REGAL-BELOIT NEWS RELEASE
CORPORATION FOR RELEASE ON OR AFTER: January 29, 2002
FOR ADDITIONAL PLEASE INFORMATION PLEASE CONTACT:
Kenneth F. Kaplan
Vice President, Chief Financial Officer and Secretary
Phone: (608)364-8800
"At the Heart of What Drives Your World"
Page 1 of 4
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REGAL-BELOIT CORPORATION REPORTS
FOURTH QUARTER AND YEAR 2001 FINANCIAL RESULTS
January 29, 2002 (Beloit, WI): James L. Packard, Chairman, President and Chief
Executive Officer of Regal-Beloit Corporation (AMEX:RBC), today reported 2001
net sales of $663,571,000 and net income of $19,590,000, or $.93 per share. (All
EPS values are assuming dilution.)
Earnings per share in 2001 were $.18 in the fourth quarter and $.93 for 2001, as
compared to $.31 and $1.61 in the comparable periods of 2000, respectively. Net
income was $3,761,000 in the fourth quarter and $19,590,000 for the full year,
decreases of 41.7% and 42.0% from net income of $6,448,000 and $33,771,000 in
2000's fourth quarter and full year, respectively.
The Company's fourth quarter 2001 net sales were $147,784,000, a 13.5% decrease
from $170,811,000 in comparable 2000, due primarily to weak product demand
across almost all of the Company's markets as a result of the U.S. economic
recession, which deepened following September 11, 2001. Mechanical Group fourth
quarter 2001 sales were 17.2% lower than comparable 2000, while sales of the
Electrical Group in the fourth quarter were 11.6% below 2000 fourth quarter
sales. (See accompanying financial schedules for segment data.)
Net sales of the Company for the year 2001 were $663,571,000, 10.9% higher than
2000 sales of $598,203,000. Mechanical Group sales in 2001 were 15.4% below 2000
sales, while Electrical Group 2001 sales represent a 29.1% increase from 2000.
Sales in 2001 included, for the full year, the Leeson Electric and Thomson
Technology acquisitions made in 2000; excluding these acquisitions, sales of the
Company in 2001 were 11.4% below 2000 sales and for the Electrical Group in 2001
were 8.6% lower than in 2000.
Income from operations was $56,060,000 for the Company in 2001, a decrease of
21.7% from 2000. As a percent of net sales, income from operations declined to
8.4% of net sales in 2001 from 12.0% in 2000. The decrease resulted primarily
from lower sales volumes (excluding acquisitions), reduced production levels to
achieve inventory reductions and to increased price competition, all of which
contributed to a decrease in gross profit as a percent of sales from 2000 to
2001, and to an increase in operating expenses as a percent of sales.
Interest expense of the Company was $22,239,000 in 2001 as compared to
$15,332,000 in 2000. The increase was due to increased long-term debt borrowed
in September 2000 to finance the Leeson acquisition. Reduced debt outstanding
during the year and lower interest rates the Company paid on its debt as
interest rates in the economy declined throughout the year, resulted in
quarterly reductions in interest expense as the year progressed.
Corporate Offices
200 State Street o Beloit, WI 53511-6254
608-364-8800 o Fax: 608-364-8818
Website: www.regal-beloit.com
REGAL-BELOIT NEWS RELEASE
CORPORATION FOR RELEASE ON OR AFTER: January 29, 2002
FOR ADDITIONAL PLEASE INFORMATION PLEASE CONTACT:
Kenneth F. Kaplan
Vice President, Chief Financial Officer and Secretary
Phone: (608)364-8800
"At the Heart of What Drives Your World"
Page 2 of 4
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Cash flow from operations was $17,488,000 in the fourth quarter of 2001 and
$81,769,000 for all of 2001. Nearly $33,700,000 of the annual total was due to
receivables and inventory reductions in 2001. Capital expenditures in 2001 were
$15,426,000 while depreciation was $22,294,000 and amortization $9,504,000. In
the fourth quarter $9,024,000 of debt was repaid, reducing debt outstanding at
December 31, 2001 to $345,667,000 versus $393,510,000 at year-end 2000.
James L. Packard, Chairman, President and Chief Executive Officer commented,
"While our reported earnings for the fourth quarter of 2001 were as forecasted,
our sales and earnings were both impacted by the continuing recession and the
events of September 11. During these difficult times, our people have again
risen to the challenge and accomplished many initiatives that we believe will
enhance the future performance of the Company."
"In 2001, a period of declining sales, our operating units reduced inventories
over $16,000,000, a difficult accomplishment, given our fast delivery business
model. One of the major contributors to our ability to reduce inventories has
been the substantial increase in our truck fleet and distribution system
capabilities. These improvements, together with the significant expansion of our
logistics operations, reduce costs and delivery time for both our customers and
ourselves. Overall, our cash flow was very strong, enabling us to reduce our
outstanding debt by nearly $48,000,000 during the year."
"We also organized our Motor Technologies Group. This Group's focus centralizes
and manages all our motor manufacturing, purchasing, engineering, accounting,
information technology, and quality control activities. This has allowed us to
consolidate operations, implement best practices and effect significant cost
reductions in each of these functions. This past year also provided the time and
focus to bring about several new product introductions, examples of which were
higher efficiency motors, higher efficiency gearboxes, and large frame
generators."
