Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Rexnord Corp | a8-kq1fiscal2019.htm |
Exhibit 99.1
Press Release | |
July 30, 2018 | Contact Information: |
For Immediate Release | Rob McCarthy |
Vice President - Investor Relations | |
414.223.1615 | |
Rexnord Reports Q1 FY2019 Financial Results and Increases FY2019 Operating Outlook
Call scheduled for Tuesday, July 31, 2018 at 8:00 a.m. Eastern Time
MILWAUKEE, WI (USA) - Rexnord Corporation (NYSE:RXN)
First Quarter Highlights
• | Net sales were $504 million and increased 14% year over year (+4% core sales(1), +8% acquisitions, +2% foreign currency translation). |
• | Net income from continuing operations was $42 million (diluted EPS of $0.34), compared with the comparable $29 million (diluted EPS of $0.22) in the year-ago quarter. |
• | Net loss(2) was $7 million, including a $43 million loss from discontinued operations, (diluted loss per share of $0.06), compared with net income(2) of $21 million (diluted EPS of $0.20) in the year-ago quarter. |
• | Adjusted EPS(1) was $0.41 compared with $0.29 in the year-ago quarter. |
• | Adjusted EBITDA(1) was $105 million (20.8% of net sales) compared with $85 million (19.2% of net sales) in last year's first quarter. |
• | Net debt leverage ratio of 2.7x. |
• | VAG results are now reported as Discontinued Operations. |
Todd A. Adams, President and Chief Executive Officer, commented, “Our fiscal 2019 has gotten off to a solid start, as our first quarter operating results were slightly better than expected. Our net sales grew 14% year over year and we successfully leveraged the Rexnord Business System (“RBS”) to manage input cost inflation with a combination of materials cost actions, supply chain management, and selective price increases and delivered solid margin expansion in both platforms. As a result, our margins benefited from our positive core growth and structural cost reductions and our Adjusted EBITDA increased 23% year over year. Development of our digital capabilities continues to progress in both platforms, and we remain on track to broaden our offering of IIoT connected products this year.”
“Our Process & Motion Control (“PMC”) platform’s operating results continued to strengthen with a net sales increase of 16%, significant organic margin expansion and 26% year-over-year growth in Adjusted EBITDA. Demand continued to develop favorably in most of our served end markets, and we saw an acceleration in sell-through in our North American industrial distribution channels in the quarter. Centa’s operating results are tracking slightly better than expected and I am increasingly confident that RBS will enable us to drive the meaningful margin expansion at Centa as we had expected.”
“Our Water Management platform results were in line with our expectations as total sales growth of 10% was driven by our above-market core growth of 7% and comparable margins expanded by 100 basis points. Core growth is benefiting from the positive customer reaction to our new product introductions over the past year and the ongoing growth in our North American nonresidential construction end markets. We continue to expect the platform to deliver solid year-over-year core growth and margin expansion during our fiscal 2019. As we announced last quarter, we intend to focus and build our Water Management platform around our Zurn specification-grade commercial plumbing products and anticipate divesting our non-strategic VAG operations that serve global water and wastewater infrastructure end markets.”
(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 loss/income attributable to Rexnord common stockholders. |
Fiscal 2019 Outlook
Adams continued, “We are slightly increasing our outlook for our fiscal 2019. Our revised outlook includes net income from continuing operations to be in a range of $132 million to $143 million, our Adjusted EBITDA(1) to be in a range of $425 million to $440 million, and our free cash flow to exceed net income. We believe our upgraded outlook prudently balances the momentum we’ve seen in our first quarter with the realities of nine months to go in our fiscal year.”
(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 loss/income attributable to Rexnord common stockholders. |
First Quarter Fiscal 2019 Segment Highlights
Process & Motion Control
PMC net sales increased 16% year over year to $332 million in the first quarter of fiscal 2019. Core sales increased 3%, Centa contributed 11% and foreign currency translation had a favorable impact of 2% year over year. The increase in core sales is the result of favorable demand trends across most of our served end markets, partially offset by the shift of some shipments in our Aerospace market from the first quarter to our second quarter.
