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 4, 2009

              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 4, 2009, Regal Beloit Corporation (the “Company”) issued a news release reporting the financial results of the Company for the financial periods ended December 27, 2008. 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 4, 2009.

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, 2009	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 4, 2009

Exhibit Number	Exhibit Description
99.1	News Release of Regal Beloit Corporation, dated February 4, 2009.

EX-99.1

	NEWS RELEASE
	FOR RELEASE ON OR AFTER:    February 4, 2009
	FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
	David A. Barta Vice President, Chief Financial Officer 608-361-7405
Page 1

REGAL BELOIT REPORTS FOURTH QUARTER AND

FULL YEAR RESULTS

·   2008 Net Sales, Net Income and EPS Reach Record Levels

·   Successful Integration of 2007 Acquisitions

·   Launched a Record Number of New Products in 2008

·   Strong Balance Sheet and Ample Liquidity Heading into 2009

February 4, 2009 (Beloit, WI):  Regal Beloit Corporation (NYSE:RBC) today reported financial results for the fourth quarter and fiscal year ended December 27, 2008.  Net sales of $483.0 million increased 1.7% as compared to the $474.7 million reported for the fourth quarter of 2007.  Diluted earnings per share were $0.67 as compared to $0.71 for the fourth quarter of 2007.  For the full year of 2008, sales reached a record $2.246 billion as compared to $1.802 billion for 2007.  Full year diluted earnings per share were $3.87 per share as compared to $3.49 per share for 2007.

“We are very pleased to report another record year for the Company.  This is clearly proof of our ability to adapt to a changing environment through improved operating efficiencies and the introduction of a record number of new products in 2008,” commented Henry Knueppel, Chairman and Chief Executive Officer, “Our results were achieved despite unprecedented raw material inflation, a depressed HVAC market throughout the year, and deteriorating industrial and commercial markets late in 2008.”

Sales for the fourth quarter of $483.0 million were 1.7% above the $474.7 million reported for the fourth quarter of 2007.  Sales for the fourth quarter included $38.2 million of sales attributable to the Hwada acquisition completed in April of 2008, the Dutchi acquisition completed in October of 2008 and the Alstom acquisition completed in November 2007.  Sales for the Electrical segment increased 2.6% as compared to the comparable period of 2007, including the results from the acquisitions mentioned above. Sales for the HVACR products decreased 7.8% for the quarter.  Sales of commercial and industrial motors decreased 5.6% and sales of electric generators increased 13.2%.  Sales in the Mechanical segment decreased 4.1%.

From a geographic perspective, sales outside the United States were 28.9% of total sales for the quarter as compared to 25.2% in the fourth quarter of 2007. The negative impact of foreign currency exchange rate changes decreased total sales by 2.2%.   From an energy efficiency standpoint, sales of high efficiency products increased 12.8% from the fourth quarter of 2007 and represented 11.7% of total sales for the quarter. The gross profit margin for the fourth quarter of 2008 was 23.7%, which was 150 basis points above the gross profit margin in the fourth quarter of 2007, primarily driven by our focus on Lean Six Sigma, other productivity improvements and the margin gain from the higher mix of more energy efficient products.  While material inflation exceeded the impact of price increases, strong productivity results more than offset the price - inflation shortfall.

Regal Beloit Corporation

News Release

Page 2

Income from operations was $39.6 million or 8.2% of sales as compared to the $45.3 million or 9.5% of sales reported for the fourth quarter of 2007.  The operating margins were impacted by the businesses acquired in 2008, which operated at lower margins and an increase in operating expenses.  Included in operating expense was approximately $5.0 million of additional expense related to reserves for certain discrete customer receivables and impairment of certain fixed assets. Operating expenses increased approximately $5.2 million as a result of the 2007 Alstom and 2008 acquisitions.  Net income in the fourth quarter of 2008 was $21.4 million as compared to the $24.0 million reported in the fourth quarter of 2007.  Diluted earnings per share were $0.67 versus the $0.71 reported in the fourth quarter of 2007.

For the full year ended December 27, 2008, net sales increased 24.6% to a record $2.246 billion from $1.802 billion in 2007.  Full year 2008 sales included $404.5 million of incremental sales from the businesses acquired in 2007 and 2008.  The gross profit margin decreased 60 basis points to 22.3% for the full year.   While margins were favorably impacted by the Company’s Lean Six Sigma and productivity initiatives, the impact of raw material inflation net of product price actions decreased margins on an overall basis.   Income from operations was $230.4 million or 10.3% of sales as compared to the $206.1 million or 11.4% of sales reported for fiscal year 2007, reflecting the impact of the price-inflation gap and the lower overall margin contribution from the acquired businesses.  Net income for fiscal 2008 was $128.6 million as compared to $118.3 million reported for fiscal 2007.  Diluted earnings per share were $3.87, an increase of 10.9% over the $3.49 reported in 2007.

