Document
false0000082811 0000082811 2020-02-03 2020-02-03


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

Date of Report (Date of earliest event reported):    February 3, 2020
_______________________

              Regal Beloit Corporation             
(Exact name of registrant as specified in its charter)

Wisconsin
1-7283
39-0875718
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)

          200 State Street, Beloit, Wisconsin 53511-6254           
(Address of Principal Executive Offices, Including Zip Code)

Registrant's Telephone Number: (608) 364-8800

_______________________

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))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
_______________________

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class
Trading symbol
Name of each exchange on which registered
Common Stock
RBC
New York Stock Exchange





Item 2.02.    Results of Operations and Financial Condition.
Effective December 28, 2019, the Company reorganized its reportable segments to align with its new management reporting structure and business activities. Prior to this reorganization, the Company was comprised of three reportable segments: Commercial & Industrial Systems, Climate Solutions and Power Transmission Solutions. As a result of this reorganization, the Company divided the Commercial & Industrial Systems segment into separate reportable segments.  Therefore, the Company is now comprised of four reportable segments: Commercial Systems, Industrial Systems, Climate Solutions and Power Transmission Solutions. The Company has recast previously reported segment financial information on a basis consistent with these segments.
A description of the four reportable segments after the reorganization is as follows:

Segment
Typical Products
Typical Applications
Commercial Systems
AC/DC motors from fractional to 5 horsepower (hp) and electronic variable speed controls
Fans and blowers
Hermetic stator and rotor sets from 5 to 2,900 hp
Commercial HVAC, water pumps, air compressors, commercial kitchen and laundry equipment
Industrial Systems
AC motors from 3 to 3,500 hp
Alternators from 5 to 4,000 kilowatts
Automatic transfer switches and switchgear
General industrial equipment, agriculture, marine, oil and gas, data centers, power generation
Climate Solutions
Fractional horsepower motors and electronic variable speed controls
Small fans and blowers
Residential and light commercial HVAC, water heating, commercial refrigeration, small appliances
Power Transmission Solutions
Mounted and unmounted bearings
PT drives and components, gearboxes and gearing sets
High performance couplings
Conveying products and components
Industrial equipment, material handling, Commercial HVAC, food and beverage, oil and gas

For informational purposes, we are hereby furnishing selected supplemental unaudited financial information in the attached Exhibit 99.2 reflecting these changes for the periods presented. This information includes our unaudited net sales and income (loss) from operations for each fiscal quarter of 2019 and 2018, and the fiscal years ended December 28, 2019 and December 29, 2018. For further information about our financial results for fiscal year 2018, see our Annual Report on Form 10-K for the fiscal year ended December 29, 2018 filed with the Securities and Exchange Commission on February 26, 2019.
 
The information in this Current Report on 8-K and the exhibit attached hereto shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

On February 3, 2020, Regal Beloit Corporation (the “Company”) issued a news release reporting the financial results of the Company for its fourth quarter ended December 28, 2019. A copy of the Company's news release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01    Regulation FD Disclosure.

The Company will hold a conference call at 10:00 a.m. EDT on February 4, 2020 to discuss its financial results for its fourth quarter ended December 28, 2019 and will provide a presentation in connection therewith. A copy of the Company's conference call presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.





Item 9.01.    Financial Statements and Exhibits.
(a)
Not Applicable
(b)
Not Applicable
(c)
Not Applicable
(d)
Exhibits. The following exhibits are being furnished herewith:

Exhibit Index
Exhibit Number
 
Exhibit Description
 
 
104.1
 
Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document).







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.

REGAL BELOIT CORPORATION


Date: February 4, 2020          By: /s/ Thomas E. Valentyn                
Thomas E. Valentyn
Vice President, General Counsel and Secretary




  regallogopurplewhitea06.jpg
newsreleaseimagea12.jpg

FOR RELEASE ON: February 3, 2020        

CONTACT:    Robert Cherry, VP - Investor Relations
608-361-7530                    
[email protected]

Regal Beloit Corporation Announces Fourth Quarter 2019 Financial Results

•
Improving Deleverage
•
Strong Free Cash Flow
•
Reorganized Segments by Separating Commercial and Industrial Systems

BELOIT, WI - Regal Beloit Corporation (NYSE: RBC), a global leader in the engineering and manufacturing of high-efficiency electric motors and power transmission products, reported fourth quarter 2019 diluted earnings per share of $0.89. Fourth quarter 2019 adjusted diluted earnings per share* were $1.25. Full year 2019 diluted earnings per share were $5.66. Full year 2019 adjusted diluted earnings per share were $5.49.

Key financial results for the fourth quarter 2019 included:

•
Total net sales of $738.2 million decreased 16.3% from the prior year and included a negative 0.5% impact from foreign currency and a negative 6.5% impact from businesses divested/to be exited. The result was a negative organic sales growth rate of 9.3%.
•
Income from operations was $61.7 million or 8.4% of net sales. Adjusted income from operations was $77.5 million or 10.5% of adjusted net sales.
•
Adjusted income from operations delevered at 12.2% from prior year.
•
Net cash provided by operating activities was $137.3 million and capital expenditures totaled $15.1 million, resulting in free cash flow of $122.2 million.
•
Inventories down $47.3 million from the end of the third quarter 2019.
•
Debt decreased $63.4 million from $1,200.9 million at the end of the third quarter 2019 to $1,137.5 million. Net debt decreased $101.8 million from $907.9 million at the end of the third quarter 2019 to $806.1 million.
•
Debt to EBITDA was 2.3, unchanged from the end of the third quarter 2019. Net debt to adjusted EBITDA was 1.7 down from 1.9 at the end of the third quarter 2019.
•
Purchased 180,763 shares for a total of $15.0 million.

Key Financial results for the full year 2019 included:

•
Income from operations was $351.1 million or 10.8% of net sales. Adjusted income from operations was $342.1 million or 10.7% of adjusted net sales.
•
Adjusted income from operations delevered at 15.5% from prior year.
•
Net cash provided by operating activities was $408.5 million and capital expenditures totaled $92.4 million, resulting in free cash flow of $316.1 million as compared to $285.1 million in 2018.
•
Debt decreased $169.6 million from $1,307.1 million at the end of 2018 to $1,137.5 million. Net debt decreased $252.4 million from $1,058.5 million at the end of 2018 to $806.1 million.
•
Debt to EBITDA was 2.3, down from 2.7 at the end of the end of 2018. Net debt to adjusted EBITDA was 1.7 down from 2.1 at the end of 2018.
•
Purchased 2,194,545 shares for a total of $165.0 million.

Effective as of December 28, 2019, the Company reorganized its segments to align with its new management reporting structure and business activities. Prior to this reorganization, the Company was comprised of three segments: Commercial & Industrial Systems, Climate Solutions and Power Transmission Solutions. As a result of this reorganization, the Company divided the Commercial and Industrial Systems segment into separate segments. Therefore, the Company is now comprised of four segments: Commercial Systems, Industrial Systems, Climate


*This earnings release includes non-GAAP financial measures. Descriptions of why we believe these non-GAAP measures are useful and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included with this earnings release.


Solutions, and Power Transmission Solutions. The Company has recast previously reported segment financial information on a basis consistent with these segments. For details on the 2018 and 2019 recast results reflecting the realigned segments, please see the tables in the appendix. A description of the Company’s four segments can be found in the Company’s Form 8-K dated February 3, 2020.

“While the market conditions continue to be challenging, our ability to remove cost and delever at a relatively low rate for three consecutive quarters further illustrates the margin potential of the company. The Climate and PTS businesses were both able to achieve notable operating profit growth despite sizable sales headwinds. With our announced re-segmentation, our Commercial and Industrial businesses will have improved transparency, renewed focus, and clear accountability. We have new leadership in approximately half of our top 25 business unit management roles, which in addition to our tenured talent, is driving fresh ideas and a spotlight on performance. Lastly, Regal delivered another quarter of excellent free cash flow. I am very proud of our teams’ efforts,” said Regal CEO Louis Pinkham.

Fourth quarter 2019 segment results versus the prior year fourth quarter:

•
Commercial Systems segment net sales were $202.0 million, a decrease of 26.1%. Businesses divested/to be exited had a negative 15.1% impact, and foreign currency had a negative 0.6% impact. The result was a negative organic sales growth rate of 10.4% driven by continued inventory de-stocking in the North American pool pump market, weakness in North American general industry, and the impact of 80/20 account pruning. Operating margin was 3.9%. After net adjustments of $7.2 million, adjusted operating margin was 7.5% of adjusted net sales. Adjusted income from operations delevered at 28.7% from prior year.

•
Industrial Systems segment net sales were $138.0 million, a decrease of 15.6%. Businesses divested/to be exited had a negative 0.7% impact, and foreign currency had a negative 0.7% impact. The result was a negative organic sales growth rate of 14.2% driven by continued power generation project delays due to end market overcapacity and the oil & gas downturn, weak North American and China industrial demand due to trade uncertainty, and the impact of 80/20 account pruning. Operating margin was negative 1.0%. After net adjustments of $3.0 million, adjusted operating margin was 1.2% of adjusted net sales. Adjusted income from operations delevered at 18.3% from prior year.

•
Climate Solutions segment net sales were $206.4 million, a decrease of 11.1%. The businesses divested/to be exited had a negative 4.4% impact, and foreign currency had a negative 0.2% impact. The result was a negative organic sales growth rate of 6.5% driven by a mild start to the winter in North America, the impact from the FER pre-buy in residential HVAC in the first half of the year, inventory reductions by HVAC OEMs and 80/20 account pruning efforts, which were partially offset by improving demand in Asia Pacific. Operating margin was 17.3%. After net adjustments of $0.4 million, adjusted operating margin was 17.1% of adjusted net sales. Adjusted income from operations grew despite the 6.5% organic sales decline in the quarter.

•
Power Transmission Solutions segment net sales were $191.8 million, a decrease of 9.9%. The businesses divested/to be exited had a negative 2.3% impact, and foreign currency had a negative 0.4% impact. The result was a negative organic sales growth rate of 7.2% driven by a significant slowdown in upstream and midstream oil & gas, continued weakness in the industrial distribution channel, and 80/20 account pruning efforts, which were partially offset by strong demand in renewable energy. Operating margin was 10.2%. After net adjustments of $6.0 million, adjusted operating margin was 13.3% of adjusted net sales. Adjusted income from operations grew despite the 7.2% organic sales decline in the quarter.

2020 Outlook

“We are providing adjusted diluted earnings per share guidance of $5.65 to $6.05, an increase of approximately 7% at the midpoint from 2019. We expect markets to continue to be challenged in the first half of the year but believe the second half should see a recovery,” continued Mr. Pinkham.

He concluded, “We are energized about our re-segmentation, executing 80/20, and driving improvement in profitability, while staying laser focused on exceeding customer needs with differentiated products, solutions, and


services. I look forward to sharing more about our strategy to drive further shareholder creation at our Investor Day on March 3rd in New York City.”

The Company forecasts 2020 GAAP diluted earnings per share of $5.35 to $5.75. The difference between the GAAP diluted earnings per share guidance and the adjusted diluted earnings per share guidance relates to expected restructuring and related costs of $0.28 per share, gain on businesses divested and assets to be exited of $0.01 per share, and executive transition costs of $0.03 per share.

For details related to all 2018 and 2019 divestitures, please see the tables in the appendix. In these tables, net sales and adjusted income from operations are provided for each segment by quarter and for the full year for ongoing business comparison purposes.

Conference Call

Regal will hold a conference call to discuss the earnings release at 9:00 AM CST (10:00 AM EST) on Tuesday, February 4, 2020. To listen to the live audio and view the presentation during the call, please visit Regal’s Investors website: https://investors.regalbeloit.com. To listen by phone or to ask the presenters a question, dial 1.888.317.6003 (U.S. callers) or +1.412.317.6061 (international callers) and enter 2781436# when prompted.

A webcast replay will be available at the link above, and a telephone replay will be available at 1.877.344.7529 (U.S. callers) or +1.412.317.0088 (international callers), using a replay access code of 10138325#. Both will be accessible until May 4, 2020.

About the Company

Regal Beloit Corporation (NYSE: RBC) is a global leader in the engineering and manufacturing of electric motors and controls, power generation solutions and power transmission products serving customers throughout the world. We create a better tomorrow by developing and responsibly producing energy-efficient products and systems.

Our company is comprised of four operating segments: Commercial Systems, Industrial Systems, Climate Solutions and Power Transmission Solutions. Regal is headquartered in Beloit, Wisconsin and has manufacturing, sales and service facilities worldwide. For more information, visit RegalBeloit.com.

CAUTIONARY STATEMENT

The following is a cautionary statement made under the Private Securities Litigation Reform Act of 1995: With the exception of historical facts, the statements contained in this release may be forward-looking statements. Forward-looking statements represent our management’s judgment regarding future events. In many cases, you can identify forward-looking statements by terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “forecast,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative of these terms or other similar words. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including but not limited to: uncertainties regarding our ability to execute our restructuring plans within expected costs and timing; actions taken by our competitors and our ability to effectively compete in the increasingly competitive global electric motor, drives and controls, power generation and power transmission industries; our ability to develop new products based on technological innovation, such as the Internet of Things, and marketplace acceptance of new and existing products, including products related to technology not yet adopted or utilized in certain geographic locations in which we do business; fluctuations in commodity prices and raw material costs; our dependence on significant customers; risks associated with global manufacturing, including risks associated with public health crises; issues and costs arising from the integration of acquired companies and businesses and the timing and impact of purchase accounting adjustments; our overall debt levels and our ability to repay principal and interest on our outstanding debt; prolonged declines in one or more markets we serve, such as heating, ventilation, air conditioning, refrigeration, power generation, oil and gas, unit material handling or water heating; economic changes in global markets where we do business, such as reduced demand for the products we sell, currency exchange rates, inflation rates, interest rates, recession, government policies, including policy changes affecting taxation, trade, tariffs, immigration, customs, border actions and the like, and other external factors that we cannot control; product liability and other


litigation, or claims by end users, government agencies or others that our products or our customers’ applications failed to perform as anticipated, particularly in high volume applications or where such failures are alleged to be the cause of property or casualty claims; unanticipated liabilities of acquired businesses; unanticipated adverse effects or liabilities from business exits or divestitures; unanticipated costs or expenses we may incur related to product warranty issues; our dependence on key suppliers and the potential effects of supply disruptions; infringement of our intellectual property by third parties, challenges to our intellectual property, and claims of infringement by us of third party technologies; effects on earnings of any significant impairment of goodwill or intangible assets; losses from failures, breaches, attacks or disclosures involving our information technology infrastructure and data; cyclical downturns affecting the global market for capital goods; and other risks and uncertainties including but not limited to those described in “Item 1A-Risk Factors” of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February 26, 2019 and from time to time in other filed reports. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the applicable cautionary statements. The forward-looking statements included in this release are made only as of their respective dates, and we undertake no obligation to update these statements to reflect subsequent events or circumstances.