PMC income from operations for the first quarter of fiscal 2019 was $50 million, or 15.0% of net sales. Income from operations as a percentage of net sales increased by 140 basis points year over year, primarily due to the increase in core sales, RBS-led productivity gains and benefits from our footprint repositioning actions.
Adjusted EBITDA(1) in the first quarter was $72 million. Adjusted EBITDA as a percentage of net sales increased by 180 basis points year over year to 21.5%.
Water Management (2)
Water Management net sales were $171 million in the first quarter of fiscal 2019, an increase of 10% year over year. Core sales increased 7%, and last years acquisition of World Dryer added 3% year over year. During the quarter we saw increased demand in our nonresidential construction end markets.
Water Management income from operations was $37 million for the first quarter of fiscal 2019, or 21.3% of net sales. Income from operations as a percentage of net sales increased by 120 basis points year over year, primarily due to the increase in core sales and ongoing cost reduction and productivity initiatives.
Adjusted EBITDA(1) in the first quarter was $43 million or 25.4% of net sales. Adjusted EBITDA as a percentage of net sales increased by 100 basis points year over year.
(1) | Refer to "Non-GAAP Measures" for a definition of this non-GAAP metric, as well as the accompanying reconciliations to GAAP. |
(2) | As a result of Rexnord's previously announced plan to divest the VAG business, its operations are now being reported as a discontinued operation and therefore not included in this discussion. |
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 the Centa and World Dryer acquisitions), 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 (such as VAG), 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 before interest, 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.
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.
About Rexnord
Headquartered in Milwaukee, Wisconsin, Rexnord is comprised of two strategic platforms, Process & Motion Control and Water Management, with approximately 8,000 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 Tuesday, July 31, 2018 at 8:00 a.m. Eastern Time to discuss its fiscal 2019 first quarter results and provide a general business update. Rexnord President 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 #: 888-771-4371
International toll #: 847-585-4405
Access Code: 4727 5461
A live webcast of the call will also be available on the Company's investor relations website. Please go to the website (investors.rexnord.com) at least fifteen 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 10:30 a.m. Eastern Time, July 31, 2018 until 11:59 p.m. Eastern Time, August 14, 2018. To access the replay, please dial 888-843-7419 (domestic) or 630-652-3042 (international). The passcode for the replay is: 4727 5461#. The replay will also be available as a webcast on the Company’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 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 Form 10-K for the fiscal year ended March 31, 2018 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.
Rexnord Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(in Millions, except share and per share amounts)
(Unaudited)
First Quarter Ended | ||||||||
June 30, 2018 | June 30, 2017 | |||||||
Net sales | $ | 503.6 | $ | 443.2 | ||||
Cost of sales | 308.1 | 279.1 | ||||||
Gross profit | 195.5 | 164.1 | ||||||
Selling, general and administrative expenses | 111.8 | 96.7 | ||||||
Restructuring and other similar charges | 3.1 | 2.3 | ||||||
Amortization of intangible assets | 8.5 | 7.9 | ||||||
