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Rexnord Corporation First Quarter Results For Fiscal 2014

Rexnord Corporation (NYSE:RXN):

Consolidated Highlights

  • Net sales increased 3% (+3% core sales) to $509 million in the first quarter.
  • Income from operations increased 11% to $61 million year-over-year resulting in a 90 basis point increase in operating margin to 12%.
  • Reported net income from continuing operations increased to $14 million from a net loss of $1 million in the prior year; Adjusted net income increased 7% over the prior year to $24 million.
  • Diluted earnings per share from continuing operations was $0.14; first quarter adjusted earnings per share was $0.24.
  • Adjusted EBITDA in the first quarter was $93 million resulting in an adjusted EBITDA margin of 18.3%.
  • Total liquidity was $657 million ($335 million of cash plus $322 million of available borrowings).

Todd A. Adams, President and Chief Executive Officer, commented "We are pleased with the start to our fiscal year as core sales growth, earnings and free cash flow were slightly better than we anticipated going into our first quarter. Core sales in Process and Motion Control progressed to flat from down 4% in our fiscal 2013 fourth quarter reflecting the diversity of the platform and the stabilization in demand we are seeing in most of our end markets. Core sales in Water Management grew 8% year-over-year as our growth initiatives are driving market share gains in advance of the expected market recovery we see coming over the next couple of years. Looking ahead, we anticipate the global macro environment to remain somewhat muted but believe we can continue to outperform the market in both segments of our business while driving margin improvement and solid free cash flow."

Second Quarter and Fiscal 2014 Outlook and Guidance

Adams continued "Based on our first quarter results and latest outlook, we are increasing our full year core sales guidance to +2% to +4% and increasing the low end of our adjusted EPS range by $0.02 resulting in a full year EPS range of $1.12 to $1.18. With respect to our second quarter, we anticipate sales to be in the range of $510 million to $520 million and adjusted EPS in the range of $0.23 to $0.25 (35% discrete tax rate in the second quarter with full year guidance unchanged at 31 - 33%)."

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