0000082811-95-000014.txt : 19950811 0000082811-95-000014.hdr.sgml : 19950811 ACCESSION NUMBER: 0000082811-95-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950810 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGAL BELOIT CORP CENTRAL INDEX KEY: 0000082811 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT [3560] IRS NUMBER: 390875718 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07283 FILM NUMBER: 95560472 BUSINESS ADDRESS: STREET 1: 200 STATE ST CITY: BELOIT STATE: WI ZIP: 53511 BUSINESS PHONE: 6083648800 MAIL ADDRESS: STREET 1: 200 STATE STREET CITY: BELOIT STATE: WI ZIP: 53511-6254 FORMER COMPANY: FORMER CONFORMED NAME: BELOIT TOOL CORP DATE OF NAME CHANGE: 19730522 FORMER COMPANY: FORMER CONFORMED NAME: RECORD A PUNCH CORP DATE OF NAME CHANGE: 19690320 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended June 30, 1995 Commission File Number 1-7283 REGAL-BELOIT CORPORATION (Exact name of registrant as specified in its charter) Wisconsin 39-0875718 (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization) 200 State Street, Beloit, Wisconsin 53511-6254 (Address of principal executive offices) (608) 364-8800 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO Indicate the number of shares outstanding of each of the issuers' classes of common stock as of the latest practicable date. 20,518,326 Shares, Common Stock, $.01 Par Value REGAL-BELOIT CORPORATION FORM 10-Q For Quarter Ended June 30, 1995 INDEX PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Condensed Balance Sheet Statement of Income Condensed Statement of Cash Flows Notes to Financial Statements Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations PART II - OTHER INFORMATION Item 4 - Submission of Matters To A Vote of Security Holders Item 6 - Reports on Form 8-K Signatures PART I FINANCIAL INFORMATION Item 1. Financial Statements
REGAL-BELOIT CORPORATION CONDENSED BALANCE SHEET ASSETS (From Audited (Unaudited) Statements) ------------- ------------- June 30, 1995 Dec. 31, 1994 ------------- ------------- Current Assets: Cash and cash equivalents.......................... $ 5,002,000 $ 13,378,000 Receivables, less reserves of $1,263,000 in 1995 and $1,161,000 in 1994........................... 39,951,000 30,623,000 Inventories........................................ 48,358,000 43,621,000 Other current assets............................... 4,292,000 4,074,000 Total Current Assets............................ 97,603,000 91,696,000 Plant and Equipment at Cost........................... 126,858,000 116,470,000 Less - accumulated depreciation.................. (54,879,000) (50,685,000) 71,979,000 65,785,000 Advance Payment for Acquisition....................... 0 9,853,000 Other Noncurrent Assets............................... 354,000 331,000 $169,936,000 $167,665,000 LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-Term Debt.................................. $ 466,000 $ 10,511,000 Accounts payable................................. 14,049,000 8,773,000 Federal and state income taxes................... 1,230,000 1,164,000 Other current liabilities........................ 21,883,000 16,133,000 Total Current Liabilities................... 37,628,000 36,581,000 Long-term Debt........................................ 4,419,000 16,022,000 Deferred Income Taxes................................. 4,844,000 4,517,000 Shareholders' Investment: Common stock, $.01 par value, 25,000,000 shares authorized, 20,518,326 issued in 1995 and 20,454,952 issued in 1994..................... 205,000 205,000 Additional paid-in capital....................... 36,952,000 36,595,000 Retained earnings................................ 86,124,000 74,265,000 Cumulative Foreign Currency Translation Adjustments................................... (236,000) (520,000) 123,045,000 110,545,000 $169,936,000 $167,665,000 See accompanying notes.
REGAL-BELOIT CORPORATION STATEMENT OF INCOME (Unaudited) ------------------------------------------------------ Three Months Ended Six Months Ended -------------------------- -------------------------- June 30, June 30, -------------------------- -------------------------- 1995 1994 1995 1994 ------------ ------------ ------------ ------------ Net Sales.......................... $ 76,265,000 $ 60,044,000 $150,605,000 $118,895,000 Cost of Sales...................... 54,048,000 42,673,000 107,228,000 85,087,000 Gross Profit..................... 22,217,000 17,371,000 43,377,000 33,808,000 Operating Expenses................. 8,337,000 8,029,000 17,140,000 16,490,000 Income from Operations........... 13,880,000 9,342,000 26,237,000 17,318,000 Interest Expense................... 217,000 266,000 539,000 559,000 Interest Income.................... 43,000 19,000 79,000 32,000 Income Before Taxes.............. 13,706,000 9,095,000 25,777,000 16,791,000 Provision for Income Taxes......... 5,331,000 3,574,000 10,021,000 6,639,000 Net Income..................... $ 8,375,000 $ 5,521,000 $ 15,756,000 $ 10,152,000 Per Share of Common Stock: Net Income....................... $.41 $.27 $.77 $.50 Cash Dividends Declared.......... $.10 $.075 $.19 $.145 Weighted Average Number of Shares Outstanding............... 20,504,543 20,435,652 20,487,783 20,431,290 See accompanying notes.
