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Rexnord Reports Second Quarter 2021 Financial Results

July 20, 2021

Call scheduled for Wednesday, July 21, 2021 at 8:00 a.m. Eastern Time

MILWAUKEE--(BUSINESS WIRE)-- Rexnord Corporation (NYSE:RXN)

Second Quarter Highlights

  • Net sales were $568 million compared with $449 million in last year’s June quarter (+21% core sales(1), +3% acquisitions and divestitures, +3% foreign currency translation).
  • Net income(2) was $73 million (diluted EPS of $0.59), compared with $36 million (diluted EPS of $0.29) in the year-ago quarter.
  • Adjusted EPS(1) was $0.58 compared with $0.36 in the year-ago quarter.
  • Adjusted EBITDA(1) was $133 million (23.5% of net sales) compared with $103 million (23.0% of net sales) in last year's June quarter.
  • Net debt leverage ratio at 1.7x.

Todd Adams, Chairman and Chief Executive Officer, commented, “We delivered a very strong second quarter with above market sales growth, solid margins, and strong free cash flow. Momentum across our business continues to accelerate and the trajectory of both platforms provides a terrific backdrop for our planned merger of Process and Motion Control ("PMC") with Regal Beloit while establishing our Water Management ("WM") platform as a premier, pure-play water company. Our WM platform continues to perform exceptionally well as core sales grew 29% over a COVID impacted prior year second quarter where our sales were down only 5%. With respect to the Regal Beloit transaction, we are making good progress on all fronts and anticipate a shareholder meeting in the third quarter. With PMC’s strong performance in the first half of 2021 and an improved outlook for the second half of the year, we now believe PMC will deliver over $300 million of EBITDA in 2021, which is considerably ahead of the expectations we had at the beginning of the year, and should only strengthen the value creation opportunity of the combined business."

“In addition to a strong top-line in WM, our margins of 27% were at the high-end of our expectations and driven by our ability to navigate all of the well-publicized global supply chain challenges facing manufacturers. We are excited that a number of organic growth initiatives that we’ve been investing in are gaining traction and see a clear path to double digit core growth in WM in fiscal 2021 and with a preliminary view that the market in 2022 looks decent."

“Improving demand patterns across PMC’s end markets resulted in an increase in PMC’s order backlog and a 1.10x book-to-bill ratio. We enter the second half of the calendar year with $60 million dollars of additional backlog and an Aerospace market that continues to improve as order growth turned positive in the quarter as we had anticipated. Top-line growth coupled with the compounding benefits from our structural cost reductions and simplification initiatives should drive robust earnings and cash flow heading into the closing of the Regal Beloit transaction."

Third Quarter Outlook

Adams continued, “Given the anticipated timing of the separation of our PMC and WM platforms, we will continue to limit our external outlook to the upcoming quarter. Based on the permanent cost reduction initiatives we have implemented, our order backlog heading into the third quarter and an anticipated range of demand patterns through September, we expect third quarter sales in our WM platform to increase year over year in the high teens percentage range and Adjusted EBITDA margin to range between 26% and 27%. We expect sales in our PMC platform to increase by a mid-teens percentage range and Adjusted EBITDA margin to range between 23% and 24%, and for our corporate expenses to approximate $10 million.”

Second Quarter 2021 Segment Highlights

Water Management

WM net sales were $243.7 million during the three months ended June 30, 2021, an increase of 39% year over year. Excluding a 1% increase to net sales associated with foreign currency transaction and a 9% increase in net sales resulting from our prior-year acquisition of Hadrian, core sales increased 29% year over year driven by increased demand across all of our product categories.

WM income from operations was $52.8 million or 21.7% of net sales. Income from operations as a percentage of net sales decreased by 130 basis points year over year as the favorable impact of higher sales growth year over year was more than offset by the temporary mix impact of the Hadrian acquisition, the year-over-year change in the adjustment to state inventories at last-in-first-out cost and the benefit of temporary cost reduction actions in the prior year second quarter in response to the COVID-19 pandemic.

Adjusted EBITDA(1) was $65.3 million or 26.8% of net sales during the three months ended June 30, 2021. Adjusted EBITDA(1) was $50.9 million, or 29.1% of net sales during the three months ended June 30, 2020.

Process & Motion Control

PMC net sales were $324.6 million during the three months ended June 30, 2021, an increase of 18% as compared to the prior year. Excluding a 4% increase to net sales associated with foreign currency translation and a 2% decrease from a small divestiture, core sales increased by 16% year over year as core sales growth of 21% in our non-aerospace markets, driven by growth across nearly all product categories and geographies, was partially offset by the anticipated core sales decline of 15% in our Aerospace markets as a result of the lower year over year backlog given the change in customer buying patterns due to the COVID-19 pandemic over the past 12 months.

PMC income from operations was $66.8 million, or 20.6% of net sales. Income from operations as a percentage of net sales increased by 620 basis points year over year due to gains recognized on the sale of certain fixed assets, benefits from cost reduction and productivity initiatives and the favorable impact of higher year over year sales growth, partially offset by the benefit of temporary cost reduction actions in the prior year second quarter in response to the COVID-19 pandemic.

Adjusted EBITDA(1) was $78.4 million or 24.2% of net sales during the three months ended June 30, 2021. Adjusted EBITDA(1) was $59.4 million, or 21.6% of net sales during the three months ended June 30, 2020.

 

(1)

 

Refer to "Non-GAAP Measures" for a definition of this non-GAAP metric, as well as the accompanying reconciliations to GAAP.

   
 

(2)

 

Reflects net income attributable to Rexnord.

Non-GAAP Financial Measures

The following non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis. We believe that these financial measures are appropriate to enhance an overall understanding of our underlying operating performance trends compared to historical and prospective periods and our peers. Management also believes that these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods as well as insight into the compliance with our debt covenants. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of non-GAAP financial measures presented above to our GAAP results has been provided in the financial tables included in this press release.

Core Sales

Core sales excludes the impact of acquisitions (such as Hadrian), divestitures and foreign currency translation. Management believes that core sales facilitates easier and more meaningful comparison of our net sales performance with prior and future periods and to our peers. We exclude the effect of acquisitions and divestitures because the nature, size and number of acquisitions and divestitures can vary dramatically from period to period and between us and our peers, and can also obscure underlying business trends and make comparisons of long-term performance difficult. We exclude the effect of foreign currency translation from this measure because the volatility of currency translation is not under management's control.