Income from operations | 72.1 | 57.2 | ||||||
Non-operating expense: | ||||||||
Interest expense, net | (18.6 | ) | (19.9 | ) | ||||
Other income, net | 1.7 | 1.0 | ||||||
Income before income taxes | 55.2 | 38.3 | ||||||
Provision for income taxes | (14.5 | ) | (8.9 | ) | ||||
Equity method investment income | 1.5 | — | ||||||
Net income from continuing operations | 42.2 | 29.4 | ||||||
Loss from discontinued operations, net of tax | (42.8 | ) | (2.9 | ) | ||||
Net (loss) income | (0.6 | ) | 26.5 | |||||
Non-controlling interest income | 0.1 | — | ||||||
Net (loss) income attributable to Rexnord | (0.7 | ) | 26.5 | |||||
Dividends on preferred stock | (5.8 | ) | (5.8 | ) | ||||
Net (loss) income attributable to Rexnord common stockholders | $ | (6.5 | ) | $ | 20.7 | |||
Basic net income (loss) per share attributable to Rexnord common stockholders: | ||||||||
Continuing operations | $ | 0.35 | $ | 0.23 | ||||
Discontinued operations | $ | (0.41 | ) | $ | (0.03 | ) | ||
Net (loss) income | $ | (0.06 | ) | $ | 0.20 | |||
Diluted net income (loss) per share attributable to Rexnord common stockholders: | ||||||||
Continuing operations | $ | 0.34 | $ | 0.22 | ||||
Discontinued operations | $ | (0.40 | ) | $ | (0.03 | ) | ||
Net (loss) income | $ | (0.06 | ) | $ | 0.20 | |||
Weighted-average number of shares outstanding (in thousands): | ||||||||
Basic | 104,338 | 103,694 | ||||||
Effect of dilutive equity awards | 2,804 | 1,538 | ||||||
Diluted | 107,142 | 105,232 | ||||||
Rexnord Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
First quarter ended June 30, 2018 and June 30, 2017
(in Millions, except share and per share amounts) (Unaudited)
First Quarter Ended | |||||||
Adjusted EBITDA | June 30, 2018 | June 30, 2017 | |||||
Net (loss) income attributable to Rexnord common stockholders | $ | (6.5 | ) | $ | 20.7 | ||
Dividends on preferred stock | 5.8 | 5.8 | |||||
Non-controlling interest income | 0.1 | — | |||||
Loss from discontinued operations, net of tax | 42.8 | 2.9 | |||||
Equity method investment income | (1.5 | ) | — | ||||
Income tax provision | 14.5 | 8.9 | |||||
Other income, net (1) | (1.7 | ) | (1.0 | ) | |||
Interest expense, net | 18.6 | 19.9 | |||||
Income from operations | 72.1 | 57.2 | |||||
Adjustments | |||||||
Depreciation and amortization | 22.2 | 20.1 | |||||
Restructuring and other similar charges | 3.1 | 2.3 | |||||
Acquisition-related fair value adjustment | 1.6 | — | |||||
Stock-based compensation expense | 5.9 | 5.3 | |||||
Last-in first-out inventory adjustments | 0.2 | 0.3 | |||||
Other, net (2) | (0.1 | ) | (0.1 | ) | |||
Subtotal of adjustments | 32.9 | 27.9 | |||||
Adjusted EBITDA | $ | 105.0 | $ | 85.1 | |||
First Quarter Ended | |||||||
Adjusted Net Income and Earnings Per Share | June 30, 2018 | June 30, 2017 | |||||
Net (loss) income attributable to Rexnord common stockholders | $ | (6.5 | ) | $ | 20.7 | ||
Non-controlling interest income | 0.1 | — | |||||
Loss from discontinued operations, net of tax | 42.8 | 2.9 | |||||
Dividends on preferred stock | 5.8 | — | |||||
Equity method investment income | (1.5 | ) | — | ||||
Supply chain optimization and footprint repositioning initiatives (3) | 1.3 | 1.0 | |||||
Restructuring and other similar charges | 3.1 | 2.3 | |||||
Acquisition-related fair value adjustment | 1.6 | — | |||||
Amortization of intangible assets | 8.5 | 7.9 | |||||
Other income, net (1) | (1.7 | ) | (1.0 | ) | |||
Other, net (2) | (0.1 | ) | (0.1 | ) | |||
Tax effect on above items | (3.3 | ) | (3.5 | ) | |||
Adjusted net income | $ | 50.1 | $ | 30.2 | |||
GAAP diluted net income per share from continuing operations | $ | 0.34 | $ | 0.22 | |||