REGAL-BELOIT CORPORATION CONDENSED STATEMENT OF CASH FLOWS (Unaudited) --------------------------- Six Months Ended June 30, --------------------------- 1995 1994 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income.............................................. $ 15,756,000 $ 10,152,000 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation, amortization and deferred income taxes.. 5,359,000 4,400,000 Change in assets and liabilities: Current assets, other than cash...................... ( 9,188,000) (5,572,000) Current liabilities, other than notes payable........ 9,348,000 6,033,000 Net cash provided from operating activities....... 21,275,000 15,013,000 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to plant and equipment, net of retirements.... ( 5,116,000) (4,322,000) Other, net.............................................. 215,000 20,000 Net cash used in investing activities................ (4,901,000) (4,302,000) CASH FLOWS FROM FINANCING ACTIVITIES: Reduction of short-term debt............................ (10,042,000) 0 Reduction of long-term debt............................. (11,602,000) ( 7,518,000) Dividends to shareholders............................... ( 3,481,000) ( 2,859,000) Other, net.............................................. 357,000 138,000 Net cash used for financing activities............... (24,768,000) (10,239,000) EFFECT OF EXCHANGE RATE ON CASH............................ 18,000 20,000 Net (decrease) increase in cash and cash equivalents.... ( 8,376,000) 492,000 Cash and cash equivalents at beginning of period........ 13,378,000 2,193,000 Cash and cash equivalents at end of period.............. $ 5,002,000 $ 2,685,000 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during year for: Interest............................................. $ 548,000 $ 563,000 Income Taxes......................................... $ 9,764,000 $ 6,766,000 See accompanying notes.
REGAL-BELOIT CORPORATION NOTES TO FINANCIAL STATEMENTS JUNE 30, 1995 1. BASIS OF PRESENTATION The condensed financial statements include the accounts of Regal-Beloit Corporation and its wholly owned subsidiaries and have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested these statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest Annual Report on Form 10-K. 2. INVENTORIES Cost for approximately 64% of the Company's inventory is determined using the last-in, first-out (LIFO) inventory valuation method. The approximate percentage distribution between major classes of inventories is as follows: 6-30 12-31 1995 1994 Raw Material 20% 16% Work-in-Process 24% 23% Finished Goods 56% 61% 3. ACQUISITION Effective January 1, 1995, the Company acquired selected net assets of the Marine and Industrial Transmission Division of Borg-Warner Automotive Transmission and Engine Components Corporation. Late in 1994, the Company made an advance payment of $9,853,000 to cover the purchase of these net assets. The final purchase price settlement for this acquisition is expected to be slightly lower than the advance payment. This acquisition has been renamed the Velvet Drive Transmission Division of Regal-Beloit Corporation. This Division produces both marine and industrial transmissions. The marine transmissions are used in boats with a horsepower range up to 500 horsepower for gasoline engines and up to 250 horsepower for diesel engines. The industrial transmissions are used in applications such as heavy-duty, all-terrain forklifts and specialty vehicles which include airport towmotors for baggage handling and mining personnel carriers. 4. DISCLOSURES In the opinion of Management, all adjustments which were necessary for a fair statement of the results of the interim periods have been included in the preceding financial statements. However, the results of operations for the quarter are not necessarily indicative of results to be expected for the year. Certain items, such as income taxes, LIFO charges, profit sharing expenses and various other accruals, are included in these statements based on estimates for the entire year. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation Results of Operations --------------------- Net sales for the quarter ended June 30, 1995 were a record $76,265,000 or 27.0% higher than sales of $60,044,000 in the comparable second quarter of 1994 and 2.6% greater than sales in the recent first quarter of 1995. Net sales for the first six months of 1995 were $150,605,000, or 26.7% greater than sales of $118,895,000 for the same period in 1994. The recent Velvet Drive Transmission acquisition on January 1, 1995 and the acquisition of Costruzioni Meccaniche Legnanesi, S.r.L. of Legnano, Italy in December 1994 accounted for 10.0% of the sales increase compared to the first half of 1994. The remaining 16.7% sales increase can be attributed to increased order levels in both the Power Transmission Group and the Cutting Tool Group. In addition, selective product price increases have been made in response to increased costs being received from suppliers of raw material and component parts. Gross profit margins increased to 29.1% of sales as compared to 28.9% in the comparable second quarter of 1994 and 28.5% in the recent first quarter of 1995. For the first six months of 1995, gross profit margins were 28.8% of sales as compared to 28.4% for the same period last year. Despite higher sales, operating expenses were reduced in the second quarter from the prior first quarter's levels and were 10.9% of sales as compared to 13.4% in the second quarter of 1994 and 11.8% in the previous first quarter of 1995. Year-to-date operating expenses are 3.9% higher than 1994 expenses primarily due to recent acquisitions, but on higher sales volumes, have declined to 11.4% of sales in 1995 as compared to 13.9% in 1994 as these expenses are typically fixed. Income from operations improved in the second quarter to 18.2% of sales compared to 15.6% in the second quarter of 1994 and 16.6% in the first quarter of 1995. For the first half of 1995, income from operations increased almost three percentage points to 17.4% of sales compared to 14.6% for the same period in 1994. Interest expense declined during the second quarter compared to the recent first quarter of 1995 due to the continued retirement of debt under the Company's Bank Credit Agreement. As of May 1995, the entire $9,853,000 debt used for the Velvet Drive Transmission acquisition on January 1, 1995 was retired. LIQUIDITY AND CAPITAL RESOURCES ------------------------------- Working capital increased to $59,975,000 as of June 30, 1995 as compared to $55,115,000 as of December 31, 1994. The majority of this increase can be attributed to the Velvet Drive Transmission acquisition. The current ratio was 2.6:1 in the second quarter, the same as it was in the first quarter of 1995. This compares to 2.5:1 as of last year end. Available cash generated from the business was used to retire $11,603,000 in long-term debt in the first half of 1995. The reduction of long-term debt and corresponding increase in shareholders' investment during the quarter resulted in long-term debt, as a percentage of total capitalization, to be reduced to 3.5% as of June 30, 1995, down from 12.7% as of December 31, 1994. This provides the Company significant additional long- term debt capacity which is typically required only for the purchase of acquisitions. The Company feels that additional internally generated growth can be financed adequately by cash generated from operations and from its short-term credit facilities. PART II OTHER INFORMATION Item 4. Submission of Matters to A Vote of Security Holders (a) The Annual Meeting of stockholders of Regal-Beloit Corporation was held on April 18, 1995. (c) Matters voted on at the Annual Meeting and the results of each vote were as follows: (1) Elect three Class B Directors for a term of three years.
Broker For Withheld Abstain Non-Votes --------- -------- ------- --------- John M. Eldred 18,655,023 340,052 0 0 John A. McKay 18,768,623 226,452 0 0 Frederick Kasten, Jr. 18,768,623 226,452 0 0
(2) Ratify the appointment of Arthur Andersen LLP as independent public accountants for the Company for the year ending December 31, 1995.
Broker For Withheld Abstain Non-Votes ---------- -------- ------- --------- 18,829,581 17,676 147,818 0
Item 6. Reports on Form 8-K There were no reports on Form 8-K filed since the Company's last report on Form 10-Q dated May 1, 1995. 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 thereunto duly authorized.
REGAL-BELOIT CORPORATION (Registrant) Gerald J. Berres ---------------------------------------------- Gerald J. Berres Vice President - Secretary General Counsel Robert C. Burress ---------------------------------------------- Robert C. Burress Vice President - Chief Financial Officer (Principal Accounting and Financial Officer)
DATE: August 10, 1995 EX-27 2
5 6-MOS DEC-31-1995 JUN-30-1995 5,002,000 0 39,951,000 1,263,000 48,358,000 97,603,000 126,858,000 54,879,000 169,936,000 37,628,000 0 205,000 0 0 122,840,000 169,936,000 150,605,000 150,605,000 107,228,000 107,228,000 17,140,000 0 539,000 25,777,000 10,021,000 15,756,000 0 0 0 15,756,000 .77 0