MIRA
INFORM REPORT
|
Report Date : |
15.11.2008 |
IDENTIFICATION
DETAILS
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Name : |
REGAL-BELOIT CORPORATION |
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Registered Office : |
200 State Street, Beloit, WI 53511 |
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Country : |
United States |
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Financials (as on) : |
29.09.2008 |
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Date of Incorporation : |
01.02.1955 |
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Com. Reg. No.: |
Delaware 0484230 |
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Legal Form : |
Public Company |
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Line of Business : |
Manufacturer, Distributor, and Seller of Electrical and Mechanical Products |
RATING &
COMMENTS
|
MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 10,000,000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
Company
Name
REGAL-BELOIT CORPORATION
Company acronym:
Contact Information
|
Address |
200 State Street USA |
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Telephone |
608-364-8800 |
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Fax |
608-364-8818 |
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Website |
www.regal-beloit.com |
Registration Data
|
Date of Registration |
February 1st, 1955 |
|
Registration number |
Delaware 0484230 |
|
Legal address |
The Corporation Trust Company 1209 Orange Street, Wilmington, DE 19801 - USA |
|
Legal Form |
Public Company (NYSE=RBC) |
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Share Capital |
32,276,145 Shares, Common Stock, $.01 Par Value (as of October 31, 2008) |
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Other Registration Data |
- |
Shareholders
with Shares
97% of the common stock is held by institutional and mutual fund owners including
|
AXA |
8.63% |
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DIMENSIONAL FUND ADVISORS INC |
6.54% |
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Allianz Global Investors of America L.P. |
5.96% |
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Barclays Global Investors UK Holdings Ltd |
5.45% |
Board/Executive
|
Name |
Henry W. Knueppel |
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Position within the company |
Chairman & CEO |
|
Name |
Mark J. Gliebe |
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Position within the company |
President & COO |
|
Name |
David A. Barta |
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Position within the company |
Vice President &
CFO |
Changes in
Registration Data
None recorded
Activities (realistic
and officials)
Regal Beloit Corporation, together with its subsidiaries, manufactures,
distributes, and sells electrical and mechanical products in the United States,
Canada, Mexico, India, Australia, Thailand, Europe, and the People’s Republic
of China. It operates in two segments, Electrical and Mechanical.
The Electrical segment offers alternate current (AC) and direct current
(DC) commercial and industrial electric motors; heating, ventilation, and air
conditioning motors; and electric generators and controls, capacitors, and
electrical connecting devices. It also produces precision servo motors;
automatic transfer switches; and paralleling switchgear to interconnect and
control electric power generation equipment and electrical connecting devices,
such as terminal blocks, fuse holders, and power blocks. In addition, this
segment markets a line of AC and DC adjustable speed drives.
The Mechanical segment manufactures mechanical motion control products,
including worm gear, bevel gear, helical gear, and concentric shaft gearboxes;
marine transmissions; after-market automotive transmissions, and ring and
pinions; custom gearings; gear motors; and manual valve actuators, which are
used primarily in oil and gas, water distribution and treatment, and chemical
processing applications.
The company sells its products to original equipment manufacturers,
distributors, and end users.
Staff
|
Number of staff
employed |
17,900 |
Export/Import
(Countries, goods and total values for the period)
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Imports From |
Europe, Far East |
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Exports To |
- |
Facilities
|
Owned |
Corporate office (building) |
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Premises Size |
30,000 sq. feet |
Subsidiaries
and Participation
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Parent Company |
Public Company |
|
Subsidiaries |
Numerous subsidiaries in the U.S. and worldwide, including Mexico,
Canada, Germany, Italy, Australia, China, and others. |
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Affiliates |
- |
Branches
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Address |
Numerous branches in the U.S. |
Bankers
|
Bank |
JP Morgan Chase |
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Branch |
Bank of America |
Suppliers,
Partners
|
Suppliers |
Not known |
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Partners |
Not known |
Litigation,
Remarks on Payment
|
Litigation |
None Recorded |
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Remarks on Payment |
No Complaints |
Financial
Information
|
Source |
S.E.C. |
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Figures are |
Declared |
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Currency |
USD |
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View: Annual Data | |
All numbers in thousands |
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Reporter Comments
|
Comments |
Regal Beloit Corporation reported record financial results for the third
quarter ended September 27, 2008. Record quarterly sales were driven by
robust market demand for generators and industrial and HVACR motor products,
coupled with strong operational execution and productivity improvements. The
sales and earnings performance was achieved in spite of continued raw
material cost inflation and a challenging global economic environment. |
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Local Reputation |
The company being investigated is believed by local reporters to be a Low Trade Risk and to be fair. According to our credit analysts, during the last 6 months, 88% of
trade experience indicates a regular payment. Payments of imports are currently made with an average of 10 days
beyond terms. |
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MAX CREDIT |
USD 10,000,000+ |
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CREDIT REQUIRED |
MAXIMUM CREDIT |
|
Maximum |
USD 10,000,000+ |
REGAL
BELOIT REPORTS RECORD SALES AND EARNINGS FOR THE THIRD QUARTER OF 2008
November 3, 2008 (Beloit, WI): Regal Beloit Corporation (NYSE:RBC)
today reported record financial results for the third quarter ended September
27, 2008. Record quarterly sales were driven by robust market demand for
generators and industrial and HVACR motor products, coupled with strong
operational execution and productivity improvements. The sales and earnings
performance was achieved in spite of continued raw material cost inflation and
a challenging global economic environment.
