||
Current Maturities of Long-Term Debt | 4.7 | 3.9 | ||
Liabilities Held for Sale | 3.8 | 103.7 | ||
Total Current Liabilities | 1,208.6 | 1,326.4 | ||
Long-Term Debt | 5,654.6 | 6,377.0 | ||
Deferred Income Taxes | 907.3 | 1,012.7 | ||
Pension and Other Post Retirement Benefits | 109.2 | 120.4 | ||
Noncurrent Operating Lease Liabilities | 122.6 | 132.2 | ||
Other Noncurrent Liabilities | 70.9 | 77.2 | ||
Noncurrent Liabilities Held for Sale | — | 20.4 | ||
Equity: | ||||
Regal Rexnord Corporation Shareholders' Equity: | ||||
Common Stock, | 0.7 | 0.7 | ||
Additional Paid-In Capital | 4,652.0 | 4,646.2 | ||
Retained Earnings | 2,026.5 | 1,979.8 | ||
Accumulated Other Comprehensive Loss | (206.1) | (282.4) | ||
Total Regal Rexnord Corporation Shareholders' Equity | 6,473.1 | 6,344.3 | ||
Noncontrolling Interests | 12.7 | 20.8 | ||
Total Equity | 6,485.8 | 6,365.1 | ||
Total Liabilities and Equity | $ 14,559.0 | $ 15,431.4 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | ||||||||
Unaudited | ||||||||
(Dollars in Millions) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2024 | Sep 30, 2023 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income (Loss) | $ 73.0 | $ (138.6) | $ 156.4 | $ (110.9) | ||||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating | ||||||||
Depreciation | 40.6 | 53.9 | 122.6 | 131.7 | ||||
Amortization | 86.8 | 87.0 | 260.0 | 222.7 | ||||
Goodwill Impairment | — | 57.3 | — | 57.3 | ||||
Asset Impairments | — | 3.7 | 1.5 | 6.1 | ||||
Loss on Assets Held for Sale | — | 112.7 | 4.3 | 112.7 | ||||
Noncash Lease Expense | 10.8 | 11.9 | 33.0 | 31.6 | ||||
Share-Based Compensation Expense | 8.3 | 12.9 | 26.9 | 49.1 | ||||
Financing Fee Expense | 3.2 | 2.9 | 9.4 | 29.8 | ||||
Benefit from Deferred Income Taxes | (35.2) | (35.2) | (89.0) | (89.4) | ||||
Other Non-Cash Changes | 1.8 | 2.3 | 6.5 | 5.6 | ||||
Change in Operating Assets and Liabilities, Net of Acquisitions and Divestitures | ||||||||
Receivables | 44.1 | (13.2) | 27.3 | 29.2 | ||||
Inventories | (8.5) | 52.0 | (54.3) | 206.7 | ||||
Accounts Payable | (24.2) | (14.4) | 0.7 | (18.7) | ||||
Other Assets and Liabilities | (45.9) | (8.5) | (109.1) | (149.5) | ||||
Net Cash Provided by Operating Activities | 154.8 | 186.7 | 396.2 | 514.0 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Additions to Property, Plant and Equipment | (29.3) | (25.2) | (80.2) | (88.7) | ||||
Business Acquisitions, Net of Cash Acquired | — | — | — | (4,870.2) | ||||
Proceeds Received from Sale of Businesses, Net of Cash Transferred | — | — | 374.8 | — | ||||
Proceeds Received from Sales of Property, Plant and Equipment | — | 0.2 | 1.3 | 6.3 | ||||
Net Cash (Used in) Provided by Investing Activities | (29.3) | (25.0) | 295.9 | (4,952.6) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Borrowings Under Revolving Credit Facility | 381.0 | 389.0 | 1,316.2 | 1,801.3 | ||||
