REGAL REXNORD CORP
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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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, 2026 · Filed Aug 5, 2026
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 2026-03-31; filed 2026-05-07.
0000082811-26-000144
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0000082811-26-000229
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 54 previous paragraphs and 60 current paragraphs.
39 unchanged; 14 reworded; 6 added; 1 removed; 0 previous and 1 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 (6)
Current report
On February 20, 2026, the US Supreme Court ruled that tariffs imposed under IEEPA were not authorized by the statute. The Company is the importer of record for certain raw materials and products that were previously subject to such tariffs under IEEPA. The Company recorded a $33.0 million pre-tax benefit related to certain IEEPA tariff refunds for the three and six months ended June 30, 2026. There are other IEEPA tariff duties that may be eligible for submission and recovery under future phases of the CAPE refund process, but the ultimate amount and timing of recovery is uncertain at this time. For the year ended December 31, 2026, the Company estimates a pre-tax benefit of $49 million, including $33.0 million recorded for the six months ended June 30, 2026. See Note 2 - Other Financial Information of the Notes to the Condensed Consolidated Financial Statements for more information.
Current report
IPS net sales for the second quarter 2026 were $669.4 million, an increase of $19.6 million, or 3.0%, as compared to the second quarter 2025. The increase primarily consisted of an organic sales increase of 2.0% and a positive foreign currency translation impact of 1.1%. The $13.0 million increase in organic sales largely reflects strong growth in the energy market. Gross profit for the second quarter of 2026 was $286.9 million, an increase of $6.5 million, or 2.3%, as compared to the second quarter of 2025, primarily driven by a benefit from IEEPA tariff refunds of $8.3 million partially offset by sales mix headwinds. Total operating expenses for the second quarter of 2026 were relatively consistent with the second quarter of 2025.
Current report
The effective tax rate for the three months ended June 30, 2026 was 18.7% versus 21.3% for the three months ended June 30, 2025. The decrease was primarily due to changes in the amount and mix of pre-tax earnings, the relative impact of permanent and discrete tax items, and benefits from tax planning strategies.
Current report
Net sales increased $123.3 million or 4.2% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase consisted of an organic sales increase of 2.5% and a positive foreign currency translation impact of 1.8%. The increase in organic sales of $71.2 million was driven by a $112.2 million increase within AMC and a $30.0 million increase within IPS, partially offset by a $71.0 million decrease in organic sales within PES. Gross profit increased $69.2 million, or 6.3%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by a benefit from IEEPA tariff refunds of $32.0 million and increases of $26.5 million and $15.4 million, (excluding the benefit from IEEPA tariff refunds) at AMC and IPS, respectively. Total operating expenses for the six months ended June 30, 2026 increased $43.4 million, or 5.8%, compared to the six months ended June 30, 2025, primarily driven by a $21.0 million increase within IPS and a $17.9 million increase within AMC. Interest expense for the six months ended June 30, 2026 was $158.0 million, a decrease of $17.5 million, or 10.0%, compared to the six months ended June 30, 2025, primarily driven by a reduction in outstanding debt.
Current report
AMC net sales for the six months ended June 30, 2026 were $934.8 million, an increase of $127.4 million, or 15.8%, compared to the six months ended June 30, 2025. The increase consisted of an organic sales increase of 13.9% and a positive foreign currency translation impact of 1.9%. The $112.2 million increase in organic sales was primarily driven by broad-based growth, but with particular strength in the data center and discrete automation markets, as well as continued positive trends in the aerospace & defense market. Gross profit increased $32.4 million, or 10.4%, compared to the six months ended June 30, 2025, primarily driven by higher sales volumes and a benefit from IEEPA tariff refunds of $5.9 million. Total operating expenses increased by $17.9 million, or 7.2%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily driven by labor and benefit costs due to inflation and growth investments, and foreign currency impacts.
Current report
PES net sales for the six months ended June 30, 2026 were $785.0 million, a decrease of $59.3 million, or 7.0%, compared to the six months ended June 30, 2025. The decrease consisted of an organic sales decrease of 8.4%, partially offset by a positive foreign currency translation impact of 1.4%. The $71.0 million decrease in organic sales primarily reflects weakness in the residential HVAC and pool markets, which was partially offset by growth in the commercial HVAC market. Gross profit increased $13.1 million, or 5.4%, as compared to the six months ended June 30, 2025, primarily driven by a benefit from IEEPA tariff refunds of $17.8 million. Total operating expenses for the six months ended June 30, 2026 are relatively consistent with the six months ended June 30, 2025.