“We are very pleased with our
record results for the third quarter, despite continued cost pressures and
market uncertainties. The diversity in our end-markets, a focus on expanding
our global footprint in high growth regions, and the ability to continuously
bring innovation to our industry have helped us overcome significant headwinds
over the past few months,” commented
Henry W. Knueppel, Chairman and Chief Executive Officer of Regal Beloit. “Due to our strong fundamentals and our
ability to successfully implement our strategies over the past several years,
we remain poised to capitalize on accelerating growth opportunities. While we
recognize the economic challenges in the short-term, we are well-positioned to
capture the growth potential resulting from increased demand for energy
efficiency products and global acquisitions.”
Sales for the third quarter of 2008 were $620.6 million, a
38.1% increase over the $449.4 million reported for the same period in 2007.
The third quarter of 2008 included $122.6 million in sales from the four 2007
acquisitions, as compared to $28.3 million for the third quarter of 2007. An
additional $34.2 million of the third quarter 2008 sales are attributable to
the Hwada acquisition completed on April 25, 2008.
In the Electrical segment, sales increased 42.5%, which
includes the positive impact of the acquisitions noted above. Exclusive of the
acquired businesses, Electrical segment sales are up 10.8%, largely due to
global generator sales increasing 25.0%, commercial and industrial motors sales
in North America increasing 9.1% and HVACR motor sales increasing as well.
Sales in the Mechanical segment increased 5.3% from the prior year period.
From a geographic perspective, Asia-based sales increased
101.1%, including the impact of acquired businesses, as compared to the third
quarter of 2007. In total, sales to regions outside of the United States were
26.8% of total sales for the third quarter of 2008, in comparison to 19.4% for
the same period of 2007. From an energy efficiency perspective, sales of high
efficiency motor and gear products were 13.6% of total sales. Exclusive of the
acquired businesses, sales of high efficiency products increased 28.4% over the
comparable data from the third quarter of 2007. Further, the impact of foreign
currency exchange rate changes, excluding acquisitions, from the year ago
period added 0.5% to total sales.
The gross profit margin for the third quarter of 2008 was
21.4% as compared to the 23.8% reported for the comparable period of 2007. The
decrease was primarily driven by lower gross profit margins of 17.3% from the
acquired businesses and higher material costs throughout the quarter. Net of
the impact of product price increases, the material cost increases totaled
$13.0 million.
Operating expenses were $67.1 million (10.8% of sales) in the
third quarter 2008 versus $53.3 million (11.9% of sales) for the same period in
2007. Income from operations was $65.7 million versus $53.4 million in the
comparable period of 2007. As a percent of sales, income from operations was
10.6% for the third quarter 2008 versus 11.9% in the comparable period of 2007.
This decrease reflected lower operating profit margins from the acquired
businesses and increased raw material costs which were partially offset by
contributions from new products, pricing actions, and productivity.
Net interest expense was $6.7 million for the quarter, versus
$4.8 million in the comparable period of 2007. The increase reflected higher
levels of average debt outstanding driven by the acquisitions completed in the
third and fourth quarters of 2007, as well as the Hwada acquisition completed
in April of 2008.
Net income for the third quarter of 2008 was $36.9 million,
an increase of 18.1% versus the $31.2 million reported in the comparable period
of 2007. Fully diluted earnings per share increased 18.5% to $1.09, as compared
to $0.92 per share reported in the third quarter of 2007
Cash flow from operations was $42.3 million in the third
quarter 2008, as compared to $68.2 million in the year ago period, reflecting
an increase in working capital driven by increases in inventory and trade
accounts receivable. Productivity and new product-oriented capital spending was
$15.8 million for the quarter, as compared to $6.0 million for the comparative
period in 2007. Depreciation and amortization was $14.9 million versus $10.0
million for the comparative period of 2007. Total debt at the end of the
quarter was $571.2 million, a $3.0 million increase from the end of the second
quarter and $7.0 million increase from the end of 2007.
