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REGALBELOIT Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 4, 2009 05:20PM
REGALBELOIT Corp. (RBC) filed Quarterly Report for the period ended 2009-11-04.
Highlight of Business Operations:
Net income attributable to Regal Beloit Corporation decreased 13.8% to $31.2 million for the three months ended September 26, 2009 as compared to $36.1 million in the comparable period last year. Diluted earnings per share decreased 23.4% to $0.82 for the three months ended September 26, 2009 as compared to $1.07 for the comparable period of 2008.
Net income attributable to Regal Beloit Corporation for the nine months ended September 26, 2009 was $60.4 million, a decrease of 42.4% versus the $104.9 million reported in the comparable period of 2008. Fully diluted earnings per share was $1.71 as compared to $3.14 per share reported in 2008. The average number of diluted shares was 35,294,400 during the nine months ended September 26, 2009 as compared to 33,452,880 during the comparable period of 2008.
Working capital was $624.0million at September 26, 2009, a 45.0% increase from $430.3 million at December 27, 2008. The $193.7 million increase was primarily driven by the $150.4 million of net proceeds from the sale of common stock in May 2009. In addition, a $17.4 million decrease in accounts receivable and a $100.1 million decrease in inventory, partially offset by $27.2 decrease in accounts payable provided another $90.3 million of working capital. The ratio of current assets to our current liabilities (“current ratio”) was 2.6:1 at September 26, 2009 and 2.0:1 at December 27, 2008.
Net cash provided by operating activities was $235.6 million for the nine months ended September 26, 2009 as compared to $158.6 million in the comparable period of 2008. The increase is driven by large working capital improvements partially offset by lower net income in 2009 versus the comparable period of 2008. Net cash used in investing activities was $37.7 million in the first nine months of 2009 as compared to the $57.6 million used in the comparable period of the prior year. Additions to property, plant and equipment were $25.9 million in the first nine months of 2009, which was $18.1 million less than the comparable period of 2008. Our cash provided by financing activities was $90.7 million for the first nine months of 2009 driven by the $150.4 million equity offering net proceeds, versus $28.9 million used in financing activities in the comparable period of 2008. During the nine months ended September 27, 2008, the Company repurchased 110,000 shares at a total cost of $4.2 million. There were no shares repurchased in 2009.
Our outstanding long-term debt decreased from $560.1 million at December 27, 2008 to $473.3 million at September 26, 2009. The decrease of $86.8 million includes a $47.5 million reclassification to Current Maturities of Debt for the Convertible Notes which were paid in the fourth quarter of 2009. In the fourth quarter of 2009, a total of 872,806 shares were issued to former bondholders in settlement of the conversion premium for the $47.5 million redemption. At September 26, 2009, there was $7.3 million outstanding under our $500.0 million unsecured revolving credit facility that expires on April 30, 2012 (the “Facility”). The Facility permits the Company to borrow at interest rates based upon a margin above the London Inter-Bank Offered Rate (“LIBOR”), which margin varies with the ratio of total funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) as defined in the Facility. These interest rates also vary as LIBOR varies. We pay a commitment fee on the unused amount of the Facility, which also varies with the ratio of our total debt to our EBITDA.
At September 26, 2009, there was $250.0 million of senior notes (the “Notes”) outstanding. The Notes were issued and sold in two series: $150.0 million in Floating Rate Series 2007A Senior Notes, Tranche A, due August 23, 2014, and $100.0 million in Floating Rate Series 2007A Senior Notes, Tranche B, due August 23, 2017. The Notes bear interest at a margin over LIBOR, which margin varies with the ratio of the Company s consolidated debt to consolidated EBITDA as defined in the Notes. These interest rates also vary as LIBOR varies. The Notes permit the Company to issue and sell additional note series, subject to certain terms and conditions described in the Agreement, up to a total of $600.0 million in combined Notes.
John Keeley of Keeley Fund Management, David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC.