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

August 9, 2007

Date of Report (Date of earliest event reported)

Baldor Electric Company

Exact name of registrant as specified in its charter

Missouri	01-07284	43-0168840
State or other jurisdiction of incorporation	Commission File Number	IRS Employer Identification No
5711 R. S. Boreham, Jr. St Fort Smith, Arkansas		72901
Address of principal executive offices		Zip Code

479-646-4711

Registrant’s telephone number, including area code

N/A

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 8.01 OTHER EVENTS

As previously reported, Baldor Electric Company (“Baldor”) completed its acquisition of the Reliance Electric business portion of the Power Systems Group from Rockwell Automation, Inc. and certain of its affiliates effective January 31, 2007 (the “Acquisition”). Baldor used the proceeds from its offering of senior unsecured notes and common stock, together with $1.0 billion in term loan borrowings under its senior secured credit facility and the issuance of 1.58 million shares of common stock to Rockwell Automation of Ohio, Inc. to pay the purchase price for the Acquisition, to repay substantially all indebtedness existing prior to the Acquisition and to pay fees and expenses related thereto (collectively, the “Transactions”). Baldor previously filed on Form 8-K on January 8, 2007, as amended by Form 8-K filed January 11, 2007, historical and pro forma financial information with respect to the Power Systems Group and the acquisition of the Reliance Electric business, including an unaudited pro forma condensed combined statement of income for the year ended December 31, 2005, and for the nine months ended September 30, 2006. Baldor also filed on Form 8-K on July 10, 2007, a pro forma condensed combined statement of earnings for the three months ended March 31, 2007, illustrating the effects of the Reliance Electric acquisition as if it had been consummated as of the beginning of the period. Baldor is filing this Form 8-K to incorporate by reference into its Registration Statement on Form S-3, which was filed July 10, 2007, updated pro forma financial information with respect to the acquisition of the Reliance Electric business, as required by Rule 11-02 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Specifically, this Form 8-K is being filed to provide updated pro forma condensed combined statement of earnings for the six months ended June 30, 2007, illustrating the effects of the Reliance Electric acquisition as if it had been consummated as of the beginning of the period.

In accordance with Rule 11-02(c)(1) of Regulation S-X of the Securities Exchange Act of 1934, as amended, a pro forma balance sheet has not been prepared to give effect to acquisition of Reliance Electric as of June 30, 2007, as it is reflected in the consolidated balance sheet presented in the quarterly report filed on Form 10-Q for the period ended June 30, 2007.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(b) The unaudited pro forma combined condensed financial information of Baldor, giving effect to the Acquisition and Transactions for the six months ended June 30, 2007, is attached as an exhibit hereto.

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.

Baldor Electric Company

(Registrant)

Date	August 9, 2007	/s/ George E. Moschner
		George E. Moschner
		Chief Financial Officer
		(Principal Financial Officer)

INDEX OF EXHIBITS

Exhibit No.	Description
99.1	Unaudited pro forma condensed combined statement of earnings for the six months ended June 30, 2007

EX-99.1

EXHIBIT 99.1

PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

On January 31, 2007, Baldor completed its acquisition of the Reliance Electric industrial motors business and Dodge mechanical power transmission business (together known as the “Acquired Businesses”) from Rockwell Automation and certain of its subsidiaries for total consideration of approximately $1.8 billion, subject to adjustment (the “Acquisition”). Baldor used the proceeds from its offering of senior unsecured notes and common stock, together with $1.0 billion in term loan borrowings under its senior secured credit facility and the issuance of 1.58 million shares of common stock to Rockwell Automation of Ohio, Inc. to pay the purchase price for the Acquisition, to repay substantially all indebtedness existing prior to the Acquisition and to pay fees and expenses related thereto (collectively, the “Transactions”).

The following unaudited pro forma condensed combined statement of earnings should be read in conjunction with historical consolidated financial statements and related notes of both Baldor and the Power Systems Group which are included or incorporated by reference in Baldor’s filings with the Securities and Exchange Commission.

The unaudited pro forma condensed combined statement of earnings for the six months ended June 30, 2007, presented herein gives effect to the Acquisition and the Transactions as if they occurred on January 1, 2007, and combines the historical consolidated statement of earnings of Baldor for the six months ended June 30, 2007, with the historical consolidated statement of earnings of Power Systems for the one month ended January 31, 2007. Because the Acquisition was completed January 31, 2007, historical information for Power Systems is only presented for the one month ended January 31, 2007, as the results of operations for Power Systems for February 1, 2007, through June 30, 2007, are reflected in the statement of earnings for Baldor.

The historical consolidated financial statements have been adjusted to give effect to pro forma items that are (i) directly attributable to the Acquisition and the Transactions, and (ii) factually supportable. The pro forma events must be expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and is not necessarily indicative of what the actual combined results of operations would be for future periods.

The unaudited pro forma condensed combined statement of earnings was prepared using the purchase method of accounting to account for the Acquisition. Accordingly, we have adjusted the historical consolidated statement of earnings to give effect to the consideration issued in connection with the Acquisition.

