Business Operations and Strategy - The Company sold its industrial motors and generators businesses for $444.0 million on April 30, 2024, which represented the substantial majority of the Industrial Systems operating segment[24]. - The total purchase price for the acquisition of Altra was $5.1 billion, completed on March 27, 2023, which is expected to generate significant revenue and cost synergies[26]. - The Company operates in three segments: Automation & Motion Control, Industrial Powertrain Solutions, and Power Efficiency Solutions, each serving diverse markets[17]. - The Company plans to leverage its strong free cash flows to enhance growth and raise shareholder returns, maintaining a long track record of strong free cash flow generation[30]. - The Company aims to double its new product vitality in the medium term, focusing on serving secular growth markets and enhancing energy efficiency[23]. - The Company is focused on improving business durability by increasing the consistency of sales performance and targeting markets with secular growth tailwinds[23]. - The Company emphasizes innovation through research and development, targeting energy efficiency and smart product solutions to gain market share[34]. - The company is expanding into new markets, which requires significant investment and carries risks related to demand fluctuations and supply chain disruptions[99]. - The company plans to continue making acquisitions as part of its growth strategy, but successful integration and realization of anticipated benefits are uncertain[110]. Financial Performance - The company reported annual net sales of $5.9 billion for the year ended December 31, 2025, compared to $6.0 billion for the year ended December 31, 2024, reflecting a slight decrease[174]. - Net sales for 2025 were $5,934.5 million, a decrease of $99.3 million, or 1.6%, compared to 2024, primarily due to divestitures impacting sales by 2.8%[195]. - Gross profit for 2025 increased by $26.8 million, or 1.2%, driven by a $41.9 million increase in Industrial Powertrain Solutions and a $26.8 million increase in Power Efficiency Solutions[195]. - Operating expenses for 2025 totaled $1,537.0 million, a decrease of $24.0 million, or 1.5%, primarily due to the impact of divestitures[195]. - Cash flow provided by operating activities was $990.8 million in 2025, an increase of $381.4 million from 2024, driven by cash proceeds from the sale of receivables[203]. - Cash flow used in investing activities was $71.0 million in 2025, compared to cash flow provided by investing activities of $275.4 million in 2024, mainly due to proceeds from the sale of the industrial motors and generators businesses in 2024[205]. - Cash flow used in financing activities decreased to $814.1 million in 2025 from $1,095.8 million in 2024, with net debt repayments of $709.4 million in 2025, down by $228.9 million compared to 2024[207]. - The effective tax rate for 2025 was 20.3%, consistent with the effective tax rate for 2024 of 20.0%[199]. Workforce and Training - As of December 31, 2025, the company employed approximately 29,200 associates worldwide, with about 28,700 being full-time[42]. - In 2025, 99.6% of global employees completed training on the company's Code of Business Conduct and Ethics[46]. - The company has a structured annual goal-setting process for associates, linking performance to pay through evaluations and coaching[45]. - The company conducted a global associate engagement survey in 2025 and executed a robust action plan in response[47]. Environmental and Social Responsibility - The company aims to achieve carbon neutrality across its absolute Scope 1 and 2 emissions by 2032[49]. - The company is focused on innovation and product design to increase overall energy efficiency and reduce Scope 3 emissions associated with product use[49]. - The company allocated $1.1 million to charitable organizations across the US, Mexico, and Canada in 2025[48]. - The company has committed to achieving absolute Scope 1 and Scope 2 carbon emission neutrality by 2032 and aims for net zero across all scopes in the long term[80]. Risks and Challenges - The company is dependent on a limited number of suppliers for key materials, which may affect its business and results of operations[57]. - The volatility in prices and availability of raw materials such as steel, copper, and rare earth magnets may adversely affect gross margins[58]. - A significant portion of revenue is dependent on several key OEM customers and distributors, and any loss or reduction in purchases could materially affect the business[62]. - The company faces demand uncertainty as many orders are placed through purchase orders rather than long-term contracts, leading to unpredictable