Repayments Under Revolving Credit Facility | (373.2) | (487.5) | (1,380.5) | (2,213.8) | ||||
Proceeds from Short-Term Borrowings | — | 5.6 | — | 34.7 | ||||
Repayments of Short-Term Borrowings | — | (5.4) | — | (38.2) | ||||
Proceeds from Long-Term Borrowings | — | — | — | 5,532.9 | ||||
Repayments of Long-Term Borrowings | (122.1) | (88.2) | (668.4) | (624.7) | ||||
Dividends Paid to Shareholders | (23.3) | (23.2) | (69.9) | (69.6) | ||||
Shares Surrendered for Taxes | (1.1) | (2.3) | (12.4) | (11.5) | ||||
Proceeds from the Exercise of Stock Options | 0.3 | 1.6 | 4.1 | 3.1 | ||||
Financing Fees Paid | — | — | — | (51.1) | ||||
Repurchase of Common Stock | (50.0) | — | (50.0) | — | ||||
Distributions to Noncontrolling Interests | — | — | — | (8.4) | ||||
Net Cash (Used in) Provided By Financing Activities | (188.4) | (210.4) | (860.9) | 4,354.7 | ||||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 12.9 | (12.1) | (6.1) | (5.8) | ||||
Net (Decrease) Increase in Cash and Cash Equivalents | (50.0) | (60.8) | (174.9) | (89.7) | ||||
Cash and Cash Equivalents at Beginning of Period (a) | 510.4 | 659.6 | 635.3 | 688.5 | ||||
Cash and Cash Equivalents at End of Period (b) | $ 460.4 | $ 598.8 | $ 460.4 | $ 598.8 | ||||
(a) Includes cash and cash equivalents in Assets Held for Sale of | ||||||||
(b) Includes cash and cash equivalents in Assets Held for Sale of |
SEGMENT INFORMATION | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Industrial | Power | Automation & | Industrial | Total Regal | ||||||||||||||||
Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | |||||||||||
Net Sales | $ — | $ 1,477.4 | $ 1,649.8 | |||||||||||||||||
Adjusted Net Sales | $ — | $ 1,477.4 | $ 1,649.8 | |||||||||||||||||
GAAP Operating Margin | 13.1 % | 6.1 % | 13.6 % | 14.1 % | 7.7 % | 10.3 % | — % | (131.2) % | 11.8 % | (1.2) % | ||||||||||
Adjusted Operating Margin | 15.4 % | 9.3 % | 14.7 % | 16.3 % | 9.6 % | 12.0 % | — % | 4.2 % | 13.6 % | 11.5 % | ||||||||||
Adjusted EBITDA Margin % | 26.8 % | 21.7 % | 17.8 % | 19.7 % | 21.8 % | 24.0 % | — % | 7.2 % | 22.8 % | 20.6 % | ||||||||||
Components of Net Sales: | ||||||||||||||||||||
Organic Sales Growth | 0.8 % | (6.2) % | (6.2) % | (19.1) % | (4.1) % | 5.5 % | — % | (13.2) % | (2.7) % | (10.8) % | ||||||||||
Acquisitions | — % | 59.1 % | — % | — % | — % | 112.5 % | — % | — % | — % | 34.9 % | ||||||||||
Foreign Currency Impact | (0.3) % | 1.3 % | (0.2) % | 0.1 % | (0.2) % | — % | — % | (0.3) % | (0.2) % | 0.4 % | ||||||||||
Nine Months Ended | ||||||||||||||||||||
Industrial | Power | Automation & | Industrial | Total Regal | ||||||||||||||||
Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | |||||||||||
Net Sales | $ 1,963.1 | $ 1,753.8 | $ 1,227.8 | $ 1,390.9 | $ 1,224.0 | $ 1,096.1 | $ 4,572.7 | $ 4,642.5 | ||||||||||||
