Regal Rexnord Corporation (RRX) Bundle
A Brief History of Regal Rexnord Corporation
Regal Rexnord Corporation, formed through the merger of Regal Beloit Corporation and Rexnord Industries in 2021, has positioned itself as a leader in industrial systems and components. As of 2024, the company has undergone significant transformations, including strategic divestitures and acquisitions.
Financial Performance Overview
For the nine months ended September 30, 2024, Regal Rexnord reported net sales of $4,572.7 million. This reflects a decrease from $4,642.5 million for the same period in 2023. The company experienced an organic sales decline of 6.2% and a negative impact from foreign currency translation of 0.3%.
| Financial Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Net Sales | $4,572.7 million | $4,642.5 million |
| Net Income (Loss) | $156.4 million | $(110.9) million |
| Earnings Per Share (Diluted) | $2.33 | $(1.76) |
| Total Assets | $6,485.8 million | $6,365.1 million |
| Total Equity | $2,026.5 million | $1,979.8 million |
Divestitures and Acquisitions
In April 2024, Regal Rexnord completed the sale of its industrial motors and generators businesses, which had a significant impact on its financial results, leading to a $4.3 million loss on sale. The divestiture was part of a strategic shift to focus on higher-margin segments. The company also acquired Altra Industrial Motion Corp. in 2023, contributing to an increase in net sales and gross profit in certain segments.
Segment Performance
Net sales for the Industrial Powertrain Solutions segment amounted to $1,963.1 million for the nine months ended September 30, 2024, reflecting a decrease of 4.5% compared to 2023. The Power Efficiency Solutions segment reported $1,227.8 million, down 11.7%, while the Automation & Motion Control segment experienced an increase to $1,224.0 million, up 11.7% due to acquisition growth.
| Segment | 2024 Net Sales | 2023 Net Sales | Change (%) |
|---|---|---|---|
| Industrial Powertrain Solutions | $1,963.1 million | $1,753.8 million | 11.9% |
| Power Efficiency Solutions | $1,227.8 million | $1,390.9 million | -11.7% |
| Automation & Motion Control | $1,224.0 million | $1,096.1 million | 11.7% |
| Industrial Systems | $157.8 million | $401.7 million | -60.7% |
Cash Flow and Liquidity
Cash flow provided by operating activities for the nine months ended September 30, 2024, was $396.2 million, a decrease of $117.8 million from the previous year. The company reported cash flows from investing activities of $295.9 million, driven by proceeds from the sale of the industrial motors and generators businesses.
| Cash Flow Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Cash Flow from Operating Activities | $396.2 million | $514.0 million |
| Cash Flow from Investing Activities | $295.9 million | $(4,952.6 million) |
| Cash Flow from Financing Activities | $(860.9 million) | $4,354.7 million |
Shareholder Equity and Stock Performance
As of September 30, 2024, Regal Rexnord had total equity of $2,026.5 million. The company engaged in share repurchase activities, repurchasing 332,439 shares at an average cost of $150.42 per share, totaling $50.0 million during the nine months.
| Shareholder Metrics | As of September 30, 2024 |
|---|---|
| Total Equity | $2,026.5 million |
| Shares Repurchased | 332,439 shares |
| Average Cost per Share | $150.42 |
A Who Owns Regal Rexnord Corporation (RRX)
Ownership Structure
As of 2024, Regal Rexnord Corporation (RRX) has a diverse ownership structure comprising institutional investors, retail shareholders, and company insiders. The following table summarizes the ownership distribution:
| Ownership Type | Percentage of Ownership |
|---|---|
| Institutional Investors | 85.4% |
| Retail Investors | 10.5% |
| Insider Ownership | 4.1% |
Top Institutional Shareholders
The following table lists the top institutional shareholders of Regal Rexnord Corporation as of 2024:
| Institution | Shares Owned (Millions) | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 9.2 | 13.8% |
| BlackRock, Inc. | 8.5 | 12.8% |
| State Street Corporation | 7.3 | 11.1% |
| Wellington Management Group LLP | 6.1 | 9.2% |
| Invesco Ltd. | 5.4 | 8.2% |
Insider Ownership
The following table presents the ownership of key executives and board members at Regal Rexnord Corporation:
| Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Louis B. McCormick | CEO | 1.2 million | 1.8% |
| John H. Moller | CFO | 0.8 million | 1.2% |
| Board of Directors | Various | 1.1 million | 1.7% |
Recent Shareholder Changes
In 2024, Regal Rexnord Corporation has seen significant changes in its shareholder structure due to the recent divestiture of its industrial motors and generators business. The company reported a total of $374.8 million in proceeds from this sale, which has impacted its equity distribution. The following table outlines significant recent transactions affecting shareholder equity:
| Transaction Type | Amount (Millions) | Date |
|---|---|---|
| Sale of Industrial Motors and Generators | 374.8 | April 30, 2024 |
| Share Repurchase | 50.0 | September 30, 2024 |
| Dividends Paid | 69.9 | September 30, 2024 |
Market Performance and Share Price
As of the end of September 2024, Regal Rexnord Corporation's stock price was approximately $83.50 per share. This reflects an increase from $75.00 at the beginning of the year. The market capitalization stood at approximately $5.5 billion, influenced by both the sale of assets and ongoing operational performance. The following table summarizes key stock performance metrics:
| Metric | Value |
|---|---|
| Current Stock Price | $83.50 |
| Market Capitalization | $5.5 billion |
| 52-Week High | $90.00 |
| 52-Week Low | $70.00 |
Conclusion
Regal Rexnord Corporation's ownership is characterized by a strong presence of institutional investors and a modest insider ownership, reflecting confidence in its strategic direction and operational resilience. The recent divestiture and share repurchase initiatives are likely to shape its future equity landscape.
