Regal Beloit(US:RRX)2025-05-06 17:33Financial Performance - Net sales for the three months ended March 31, 2025, were $1,418.1 million, a decrease of 8.3% compared to $1,547.7 million for the same period in 2024[12]. - Gross profit for the same period was $527.6 million, down from $553.1 million, reflecting a gross margin of 37.2%[12]. - Net income attributable to Regal Rexnord Corporation increased to $57.3 million, compared to $19.8 million in the prior year, representing a growth of 189.4%[12]. - Earnings per share attributable to Regal Rexnord Corporation were $0.86, significantly higher than $0.30 for the same quarter last year[12]. - Comprehensive income for the three months ended March 31, 2025, was $181.9 million, compared to a loss of $67.5 million in the prior year[14]. - Net income for the three months ended March 31, 2025, was $57.5 million, compared to $20.4 million for the same period in 2024, representing an increase of 181.8%[21]. - The company reported a consolidated income from operations of $159.7 million for Q1 2025, an increase from $133.9 million in Q1 2024[114]. Assets and Liabilities - Total assets as of March 31, 2025, were $14,032.3 million, slightly down from $14,033.7 million at the end of 2024[16]. - Current liabilities increased to $1,218.4 million from $1,215.7 million, with accounts payable rising to $589.3 million[16]. - Long-term debt decreased to $5,291.8 million from $5,452.7 million, indicating a reduction in leverage[16]. - Cash and cash equivalents were $305.3 million, down from $393.5 million at the end of 2024[16]. - Total debt as of March 31, 2025, was $5,296.9 million, a decrease from $5,457.7 million as of December 31, 2024[54]. - As of March 31, 2025, total current assets were $1,165.6 million, an increase from $1,132.2 million as of December 31, 2024[139]. Cash Flow and Capital Expenditures - Net cash provided by operating activities increased to $102.3 million in Q1 2025 from $83.1 million in Q1 2024, a growth of 23.0%[21]. - Cash flow provided by operating activities increased by $19.2 million to $102.3 million for the three months ended March 31, 2025, compared to $83.1 million in 2024[124]. - Cash flow used in investing activities decreased to $3.5 million for the three months ended March 31, 2025, from $17.5 million in the same period in 2024[125]. - Capital expenditures for the three months ended March 31, 2025, totaled $16.8 million[47]. - The company anticipates capital spending for property, plant, and equipment to be approximately $120 million in 2025[126]. Segment Performance - North America generated $1,002.3 million in revenue for Q1 2025, accounting for 70.6% of total revenue, while Asia contributed $95.0 million, representing 6.7%[29]. - The Automation & Motion Control segment reported net sales of $396.3 million, a decrease of $3.9 million or 1.0% compared to Q1 2024, with a negative foreign currency translation impact of 1.4%[117]. - The Industrial Powertrain Solutions segment had net sales of $612.7 million, a decrease of $30.7 million or 4.8% compared to Q1 2024, with an organic sales decline of 3.4%[118]. - The Power Efficiency Solutions segment achieved net sales of $409.1 million, an increase of $23.8 million or 6.2% compared to Q1 2024, driven by an organic sales increase of 8.0%[119]. Tax and Interest - The effective tax rate for the three months ended March 31, 2025, was 21.2%, a decrease from 34.8% for the same period in 2024, primarily due to a non-deductible loss from the divestiture of the industrial motors and generators businesses[70]. - The average daily balance in borrowings under the Multicurrency Revolving Facility was $81.4 million for the three months ended March 31, 2025, compared to $98.5 million for the same period in 2024[61]. - The company paid $76.9 million in interest during the three months ended March 31, 2025, compared to $94.8 million in the same period of 2024, a reduction of 18.9%[21]. Shareholder Actions - The company declared dividends of $0.35 per share, totaling $23.2 million for the quarter[18]. - The Company authorized a share repurchase program of up to $500.0 million, with $145.0 million remaining available for purchase as of March 31, 2025[167]. - Curtis Stoelting terminated a Rule 10b5-1 trading arrangement on February 14, 2025, which allowed for the potential sale of up to 4,500 shares[168]. - A new Rule 10b5-1 trading arrangement was entered into by Mr. Stoelting for the sale of up to 9,000 shares, effective May 26, 2025[169]. Derivatives and Hedging - The Company has commodity forward contracts to hedge forecasted purchases of commodities, with a notional amount of $56.0 million for copper as of March 31, 2025[84]. - The Company had currency forward contracts with a notional amount of $1,227.5 million for euros as of March 31, 2025[84]. - The fair value of derivative currency contracts as of March 31, 2025, was $18.7 million, compared to $1.0 million on December 31, 2024[92]. - The company recorded an estimated liability for incurred claims related to sub-fractional motors, but cannot assure that these claims will not materially affect its subsidiary's financial condition[74]. - The company is exposed to foreign currency risks from operations, including translation of local currency balances and intercompany loans, and aims to minimize this exposure through foreign currency exchange contracts[146]. Restructuring and Future Outlook - The restructuring costs for the three months ended March 31, 2025, totaled $9.8 million, slightly up from $9.3 million in the same period of 2024[96]. - The company expects to incur approximately $16.8 million in future restructuring charges throughout the remainder of 2025[96]. - The company plans to mitigate the impact of current tariffs on 2025 earnings through various actions[113]. - The company expects to incur increased costs due to tariffs imposed by the US government and retaliatory tariffs from other countries, which may impact financial results[159].