Adjusted Net Sales | $ 1,963.1 | $ 1,753.8 | $ 1,227.8 | $ 1,390.9 | $ 1,224.0 | $ 1,096.1 | $ 4,572.7 | $ 4,642.5 | ||||||||||||
GAAP Operating Margin | 13.1 % | 6.0 % | 10.8 % | 12.2 % | 9.2 % | 7.9 % | 0.2 % | (40.4) % | 11.0 % | 4.3 % | ||||||||||
Adjusted Operating Margin | 14.8 % | 11.9 % | 12.5 % | 14.1 % | 10.4 % | 12.5 % | 7.0 % | 4.0 % | 12.7 % | 12.0 % | ||||||||||
Adjusted EBITDA Margin % | 26.2 % | 24.2 % | 15.8 % | 17.3 % | 22.2 % | 24.3 % | 8.3 % | 7.0 % | 21.7 % | 20.7 % | ||||||||||
Components of Net Sales: | ||||||||||||||||||||
Organic Sales Growth | (1.6) % | (2.1) % | (11.4) % | (19.1) % | (6.2) % | 8.0 % | (11.0) % | (1.8) % | (6.2) % | (8.0) % | ||||||||||
Acquisitions | 13.9 % | 42.2 % | — % | . | 18.2 % | 84.7 % | — % | — % | 10.0 % | 25.5 % | ||||||||||
Foreign Currency Impact | (0.3) % | (0.3) % | (0.3) % | (0.6) % | (0.3) % | (0.7) % | (0.8) % | (1.8) % | (0.3) % | (0.6) % |
.
ADJUSTED DILUTED EARNINGS PER SHARE | ||||||||
Unaudited | ||||||||
Three Months Ended | Nine Months Ended | |||||||
Sep 30, | Sep 30, | Sep 30, | Sep 30, | |||||
GAAP Diluted Earnings (Loss) Per Share | $ 1.09 | $ (2.10) | $ 2.32 | $ (1.71) | ||||
Intangible Amortization | 0.98 | 0.99 | 2.95 | 2.53 | ||||
Restructuring and Related Costs (a) | 0.22 | 0.21 | 0.60 | 0.46 | ||||
Share-Based Compensation Expense (b) | 0.11 | 0.15 | 0.34 | 0.64 | ||||
Impairments and Exit Related Costs | — | 0.04 | 0.02 | 0.07 | ||||
Inventory and Operating Lease Asset Step Up | — | 0.10 | 0.01 | 0.60 | ||||
Loss on Sale of Businesses (c) | — | 1.69 | 0.06 | 1.69 | ||||
Goodwill Impairment | — | 0.86 | — | 0.86 | ||||
Gain on Sale of Assets | — | — | (0.01) | — | ||||
Transaction and Integration Related Costs (d) | 0.09 | 0.13 | 0.24 | 1.60 | ||||
Discrete Tax Items (e) | — | 0.03 | 0.25 | 0.13 | ||||
Adjusted Diluted Earnings Per Share | 2.49 | 2.10 | 6.78 | 6.87 |
(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) | Reflects the loss 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) | Primarily relates to capital gains taxes and deferred income tax remeasurement related to the industrial motors and generators sale for the nine months ended September 30, 2024. |
2024 ADJUSTED ANNUAL GUIDANCE | ||||
Unaudited | ||||
Minimum | Maximum | |||
2024 GAAP Diluted EPS Annual Guidance | $ 3.27 | $ 3.57 | ||
Intangible Amortization | 3.94 | 3.94 | ||
Restructuring and Related Costs (a) | 0.82 | 0.82 | ||
Share-Based Compensation Expense | 0.46 | 0.46 | ||
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) | 0.33 | 0.33 | ||
Discrete Tax Items | 0.25 | 0.25 | ||
2024 Adjusted Diluted EPS Annual Guidance | $ 9.15 | $ 9.45 |
(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, 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. |