revenue patterns[63]. - The company relies on estimated demand forecasts, and inaccuracies in these forecasts could adversely affect revenue and financial condition[69]. - The introduction of evolving technologies, particularly in AI and machine learning, poses risks related to compliance, security, and competitive disadvantage[61]. - Climate change and related regulations could disrupt operations and increase costs, impacting the overall business strategy[76]. - The company is subject to various financial covenants that could limit its ability to borrow additional funds or take advantage of business opportunities[75]. - The company’s performance is vulnerable to general economic conditions, which could affect its ability to service debt and fund liquidity needs[72]. - The company is exposed to risks from commodity, currency, and interest rate fluctuations, which may adversely impact financial performance[117]. - Foreign currency fluctuations could affect revenues and operating costs, as net assets and earnings from foreign subsidiaries are translated into US Dollars[118]. - The company is subject to various tax laws and regulations, and claims from taxing authorities could adversely impact operating results and financial position[119]. - Required cash contributions to pension plans may increase, impacting cash available for other obligations and overall financial condition[120]. - The company faces significant pressure from customers to reduce costs, which could adversely affect gross margins if cost savings are not generated[100]. - Unfavorable changes in political and regulatory climates in countries where the company operates could materially affect its financial condition and cash flows[102]. - The company faces risks related to labor disputes, which could disrupt operations and increase labor costs if unionized workers engage in strikes or work stoppages[106]. - Integration costs and challenges from past and future acquisitions, such as the Altra Transaction, could adversely affect future results and the market price of the company's common stock[107][108]. Cybersecurity and Compliance - Operations are highly dependent on IT infrastructure, and any failures or breaches could significantly impact business operations and revenue[82]. - Cybersecurity threats are increasing, and the company may face unauthorized disclosures of information, leading to financial liability and reputational damage[83]. - The company has established a comprehensive cybersecurity program to manage risks and protect information systems[142][150]. - Cybersecurity threats have not materially affected the company to date, but the threat environment is increasingly challenging[153]. - The company is subject to various domestic and foreign laws regarding improper payments and data privacy, which could lead to civil or criminal penalties[132][133]. - Compliance with evolving data privacy laws, including GDPR, may increase operational costs and expose the company to significant fines for non-compliance[134]. - The company is subject to environmental laws that could impose significant costs and liabilities for non-compliance[136][138]. Corporate Governance and Financial Management - The company maintains a flexible global manufacturing presence, which aids in navigating geopolitical and supply chain disruptions[23]. - The company has approximately $4.8 billion in aggregate debt outstanding as of December 31, 2025, which includes debt from the Altra Transaction[73]. - The company has a share repurchase program authorized for up to $500 million, with $145 million remaining available as of December 31, 2025[164]. - The company did not repurchase any shares during 2025, but purchased 332,439 shares for $50 million in 2024[164]. - The company maintained a current ratio of 2.1:1 as of December 31, 2025, down from 2.3:1 in 2024, indicating a decrease in short-term liquidity[208]. - The company repatriated approximately $457.4 million of foreign cash in 2025 to support debt repayment, with $429.7 million of cash held by foreign subsidiaries available for domestic operations if needed[208]. - The company had no borrowings under the 2025 Term Facility as of December 31, 2025, but borrowed $850.0 million on February 12, 2026, to refinance the 2026 Senior Notes[210]. - The company had $1,500.0 million of available borrowing capacity under the 2025 Revolving Facility as of December 31, 2025, with a non-use fee applicable on the unused amount[211]. - The company plans to use cash generated from operations to fund interest obligations and reduce debt principal over time[213]. - The company had $1,100.0 million of 2026 Senior Notes maturing on February 16, 2026, which were refinanced through the 2025 Term Facility[212].

