REGAL REXNORD CORP
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
RRX$169.07+5.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0000082811-25-000119
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000082811-25-000202
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 55 previous paragraphs and 66 current paragraphs.
41 unchanged; 11 reworded; 12 added; 3 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 5 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
One Big Beautiful Bill Act
Current report
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into U.S. law, which contains a broad range of tax reform provisions, including domestic research and development cost expensing, extension of 100% bonus depreciation, limitations on interest expense deductions and revisions to international tax regimes. The Company is currently evaluating the financial impacts of the OBBBA and will reflect its effects beginning in the third quarter of 2025. We do not currently anticipate a material effect on our annual effective tax rate or cash flows as a result of this legislation.
Current report
(1) Results for the Industrial Systems segment covers results through the close of the sale on April 30, 2024.
Current report
AMC net sales for the second quarter 2025 were $411.1 million, a decrease of $11.1 million or 2.6% as compared to the second quarter 2024. The decrease consisted of an organic sales decline of 3.4%, partially offset by positive foreign currency translation of 0.8%. The decrease in organic sales reflects weakness in the medical end market, headwinds related to temporary challenges sourcing rare earth magnets, which impacted shipments of certain higher margin products in the defense and medical markets, and project timing in the data center market, partially offset by growth in the aerospace market. Gross profit for the second quarter of 2025 was $154.6 million, a decrease of $14.6 million or 8.6% as compared to the second quarter of 2024, driven by lower volume and sales mix. Total operating expenses for the second quarter of 2025 were $124.2 million, a decrease of $3.2 million, or 2.5% as compared to the second quarter of 2024, primarily driven by a $2.3 million gain on the sale of assets during the second quarter 2025.
Current report
IPS net sales for the second quarter 2025 were $649.8 million, a decrease of $25.7 million or 3.8% as compared to the second quarter 2024. The decrease consisted of an organic sales decline of 4.4%, partially offset by positive foreign currency translation of 0.6%. The $30.1 million decrease in organic sales primarily reflects large project timing in the metals and mining market. Gross profit for the second quarter of 2025 was $280.4 million, an increase of $9.9 million or 3.7% as compared to the second quarter of 2024, primarily driven by synergies along with lower depreciation and excess and obsolescence expense. Total operating expenses for the second quarter of 2025 were $188.0 million, an increase of $7.3 million, or 4.0% as compared to the second quarter of 2024.
Current report
PES net sales for the second quarter 2025 were $435.2 million, an increase of $24.3 million or 5.9% as compared to the second quarter 2024. The increase consisted of organic sales growth of 6.5% and positive foreign currency translation of 0.2%, partially offset by the impact from divestitures of 0.8%. The increase in organic sales reflects growth in the residential and commercial HVAC markets. Gross profit for the second quarter 2025 was $129.7 million, an increase of $8.5 million or 7.0% as compared to the second quarter 2024 driven by higher volume and lower restructuring and related expenses of $5.8 million. Total operating expenses for the second quarter of 2025 were $70.2 million, a decrease of $5.9 million, or 7.8% as compared to the second quarter of 2024.
Current report
(1) Results for the Industrial Systems segment covers results through the close of the sale on April 30, 2024.
Current report
Net sales decreased $181.1 million or 5.9% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease consisted of a negative impact from divestitures of 5.3%, a negative foreign currency translation impact of 0.4% and an organic sales decline of 0.2%. The decrease from divestitures was primarily due to a reduction of $157.8 million from the divestiture of the industrial motors and generators business. The organic sales decline was due to lower organic sales of $51.9 million within IPS and $12.7 million within AMC,partially offset by an increase of $57.4 million within PES. Gross profit decreased $31.8 million, or 2.8%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily driven $39.2 million due to the divestiture of the industrial motors and generators business and a $16.4 million decrease within AMC, partially offset by an increase of $21.2 million within PES. Total operating expenses for the six months ended June 30, 2025 decreased $46.0 million or 5.8% as compared to the six months ended June 30, 2024, primarily driven by $38.9 million from the divestiture of the industrial motors and generators businesses and a $7.6 million decrease within PES. Interest expense for the six months ended June 30, 2025 was $175.5 million, a decrease of $31.6 million or 15.3% as compared to the six months ended June 30, 2024, primarily driven by a reduction in outstanding debt.