ADJUSTED EBITDA | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Industrial | Power Efficiency | Automation & | Industrial | Total Regal | ||||||||||||||||
Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | |||||||||||
GAAP Income (Loss) from | $ 84.5 | $ 39.4 | $ 58.6 | $ 65.0 | $ 31.0 | $ 43.1 | $ — | $ (167.9) | $ (20.4) | |||||||||||
Restructuring and Related Costs (a) | 9.0 | 6.7 | 3.5 | 8.7 | 6.6 | 2.5 | — | (0.1) | 19.1 | 17.8 | ||||||||||
Inventory and Operating Lease | 0.2 | 7.1 | — | — | — | 1.7 | — | — | 0.2 | 8.8 | ||||||||||
Impairments and Exit Related | — | 1.3 | — | 1.5 | — | 0.5 | — | 0.4 | — | 3.7 | ||||||||||
Loss on Sale of Businesses (b) | — | — | — | — | — | — | — | 112.7 | — | 112.7 | ||||||||||
Goodwill Impairment | — | — | — | — | — | — | — | 57.3 | — | 57.3 | ||||||||||
Transaction and Integration | 5.2 | 4.8 | 1.5 | — | 1.0 | 2.7 | — | 3.0 | 7.7 | 10.5 | ||||||||||
Adjusted Income from Operations | $ 98.9 | $ 59.3 | $ 63.6 | $ 75.2 | $ 38.6 | $ 50.5 | $ — | $ 5.4 | $ 190.4 | |||||||||||
Amortization | $ 50.9 | $ 50.5 | $ 2.0 | $ 2.1 | $ 33.9 | $ 34.2 | $ — | $ 0.2 | $ 86.8 | $ 87.0 | ||||||||||
Depreciation | 18.9 | 21.8 | 9.4 | 9.8 | 12.3 | 11.9 | — | 2.9 | 40.6 | 46.4 | ||||||||||
Share-Based Compensation | 4.0 | 6.4 | 1.7 | 2.9 | 2.6 | 3.1 | — | 0.5 | 8.3 | 12.9 | ||||||||||
Other Income, Net | — | 0.9 | 0.1 | 0.7 | 0.1 | 0.7 | — | 0.2 | 0.2 | 2.5 | ||||||||||
Adjusted EBITDA(d) | $ 138.9 | $ 76.8 | $ 90.7 | $ 87.5 | $ 100.4 | $ — | $ 9.2 | $ 339.2 | ||||||||||||
GAAP Operating Margin % | 13.1 % | 6.1 % | 13.6 % | 14.1 % | 7.7 % | 10.3 % | — % | (131.2) % | 11.8 % | (1.2) % | ||||||||||
Adjusted Operating Margin % | 15.4 % | 9.3 % | 14.7 % | 16.3 % | 9.6 % | 12.0 % | — % | 4.2 % | 13.6 % | 11.5 % | ||||||||||
Adjusted EBITDA Margin % | 26.8 % | 21.7 % | 17.8 % | 19.7 % | 21.8 % | 24.0 % | — % | 7.2 % | 22.8 % | 20.6 % |
(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 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 September 2023 is calculated as follows: |
Sep 30, 2023 | |||
Total Regal Rexnord Adjusted EBITDA | 339.2 | ||
Less: Industrial Systems Adjusted EBITDA | 9.2 | ||
Adjusted EBITDA excluding Industrial Systems | 330.0 | ||
Total Regal Rexnord Net Sales | 1,649.8 | ||
Less: Industrial Systems Net Sales | 128.0 | ||
Net Sales excluding Industrial Systems | 1,521.8 | ||
Adjusted EBITDA Margin % excluding Industrial Systems | 21.7 % |
Nine Months Ended | ||||||||||||||||||||
Industrial | Power and | Automation & | Industrial | Total Regal | ||||||||||||||||
Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | Sep 30, | |||||||||||
GAAP Income (Loss) from | $ 256.4 | $ 132.2 | $ 113.0 | $ 86.5 | $ 0.3 | $ (162.1) | $ 501.9 | |||||||||||||
Restructuring and Related Costs (a) | 20.3 | 10.1 | 18.6 | 24.1 | 11.8 | 5.0 | 3.1 | 0.8 | 53.8 | 40.0 | ||||||||||
