On May 4, Beloit, Wisconsin-based electric motors manufacturer Regal Rexnord reported its first-quarter 2023 financial results, showing a sales decline during the January-March period.
Regal Rexnord posted 1Q net sales of $1.22 billion, a decrease of 5.7% year-over-year. The decline follows a sales increase of 2% in 4Q 2022 and an increase of 48% in 3Q.
1Q organic revenue was down 4% year-over-year while organic orders fell 9%, according to a news release. Regal Rexnord reported sales for the following business segments:
- Automation & Motion Control net sales were $203.2 million, an increase of 10.3%, or 11.7% on an organic basis. Segment growth reflected strength in the data center, aerospace, and food & beverage markets, according to the release.
- Industrial Powertrain Solutions segment net sales were $414.4 million, a decrease of 0.5%, or an increase of 1.3% on an organic basis. Segment results reflected strength in the metals & mining and energy markets, partially offset by project timing in alternative energy, Regal Rexnord said.
- Power Efficiency Solutions net sales were $469.5 million, a decrease of 17.2%, or 15.9% on an organic basis. Segment decline reflected weakness in the U.S. pool pump market and global residential HVAC markets.
- Industrial Systems net sales were $137 million, an increase of 4.8%, or 8% on an organic basis. Segment growth reflected strength in the North America general industrial and global oil & gas markets.
Most notably Regal Rexnord closed its $5 billion acquisition of Altra Industrial Motion — first reported last fall — at the end of 1Q. Despite Regal Rexnord’s overall sales decline in 1Q, CEO Louis Pinkham spoke on the potential for long-term growth following the Altra acquisition.
“We see a tremendous opportunity to accelerate profitable growth together with Altra,” Pinkham said in the release. “Our extensive, pre-close integration planning allowed us to hit the ground running towards pursuing the $160 million in Altra cost synergies. And even though we’re only a few weeks post-closing, teams across the combined organization have already been meeting and identifying cross-marketing synergies – an opportunity we are extremely excited about, and will look to quantify in the future.
“Regarding our legacy Regal Rexnord business, I am pleased with our first quarter performance,” Pinkham continued. “While our PES business saw pressure related to reducing channel inventories and market headwinds, the Regal Rexnord team overall did a great job executing what is under our control. Notably, we made meaningful progress on working capital and, in particular, lowering inventory, which resulted in atypically strong cash flow in the quarter.”