Regal Rexnord Corp (NYSE:RRX) has emerged as one of the biggest winners in the automation rally. RRX stock has surged roughly 67% over the past three months as investors increasingly bet on robotics as the next major industrial growth engine. • Regal Rexnord stock is moving in positive territory. Why is RRX stock advancing?Humanoid Robots Drive New Growth NarrativeAccording to JPMorgan analyst Tomohiko Sano, the company is now directly exposed to one of the most compelling frontiers in automation: humanoid ...

Regal Rexnord Conference Call Summary Company Overview - **Company**: Regal Rexnord - **Industry**: Power transmission and automation solutions Key Points Company Transformation - Regal Rexnord has undergone significant transformation over the past seven years, shifting from a commodity product supplier to a technology-driven solutions provider [2][3] - Gross margins improved from 26% to 38%, with a target of reaching 40% [2] - The company has decentralized operations into 20 divisions, enhancing strategic focus and market growth [3] Strategic Focus - The company emphasizes the 80/20 principle, focusing on high-value customers and products, which has been ingrained in the company culture [5][6] - Regal Rexnord has successfully integrated acquisitions from Rexnord and Altra, achieving $325 million in synergies and a path to $250 million in incremental cross-sell by 2028 [8][9] Market Position and Growth - Approximately 40% of Regal's portfolio is correlated with the Purchasing Managers' Index (PMI) [14] - The company aims to double its solution sales, which currently contribute high single digits to growth, by 2027 [19] - Regal is transitioning from short-cycle to longer-cycle projects, with a third of its business now in long-cycle segments [27] Financial Targets - The company targets a gross margin of 40% and an adjusted EBITDA margin of 25% by 2027 [32] - Current gross margins are around 38%, with expectations to reach 39% by the end of the year, despite challenges from tariffs and supply chain issues [33][34] Data Center Market - Regal is experiencing strong demand in the data center market, with a current funnel of $600 million in potential orders [42] - The company has expanded its facilities in Canada and Texas to support this growth, with expectations to ship the majority of orders by 2027 [39][41] Product Development and Innovation - Regal is developing modular solutions for data centers, responding to customer demands for integrated systems rather than individual components [38] - The EPOD product line is expected to achieve a 20%+ EBITDA margin, with potential for improvement as production ramps up [46] Segment Performance - The Industrial Power Solutions (IPS) segment is expected to see low single-digit organic growth, influenced by market conditions and order trends [59][60] - The Power Electronics Solutions (PES) segment is critical for the overall portfolio, providing cash flow to support acquisitions, despite facing challenges in the residential HVAC market [62][63] Automation and Future Opportunities - Regal is well-positioned in the automation market, particularly in defense and motion control, with a strong order momentum [68][70] - The company is exploring humanoid robotics, leveraging its existing product lines to create integrated solutions [80][81] Conclusion - Regal Rexnord is poised for growth with a strong focus on solutions, strategic acquisitions, and market expansion, particularly in the data center and automation sectors. The company is navigating current market challenges while setting ambitious financial targets for the coming years [12][92]

PresentationUnknown Analyst Good morning. It's a pleasure today to welcome Reckitt back to CAGNY. Today, we have CEO, Kris Licht; and CFO, Shannon Eisenhardt, with us. Reckitt has been on an incredible journey since he last joined the CAGNY stage in 2024. First, in announcing a strategy update that very summer and then successfully delivering against that plan and exceeding it with asset sales, productivity savings, strong performance in core Reckitt and home to many of the brands that we know near and dear ...

Question-and-Answer SessionMaybe starting with you, Louis, just with your time at Regal coming to an end, would be great just for you to talk a little bit about the company you inherited and how it's transformed over your tenure and really what excites you about opportunities ahead for Regal?Louis PinkhamCEO & Director Yes. So thanks, Kyle, for the question. First of all, appreciate the invite from Citi and thanks for hosting us. And thanks to our investors who are here and listening for your interest. Yes, ...

Question-and-Answer SessionMaybe start off with the broad demand backdrop specifically around the shorter cycle industrial activity in IPS and AMC. A lot of people sort of curious about if there's real green shoots in the U.S. industrial economy. Kind of what's your perspective on that?Louis PinkhamCEO & Director I think the indicators are pretty mixed at this point. And by the way, Julian, thank you for hosting us. It's a pleasure to be here, and it's good to see all of our investors, but to your question, ...