Inventory and Operating Lease | 0.9 | 38.7 | — | — | — | 14.2 | — | — | 0.9 | 52.9 | ||||||||||
Impairments and Exit Related | 0.2 | 1.6 | 0.2 | 1.5 | 1.1 | 2.6 | — | 0.4 | 1.5 | 6.1 | ||||||||||
Loss on Sale of Businesses (b) | — | — | — | — | — | — | 4.3 | 112.7 | 4.3 | 112.7 | ||||||||||
Goodwill Impairment | — | — | — | — | — | — | — | 57.3 | — | 57.3 | ||||||||||
Gain on Sale of Assets | — | — | — | — | (0.8) | (0.6) | — | — | (0.8) | (0.6) | ||||||||||
Transaction and Integration | 12.5 | 53.3 | 3.0 | — | 2.3 | 29.2 | 3.4 | 6.9 | 21.2 | 89.4 | ||||||||||
Adjusted Income from Operations | $ 290.3 | $ 154.0 | $ 127.4 | $ 11.1 | $ 16.0 | $ 582.8 | ||||||||||||||
Amortization | $ 151.1 | $ 6.2 | $ 6.3 | $ 102.5 | $ 83.8 | $ 0.2 | $ 0.6 | $ 260.0 | ||||||||||||
Depreciation | 59.6 | 56.3 | 28.1 | 29.1 | 35.2 | 29.6 | 0.4 | 9.2 | 123.3 | 124.2 | ||||||||||
Share-Based Compensation | 12.6 | 25.0 | 5.6 | 7.7 | 7.3 | 14.7 | 1.4 | 1.7 | 26.9 | 49.1 | ||||||||||
Other (Expense) Income, Net | (0.2) | 2.5 | (0.1) | 2.0 | (0.1) | 1.6 | — | 0.6 | (0.4) | 6.7 | ||||||||||
Adjusted EBITDA | $ 513.4 | $ 193.8 | $ 272.3 | $ 13.1 | $ 28.1 | $ 992.6 | ||||||||||||||
GAAP Operating Margin % | 13.1 % | 6.0 % | 10.8 % | 12.2 % | 9.2 % | 7.9 % | 0.2 % | (40.4) % | 11.0 % | 4.3 % | ||||||||||
Adjusted Operating Margin % | 14.8 % | 11.9 % | 12.5 % | 14.1 % | 10.4 % | 12.5 % | 7.0 % | 4.0 % | 12.7 % | 12.0 % | ||||||||||
Adjusted EBITDA Margin % | 26.2 % | 24.2 % | 15.8 % | 17.3 % | 22.2 % | 24.3 % | 8.3 % | 7.0 % | 21.7 % | 20.7 % |
(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 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 | Nine Months Ended | |||||||
Sep 30, | Sep 30, | Sep 30, | Sep 30, | |||||
Net Income (Loss) | $ 73.0 | $ (138.6) | $ 156.4 | $ (110.9) | ||||
Plus: Income Taxes | 8.4 | 12.7 | 53.2 | 34.9 | ||||
Plus: Interest Expense | 98.0 | 111.5 | 305.1 | 323.3 | ||||
Less: Interest Income | (5.1) | (3.5) | (13.2) | (40.5) | ||||
Plus: Depreciation | 40.6 | 46.4 | 123.3 | 124.2 | ||||
Plus: Amortization | 86.8 | 87.0 | 260.0 | 222.7 | ||||
EBITDA | 301.7 | 115.5 | 884.8 | 553.7 | ||||
Plus: Restructuring and Related Costs (a) | 19.1 | 17.8 | 53.8 | 40.0 | ||||
Plus: Share-Based Compensation Expense (b) | 8.3 | 12.9 | 26.9 | 49.1 | ||||
Plus: Inventory and Operating Lease Asset Step Up | 0.2 | 8.8 | 0.9 | 52.9 | ||||
Plus: Impairments and Exit Related Costs | — | 3.7 | 1.5 | 6.1 | ||||
Plus: Loss on Sale of Businesses (c) | — | 112.7 | 4.3 | 112.7 | ||||
Plus: Goodwill Impairment | — | 57.3 | — | 57.3 | ||||
Less: Gain on Sale of Assets | — | — | (0.8) | (0.6) | ||||
Plus: Transaction and Integration Related Costs (d) | 7.7 | 10.5 | 21.2 | 89.4 | ||||
Adjusted EBITDA | $ 337.0 | $ 339.2 | $ 992.6 | $ 960.6 |
(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) | Reflects the loss 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 | ||