Adjusted Net Income and Adjusted Earnings Per Share

Adjusted net income and adjusted earnings per share (calculated on a diluted basis) exclude actuarial gains and losses on pension and postretirement benefit obligations, restructuring and other similar charges, gains or losses on divestitures, discontinued operations, gains or losses on extinguishment of debt, the impact of acquisition-related fair value adjustments in connection with purchase accounting, amortization of intangible assets, and other non-operational, non-cash or non-recurring losses, net of their income tax impact. The tax rates used to calculate adjusted net income and adjusted earnings per share are based on a transaction specific basis. We believe that adjusted net income and adjusted earnings per share are useful in assessing our financial performance by excluding items that are not indicative of our core operating performance or that may obscure trends useful in evaluating our continuing results of operations. All references to Net Income and EPS within this earnings release refer to net income attributable to Rexnord common stockholders and net income per diluted share attributable to Rexnord common stockholders, respectively.

EBITDA

EBITDA represents earnings from continuing operations before interest and other debt related activities, taxes, depreciation and amortization. EBITDA is presented because it is an important supplemental measure of performance and it is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is also presented and compared by analysts and investors in evaluating our ability to meet debt service obligations. Other companies in our industry may calculate EBITDA differently. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of operating performance or any other measures of performance derived in accordance with GAAP. Because EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business.

Adjusted EBITDA

“Adjusted EBITDA” is the term we use to describe EBITDA as defined and adjusted in our credit agreement, which is net income, adjusted for the items summarized in the Reconciliation of GAAP to Non-GAAP Financial Measures table below. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, non-cash or non-recurring losses or gains. In view of our debt level, it is also provided to aid investors in understanding our compliance with our debt covenants. Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA varies from others in our industry. This measure should not be considered as an alternative to net income, income from operations (as it relates to our two reportable segments, we adjust from income from operations because “non-operating” expenses such as interest and income taxes are not allocated to our segments and therefore net income is not presented at the segment level) or any other performance measures derived in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; or (f) the impact of earnings or charges resulting from matters that we and the lenders under our credit agreement may not consider indicative of our ongoing operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-cash, non-operating or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results.

In addition, certain of these expenses can represent the reduction of cash that could be used for other corporate purposes. Further, although not included in the calculation of Adjusted EBITDA below, the measure may at times allow us to add estimated cost savings and operating synergies related to operational changes ranging from acquisitions to dispositions to restructurings and/or exclude one-time transition expenditures that we anticipate we will need to incur to realize cost savings before such savings have occurred. Further, management and various investors use the ratio of total debt less cash to Adjusted EBITDA (which includes a full pro-forma last-twelve-month impact of acquisitions), or "net debt leverage", as a measure of our financial strength and ability to incur incremental indebtedness when making key investment decisions and evaluating us against peers. Lastly, management and various investors use the ratio of the change in Adjusted EBITDA divided by the change in net sales (referred to as “incremental margin” in the case of an increase in net sales or “decremental margin” in the case of a decrease in net sales) as an additional measure of our financial performance and is utilized when making key investment decisions and evaluating us against peers.

Free Cash Flow

We define Free Cash Flow as cash flow from operations less capital expenditures, and we use this metric in analyzing our ability to service and repay our debt and to forecast future periods. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service our debt. We define Free Cash Flow Conversion as Free Cash Flow divided by net income.

Return on Invested Capital (“ROIC”)

ROIC is used because we believe it is an important supplemental measure of financial performance and it is also currently a performance measure under our long-term incentive plan. ROIC is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. ROIC is also used by investors and analysts to evaluate management’s deployment of capital to create shareholder value. We define ROIC as tax-effected net operating income for the last 12 months divided by average total invested capital over a rolling four-quarter period. Total invested capital is defined as shareholders equity plus debt, less cash and cash equivalents. Other companies may not define or calculate ROIC in the same way. We may also periodically refer to “underlying ROIC” which adjusts total invested capital by reversing the effects on our current capital structure of the 2006 leveraged buyout of the then privately-held Company by a separate private owner.

About Rexnord

Headquartered in Milwaukee, Wisconsin, Rexnord is comprised of two strategic platforms, Process & Motion Control and Water Management, with approximately 6,800 employees worldwide. The Process & Motion Control platform designs, manufactures, markets and services specified, highly-engineered mechanical components used within complex systems. The Water Management platform designs, procures, manufactures and markets products that provide and enhance water quality, safety, flow control and conservation. Additional information about the Company can be found at www.rexnordcorporation.com.

Conference Call Details

Rexnord will hold a conference call on Wednesday, July 21, 2021, at 8:00 a.m. Eastern Time to discuss its second quarter 2021 results, provide a general business update and respond to investor questions. Rexnord Chairman and CEO, Todd Adams, and Senior Vice President and CFO, Mark Peterson, will co-host the call. The conference call can be accessed via telephone as follows:

Domestic toll-free #: 866-211-3116
International toll #: 647-689-6577
Access Code: 7258079

A live webcast of the call will also be available on the Company's investor relations website. Please go to the website (investors.rexnordcorporation.com) at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

If you are unable to participate during the live teleconference, a replay of the conference call will be available from 11:00 a.m. Eastern Time on July 21, 2021, until 11:59 p.m. Eastern Time on August 4, 2021. To access the replay, please dial 800-585-8367 (domestic) or 416-621-4642 (international). The conference ID for the replay is: 7258079. The replay will also be available as a webcast on Rexnord's investor relations website.

Cautionary Statement on Forward-Looking Statements

Information in this release may involve outlook, expectations, beliefs, plans, intentions, strategies or other statements regarding the future, which are forward-looking statements. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Rexnord Corporation as of the date of the release, and Rexnord Corporation assumes no obligation to update any such forward-looking statements. The statements in this release are not guarantees of future performance and actions, and actual results could differ materially from current expectations. Numerous factors could cause or contribute to such differences. Please refer to "Risk Factors" and "Cautionary Notice Regarding Forward-Looking Statements" in the Company's Transition Report on Form 10-K for the transition period ended December 31, 2020, as well as the Company's annual, quarterly and current reports filed on Forms 10-K, 10-Q and 8-K from time to time with the Securities and Exchange Commission for a further discussion of the factors and risks associated with the business. Our previously announced transaction with Regal Beloit Corporation is subject to various risks, uncertainties and factors including, among others: the inability to complete the transaction; the inability to recognize the anticipated benefits of the proposed transaction, including due to the failure to receive required security holder approvals, or the failure of other closing conditions; and costs related to the proposed transaction; see also Part I, Item 1A, "Risk Factors" in the Company's Quarterly Reporting on Form 10-Q for the quarterly period ended June 30, 2021. In addition, the effects of the ongoing COVID-19 pandemic on our employees, customers and supply chain, including those related to governmental actions, all of which are uncertain at this time, may, among other impacts, heighten the effects on our business, results of operations and financial condition of the risk factors identified in our Transition Report on Form 10-K.