Mr. Packard added, "We continued to improve this past year on our very solid
foundation for the future growth of revenues and earnings of our Company. While
we can't clearly predict when the upturn in our business will take place, we do
not sense a major change from fourth quarter 2001 levels. We estimate that our
first quarter earnings will be in a range of $.24-$.28 per share, including $.08
per share for the FAS 142 accounting change which ends most goodwill
amortization."
Regal-Beloit Corporation is a leading manufacturer of 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 and
Canada, and in Europe and the Far East.
Corporate Offices
200 State Street o Beloit, WI 53511-6254
608-364-8800 o Fax: 608-364-8818
Website: www.regal-beloit.com
REGAL-BELOIT NEWS RELEASE
CORPORATION FOR RELEASE ON OR AFTER: January 29, 2002
FOR ADDITIONAL PLEASE INFORMATION PLEASE CONTACT:
Kenneth F. Kaplan
Vice President, Chief Financial Officer and Secretary
Phone: (608)364-8800
"At the Heart of What Drives Your World"
Page 3 of 4
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Regal-Beloit will be holding a telephone conference call pertaining to this news
release at 1:30 PM CST (2:30 PM EST) on Tuesday, January 29, 2002. Interested
parties should call 1-800-553-0351 a few minutes before the call is scheduled,
referencing the Regal-Beloit conference call.
CAUTIONARY STATEMENT
The following is a cautionary statement made under the Private Securities
Litigation Reform Act of 1995: With the exception of historical facts, the
statements contained in this news release may be forward looking statements.
Actual results may differ materially from those contemplated. Forward looking
statements involve risks and uncertainties, including but not limited to, the
following risks: 1) cyclical downturns affecting the markets for capital goods,
2) substantial increases in interest rates that impact the cost of the Company's
outstanding debt, 3) the success of Management in increasing sales and
maintaining or improving the operating margins of its businesses, 4) the
availability of or material increases in the costs of select raw materials or
parts, and 5) actions taken by competitors. Investors are directed to the
Company's documents, such as its Annual Report on Form 10-K and Form 10-Q's
filed with the Securities and Exchange Commission.
Corporate Offices
200 State Street o Beloit, WI 53511-6254
608-364-8800 o Fax: 608-364-8818
Website: www.regal-beloit.com
REGAL-BELOIT NEWS RELEASE
CORPORATION FOR RELEASE ON OR AFTER: January 29, 2002
FOR ADDITIONAL PLEASE INFORMATION PLEASE CONTACT:
Kenneth F. Kaplan
Vice President, Chief Financial Officer and Secretary
Phone: (608)364-8800
"At the Heart of What Drives Your World"
Page 4 of 4
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STATEMENTS OF INCOME (Unaudited) (Audited)
In Thousands of Dollars Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
---- ---- ---- ----
Net Sales.............................. $ 147,784 $ 170,811 $ 663,571 $ 598,203
Cost of Sales ......................... 110,593 125,688 497,694 440,774
---------- ---------- ---------- ----------
Gross Profit ........................ 37,191 45,123 165,877 157,429
Operating Expenses .................... 26,369 26,485 109,817 85,821
---------- ---------- ---------- ----------
Income From Operations............... 10,822 18,638 56,060 71,608
Interest Expense....................... 4,233 8,100 22,239 15,332
Interest Income........................ 72 156 221 274
---------- ---------- ---------- ----------
Income Before Taxes.................. 6,661 10,694 34,042 56,550
Provision For Income Taxes ............ 2,900 4,246 14,452 22,779
---------- ---------- ---------- ----------
Net Income .......................... $ 3,761 $ 6,448 $ 19,590 $ 33,771
========== ========== ========== ==========
Per Share of Common Stock:
Earnings Per Share .................. $ .18 $ .31 $ .94 $ 1.61
========== ========== ========== ==========
Earnings Per Share-Assuming
Dilution........................... $ .18 $ .31 $ .93 $ 1.61
========== ========== ========== ==========
Cash Dividends Declared.............. $ .12 $ .12 $ .48 $ .48
========== ========== ========== ==========
Average Number of Shares Outstanding... 20,874,882 20,969,688 20,868,896 20,984,423
========== ========== ========== ==========
Average Number of Shares-Assuming
Dilution............................. 21,129,920 20,969,688 21,124,204 20,996,189
========== ========== ========== ==========
SEGMENT INFORMATION
In Thousands of Dollars
(Unaudited)
Mechanical Group Electrical Group
Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2001 2000 2001 2000 2001 2000 2001 2000
---- ---- ---- ---- ---- ---- ---- ----
Net Sales.................... $ 47,756 $ 57,690 $206,615 $244,249 $100,028 $ 113,121 $456,956 $353,954
Income From Operations....... $ 3,627 $ 7,311 $ 15,872 $ 30,794 $ 7,195 $ 11,327 $ 40,188 $ 40,814
NOTES TO STATEMENTS OF INCOME
1. The Condensed Statements of Income incorporate the results of operations of Leeson Electric Corporation, which business
was acquired by the Company on September 29, 2000 for approximately $260,000,000 in cash.
2. Certain footnotes and other information normally included in statements of income prepared in accordance with generally
accepted accounting principles have been condensed or omitted from these statements of income, and therefore these
statements of income should be read in conjunction with the Company's 2000 Annual Report and Securities and Exchange
Commission filings.
Corporate Offices
200 State Street o Beloit, WI 53511-6254
608-364-8800 o Fax: 608-364-8818
Website: www.regal-beloit.com