NON-GAAP MEASURES AND OTHER DEFINITIONS
Unaudited
(Dollars in Millions, Except per Share Data)


We prepare financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also periodically disclose certain financial measures in our quarterly earnings releases, on investor conference calls, and in investor presentations and similar events that may be considered “non-GAAP” financial measures. This additional information is not meant to be considered in isolation or as a substitute for our results of operations prepared and presented in accordance with GAAP.

In this earnings release, we disclose the following non-GAAP financial measures, and we reconcile these measures in the tables below to the most directly comparable GAAP financial measures: adjusted diluted earnings per share (both historical and projected), adjusted income from operations, adjusted operating margin, adjusted net sales, net debt, adjusted EBITDA, adjusted operating leverage, adjusted net income attributable to Regal Beloit Corporation, free cash flow, free cash flow as a percentage of adjusted net income attributable to Regal Beloit Corporation, adjusted income before taxes, adjusted provision for income taxes, adjusted effective tax rate, net sales from ongoing business, adjusted income from operations of ongoing business, ongoing business adjusted operating margin and adjusted diluted earnings per share for ongoing business. We believe that these non-GAAP financial measures are useful measures for providing investors with additional information regarding our results of operations and for helping investors understand and compare our operating results across accounting periods and compared to our peers. Our management primarily uses adjusted income from operations, adjusted operating income, adjusted operating margin, and adjusted operating leverage to help us manage and evaluate our business and make operating decisions, while adjusted diluted earnings per share, net debt, adjusted EBITDA, adjusted net sales, adjusted net income attributable to Regal Beloit Corporation, free cash flow, free cash flow as a percentage of adjusted net income attributable to Regal Beloit Corporation, adjusted income before taxes, adjusted provision for income taxes, adjusted effective tax rate, net sales from ongoing business, adjusted income from operations of ongoing business, ongoing business adjusted operating margin and adjusted diluted earnings per share for ongoing business are primarily used to help us evaluate our business and forecast our future results. Accordingly, we believe disclosing and reconciling each of these measures helps investors evaluate our business in the same manner as management.

In addition to these non-GAAP measures, we also use the term “organic sales” to refer to GAAP sales from existing operations excluding any sales from acquired businesses recorded prior to the first anniversary of the acquisition (“net sales from business acquired") and excluding any sales from business divested/to be exited (“net sales from business divested/to be exited“) recorded prior to the first anniversary of the exit and excluding the impact of foreign currency translation. The impact of foreign currency translation is determined by translating the respective period’s organic sales using the currency exchange rates that were in effect during the prior year periods. We use the term “organic sales growth” to refer to the increase in our sales between periods that is attributable to organic sales. For further clarification, we may use the term “acquisition growth” to refer to the increase in our sales between periods that is attributable to acquisition sales.







CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
(Dollars in Millions, Except per Share Data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
Net Sales
 
$
738.2

 
$
881.7

 
$
3,238.0

 
$
3,645.6

Cost of Sales
 
548.0

 
642.0

 
2,377.3

 
2,681.0

Gross Profit
 
190.2

 
239.7

 
860.7

 
964.6

Operating Expenses
 
128.5

 
149.9

 
499.6

 
599.4

Goodwill Impairment
 
—

 
—

 
—

 
9.5

Asset Impairments
 
—

 
—

 
10.0

 
8.7

Total Operating Expenses
 
128.5

 
149.9

 
509.6

 
617.6

Income from Operations
 
61.7

 
89.8

 
351.1

 
347.0

Other (Income) Expenses, net
 
(0.5
)
 
0.3

 
(0.1
)
 
1.5

Interest Expense
 
12.5

 
14.3

 
53.0

 
55.2

Interest Income
 
1.6

 
0.1

 
5.6

 
1.9

Income before Taxes
 
51.3

 
75.3

 
303.8

 
292.2

Provision for Income Taxes
 
13.7

 
18.8

 
61.2

 
56.4

Net Income
 
37.6

 
56.5

 
242.6

 
235.8

Less: Net Income Attributable to Noncontrolling Interests
 
0.9

 
0.9

 
3.7

 
4.6

Net Income Attributable to Regal Beloit Corporation
 
$
36.7

 
$
55.6

 
$
238.9

 
$
231.2

Earnings Per Share Attributable to Regal Beloit Corporation:
 
 
 
 
 
 
 
 
Basic
 
$
0.90

 
$
1.29

 
$
5.69

 
$
5.30

Assuming Dilution
 
$
0.89

 
$
1.28

 
$
5.66

 
$
5.26

Cash Dividends Declared Per Share
 
$
0.30

 
$
0.28

 
$
1.18

 
$
1.10

Weighted Average Number of Shares Outstanding:
 
 
 
 
 
 
 
 
Basic
 
40.9

 
43.1

 
42.0

 
43.6

Assuming Dilution
 
41.1

 
43.4

 
42.2

 
43.9




CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
 
Unaudited
 
 
 
 
(Dollars in Millions)
 
 
 
 
 
 
Dec 28,
2019
 
Dec 29,
2018
ASSETS
 
 
 
 
Current Assets:
 
 
 
 
Cash and Cash Equivalents
 
$
331.4

 
$
248.6

Trade Receivables, less Allowances
of $9.7 Million in 2019 and $13.3 Million in 2018
 
461.4

 
551.9

Inventories
 
678.4

 
767.2

Prepaid Expenses and Other Current Assets
 
136.5

 
250.0

Total Current Assets
 
1,607.7

 
1,817.7

 
 
 
 
 
Net Property, Plant, Equipment and Noncurrent Assets
 
2,823.0

 
2,806.1

Total Assets
 
$
4,430.7

 
$
4,623.8

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Current Liabilities:
 
 
 
 
Accounts Payable
 
$
337.0

 
$
424.8

Other Accrued Expenses
 
222.9

 
258.2

Current Maturities of Debt
 
0.6

 
0.5

Total Current Liabilities
 
560.5

 
683.5

 
 
 
 
 
Long-Term Debt
 
1,136.9

 
1,306.6

Other Noncurrent Liabilities
 
352.9

 
295.2

Equity:
 
 
 
 
Total Regal Beloit Corporation Shareholders' Equity
 
2,351.1

 
2,310.5

Noncontrolling Interests
 
29.3

 
28.0

Total Equity
 
2,380.4

 
2,338.5

Total Liabilities and Equity
 
$
4,430.7

 
$
4,623.8




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
(Dollars in Millions)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
Dec 28, 2019
 
Dec 29, 2018
 
Dec 28, 2019
 
Dec 29, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
Net Income
 
37.6

 
56.5

 
242.6

 
235.8

Adjustments to Reconcile Net Income and Changes in Assets and Liabilities (Net of Acquisitions and Divestitures) to Net Cash Provided by Operating Activities:
 
 
 
 
 
 
 
 
Depreciation and Amortization
 
34.1

 
36.1

 
134.5

 
142.4

(Gain) Loss on Disposal of Assets
 
(2.4
)
 
(2.4
)
 
(0.7
)
 
1.1

(Gain) Loss on Businesses Divested and Assets to be Exited
 
0.5

 
—

 
(34.7
)
 
34.9

Share-Based Compensation Expense
 
3.0

 
6.4

 
13.0

 
16.9

Change in Operating Assets and Liabilities
 
64.5

 
15.8

 
53.8

 
(68.4
)
Net Cash Provided by Operating Activities
 
137.3

 
112.4

 
408.5

 
362.7

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
Additions to Property, Plant and Equipment
 
(15.1
)
 
(18.4
)
 
(92.4
)
 
(77.6
)
Proceeds Received from Sales of Property, Plant and Equipment
 
7.1

 
5.6

 
8.8

 
10.0

Net Sales of Investment Securities
 
—

 
—

 
—

 
0.5

Business Acquisitions, Net of Cash Acquired
 
—

 
—

 
—

 
(161.5
)
Proceeds Received from (Settlement of) Disposal of Businesses
 
(1.7
)
 
0.7

 
157.9

 
0.7

Net Cash (Used in) Provided by Investing Activities
 
(9.7
)
 
(12.1
)
 
74.3

 
(227.9
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
Net (Repayments) Borrowings Under Revolving Credit Facility
 
2.4

 
53.0

 
(80.7
)
 
78.6

Net Repayments of Short-Term Borrowings
 
—

 
(0.1
)
 
—

 
(0.7
)
Proceeds from Long-Term Debt
 
—

 
—

 
—

 
900.2

Repayments of Long-Term Debt
 
(66.1
)
 
(25.1
)
 
(90.3
)
 
(811.4
)
Dividends Paid to Shareholders
 
(12.3
)
 
(12.1
)
 
(48.9
)
 
(47.2
)
Proceeds from the Exercise of Stock Options
 
0.3

 
—

 
0.3

 
—

Repurchase of Common Stock
 
(15.0
)
 
(49.5
)
 
(165.1
)
 
(127.8
)
Distributions to Noncontrolling Interest
 
—

 
—

 
(1.8
)
 
(1.6
)
Shares Surrendered for Taxes
 
(2.9
)
 
(0.1
)
 
(10.9
)
 
(3.5
)
Purchase of Subsidiary Shares from Noncontrolling Interest
 
—

 
—

 
—

 
(0.8
)
Financing Fees Paid
 
—

 
—

 
—

 
(3.5
)
Net Cash Used in Financing Activities
 
(93.6
)
 
(33.9
)
 
(397.4
)
 
(17.7
)
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS
 
4.4

 
(2.2
)
 
(2.6
)
 
(8.1
)
Net Increase in Cash and Cash Equivalents
 
38.4

 
64.2

 
82.8

 
109.0

Cash and Cash Equivalents at Beginning of Period
 
293.0

 
184.4

 
248.6

 
139.6

Cash and Cash Equivalents at End of Period
 
$
331.4

 
$
248.6

 
$
331.4

 
$
248.6


SEGMENT INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in Millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
 
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
Net Sales
 
$
202.0

 
$
273.2

 
$
138.0

 
$
163.5

 
$
206.4

 
$
232.2

 
$
191.8

 
$
212.8

 
$
738.2

 
$
881.7

Net Sales from Businesses Divested/to be Exited
 
—

 
(46.1
)
 
—

 
(1.4
)
 
(0.2
)
 
(11.2
)
 
—

 
(5.2
)
 
(0.2
)
 
(63.9
)
Adjusted Net Sales*
 
$
202.0

 
$
227.1

 
$
138.0

 
$
162.1

 
$
206.2

 
$
221.0

 
$
191.8

 
$
207.6

 
$
738.0

 
$
817.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating Margin
 
3.9
 %
 
10.1
 %
 
(1.0
)%
 
2.7
 %
 
17.3
 %
 
14.3
 %
 
10.2
 %
 
11.5
 %
 
8.4
 %
 
10.2
 %
Adjusted Operating Margin*
 
7.5
 %
 
10.4
 %
 
1.2
 %
 
3.7
 %
 
17.1
 %
 
14.7
 %
 
13.3
 %
 
12.1
 %
 
10.5
 %
 
10.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Components of Net Sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Organic Sales Growth*
 
(10.4
)%
 
1.2
 %
 
(14.2
)%
 
(0.9
)%
 
(6.5
)%
 
9.3
 %
 
(7.2
)%
 
8.4
 %
 
(9.3
)%
 
4.7
 %
Acquisitions
 
—
 %
 
16.1
 %
 
—
 %
 
—
 %
 
—
 %
 
—
 %
 
—
 %
 
—
 %
 
—
 %
 
4.1
 %
Businesses Divested/to be Exited
 
(15.1
)%
 
(1.5
)%
 
(0.7
)%
 
(0.1
)%
 
(4.4
)%
 
(1.0
)%
 
(2.3
)%
 
0.6
 %
 
(6.5
)%
 
(0.1
)%
Foreign Currency Impact
 
(0.6
)%
 
(0.9
)%
 
(0.7
)%
 
(2.8
)%
 
(0.2
)%
 
(1.0
)%
 
(0.4
)%
 
(0.7
)%
 
(0.5
)%
 
(1.3
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SEGMENT INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in Millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
 
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
Net Sales
 
$
905.3

 
$
1,110.9

 
$
575.4

 
$
671.1

 
$
968.5

 
$
1,024.8

 
$
788.8

 
$
838.8

 
$
3,238.0

 
$
3,645.6

Net Sales from Businesses Divested/to be Exited
 
(25.0
)
 
(175.5
)
 
—

 
(6.3
)
 
(22.2
)
 
(61.7
)
 
(5.6
)
 
(19.9
)
 
(52.8
)
 