Rexnord Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(in Millions, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Net sales

 

$

568.3

 

 

$

449.1

 

 

$

1,094.4

 

 

$

996.1

 

Cost of sales

 

 

332.5

 

 

 

272.2

 

 

 

650.7

 

 

 

602.7

 

Gross profit

 

 

235.8

 

 

 

176.9

 

 

 

443.7

 

 

 

393.4

 

Selling, general and administrative expenses

 

 

122.0

 

 

 

100.2

 

 

 

241.3

 

 

 

213.0

 

Restructuring and other similar charges

 

 

1.1

 

 

 

1.7

 

 

 

1.7

 

 

 

8.3

 

Amortization of intangible assets

 

 

9.1

 

 

 

9.0

 

 

 

18.5

 

 

 

18.1

 

Income from operations

 

 

103.6

 

 

 

66.0

 

 

 

182.2

 

 

 

154.0

 

Non-operating expense:

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(11.7

)

 

 

(13.4

)

 

 

(22.7

)

 

 

(26.8

)

Actuarial loss on pension and postretirement benefit obligations

 

 

 

 

 

 

 

 

 

 

 

(35.8

)

Other income (expense), net

 

 

1.7

 

 

 

0.4

 

 

 

1.3

 

 

 

(3.2

)

Income before income taxes

 

 

93.6

 

 

 

53.0

 

 

 

160.8

 

 

 

88.2

 

Provision for income taxes

 

 

(20.5

)

 

 

(17.2

)

 

 

(37.7

)

 

 

(23.6

)

Equity method investment income (loss)

 

 

0.2

 

 

 

 

 

 

0.3

 

 

 

(0.2

)

Net income

 

 

73.3

 

 

 

35.8

 

 

 

123.4

 

 

 

64.4

 

Non-controlling interest income

 

 

0.1

 

 

 

0.2

 

 

 

0.2

 

 

 

0.3

 

Net income attributable to Rexnord

 

$

73.2

 

 

$

35.6

 

 

$

123.2

 

 

$

64.1

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to Rexnord:

 

 

 

 

 

 

 

 

Basic

 

$

0.61

 

 

$

0.30

 

 

$

1.03

 

 

$

0.53

 

Diluted

 

$

0.59

 

 

$

0.29

 

 

$

0.99

 

 

$

0.52

 

Weighted-average number of shares outstanding (in thousands):

 

 

 

 

 

 

 

 

Basic

 

 

120,465

 

 

 

120,246

 

 

 

120,138

 

 

 

121,013

 

Effect of dilutive equity securities

 

 

3,832

 

 

 

1,802

 

 

 

3,953

 

 

 

2,374

 

Diluted

 

 

124,297

 

 

 

122,048

 

 

 

124,091

 

 

 

123,387

 

Rexnord Corporation and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures

Three Months Ended June 30, 2021

(in Millions) (Unaudited)

 

 

 

Three Months Ended June 30, 2021

 

 

Reported
Results

 

 

 

Adjustments

 

 

 

Non-GAAP
Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

568.3

 

 

 

 

$

 

 

 

 

$

568.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

126.7

 

 

 

 

 

6.7

 

(a)

 

 

 

133.4

 

 

 

Depreciation and amortization

 

 

(23.1

)

 

 

 

 

 

 

 

 

 

(23.1

)

 

 

Income from operations

 

 

103.6

 

 

 

 

 

6.7

 

(b)

 

 

 

110.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

93.6

 

 

 

 

 

(0.9

)

(c)

 

 

 

92.7

 

 

 

Provision for income taxes and indicated rate

 

 

(20.5

)

 

21.9

%

 

 

(0.6

)

 

(66.7

)%

 

 

(21.1

)

 

22.8

%

Equity method investment income

 

 

0.2

 

 

 

 

 

(0.2

)

 

 

 

 

 

 

 

Net income

 

 

73.3

 

 

 

 

 

(1.7

)

 

 

 

 

71.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest income

 

 

0.1

 

 

 

 

 

(0.1

)

 

 

 

 

 

 

 

Net income attributable to Rexnord

 

$

73.2

 

 

 

 

$

(1.6

)

 

 

 

$

71.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA
Adjustments
(a)

 

 

 

Income from
Operations
Adjustment
(b)

 

 

 

Income before
Income Taxes
Adjustments
(c)

 

 

Restructuring and other similar charges

 

$

1.1

 

 

 

 

$

1.1

 

 

 

 

$

1.1

 

 

 

Other, net (1)

 

 

(9.4

)

 

 

 

 

(9.4

)

 

 

 

 

(9.4

)

 

 

Last-in-first-out inventory adjustments

 

 

2.8

 

 

 

 

 

2.8

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

12.2

 

 

 

 

 

12.2

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

9.1

 

 

 

Other income, net (2)

 

 

 

 

 

 

 

 

 

 

 

 

(1.7

)

 

 

Total Adjustments

 

$

6.7

 

 

 

 

$

6.7

 

 

 

 

$

(0.9

)

 

 

(1)

 

Other, net includes the gains and losses from sale of long-lived assets.

(2)

 

Other income, net, for the periods indicated, consists primarily of gains and losses from foreign currency transactions, the non-service cost components of net periodic benefit credits associated with our defined benefit plans.

Rexnord Corporation and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures

Six Months Ended June 30, 2021

(in Millions) (Unaudited)

 

 

Six Months Ended June 30, 2021

 

 

Reported
Results

 

 

 

Adjustments

 

 

 

Non-GAAP
Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

1,094.4

 

 

 

 

$

 

 

 

 

$

1,094.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

228.8

 

 

 

 

 

24.8

 

(a)

 

 

 

253.6

 

 

 

Depreciation and amortization

 

 

(46.6

)

 

 

 

 

 

 

 

 

 

(46.6

)

 

 

Income from operations

 

 

182.2

 

 

 

 

 

24.8

 

(b)

 

 

 

207.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

160.8

 

 

 

 

 

10.3

 

(c)

 

 

 

171.1

 

 

 

Provision for income taxes and indicated rate

 

 

(37.7

)

 

23.4

%

 

 

(3.4

)

 

33.0

%

 

 

(41.1

)

 

24.0

%

Equity method investment income

 

 

0.3

 

 

 

 

 

(0.3

)

 

 

 

 

 

 

 

Net income

 

 

123.4

 

 

 

 

 

6.6

 

 

 

 

 

130.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest income

 

 

0.2

 

 

 

 

 

(0.2

)

 

 

 

 

 

 

 

Net income attributable to Rexnord

 

$

123.2

 

 

 

 

$

6.8

 

 

 

 

$

130.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA
Adjustment
(a)

 

 

 

Income from
Operations
Adjustments
(b)

 

 

 

Income before
Income Taxes
Adjustments
(c)

 

 

Restructuring and other similar charges

 

$

1.7

 

 

 

 

$

1.7

 

 

 

 

$

1.7

 

 

 

Acquisition-related fair value adjustment

 

 

0.6

 

 

 

 

 

0.6

 

 

 

 

 

0.6

 

 

 

Other, net (1)

 

 

(9.2

)

 

 

 

 

(9.2

)

 

 

 

 

(9.2

)

 

 

Last-in-first-out inventory adjustments

 

 

4.7

 

 

 

 

 

4.7

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

27.0

 

 

 

 

 

27.0

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

18.5

 

 

 

Other income, net (2)

 

 

 

 

 

 

 

 

 

 

 

 

(1.3

)

 

 

Total Adjustments

 

$

24.8

 

 

 

 

$

24.8

 

 

 

 

$

10.3

 

 

 

(1)

 

Other, net includes the gains and losses from sale of long-lived assets.