Removed paragraphs (1)
Previous report
On February 20, 2026, the US Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) were not authorized by the statute. The Company is the importer of record for certain raw materials and products that were previously subject to such tariffs under IEEPA. Significant uncertainty remains regarding how and when any amounts may be recovered. We are evaluating the ruling and potential actions available to us. Because the process, timing, and amount of any recovery are uncertain, we have not recorded any potential benefit from a refund as of the date of this filing.
Reworded paragraphs (14)
Previous wording
On April 22, 2026 we announced that Aamir Paul will succeed Louis V. Pinkham as the Company’s Chief Executive Officer, effective no later than July 1, 2026, upon the conclusion of his responsibilities with his current employer. The Board of Directors (the “Board”) has also determined that Mr. Paul will serve on the Board as a director, effective on the commencement of his employment with the Company and the resignation of Mr. Pinkham as a director, with an initial term continuing until the Company’s 2027 annual meeting of shareholders. The Company had previously announced Mr. Pinkham’s transition on October 29, 2025.
Current wording
On July 1, 2026, Aamir Paul succeeded Louis V. Pinkham as the Company’s Chief Executive Officer. The Board of Directors (the “Board”) appointed Mr. Paul to serve on the Board as a director with an initial term continuing until the Company’s 2027 annual meeting of shareholders.
Previous wording
Net sales for the first quarter 2026 were $1,479.1 million, an increase of $61.0 million, or 4.3%, compared to the first quarter of 2025. The increase consisted of an organic sales increase of 1.6% and a positive foreign currency translation impact of 2.7%. The increase in organic sales of $22.7 million was driven by a $48.0 million increase within AMC and a $16.9 million increase within IPS, partially offset by a $42.2 million decrease in organic sales within PES. Gross profit for the first quarter 2026 was $549.9 million, an increase of $22.3 million, or 4.2%, compared to the first quarter 2025, primarily due an increase of $17.2 million from the IPS segment. Total operating expenses for the first quarter 2026 were $397.2 million, an increase of $29.3 million, or 8.0%, as compared to the first quarter 2025, primarily due to an increase of $19.7 million from the IPS segment.
Current wording
Net sales for the second quarter 2026 were $1,558.4 million, an increase of $62.3 million, or 4.2%, compared to the second quarter 2025. The increase consisted of an organic sales increase of 3.3% and a positive foreign currency translation impact of 1.0%. The increase in organic sales of $48.5 million was driven by a $64.2 million increase within AMC and a $13.0 million increase within IPS, partially offset by a $28.7 million decrease in organic sales within PES. Gross profit for the second quarter 2026 was $611.6 million, an increase of $46.9 million, or 8.3%, compared to the second quarter 2025, primarily driven by a benefit from IEEPA tariff refunds of $32.0 million and an increase of $22.8 million (excluding the benefit from IEEPA tariff refunds) at AMC. Total operating expenses for the second quarter 2026 were $396.4 million, an increase of $14.0 million, or 3.7%, as compared to the second quarter 2025, primarily due to an increase of $10.6 million within AMC.
Previous wording
AMC net sales for the first quarter 2026 were $457.1 million, an increase of $60.8 million, or 15.3%, as compared to the first quarter 2025. The increase consisted of an organic sales increase of 12.1% and a positive foreign currency translation impact of 3.2%. The $48.0 million increase in organic sales reflects broad-based growth, but with particular strength in the data center and discrete automation markets, as well as signs of recovery in the food & beverage market. AMC gross profit and total operating expenses in for the first quarter of 2026 were relatively consistent with the first quarter of 2025.
Current wording
AMC net sales for the second quarter 2026 were $477.7 million, an increase of $66.6 million, or 16.2%, as compared to the second quarter 2025. The increase consisted of an organic sales increase of 15.6% and a positive foreign currency translation impact of 0.6%. The $64.2 million increase in organic sales reflects broad-based growth, but with particular strength in the data center, discrete automation, and aerospace & defense markets. Gross profit for the second quarter of 2026 was $183.3 million, an increase of $28.7 million, or 18.6%, as compared to the second quarter of 2025, primarily driven by higher sales volumes and a benefit from IEEPA tariff refunds of $5.9 million. Total operating expenses for the second quarter of 2026 were $134.8 million, an increase of $10.6 million, or 8.5%, compared to the second quarter of 2025, primarily driven by labor and benefit costs due to inflation and growth investments.
