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):                                                   August 3, 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))

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Item 2.02.                      Results of Operations and Financial Condition.

On August 3, 2009, Regal Beloit Corporation (the “Company”) issued a news release reporting the financial results of the Company for the financial period ended June 27, 2009. 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 August 3, 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:  August 4, 2009                                                           By: /s/ Paul J. Jones

Paul J. Jones

Vice President, General Counsel and Secretary

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REGAL BELOIT CORPORATION

Exhibit Index to Report on Form 8-K

Dated August 3, 2009

Exhibit Number	Exhibit Description
99.1	News Release of Regal Beloit Corporation, dated August 3, 2009.

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EX-99.1

NEWS RELEASE
FOR RELEASE ON OR AFTER:    August 3, 2009
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
	John Perino Vice President, Investor Relations 608-361-7501

REGAL BELOIT REPORTS SECOND QUARTER RESULTS

·   Operating Cash Flow of $106.8 million

·   Plant Rationalizations Proceeding on Plan

·   Legislation Continues to Support Energy Efficient Products

August 3, 2009 (Beloit, WI):  Regal Beloit Corporation (NYSE:RBC) today reported financial results for the second quarter ended June 27, 2009.  Net sales of $454.6 million decreased 25.0% as compared to the $606.3 million reported for the second quarter of 2008.  Diluted earnings per share were $0.47 as compared to $1.11 for the second quarter of 2008.

“The second quarter proved to be better than our expectations.  We were particularly pleased with the results of our inventory reduction efforts, which exceeded our stated goal.  We also benefited from the impact of the continued move to more energy efficient motor products.  From a cost perspective, our cost reduction efforts are on plan and we expect to see even greater benefits from these activities as we move into the second half of the year. We are continuing to execute our business strategy and concentrate on business fundamentals and we are in a terrific position to execute on business growth opportunities as those situations arise in the future,” commented Henry Knueppel, Chairman and Chief Executive Officer.

Sales for the second quarter of 2009 were $454.6 million, a 25.0% decrease from the $606.3 million reported for the second quarter of 2008.  Second quarter 2009 sales included $16.3 million of incremental sales related to the Hwada and Dutchi businesses acquired in 2008 and  the Custom Power Technology acquisition completed on January 2, 2009.

In the Electrical segment, sales decreased 24.7%, including the impact of the acquisitions noted above.  Exclusive of the  acquired businesses, Electrical segment sales decreased 27.7%, largely due to global generator sales decreasing 49.1%, commercial and industrial motors sales in North America decreasing 33.1% and residential HVAC motor sales decreasing 4.4%.  Sales in the Mechanical segment decreased 27.5% from the prior year period.

From a geographic perspective, Asia-based sales were down 33.9% as compared to the second quarter of 2008.  In total, sales to regions outside of the United States were 26.6% of total sales for the second quarter of 2009 in comparison to 27.0% for the comparable period of 2008.  The negative impact of foreign currency exchange rate changes decreased total sales by 1.7%.   From an energy efficiency standpoint, sales of high efficiency products represented 19.7% of total sales for the quarter as compared to 13.0% for the same period of 2008.

The gross profit margin for the second quarter was 20.8% as compared to the 21.6% reported for the comparable period of 2008.  The decrease was driven primarily by the fixed cost absorption impact of lower unit volume production, which was magnified by the inventory reduction efforts.

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In addition, costs related to the ongoing plant rationalizations increased cost of sales by approximately $1.8 million.

Operating expenses were $65.2 million (14.3% of sales) in the second quarter of 2009 versus $63.7 million (10.5% of sales) in 2008.   Operating expenses included an incremental $3.8 million for the Dutchi and Hwada businesses which were acquired in 2008 and the CPT business acquired in 2009.  Operating expense also includes approximately $4.0 million of bad debt, legal and restructuring expenses.

Income from operations was $29.5 million versus $67.5 million in the comparable period of 2008.  As a percent of sales, income from operations was 6.5% for the second quarter versus 11.1% in the comparable period of 2008.

Net interest expense was $5.1 million versus $7.8 million in the comparable period of 2008.  The decrease was driven by lower effective interest rates in 2009 versus the comparable period of 2008.

The effective tax rate for the three months ended June 27, 2009 was 28.0% versus 35.3% for the second quarter of 2008.   The decrease in the effective tax rate results primarily from the global distribution of taxable income.