(2)

 

Other income, net, for the periods indicated, consists primarily of gains and losses from foreign currency transactions, the non-service cost components of net periodic benefit credits associated with our defined benefit plans.

Rexnord Corporation and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures

Three Months Ended June 30, 2020

(in Millions) (Unaudited)

 

 

 

Three Months Ended June 30, 2020

 

 

Reported
Results

 

 

 

Adjustments

 

 

 

Non-GAAP
Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

449.1

 

 

 

 

$

 

 

 

 

$

449.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

87.7

 

 

 

 

 

15.4

 

(a)

 

 

 

103.1

 

 

 

Depreciation and amortization

 

 

(21.7

)

 

 

 

 

0.4

 

(d)

 

 

 

(21.3

)

 

 

Income from operations

 

 

66.0

 

 

 

 

 

15.8

 

(b)

 

 

 

81.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

53.0

 

 

 

 

 

11.1

 

(c)

 

 

 

64.1

 

 

 

Provision for income taxes and indicated rate

 

 

(17.2

)

 

32.5

%

 

 

(3.1

)

 

27.9

%

 

 

(20.3

)

 

31.7

%

Net income

 

 

35.8

 

 

 

 

 

8.0

 

 

 

 

 

43.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest income

 

 

0.2

 

 

 

 

 

(0.2

)

 

 

 

 

 

 

 

Net income attributable to Rexnord

 

35.6

 

 

 

 

8.2

 

 

 

 

43.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA
Adjustments
(a)

 

 

 

Income from
Operations
Adjustments
(b)

 

 

 

Income before
Income Taxes
Adjustments
(c)

 

 

Restructuring and other similar charges

 

$

1.7

 

 

 

 

$

1.7

 

 

 

 

$

1.7

 

 

 

Acquisition-related fair value adjustment

 

 

0.9

 

 

 

 

 

0.9

 

 

 

 

 

0.9

 

 

 

Other, net (1)

 

 

(0.5

)

 

 

 

 

(0.5

)

 

 

 

 

(0.5

)

 

 

Stock-based compensation expense

 

 

13.3

 

 

 

 

 

13.3

 

 

 

 

 

 

 

 

Supply chain optimization and footprint repositioning initiatives (d)(2)

 

 

 

 

 

 

 

0.4

 

 

 

 

 

0.4

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

9.0

 

 

 

Other income, net (3)

 

 

 

 

 

 

 

 

 

 

 

 

(0.4

)

 

 

Total Adjustments

 

$

15.4

 

 

 

 

$

15.8

 

 

 

 

$

11.1

 

 

 

(1)

 

Other, net includes the gains and losses from sale of long-lived assets.

(2)

 

Represents accelerated depreciation associated with our strategic supply chain optimization and footprint repositioning initiatives.

(3)

 

Other income, net, for the periods indicated, consists primarily of gains and losses from foreign currency transactions and the non-service cost components of net periodic benefit credits associated with our defined benefit plans.

Rexnord Corporation and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures

Six Months Ended June 30, 2020

(in Millions) (Unaudited)

 

 

 

Six Months Ended June 30, 2020

 

 

Reported
Results

 

 

 

Adjustments

 

 

 

Non-GAAP
Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

996.1

 

 

 

 

$

 

 

 

 

$

996.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

198.0

 

 

 

 

 

29.1

 

(a)

 

 

 

227.1

 

 

 

Depreciation and amortization

 

 

(44.0

)

 

 

 

 

1.0

 

(d)

 

 

 

(43.0

)

 

 

Income from operations

 

 

154.0

 

 

 

 

 

30.1

 

(b)

 

 

 

184.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

88.2

 

 

 

 

 

67.6

 

(c)

 

 

 

155.8

 

 

 

Provision for income taxes and indicated rate

 

 

(23.6

)

 

26.8

%

 

 

(19.9

)

 

29.4

%

 

 

(43.5

)

 

27.9

%

Equity method investment income

 

 

(0.2

)

 

 

 

 

0.2

 

 

 

 

 

 

 

 

Net income

 

 

64.4

 

 

 

 

 

47.9

 

 

 

 

 

112.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest income

 

 

0.3

 

 

 

 

 

(0.3

)

 

 

 

 

 

 

 

Net income attributable to Rexnord

 

64.1

 

 

 

 

48.2

 

 

 

 

112.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA
Adjustments
(a)

 

 

 

Income from
Operations
Adjustments
(b)

 

 

 

Income before
Income Taxes
Adjustments
(c)

 

 

Restructuring and other similar charges

 

$

8.3

 

 

 

 

$

8.3

 

 

 

 

$

8.3

 

 

 

Acquisition-related fair value adjustment

 

 

1.9

 

 

 

 

 

1.9

 

 

 

 

 

1.9

 

 

 

Other, net (1)

 

 

(0.7

)

 

 

 

 

(0.7

)

 

 

 

 

(0.7

)

 

 

Last-in-first-out inventory adjustments

 

 

(1.9

)

 

 

 

 

(1.9

)

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

21.5

 

 

 

 

 

21.5

 

 

 

 

 

 

 

 

Supply chain optimization and footprint repositioning initiatives (d)(2)

 

 

 

 

 

 

 

1.0

 

 

 

 

 

1.0

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

18.1

 

 

 

Other expense, net (3)

 

 

 

 

 

 

 

 

 

 

 

 

3.2

 

 

 

Actuarial loss on pension and postretirement benefit obligations

 

 

 

 

 

 

 

 

 

 

 

 

35.8

 

 

 

Total Adjustments

 

$

29.1

 

 

 

 

$

30.1

 

 

 

 

$

67.6

 

 

 

(1)

 

Other, net includes the gains and losses from sale of long-lived assets.

(2)

 

Represents accelerated depreciation associated with our strategic supply chain optimization and footprint repositioning initiatives.

(3)

 

Other expense, net, for the periods indicated, consists primarily of gains and losses from foreign currency transactions and the non-service cost components of net periodic benefit credits associated with our defined benefit plans.