Sep 30, 2024 | ||
Net Income | $ 213.0 | |
Plus: Income Taxes | 71.0 | |
Plus: Interest Expense | 412.8 | |
Less: Interest Income | (16.3) | |
Plus: Depreciation | 164.8 | |
Plus: Amortization | 345.1 | |
EBITDA | $ 1,190.4 | |
Plus: Restructuring and Related Costs (a) | 98.2 | |
Plus: Share-Based Compensation Expense | 36.0 | |
Plus: Inventory and Operating Lease Asset Step Up | 2.5 | |
Plus: Impairments and Exit Related Costs | 5.0 | |
Less: Gain on Sale of Businesses (b) | (20.7) | |
Less: Gain on Sale of Assets | (0.8) | |
Plus: Transaction and Integration Related Costs (c) | 28.5 | |
Adjusted EBITDA* (d) | $ 1,339.1 | |
Current Maturities of Long-Term Debt | $ 4.7 | |
Long-Term Debt | 5,654.6 | |
Total Gross Debt | $ 5,659.3 | |
Cash and Cash Equivalents (e) | (460.4) | |
Net Debt | $ 5,198.9 | |
Gross Debt/Adjusted EBITDA | 4.23 | |
Net Debt/Adjusted EBITDA (d) | 3.88 | |
Interest Coverage Ratio (d) | 3.38 |
(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 net gain recorded related to the sale of the industrial motors and generators businesses over the last twelve months. | |
(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 impact of the synergies the Company expects to realize within 18 months is as follows: |
Adjusted EBITDA | $ 1,339.1 | |
Synergies to be Realized Within 18 months | 100.0 | |
Adjusted EBITDA (including synergies) | $ 1,439.1 | |
Net Debt/Adjusted EBITDA (including synergies) | 3.61 | |
Interest Expense | $ 412.8 | |
Interest Income | (16.3) | |
Net Interest Expense | $ 396.5 | |
Interest Coverage Ratio(1) | 3.38 | |
Interest Coverage Ratio (including synergies)(2) | 3.63 | |
(1) Computed as Adjusted EBITDA/Net Interest Expense | ||
(2) Computed as Adjusted EBITDA (including synergies)/Net Interest Expense | ||
(e) | This amount includes |
ADJUSTED FREE CASH FLOW | ||||||||
Unaudited | ||||||||
(Dollars in Millions) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
Sep 30, | Sep 30, | Sep 30, | Sep 30, | |||||
Net Cash Provided by Operating Activities | $ 154.8 | $ 186.7 | $ 396.2 | $ 514.0 | ||||
Payments for Certain Acquisition Costs (Net of Tax of | — | — | — | 86.9 | ||||
Payments for Certain Costs to Sell Businesses (Net of Tax of | — | — | 10.5 | — | ||||
Adjusted Cash Flows from Operations | 154.8 | 186.7 | 406.7 | 600.9 | ||||
Additions to Property Plant and Equipment | (29.3) | (25.2) | (80.2) | (88.7) | ||||
Adjusted Free Cash Flow | $ 125.5 | $ 161.5 | $ 326.5 | $ 512.2 |
(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 | Nine Months Ended | ||||||
Sep 30, | Sep 30, | Sep 30, | Sep 30, | ||||
Income (Loss) before Taxes | $ 81.4 | $ (125.9) | $ 209.6 | $ (76.0) | |||
Provision for Income Taxes | 8.4 | 12.7 | 53.2 | 34.9 | |||
Effective Tax Rate | 10.3 % | (10.1) % | 25.4 % | (45.9) % | |||
