Rexnord Corp. reports its 3rd Quarter Fiscal 2014 results.
Todd A. Adams, President and Chief Executive Officer, commented, "We are pleased with our third quarter results and overall levels of core growth, profitability and free cash flow. As it relates to each of our platforms, the 12 percent core growth and 160 basis point adjusted operating margin improvement in our Water Management platform aligns with our expectations of accelerating growth and margin improvement within the platform while the outlook in our served markets continues to improve. In Process & Motion Control, we are encouraged by the very strong margin performance amidst, in aggregate, a stable set of industrial end markets that we expect to improve over the next several quarters. Finally, our strong free cash flow in the quarter allowed us to both de-lever and acquire Precision Gear Holdings, which expands our exposure to the energy and aerospace end markets."
Adams continued, "We are raising our full year adjusted earnings per share guidance to $1.35 to $1.39 reflecting our third quarter results, latest outlook, benefit of the recently completed Precision Gear Holdings acquisition as well as the inclusion of incremental expenses we will incur related to acquisition opportunities that we are currently pursuing."
In a release on January 28, the Company noted that Process & Motion Control ("PMC") net sales were $301 million in the third quarter of fiscal 2014 and $303 million in the third quarter of fiscal 2013. Core net sales decreased 1 percent year-over-year as low single digit sales growth in the majority of the Company's end- markets was offset by a decline in sales to its bulk material handling markets.
PMC Adjusted EBITDA in the third quarter was $76 million and Adjusted EBITDA as a percentage of net sales increased 60 basis points from the prior year period to 25.3 percent of net sales.
Water Management net and core sales increased 12 percent from the prior year to $188 million in the third quarter of fiscal 2014. The growth in sales was primarily driven by market share gains in the majority of the Company's served markets, as well as increased alternative market sales in its non-residential construction end- markets.
Water Management Adjusted EBITDA in the third quarter was $28 million and Adjusted EBITDA as a percentage of net sales increased 100 basis points from the prior year period to 15.0 percent of net sales.
Core sales excludes the impact of acquisitions, divestitures and foreign currency translation. Management believes that core sales facilitates easier comparison of the Company's net sales performance with prior and future periods and to its peers.
Headquartered in Milwaukee, Wisconsin, Rexnord is comprised of two strategic platforms, Process & Motion Control and Water Management.
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