Rexnord Corporation and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures

Three and Six Months Ended June 30, 2021 and June 30, 2020

(in Millions, except share and per share amounts) (Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

Adjusted EBITDA

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Net income attributable to Rexnord

 

$

73.2

 

 

$

35.6

 

 

$

123.2

 

 

$

64.1

 

Non-controlling interest income

 

 

0.1

 

 

 

0.2

 

 

 

0.2

 

 

 

0.3

 

Equity method investment (income) loss

 

 

(0.2

)

 

 

 

 

 

(0.3

)

 

 

0.2

 

Provision for income taxes

 

 

20.5

 

 

 

17.2

 

 

 

37.7

 

 

 

23.6

 

Actuarial loss on pension and postretirement benefit obligations

 

 

 

 

 

 

 

 

 

 

 

35.8

 

Other (income) expense, net (1)

 

 

(1.7

)

 

 

(0.4

)

 

 

(1.3

)

 

 

3.2

 

Interest expense, net

 

 

11.7

 

 

 

13.4

 

 

 

22.7

 

 

 

26.8

 

Income from operations

 

$

103.6

 

 

$

66.0

 

 

$

182.2

 

 

$

154.0

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

23.1

 

 

$

21.7

 

 

$

46.6

 

 

 

44.0

 

Restructuring and other similar charges

 

 

1.1

 

 

 

1.7

 

 

 

1.7

 

 

 

8.3

 

Acquisition-related fair value adjustment

 

 

 

 

 

0.9

 

 

 

0.6

 

 

 

1.9

 

Stock-based compensation expense

 

 

12.2

 

 

 

13.3

 

 

 

27.0

 

 

 

21.5

 

Last-in first-out inventory adjustments

 

 

2.8

 

 

 

 

 

 

4.7

 

 

 

(1.9

)

Other, net (2)

 

 

(9.4

)

 

 

(0.5

)

 

 

(9.2

)

 

 

(0.7

)

Subtotal of adjustments

 

 

29.8

 

 

 

37.1

 

 

 

71.4

 

 

 

73.1

 

Adjusted EBITDA

 

$

133.4

 

 

$

103.1

 

 

$

253.6

 

 

$

227.1

 

 

(1)  

Other (income) expense, net, for the periods indicated, consists primarily of gains and losses from foreign currency transactions and the non-service cost components of net periodic benefit credits associated with our defined benefit plans.

(2)  

Other, net includes the gains and losses from the sale of long-lived assets.

   

Three Months Ended

 

Six Months Ended

 

Adjusted Net Income and Earnings Per Share

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Net income attributable to Rexnord

 

$

73.2

 

 

$

35.6

 

 

$

123.2

 

 

$

64.1

 

Non-controlling interest income

 

 

0.1

 

 

 

0.2

 

 

 

0.2

 

 

 

0.3

 

Equity method investment (income) loss

 

 

(0.2

)

 

 

 

 

 

(0.3

)

 

 

0.2

 

Amortization of intangible assets

 

 

9.1

 

 

 

9.0

 

 

 

18.5

 

 

 

18.1

 

Restructuring and other similar charges

 

 

1.1

 

 

 

1.7

 

 

 

1.7

 

 

 

8.3

 

Supply chain optimization and footprint repositioning initiatives (1)

 

 

 

 

 

0.4

 

 

 

 

 

 

1.0

 

Acquisition-related fair value adjustment

 

 

 

 

 

0.9

 

 

 

0.6

 

 

 

1.9

 

Actuarial loss on pension and postretirement benefit obligations

 

 

 

 

 

 

 

 

 

 

 

35.8

 

Other (income) expense, net (2)

 

 

(1.7

)

 

 

(0.4

)

 

 

(1.3

)

 

 

3.2

 

Other, net (3)

 

 

(9.4

)

 

 

(0.5

)

 

 

(9.2

)

 

 

(0.7

)

Tax effect on above items

 

 

(0.6

)

 

 

(3.1

)

 

 

(3.4

)

 

 

(19.9

)

Adjusted net income

 

$

71.6

 

 

$

43.8

 

 

$

130.0

 

 

$

112.3

 

 

 

 

 

 

 

 

 

 

GAAP diluted net income per share

 

$

0.59

 

 

$

0.29

 

 

$

0.99

 

 

$

0.52

 

Adjusted earnings per share - diluted

 

$

0.58

 

 

$

0.36

 

 

$

1.05

 

 

$

0.91

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding (in thousands)

 

 

 

 

 

 

 

 

GAAP basic weighted-average shares

 

 

120,465

 

 

 

120,246

 

 

 

120,138

 

 

 

121,013

 

Effect of dilutive equity securities

 

 

3,832

 

 

 

1,802

 

 

 

3,953

 

 

 

2,374

 

Adjusted diluted weighted-average shares

 

 

124,297

 

 

 

122,048

 

 

 

124,091

 

 

 

123,387

 

 

(1)

 

Represents accelerated depreciation associated with our strategic supply chain optimization and footprint repositioning initiatives.

(2)

 

Other (income) expense, net, for the periods indicated, consists primarily of gains and losses from foreign currency transactions and the non-service cost components of net periodic benefit credits associated with our defined benefit plans.

(3)

 

Other, net includes the gains and losses from the sale of long-lived assets.

 

 

Three Months Ended

 

 

June 30, 2021

 

June 30, 2020

Adjusted EBITDA by Segment

 

Process & Motion
Control

 

Water
Management

 

Corporate

 

Process & Motion
Control

 

Water
Management

 

Corporate

Income (loss) from operations

 

$

66.8

 

 

$

52.8

 

 

$

(16.0

)

 

$

39.6

 

 

$

40.1

 

 

$

(13.7

)

Operating margin

 

 

20.6

%

 

 

21.7

%

 

 

 

 

14.4

%

 

 

23.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

14.9

 

 

 

8.0

 

 

 

0.2

 

 

 

14.3

 

 

 

7.3

 

 

 

0.1

 

Restructuring and other similar charges

 

 

0.8

 

 

 

0.3

 

 

 

 

 

 

0.7

 

 

 

0.9

 

 

 

0.1

 

Acquisition-related fair value adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.9

 

 

 

 

Stock-based compensation expense

 

 

5.1

 

 

 

1.6

 

 

 

5.5

 

 

 

5.0

 

 

 

2.0

 

 

 

6.3

 

Last-in first-out inventory adjustments

 

 

0.2

 

 

 

2.6

 

 

 

 

 

 

0.3

 

 

 

(0.3

)

 

 

 

Other, net

 

 

(9.4

)

 

 

 

 

 

 

 

 

(0.5

)

 

 

 

 

 

 

Adjusted EBITDA

 

$

78.4

 

 

$

65.3

 

 

$

(10.3

)