Current report
AMC net sales were $807.4 million, a decrease of $15.0 million, or 1.8%, as compared to the six months ended June 30, 2024. The decrease consisted of an organic sales decline of 1.5% and a negative foreign currency translation impact of 0.3%. The $12.7 million decrease in organic sales was primarily driven by headwinds related to temporary challenges sourcing rare earth magnets, which impacted shipments of certain higher margin products into the defense and medical markets, and project timing in the data center market, partially offset by growth in the aerospace and discrete automation markets. Gross profit decreased $16.4 million, or 5.0%, compared to the six months ended June 30, 2024, primarily driven by lower volume and sales mix. Total operating expenses for the six months ended June 30, 2025 are relatively consistent with the six months ended June 30, 2024.
Current report
IPS net sales for the six months ended June 30, 2025 were $1,262.5 million, a decrease of $56.4 million, or 4.3%, as compared to the six months ended June 30, 2024. The decrease consisted of an organic sales decline of 3.9% and a negative foreign currency translation impact of 0.4%. The $51.9 million decrease in organic sales was driven by large project timing in the metals and mining market and weakness in general industrial markets. Gross profit for the six months ended June 30, 2025 was relatively consistent with the six months ended June 30, 2024. Total operating expenses for the six months ended June 30, 2025 were relatively consistent with the six months ended June 30, 2024.
Current report
PES net sales for the six months ended June 30, 2025 were $844.3 million, an increase of $48.1 million, or 6.0%, as compared to the six months ended June 30, 2024. The increase consisted of an organic sales increase of 7.3%, partially offset by a negative impact from the divestiture of businesses of 0.9% and negative foreign currency translation impact of 0.4%. The $57.4 million increase in organic sales reflects growth in the residential and commercial HVAC markets. Gross profit increased $21.2 million, or 9.6%, as compared to the six months ended June 30, 2024, primarily driven by higher volume and lower restructuring and related expenses of $12.5 million. Total operating expenses for the six months ended June 30, 2025 decreased $7.6 million, or 5.2%, as compared to the six months ended June 30, 2024.
Current report
The effective tax rate for the six months ended June 30, 2025 was 21.3% versus 34.9% for the six months ended June 30, 2024 due to the tax effects associated with the divestiture of the industrial motors and generators businesses during the six months ended June 30, 2024.
Removed paragraphs (3)
Previous report
AMC net sales for the first quarter 2025 were $396.3 million, a decrease of $3.9 million or 1.0% as compared to the first quarter 2024. The decrease consisted of negative foreign currency translation of 1.4%, partially offset by an organic sales increase of 0.4% reflecting strength in the aerospace and defense markets and discrete automation markets, net of weakness in the general industrial and medical markets. Gross profit for the first quarter of 2025 is relatively consistent with the first quarter of 2024. Total operating expenses for the first quarter of 2025 are relatively consistent with the first quarter of 2024.
Previous report
IPS net sales for the first quarter 2025 were $612.7 million, a decrease of $30.7 million or 4.8% as compared to the first quarter 2024. The decrease consisted of an organic sales decline of 3.4% and negative foreign currency translation of 1.4%. The $21.8 million decrease in organic sales primarily reflects declines in metals and mining, and in the machinery/off-highway markets within general industrial, partially offset by growth in energy markets. Gross profit for the first quarter of 2025 was $257.5 million, a decrease of $7.3 million or 2.8% as compared to the first quarter of 2024. The decrease includes higher restructuring expenses of $3.2 million. Total operating expenses for the first quarter of 2025 were $175.8 million, a decrease of $6.9 million, or 3.8% as compared to the first quarter of 2024. The decrease was primarily driven by a $6.0 million gain on the sale of fixed assets in the first quarter of 2025 that did not occur in the first quarter of 2024.
Previous report
PES net sales for the first quarter 2025 were $409.1 million, an increase of $23.8 million or 6.2% as compared to the first quarter 2024. The increase consisted of an organic sales increase of 8.0%, negative impact of divestitures of 0.9%, and negative foreign currency translation of 0.9%. The $30.7 million increase in organic sales primarily reflects growth in the N.A. residential HVAC market. Gross profit for the first quarter 2025 was $112.0 million, an increase of $12.7 million or 12.8% as compared to the first quarter 2024. The increase includes lower restructuring expenses of $4.4 million. Total operating expenses for the first quarter of 2025 are relatively consistent with the first quarter of 2024.
Reworded paragraphs (11)
Previous wording
The Company has updated its annual guidance for GAAP diluted earnings per share to a range of $4.49 to $5.29 due to gain on sale of assets for the three months ended March 31, 2025. The Company's mitigation actions are expected to neutralize the impact of current tariffs on 2025 earnings.