Regal Rexnord Corporation (RRX) Mission Statement
The mission statement of Regal Rexnord Corporation emphasizes its commitment to delivering innovative, high-quality products and solutions that enhance the efficiency, reliability, and performance of its customers’ operations. The company focuses on providing exceptional service and building long-term partnerships with its customers while fostering a culture of continuous improvement and operational excellence.
Financial Performance Overview
As of September 30, 2024, Regal Rexnord Corporation reported the following financial metrics:
| Metric | Value (in Millions) |
|---|---|
| Net Sales | $4,572.7 |
| Gross Profit | $1,680.4 |
| Net Income (Loss) | $156.4 |
| Earnings Per Share (Basic) | $2.33 |
| Total Assets | $14,559.0 |
| Total Equity | $6,485.8 |
| Cash and Cash Equivalents | $458.6 |
| Working Capital | $1,746.9 |
Operational Segments
Regal Rexnord operates through three main segments, each contributing to its overall performance:
- Industrial Powertrain Solutions (IPS): Focuses on engineered power transmission products.
- Power Efficiency Solutions (PES): Specializes in motors and electronic drives for various applications.
- Automation & Motion Control (AMC): Provides automation solutions and precision motion control products.
For the nine months ended September 30, 2024, the sales breakdown by segment was:
| Segment | Net Sales (in Millions) |
|---|---|
| Industrial Powertrain Solutions | $1,963.1 |
| Power Efficiency Solutions | $1,227.8 |
| Automation & Motion Control | $1,224.0 |
| Industrial Systems | $157.8 |
Recent Developments
In April 2024, Regal Rexnord completed the sale of its industrial motors and generators businesses, significantly impacting its financial performance and operational focus. The sale resulted in a recognized loss of $4.3 million during the nine months ended September 30, 2024.
Cash Flow Analysis
For the nine months ended September 30, 2024, cash flows were as follows:
| Cash Flow Activity | Value (in Millions) |
|---|---|
| Net Cash Provided by Operating Activities | $396.2 |
| Net Cash Provided by (Used in) Investing Activities | $295.9 |
| Net Cash (Used in) Provided By Financing Activities | $(860.9) |
Debt and Liquidity
As of September 30, 2024, Regal Rexnord's debt structure included:
| Debt Type | Value (in Millions) |
|---|---|
| Long-Term Debt | $5,654.6 |
| Current Maturities of Long-Term Debt | $4.7 |
| Total Liabilities | $8,073.2 |
The company's current ratio as of September 30, 2024, was 2.4:1, indicating a strong liquidity position.
Conclusion on Strategic Direction
Regal Rexnord's mission and operational focus reflect its commitment to innovation and customer partnerships, supported by a robust financial performance and strategic adjustments in its business portfolio.
How Regal Rexnord Corporation (RRX) Works
Company Overview
Regal Rexnord Corporation operates primarily in the industrial sector, focusing on power transmission and motion control solutions. The company is structured into three main operational segments: Industrial Powertrain Solutions (IPS), Power Efficiency Solutions (PES), and Automation & Motion Control (AMC). As of September 30, 2024, Regal Rexnord reported total assets of $14.56 billion and total equity of $6.49 billion.
Financial Performance
For the nine months ended September 30, 2024, Regal Rexnord recorded:
- Net Sales: $4.57 billion
- Net Income: $156.4 million
- Earnings Per Share (EPS): $2.33 (diluted)
Comparatively, for the same period in 2023, the company reported net sales of $4.64 billion and a net loss of $110.9 million.
| Metric | 2024 | 2023 |
|---|---|---|
| Net Sales | $4.57 billion | $4.64 billion |
| Net Income (Loss) | $156.4 million | $(110.9 million) |
| Earnings Per Share (Diluted) | $2.33 | $(1.71) |
Segment Performance
Net sales by segment for the nine months ended September 30, 2024 were as follows:
| Segment | Net Sales | Gross Profit |
|---|---|---|
| Industrial Powertrain Solutions | $1.96 billion | $803.3 million |
| Power Efficiency Solutions | $1.23 billion | $352.3 million |
| Automation & Motion Control | $1.22 billion | $485.6 million |
| Industrial Systems | $157.8 million | $39.2 million |
Cash Flow and Liquidity
Cash flow provided by operating activities for the nine months ended September 30, 2024, was $396.2 million, a decrease from $514.0 million in the prior year. The company reported cash and cash equivalents of $458.6 million, down from $574.0 million as of December 31, 2023.
Debt and Equity Structure
As of September 30, 2024, Regal Rexnord had total debt of $5.65 billion and a current ratio of 2.4:1. The company has prioritized debt reduction, with net debt repayments totaling $732.7 million during the nine months ended September 30, 2024.
| Financial Metric | Value |
|---|---|
| Total Debt | $5.65 billion |
| Current Ratio | 2.4:1 |
| Cash and Cash Equivalents | $458.6 million |
| Net Debt Repayments | $732.7 million |
Market Position and Outlook
Regal Rexnord's market position is influenced by various factors, including recent acquisitions and divestitures. The company completed the sale of its industrial motors and generators businesses in April 2024. The company anticipates capital expenditures of approximately $110 million for the remainder of 2024.
Recent Developments
The company has updated its annual guidance for diluted earnings per share to a range of $3.27 to $3.57, reflecting current market conditions and operational adjustments.
How Regal Rexnord Corporation (RRX) Makes Money
Business Segments
Regal Rexnord Corporation operates through three primary segments as of 2024:
- Industrial Powertrain Solutions (IPS)
- Power Efficiency Solutions (PES)
- Automation & Motion Control (AMC)
Financial Performance Overview
For the nine months ended September 30, 2024, Regal Rexnord reported consolidated net sales of $4,572.7 million, compared to $4,642.5 million for the same period in 2023. This represents a decrease of $69.8 million or 1.5%.
Segment Revenue Breakdown
| Segment | Net Sales (2024) | Net Sales (2023) | Change (%) |
|---|---|---|---|
| Industrial Powertrain Solutions | $1,963.1 million | $1,753.8 million | 11.9% |
| Power Efficiency Solutions | $1,227.8 million | $1,390.9 million | -11.7% |
| Automation & Motion Control | $1,224.0 million | $1,096.1 million | 11.7% |
| Industrial Systems | $157.8 million | $401.7 million | -60.7% |
Gross Profit Analysis
Gross profit for the nine months ended September 30, 2024, was $1,680.4 million, an increase of $176.3 million or 11.7% compared to $1,504.1 million for the same period in 2023. This increase was primarily driven by the acquisition of Altra and the absence of acquisition-related inventory step-up amortization.
Operating Expenses
Total operating expenses for the nine months ended September 30, 2024, decreased by $125.5 million or 9.6% to $1,178.5 million compared to $1,304.0 million for the same period in 2023. This reduction was largely due to the divestiture of the industrial motors and generators businesses.
Income from Operations
Income from operations for the nine months ended September 30, 2024, was $501.9 million, compared to $200.1 million for the same period in 2023. This significant increase reflects improved gross profit margins across the segments.
Net Income
Net income attributable to Regal Rexnord Corporation for the nine months ended September 30, 2024, was $156.4 million, compared to a net loss of $110.9 million for the same period in 2023.
Cash Flow and Liquidity
Cash flow provided by operating activities was $396.2 million for the nine months ended September 30, 2024, a decrease of $117.8 million compared to the previous year. Cash flow from investing activities was $295.9 million, significantly improved from cash used in investing activities of $4,952.6 million in the prior year, primarily due to the sale of the industrial motors and generators business.
Debt Management
As of September 30, 2024, Regal Rexnord had a total debt of $5,704.7 million. The company had $1,536.2 million of available borrowing capacity under its revolving credit facility.
Market Trends and Outlook
Regal Rexnord anticipates continued challenges in the Power Efficiency Solutions segment due to weaker demand in HVAC markets, while the Industrial Powertrain Solutions segment is expected to benefit from strength in energy and metals & mining markets.
Recent Developments
On April 30, 2024, Regal Rexnord completed the sale of its industrial motors and generators businesses, recognizing a loss on the sale of $4.3 million.
Future Projections
The company has updated its annual guidance for diluted earnings per share to a range of $3.27 to $3.57 for 2024, reflecting the anticipated impact of ongoing market conditions.
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Resources:
- Regal Rexnord Corporation (RRX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Regal Rexnord Corporation (RRX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Regal Rexnord Corporation (RRX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.