Income (Loss) before Taxes | $ 81.4 | $ (125.9) | $ 209.6 | $ (76.0) | |||
Intangible Amortization | 86.8 | 87.0 | 260.0 | 222.7 | |||
Restructuring and Related Costs (a) | 19.1 | 17.8 | 53.8 | 40.0 | |||
Share-Based Compensation Expense (b) | 8.3 | 12.9 | 26.9 | 49.1 | |||
Inventory and Operating Lease Asset Step Up | 0.2 | 8.8 | 0.9 | 52.9 | |||
Impairments and Exit Related Costs | — | 3.7 | 1.5 | 6.1 | |||
Loss on Sale of Businesses (c) | — | 112.7 | 4.3 | 112.7 | |||
Goodwill Impairment | — | 57.3 | — | 57.3 | |||
Gain on Sale of Assets | — | — | (0.8) | (0.6) | |||
Transaction and Integration Related Costs (d) | 7.7 | 10.5 | 21.2 | 128.7 | |||
Adjusted Income before Taxes* | $ 203.5 | $ 184.8 | $ 577.4 | $ 592.9 | |||
Provision for Income Taxes | $ 8.4 | $ 12.7 | $ 53.2 | $ 34.9 | |||
Tax Effect of Intangible Amortization | 21.1 | 21.1 | 63.2 | 54.1 | |||
Tax Effect of Restructuring and Related Costs | 4.6 | 3.8 | 13.2 | 9.7 | |||
Tax Effect of Share-Based Compensation Expense | 1.0 | 2.6 | 4.6 | 6.3 | |||
Tax Effect of Inventory and Operating Lease Asset Step Up | — | 2.1 | 0.2 | 12.7 | |||
Tax Effect of Impairments and Exit Related Costs | — | 0.9 | 0.4 | 1.5 | |||
Tax Effect of Gain on Sale of Assets | — | — | (0.2) | (0.1) | |||
Tax Effect of Transaction and Integration Related Costs | 1.8 | 2.0 | 5.0 | 21.8 | |||
Discrete Tax Items | — | (1.4) | (16.3) | (8.2) | |||
Adjusted Provision for Income Taxes* | $ 36.9 | $ 43.8 | $ 123.3 | $ 132.7 | |||
Adjusted Effective Tax Rate* | 18.1 % | 23.7 % | 21.4 % | 22.4 % |
(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) | Reflects the loss 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) | Primarily relates to capital gains taxes and deferred income tax remeasurement related to the industrial motors and generators sale for the nine months ended September 30, 2024. |
ORGANIC SALES GROWTH | ||||||||||
Unaudited | ||||||||||
(Dollars in Millions) | ||||||||||
Three Months Ended | ||||||||||
Industrial | Power and | Automation & | Industrial | Total Regal | ||||||
Net Sales Three Months Ended Sep 30, 2024 | $ 644.2 | $ 431.6 | $ 401.6 | $ — | $ 1,477.4 | |||||
Impact from Foreign Currency Exchange | 1.8 | 1.1 | 1.0 | — | 3.9 | |||||
Organic Sales Three Months Ended Sep 30, | $ 646.0 | $ 432.7 | $ 402.6 | $ — | $ 1,481.3 | |||||
Net Sales Three Months Ended Sep 30, 2023 | $ 640.7 | $ 461.3 | $ 419.8 | $ 128.0 | $ 1,649.8 | |||||
Net Sales from Businesses Divested | — | — | — | (128.0) | (128.0) | |||||
Adjusted Net Sales Three Months Ended Sep | $ 640.7 | $ 461.3 | $ 419.8 | $ — | $ 1,521.8 | |||||
Three Months Ended Sep 30, 2024 Net Sales | 0.5 % | (6.4) % | (4.3) % | — % | (2.9) % | |||||
Three Months Ended Sep 30, 2024 Organic | 0.8 % | (6.2) % | (4.1) % | — % | (2.7) % | |||||
Nine Months Ended | ||||||||||