The unaudited pro forma condensed combined statement of earnings does not include the impacts of any revenue, cost or other operating synergies that may result from the Acquisition or any related restructuring costs. The unaudited pro forma condensed combined statement of earnings does not reflect certain amounts resulting from the Acquisition because we consider them to be of a non-recurring nature. Such amounts may be comprised of restructuring and other exit costs and non-recurring costs relating to the integration of Baldor and the Acquired Businesses.

Based on Baldor’s review of Power Systems’ summary of significant accounting policies disclosed in the latter’s historical financial statements, the nature and amount of any adjustments to the historical financial statements of Power Systems to conform their accounting policies to those of Baldor were not significant.

Baldor Electric Company and Affiliates

Unaudited Pro Forma Condensed Combined Statement of Earnings

For the Six Months Ended June 30, 2007

(in thousands except for per share data)

	Historical						Pro Forma
	Six Months Ended June 30, 2007			Month Ended January 31, 2007
	Baldor			Power Systems			Adjustments			Baldor Pro Forma
Consolidated Statement of Earnings Data:
Net sales	$	887,309		$	94,105		$	—		$	981,414
Cost of goods sold		626,163			66,545			(790	) 1,2,3,5,7		691,918
Gross profit		261,146			27,560			790			289,496
Selling and administrative		139,903			14,844			(855	) 5,7		153,892
Operating profit (1)		121,243									135,604
Other income (expense), net		1,670			(135	)		—			1,535
Interest		(50,913	)		(113	)		(9,963	) 4		(60,989	)
Earnings before income taxes		72,000			12,468			(8,318	)		76,150
Income taxes		25,920			4,488			(2,995	) 6		27,413
Net Earnings	$	46,080		$	7,980		$	(5,323	)	$	48,737
Net earnings per share – basic	$	1.06								$	1.07
Net earnings per share – diluted	$	1.04								$	1.05
Weighted average shares outstanding – basic		43,452						2,175	8		45,627
Weighted average shares outstanding – diluted		44,110						2,175	8		46,285

See Notes to Unaudited Pro Forma Condensed Combined Financial Information

(1) Operating profit not presented on Power Systems Historical Statements and Adjustments as Power Systems has not presented Operating profit historically.

NOTES TO THE UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

(Dollars in thousands)

The pro forma adjustments included in the unaudited pro forma condensed combined statement of earnings are as described below.

1. The historical financial statements of Power Systems included revenues and expenses related to certain non-custom drives that were purchased from Rockwell Automation. After the Acquisition, Baldor may continue to purchase those drives from Rockwell Automation at an increased price. This adjustment represents increased Cost of goods sold to reflect the effect of increased pricing, amounting to $300.

2. Reflects the elimination of amortization of intangibles of $160 in Cost of goods sold for Power Systems related to intangible assets recorded on the historical financial statements of Power Systems; and the inclusion of amortization expense of $1,036 for the month ended January 31, 2007, in relation to the intangible assets acquired.

3. Reflects the incremental depreciation expense of $704 in relation to the step-up in fair value of fixed assets for the month ended January 31, 2007.

4. Reflects the elimination of interest expense related to debt to be repaid in the Transactions and the addition of assumed interest expense for senior notes and senior secured credit facility, in connection with the issuance of new debt in the Transactions. Historic interest expense eliminated amounts to $42 for the month ended January 31, 2007. Estimated interest expense amounts to $10,005 for the month ended January 31, 2007, assuming a weighted average interest rate of 7.7% for the new debt. The adjustment assumes amortization of debt issuance costs on a straight-line basis over the respective maturities of the indebtedness. A portion of the new debt bears interest at a variable rate. For each 0.125% change in interest rate, annual interest expense would change by $1,194.

5. Baldor’s defined contribution plan expense is based on 12% of pre-tax pre-profit sharing earnings. The pro forma Transaction adjustments reduce pre-tax earnings. Accordingly, profit sharing expense is reduced by $1,422 ($1,179 in Cost of goods sold and $243 in Selling and administrative) for the month ended January 31, 2007.

6. Tax effect of adjustments such that the pro forma results reflect an effective tax rate comparable to the historical rate of Baldor.

7. Reflects the elimination of pension and post-retirement benefit expense of $4,003 ($2,838 in Cost of goods sold and $1,165 in Selling and administrative) for the month ended January 31, 2007; and the inclusion of defined contribution plan expense of $1,900 ($1,347 in Cost of goods sold and $553 in Selling and administrative) for the month ended January 31, 2007. Certain pension and post-retirement benefit plans historically maintained by Power Systems were replaced with Baldor’s defined contribution plan.

8. Basic net earnings per share is calculated by dividing the net earnings for the period by the weighted average common shares outstanding for the period, inclusive of the 1,579,280 shares issued to Rockwell Automation and the 11,725,000 shares issued in the Common Stock offering. Weighted average common shares outstanding for the diluted net earnings per share calculation includes the shares issued to Rockwell Automation, the shares issued in the Common Stock offering and the dilutive effects of outstanding stock options.