“While we remain confident in our strategy that has
positioned us to succeed in the long-term, we anticipate continued material
cost pressures and uncertain economic conditions throughout the fourth
quarter,” added Knueppel. “Given these headwinds, we believe earnings per share
to be in the range of $.67 to $.75 for the fourth quarter.
Regal Beloit will be holding a conference call to discuss
third quarter financial results at 10:30 AM CST, Tuesday, November 4, 2008.
Interested parties should call 866-394-7807 (domestic) or 706-634-1728
(international), conference ID 71041041. A replay of the call will be available
through November 14 at 800-642-1687 (domestic) or 706-645-9291 (international),
access code 71041041.
About REGAL BELOIT CORPORATION:
Regal Beloit Corporation is a leading manufacturer and
marketer of branded mechanical and electrical motion control and power
generation products serving markets throughout the world. Regal Beloit is
headquartered in Beloit, Wisconsin, and has manufacturing, sales, and service
facilities throughout the United States, Canada, Mexico, Europe and Asia.
CAUTIONARY STATEMENT
This Quarterly Report 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 terminology such as “may,” “will,”
“plan,” “expect,” “anticipate,” “estimate,” “believe,” or “continue” or the
negative of these terms or other similar words. Actual results and events could
differ materially and adversely from those contained in the forward-looking
statements due to a number of factors, including:
•
economic changes in global markets where we do business, such as currency
exchange rates, inflation rates, interest rates, recession, foreign government
policies and other external factors that we cannot control;
•
unanticipated fluctuations in commodity prices and raw material costs;
•
cyclical downturns affecting the global market for capital goods;
•
unexpected issues and costs arising from the integration of acquired companies
and businesses;
•
marketplace acceptance of new and existing products including the loss of, or a
decline in business from, any significant customers;
• the
impact of capital market transactions that we may effect;
• the
availability and effectiveness of our information technology systems;
•
unanticipated costs associated with litigation matters;
•
actions taken by our competitors;
•
difficulties in staffing and managing foreign operations; and
• other
risks and uncertainties including but not limited to those described in Item
1A-Risk Factors of the
Company’s
Annual Report on Form 10-K filed on February 27, 2008 and from time to time in
our reports filed with U.S. Securities and Exchange Commission.
All subsequent written and oral forward-looking statements
attributable to us or to persons acting on our behalf are expressly qualified
in their entirety by the applicable cautionary statements. The forward-looking
statements included in this news release are made only as of their respective
dates, and we undertake no obligation to update these statements to reflect
subsequent events or circumstances. See also Item 1A - Risk Factors in
the Company’s Annual Report on Form 10-K filed on February 27, 2008.
Statement of income
In thousand of
Dollars
(Unaudited)
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|
Three Months Ended |
Nine Months ended |
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|
Sept 27, 2008 |
Sept 29, 2007 |
Sept 27, 2008 |
Sept 29, 2007 |
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Net Sales |
$
620,607 |
$449,374 |
$1,763,266 |
$1,327,815 |
|
Cost of Sales |
487,810 |
342,660 |
1,377,193 |
1,019,998 |
|
Gross Profit |
132,797 |
106,714 |
386,073 |
307,817 |
|
Operating Expenses
|
67,063 |
53,339 |
195,233 |
147,056 |
|
Income from
operations |
65,734 |
53,375 |
190,840 |
160,761 |
|
Interest Expense |
7,103 |
5,116 |
21,449 |
14,607 |
|
Interest Income |
418 |
365 |
1,333 |
695 |
|
Income Before
Taxes & Minority Interest |
59,049 |
48,624 |
170,724 |
146,849 |
|
Provision For
Income Taxes |
21,261 |
16,638 |
60,826 |
50,301 |
|
Income Before
Minority Interest |
37,788 |
31,986 |
109,898 |
96.548 |
|
Minority Interest
in Income, Net of Tax |
882 |
747 |
2,749 |
2,243 |
|
Net Income |
$
36,906 |
$ 31,239 |
$
107,149 |
$ 94,305 |
|
Earnings Per Share
of Common Stock: |
|
|
|
|
|
Basic |
$
1.18 |
$ 1.00 |
$
3.42 |
$ 3.02 |
|