Previous wording
PES net sales for the first quarter 2026 were $373.8 million, a decrease of $35.3 million, or 8.6%, as compared to the first quarter 2025. The decrease consisted of an organic sales decline of 10.3%, partially offset by a positive foreign currency translation impact of 1.7%. The $42.2 million decrease in organic sales primarily reflects expected weakness in the residential HVAC market, which was partially offset by growth in the commercial HVAC markets in North America and Asia Pacific. Gross profit and total operating expenses for the first quarter of 2026 were relatively consistent with the first quarter of 2025.
Current wording
PES net sales for the second quarter 2026 were $411.3 million, a decrease of $23.9 million, or 5.5%, as compared to the second quarter 2025. The decrease consisted of an organic sales decline of 6.6%, partially offset by a positive foreign currency translation impact of 1.1%. The $28.7 million decrease in organic sales primarily reflects weakness in the residential HVAC and pool markets, which was partially offset by growth in the commercial HVAC market. Gross profit for the second quarter of 2026 was $141.4 million, an increase of $11.7 million, or 9.0%, as compared to the second quarter of 2025, primarily driven by a benefit from IEEPA tariff refunds of $17.8 million. Total operating expenses for the second quarter of 2026 were relatively consistent with the second quarter of 2025.
Previous wording
IPS net sales for the first quarter 2026 were $648.2 million, an increase of $35.5 million, or 5.8%, as compared to the first quarter 2025. The increase primarily consisted of organic sales growth of 2.8% and a positive foreign currency translation impact of 3.1%. The $16.9 million increase in organic sales reflects broad-based growth, but with particular strength in the general industrial market. Gross profit for the first quarter of 2026 was $274.7 million, an increase of $17.2 million, or 6.7%, as compared to the first quarter of 2025. The increase was primarily driven by higher sales volumes, synergy benefits, and lower restructuring and related costs. Total operating expenses for the first quarter of 2026 were $195.5 million, an increase of $19.7 million, or 11.2% as compared to the first quarter of 2025. The increase was primarily driven by increased labor and benefit costs and a $6.0 million gain on the sale of assets in the first quarter of 2025.
Current wording
IPS net sales for the six months ended June 30, 2026 were $1,317.7 million, an increase of $55.2 million, or 4.4%, compared to the six months ended June 30, 2025. The increase primarily consisted of an organic sales increase of 2.4% and a positive foreign currency translation impact of 2.1%. The $30.0 million increase in organic sales was primarily driven by strength in the general industrial and energy markets. Gross profit increased $23.7 million, or 4.4%, compared to the six months ended June 30, 2025 primarily driven by higher sales volumes, synergy benefits, a benefit from IEEPA tariff refunds of $8.3 million, and lower restructuring and related costs of $4.3 million. Total operating expenses increased $21.0 million, or 5.8%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily driven by increased labor and benefit costs due to inflation, foreign currency impacts, and a $6.0 million gain on the sale of assets in the first quarter of 2025.
Previous wording
The effective tax rate for the three months ended March 31, 2026 was 15.9% versus 21.2% for the three months ended March 31, 2025. The decrease was primarily driven by a discrete tax benefit related to stock option exercises in the current year.
Current wording
The effective tax rate for the six months ended June 30, 2026 was 17.7% versus 21.3% for the six months ended June 30, 2025. The decrease was primarily due to a discrete tax benefit related to stock option exercises in the current year, changes in the amount and mix of pre-tax earnings, the relative impact of permanent and discrete tax items, and benefits from tax planning strategies.
Previous wording
As noted above, we disclose organic sales and organic sales growth non-GAAP financial measures, and we reconcile these measures in the table below to GAAP net sales. We believe that these non-GAAP financial measures are useful measures for providing investors with additional information regarding our results of operations and for helping investors understand and compare our operating results across accounting periods and compared to our peers. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for the Company's results of operations prepared and presented in accordance with GAAP.
Current wording
As noted above, we disclose organic sales and organic sales growth as non-GAAP financial measures, and we reconcile these measures in the table below to GAAP net sales. We believe that these non-GAAP financial measures are useful measures for providing investors with additional information regarding our results of operations and for helping investors understand and compare our operating results across accounting periods and compared to our peers. This additional non-GAAP information is not meant to be considered in isolation or as a substitute for the Company's results of operations prepared and presented in accordance with GAAP.
Previous wording
Cash flow provided by operating activities was $14.9 million for the three months ended March 31, 2026, a $87.4 million decrease from the three months ended March 31, 2025. This decrease was primarily driven by working capital changes, specifically accounts receivable.
