#United States #financial results #Milwaukee #Q4 2024 #Regal Rexnord

Regal Rexnord Corporation Reports Fourth Quarter 2024 Financial Results

Regal Rexnord Corporation (NYSE: RRX) has recently disclosed its financial results for the fourth quarter of 2024, showcasing a mixed performance amidst ongoing challenges in the market. The company achieved a diluted earnings per share (EPS) of $0.62, with an adjusted diluted EPS reaching $2.34. This reflects a 2.6% increase compared to the previous year, demonstrating the firm’s focus on sustaining profitability despite headwinds.

Q4 Highlights

• - EPS Metrics: The adjusted EPS of $2.34 indicates resilience in earnings performance, even as overall revenue faced a decline.
• - Debt Management: Regal Rexnord proactively reduced its gross debt by $205 million during the fourth quarter, showcasing the company's strength in managing its liabilities effectively. The net debt to adjusted EBITDA ratio stands at approximately 3.6x, highlighting a robust financial position.
• - Cash Flow: The firm's operating activities generated $213.2 million in cash, with adjusted free cash flow improving by 8.4% year-over-year to $185.3 million.
• - Sales Report: Total sales for the quarter amounted to $1,461.1 million, down 9.1% compared to the same period last year, attributed to challenging market conditions, despite a 4.4% increase in daily orders.
• - Gross Margins: The gross margin for Q4 came in at 34.9%, with an adjusted gross margin of 37.1%, marking an increase of 60 basis points year-over-year.

Full Year 2024 Overview

As Regal Rexnord reflects on the entire year, it proudly notes several accomplishments:

• - The company surpassed its synergy delivery target, achieving $101 million, which exceeds the goal by $11 million.
• - Adjusted gross margins for the year improved to 37.8%, an increase of 210 basis points compared to the previous year, emphasizing the effectiveness of operational improvements.
• - The yearly net income surged to $198.4 million, a significant recovery from a GAAP net loss of $54.3 million in the prior year.
• - Regal Rexnord has successfully paid down $938 million in gross debt throughout 2024, exceeding expectations and strengthening its balance sheet.

Strategic Partnerships and Future Outlook

Looking ahead, Regal Rexnord plans to maintain its growth trajectory with exciting initiatives planned for 2025. CEO Louis Pinkham remarked that despite a tough market environment, there are indications that the company is poised for further recovery, particularly with improved orders and strategic partnerships, including a collaboration with Honeywell focusing on electric aircraft (eVTOL).

The company has provided guidance for 2025, with expected GAAP diluted EPS ranging from $4.42 to $5.22 and adjusted diluted EPS between $9.60 to $10.40. This optimistic outlook reflects a commitment to optimizing operations and capitalizing on emerging market opportunities.

Segment Performance Insights

Breaking down the performance by segments, Regal Rexnord noted:

• - Automation & Motion Control: This sector recorded net sales of $409.8 million, down by 2.6%, despite strengths in food and beverage and aerospace sectors.
• - Industrial Powertrain Solutions: Sales in this category reached $635.0 million, experiencing a slight decline yet demonstrating growth in energy and aerospace markets.
• - Power Efficiency Solutions: This segment reported net sales of $416.3 million, with strong growth attributed to residential HVAC applications.

In conclusion, Regal Rexnord's ability to navigate through market challenges by focusing on debt reduction, operational efficiencies, and strategic collaborations positions it for a promising future. Investors and stakeholders can look forward to the earnings call on February 6, 2025, where more details will be discussed, further illustrating the company’s trajectory for sustained growth and success.

For more detailed financial information, including access to supplementary reporting materials, please visit Regal Rexnord's investor website.