(263.4
)
Adjusted Net Sales*
 
$
880.3

 
$
935.4

 
$
575.4

 
$
664.8

 
$
946.3

 
$
963.1

 
$
783.2

 
$
818.9

 
$
3,185.2

 
$
3,382.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating Margin
 
11.4
 %
 
9.2
 %
 
(1.6
)%
 
3.7
 %
 
16.9
 %
 
11.3
 %
 
11.8
 %
 
12.4
 %
 
10.8
 %
 
9.5
 %
Adjusted Operating Margin*
 
9.1
 %
 
9.9
 %
 
0.1
 %
 
4.3
 %
 
16.9
 %
 
15.1
 %
 
13.0
 %
 
12.8
 %
 
10.7
 %
 
11.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Components of Net Sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Organic Sales Growth
 
(8.1
)%
 
3.9
 %
 
(11.4
)%
 
3.3
 %
 
(1.2
)%
 
4.7
 %
 
(3.5
)%
 
8.9
 %
 
(5.7
)%
 
5.2
 %
Acquisitions
 
3.4
 %
 
12.0
 %
 
—
 %
 
—
 %
 
—
 %
 
—
 %
 
—
 %
 
—
 %
 
0.9
 %
 
3.1
 %
Businesses Divested/to be Exited
 
(12.6
)%
 
(0.3
)%
 
(0.8
)%
 
(0.2
)%
 
(3.7
)%
 
(1.1
)%
 
(1.6
)%
 
0.1
 %
 
(5.3
)%
 
(0.2
)%
Foreign Currency Impact
 
(1.2
)%
 
0.5
 %
 
(2.1
)%
 
0.6
 %
 
(0.6
)%
 
(0.1
)%
 
(0.9
)%
 
0.5
 %
 
(1.1
)%
 
0.3
 %





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ADJUSTED DILUTED EARNINGS PER SHARE
 
Three Months Ended
 
Twelve Months Ended
 
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
GAAP Diluted Earnings Per Share
 
$
0.89

 
$
1.28

 
$
5.66

 
$
5.26

Restructuring and Related Costs
 
0.33

 
0.04

 
0.57

 
0.13

Purchase Accounting and Transaction Costs
 
—

 
—

 
—

 
0.09

(Gain) Loss on Businesses Divested and Assets to be Exited
 
0.01

 
—

 
(0.69
)
 
0.61

Net (Income) Loss from Businesses Divested/to be Exited
 
0.01

 
(0.11
)
 
(0.07
)
 
(0.40
)
Executive Transition Costs
 
0.07

 
0.07

 
0.08

 
0.07

Gain on Sale of Assets
 
(0.06
)
 
(0.04
)
 
(0.06
)
 
(0.04
)
Impact of the New US Tax Legislation
 
—

 
0.07

 
—

 
(0.08
)
Adjusted Diluted Earnings Per Share
 
$
1.25

 
$
1.31

 
$
5.49

 
$
5.64

 
 
 
 
 
 
 
 
 

2020 ADJUSTED ANNUAL GUIDANCE
 
Minimum
 
Maximum
2020 Diluted EPS Annual Guidance
 
$
5.35

 
$
5.75

Restructuring and Related Costs
 
0.28

 
0.28

Gain on Businesses Divested and Assets to be Exited
 
(0.01
)
 
(0.01
)
Executive Transition Costs
 
0.03

 
0.03

2020 Adjusted Diluted EPS Annual Guidance
 
$
5.65

 
$
6.05




ADJUSTED INCOME FROM OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
 
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
GAAP Income (Loss) from Operations
 
$
7.9

 
$
27.7

 
$
(1.4
)
 
$
4.4

 
$
35.7

 
$
33.3

 
$
19.5

 
$
24.4

 
$
61.7

 
$
89.8

Restructuring and Related Costs
 
7.0

 
1.1

 
2.9

 
0.6

 
2.7

 
0.4

 
5.5

 
0.1

 
18.1

 
2.2

Purchase Accounting and Transaction Costs
 
—

 
0.1

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
0.1

Loss on Businesses Divested and Assets to be Exited
 
0.1

 
—

 
—

 
—

 
—

 
—

 
0.4

 
—

 
0.5

 
—

Gain on Sale of Assets
 
—

 
(1.5
)
 
—

 
—

 
(3.8
)
 
(0.7
)
 
—

 
—

 
(3.8
)
 
(2.2
)
Operating (Income) Loss from Businesses Divested/to be Exited
 
—

 
(4.9
)
 
—

 
0.3

 
0.6

 
(1.6
)
 
—

 
(0.3
)
 
0.6

 
(6.5
)
Executive Transition Costs
 
0.1

 
1.1

 
0.1

 
0.7

 
0.1

 
1.1

 
0.1

 
0.9

 
0.4

 
3.8

Adjusted Income from Operations
 
$
15.1

 
$
23.6

 
$
1.6

 
$
6.0

 
$
35.3

 
$
32.5

 
$
25.5

 
$
25.1

 
$
77.5

 
$
87.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating Margin %
 
3.9%
 
10.1%
 
(1.0)%
 
2.7%
 
17.3%
 
14.3%
 
10.2%
 
11.5%
 
8.4%
 
10.2%
Adjusted Operating Margin %
 
7.5%
 
10.4%
 
1.2%
 
3.7%
 
17.1%
 
14.7%
 
13.3%
 
12.1%
 
10.5%
 
10.7%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ADJUSTED INCOME FROM OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
 
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
GAAP Income (Loss) from Operations
 
$
103.1

 
$
102.2

 
$
(9.3
)
 
$
24.8

 
$
163.9

 
$
115.6

 
$
93.4

 
$
104.4

 
$
351.1

 
$
347.0

Restructuring and Related Costs
 
11.8

 
2.9

 
8.4

 
2.7

 
4.2

 
1.8

 
6.9

 
0.3

 
31.3

 
7.7

Purchase Accounting and Transaction Costs
 
0.1

 
5.4

 
—

 
—

 
—

 
—

 
—

 
—

 
0.1

 
5.4

(Gain) Loss on Businesses Divested and Assets to be Exited
 
(32.6
)
 
—

 
1.0

 
—

 
(4.7
)
 
34.9

 
1.6

 
—

 
(34.7
)
 
34.9

Gain on Sale of Assets
 
—

 
(1.5
)
 
—

 
—

 
(3.8
)
 
(0.7
)
 
—

 
—

 
(3.8
)
 
(2.2
)
Operating (Income) Loss from Businesses Divested/to be Exited
 
(3.3
)
 
(17.1
)
 
—

 
0.5

 
(0.5
)
 
(6.8
)
 
(0.3
)
 
(0.5
)
 
(4.1
)
 
(23.9
)
Executive Transition Costs
 
0.6

 
1.1

 
0.5

 
0.7

 
0.6

 
1.1

 
0.5

 
0.9

 
2.2

 
3.8

Adjusted Income from Operations
 
$
79.7

 
$
93.0

 
$
0.6

 
$
28.7

 
$
159.7

 
$
145.9

 
$
102.1

 
$
105.1

 
$
342.1

 
$
372.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating Margin %
 
11.4%
 
9.2%
 
(1.6)%
 
3.7%
 
16.9%
 
11.3%
 
11.8%
 
12.4%
 
10.8%
 
9.5%
Adjusted Operating Margin %
 
9.1%
 
9.9%
 
0.1%
 
4.3%
 
16.9%
 
15.1%
 
13.0%
 
12.8%
 
10.7%
 
11.0%



DEBT TO EBITDA
 
 
 
Last Twelve Months
 
 
 
 
Dec 28,
2019
 
Dec 29,
2018
Net Income
 
$
242.6

 
$
235.8

Interest Expense
 
 
 
53.0

 
55.2

Interest Income
 
 
 
(5.6
)
 
(1.9
)
Taxes
 
 
 
61.2

 
56.4

Depreciation and Amortization
 
 
 
134.5

 
142.4

EBITDA
 
 
 
$
485.7

 
$
487.9

Restructuring and Related Costs
 
 
 
31.3

 
7.7

Purchase Accounting and Transactions Costs
 
 
 
0.1

 
5.4

Impairment and Exit Related Costs
 
 
 
10.0

 
34.9

Executive Transition Costs
 
 
 
2.2

 
3.8

Operating Income from Businesses Divested/to be Exited
 
 
 
(4.1
)
 
(23.9
)
Gain on Sale of Assets
 
 
 
(3.8
)
 
(2.2
)
Gain on Divestiture of Businesses
 
 
 
(44.7
)
 
—

Adjusted EBITDA
 
 
 
$
476.7

 
$
513.6

 
 
 
 
 
 
 
Current Maturities of Long-Term Debt
 
 
 
$
0.6

 
$
0.5

Long-Term Debt
 
 
 
1,136.9

 
1,306.6

Total Gross Debt
 
 
 
$
1,137.5

 
$
1,307.1

Cash
 
 
 
(331.4
)
 
(248.6
)
Net Debt
 
 
 
$
806.1

 
$
1,058.5

 
 
 
 
 
 
 
Gross Debt/EBITDA
 
 
 
2.3

 
2.7

Gross Debt/Adjusted EBITDA
 
 
 
2.4

 
2.5

 
 
 
 
 
 
 
Net Debt/EBITDA
 
 
 
1.7

 
2.2

Net Debt/Adjusted EBITDA
 
 
 
1.7

 
2.1


OPERATING LEVERAGE-TOTAL REGAL
 
Three Months Ended
 
Twelve Months Ended
(Dollars in Millions)
 
Dec 28,
2019
 
Dec 29,
2018
 
Change
 
Dec 28,
2019
 
Dec 29,
2018
 
Change
GAAP Income from Operations
 
$
61.7

 
$
89.8

 
$
(28.1
)
 
$
351.1

 
$
347.0

 
$
4.1

Adjusted Income from Operations
 
$
77.5

 
$
87.2

 
$
(9.7
)
 
$
342.1

 
$
372.7

 
$
(30.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
$
738.2

 
$
881.7

 
$
(143.5
)
 
$
3,238.0

 
$
3,645.6

 
$
(407.6
)
Adjusted Net Sales
 
$
738.0

 
$
817.8

 
$
(79.8
)
 
$
3,185.2

 
$
3,382.2

 
$
(197.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating Leverage
 
 
 
 
 
19.6
%
 
 
 
 
 
(1.0
)%
Adjusted Operating Leverage
 
 
 
 
 
12.2
%
 
 
 
 
 
15.5
 %



OPERATING LEVERAGE-COMMERCIAL SYSTEMS
 
Three Months Ended
 
Twelve Months Ended
(Dollars in Millions)
 
Dec 28,
2019
 
Dec 29,
2018
 
Change
 
Dec 28,
2019
 
Dec 29,
2018
 
Change
GAAP Income from Operations
 
$
7.9

 
$
27.7

 
$
(19.8
)
 
$
103.1

 
$
102.2

 
$
0.9

Adjusted Income from Operations
 
$
15.1

 
$
23.6

 
$
(8.5
)
 
$
79.7

 
$
93.0

 
$
(13.3
)
2019 Corporate Allocation to 2018 Acquisition
 
$
1.3

 
$
—

 
 
 
$
5.4

 
$
—

 
 
Adjusted Income from Operations Excluding Corporate Allocation to 2018 Acquisition
 
$
16.4

 
$
23.6

 
$
(7.2
)
 
$
85.1

 
$
93.0

 
$
(7.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
$
202.0

 
$
273.2

 
$
(71.2
)
 
$
905.3

 
$
1,110.9

 
$
(205.6
)
Adjusted Net Sales
 
$
202.0

 
$
227.1

 
$
(25.1
)
 
$
880.3

 
$
935.4

 
$
(55.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating Leverage
 
 
 
 
 
27.8
%
 
 
 
 
 
(0.4
)%
Adjusted Operating Leverage
 
 
 
 
 
33.9
%
 
 
 
 
 
24.1
 %
Adjusted Operating Leverage Excluding Corporate Allocation to 2018 Acquisition
 
 
 
 
 
28.7
%
 
 
 
 
 
14.3
 %

OPERATING LEVERAGE-INDUSTRIAL SYSTEMS
 
Three Months Ended
 
Twelve Months Ended
(Dollars in Millions)
 
Dec 28,
2019
 
Dec 29,
2018
 
Change
 
Dec 28,
2019
 
Dec 29,
2018
 
Change
GAAP Income (Loss) from Operations
 
$
(1.4
)
 
$
4.4

 
$
(5.8
)
 
$
(9.3
)
 
$
24.8

 
$
(34.1
)
Adjusted Income from Operations
 
$
1.6

 
$
6.0

 
$
(4.4
)
 
$
0.6

 
$
28.7

 
$
(28.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
$
138.0

 
$
163.5

 
$
(25.5
)
 
$
575.4

 
$
671.1

 
$
(95.7
)
Adjusted Net Sales
 
$
138.0

 
$
162.1

 
$
(24.1
)
 
$
575.4

 
$
664.8

 
$
(89.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating Leverage
 
 
 
 
 
22.7
%
 
 
 
 
 
35.6
%
Adjusted Operating Leverage
 
 
 
 
 
18.3
%
 
 
 
 
 
31.4
%





FREE CASH FLOW
 
Three Months Ended
 
Twelve Months Ended
 
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
Net Cash Provided by Operating Activities
 
$
137.3

 
$
112.4

 
$
408.5

 
$
362.7

Additions to Property Plant and Equipment
 
(15.1
)
 
(18.4
)
 
(92.4
)
 
(77.6
)
Free Cash Flow
 
$
122.2

 
$
94.0

 
$
316.1

 
$
285.1

 
 
 
 
 
 
 
 
 
GAAP Net Income Attributable to Regal Beloit Corporation
 
$
36.7

 
$
55.6

 
$
238.9

 
$
231.2

(Gain) Loss on Businesses Divested and Impairments
 
0.5

 
—

 
(34.7
)
 
18.2

Tax Effect from (Gain) Loss on Businesses Divested and Impairments
 
(0.1
)
 
—

 
5.4

 
(4.0
)
Adjusted Net Income Attributable to Regal Beloit Corporation1
 
$
37.1

 
$
55.6

 
$
209.6

 
$
245.4

 
 
 
 
 
 
 
 
 
Free Cash Flow as a Percentage of Adjusted Net Income Attributable to Regal Beloit Corporation
 
329.4
%
 
169.1
%
 
150.8
%
 
116.2
%
 
 
 
 
 
 
 
 
 
 1 The Net Income Attributable to Regal Beloit Corporation is adjusted for the gains and losses on divested businesses and goodwill and asset impairments related to the business to be exited and used in the Free Cash Flow Calculation.

ADJUSTED EFFECTIVE TAX RATE
 
Three Months Ended
 
Twelve Months Ended
 
 
Dec 28,
2019
 
Dec 29,
2018
 
Dec 28,
2019
 
Dec 29,
2018
Income before Taxes
 
$
51.3

 
$
75.3

 
$
303.8

 
$
292.2

Provision for Income Taxes
 
13.7

 
18.8

 
61.2

 
56.4

Effective Tax Rate
 
26.7
%
 
25.0
%
 
20.1
%
 
19.3
%
 
 
 
 
 
 
 
 
 
Income before Taxes
 
$
51.3

 
$
75.3

 
$
303.8

 
$
292.2

(Gain) Loss on Businesses Divested and Assets to be Exited
 
0.5

 
—

 
(34.7
)
 
34.9

Adjusted Income before Taxes
 
$
51.8

 
$
75.3

 
$
269.1

 
$
327.1

 
 
 
 
 
 
 
 
 
Provision for Income Taxes
 
$
13.7

 
$
18.8

 
$
61.2

 
$
56.4

Tax Effect from (Gain) Loss on Businesses Divested and Assets to be Exited
 
0.1

 
—

 
(5.4
)
 
8.2

Impact of the New US Tax Legislation
 
—

 
(3.0
)
 
—

 
3.6

Non-deductible Portion of Executive Transition Costs
 
(2.3
)
 
—

 
(2.3
)
 
—

Adjusted Provision for Income Taxes
 
$
11.5

 
$
15.8

 
$
53.5

 
$
68.2

 
 
 
 
 
 
 
 
 
Adjusted Effective Tax Rate
 
22.2
%
 
21.0
%
 
19.9
%
 
20.8
%



ORGANIC SALES GROWTH
 
Three Months Ended
 
 
 
December 28, 2019
 
 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
 
Net Sales Three Months Ended Dec 28, 2019
 
$
202.0

 
$
138.0

 
$
206.4

 
$
191.8

 
$
738.2

 
Net Sales from Businesses Divested/to be Exited
 
—

 
—

 
(0.2
)
 
—

 
(0.2
)
 
Impact from Foreign Currency Exchange Rates
 
1.4

 
1.1

 
0.4

 
0.9

 
3.8

 
Organic Sales Three Months Ended Dec 28, 2019
 
$
203.4

 
$
139.1

 
$
206.6

 
$
192.7

 
$
741.8

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales Three Months Ended Dec 29, 2018
 
$
273.2

 
$
163.5

 
$
232.2

 
$
212.8

 
$
881.7

 
Net Sales from Businesses Divested/to be Exited
 
(46.1
)
 
(1.4
)
 
(11.2
)
 
(5.2
)
 
(63.9
)
 
Adjusted Net Sales Three Months Ended Dec 29, 2018
 
$
227.1

 
$
162.1

 
$
221.0

 
$
207.6

 
$
817.8

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended Dec 28, 2019 Organic Sales Growth %
 
(10.4
)%
 
(14.2
)%
 
(6.5
)%
 
(7.2
)%
 
(9.3
)%
 
Three Months Ended Dec 28, 2019 Net Sales Growth %
 
(26.1
)%
 
(15.6
)%
 
(11.1
)%
 
(9.9
)%
 
(16.3
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
ORGANIC SALES GROWTH
 
Twelve Months Ended
 
 
 
December 28, 2019
 
 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
 
Net Sales Twelve Months Ended Dec 28, 2019
 
$
905.3

 
$
575.4

 
$
968.5

 
$
788.8

 
$
3,238.0

 
Net Sales from Business Acquired
 
(31.7
)
 
—

 
—

 
—

 
(31.7
)
 
Net Sales from Businesses Divested/to be Exited
 
(25.0
)
 
—

 
(22.2
)
 
(5.6
)
 
(52.8
)
 
Impact from Foreign Currency Exchange Rates
 
10.8

 
13.7

 
5.7

 
7.1

 
37.3

 
Organic Sales Twelve Months Ended Dec 28, 2019
 
$
859.4

 
$
589.1

 
$
952.0

 
$
790.3

 
$
3,190.8

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales Twelve Months Ended Dec 29, 2018
 
$
1,110.9

 
$
671.1

 
$
1,024.8

 
$
838.8

 
$
3,645.6

 
Net Sales from Businesses Divested/to be Exited
 
(175.5
)
 
(6.3
)
 
(61.7
)
 
(19.9
)
 
(263.4
)
 
Adjusted Net Sales Twelve Months Ended Dec 29, 2018
 
$
935.4

 
$
664.8

 
$
963.1

 
$
818.9

 
$
3,382.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended Dec 28, 2019 Organic Sales Growth %
 
(8.1
)%
 
(11.4
)%
 
(1.2
)%
 
(3.5
)%
 
(5.7
)%
 
Twelve Months Ended Dec 28, 2019 Net Sales Growth %
 
(18.5
)%
 
(14.3
)%
 
(5.5
)%
 
(6.0
)%
 
(11.2
)%
 




The following tables outline by quarter and full year the 2019 net sales and income from operations, and the full year adjusted diluted earnings per share, illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2019 guidance and actual performance.

 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
Fiscal 2019 First Quarter Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Three Months Ended March 30, 2019
 
$
242.2

 
$
138.1

 
$
263.3

 
$
210.2

 
$
853.8

Net Sales from Businesses Divested/to be Exited
 
(12.4
)
 
—

 
(15.5
)
 
(5.6
)
 
(33.5
)
Net Sales from Ongoing Business
 
$
229.8

 
$
138.1

 
$
247.8

 
$
204.6

 
$
820.3

 
 
 
 
 
 
 
 
 
 
 
GAAP Income (Loss) from Operations Three Months Ended March 30, 2019
 
$
57.8

 
$
(4.3
)
 
$
38.9

 
$
28.2

 
$
120.6

Restructuring and Related Costs
 
1.2

 
0.9

 
0.1

 
0.1

 
2.3

Purchase Accounting and Transaction Costs
 
0.1

 
—

 
—

 
—

 
0.1

(Gain) Loss on Businesses Divested and Assets to be Exited
 
(34.6
)
 
1.0

 
1.3

 
1.1

 
(31.2
)
Income from Operations of Businesses Divested/to be Exited
 
(1.7
)
 
—

 
(1.9
)
 
(0.3
)
 
(3.9
)
Executive Transition Costs
 
0.4

 
0.3

 
0.5

 
0.4

 
1.6

Adjusted Income (Loss) from Operations of Ongoing Business
 
$
23.2

 
$
(2.1
)
 
$
38.9

 
$
29.5

 
$
89.5

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
10.1
%
 
(1.5
)%
 
15.7
%
 
14.4
%
 
10.9
%
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2019 Second Quarter Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Three Months Ended June 29, 2019
 
$
246.3

 
$
155.5

 
$
267.9

 
$
204.0

 
$
873.7

Net Sales from Businesses Divested/to be Exited
 
(12.6
)
 
—

 
(5.6
)
 
—

 
(18.2
)
Net Sales from Ongoing Business
 
$
233.7

 
$
155.5

 
$
262.3

 
$
204.0

 
$
855.5

 
 
 
 
 
 
 
 
 
 
 
GAAP Income (Loss) from Operations Three Months Ended June 29, 2019
 
$
20.8

 
$
(1.3
)
 
$
51.7

 
$
24.8

 
$
96.0

Restructuring and Related Costs
 
1.1

 
1.5

 
0.6

 
0.4

 
3.6

(Gain) Loss on Businesses Divested and Assets to be Exited
 
1.8

 
—

 
(6.1
)
 
0.1

 
(4.2
)
Income from Operations of Businesses Divested/to be Exited
 
(1.6
)
 
—

 
(0.1
)
 
—

 
(1.7
)
Executive Transition Costs
 
0.1

 
—

 
—

 
—

 
0.1

Adjusted Income from Operations of Ongoing Business
 
$
22.2

 
$
0.2

 
$
46.1

 
$
25.3

 
$
93.8

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
9.5
%
 
0.1
 %
 
17.6
%
 
12.4
%
 
11.0
%



 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
Fiscal 2019 Third Quarter Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Three Months Ended September 28, 2019
 
$
214.8

 
$
143.8

 
$
230.9

 
$
182.8

 
$
772.3

Net Sales from Businesses Divested/to be Exited
 
—

 
—

 
(0.9
)
 
—

 
(0.9
)
Net Sales from Ongoing Business
 
$
214.8

 
$
143.8

 
$
230.0

 
$
182.8

 
$
771.4

 
 
 
 
 
 
 
 
 
 
 
GAAP Income (Loss) from Operations Three Months Ended September 28, 2019
 
$
16.6

 
$
(2.3
)
 
$
37.6

 
$
20.9

 
$
72.8

Restructuring and Related Costs
 
2.5

 
3.1

 
0.8

 
0.9

 
7.3

Loss on Businesses Divested and Assets to be Exited
 
0.1

 
—

 
0.1

 
—

 
0.2

Loss from Operations of Businesses Divested/to be Exited
 
—

 
—

 
0.9

 
—

 
0.9

Executive Transition Costs
 
—

 
0.1

 
—

 
—

 
0.1

Adjusted Income from Operations of Ongoing Business
 
$
19.2

 
$
0.9

 
$
39.4

 
$
21.8

 
$
81.3

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
8.9
%
 
0.6
%
 
17.1
%
 
11.9
%
 
10.5
%
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2019 Fourth Quarter Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Three Months Ended December 28, 2019
 
$
202.0

 
$
138.0

 
$
206.4

 
$
191.8

 
$
738.2

Net Sales from Businesses Divested/to be Exited
 
—

 
—

 
(0.2
)
 
—

 
(0.2
)
Net Sales from Ongoing Business
 
$
202.0

 
$
138.0

 
$
206.2

 
$
191.8

 
$
738.0

 
 
 
 
 
 
 
 
 
 
 
GAAP Income (Loss) from Operations Three Months Ended December 28, 2019
 
$
7.9

 
$
(1.4
)
 
$
35.7

 
$
19.5

 
$
61.7

Restructuring and Related Costs
 
7.0

 
2.9

 
2.7

 
5.5

 
18.1

Gain on Sale of Assets
 
—

 
—

 
(3.8
)
 
—

 
(3.8
)
Loss on Businesses Divested and Assets to be Exited
 
0.1

 
—

 
—

 
0.4

 
0.5

Loss from Operations of Businesses Divested/to be Exited
 
—

 
—

 
0.6

 
—

 
0.6

Executive Transition Costs
 
0.1

 
0.1

 
0.1

 
0.1

 
0.4

Adjusted Income from Operations of Ongoing Business
 
$
15.1

 
$
1.6

 
$
35.3

 
$
25.5

 
$
77.5

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
7.5
%
 
1.2
%
 
17.1
%
 
13.3
%
 
10.5
%



 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
Fiscal 2019 Full Year Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Twelve Months Ended December 28, 2019
 
$
905.3

 
$
575.4

 
$
968.5

 
$
788.8

 
$
3,238.0

Net Sales from Businesses Divested/to be Exited
 
(25.0
)
 
—

 
(22.2
)
 
(5.6
)
 
(52.8
)
Net Sales from Ongoing Business
 
$
880.3

 
$
575.4

 
$
946.3

 
$
783.2

 
$
3,185.2

 
 
 
 
 
 
 
 
 
 
 
GAAP Income (Loss) from Operations Twelve Months Ended December 28, 2019
 
$
103.1

 
$
(9.3
)
 
$
163.9

 
$
93.4

 
$
351.1

Restructuring and Related Costs
 
11.8

 
8.4

 
4.2

 
6.9

 
31.3

Purchase Accounting and Transaction Costs
 
0.1

 
—

 
—

 
—

 
0.1

Gain on Sale of Assets
 
—

 
—

 
(3.8
)
 
—

 
(3.8
)
(Gain) Loss on Businesses Divested and Assets to be Exited
 
(32.6
)
 
1.0

 
(4.7
)
 
1.6

 
(34.7
)
Income from Operations of Businesses Divested/to be Exited
 
(3.3
)
 
—

 
(0.5
)
 
(0.3
)
 
(4.1
)
Executive Transition Costs
 
0.6

 
0.5

 
0.6

 
0.5

 
2.2

Adjusted Income from Operations of Ongoing Business
 
$
79.7

 
$
0.6

 
$
159.7

 
$
102.1

 
$
342.1

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
9.1
%
 
0.1
%
 
16.9
%
 
13.0
%
 
10.7
%

2019 ADJUSTED DILUTED EARNINGS PER SHARE FOR ONGOING BUSINESS
 
Three Months Ended
 
Twelve Months Ended Dec 28, 2019
 
 
Mar 30,
2019
 
Jun 29,
2019
 
Sep 28,
2019
 
Dec 28,
2019
 
Adjusted Diluted Earnings Per Share
 
$
1.43

 
$
1.52

 
$
1.35

 
$
1.25

 
$
5.55

Earnings Per Share from Businesses Divested/to be Exited
 
(0.03
)
 
(0.03
)
 
—

 
—

 
(0.06
)
Adjusted Diluted Earnings Per Share for Ongoing Business
 
$
1.40

 
$
1.49

 
$
1.35

 
$
1.25

 
$
5.49



The following tables outline by quarter and full year the 2018 net sales and income from operations, and the full year adjusted diluted earnings per share, illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2019 guidance and actual performance.



 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2018 First Quarter Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Three Months Ended March 31, 2018
 
$
249.0

 
$
165.0

 
$
259.9

 
$
204.9

 
$
878.8

Net Sales from Businesses Divested/to be Exited
 
(42.3
)
 
(1.6
)
 
(18.0
)
 
(4.3
)
 
(66.2
)
Net Sales from Ongoing Business
 
$
206.7

 
$
163.4

 
$
241.9

 
$
200.6

 
$
812.6

 
 
 
 
 
 
 
 
 
 
 
GAAP Income from Operations Three Months Ended March 31, 2018
 
$
19.7

 
$
9.4

 
$
32.3

 
$
26.8

 
$
88.2

Restructuring and Related Costs
 
0.8

 
0.5

 
0.4

 
—

 
1.7

(Income) Loss from Operations of Businesses Divested/to be Exited
 
(2.9
)
 
0.1

 
(1.6
)
 
0.4

 
(4.0
)
Adjusted Income from Operations of Ongoing Business
 
$
17.6

 
$
10.0

 
$
31.1

 
$
27.2

 
$
85.9

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
8.5
%
 
6.1
%
 
12.9
%
 
13.6
%
 
10.6
%
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2018 Second Quarter Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Three Months Ended June 30, 2018
 
$
292.2

 
$
176.8

 
$
277.3

 
$
213.4

 
$
959.7

Net Sales from Businesses Divested/to be Exited
 
(42.0
)
 
(1.7
)
 
(19.2
)
 
(5.6
)
 
(68.5
)
Net Sales from Ongoing Business
 
$
250.2

 
$
175.1

 
$
258.1

 
$
207.8

 
$
891.2

 
 
 
 
 
 
 
 
 
 
 
GAAP Income from Operations Three Months Ended June 30, 2018
 
$
23.6

 
$
6.9

 
$
44.0

 
$
25.1

 
$
99.6

Restructuring and Related Costs
 
0.2

 
0.5

 
0.7

 
0.1

 
1.5

Purchase Accounting and Transaction Costs
 
5.1

 
—

 
—

 
—

 
5.1

(Income) Loss from Operations of Businesses Divested/to be Exited
 
(4.1
)
 
0.1

 
(2.1
)
 
(0.3
)
 
(6.4
)
Adjusted Income from Operations of Ongoing Business
 
$
24.8

 
$
7.5

 
$
42.6

 
$
24.9

 
$
99.8

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
9.9
%
 
4.3
%
 
16.5
%
 
12.0
%
 
11.2
%
 
 
 
 
 
 
 
 
 
 
 



 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2018 Third Quarter Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Three Months Ended September 29, 2018
 
$
296.5

 
$
165.8

 
$
255.4

 
$
207.7

 
$
925.4

Net Sales from Businesses Divested/to be Exited
 
(45.1
)
 
(1.6
)
 
(13.3
)
 
(4.8
)
 
(64.8
)
Net Sales from Ongoing Business
 
$
251.4

 
$
164.2

 
$
242.1

 
$
202.9

 
$
860.6

 
 
 
 
 
 
 
 
 
 
 
GAAP Income from Operations Three Months Ended September 29, 2018
 
$
31.2

 
$
4.1

 
$
6.0

 
$
28.1

 
$
69.4

Restructuring and Related Costs
 
0.8

 
1.1

 
0.3

 
0.1

 
2.3

Purchase Accounting and Transaction Costs
 
0.2

 
—

 
—

 
—

 
0.2

Impairment and Exit Related Costs
 
—

 
—

 
34.9

 
—

 
34.9

Income from Operations of Businesses Divested/to be Exited
 
(5.2
)
 
—

 
(1.5
)
 
(0.3
)
 
(7.0
)
Adjusted Income from Operations of Ongoing Business
 
$
27.0

 
$
5.2

 
$
39.7

 
$
27.9

 
$
99.8

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
10.7
%
 
3.2
%
 
16.4
%
 
13.8
%
 
11.6
%
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2018 Fourth Quarter Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Three Months Ended December 29, 2018
 
$
273.2

 
$
163.5

 
$
232.2

 
$
212.8

 
$
881.7

Net Sales from Businesses Divested/to be Exited
 
(46.1
)
 
(1.4
)
 
(11.2
)
 
(5.2
)
 
(63.9
)
Net Sales from Ongoing Business
 
$
227.1

 
$
162.1

 
$
221.0

 
$
207.6

 
$
817.8

 
 
 
 
 
 
 
 
 
 
 
GAAP Income from Operations Three Months Ended December 29, 2018
 
$
27.7

 
$
4.4

 
$
33.3

 
$
24.4

 
$
89.8

Restructuring and Related Costs
 
1.1

 
0.6

 
0.4

 
0.1

 
2.2

Purchase Accounting and Transaction Costs
 
0.1

 
—

 
—

 
—

 
0.1

Gain on Sale of Assets
 
(1.5
)
 
—

 
(0.7
)
 
—

 
(2.2
)
Executive Transition Costs
 
1.1

 
0.7

 
1.1

 
0.9

 
3.8

(Income) Loss from Operations of Businesses Divested/to be Exited
 
(4.9
)
 
0.3

 
(1.6
)
 
(0.3
)
 
(6.5
)
Adjusted Income from Operations of Ongoing Business
 
$
23.6

 
$
6.0

 
$
32.5

 
$
25.1

 
$
87.2

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
10.4
%
 
3.7
%
 
14.7
%
 
12.1
%
 
10.7
%



 
 
Commercial Systems
 
Industrial Systems
 
Climate Solutions
 
Power Transmission Solutions
 
Total Regal
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2018 Full Year Schedule for Ongoing Business
 
 
 
 
 
 
 
 
 
 
Net Sales Twelve Months Ended December 29, 2018
 
$
1,110.9

 
$
671.1

 
$
1,024.8

 
$
838.8

 
$
3,645.6

Net Sales from Businesses Divested/to be Exited
 
(175.5
)
 
(6.3
)
 
(61.7
)
 
(19.9
)
 
(263.4
)
Net Sales from Ongoing Business
 
$
935.4

 
$
664.8

 
$
963.1

 
$
818.9

 
$
3,382.2

 
 
 
 
 
 
 
 
 
 
 
GAAP Income from Operations Twelve Months Ended December 29, 2018
 
$
102.2

 
$
24.8

 
$
115.6

 
$
104.4

 
$
347.0

Restructuring and Related Costs
 
2.9

 
2.7

 
1.8

 
0.3

 
7.7

Purchase Accounting and Transaction Costs
 
5.4

 
—

 
—

 
—

 
5.4

Gain on Sale of Assets
 
(1.5
)
 
—

 
(0.7
)
 
—

 
(2.2
)
Executive Transition Costs
 
1.1

 
0.7

 
1.1

 
0.9

 
3.8

Impairment and Exit Related Costs
 
—

 
—

 
34.9

 
—

 
34.9

(Income) Loss from Operations of Businesses Divested/to be Exited
 
(17.1
)
 
0.5

 
(6.8
)
 
(0.5
)
 
(23.9
)
Adjusted Income from Operations of Ongoing Business
 
$
93.0

 
$
28.7

 
$
145.9

 
$
105.1

 
$
372.7

 
 
 
 
 
 
 
 
 
 
 
Ongoing Business Adjusted Operating Margin %
 
9.9
%
 
4.3
%
 
15.1
%
 
12.8
%
 
11.0
%

2018 ADJUSTED DILUTED EARNINGS PER SHARE FOR ONGOING BUSINESS
 
Three Months Ended
 
Twelve Months Ended Dec 29, 2018
 
 
Mar 31,
2018
 
Jun 30,
2018
 
Sep 29,
2018
 
Dec 29,
2018
 
Adjusted Diluted Earnings Per Share
 
$
1.33

 
$
1.59

 
$
1.67

 
$
1.41

 
$
6.00

Earnings Per Share from Businesses Divested/to be Exited
 
(0.06
)
 
(0.09
)
 
(0.11
)
 
(0.10
)
 
(0.36
)
Adjusted Diluted Earnings Per Share for Ongoing Business
 
$
1.27

 
$
1.50

 
$
1.56

 
$
1.31

 
$
5.64



February 4, 2020 Fourth Quarter 2019 Earnings 4Q CONFERENCE CALL Louis Pinkham Rob Rehard Rob Cherry Chief Executive Officer Vice President Vice President Chief Financial Officer Investor Relations

 
4Q 2019 CAUTIONARY STATEMENT The following is a cautionary statement made under the Private Securities Litigation Reform Act of 1995: and other external factors that we cannot control; product liability and other litigation, or claims by end With the exception of historical facts, the statements contained in this presentation may be forward-looking users, government agencies or others that our products or our customers’ applications failed to perform as statements. Forward-looking statements represent our management’s judgment regarding future events. In anticipated, particularly in high volume applications or where such failures are alleged to be the cause of many cases, you can identify forward-looking statements by terminology such as “may,” “will,” “expect,” property or casualty claims; unanticipated liabilities of acquired businesses; unanticipated adverse effects or “intend,” “estimate,” “forecast,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative of liabilities from business exits or divestitures; unanticipated costs or expenses we may incur related to these terms or other similar words. These forward-looking statements are not guarantees of future product warranty issues; our dependence on key suppliers and the potential effects of supply disruptions; performance and are subject to risks, uncertainties, assumptions and other factors, some of which are infringement of our intellectual property by third parties, challenges to our intellectual property, and claims beyond our control, which could cause actual results to differ materially from those expressed or implied by of infringement by us of third party technologies; effects on earnings of any significant impairment of such forward-looking statements, including but not limited to: uncertainties regarding our ability to execute goodwill or intangible assets; losses from failures, breaches, attacks or disclosures involving our information our restructuring plans within expected costs and timing; actions taken by our competitors and our ability to technology infrastructure and data; cyclical downturns affecting the global market for capital goods; and effectively compete in the increasingly competitive global electric motor, drives and controls, power other risks and uncertainties including but not limited to those described in “Item 1A-Risk Factors” of the generation and power transmission industries; our ability to develop new products based on technological Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February innovation, such as the Internet of Things, and marketplace acceptance of new and existing products, 26, 2019 and from time to time in other filed reports. All subsequent written and oral forward-looking including products related to technology not yet adopted or utilized in certain geographic locations in which statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by we do business; fluctuations in commodity prices and raw material costs; our dependence on significant the applicable cautionary statements. The forward-looking statements included in this presentation are customers; risks associated with global manufacturing, including risks associated with public health crises; made only as of their respective dates, and we undertake no obligation to update these statements to issues and costs arising from the integration of acquired companies and businesses and the timing and reflect subsequent events or circumstances. impact of purchase accounting adjustments; our overall debt levels and our ability to repay principal and interest on our outstanding debt; prolonged declines in one or more markets we serve, such as heating, ventilation, air conditioning, refrigeration, power generation, oil and gas, unit material handling or water heating; economic changes in global markets where we do business, such as reduced demand for the products we sell, currency exchange rates, inflation rates, interest rates, recession, government policies, including policy changes affecting taxation, trade, tariffs, immigration, customs, border actions and the like, ©2020 Regal Beloit Corporation 2

 
4Q 2019 NON-GAAP FINANCIAL MEASURES We prepare financial statements in accordance with accounting principles generally accepted percentage of adjusted net income attributable to Regal Beloit Corporation, adjusted income in the United States (“GAAP”). We also periodically disclose certain financial measures in our before taxes, adjusted provision for income taxes, adjusted effective tax rate, net sales from quarterly earnings releases, on investor conference calls, and in investor presentations and ongoing business, adjusted income from operations of ongoing business, ongoing business similar events that may be considered “non-GAAP” financial measures. This additional adjusted operating margin and adjusted diluted earnings per share for ongoing business are information is not meant to be considered in isolation or as a substitute for our results of primarily used to help us evaluate our business and forecast our future results. Accordingly, we operations prepared and presented in accordance with GAAP. believe disclosing and reconciling each of these measures helps investors evaluate our business in the same manner as management. In this presentation, we disclose the following non-GAAP financial measures, and we reconcile these measures in the tables below to the most directly comparable GAAP financial measures: In addition to these non-GAAP measures, we also use the term “organic sales” to refer to GAAP adjusted diluted earnings per share (both historical and projected), adjusted income from sales from existing operations excluding any sales from acquired businesses recorded prior to operations, adjusted operating margin, adjusted net sales, net debt, adjusted EBITDA, adjusted the first anniversary of the acquisition (“net sales from business acquired") and excluding any operating leverage, adjusted net income attributable to Regal Beloit Corporation, free cash sales from business divested/to be exited (“net sales from business divested/to be exited“) flow, free cash flow as a percentage of adjusted net income attributable to Regal Beloit recorded prior to the first anniversary of the exit and excluding the impact of foreign currency Corporation, adjusted income before taxes, adjusted provision for income taxes, adjusted translation. The impact of foreign currency translation is determined by translating the effective tax rate, net sales from ongoing business, adjusted income from operations of respective period’s organic sales using the currency exchange rates that were in effect during ongoing business, ongoing business adjusted operating margin, and adjusted diluted earnings the prior year periods. We use the term “organic sales growth” to refer to the increase in our per share for ongoing business. We believe that these non-GAAP financial measures are useful sales between periods that is attributable to organic sales. For further clarification, we may use measures for providing investors with additional information regarding our results of the term “acquisition growth” to refer to the increase in our sales between periods that is operations and for helping investors understand and compare our operating results across attributable to acquisition sales. accounting periods and compared to our peers. Our management primarily uses adjusted income from operations, adjusted operating income, adjusted operating margin, and adjusted operating leverage to help us manage and evaluate our business and make operating decisions, while adjusted diluted earnings per share, net debt, adjusted EBITDA, adjusted net sales, adjusted net income attributable to Regal Beloit Corporation, free cash flow, free cash flow as a ©2020 Regal Beloit Corporation 3

 
4Q 2019 AGENDA Opening Comments & Overview LOUIS PINKHAM, CEO 4Q 2019 Results & 2020 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO ©2020 Regal Beloit Corporation 4

 
4Q 2019 OVERVIEW • U.S. & China Industrial Slowdown, Distribution, OEM De-Stocking ($ in millions, except per share data) 4Q 2019 4Q 2018 • Reorganization and Cost-Out Initiatives Driving Performance • Adj. Operating Margin Delevered* at 12.2%, 15.5% YoY Adjusted Net Sales* $738.0 $817.8 • Sales per Employee up ~7% YoY • Financial Reporting Re-segmentation Adjusted Income from $77.5 $87.2 • Climate and PTS Unchanged, Commercial and Industrial Split Operations* • All Four Segment Presidents Report to CEO • Improves Transparency, Focus and Accountability Adjusted Operating Margin* 10.5% 10.7% • Commercial Systems and Industrial Systems • Pool Pump Overstocking, Industrial Slowdown, China Adjusted Diluted EPS* $1.25 $1.31 • Reducing SG&A Costs and Executing 80/20 Net Cash Provided by • Both Segments Delevered at Lower than Historical Rates $137.3 $112.4 Operating Activities * Non-GAAP Financial Measurement, See Appendix for Reconciliation. ©2020 Regal Beloit Corporation 5

 
4Q 2019 INDUSTRIAL SYSTEMS TerraMAX® Industrial Motor Platform New Generator Platform ©2020 Regal Beloit Corporation 6

 
4Q 2019 OVERVIEW – COMMERCIAL SYSTEMS Energy Efficient Direct Drive Integrated Motorized Pool Pump Motor Fans & Blowers ©2020 Regal Beloit Corporation 7

 
4Q 2019 OVERVIEW • Climate Solutions and PTS Operating Solidly • Climate Adj. OP Margin* Up 240 bps, PTS Up 120 bps • Overcame Weather and Inventory De-Stocking Headwinds • Operating Profit Up YoY Despite Down Sales * Non-GAAP Financial Measurement, See Appendix for Reconciliation. ©2020 Regal Beloit Corporation 8

 
4Q 2019 CLIMATE SOLUTIONS FER Compliant Furnace Products Global Boiler Gas Pre-Mix Efficiency and Features ©2020 Regal Beloit Corporation 9

 
4Q 2019 POWER TRANSMISSION SOLUTIONS Modsort™ Material Handling Solutions Renewable Energy ©2020 Regal Beloit Corporation 10

 
4Q 2019 OVERVIEW • New Leadership in 12 of 25 Business Unit Management Roles ($ in millions, except per share data) 4Q 2019 4Q 2018 • Systematically Executing on 80/20 • ~$14M in Low Margin Sales Pruned in 4Q, ~1.7% of Sales Decline Adjusted Net Sales* $738.0 $817.8 • 900+ Associates Trained or 22% of Salaried Workforce • Excellent Cash Management Adjusted Income from $77.5 $87.2 • Free Cash Flow* Up $28.2 Million Operations* • Inventories Reduced $47 Million from End of 3Q 2019 Adjusted Operating Margin* 10.5% 10.7% • Evaluating Portfolio • Focus on Improving Earnings and ROIC • Opportunities to Leverage Climate and PTS Strengths Adjusted Diluted EPS* $1.25 $1.31 • More to Share at Investor Day on March 3, 2020 in New York City Net Cash Provided by $137.3 $112.4 Operating Activities * Non-GAAP Financial Measurement, See Appendix for Reconciliation. ©2020 Regal Beloit Corporation 11

 
4Q 2019 AGENDA Opening Comments & Overview LOUIS PINKHAM, CEO 4Q 2019 Results & 2020 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO ©2020 Regal Beloit Corporation 12

 
4Q 2019 COMMERCIAL SYSTEMS Sales Adjusted Net Sales* Adjusted Income • Organic Sales* Down 10.4% ($ Millions) from Operations* • Market Performance ($ Millions) – NA Pool Pump – OEM & Distribution – NA General Industry – China $227.1 – 80/20 Account Pruning (~2%) $202.0 Adjusted Operating Margin* • 7.5% of Adj. Net Sales • Down 290 bps from Prior Year $23.6 – Volume $15.1 – Mix – Primarily Pool Pump Distribution – Corporate Allocation to New Acquisition + Price/Cost + 80/20 4Q18 4Q19 4Q18 4Q19 * Non-GAAP Financial Measurement, See Appendix for Reconciliation. Full Year Deleverage* of 14.3% Driven by 80/20, Productivity & Price/Cost ©2020 Regal Beloit Corporation 13

 
4Q 2019 INDUSTRIAL SYSTEMS Sales Adjusted Net Sales* Adjusted Income • Organic Sales* Down 14.2% ($ Millions) from Operations* • Market Performance ($ Millions) – Power Generation – NA Industrial – China Industrial – 80/20 Account Pruning (~1.5%) $162.1 $138.0 Adjusted Operating Margin* • 1.2% of Adj. Net Sales • Down 250 bps from Prior Year – Volume – Mix $6.0 – Tariff + SG&A Reductions $1.6 + 80/20 4Q18 4Q19 4Q18 4Q19 * Non-GAAP Financial Measurement, See Appendix for Reconciliation. Cost-Out Actions & 80/20 Starting to Gain Traction, Deleverage of 18.3% ©2020 Regal Beloit Corporation 14

 
4Q 2019 CLIMATE SOLUTIONS Sales Adjusted Net Sales* Adjusted Income • Organic Sales* Down 6.5% ($ Millions) from Operations* • Market Performance ($ Millions) – NA HVAC Mild Winter Start – FER Pre-buy Inventory – 80/20 Account Pruning (~2%) $221.0 $206.2 + Asia Pacific $35.3 Adjusted Operating Margin* $32.5 • 17.1% of Adj. Net Sales • Up 240 bps from Prior Year + Productivity + SG&A Reductions + 80/20 – Volume 4Q18 4Q19 4Q18 4Q19 * Non-GAAP Financial Measurement, See Appendix for Reconciliation. 8.6% Positive Operating Profit Growth on 6.5% Reduction in Organic Sales ©2020 Regal Beloit Corporation 15

 
4Q 2019 POWER TRANSMISSION SOLUTIONS Sales Adjusted Net Sales* Adjusted Income • Organic Sales* Down 7.2% ($ Millions) from Operations* • Market Performance ($ Millions) – Upstream & Midstream Oil & Gas – Industrial Distribution $207.6 – Beverage Conveying $191.8 – 80/20 Account Pruning (~1%) + Renewable Energy Adjusted Operating Margin* $25.1 $25.5 • 13.3% of Adj. Net Sales • Up 120 bps from Prior Year + Price/Cost + Productivity + SG&A Reductions + 80/20 4Q18 4Q19 4Q18 4Q19 – Volume * Non-GAAP Financial Measurement, See Appendix for Reconciliation. 1.6% Positive Operating Profit Growth on 7.2% Reduction in Organic Sales ©2020 Regal Beloit Corporation 16

 
4Q 2019 KEY FINANCIAL METRICS Capital Expenditures Balance Sheet as December 28, 2019 • $15.1 Million in 4Q 2019 • Total Debt of $1,137.5 Million • $92.4 Million in FY 2019 • Net Debt of $806.1 Million • Down $101.8 Million from 3Q 2019 Restructuring & Related Costs • Down $252.4 Million from FY2018 • $18.1 Million in 4Q 2019 • Net Debt/Adj. EBITDA* of 1.7 • $31.3 Million in FY 2019 • 2019 Actions Expected to Drive $38 Million in Annual Savings Free Cash Flow* • $122.2 Million in 4Q 2019, Up $28.2 Million from 2018 Effective Tax Rate (ETR) • $316.1 Million in FY 2019, Up $31.0 Million from 2018 • 22.2% Adj. ETR* in 4Q 2019 • Purchased 180,763 Shares for a Total of • 19.9% Adj. ETR* in FY 2019 $15.0 Million in 4Q 2019 • Purchased 2,194,545 Shares for a Total of $165.0 Million in FY 2019 * Non-GAAP Financial Measurement, See Appendix for Reconciliation. Executing on Free Cash Flow Generation and Balanced Capital Allocation Strategy ©2020 Regal Beloit Corporation 17

 
4Q 2019 FULL YEAR 2020 GUIDANCE FY 2020 Organic Growth Flat to Slightly Down with Recovery in Second Half FY 2020 Macroeconomic Considerations • Global Trade Uncertainties • Coronavirus Uncertainties • U.S. Industrial Slowdown FY 2020 GAAP Diluted EPS Guidance of $5.35 to $5.75 FY 2020 Adjusted Diluted EPS* Guidance of $5.65 to $6.05 • Adjusted EPS Growth of ~7% at Mid-point Other FY 2020 Guidance • Net Interest Expense of ~$43 Million • Capital Expenditures of ~$75 Million • Depreciation & Amortization Expense of ~$132 Million • Effective Tax Rate of ~21% • Restructuring Expense of ~$15 Million • Excludes Impact of Any Potential Share Purchases * Non-GAAP Financial Measurement, See Appendix for Reconciliation. Expecting Adjusted EPS Growth of ~7% ©2020 Regal Beloit Corporation 18

 
4Q 2019 AGENDA Opening Comments & Overview LOUIS PINKHAM, CEO 4Q 2019 Results & 2020 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO ©2020 Regal Beloit Corporation 19

 
4Q Appendix

 
4Q 2019 APPENDIX ADJUSTED DILUTED EARNINGS PER SHARE Three Months Ended Twelve Months Ended Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 GAAP Diluted Earnings Per Share $ 0.89 $ 1.28 $ 5.66 $ 5.26 Restructuring and Related Costs 0.33 0.04 0.57 0.13 Purchase Accounting and Transaction Costs — — — 0.09 (Gain) Loss on Businesses Divested and Assets to be Exited 0.01 — (0.69) 0.61 Net (Income) Loss from Businesses Divested/to be Exited 0.01 (0.11) (0.07) (0.40) Executive Transition Costs 0.07 0.07 0.08 0.07 Gain on Sale of Assets (0.06) (0.04) (0.06) (0.04) Impact of the New US Tax Legislation — 0.07 — (0.08) Adjusted Diluted Earnings Per Share $ 1.25 $ 1.31 $ 5.49 $ 5.64 2020 ADJUSTED ANNUAL GUIDANCE Minimum Maximum 2020 Diluted EPS Annual Guidance $ 5.35 $ 5.75 Restructuring and Related Costs 0.28 0.28 Gain on Businesses Divested and Assets to be Exited (0.01) (0.01) Executive Transition Costs 0.03 0.03 2020 Adjusted Diluted EPS Annual Guidance $ 5.65 $ 6.05 ©2020 Regal Beloit Corporation 21

 
4Q 2019 APPENDIX Three Months Ended Power Commercial Transmission ADJUSTED INCOME FROM OPERATIONS Syste ms Industrial Systems Climate Solutions Solutions Total Regal (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 GAAP Income (Loss) from Operations $ 7.9 $ 27.7 $ (1.4) $ 4.4 $ 35.7 $ 33.3 $ 19.5 $ 24.4 $ 61.7 $ 89.8 Restructuring and Related Costs 7.0 1.1 2.9 0.6 2.7 0.4 5.5 0.1 18.1 2.2 Purchase Accounting and Transaction Costs - 0.1 - - - - - - - 0.1 Loss on Businesses Divested and Assets to be Exited 0.1 - - - - - 0.4 - 0.5 - Gain on Sale of Assets - (1.5) - - (3.8) (0.7) - - (3.8) (2.2) Operating (Income) Loss from Businesses Divested/to be Exited - (4.9) - 0.3 0.6 (1.6) - (0.3) 0.6 (6.5) Executive Transition Costs 0.1 1.1 0.1 0.7 0.1 1.1 0.1 0.9 0.4 3.8 Adjusted Income from Operations $ 15.1 $ 23.6 $ 1.6 $ 6.0 $ 35.3 $ 32.5 $ 25.5 $ 25.1 $ 77.5 $ 87.2 GAAP Operating Margin % 3.9 % 10.1 % (1.0)% 2.7 % 17.3 % 14.3 % 10.2 % 11.5 % 8.4 % 10.2 % Adjusted Operating Margin % 7.5 % 10.4 % 1.2 % 3.7 % 17.1 % 14.7 % 13.3 % 12.1 % 10.5 % 10.7 % Twelve Months Ended Power Commercial Transmission ADJUSTED INCOME FROM OPERATIONS Syste ms Industrial Systems Climate Solutions Solutions Total Regal (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 GAAP Income (Loss) from Operations $ 103.1 $ 102.2 $ (9.3) $ 24.8 $ 163.9 $ 115.6 $ 93.4 $ 104.4 $ 351.1 $ 347.0 Restructuring and Related Costs 11.8 2.9 8.4 2.7 4.2 1.8 6.9 0.3 31.3 7.7 Purchase Accounting and Transaction Costs 0.1 5.4 - - - - - - 0.1 5.4 (Gain) Loss on Businesses Divested and Assets to be Exited (32.6) - 1.0 - (4.7) 34.9 1.6 - (34.7) 34.9 Gain on Sale of Assets - (1.5) - - (3.8) (0.7) - - (3.8) (2.2) Operating (Income) Loss from Businesses Divested/to be Exited (3.3) (17.1) - 0.5 (0.5) (6.8) (0.3) (0.5) (4.1) (23.9) Executive Transition Costs 0.6 1.1 0.5 0.7 0.6 1.1 0.5 0.9 2.2 3.8 Adjusted Income from Operations $ 79.7 $ 93.0 $ 0.6 $ 28.7 $ 159.7 $ 145.9 $ 102.1 $ 105.1 $ 342.1 $ 372.7 GAAP Operating Margin % 11.4 % 9.2 % (1.6)% 3.7 % 16.9 % 11.3 % 11.8 % 12.4 % 10.8 % 9.5 % Adjusted Operating Margin % 9.1 % 9.9 % 0.1 % 4.3 % 16.9 % 15.1 % 13.0 % 12.8 % 10.7 % 11.0 % ©2020 Regal Beloit Corporation 22