Current wording
Cash flow provided by operating activities was $191.6 million for the six months ended June 30, 2026, a $433.9 million decrease from the six months ended June 30, 2025. This decrease was primarily driven by $368.5 million of cash proceeds from the sale of receivables under the Securitization Facility in the second quarter 2025 along with other working capital changes. See Note 6 - Receivables Securitization for additional information regarding the Securitization Facility.
Previous wording
Our working capital was $1,485.0 million as of March 31, 2026, compared to $1,448.0 million as of December 31, 2025, an increase of $37.0 million driven by increases in accounts receivables, inventory, and prepaid expenses and other current assets, partially offset by a decrease in cash and an increase in accounts payable.
Current wording
Our working capital was $1,582.1 million as of June 30, 2026, compared to $1,448.0 million as of December 31, 2025, an increase of $134.1 million driven by increases in accounts receivables, inventory, and prepaid expenses and other current assets, partially offset by a decrease in cash.
Previous wording
Cash flow used in investing activities was $17.4 million for the three months ended March 31, 2026 as compared to cash flow used in investing activities of $3.5 million for the three months ended March 31, 2025. The increase was primarily driven by proceeds received from sales of property, plant and equipment in 2025.
Current wording
Cash flow used in investing activities was $37.1 million and 29.2 million for the six months ended June 30, 2026 and June 30, 2025, respectively. The increase was primarily driven by proceeds received from sales of property, plant and equipment in 2025.
Previous wording
Cash flow used in financing activities was $115.4 million for the three months ended March 31, 2026, compared to $192.5 million used in financing activities for the three months ended March 31, 2025. We made net debt repayments of $83.5 million during the three months ended March 31, 2026, compared to net debt repayments of $164.1 million during the three months ended March 31, 2025. The net debt repayments in the current year primarily reflected the repayment of $1,100.0 million of 2026 Senior Notes, partially offset by$850.0 million in proceeds from the 2025 Term Facility and $167.8 million of net borrowings made on the 2025 Revolving Facility during the three months ended March 31, 2026. The net debt repayments in the prior 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. There were $23.3 million of dividends paid for the three months ended March 31, 2026 and $23.2 million of dividends paid for the three months ended March 31, 2025.
Current wording
Cash flow used in financing activities was $235.4 million and $686.2 million for the six months ended June 30, 2026 and June 30, 2025, respectively. We made net debt repayments of $180.1 million during the six months ended June 30, 2026, compared to net debt repayments of $633.9 million during the six months ended June 30, 2025. The net debt repayments in the current year primarily reflected the repayment of $1,100.0 million of 2026 Senior Notes, partially offset by $850.0 million in proceeds from the 2025 Term Facility and $72.5 million of net borrowings made on the 2025 Revolving Facility during the six months ended June 30, 2026. The net debt repayments in the prior 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. There were $46.6 million of dividends paid for the six months ended June 30, 2026 and June 30, 2025.
Previous wording
As of March 31, 2026, $393.6 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, 2026, we have repatriated $85.6 million of foreign cash in 2026. We are continuing to evaluate opportunities to repatriate additional foreign cash in 2026.
Current wording
As of June 30, 2026, $432.3 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, 2026, we have repatriated $84.3 million of foreign cash in 2026. We are continuing to evaluate opportunities to repatriate additional foreign cash in 2026.
Previous wording
The Company borrowed$850.0 million under the 2025 Term Facility on February 12, 2026 and used the proceeds to refinance $1,100.0 million of 2026 Senior Notes. As of March 31, 2026, the Company had$850.0 million outstanding under the 2025 Term Facility and $167.8 million of borrowings under the 2025 Revolving Facility, along with $1,332.2 million of available borrowing capacity. The Company pays a non-use fee on the aggregate unused amount of the 2025 Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.
Current wording
The Company borrowed$850.0 million under the 2025 Term Facility on February 12, 2026 and used the proceeds to refinance $1,100.0 million of 2026 Senior Notes. As of June 30, 2026, the Company had $850.0 million outstanding under the 2025 Term Facility and $72.5 million of borrowings under the 2025 Revolving Facility, along with $1,427.5 million of available borrowing capacity. The Company pays a non-use fee on the aggregate unused amount of the 2025 Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio.
Previous wording
The following table sets forth summarized income statement information of the Obligor Group for the three months ended March 31, 2026:
Current wording
The following table sets forth summarized income statement information of the Obligor Group for the six months ended June 30, 2026:
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Six Months Ended June 30, 2026 Compared to June 30, 2025