8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

_______________________

     Date of Report

     (Date of earliest

     event reported):February 5, 2007

              Regal-Beloit Corporation             

(Exact name of registrant as specified in its charter)

Wisconsin	1-7283	39-0875718
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

          200 State Street, Beloit, Wisconsin 53511-6254           

(Address of principal executive offices, including Zip code)

  (608) 364-8800  

(Registrant’s telephone number)

  Not Applicable  

(Former Name or Former Address, if Changed Since Last Report)

_______________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 5, 2007, Regal-Beloit Corporation (the “Company”) issued a news release reporting the financial results of the Company for the financial periods ended December 30, 2006. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(a)   Not Applicable

(b)   Not Applicable

(c)   Not Applicable

(d)   Exhibits. The following exhibit is being furnished herewith:

99.1 News Release of Regal-Beloit Corporation, dated February 5, 2007.

SIGNATURES

  Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	REGAL-BELOIT CORPORATION
Date:  February 5, 2007	By:	/s/ Paul J. Jones
		Paul J. Jones
		Vice President, General Counsel and Secretary

REGAL-BELOIT CORPORATION

Exhibit Index to Report on Form 8-K

Dated February 5, 2007

Exhibit Number	Exhibit Description
99.1	News Release of Regal-Beloit Corporation, dated February 5, 2007.

EX-99.1

	NEWS RELEASE
	FOR RELEASE ON OR AFTER: February 5, 2007
	FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
	David A. Barta Vice President, Chief Financial Officer 608-361-7405
Page 1

REGAL-BELOIT FOURTH QUARTER

EARNINGS PER SHARE INCREASE 8%

ANNUAL EARNINGS PER SHARE INCREASE 46%

2006 Net Sales, Net Income and EPS reach record levels

February 5, 2007 (Beloit, WI): REGAL-BELOIT CORPORATION (NYSE:RBC) today reported sales and earnings for the fourth quarter ended December 30, 2006. Net sales decreased 2.5% to $366.6 million from $376.2 million in the fourth quarter of 2005. The fourth quarter comparison was impacted by strong sales reported in the prior year driven primarily by the volume impact of the HVAC industry’s adoption of the SEER 13 legislation. Net income increased 13.1% to $23.0 million as compared to $20.3 million in the comparable period of 2005. Diluted earnings per share increased 7.9% to $.68 compared to $.63 for the fourth quarter of 2005.

In the Electrical segment, sales decreased 1.3% primarily driven by the HVAC business. Included in the results for the quarter were $14.6 million of sales attributable to the Sinya motor business acquired in the second quarter of 2006. Sales of generators increased over 20% and large industrial motors sales increased over 9%. Sales in the Mechanical segment were down 10.6%, however, the sale of substantially all of the assets of the Cutting Tools business in May 2006reduced segment sales by approximately $4.3million or 8.3% for the quarter.

The gross profit margin for the fourth quarter of 2006 was 24.3%, which was 150 basis points above the gross profit margin in the fourth quarter of 2005 as a result of contributions from our Lean Six Sigma and productivity initiatives. Income from operations was $39.5 million or 10.8% of sales, a 3.1% increase over the $38.3 million or 10.2% of sales reported for the fourth quarter of 2005. As a result of the 2006 implementation of FAS123R, operating expenses for the fourth quarter of 2006 included $0.9 million of expense related to equity compensation as compared to $0.1 million in the fourth quarter of 2005. Net income in the fourth quarter of 2006 was $23.0 million, a 13.1% increase from $20.3 million reported in the fourth quarter of 2005.

For the full year ended December 30, 2006, net sales increased 13.4% to $1.620 billion from $1.429 billion in 2005. Full year 2006 sales included $36.5 million of sales from the May 2006 acquisition of Sinya which was partially offset by a $14.0 million decrease resulting from the sale of substantially all of the assets of the Cutting Tools business in May of 2006 and the sale of the Illinois Gear business in May of 2005. The gross profit margin improved 220 basis points to 24.0% for the full year, again reflecting the impact of the Lean Six Sigma and productivity initiatives. Income from operations was $194.0 million or 12.0% of sales as compared to the $134.6 million or 9.4% of sales reported for fiscal year 2005. Net income for fiscal 2006 was $109.8 million, a 57.9% increase from $69.6 million reported for fiscal 2005. Diluted earnings per share were $3.28, an increase of 45.8% over the $2.25 reported in 2005.

“The fourth quarter finished in line with our expectations. Our expectations contemplated a return to a more seasonal pattern as compared to the abnormally strong sales environment in the fourth quarter of 2005. On a lower sales base versus 2005, we were able to deliver a strong income performance driven by contributions from our corporate wide initiatives. Additionally, we are quite pleased with our full year results which included record sales and earnings and much improved operating margins,” said Henry Knueppel, Chairman and Chief Executive Officer.