Adjusted earnings per share - diluted | $ | 0.41 | $ | 0.29 | |||
Weighted-average number of shares outstanding (in thousands) | |||||||
GAAP basic weighted-average shares | 104,338 | 103,694 | |||||
Effect of dilutive equity awards | 2,804 | 1,538 | |||||
Adjustment for assumed conversion of preferred stock into common stock | 15,980 | — | |||||
Adjusted diluted weighted-average shares | 123,122 | 105,232 | |||||
(1) | 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. See "Management Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Form 10-Q for the quarter ended June 30, 2018 for further information. |
(2) | Other, net includes the gains and losses from sale of long-lived assets |
(3) | Represents accelerated depreciation and other non-cash expenses associated with our strategic supply chain optimization and footprint repositioning initiatives. |
First Quarter Ended | |||||||||||||||||||||||
June 30, 2018 | June 30, 2017 | ||||||||||||||||||||||
Adjusted EBITDA by Segment | Process & Motion Control | Water Management | Corporate | Process & Motion Control | Water Management | Corporate | |||||||||||||||||
Operating income (loss) | $ | 49.9 | $ | 36.5 | $ | (14.3 | ) | $ | 39.0 | $ | 31.2 | $ | (13.0 | ) | |||||||||
Operating margin | 15.0 | % | 21.3 | % | 13.6 | % | 20.1 | % | |||||||||||||||
Depreciation and amortization | 15.9 | 6.2 | 0.1 | 14.4 | 5.7 | — | |||||||||||||||||
Restructuring and other similar charges | 2.7 | 0.4 | — | 2.2 | 0.1 | — | |||||||||||||||||
Acquisition-related fair value adjustment | 1.6 | — | — | — | — | — | |||||||||||||||||
Stock-based compensation expense | 1.4 | 0.3 | 4.2 | 1.2 | 0.7 | 3.4 | |||||||||||||||||
Last-in first-out inventory adjustments | 0.2 | — | — | 0.1 | 0.2 | — | |||||||||||||||||
Other, net | (0.1 | ) | — | — | (0.1 | ) | — | — | |||||||||||||||
Adjusted EBITDA | $ | 71.6 | $ | 43.4 | $ | (10.0 | ) | $ | 56.8 | $ | 37.9 | $ | (9.6 | ) | |||||||||
Adjusted EBITDA margin | 21.5 | % | 25.4 | % | 19.7 | % | 24.4 | % | |||||||||||||||
Three Months Ended | ||||||||
June 30, 2018 | June 30, 2017 | |||||||
Cash provided by operating activities | $ | 16.2 | $ | 37.0 | ||||
Expenditures for property, plant and equipment | (11.1 | ) | (6.9 | ) | ||||
Free cash flow | $ | 5.1 | $ | 30.1 | ||||
Fiscal 2019 Earnings Outlook Reconciliation (1) | Earnings Guidance for | |||
the Fiscal Year Ending | ||||
March 31, 2019 | ||||
Net income from continuing operations attributable to Rexnord common stockholders | $132 million to $143 million | |||
Dividends on preferred stock | 23 | |||
Provision for income taxes | 68 | |||
Interest expense, net | 73 | |||
Depreciation and amortization | 90 | |||
Restructuring and other similar charges | 15 | |||
Stock-based compensation expense | 25 | |||
Adjusted EBITDA | $425 to $440 million | |||
(1) | Our outlook is based upon the extent of information available as of the date of this filing regarding events and conditions that will impact our future operating results for our fiscal year 2019. Our actual results may be materially impacted by events for which information is not available, such as asset impairments, purchase accounting effects related to future acquisitions, future restructuring actions, gains (losses) recognized on the disposal of tangible and intangible assets, gains (losses) on debt extinguishment, actuarial gains (losses) on our defined benefit plans, and other gains (losses) related to events or conditions not yet known. Consequently, we have not included incremental gains or (losses) for these items in our forward-looking guidance since that information is not reasonably available. |
Rexnord Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(in Millions)