Regal Rexnord (NYSE:RRX) FY Conference February 18, 2026 01:50 PM ET Company ParticipantsLouis Pinkham - CEORob Rehard - CFOConference Call ParticipantsJulian Mitchell - Equity Research AnalystJulian MitchellGreat. Well, thanks, everyone for being here. It's my pleasure to have up next, Regal Rexnord Corporation, Louis Pinkham, Chief Executive, and Rob Rehard, our CFO. Maybe start off with, you know, the broad demand backdrop, specifically around the shorter cycle industrial activity in IPS and AMC. A lot o ...

INVESTOR PRESENTATION FEBRUARY 2026 Forward Looking Statements And Non-GAAP Financial Measures 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 ...

Core Insights - Regal Rexnord Corporation will participate in upcoming conferences, including Citi's 2026 Global Industrial Tech & Mobility Conference and Barclays 43rd Annual Industrial Select Conference, both taking place in Miami [1] Company Overview - Regal Rexnord employs 30,000 associates globally, focusing on sustainable solutions that power, transmit, and control motion [1] - The company offers electric motors and air moving subsystems, along with a portfolio of engineered power transmission components and subsystems for industrial applications [1] - Regal Rexnord's automation offerings include controllers, drives, precision motors, and actuators for various applications, from factory automation to surgical tools [1] Market Segments - The company's end markets include discrete automation, food & beverage, aerospace, medical, data center, energy, residential and commercial buildings, general industrial, and metals and mining [1] - Regal Rexnord operates through three segments: Automation & Motion Control, Industrial Powertrain Solutions, and Power Efficiency Solutions [1] Recent Performance - The company reported strong fourth-quarter 2025 financial results, highlighting organic growth acceleration and data center orders valued at approximately $735 million [1] - Daily orders increased by 53.8% compared to the previous year, driven by significant wins in data center traction [1]

Core Insights - The company reported improved margins with an adjusted gross margin of 37.6%, up 50 basis points year over year, driven by synergies, price realization, and volume leverage [1] - Fourth-quarter organic revenue rose 2.9% year over year, with significant growth in the Automation and Motion Control (AMC) segment, which grew over 15% organically [2] - The CEO highlighted solid adjusted EPS growth, strong orders, and a rising backlog, with fourth-quarter orders increasing 53.8% year over year and a book-to-bill ratio of 1.48 [4][5] Financial Performance - Adjusted EBITDA margin was 21.6%, roughly flat year over year, while adjusted EPS for the quarter was $2.51, reflecting a 7.3% increase [1] - For fiscal year 2025, orders grew 15.5% on a daily basis, with adjusted EPS rising to $9.65, up nearly 6% [14] - The company generated $141 million of free cash flow in the quarter and ended with net leverage of 3.1x [7] Segment Performance - The AMC segment saw organic sales grow 15.2% year over year, with adjusted EBITDA margin at 20.5%, down about one point from the prior year [17] - Industrial Powertrain Solutions (IPS) reported organic sales growth of 3.7% year over year, with adjusted EBITDA margin at 25.7% [17] - Power Efficiency Solutions (PES) experienced a decline in organic sales by 10.7% year over year, primarily due to weaker residential HVAC performance [17] Order Activity and Backlog - The company highlighted $735 million in fourth-quarter orders for its E-Pod data-center power solution, contributing to a backlog that is approximately 50% higher year over year [5][7] - Daily order growth surged 53.8% in Q4, with a current pipeline of about $600 million for the broader data center business [6][13] - Management expects E-Pod projects to carry adjusted EBITDA margins in the 20%+ range, with shipments anticipated to begin in early 2027 [10][12] Guidance and Future Outlook - For 2026, management guided to roughly 3% sales growth, an adjusted EBITDA margin of 22.5%, and adjusted EPS of $10.20–$11.00 [6][17] - The company plans to lower net leverage to approximately 2.7x by year-end 2026, with a focus on debt paydown as a primary capital allocation priority [20] - Management expects to realize $40 million of cost synergies in 2026, treating it as a contingency against potential P&L pressures [16] Strategic Focus - The company is addressing ongoing headwinds from rare earth magnet availability, particularly affecting parts of AMC, with mitigation plans in place [19] - Data centers remain a strategic focus, with management emphasizing the importance of this segment for future growth [13]