Current wording
The Company has updated its annual guidance for GAAP diluted earnings per share to a range of $4.50 to $5.10. The Company's mitigation actions are expected to neutralize the impact of current tariffs on 2025 earnings.
Previous wording
Net sales for the first quarter 2025 were $1,418.1 million, a decrease of $129.6 million, or 8.4%, compared to the first quarter of 2024. The decrease consisted of a negative impact from divestitures of 7.9%, and a negative foreign currency translation impact of 1.2%, partially offset by an organic sales increase of 0.7%. The decrease from divestitures was primarily due to a reduction of $118.8 million from the divestiture of the industrial motors and generators business. The increase in organic sales of $10.5 million was driven by a $30.7 million increase within PES and a $1.6 million increase within AMC, partially offset by a $21.8 million decrease in organic sales within IPS. Gross profit for the first quarter 2025 was $527.6 million, a decrease of $25.5 million or 4.6% compared to the first quarter 2024 primarily due to a decrease of $29.1 million from the divestiture of the industrial motors and generators business and a decrease of $7.3 million from the IPS segment, partially offset by an increase of $12.7 million from the PES segment. Total operating expenses for the first quarter 2025 were $367.9 million, a decrease of $51.3 million or 12.2% as compared to the first quarter 2024. The decrease was primarily driven by a reduction of $46.0 million from the divestiture of the industrial motors and generators business.
Current wording
Net sales for the second quarter 2025 were $1,496.1 million, a decrease of $51.5 million, or 3.3%, compared to the second quarter of 2024. The decrease consisted of a negative impact from divestitures of 2.7% and an organic sales decline of 1.2%, partially offset by a positive foreign currency translation impact of 0.6%. The decrease from divestitures was primarily due to a reduction of $39.0 million from the divestiture of the industrial motors and generators business. The decrease in organic sales of $17.7 million was driven by a $30.1 million decrease within IPS and a $14.3 million decrease within AMC, partially offset by a $26.7 million increase within PES. Gross profit for the second quarter 2025 was $564.7 million, a decrease of $6.3 million or 1.1% compared to the second quarter 2024 primarily due to a $14.6 million decrease within AMC and a $10.1 million decrease from the divestiture of the industrial motors and generators business, partially offset by an increase of $9.9 million within IPS and an increase of $8.5 million within PES. Total operating expenses for the second quarter 2025 were $382.4 million, an increase of $5.3 million or 1.4% as compared to the second quarter 2024. Interest expense for the second quarter 2025 was $85.3 million, a decrease of $16.4 million or 16.1% as compared to the second quarter 2024, primarily driven by a reduction in outstanding debt.
Previous wording
The effective tax rate for the three months ended March 31, 2025 was 21.2% versus 34.8% for the three months ended March 31, 2024. The decrease was primarily driven by the non-deductible loss incurred in the prior year associated with the divestiture of the industrial motors and generators business.
Current wording
The effective tax rate for the three months ended June 30, 2025 was 21.3% versus 35.0% for the three months ended June 30, 2024 due to the tax effects associated with the divestiture of the industrial motors and generators businesses during the three months ended June 30, 2024.
Previous wording
Cash flow provided by operating activities was $102.3 million for the three months ended March 31, 2025, a $19.2 million increase from the three months ended March 31, 2024. This increase was primarily driven by additional income generated in 2025.
Current wording
Cash flow provided by operating activities was $625.5 million for the six months ended June 30, 2025, a $384.1 million increase from the six months ended June 30, 2024. This increase was primarily driven by cash proceeds from the sale of receivables under the Securitization Facility coupled with additional income generated in 2025. See Note 7 - Receivables Securitization for additional considerations regarding the Securitization Facility.
Previous wording
Our working capital was $1,535.0 million as of March 31, 2025, compared to $1,535.6 million as of December 31, 2024, which is comparable period over period.
Current wording
Our working capital was $1,258.7 million as of June 30, 2025, compared to $1,535.6 million as of December 31, 2024, a decrease of $276.9 million primarily due to the sale of receivables under the Securitization Facility.
Previous wording
Cash flow used in investing activities was $3.5 million for the three months ended March 31, 2025 as compared to cash flow used in investing activities of $17.5 million for the three months ended March 31, 2024. The decrease was primarily driven by higher proceeds received from sales of property, plant and equipment in 2025.
Current wording
Cash flow used in investing activities was $29.2 million for the six months ended June 30, 2025 as compared to cash flow provided by investing activities of $325.2 million for the six months ended June 30, 2024. The decrease was primarily driven by proceeds received from the sale of the industrial motors and generators businesses in 2024.