The Company ended the year with total debt of $576.5 million as compared to $564.3 million at the end of 2007.  The primary debt covenant for the Company is Debt-to-EBITDA which ended the year at approximately 2.0, which is well within the limit of 3.75.

“While the fourth quarter started on a positive note with a relatively strong sales performance in October, the global economic issues became apparent as we moved into November and December. Although we will be facing significant business challenges in 2009, we are well positioned with our strong balance sheet and our adherence to maintaining operational efficiency to meet those challenges.  These will continue to serve as powerful drivers in the Company’s long-term growth and profitability goals,” continued Henry Knueppel, Chairman and Chief Executive Officer.

“Due to the impending headwinds in the sales environment, we are continuing to aggressively address our production rates, cost structure and inventory levels.  We are adjusting our workforce and are accelerating productivity and plant restructuring projects.  Raw material costs will provide some relief as the year progresses; however, this will be substantially muted in the first half as a result of commodity hedges.  Given these situations and the normal seasonality of our business, we are estimating first quarter earnings per share to be in the range of $0.38 to $0.46 and sequential improvement as we move through the year,” concluded Henry Knueppel, Chairman and Chief Executive Officer.

Regal Beloit Corporation

News Release

Page 3

The guidance for the first quarter includes the impact of the change in accounting for the Company’s convertible senior subordinated notes as prescribed in APB 14-1.  This impact will be a non-cash interest charge in the amount of $1.4 million. The comparable amount for 2008 would have been $1.6 million.  This will be further highlighted in the Company’s annual report on Form 10-K when filed with the Securities and Exchange Commission.

Regal Beloit will be holding a conference call pertaining to this news release at 10:30 AM CT (11:30 AM ET) on Thursday, February 5.  Interested parties should call 866-394-7807, referencing Regal Beloit conference ID 83558992.  International callers should call 763-488-9117 using the same conference ID.  A replay of the call will be available through February 19, 2009 at 800-642-1687, conference ID 83558992.  International callers should call 706-645-9291 using the same conference ID.

Regal Beloit Corporation is a leading manufacturer of mechanical and electrical motion control and power generation products serving markets throughout the world.  Regal Beloit Corporation is headquartered in Beloit, Wisconsin, and has manufacturing, sales, and service facilities throughout the United States, Canada, Mexico, Europe and Asia.

CAUTIONARY STATEMENT

This Quarterly Report contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements represent our management’s judgment regarding future events.  In many cases, you can identify forward-looking statements by terminology such as “may,” “will,”  “plan,” “expect,” “anticipate,” “estimate,” “believe,” or “continue” or the negative of these terms or other similar words.  Actual results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of factors, including:

·   economic changes in global markets where we do business, such as reduced demand for the products we sell, currency exchange rates, inflation rates, interest rates, recession, foreign government policies and other external factors that we cannot control;

·   unanticipated fluctuations in commodity prices and raw material costs;

·   cyclical downturns affecting the global market for capital goods;

·   unexpected issues and costs arising from the integration of acquired companies and businesses;

·   marketplace acceptance of new and existing products including the loss of, or a decline in business from, any significant customers;

·   the impact of capital market transactions that we may effect;

·   the availability and effectiveness of our information technology systems;

·   unanticipated costs associated with litigation matters;

·   actions taken by our competitors;

·   difficulties in staffing and managing foreign operations; and

·   other risks and uncertainties including but not limited to those described in Item 1A-Risk Factors of the Company’s Annual Report on Form 10-K filed on February 27, 2008 and 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 Form 10-K are made only as of their respective dates, and we undertake no obligation to update these statements to reflect subsequent events or circumstances.  See also Item 1A - Risk Factors in the Company’s Annual Report on Form10-K filed on February 27, 2008.

Regal Beloit Corporation

News Release

Page 4

STATEMENTS OF INCOME

In Thousands of Dollars

	(Unaudited)
	Three Months Ended				Fiscal Year Ended
	December 27,  2008		December 29,  2007		December 27,  2008		December 29,  2007
Net Sales	$	482,983	$	474,682	$	2,246,249	$	1,802,497
Cost of Sales		368,376		369,146		1,745,569		1,389,144
Gross Profit		114,607		105,536		500,680		413,353
Operating Expenses		75,016		60,237		270,249		207,293
Income From Operations		39,591		45,299		230,431		206,060
Interest Expense		6,260		7,449		27,709		22,056
Interest Income		146		238		1,479		933
Income Before Taxes & Minority Interest		33,477		38,088		204,201		184,937
Provision For Income Taxes		11,399		13,382		72,225		63,683
Income Before Minority Interest		22,078		24,706		131,976		121,254
Minority Interest in Income, Net of Tax		640		664		3,389		2,907
Net Income	$	21,438	$	24,042	$	128,587	$	118,347
Earnings Per Share of Common Stock:
Basic	$	0.68	$	0.77	$	4.10	$	3.79
Assuming Dilution	$	0.67	$	0.71	$	3.87	$	3.49
Weighted Average Number of Shares Outstanding:
Basic		31,393,295		31,326,459		31,343,330		31,252,145
Assuming Dilution		32,623,311		33,840,176		33,250,689		33,920,886