 
4Q 2019 APPENDIX Three Months Ended Commercial Power Transmission ADJUSTED NET SALES Syste ms Industrial Systems Climate Solutions Solutions Total Regal (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Net Sales $ 202.0 $ 273.2 $ 138.0 $ 163.5 $ 206.4 $ 232.2 $ 191.8 $ 212.8 $ 738.2 $ 881.7 Nets Sales from Businesses Divested/to be Exited - (46.1) - (1.4) (0.2) (11.2) - (5.2) (0.2) (63.9) Adjusted Net Sales $ 202.0 $ 227.1 $ 138.0 $ 162.1 $ 206.2 $ 221.0 $ 191.8 $ 207.6 $ 738.0 $ 817.8 Twelve Months Ended Commercial Power Transmission ADJUSTED NET SALES Syste ms Industrial Systems Climate Solutions Solutions Total Regal (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Net Sales $ 905.3 $ 1,110.9 $ 575.4 $ 671.1 $ 968.5 $ 1,024.8 $ 788.8 $ 838.8 $ 3,238.0 $ 3,645.6 Nets Sales from Businesses Divested/to be Exited (25.0) (175.5) - (6.3) (22.2) (61.7) (5.6) (19.9) (52.8) (263.4) Adjusted Net Sales $ 880.3 $ 935.4 $ 575.4 $ 664.8 $ 946.3 $ 963.1 $ 783.2 $ 818.9 $ 3,185.2 $ 3,382.2 ©2020 Regal Beloit Corporation 23

 
4Q 2019 APPENDIX ADJUSTED EFFECTIVE TAX RATE Three Months Ended Twelve Months Ended (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 Income before Taxes $ 51.3 $ 75.3 $ 303.8 $ 292.2 Provision for Income Taxes 13.7 18.8 61.2 56.4 Effective Tax Rate 26.7% 25.0% 20.1% 19.3% Income before Taxes $ 51.3 $ 75.3 $ 303.8 $ 292.2 (Gain) Loss on Businesses Divested and Assets to be Exited 0.5 - (34.7) 34.9 Adjusted Income before Taxes $ 51.8 $ 75.3 $ 269.1 $ 327.1 Provision for Income Taxes $ 13.7 $ 18.8 $ 61.2 $ 56.4 Tax Effect from (Gain) Loss on Businesses Divested and Assets to be Exited 0.1 - (5.4) 8.2 Impact of the New US Tax Legislation - (3.0) - 3.6 Non-deductible Portion of Executive Transition Costs (2.3) - (2.3) - Adjusted Provision for Income Taxes $ 11.5 $ 15.8 $ 53.5 $ 68.2 Adjusted Effective Tax Rate 22.2% 21.0% 19.9% 20.8% ©2020 Regal Beloit Corporation 24

 
4Q 2019 APPENDIX Three Months Twelve Months FREE CASH FLOW Ended Ended (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 2019 2018 Net Cash Provided by Operating Activities $ 137.3 $ 112.4 $ 408.5 $ 362.7 Additions to Property Plant and Equipment (15.1) (18.4) (92.4) (77.6) Free Cash Flow $ 122.2 $ 94.0 $ 316.1 $ 285.1 GAAP Net Income Attributable to Regal Beloit Corporation $ 36.7 $ 55.6 $ 238.9 $ 231.2 (Gain) Loss on Businesses Divested and Impairments 0.5 - (34.7) 18.2 Tax Effect from (Gain) Loss on Businesses Divested and Impairments (0.1) - 5.4 (4.0) Adjusted Net Income Attributable to Regal Beloit Corporation $ 37.1 $ 55.6 $ 209.6 $ 245.4 Free Cash Flow as a Percentage of Adjusted Net Income Attributable to Regal Beloit Corporation 329.4 % 169.1 % 150.8 % 116.2 % ©2020 Regal Beloit Corporation 25

 
4Q 2019 APPENDIX ORGANIC SALES GROWTH Three Months Ended (Dollars in Millions) Power Commercial Industrial Climate Transmission Syste ms Syste ms Solutions Solutions Total Regal Net Sales Three Months Ended Dec 28, 2019 $ 202.0 $ 138.0 $ 206.4 $ 191.8 $ 738.2 Net Sales from Business Divested/to be Exited - - (0.2) - (0.2) Impact from Foreign Currency Exchange Rates 1.4 1.1 0.4 0.9 3.8 Organic Sales Three Months Ended Dec 28, 2019 $ 203.4 $ 139.1 $ 206.6 $ 192.7 $ 741.8 Net Sales Three Months Ended Dec 29, 2018 $ 273.2 $ 163.5 $ 232.2 $ 212.8 $ 881.7 Net Sales from Business Divested/to be Exited (46.1) (1.4) (11.2) (5.2) (63.9) Adjusted Net Sales Three Months Ended Dec 29, 2018 $ 227.1 $ 162.1 $ 221.0 $ 207.6 $ 817.8 Organic Sales Growth % (10.4)% (14.2)% (6.5)% (7.2)% (9.3)% Net Sales Growth % (26.1)% (15.6)% (11.1)% (9.9)% (16.3)% ORGANIC SALES GROWTH Twelve Months Ended (Dollars in Millions) Power Commercial Industrial Climate Transmission Syste ms Syste ms Solutions Solutions Total Regal Net Sales Twelve Months Ended Dec 28, 2019 $ 905.3 $ 575.4 $ 968.5 $ 788.8 $ 3,238.0 Net Sales from Business Acquired (31.7) - - - (31.7) Net Sales from Business Divested/to be Exited (25.0) - (22.2) (5.6) (52.8) Impact from Foreign Currency Exchange Rates 10.8 13.7 5.7 7.1 37.3 Organic Sales Twelve Months Ended Dec 28, 2019 $ 859.4 $ 589.1 $ 952.0 $ 790.3 $ 3,190.8 Net Sales Twelve Months Ended Dec 29, 2018 $ 1,110.9 $ 671.1 $ 1,024.8 $ 838.8 $ 3,645.6 Net Sales from Business Divested/to be Exited (175.5) (6.3) (61.7) (19.9) (263.4) Adjusted Net Sales Twelve Months Ended Dec 29, 2018 $ 935.4 $ 664.8 $ 963.1 $ 818.9 $ 3,382.2 Organic Sales Growth % (8.1)% (11.4)% (1.2)% (3.5)% (5.7)% Net Sales Growth % (18.5)% (14.3)% (5.5)% (6.0)% (11.2)% ©2020 Regal Beloit Corporation 26

 
4Q 2019 APPENDIX TOTAL GROSS DEBT/EBITDA TOTAL GROSS DEBT/ADJUSTED EBITDA (Dollars in Millions) (Dollars in Millions) LTM Dec 28, LTM Dec 28, 2019 2019 Net Income $ 242.6 Net Income $ 242.6 Plus: Taxes 61.2 Plus: Taxes 61.2 Plus: Interest Expense Plus: Interest Expense 53.0 53.0 Less: Interest Income Less: Interest Income (5.6) (5.6) Plus: Depreciation and Amortization Plus: Depreciation and Amortization 134.5 134.5 Plus: Restructuring and Related Costs 31.3 EBITDA $ 485.7 Plus: Purchase Accounting & Transaction Costs 0.1 Plus: Impairment and Exit Related Costs 10.0 Current Maturities of Debt $ 0.6 Plus: Executive Transition Costs 2.2 Long-Term Debt 1,136.9 Less: Operating Income from Businesses Divested/to be Exited (4.1) Total Gross Debt $ 1,137.5 Less: Gain on Sale of Assets (3.8) Less: Gain on Divestiture of Business (44.7) Total Gross Debt/EBITDA 2.3 Adjusted EBITDA $ 476.7 Current Maturities of Debt $ 0.6 Long-Term Debt 1,136.9 Total Gross Debt $ 1,137.5 Total Gross Debt/Adjusted EBITDA 2.4 ©2020 Regal Beloit Corporation 27

 
4Q 2019 APPENDIX TOTAL NET DEBT/EBITDA TOTAL NET DEBT/ADJUSTED EBITDA (Dollars in Millions) (Dollars in Millions) LTM Dec 28, LTM Dec 28, 2019 2019 Net Income $ 242.6 Net Income $ 242.6 Plus: Taxes 61.2 Plus: Taxes 61.2 Plus: Interest Expense 53.0 Plus: Interest Expense 53.0 Less: Interest Income (5.6) Less: Interest Income (5.6) Plus: Depreciation and Amortization 134.5 Plus: Depreciation and Amortization 134.5 Plus: Restructuring and Related Costs 31.3 Plus: Purchase Accounting & Transaction Costs Adjusted EBITDA $ 485.7 0.1 Plus: Impairment and Exit Related Costs 10.0 Plus: Executive Transition Costs 2.2 Current Maturities of Debt $ 0.6 Less: Operating Income from Businesses Divested/to be Exited (4.1) Long-Term Debt 1,136.9 Less: Gain on Sale of Assets (3.8) Less: Cash (331.4) Less: Gain on Divestiture of Business (44.7) Total Net Debt $ 806.1 Adjusted EBITDA $ 476.7 Total Net Debt/Adjusted EBITDA 1.7 Current Maturities of Debt $ 0.6 Long-Term Debt 1,136.9 Less: Cash (331.4) Total Net Debt $ 806.1 Total Net Debt/Adjusted EBITDA 1.7 ©2020 Regal Beloit Corporation 28

 
4Q 2019 APPENDIX OPERATING LEVERAGE-TOTAL REGAL Three Months Ended Twelve Months Ended (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 Change 2019 2018 Change GAAP Income from Operations $ 61.7 $ 89.8 $ (28.1) $ 351.1 $ 347.0 $ 4.1 Adjusted Income from Operations $ 77.5 $ 87.2 $ (9.7) $ 342.1 $ 372.7 $ (30.6) Net Sales $ 738.2 $ 881.7 $ (143.5) $ 3,238.0 $ 3,645.6 $ (407.6) Adjusted Net Sales $ 738.0 $ 817.8 $ (79.8) $ 3,185.2 $ 3,382.2 $ (197.0) GAAP Operating Leverage 19.6 % (1.0)% Adjusted Operating Leverage 12.2 % 15.5 % ©2020 Regal Beloit Corporation 29

 
4Q 2019 APPENDIX OPERATING LEVERAGE-COMMERCIAL SYSTEMS Three Months Ended Twelve Months Ended (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 Change 2019 2018 Change GAAP Income from Operations $ 7.9 $ 27.7 $ (19.8) $ 103.1 $ 102.2 $ 0.9 Adjusted Income from Operations $ 15.1 $ 23.6 $ (8.5) $ 79.7 $ 93.0 $ (13.3) 2019 Corporate Allocation to 2018 Acquisition $ 1.3 $ — $ 5.4 $ — Adjusted Income from Operations Excluding Corporate Allocation to 2018 Acquisition $ 16.4 $ 23.6 $ (7.2) $ 85.1 $ 93.0 $ (7.9) Net Sales $ 202.0 $ 273.2 $ (71.2) $ 905.3 $ 1,110.9 $ (205.6) Adjusted Net Sales $ 202.0 $ 227.1 $ (25.1) $ 880.3 $ 935.4 $ (55.1) GAAP Operating Leverage 27.8 % (0.4)% Adjusted Operating Leverage 33.9 % 24.1 % Adjusted Operating Leverage Excluding Corporate Allocation to 2018 Acquisition 28.7 % 14.3 % OPERATING LEVERAGE-INDUSTRIAL SYSTEMS Three Months Ended Twelve Months Ended (Dollars in Millions) Dec 28, Dec 29, Dec 28, Dec 29, 2019 2018 Change 2019 2018 Change GAAP Income (Loss) from Operations $ (1.4) $ 4.4 $ (5.8) $ (9.3) $ 24.8 $ (34.1) Adjusted Income from Operations $ 1.6 $ 6.0 $ (4.4) $ 0.6 $ 28.7 $ (28.1) Net Sales $ 138.0 $ 163.5 $ (25.5) $ 575.4 $ 671.1 $ (95.7) Adjusted Net Sales $ 138.0 $ 162.1 $ (24.1) $ 575.4 $ 664.8 $ (89.4) GAAP Operating Leverage 22.7 % 35.6 % Adjusted Operating Leverage 18.3 % 31.4 % ©2020 Regal Beloit Corporation 30

 
4Q 2019 APPENDIX The following tables outline the first and second quarter 2018 net sales and income from operations illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance. Power Commercial Industrial Climate Transmission Syste ms Syste ms Solutions Solutions Total Regal Fiscal 2018 First Quarter Schedule for Ongoing Business Net Sales Three Months Ended March 31, 2018 $ 249.0 $ 165.0 $ 259.9 $ 204.9 $ 878.8 Net Sales from Businesses Divested/to be Exited (42.3) (1.6) (18.0) (4.3) (66.2) Adjusted Net Sales from Ongoing Business $ 206.7 $ 163.4 $ 241.9 $ 200.6 $ 812.6 GAAP Income from Operations Three Months Ended March 31, 2018 $ 19.7 $ 9.4 $ 32.3 $ 26.8 $ 88.2 Restructuring and Related Costs 0.8 0.5 0.4 - 1.7 Income from Operations of Businesses Divested/to be Exited (2.9) 0.1 (1.6) 0.4 (4.0) Adjusted Income from Operations of Ongoing Business $ 17.6 $ 10.0 $ 31.1 $ 27.2 $ 85.9 Ongoing Business Adjusted Operating Margin % 8.5 % 6.1 % 12.9 % 13.6 % 10.6 % Fiscal 2018 Second Quarter Schedule for Ongoing Business Net Sales Three Months Ended June 30, 2018 $ 292.2 $ 176.8 $ 277.3 $ 213.4 $ 959.7 Net Sales from Businesses Divested/to be Exited (42.0) (1.7) (19.2) (5.6) (68.5) Adjusted Net Sales from Ongoing Business $ 250.2 $ 175.1 $ 258.1 $ 207.8 $ 891.2 GAAP Income from Operations Three Months Ended June 30, 2018 $ 23.6 $ 6.9 $ 44.0 $ 25.1 $ 99.6 Restructuring and Related Costs 0.2 0.5 0.7 0.1 1.5 Purchase Accounting and Transaction Costs 5.1 - - - 5.1 Income from Operations of Businesses Divested/to be Exited (4.1) 0.1 (2.1) (0.3) (6.4) Adjusted Income from Operations of Ongoing Business $ 24.8 $ 7.5 $ 42.6 $ 24.9 $ 99.8 Ongoing Business Adjusted Operating Margin % 9.9 % 4.3 % 16.5 % 12.0 % 11.2 % ©2020 Regal Beloit Corporation 31