(Unaudited)
First Quarter Ended | ||||||||
June 30, 2018 | June 30, 2017 | |||||||
Net (loss) income attributable to Rexnord | $ | (0.7 | ) | $ | 26.5 | |||
Other comprehensive loss: | ||||||||
Foreign currency translation adjustments | (35.7 | ) | 17.4 | |||||
Net change in unrealized losses on interest rate derivatives, net of tax | 2.0 | 1.2 | ||||||
Change in pension and postretirement defined benefit plans, net of tax | (0.2 | ) | (0.3 | ) | ||||
Other comprehensive (loss) income, net of tax | (33.9 | ) | 18.3 | |||||
Non-controlling interest income | $ | 0.1 | $ | — | ||||
Total comprehensive (loss) income | $ | (34.5 | ) | $ | 44.8 | |||
Rexnord Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in Millions, except share amounts)
(Unaudited)
June 30, 2018 | March 31, 2018 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 179.0 | $ | 193.2 | ||||
Receivables, net | 295.4 | 314.7 | ||||||
Inventories | 335.8 | 304.1 | ||||||
Income tax receivable | 13.8 | 17.5 | ||||||
Other current assets | 39.5 | 37.9 | ||||||
Current assets held for sale | 171.7 | 130.3 | ||||||
Total current assets | 1,035.2 | 997.7 | ||||||
Property, plant and equipment, net | 386.2 | 396.5 | ||||||
Intangible assets, net | 518.6 | 530.9 | ||||||
Goodwill | 1,273.4 | 1,276.1 | ||||||
Other assets | 117.4 | 114.0 | ||||||
Non-current assets held for sale | $ | — | $ | 108.5 | ||||
Total assets | $ | 3,330.8 | $ | 3,423.7 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Current maturities of debt | $ | 3.9 | $ | 3.9 | ||||
Trade payables | 185.8 | 189.9 | ||||||
Compensation and benefits | 42.1 | 63.9 | ||||||
Current portion of pension and postretirement benefit obligations | 4.1 | 4.0 | ||||||
Other current liabilities | 131.1 | 127.4 | ||||||
Current liabilities held for sale | 64.8 | 65.1 | ||||||
Total current liabilities | 431.8 | 454.2 | ||||||
Long-term debt | 1,333.7 | 1,352.1 | ||||||
Pension and postretirement benefit obligations | 159.2 | 163.2 | ||||||
Deferred income taxes | 146.0 | 149.3 | ||||||
Other liabilities | 79.1 | 78.3 | ||||||
Non-current liabilities held for sale | — | 13.8 | ||||||
Total liabilities | 2,149.8 | 2,210.9 | ||||||
Stockholders' equity: | ||||||||
Common stock, $0.01 par value; 200,000,000 shares authorized; shares issued and outstanding: 104,440,030 at June 30, 2018 and 104,179,037 at March 31, 2018 | 1.0 | 1.0 | ||||||
Preferred stock, $0.01 par value; 10,000,000 shares authorized; shares of 5.75% Series A Mandatory Convertible Preferred Stock issued and outstanding: 402,500 at June 30, 2018 and March 31, 2018 | 0.0 | 0.0 | ||||||
Additional paid-in capital | 1,286.3 | 1,277.8 | ||||||
Retained earnings | 1.5 | 8.0 | ||||||
Accumulated other comprehensive loss | (108.0 | ) | (74.1 | ) | ||||
Total Rexnord stockholders' equity | 1,180.8 | 1,212.7 | ||||||
Non-controlling interest | $ | 0.2 | $ | 0.1 | ||||
Total stockholders' equity | $ | 1,181.0 | $ | 1,212.8 | ||||
Total liabilities and stockholders' equity | $ | 3,330.8 | $ | 3,423.7 | ||||
Rexnord Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in Millions)
(Unaudited)
Three Months Ended | ||||||||
June 30, 2018 | June 30, 2017 | |||||||
Operating activities | ||||||||
Net (loss) income | $ | (0.6 | ) | $ | 26.5 | |||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Depreciation | 15.8 | 14.3 | ||||||
Amortization of intangible assets | 8.8 | 8.2 | ||||||
Amortization of deferred financing costs | 0.4 | 0.6 | ||||||
Non-cash asset impairment | 44.0 | — | ||||||
Deferred income taxes | (8.2 | ) | (2.2 | ) | ||||
Other non-cash charges | 3.2 | 3.5 | ||||||
Stock-based compensation expense | 6.0 | 5.4 | ||||||