Net income attributable to Regal Beloit Corporation for the three months ended June 27, 2009 was $16.5 million, a decrease of 55.9% versus the $37.3 million reported in the second quarter of 2008. Fully diluted earnings per share was $0.47 as compared to $1.11 per share reported in the second quarter of 2008.  The secondary equity offering of the Company’s common stock completed in May 2009 added approximately 1.75 million shares to the weighted average number of shares outstanding for the quarter.  (Note: prior year financial results have been adjusted to reflect the impact of the change in accounting for the Company’s convertible senior subordinated notes as prescribed in FASB Staff Position APB 14-1: Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), which reduced second quarter 2008 diluted earnings per share by $0.03).

Cash flow from operations was $106.8 million in the second quarter of 2009 comprised of net income of $17.5 million, non-cash expenses of $19.6 million and a reduction of net assets of $69.7 million.  This compares to the second quarter 2008 cash flow from operations of $81.4 million, which was comprised of the net income of $38.1 million, non-cash expenses of $17.5 million and a reduction in net assets of $25.8 million.

The Company ended the second quarter with total gross debt of $553.1 million as compared to $587.3 million at the end of the first quarter of 2009.  Cash and cash equivalents increased $208.5 million during the second quarter to $290.5 million.  Approximately, $150.5 million of the increase was attributable to the net proceeds of the secondary stock offering completed in May 2009. Therefore, net of cash, debt decreased from $510.2 million at the end of 2008 to $262.6 million at the end of the second quarter of 2009.

Subsequent to June 27, 2009, several holders of the Company’s currently convertible senior subordinated notes submitted notices to convert their notes into cash and common stock in accordance with the terms of the indenture.  The face value of the notes converted,

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approximately $27.6 million, will be paid in cash with the premium paid in shares of the Company’s common stock.  Current and previous diluted EPS calculations included an amount estimated for the dilutive effect of the premium being paid in shares of the Company’s common stock.

“We continue to expect a difficult global sales environment as we move into the third quarter.  The impact of the cost reduction and plant rationalization efforts will, however, improve the relative profitability of our business,” continued Henry Knueppel, Chairman and Chief Executive Officer.  “Given these factors, we are estimating third quarter earnings per share to be in the range of $0.60 to $0.68.”

Regal Beloit will be holding a conference call pertaining to this news release at 11:00 AM CT (12:00 PM ET) on Tuesday August 4, 2009.  Interested parties should call 866-394-7807, referencing Regal Beloit conference ID 22051374.  International callers should call 763-488-9117 using the same conference ID.  A replay of the call will be available through September 3, 2009, 2009 at 800-642-1687, conference ID 22051374.  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 Press Release 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, weakness in the housing and commercial real estate markets, 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, including new product introductions or technological advances, and other events affecting our industry and competitors;

· difficulties in staffing and managing foreign operations;

· other domestic and international economic and political factors unrelated to our performance, such as the current substantial weakness in economic and business conditions and the stock markets as a whole; and

· other risks and uncertainties described from time to time in our reports filed with the U.S. Securities and Exchange Commission, or SEC, which are incorporated by reference.

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 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 Form 10-K filed on February 25, 2009.

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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

Unaudited

In Thousands of Dollars, Except Shares Outstanding, Dividends Declared and Per Share Data

	Three Months Ended				Six Months Ended
	June 27, 2009		(As Adjusted)*		June 27, 2009		(As Adjusted)*
			June 28, 2008				June 28, 2008
Net Sales	$	454,550	$	606,316	$	897,824	$	1,142,659
Cost of Sales		359,928		475,139		712,632		889,383
Gross Profit		94,622		131,177		185,192		253,276
Operating Expenses		65,155		63,683		127,533		128,170
Income From Operations		29,467		67,494		57,659		125,106
Interest Expense		5,501		8,357		12,620		16,770
Interest Income		377		531		510		915
Income Before Taxes & Noncontrolling Interests		24,343		59,668		45,549		109,251
Provision For Income Taxes		6,822		21,086		14,052		38,644
Net Income		17,521		38,582		31,497		70,607
Less: Net Income Attributable to Noncontrolling
Interests, net of tax		1,069		1,269		2,258		1,867
Net Income Attributable to Regal Beloit Corporation	$	16,452	$	37,313	$	29,239	$	68,740
Earnings Per Share of Common Stock:
Basic	$	0.49	$	1.19	$	0.90	$	2.19
Assuming Dilution	$	0.47	$	1.11	$	0.86	$	2.06
Cash Dividends Declared	$	0.16	$	0.16	$	0.32	$	0.31
Weighted Average Number of Shares Outstanding:
Basic		33,256,281		31,305,715		32,356,782		31,311,296
Assuming Dilution		35,105,383		33,525,725		33,850,093		33,321,379