 
4Q 2019 APPENDIX The following tables outline the third and fourth quarter 2018 net sales and income from operations illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance. Power Commercial Industrial Climate Transmission Syste ms Syste ms Solutions Solutions Total Regal Fiscal 2018 Third Quarter Schedule for Ongoing Business Net Sales Three Months Ended September 29, 2018 $ 296.5 $ 165.8 $ 255.4 $ 207.7 $ 925.4 Net Sales from Businesses Divested/to be Exited (45.1) (1.6) (13.3) (4.8) (64.8) Adjusted Net Sales from Ongoing Business $ 251.4 $ 164.2 $ 242.1 $ 202.9 $ 860.6 GAAP Income from Operations Three Months Ended September 29, 2018 $ 31.2 $ 4.1 $ 6.0 $ 28.1 $ 69.4 Restructuring and Related Costs 0.8 1.1 0.3 0.1 2.3 Purchase Accounting and Transaction Costs 0.2 - - - 0.2 Impairment and Exit Related Costs - - 34.9 - 34.9 Income from Operations of Businesses Divested/to be Exited (5.2) - (1.5) (0.3) (7.0) Adjusted Income from Operations of Ongoing Business $ 27.0 $ 5.2 $ 39.7 $ 27.9 $ 99.8 Ongoing Business Adjusted Operating Margin % 10.7 % 3.2 % 16.4 % 13.8 % 11.6 % Fiscal 2018 Fourth Quarter Schedule for Ongoing Business Net Sales Three Months Ended December 29, 2018 $ 273.2 $ 163.5 $ 232.2 $ 212.8 $ 881.7 Net Sales from Businesses Divested/to be Exited (46.1) (1.4) (11.2) (5.2) (63.9) Adjusted Net Sales from Ongoing Business $ 227.1 $ 162.1 $ 221.0 $ 207.6 $ 817.8 GAAP Income from Operations Three Months Ended December 29, 2018 $ 27.7 $ 4.4 $ 33.3 $ 24.4 $ 89.8 Restructuring and Related Costs 1.1 0.6 0.4 0.1 2.2 Purchase Accounting and Transaction Costs 0.1 - - - 0.1 Gain on Sale of Assets (1.5) - (0.7) - (2.2) Executive Transition Costs 1.1 0.7 1.1 0.9 3.8 Income from Operations of Businesses Divested/to be Exited (4.9) 0.3 (1.6) (0.3) (6.5) Adjusted Income from Operations of Ongoing Business $ 23.6 $ 6.0 $ 32.5 $ 25.1 $ 87.2 Ongoing Business Adjusted Operating Margin % 10.4 % 3.7 % 14.7 % 12.1 % 10.7 % ©2020 Regal Beloit Corporation 32

 
4Q 2019 APPENDIX The following tables outline the full year 2018 net sales and income from operations, and the full year adjusted diluted earnings per share, illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance. Power Commercial Industrial Climate Transmission Syste ms Syste ms Solutions Solutions Total Regal Fiscal 2018 Full Year Schedule for Ongoing Business Net Sales Twelve Months Ended December 29, 2018 $ 1,110.9 $ 671.1 $ 1,024.8 $ 838.8 $ 3,645.6 Net Sales from Businesses Divested/to be Exited (175.5) (6.3) (61.7) (19.9) (263.4) Adjusted Net Sales from Ongoing Business $ 935.4 $ 664.8 $ 963.1 $ 818.9 $ 3,382.2 GAAP Income from Operations Twelve Months Ended December 29, 2018 $ 102.2 $ 24.8 $ 115.6 $ 104.4 $ 347.0 Restructuring and Related Costs 2.9 2.7 1.8 0.3 7.7 Purchase Accounting and Transaction Costs 5.4 - - - 5.4 Gain on Sale of Assets (1.5) - (0.7) - (2.2) Executive Transition Costs 1.1 0.7 1.1 0.9 3.8 Impairment and Exit Related Costs - - 34.9 - 34.9 Income from Operations of Businesses Divested/to be Exited (17.1) 0.5 (6.8) (0.5) (23.9) Adjusted Income from Operations of Ongoing Business $ 93.0 $ 28.7 $ 145.9 $ 105.1 $ 372.7 Ongoing Business Adjusted Operating Margin % 9.9 % 4.3 % 15.1 % 12.8 % 11.0 % 2018 ADJUSTED DILUTED EARNINGS PER SHARE FOR ONGOING Twelve BUSINESS Three Months Ended Months Ended Dec Mar 31, 2018 Jun 30, 2018 Sep 29, 2018 Dec 29, 2018 29, 2018 Adjusted Diluted Earnings Per Share $ 1.33 $ 1.59 $ 1.67 $ 1.41 $ 6.00 Earnings Per Share from Businesses Divested/to be Exited (0.06) (0.09) (0.11) (0.10) (0.36) Adjusted Diluted Earnings Per Share for Ongoing Business $ 1.27 $ 1.50 $ 1.56 $ 1.31 $ 5.64 ©2020 Regal Beloit Corporation 33

 
4Q 2019 APPENDIX The following tables outline the first and second quarter 2019 net sales and income from operations illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance. Power Commercial Industrial Climate Transmission Syste ms Syste ms Solutions Solutions Total Regal Fiscal 2019 First Quarter Schedule for Ongoing Business Net Sales Three Months Ended March 30, 2019 $ 242.2 $ 138.1 $ 263.3 $ 210.2 $ 853.8 Net Sales from Businesses Divested/to be Exited (12.4) - (15.5) (5.6) (33.5) Adjusted Net Sales from Ongoing Business $ 229.8 $ 138.1 $ 247.8 $ 204.6 $ 820.3 GAAP Income (Loss) from Operations Three Months Ended March 30, 2019 $ 57.8 $ (4.3) $ 38.9 $ 28.2 $ 120.6 Restructuring and Related Costs 1.2 0.9 0.1 0.1 2.3 Purchase Accounting and Transaction Costs 0.1 - - - 0.1 (Gain) Loss on Businesses Divested and Assets to be Exited (34.6) 1.0 1.3 1.1 (31.2) Operating Income from Businesses Divested/to be Exited (1.7) - (1.9) (0.3) (3.9) Executive Transition Costs 0.4 0.3 0.5 0.4 1.6 Adjusted Income (Loss) from Operations of Ongoing Business $ 23.2 $ (2.1) $ 38.9 $ 29.5 $ 89.5 Ongoing Business Adjusted Operating Margin % 10.1 % (1.5)% 15.7 % 14.4 % 10.9 % Fiscal 2019 Second Quarter Schedule for Ongoing Business Net Sales Three Months Ended June 29, 2019 $ 246.3 $ 155.5 $ 267.9 $ 204.0 $ 873.7 Net Sales from Businesses Divested/to be Exited (12.6) - (5.6) - (18.2) Adjusted Net Sales from Ongoing Business $ 233.7 $ 155.5 $ 262.3 $ 204.0 $ 855.5 GAAP Income (Loss) from Operations Three Months Ended June 29, 2019 $ 20.8 $ (1.3) $ 51.7 $ 24.8 $ 96.0 Restructuring and Related Costs 1.1 1.5 0.6 0.4 3.6 (Gain) Loss on Businesses Divested and Assets to be Exited 1.8 - (6.1) 0.1 (4.2) Operating Income from Businesses Divested/to be Exited (1.6) - (0.1) - (1.7) Executive Transition Costs 0.1 - - - 0.1 Adjusted Income from Operations of Ongoing Business $ 22.2 $ 0.2 $ 46.1 $ 25.3 $ 93.8 Ongoing Business Adjusted Operating Margin % 9.5 % 0.1 % 17.6 % 12.4 % 11.0 % ©2020 Regal Beloit Corporation 34

 
4Q 2019 APPENDIX The following tables outline the third and fourth quarter 2019 net sales and income from operations illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal's 2020 guidance and actual performance. Power Commercial Industrial Climate Transmission Syste ms Syste ms Solutions Solutions Total Regal Fiscal 2019 Third Quarter Schedule for Ongoing Business Net Sales Three Months Ended September 28, 2019 $ 214.8 $ 143.8 $ 230.9 $ 182.8 $ 772.3 Net Sales from Businesses Divested/to be Exited - - (0.9) - (0.9) Adjusted Net Sales from Ongoing Business $ 214.8 $ 143.8 $ 230.0 $ 182.8 $ 771.4 GAAP Income (Loss) from Operations Three Months Ended September 28, 2019 $ 16.6 $ (2.3) $ 37.6 $ 20.9 $ 72.8 Restructuring and Related Costs 2.5 3.1 0.8 0.9 7.3 Loss on Businesses Divested and Assets to be Exited 0.1 - 0.1 - 0.2 Operating Income from Businesses Divested/to be Exited - - 0.9 - 0.9 Executive Transition Costs - 0.1 - - 0.1 Adjusted Income from Operations of Ongoing Business $ 19.2 $ 0.9 $ 39.4 $ 21.8 $ 81.3 Ongoing Business Adjusted Operating Margin % 8.9 % 0.6 % 17.1 % 11.9 % 10.5 % Fiscal 2019 Fourth Quarter Schedule for Ongoing Business Net Sales Three Months Ended December 28, 2019 $ 202.0 $ 138.0 $ 206.4 $ 191.8 $ 738.2 Net Sales from Businesses Divested/to be Exited - - (0.2) - (0.2) Adjusted Net Sales from Ongoing Business $ 202.0 $ 138.0 $ 206.2 $ 191.8 $ 738.0 GAAP Income (Loss) from Operations Three Months Ended December 28, 2019 $ 7.9 $ (1.4) $ 35.7 $ 19.5 $ 61.7 Restructuring and Related Costs 7.0 2.9 2.7 5.5 18.1 Gain on Sale of Assets - - (3.8) - (3.8) Loss on Businesses Divested and Assets to be Exited 0.1 - - 0.4 0.5 Operating (Income) Loss from Businesses Divested/to be Exited - - 0.6 - 0.6 Executive Transition Costs 0.1 0.1 0.1 0.1 0.4 Adjusted Income from Operations of Ongoing Business $ 15.1 $ 1.6 $ 35.3 $ 25.5 $ 77.5 Ongoing Business Adjusted Operating Margin % 7.5% 1.2% 17.1% 13.3% 10.5% ©2020 Regal Beloit Corporation 35

 
4Q 2019 APPENDIX The following tables outline the full year 2019 net sales and income from operations, and the full year adjusted diluted earnings per share, illustrating the impact of businesses divested and to be exited, which can be used to compare to Regal’s 2020 guidance and actual performance. Power Commercial Industrial Climate Transmission Syste ms Syste ms Solutions Solutions Total Regal Fiscal 2019 Twelve Months Ended for Ongoing Business Net Sales Twelve Months Ended December 28, 2019 $ 905.3 $ 575.4 $ 968.5 $ 788.8 $ 3,238.0 Net Sales from Businesses Divested/to be Exited (25.0) - (22.2) (5.6) (52.8) Adjusted Net Sales from Ongoing Business $ 880.3 $ 575.4 $ 946.3 $ 783.2 $ 3,185.2 GAAP Income (Loss) from Operations Nine Months Ended December 28, 2019 $ 103.1 $ (9.3) $ 163.9 $ 93.4 $ 351.1 Restructuring and Related Costs 11.8 8.4 4.2 6.9 31.3 Purchase Accounting and Transaction Costs 0.1 - - - 0.1 Gain on Sale of Assets - - (3.8) - (3.8) (Gain) Loss on Businesses Divested and Assets to be Exited (32.6) 1.0 (4.7) 1.6 (34.7) Operating Income from Businesses Divested/to be Exited (3.3) - (0.5) (0.3) (4.1) Executive Transition Costs 0.6 0.5 0.6 0.5 2.2 Adjusted Income from Operations of Ongoing Business $ 79.7 $ 0.6 $ 159.7 $ 102.1 $ 342.1 Ongoing Business Adjusted Operating Margin % 9.1 % 0.1 % 16.9 % 13.0 % 10.7 % 2019 ADJUSTED DILUTED EARNINGS PER SHARE FOR ONGOING Twelve BUSINESS Three Months Ended Months Ended Dec Mar 30, 2019 Jun 29, 2019 Sep 28, 2019 Dec 28, 2019 28, 2019 Adjusted Diluted Earnings Per Share $ 1.43 $ 1.52 $ 1.35 $ 1.25 $ 5.55 Earnings Per Share from Businesses Divested/to be Exited (0.03) (0.03) - - (0.06) Adjusted Diluted Earnings Per Share for Ongoing Business $ 1.40 $ 1.49 $ 1.35 $ 1.25 $ 5.49 ©2020 Regal Beloit Corporation 36

 
4Q 2019 APPENDIX Shipping 1Q 2Q 3Q 4Q FY Days 2014 63 63 63 64 253 2015 64 63 64 59 250 2016 64 64 63 60 251 2017 64 63 63 60 250 2018 63 64 63 61 251 2019 63 63 63 61 250 2020 63 63 63 64 253 . Regal operates on a 52/53 week fiscal year ending on the Saturday closest to December 31 . Fiscal Years 2015, 2016, 2017, 2018 and 2019 have 52 weeks . Fiscal Year 2014 and 2020 have 53 weeks ©2020 Regal Beloit Corporation 37