Previous wording
Cash flow used in financing activities was $192.5 million for the three months ended March 31, 2025, compared to $168.0 million used in financing activities for the three months ended March 31, 2024. We made net debt repayments of $164.1 million during the three months ended March 31, 2025, compared to net debt repayments of $137.5 million during the three months ended March 31, 2024. The net debt repayments in the current year primarily reflected payments of $185.0 million on the Term Facility, partially offset by $21.8 million of net borrowings made on the Multicurrency Revolving Facility during the three months ended March 31, 2025. The net debt payments in the prior year primarily resulted from payments of $60.0 million on the Term Facility and $71.7 million net repayments made on the Multicurrency Revolving Facility during the three months ended March 31, 2024. There were $23.2 million of dividends paid for the three months ended March 31, 2025, compared to $23.3 million of dividends paid in the prior year.
Current wording
Cash flow used in financing activities was $686.2 million for the six months ended June 30, 2025, compared to $672.5 million used in financing activities for the six months ended June 30, 2024. We made net debt repayments of $633.9 million during the six months ended June 30, 2025, compared to net debt repayments of $618.4 million during the six months ended June 30, 2024. The net debt repayments in the current year primarily reflected payments of $615.0 million on the Term Facility and $17.0 million of net payments made on the Multicurrency Revolving Facility during the six months ended June 30, 2025. The net debt payments in the prior year primarily resulted from payments of $187.5 million on the Term Facility, $356.8 million on the Land Term Facility (an unsecured term loan facility fully repaid as of December 31, 2024 under which the Company's subsidiary Land Newco, Inc. was the sole borrower), and $72.1 million net repayments made on the Multicurrency Revolving
Previous wording
As of March 31, 2025, $295.8 million of our cash was held by foreign subsidiaries and could be used in our domestic operations if necessary. We anticipate being able to support our liquidity and operating needs largely through cash generated from operations. We regularly assess our cash needs and the available sources to fund these needs which includes repatriation of foreign earnings which may be subject to withholding taxes. Under current law, we do not expect restrictions or taxes on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition or the results of operations for the foreseeable future. As of March 31, 2025, we have repatriated approximately $167.8 million of foreign cash in 2025 to support the repayment of debt. We are continuing to evaluate opportunities to repatriate additional foreign cash in 2025.
Current wording
As of June 30, 2025, $311.7 million of our cash was held by foreign subsidiaries and could be used in our domestic operations if necessary. We anticipate being able to support our liquidity and operating needs largely through cash generated from operations. We regularly assess our cash needs and the available sources to fund these needs which includes repatriation of foreign earnings which may be subject to withholding taxes. Under current law, we do not expect restrictions or taxes on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition or the results of operations for the foreseeable future. As of June 30, 2025, we have repatriated $357.8 million of foreign cash in 2025 to support the repayment of debt. We are continuing to evaluate opportunities to repatriate additional foreign cash in 2025.
Previous wording
As of March 31, 2025, the Company had $480.0 million of borrowings under the Term Facility and $61.8 million of borrowings under the Multicurrency Revolving Facility, along with $1,508.2 million of available borrowing capacity. The Company pays a non-use fee on the aggregate unused amount of the Multicurrency Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.
Current wording
As of June 30, 2025, the Company had $50.0 million of borrowings under the Term Facility and $23.0 million of borrowings under the Multicurrency Revolving Facility, along with $1,547.0 million of available borrowing capacity. On June 30, 2025, the Company prepaid $420 million of principal outstanding under the Term Facility with proceeds from the Securitization Facility, which was entered on June 30, 2025. The SPE received proceeds of $368.5 million for the Sold Receivables. The Company pays a non-use fee on the aggregate unused amount of the Multicurrency Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.
Previous wording
See Note 7 - Debt and Bank Credit Facilities of the Notes to the Condensed Consolidated Financial Statements for more information.
Current wording
See Note 7 - Receivables Securitization and Note 8 - Debt and Bank Credit Facilities of the Notes to the Condensed Consolidated Financial Statements for more information.
Previous wording
The following table sets forth summarized income statement information of the Obligor Group for the three months ended March 31, 2025 and March 31, 2024:
Current wording
The following table sets forth summarized income statement information of the Obligor Group for the six months ended June 30, 2025 and June 30, 2024:
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Six Months Ended June 30, 2025 Compared to June 30, 2024
Current report — wording carried from elsewhere
Facility during the six months ended June 30, 2024. There were $46.6 million of dividends paid for the six months ended June 30, 2025 and June 30, 2024.