*The Company adopted Financial Accounting Standards Board (“FASB”) Staff Position (“FSP”) No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). The adoption of FSP APB 14-1 required an adjustment of convertible debt, equity, and interest expense.

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CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

In Thousands of Dollars

			(As Adjusted
			From Audited Statements)*
ASSETS	June 27, 2009		December 27, 2008
Current Assets:
Cash and Cash Equivalents	$	290,549	$	65,250
Trade Receivables and Other Current Assets		408,029		436,094
Inventories		269,216		359,918
Total Current Assets		967,794		861,262
Net Property, Plant and Equipment		351,247		358,372
Other Noncurrent Assets		805,536		803,862
Total Assets	$	2,124,577	$	2,023,496
LIABILITIES AND EQUITY
Accounts Payable	$	161,653	$	202,456
Other Current Liabilities		156,486		228,546
Long-Term Debt		548,115		560,127
Deferred Income Taxes		85,052		72,119
Other Noncurrent Liabilities		92,840		122,607
Total Liabilities	$	1,044,146	$	1,185,855
Equity		1,080,431		837,641
Total Liabilities and Equity	$	2,124,577	$	2,023,496

*The Company adopted Financial Accounting Standards Board (“FASB”) Staff Position (“FSP”) No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). The adoption of FSP APB 14-1 required an adjustment of convertible debt, equity, and interest expense.

SEGMENT INFORMATION

Unaudited

In Thousands of Dollars

	Mechanical Segment				Electrical Segment
	Three Months Ending				Three Months Ending
	June 27, 2009		June 28, 2008		June 27, 2009		June 28, 2008
Net Sales	$	47,306	$	65,261	$	407,244	$	541,055
Income from Operation		4,128		9,600		25,339		57,894
	Six Months Ending				Six Months Ending
	June 27, 2009		June 28, 2008		June 27, 2009		June 28, 2008
Net Sales	$	99,218	$	127,811	$	798,606	$	1,014,848
Income from Operation		10,415		19,647		47,244		105,459

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

Unaudited

In Thousands of Dollars

	Six Months Ended
				(As Adjusted)*
	June 27, 2009			June 28, 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	31,497		$	70,607
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		33,793			30,211
Excess tax benefits from stock-based compensation		(1,767	)		(1,333	)
(Gain) loss on sale of assets, net		(91	)		70
Stock-based compensation expense		1,959			1,961
Non-cash convertible debt deferred financing costs		1,063			2,424
Change in assets and liabilities, net of acquisitions		58,934			12,345
Net cash provided by operating activities		125,388			116,285
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment		(18,614	)		(28,134	)
Business acquisitions, net of cash acquired		(1,500	)		(15,805	)
Sale of property, plant and equipment		306			1,149
Net cash used in investing activities		(19,808	)		(42,790	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments of short-term borrowings		(10,295	)		(92	)
Payments of long-term debt		(108	)		(233	)
Net borrowings (repayments) under revolving credit facility		(13,207	)		(182,700	)
Net proceeds from long-term borrowings		-			165,000
Net proceeds from the sale of common stock		150,507			-
Dividends paid to shareholders		(10,063	)		(9,392	)
Purchases of treasury stock		-			(4,191	)
Proceeds from the exercise of stock options		771			1,739
Excess tax benefits from stock-based compensation		1,767			1,333
Financing fees paid		-			(418	)
Net cash provided by (used in) financing activities		119,372			(28,954	)
EFFECT OF EXCHANGE RATES ON CASH		347			595
Net increase in cash and cash equivalents		225,299			45,136
Cash and cash equivalents at beginning of period		65,250			42,574
Cash and cash equivalents at end of period	$	290,549		$	87,710

*The Company adopted Financial Accounting Standards Board (“FASB”) Staff Position (“FSP”) No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). The adoption of FSP APB 14-1 required an adjustment of convertible debt, equity, and interest expense.

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