 

$

59.4

 

 

$

50.9

 

 

$

(7.2

)

Adjusted EBITDA margin

 

 

24.2

%

 

 

26.8

%

 

 

 

 

21.6

%

 

 

29.1

%

 

 

 

 

 

Six Months Ended

 

 

June 30, 2021

 

June 30, 2020

Adjusted EBITDA by Segment

 

Process & Motion
Control

 

Water
Management

 

Corporate

 

Process & Motion
Control

 

Water
Management

 

Corporate

Income (loss) from operations

 

$

121.8

 

 

$

93.4

 

 

$

(33.0

)

 

$

101.0

 

 

$

81.9

 

 

$

(28.9

)

Operating margin

 

 

18.9

%

 

 

20.8

%

 

 

 

 

15.8

%

 

 

22.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

30.1

 

 

 

16.3

 

 

 

0.2

 

 

 

29.4

 

 

 

14.3

 

 

 

0.3

 

Restructuring and other similar charges

 

 

0.8

 

 

 

0.9

 

 

 

 

 

 

6.9

 

 

 

1.1

 

 

 

0.3

 

Acquisition-related fair value adjustment

 

 

 

 

 

0.6

 

 

 

 

 

 

 

 

 

1.9

 

 

 

 

Stock-based compensation expense

 

 

10.8

 

 

 

3.1

 

 

 

13.1

 

 

 

7.2

 

 

 

2.8

 

 

 

11.5

 

Last-in first-out inventory adjustments

 

 

0.4

 

 

 

4.3

 

 

 

 

 

 

1.9

 

 

 

(3.8

)

 

 

 

Other, net

 

 

(9.2

)

 

 

 

 

 

 

 

 

(0.3

)

 

 

(0.4

)

 

 

 

Adjusted EBITDA

 

$

154.7

 

 

$

118.6

 

 

$

(19.7

)

 

$

146.1

 

 

$

97.8

 

 

$

(16.8

)

Adjusted EBITDA margin

 

 

24.0

%

 

 

26.4

%

 

 

 

 

22.9

 

 

27.3

%

 

 

 

 

 

Three Months Ended

Six Months Ended

 

 

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Cash provided by operating activities

 

 

$

73.7

 

 

$

47.6

 

 

$

145.0

 

 

$

171.5

 

Expenditures for property, plant and equipment

 

 

 

(4.8

)

 

 

(8.5

)

 

 

(14.0

)

 

 

(24.4

)

Free cash flow

 

 

$

68.9

 

 

$

39.1

 

 

$

131.0

 

 

$

147.1

 

Rexnord Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(in Millions)

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Net income attributable to Rexnord

 

$

73.2

 

 

$

35.6

 

 

$

123.2

 

 

$

64.1

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

5.4

 

 

6.4

 

 

3.7

 

 

(9.9)

 

Change in pension and postretirement defined benefit plans, net of tax

 

(0.1)

 

 

(0.1)

 

 

(0.2)

 

 

(3.8)

 

Other comprehensive income (loss), net of tax

 

5.3

 

 

6.3

 

 

3.5

 

 

(13.7)

 

Non-controlling interest income

 

0.1

 

 

0.2

 

 

0.2

 

 

0.3

 

Total comprehensive income

 

$

78.6

 

 

$

42.1

 

 

$

126.9

 

 

$

50.7

 

Rexnord Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(in Millions, except share amounts)

(Unaudited)

 

 

 

June 30, 2021

 

December 31, 2020

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

390.7

 

 

$

255.6

 

Receivables, net

 

 

330.3

 

 

 

274.8

 

Inventories

 

 

360.9

 

 

 

330.1

 

Income tax receivable

 

 

5.8

 

 

 

9.8

 

Other current assets

 

 

57.2

 

 

 

37.4

 

Total current assets

 

 

1,144.9

 

 

 

907.7

 

Property, plant and equipment, net

 

 

412.7

 

 

 

434.8

 

Intangible assets, net

 

 

509.2

 

 

 

524.6

 

Goodwill

 

 

1,375.0

 

 

 

1,370.1

 

Other assets

 

 

160.5

 

 

 

163.9

 

Total assets

 

$

3,602.3

 

 

$

3,401.1

 

Liabilities and stockholders' equity

 

 

 

 

Current liabilities:

 

 

 

 

Current maturities of debt

 

$

2.4

 

 

$

2.4

 

Trade payables

 

 

191.4

 

 

 

129.4

 

Compensation and benefits

 

 

54.7

 

 

 

57.0

 

Current portion of pension and postretirement benefit obligations

 

 

3.1

 

 

 

3.1

 

Other current liabilities

 

 

131.1

 

 

 

125.6

 

Total current liabilities

 

 

382.7

 

 

 

317.5

 

 

 

 

 

 

Long-term debt

 

 

1,189.5

 

 

 

1,189.2

 

Pension and postretirement benefit obligations

 

 

164.9

 

 

 

171.4

 

Deferred income taxes

 

 

115.2

 

 

 

119.4

 

Other liabilities

 

 

162.5

 

 

 

164.3

 

Total liabilities

 

 

2,014.8

 

 

 

1,961.8

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

Common stock, $0.01 par value; 200,000,000 shares authorized; shares issued and outstanding: 121,065,912 at June 30, 2021 and 119,549,735 at December 31, 2020

 

 

1.2

 

 

 

1.2

 

Additional paid-in capital

 

 

1,436.7

 

 

 

1,392.9

 

Retained earnings

 

 

216.7

 

 

 

116.0

 

Accumulated other comprehensive loss

 

 

(70.3

)

 

 

(73.8

)

Total Rexnord stockholders' equity

 

 

1,584.3

 

 

 

1,436.3

 

Non-controlling interest

 

 

3.2

 

 

 

3.0

 

Total stockholders' equity

 

 

1,587.5

 

 

 

1,439.3

 

Total liabilities and stockholders' equity

 

$

3,602.3

 

 

$

3,401.1

 

Rexnord Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in Millions)

(Unaudited)

 

 

 

Six Months Ended

 

 

June 30, 2021

 

June 30, 2020

Operating activities

 

 

 

 

Net income

 

$

123.4

 

 

$

64.4

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

Depreciation

 

 

28.1

 

 

 

25.9

 

Amortization of intangible assets

 

 

18.5

 

 

 

18.1

 

Gain on dispositions of long-lived assets

 

 

(9.2

)

 

 

(0.7

)

Deferred income taxes

 

 

(4.0

)

 

 

(5.3

)

Actuarial loss on pension and postretirement benefit obligations

 

 

 

 

 

35.8

 

Other non-cash (income) expenses

 

 

(1.3

)

 

 

2.6

 

Stock-based compensation expense

 

 

27.0

 

 

 

21.5

 