Changes in operating assets and liabilities: | ||||||||
Receivables | 3.2 | 8.1 | ||||||
Inventories | (40.7 | ) | (28.0 | ) | ||||
Other assets | 0.4 | (1.3 | ) | |||||
Accounts payable | (2.1 | ) | 8.2 | |||||
Accruals and other | (14.0 | ) | (6.3 | ) | ||||
Cash provided by operating activities | 16.2 | 37.0 | ||||||
Investing activities | ||||||||
Expenditures for property, plant and equipment | (11.1 | ) | (6.9 | ) | ||||
Proceeds from dispositions of long-lived assets | 3.5 | 0.2 | ||||||
Cash used for investing activities | (7.6 | ) | (6.7 | ) | ||||
Financing activities | ||||||||
Proceeds from borrowings of debt | 110.7 | — | ||||||
Repayments of debt | (127.1 | ) | (4.2 | ) | ||||
Proceeds from exercise of stock options | 2.5 | 1.0 | ||||||
Payments of preferred stock dividends | (5.8 | ) | (5.8 | ) | ||||
Cash used for financing activities | (19.7 | ) | (9.0 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (9.2 | ) | 4.8 | |||||
(Decrease) increase in cash and cash equivalents | (20.3 | ) | 26.1 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 217.6 | 490.1 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 197.3 | $ | 516.2 | ||||
Rexnord Corporation and Subsidiaries
Supplemental Data
(in Millions)
(Unaudited)
Fiscal 2019 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Fiscal Year-to-Date Total | |||||||||||||||
Net sales | |||||||||||||||||||
Process & Motion Control | $ | 332.4 | $ | — | $ | — | $ | — | $ | 332.4 | |||||||||
Water Management | 171.2 | — | — | — | 171.2 | ||||||||||||||
Total | $ | 503.6 | $ | — | $ | — | $ | — | $ | 503.6 | |||||||||
Sales growth | |||||||||||||||||||
Core growth | 4% | 4% | |||||||||||||||||
Currency translation | 2% | 2% | |||||||||||||||||
Acquisition/divestiture | 8% | 8% | |||||||||||||||||
Reported growth | 14% | 14% | |||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||
Process & Motion Control | $ | 71.6 | $ | — | $ | — | $ | — | $ | 71.6 | |||||||||
Water Management | 43.4 | — | — | — | 43.4 | ||||||||||||||
Corporate | (10.0 | ) | — | — | — | (10.0 | ) | ||||||||||||
Total | $ | 105.0 | $ | — | $ | — | $ | — | $ | 105.0 | |||||||||
Adjusted EBITDA % | |||||||||||||||||||
Process & Motion Control | 21.5 | % | 21.5 | % | |||||||||||||||
Water Management | 25.4 | % | 25.4 | % | |||||||||||||||
Total (including Corporate) | 20.8 | % | 20.8 | % | |||||||||||||||
Fiscal 2018 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Fiscal Year Total | |||||||||||||||
Net sales | |||||||||||||||||||
Process & Motion Control | $ | 287.7 | $ | 300.4 | $ | 292.5 | $ | 360.6 | $ | 1,241.2 | |||||||||
Water Management | 155.5 | 153.4 | 144.2 | 157.3 | 610.4 | ||||||||||||||
Total | $ | 443.2 | $ | 453.8 | $ | 436.7 | $ | 517.9 | $ | 1,851.6 | |||||||||
Sales growth | |||||||||||||||||||
Core growth | 5% | 2% | 6% | 6% | 5% | ||||||||||||||
Currency translation | (1)% | 1% | 1% | 3% | 1% | ||||||||||||||
Acquisition/divestiture | 3% | —% | 1% | 4% | 2% | ||||||||||||||
Reported growth | 7% | 3% | 8% | 13% | 8% | ||||||||||||||
Adjusted EBITDA | |||||||||||||||||||
Process & Motion Control | $ | 56.8 | $ | 61.6 | $ | 65.3 | $ | 85.1 | $ | 268.8 | |||||||||
Water Management | 37.9 | 43.3 | 36.7 | 38.1 | 156.0 | ||||||||||||||
Corporate | (9.6 | ) | (9.4 | ) | (9.1 | ) | (10.5 | ) | (38.6 | ) | |||||||||
Total | $ | 85.1 | $ | 95.5 | $ | 92.9 | $ | 112.7 | $ | 386.2 | |||||||||
Adjusted EBITDA % | |||||||||||||||||||
Process & Motion Control | 19.7 | % | 20.5 | % | 22.3 | % | 23.6 | % | 21.7 | % | |||||||||
Water Management | 24.4 | % | 28.2 | % | 25.5 | % | 24.2 | % | 25.6 | % | |||||||||
Total (including Corporate) | 19.2 | % | 21.0 | % | 21.3 | % | 21.8 | % | 20.9 | % | |||||||||