Assuming Dilution
|
$
1.09 |
$ 0.92 |
$
3.20 |
$ 2.78 |
|
Cash Dividends
Declared |
$
0.16 |
$ 0.15 |
$
0.47 |
$ 0.44 |
|
|
|
|
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Weighted Average
Number of Shares Outstanding: |
|
|
|
|
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Basic |
31,357,433 |
31,320,838 |
31,326,675 |
31,227,373 |
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Assuming Dilution
|
33,715,881 |
34,104,123 |
33,452,880 |
33,943,057 |
Condensed Balance sheet
In Thousand of
Dollars
(Unaudited)
|
|
Sept .27, 2008 |
Dec. 29, 2007 |
|
|
|
|
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Assets |
|
|
|
Current Assets : |
|
|
|
Cash and Cash
Equivalents |
$
113,722 |
$ 42,574 |
|
Receivables |
394022 |
297569 |
|
Other Current
Assets |
75765 |
70148 |
|
Inventories |
330346 |
318200 |
|
Total Current
Assets |
913855 |
728491 |
|
|
|
|
|
Net Property , Plant and Equipment |
371629 |
339343 |
|
|
|
|
|
Other Non current Assets |
775224 |
794413 |
|
Total Assets |
$
2060708 |
$ 1862247 |
|
|
|
|
|
Liabilities and Shareholders Investment |
|
|
|
Accounts Payable |
$
252782 |
$ 183215 |
|
Current Maturities of Debt |
17159 |
5332 |
|
Other current Liabilities |
158239 |
123373 |
|
Long Term Debt |
554087 |
558918 |
|
Deferred Income taxes |
90533 |
75055 |
|
Other Non current Liabilities |
54271 |
47783 |
|
Minority Interest in Consolidated
Subsidiaries |
14053 |
10542 |
|
Shareholders Investment |
919584 |
858029 |
|
Total
Liabilities and Shareholder’s Investment |
$ 2060708 |
$ 1862247 |
Segment information
In Thousand of
Dollars
|
|
Mechanical Segment |
Electrical Segment |
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Three Month Ending |
Nine Month Ending |
Three Month Ending |
Nine Month Ending |
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|
Sept.27 2008 |
Sept.29 2007 |
Sept.27 2008 |
Sept.29 2007 |
Sept.27 2008 |
Sept.29 2007 |
Sept.27 2008 |
Sept.29 2007 |
|
Net Sales |
$
56119 |
$
53,300 |
$168,653 |
$164,958 |
$564,488 |
$396,074 |
$1,594,613 |
$1,162,857 |
|
Income from operations |
7,368 |
7,911 |
23,414 |
24,585 |
58,366 |
46,464 |
167,426 |
136,176 |
Condensed consolidated statement of Cash flows
In Thousand of
Dollars
|
|
(Unaudited) |
|
|
|
Nine Months Ended |
|
|
|
Sept
.27, 2008 |
Dec.
29, 2007 |
|
|
|
|
|
Cash flows from operating activities |
|
|
|
Net income |
$
107149 |
$ 94305 |
|
Adjustments to
reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
45,128 |
30,345 |
|
Minority interest |
2,749 |
2,243 |
|
Excess tax benefits from stock-based compensation |
(2,463) |
(6,681) |
|
Loss (gain) on sale of assets, net |
124 |
(34) |
|
Stock-based compensation expense |
3,356 |
2,802 |
|
Change in assets and liabilities, net |
2,540 |
45,337 |
|
Net cash provided by operating activities |
158,583 |
168,317 |
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
Additions to property, plant and equipment |
(43,947) |
(23,818) |
|
Business acquisitions, net of cash acquired |
(58,05) |
(253,241) |
|
Sale of property, plant and equipment |
2,158 |
160 |
|
Net cash used in investing activities |
(57,594) |
(276,899) |
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
Net (repayments) proceeds from short-term borrowing |
(10,030) |
8,200 |
|
Payments of long-term debt |
(293) |
(333) |
|
Net repayments under revolving credit facility |
(169,700) |
(76,200) |
|
Net repayments of commercial paper borrowings |
--- |
(49,000) |
|
Net proceeds from long-term borrowings |
165,000 |
250,000 |
|
Dividends paid to shareholders |
(14,404) |
(13,394) |
|
Purchases of treasury stock |
(4,191) |
---- |
|
Proceeds from the exercise of stock options |
2,740 |
1,684 |
|
Excess tax benefits from stock-based compensation |
2,463 |
6,681 |
|
Distributions to minority partners |
--- |
(106) |
|
Financing feeds paid |
(454) |
(1,397) |
|
Net cash (used in) provided by financing activities |
(28,869) |
126,135 |
|
|
|
|
|
EFFECT OF EXCHANGE RATES ON CASH |
(972) |
1,491 |
|
Net increase in cash and cash equivalents |
71,148 |
19,044 |
|
Cash and cash equivalents at beginning of period |
42,574 |
36,520 |
|
Cash and cash equivalents at end of period |
$
113,722 |
$ 55,564 |
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.48.99 |
|
UK Pound |
1 |
Rs.72.14 |
|
Euro |
1 |
Rs.61.57 |
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)