“We continue to see global growth opportunities in all of our businesses and believe that our initiatives will continue to allow us to improve our operating margins, cash flow and return on invested capital” added Knueppel. “The first quarter of fiscal 2007 will present another difficult sales comparison for our HVAC business. Even with this tough comp, we are expecting continued growth in earnings and believe E.P.S. will be in a range of $.75 to $.83.”

REGAL-BELOIT will be holding a conference call pertaining to this news release at 1:30 PM CST (2:30 PM EST) on Monday, February 5, 2007. Interested parties should call 800-230-1059, access code 861677. A replay of the call will be available through February 16, 2007 at 800-475-6701, access code 861677.

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, Canada, Mexico, Europe and Asia.

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 press release may be forward looking statements. Forward-looking statements represent our management’s judgment regarding future events. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of factors, including: unexpected issues and costs arising from the integration of acquired companies and businesses, marketplace acceptance of our recent acquisitions, including the loss of, or a decline in business from, any significant customers; unanticipated fluctuations in commodity prices and raw material costs and issues affecting our ability to pass increased costs on to our customers; cyclical downturns affecting the markets for capital goods; substantial increases in interest rates that impact the cost of our outstanding debt; the impact of capital market transactions that the Company may effect; unanticipated costs associated with litigation matters; the success of our management in increasing sales and maintaining or improving the operating margins of our businesses; actions taken by our competitors; difficulties in staffing and managing foreign operations; our ability to satisfy various covenant requirements under our credit facility; and other risks and uncertainties described from time to time in our reports filed with U.S. Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the applicable cautionary statements. The forward-looking statements included in this press release are made only as of the date of this release, and we undertake no obligation to update these statements to reflect subsequent events or circumstances.

STATEMENTS OF INCOME

In Thousands of Dollars

	(Unaudited)
	Three Months Ended				Fiscal Year Ended
		December 30,		December 31,		December 30,		December 31,
		2006		2005		2006		2005
Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	366,649	$	376,222	$	1,619,545	$	1,428,707
Cost of Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		277,653		290,300		1,230,174		1,117,943
Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		88,996		85,922		389,371		310,764
Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		49,512		47,632		195,354		176,192
Income From Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		39,484		38,290		194,017		134,572
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4,599		5,037		19,886		22,090
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		281		57		711		442
Income Before Taxes & Minority Interest . . . . . . . . . . . . . . . .		35,166		33,310		174,842		112,924
Provision For Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11,239		11,421		62,051		39,829
Income Before Minority Interest . . . . . . . . . . . . . . . . . . . . . . . .		23,927		21,889		112,791		73,095
Minority Interest in Income, Net of Tax . . . . . . . . . . . . . . . . . . . . . .		958		1,580		2,985		3,538
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	22,969	$	20,309	$	109,806	$	69,557
Per Share of Common Stock:
Earnings Per Share . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .	$	.74	$	.66	$	3.56	$	2.34
Earnings Per Share - Assuming Dilution . . . . . . . . . . . . . . . . .	$	.68	$	.63	$	3.28	$	2.25
Cash Dividends Declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	.14	$	.13	$	.55	$	.51
Average Number of Shares Outstanding . . . . . . . . . . . . . . . . . . . . .		30,981,273		30,644,045		30,846,854		29,675,206
Average Number of Shares - Assuming Dilution . . . . . . . . . . . . . .		33,973,308		32,316,793		33,504,190		30,878,981

CONDENSED BALANCE SHEETS

In Thousands of Dollars

ASSETS	(Unaudited)		(Audited)
Current Assets:	Dec. 30, 2006		Dec. 31, 2005
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	36,520	$	32,747
Receivables and Other Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		260,671		230,217
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		275,138		224,316
Total Current Assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		572,329		487,280
Net Property, Plant and Equipment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		268,880		244,329
Goodwill  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		546,152		546,168
Other Noncurrent Assets . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		53,359		64,777
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	1,440,720	$	1,342,554
Liabilities and Shareholders’ Investment
Accounts Payable  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	108,513	$	82,513
Commercial Paper Borrowings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		49,000		25,000
Other Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		103,716		111,278
Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		324,028		386,332
Other Noncurrent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		103,795		89,435
Shareholders’ Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		751,668		647,996
Total Liabilities and Shareholders’ Investment . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	1,440,720	$	1,342,554

SEGMENT INFORMATION

In Thousands of Dollars

	(Unaudited)
	Mechanical Segment								Electrical Segment
	Three Months Ended				Fiscal Year Ended				Three Months Ended				Fiscal Year Ended
	Dec. 30, 2006		Dec. 31, 2005		Dec. 30, 2006		Dec. 31, 2005		Dec. 30, 2006		Dec. 31, 2005		Dec. 30, 2006		Dec. 31, 2005
Net Sales	$	46,070	$	51,546	$	201,004	$	201,011	$	320,579	$	324,676	$	1,418,541	$	1,227,696
Income from Operations	$	5,931	$	5,109	$	22,230	$	16,044	$	33,553	$	33,181	$	171,787	$	118,528