Regal Beloit Corporation

News Release

Page 5

CONDENSED BALANCE SHEETS

In Thousands of Dollars

	(Unaudited)
	December 27, 2008		December 29, 2007
ASSETS
Current Assets:
Cash and Cash Equivalents	$	65,250	$	42,574
Receivables and Other Current Assets		438,140		367,717
Inventories		357,550		318,200
Total Current Assets		860,940		728,491
Net Property, Plant and Equipment		358,372		339,343
Other Noncurrent Assets		803,862		794,413
Total Assets	$	2,023,174	$	1,862,247
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Accounts Payable	$	204,790	$	183,215
Other Current Liabilities		230,229		128,705
Long-Term Debt		561,190		558,918
Deferred Income Taxes		72,907		75,055
Other Noncurrent Liabilities		130,124		58,325
Total Liabilities		1,199,240		1,004,218
Shareholders’ Investment		823,934		858,029
Total Liabilities and Shareholders’ Investment	$	2,023,174	$	1,862,247

SEGMENT INFORMATION

In Thousands of Dollars

	(Unaudited)
	Mechanical Segment								Electrical Segment
	Three Months Ended				Fiscal Year Ended				Three Months Ended				Fiscal Year Ended
	Dec. 27, 2008		Dec. 29, 2007		Dec. 27, 2008		Dec. 29, 2007		Dec. 27, 2008		Dec. 29, 2007		Dec. 27, 2008		Dec. 29, 2007
Net Sales	$	55,718	$	58,120	$	247,607	$	243,534	$	427,265	$	416,562	$	1,998,642	$	1,558,963
Income from Operations	$	10,115	$	7,636	$	38,899	$	36,371	$	29,476	$	37,663	$	191,532	$	169,689

Regal Beloit Corporation

News Release

Page 6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands of Dollars

	(Unaudited)
	For the Year Ended
	December 27,			December 29,			December 30,
	2008			2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	128,587		$	118,347		$	109,806
Adjustments to Reconcile Net Income to Net Cash
Provided from Operating Activities:
Depreciation and amortization		61,457			46,619			37,682
Stock-based Compensation		4,580			3,841			3,572
Minority Interest in Earnings of Subsidiaries		3,389			2,907			2,985
Excess Tax Benefits from Stock-based Compensation		(2,463	)		(6,712	)		(3,949	)
Losses (Gains) on Sales of Property, Plant and Equipment		124			564			(1,889	)
Changes in Assets and Liabilities, Net of Acquisitions		(41,475	)		35,060			(54,659	)
Net Cash Provided from Operating Activities		154,199			200,626			93,548
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to Property, Plant and Equipment		(52,209	)		(36,628	)		(52,545	)
Business Acquisitions,  Net of Cash Acquired		(49,702	)		(337,643	)		(10,962	)
Sale of Property, Plant and Equipment		2,238			637			20,189
Net Cash Used in Investing Activities		(99,673	)		(373,634	)		(43,318	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-Term Debt Proceeds		165,200			250,000			8,500
Net (Payments) Proceeds Short-Term Borrowings		(11,820	)		5,000			-
Payments of Long-Term Debt		(324	)		(382	)		(1,294	)
Net (Repayments) Proceeds from Commercial Paper Borrowings		-			(49,000	)		24,000
Net Repayments Under Revolving Credit Facility		(162,700	)		(14,500	)		(69,900	)
Proceeds from the Exercise of Stock Options		2,880			2,190			6,942
Excess Tax Benefits from Stock-based Compensation		2,463			6,712			3,949
Financing Fees Paid		(454	)		(1,706	)		-
Distributions to Minority Partners		(3,044	)		(2,741	)		(2,538	)
Purchases of Treasury Stock		(4,191	)		-			-
Dividends Paid to Shareholders		(19,426	)		(18,099	)		(16,627	)
Net Cash Provided from (Used in) Financing Activities		(31,416	)		177,474			(46,968	)
EFFECT OF EXCHANGE RATE ON CASH:		(434	)		1,588			511
Net Increase in Cash and Cash Equivalents		22,676			6,054			3,773
Cash and Cash Equivalents at Beginning of Year		42,574			36,520			32,747
Cash and Cash Equivalents at End of Year	$	65,250		$	42,574		$	36,520