Regal Beloit Corp. reported financial results for the fourth quarter and fiscal 2013.
In a release on Feb. 10, the Company said net sales for the fourth quarter 2013 were $727.3 million compared to $715.6 million for the fourth quarter 2012. Net income (loss) for the fourth quarter 2013 was $(33.2) million compared to $29.9 million for the fourth quarter 2012. Included in the fourth quarter 2013 results were goodwill and intangible asset impairments and other related items of $81.0 million, or $74.7 million after tax. Diluted earnings (loss) per share for the fourth quarter 2013 were $(0.74), including the impact of $1.65 per share of the goodwill and intangible asset impairments and other related items and the higher share count, compared to $0.70 for the fourth quarter of 2012. Adjusted diluted earnings per share of the fourth quarter 2013 were $0.97 compared to $0.76 for the fourth quarter of 2012.
Net sales for fiscal 2013 were $3,095.7 million compared to $3,166.9 million in 2012.Diluted earnings per share for fiscal 2013 were $2.64 compared to $4.64 in 2012. Adjusted diluted earnings per share for fiscal 2013 were $4.36 compared to $4.73 in 2012.
"Regal ended the year with strong performance in the fourth quarter. We had modest revenue growth and double digit growth in adjusted earnings," said Mark Gliebe, Chairman and CEO. "We experienced revenue growth in our North American residential HVAC, power generation, oil and gas and China based businesses, which offset weaker revenue in our North American commercial & industrial motors and our India and Australia based businesses. Our operating teams delivered to our expectations and on an adjusted basis we exceeded our overall earnings guidance as a result of a $0.12 per share unanticipated tax benefit."
Fourth quarter 2013 net sales to regions outside the United States increased 1.0 percent compared to fourth quarter 2012 and represented 36.3 percent of total net sales. Fiscal 2013 net sales to regions outside the United States represented 34.1 percent of total net sales. Foreign currency exchange rates negatively impacted total net sales by 0.9 percent and international sales by 2.5 percent for the fourth quarter 2013 compared to the fourth quarter 2012. For fiscal 2013, foreign currency exchange rates negatively impacted total net sales by 0.9 percent and international sales by 2.7 percent compared to fiscal 2012.
In the fourth quarter 2013, sales of high efficiency products represented 22.1 percent of net sales. Fiscal 2013 sales of high efficiency products represented 20.6 percent of net sales.
Fourth quarter 2013 and fiscal 2013 income (loss) from operations included an $81.0 million expense for goodwill and intangible asset impairments and other related items of which $68.9 million is attributable to the Electrical segment and $12.1 million is attributable to the Mechanical segment. The effective tax rate for the fourth quarter 2013 was a tax benefit of 10.1 percent compared to a 15.6 percent provision for the fourth quarter of 2012. The change in the fourth quarter effective tax rate was primarily driven by a $6.4 million tax benefit from asset impairments and other related items. The fourth quarter earnings also benefited from favorable tax adjustments related to the global distribution of earnings and changes in the Mexican tax code enacted in December 2013 totaling $5.3 million ($0.12 EPS), which were not included in the Company's 18 percent effective tax rate guidance for the fourth quarter. The fiscal 2013 effective tax rate was 26.1 percent compared to 25.8 percent for fiscal 2012.
For the fourth quarter 2013, net cash provided by operating activities was $64.7 million. For the fourth quarter 2013, free cash flow represented 118.8 percent of adjusted net income. Fiscal 2013 net cash provided by operating activities was $305.0 million and free cash flow represented 115.1 percent of adjusted net income.
"Our first quarter guidance includes our typical seasonality in residential HVAC, modest growth in our commercial and industrial motors businesses and continued growth in both our China and global power generation businesses. We expect our markets in India and Australia to remain challenged," said Gliebe. "While we anticipate modest overall revenue growth in the first quarter, we project margin headwinds that we expect to moderate by the end of the second quarter. We expect first quarter diluted earnings per share to be $0.90 to $0.98. Adding back $0.09 of restructuring charges and purchase accounting, adjusted diluted earnings per share is expected to be $0.99 to $1.07."
Regal Beloit Corp. is a manufacturer of electric motors, mechanical and electrical motion controls and power generation products serving markets throughout the world. Regal Beloit is headquartered in Beloit, Wis., and has manufacturing, sales and service facilities throughout the United States, Canada, Mexico, Europe and Asia.
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