-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RGfljcKdBFpp7Oqmnwclcr/QBvkgU1/qQNQaOT+KoPjpEBQ2vnfIhcXMohn2Dp8i /t6nI4KwNKNl+DMni+OJEw== 0000082811-95-000016.txt : 19951119 0000082811-95-000016.hdr.sgml : 19951119 ACCESSION NUMBER: 0000082811-95-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 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: 95589802 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 September 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. 20,535,267 Shares, Common Stock, $.01 Par Value - ------------------------------------------------------------------------------- REGAL-BELOIT CORPORATION FORM 10-Q For Quarter Ended September 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 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) Sep. 30, 1995 Dec. 31, 1994 ------------- ------------- Current Assets: Cash and cash equivalents.......................... $ 10,684,000 $ 13,378,000 Receivables, less reserves of $1,249,000 in 1995 and $1,161,000 in 1994........................... 39,117,000 30,623,000 Inventories........................................ 49,024,000 43,621,000 Other current assets............................... 4,118,000 4,074,000 Total Current Assets............................ 102,943,000 91,696,000 Plant and Equipment at Cost........................... 126,563,000 116,470,000 Less - accumulated depreciation.................. (56,192,000) (50,685,000) 70,371,000 65,785,000 Advance Payment for Acquisition....................... 0 9,853,000 Other Non-current Assets.............................. 321,000 331,000 $173,635,000 $167,665,000 LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-Term Debt.................................. $ 304,000 $ 10,511,000 Accounts payable................................. 12,337,000 8,773,000 Federal and state income taxes................... 989,000 1,164,000 Other current liabilities........................ 21,907,000 16,133,000 Total Current Liabilities................... 35,537,000 36,581,000 Long-term Debt........................................ 3,887,000 16,022,000 Deferred Income Taxes................................. 4,842,000 4,517,000 Shareholders' Investment: Common stock, $.01 par value, 25,000,000 shares authorized, 20,523,767 issued in 1995 and 20,454,952 issued in 1994..................... 205,000 205,000 Additional paid-in capital....................... 36,989,000 36,595,000 Retained earnings................................ 92,506,000 74,265,000 Cumulative Foreign Currency Translation Adjustments...................................... (331,000) (520,000) 129,369,000 110,545,000 $173,635,000 $167,665,000 See accompanying notes.
REGAL-BELOIT CORPORATION STATEMENT OF INCOME
(Unaudited) ------------------------------------------------------- Three Months Ended Nine Months Ended September 30, September 30, ------------------------- --------------------------- 1995 1994 1995 1994 ----------- ----------- ------------ ------------ Net Sales...................... $71,551,000 $61,185,000 $222,156,000 $180,080,000 Cost of Sales.................. 49,859,000 43,213,000 157,087,000 128,300,000 Gross Profit................. 21,692,000 17,972,000 65,069,000 51,780,000 Operating Expenses............. 7,853,000 7,767,000 24,993,000 24,257,000 Income from Operations....... 13,839,000 10,205,000 40,076,000 27,523,000 Interest Expense............... 133,000 213,000 672,000 772,000 Interest Income................ 93,000 41,000 172,000 73,000 Income Before Taxes.......... 13,799,000 10,033,000 39,576,000 26,824,000 Provision for Income Taxes..... 5,366,000 3,901,000 15,387,000 10,540,000 Net Income................. $ 8,433,000 $ 6,132,000 $ 24,189,000 $ 16,284,000 Per Share of Common Stock: Net Income................... $.41 $.30 $1.18 $.80 Cash Dividends Declared...... $.10 $.08 $.29 $.225 Weighted Average Number of Shares Outstanding........... 20,522,194 20,438,800 20,499,380 20,433,821 See accompanying notes.
REGAL-BELOIT CORPORATION CONDENSED STATEMENT OF CASH FLOWS
(Unaudited) --------------------------- Nine Months Ended Sept. 30, --------------------------- 1995 1994 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income.............................................. $ 24,189,000 $ 16,284,000 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation, amortization and deferred income taxes.. 8,268,000 6,715,000 Change in assets and liabilities: Current assets, other than cash...................... (9,333,000) (5,988,000) Current liabilities, other than notes payable........ 7,508,000 6,725,000 Net cash provided from operating activities....... 30,632,000 23,736,000 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to plant and equipment, net of retirements.... (6,100,000) (5,481,000) Other, net.............................................. 244,000 52,000 Net cash used in investing activities................ (5,856,000) (5,429,000) CASH FLOWS FROM FINANCING ACTIVITIES: Reduction of short-term debt............................ (10,209,000) 0 Reduction of long-term debt............................. (12,136,000) (12,652,000) Dividends to shareholders............................... (5,532,000) (4,392,000) Other, net.............................................. 395,000 173,000 Net cash used for financing activities............... (27,482,000) (16,871,000) EFFECT OF EXCHANGE RATE ON CASH............................ 12,000 29,000 Net increase (decrease) in cash and cash equivalents.... (2,694,000) 1,465,000 Cash and cash equivalents at beginning of period........ 13,378,000 2,193,000 Cash and cash equivalents at end of period.............. $ 10,684,000 $ 3,658,000 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during year for: Interest............................................. $ 662,000 $ 747,000 Income Taxes......................................... $ 14,940,000 $10,180,000 See accompanying notes.