Changes in operating assets and liabilities:

 

 

 

 

Receivables

 

 

(61.7

)

 

 

(1.4

)

Inventories

 

 

(30.7

)

 

 

5.0

 

Other assets

 

 

(8.9

)

 

 

18.6

 

Accounts payable

 

 

62.1

 

 

 

(17.7

)

Accruals and other

 

 

1.7

 

 

 

4.7

 

Cash provided by operating activities

 

 

145.0

 

 

 

171.5

 

 

 

 

 

 

Investing activities

 

 

 

 

Expenditures for property, plant and equipment

 

 

(14.0

)

 

 

(24.4

)

Acquisitions, net of cash acquired

 

 

(3.4

)

 

 

(59.4

)

Proceeds from dispositions of long-lived assets

 

 

13.0

 

 

 

2.1

 

Cash used for investing activities

 

 

(4.4

)

 

 

(81.7

)

 

 

 

 

 

Financing activities

 

 

 

 

Proceeds from borrowings of debt

 

 

 

 

 

325.0

 

Repayments of debt

 

 

(1.1

)

 

 

(250.6

)

Proceeds from exercise of stock options

 

 

19.4

 

 

 

25.5

 

Repurchase of common stock

 

 

(0.9

)

 

 

(80.7

)

Payment of common stock dividends

 

 

(21.6

)

 

 

(19.4

)

Taxes withheld and paid on employees' share-based payment awards

 

 

(1.4

)

 

 

(9.4

)

Cash used for financing activities

 

 

(5.6

)

 

 

(9.6

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

0.1

 

 

 

(3.8

)

Increase in cash, cash equivalents and restricted cash

 

 

135.1

 

 

 

76.4

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

255.6

 

 

 

277.0

 

Cash, cash equivalents and restricted cash at end of period

 

$

390.7

 

 

$

353.4

 

Rexnord Corporation and Subsidiaries

Segment Financial Information

(in Millions) (Unaudited)

 

 

 

Year Ending December 31, 2021

 

 

Three Months Ended
March 31, 2021

 

Three Months Ended
June 30, 2021

 

Three Months Ending
September 30, 2021

 

Three Months Ending
December 31, 2021

 

Year to Date Ending
December 31, 2021

PMC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

320.9

 

 

 

$

324.6

 

 

 

 

 

 

 

 

 

$

645.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations & margin

 

 

55.0

 

17.1

%

 

 

66.8

 

20.6

%

 

 

 

 

 

 

 

 

121.8

 

18.9

%

Depreciation & amortization

 

 

15.2

 

 

 

 

14.9

 

 

 

 

 

 

 

 

 

 

30.1

 

 

EBITDA & margin

 

 

70.2

 

21.9

%

 

 

81.7

 

25.2

%

 

 

 

 

 

 

 

 

151.9

 

23.5

%

Adjustments

 

 

6.1

 

 

 

 

(3.3

)

 

 

 

 

 

 

 

 

 

2.8

 

 

Adjusted EBITDA & margin

 

$

76.3

 

23.8

%

 

$

78.4

 

24.2

%

 

 

 

 

 

 

 

$

154.7

 

24.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-over-year sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core sales

 

 

(13

)%

 

 

 

16

%

 

 

 

 

 

 

 

 

 

(1

)%

 

Acquisition / divestiture

 

 

(1

)%

 

 

 

(2

)%

 

 

 

 

 

 

 

 

 

(1

)%

 

Currency translation

 

 

2

%

 

 

 

4

%

 

 

 

 

 

 

 

 

 

3

%

 

Total reported

 

 

(12

)%

 

 

 

18

%

 

 

 

 

 

 

 

 

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

205.2

 

 

 

$

243.7

 

 

 

 

 

 

 

 

 

$

448.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations & margin

 

 

40.6

 

19.8

%

 

 

52.8

 

21.7

%

 

 

 

 

 

 

 

 

93.4

 

20.8

%

Depreciation & amortization

 

 

8.3

 

 

 

 

8.0

 

 

 

 

 

 

 

 

 

 

16.3

 

 

EBITDA & margin

 

 

48.9

 

23.8

%

 

 

60.8

 

24.9

%

 

 

 

 

 

 

 

 

109.7

 

24.4

%

Adjustments

 

 

4.4

 

 

 

 

4.5

 

 

 

 

 

 

 

 

 

 

8.9

 

 

Adjusted EBITDA & margin

 

$

53.3

 

26.0

%

 

$

65.3

 

26.8

%

 

 

 

 

 

 

 

$

118.6

 

26.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-over-year sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core sales

 

 

4

%

 

 

 

29

%

 

 

 

 

 

 

 

 

 

16

%

 

Acquisition / divestiture

 

 

8

%

 

 

 

9

%

 

 

 

 

 

 

 

 

 

8

%

 

Currency translation

 

 

%

 

 

 

1

%

 

 

 

 

 

 

 

 

 

1

%

 

Total reported

 

 

12

%

 

 

 

39

%

 

 

 

 

 

 

 

 

 

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

(17.0

)

 

 

 

(16.0

)

 

 

 

 

 

 

 

 

 

(33.0

)

 

Depreciation & amortization

 

 

 

 

 

 

0.2

 

 

 

 

 

 

 

 

 

 

0.2

 

 

EBITDA

 

 

(17.0

)

 

 

 

(15.8

)

 

 

 

 

 

 

 

 

 

(32.8

)

 

Adjustments

 

 

7.6

 

 

 

 

5.5

 

 

 

 

 

 

 

 

 

 

13.1

 

 

Adjusted EBITDA

 

$

(9.4

)

 

 

$

(10.3

)

 

 

 

 

 

 

 

 

$

(19.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Rexnord

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

526.1

 

 

 

$

568.3

 

 

 

 

 

 

 

 

 

$

1,094.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations & margin

 

 

78.6

 

14.9

%

 

 

103.6

 

18.2

%

 

 

 

 

 

 

 

 

182.2

 

16.6

%

Depreciation & amortization

 

 

23.5

 

 

 

 

23.1

 

 

 

 

 

 

 

 

 

 

46.6

 

 

EBITDA & margin

 

 

102.1

 

19.4

%

 

 

126.7

 

22.3

%

 

 

 

 

 

 

 

 

228.8

 

20.9

%

Adjustments

 

 

18.1

 

 

 

 

6.7

 

 

 

 

 

 

 

 

 

 

24.8

 

 

Adjusted EBITDA & margin

 

$

120.2

 

22.8

%

 

$

133.4

 

23.5

%

 

 

 

 

 

 

 

$

253.6

 

23.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-over-year sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core sales

 

 

(8

)%

 

 

 

21

%

 

 

 

 

 

 

 

 

 

5

%

 

Acquisition / divestiture

 

 

2

%

 