Industrial | Power and | Automation & | Industrial | Total Regal | ||||||
Net Sales Nine Months Ended Sep 30, 2024 | $ 1,963.1 | $ 1,227.8 | $ 1,224.0 | $ 157.8 | $ 4,572.7 | |||||
Net Sales from Businesses Acquired | (243.2) | — | (199.3) | — | (442.5) | |||||
Impact from Foreign Currency Exchange | 5.5 | 4.3 | 3.8 | 1.4 | 15.0 | |||||
Organic Sales Nine Months Ended Sep 30, | $ 1,725.4 | $ 1,232.1 | $ 1,028.5 | $ 159.2 | $ 4,145.2 | |||||
Net Sales Nine Months Ended Sep 30, 2023 | $ 1,753.8 | $ 1,390.9 | $ 1,096.1 | $ 401.7 | $ 4,642.5 | |||||
Net Sales from Businesses Divested | — | — | — | (222.9) | (222.9) | |||||
Adjusted Net Sales Nine Months Ended Sep | $ 1,753.8 | $ 1,390.9 | $ 1,096.1 | $ 178.8 | $ 4,419.6 | |||||
Nine Months Ended Sep 30, 2024 Net Sales | 11.9 % | (11.7) % | 11.7 % | (11.7) % | 3.5 % | |||||
Nine Months Ended Sep 30, 2024 Organic | (1.6) % | (11.4) % | (6.2) % | (11.0) % | (6.2) % |
ADJUSTED GROSS MARGIN | ||||||||||
Unaudited | ||||||||||
(Dollars in Millions) | ||||||||||
Three Months Ended | ||||||||||
September 30, 2024 | ||||||||||
Industrial | Power and | Automation & | Industrial | Total Regal | ||||||
Net Sales | $ 644.2 | $ 431.6 | $ 401.6 | $ — | $ 1,477.4 | |||||
Gross Margin | $ 268.0 | $ 131.8 | $ 156.5 | $ — | $ 556.3 | |||||
Restructuring and Related Costs (a) | 4.2 | 2.9 | 3.6 | — | 10.7 | |||||
Operating Lease Asset Step Up | 0.2 | — | — | — | 0.2 | |||||
Adjusted Gross Margin | $ 272.4 | $ 134.7 | $ 160.1 | $ — | $ 567.2 | |||||
Gross Margin % | 41.6 % | 30.5 % | 39.0 % | — % | 37.7 % | |||||
Adjusted Gross Margin % | 42.3 % | 31.2 % | 39.9 % | — % | 38.4 % |
(a) | Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line exits and other asset charges. |
ADJUSTED GROSS MARGIN | ||||||||||
Unaudited | ||||||||||
(Dollars in Millions) | ||||||||||
Nine Months Ended | ||||||||||
September 30, 2024 | ||||||||||
Industrial | Power and | Automation & | Industrial | Total Regal | ||||||
Net Sales | $ 1,963.1 | $ 1,227.8 | $ 1,224.0 | $ 157.8 | $ 4,572.7 | |||||
Gross Margin | $ 803.3 | $ 352.3 | $ 485.6 | $ 39.2 | $ 1,680.4 | |||||
Restructuring and Related Costs (a) | 11.8 | 16.9 | 5.7 | 1.1 | 35.5 | |||||
Operating Lease Asset Step Up | 0.9 | — | — | — | 0.9 | |||||
Adjusted Gross Margin | $ 816.0 | $ 369.2 | $ 491.3 | $ 40.3 | $ 1,716.8 | |||||
Gross Margin % | 40.9 % | 28.7 % | 39.7 % | 24.8 % | 36.7 % | |||||
Adjusted Gross Margin % | 41.6 % | 30.1 % | 40.1 % | 25.5 % | 37.5 % |
(a) | Relates to costs associated with actions taken for employee reductions, facility consolidations and site closures, product line exits and other asset charges. |
View original content:https://www.prnewswire.com/news-releases/regal-rexnord-reports-third-quarter-2024-financial-results-302295746.html
SOURCE Regal Rexnord Corporation
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