REGAL-BELOIT CORPORATION NOTES TO FINANCIAL STATEMENTS September 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 70% 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:
9-30 12-31 1995 1994 ---- ----- Raw Material 16% 16% Work-in-Process 21% 23% Finished Goods 63% 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. These adjustments were considered to be recurring in nature and there were no adjustments other than normal recurring adjustments made to these statements for the periods reported. 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 September 30, 1995 were $71,551,000, or 16.9% higher than sales of $61,185,000 in the comparable third quarter of 1994, but 6.2% lower than sales in the recent second quarter of 1995. Net sales for the first nine months of 1995 were $222,156,000 representing a 23.4% increase over sales of $180,080,000 for the same period in 1994. The 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 12.6% of the sales increase compared to the first nine months of 1994. The remaining 10.8% sales increase can be attributed to increased order levels in both the Power Transmission Group and the Cutting Tool Group along with selective price increases being in effect for the entire quarter. Net sales in the third quarter were lower than those of the second quarter primarily due to our customers' traditional vacation shutdowns and our own employees taking vacations when additional help was virtually unavailable due to a nation-wide skilled labor shortage. In addition, adverse weather conditions in the Midwest created several power outages, hampered our equipment performance and reduced our productivity. The third quarter gross profit margin increased to 30.3% of sales as compared to 29.4% in the third quarter of 1994 and 29.1% in the recent second quarter of 1995. Despite the drop in sales from second quarter levels, the gross profit margin percentage improved due to selling price increases being in effect for a full quarter and from the favorable results of physical inventories which increased the gross profit percentage by 0.4% in the quarter. For the first nine months of 1995, gross profit margins were 29.3% of sales compared to 28.8% for the same period last year. Third quarter operating expenses were 6.2% lower than the prior second quarter levels. These reduced operating expenses have occurred throughout the Company and were not significantly attributable to any single cause. With the lower sales volume during the third quarter, operating expenses were 11.0% of net sales as compared to 10.9% in the recent second quarter of 1995 and 12.7% in the comparable third quarter of 1994. Year-to-date operating expenses are 3.0% higher than 1994 expenses primarily due to recent acquisitions, but on higher sales volumes, have declined to 11.3% of sales in 1995 as compared to 13.5% in 1994. Income from operations improved in the third quarter to 19.3% of sales compared to 16.7% in the third quarter of 1994 and 18.2% in the second quarter of 1995. For the first nine months of the year, income from operations was 18.0% of sales compared to 15.3% in the same period of 1994. Interest expense continued to decline during the quarter due to a lower debt balance throughout the quarter. The entire $9,853,000 of debt used for the Velvet Drive Transmission acquisition on January 1, 1995 had already been retired during the second quarter of 1995. Liquidity and Capital Resources - ------------------------------- Working capital increased to $67,406,000 as of September 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. Accordingly, the current ratio has increased from 2.5:1 at December 31, 1994 to 2.9:1 as of September 30, 1995. Long-term debt as a percentage of total capital was reduced to 2.9% as of September 30, 1995, from 12.7% as of December 31, 1994, and allows the Company the potential for significant long-term indebtedness if needed. It is believed that the Company's existing credit facilities combined with working capital generated from operations will continue to be sufficient to meet operating and growth needs in the foreseeable future. PART II OTHER INFORMATION 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 August 10, 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 Officer) DATE: November 10, 1995
EX-27 2
5 9-MOS DEC-31-1995 SEP-30-1995 10,684,000 0 39,117,000 1,249,000 49,024,000 102,943,000 126,563,000 56,192,000 173,635,000 35,537,000 0 205,000 0 0 129,164,000 173,635,000 222,156,000 222,156,000 157,087,000 157,087,000 24,993,000 0 672,000 39,576,000 15,387,000 24,189,000 0 0 0 24,189,000 1.18 0
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