 

 

3

%

 

 

 

 

 

 

 

 

 

2

%

 

Currency translation

 

 

2

%

 

 

 

3

%

 

 

 

 

 

 

 

 

 

3

%

 

Total reported

 

(4

)%

 

 

27

%

 

 

 

 

 

 

10

%

 

 

 

Calendar Year Ended December 31, 2020

 

 

Three Months Ended
March 31, 2020

 

Three Months Ended
June 30, 2020

 

Three Months Ended
September 30, 2020

 

Three Months Ended
December 31, 2020

 

Calendar Year Ended
December 31, 2020

PMC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

363.6

 

 

 

$

274.4

 

 

 

$

293.9

 

 

 

$

302.1

 

 

 

$

1,234.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations & margin

 

 

61.4

 

16.9

%

 

 

39.6

 

14.4

%

 

 

35.8

 

12.2

%

 

 

32.9

 

10.9

%

 

 

169.7

 

13.8

%

Depreciation & amortization

 

 

15.1

 

 

 

 

14.3

 

 

 

 

14.8

 

 

 

 

15.4

 

 

 

 

59.6

 

 

EBITDA & margin

 

 

76.5

 

21.0

%

 

 

53.9

 

19.6

%

 

 

50.6

 

17.2

%

 

 

48.3

 

16.0

%

 

 

229.3

 

18.6

%

Adjustments

 

 

10.2

 

 

 

 

5.5

 

 

 

 

10.7

 

 

 

 

12.4

 

 

 

 

38.8

 

 

Adjusted EBITDA & margin

 

$

86.7

 

23.8

%

 

$

59.4

 

21.6

%

 

$

61.3

 

20.9

%

 

$

60.7

 

20.1

%

 

$

268.1

 

21.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-over-year sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core sales

 

 

(1

)%

 

 

 

(15

)%

 

 

 

(13

)%

 

 

 

(8

)%

 

 

 

(9

)%

 

Acquisition / divestiture

 

 

%

 

 

 

%

 

 

 

%

 

 

 

(1

)%

 

 

 

%

 

Currency translation

 

 

(1

)%

 

 

 

(2

)%

 

 

 

%

 

 

 

1

%

 

 

 

(1

)%

 

Total reported

 

 

(2

)%

 

 

 

(17

)%

 

 

 

(13

)%

 

 

 

(8

)%

 

 

 

(10

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

183.4

 

 

 

$

174.7

 

 

 

$

199.7

 

 

 

$

188.3

 

 

 

$

746.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations & margin

 

 

41.8

 

22.8

%

 

 

40.1

 

23.0

%

 

 

48.7

 

24.4

%

 

 

37.2

 

19.8

%

 

 

167.8

 

22.5

%

Depreciation & amortization

 

 

7.0

 

 

 

 

7.3

 

 

 

 

7.4

 

 

 

 

7.5

 

 

 

 

29.2

 

 

EBITDA & margin

 

 

48.8

 

26.6

%

 

 

47.4

 

27.1

%

 

 

56.1

 

28.1

%

 

 

44.7

 

23.7

%

 

 

197.0

 

26.4

%

Adjustments

 

 

(1.9

)

 

 

 

3.5

 

 

 

 

(0.2

)

 

 

 

1.5

 

 

 

 

2.9

 

 

Adjusted EBITDA & margin

 

$

46.9

 

25.6

%

 

$

50.9

 

29.1

%

 

$

55.9

 

28.0

%

 

$

46.2

 

24.5

%

 

$

199.9

 

26.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-over-year sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core sales

 

 

7

%

 

 

 

(5

)%

 

 

 

5

%

 

 

 

10

%

 

 

 

4

%

 

Acquisition / divestiture

 

 

4

%

 

 

 

3

%

 

 

 

3

%

 

 

 

5

%

 

 

 

4

%

 

Currency translation

 

 

%

 

 

 

%

 

 

 

%

 

 

 

%

 

 

 

%

 

Total reported

 

 

11

%

 

 

 

(2

)%

 

 

 

8

%

 

 

 

15

%

 

 

 

8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

(15.2

)

 

 

 

(13.7

)

 

 

 

(12.1

)

 

 

 

(20.1

)

 

 

 

(61.1

)

 

Depreciation & amortization

 

 

0.2

 

 

 

 

0.1

 

 

 

 

0.1

 

 

 

 

0.1

 

 

 

 

0.5

 

 

EBITDA

 

 

(15.0

)

 

 

 

(13.6

)

 

 

 

(12.0

)

 

 

 

(20.0

)

 

 

 

(60.6

)

 

Adjustments

 

 

5.4

 

 

 

 

6.4

 

 

 

 

3.3

 

 

 

 

9.0

 

 

 

 

24.1

 

 

Adjusted EBITDA

 

$

(9.6

)

 

 

$

(7.2

)

 

 

$

(8.7

)

 

 

$

(11.0

)

 

 

$

(36.5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Rexnord

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

547.0

 

 

 

$

449.1

 

 

 

$

493.6

 

 

 

$

490.4

 

 

 

$

1,980.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations & margin

 

 

88.0

 

16.1

%

 

 

66.0

 

14.7

%

 

 

72.4

 

14.7

%

 

 

50.0

 

10.2

%

 

 

276.4

 

14.0

%

Depreciation & amortization

 

 

22.3

 

 

 

 

21.7

 

 

 

 

22.3

 

 

 

 

23.0

 

 

 

 

89.3

 

 

EBITDA & margin

 

 

110.3

 

20.2

%

 

 

87.7

 

19.5

%

 

 

94.7

 

19.2

%

 

 

73.0

 

14.9

%

 

 

365.7

 

18.5

%

Adjustments

 

 

13.7

 

 

 

 

15.4

 

 

 

 

13.8

 

 

 

 

22.9

 

 

 

 

65.8

 

 

Adjusted EBITDA & margin

 

$

124.0

 

22.7

%

 

$

103.1

 

23.0

%

 

$

108.5

 

22.0

%

 

$

95.9

 

19.6

%

 

$

431.5

 

21.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-over-year sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core sales

 

 

1

%

 

 

 

(12

)%

 

 

 

(7

)%

 

 

 

(2

)%

 

 

 

(5

)%

 

Acquisition / divestiture

 

 

1

%

 

 

 

1

%

 

 

 

1

%

 

 

 

1

%

 

 

 

1

%

 

Currency translation

 

 

%

 

 

 

(1

)%

 

 

 

1

%

 

 

 

1

%

 

 

 

%

 

Total reported

 

 

2

%

 

 

 

(12

)%

 

 

 

(5

)%

 

 

 

%

 

 

 

(4

)%

 

 

Mark Peterson
Chief Financial Officer
414.223.1609

Source: Rexnord Corporation

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