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On slide 2, we mentioned we’re presenting certain non-GAAP financial measures related to adjusted diluted earnings per share, adjusted gross profit, adjusted gross profit as a percentage of net sales and free cash flow. We believe that these are useful financial measures for providing you with additional insight into our operating performance. Please read this slide for information regarding these non-GAAP financial measures and please see the appendix where you can find reconciliation of these measures to the most comparable measures in accordance with GAAP.Now, I'll turn the call over to Mark. Mark Joseph Gliebe Welcome and good morning everyone, and thank you for joining the call and for your interest in REGAL-BELOIT. We will follow our normal agenda. I will make some opening comments, Chuck will give you the financial update, Jon Schlemmer will provide you color on products, markets, and operations. I’ll summarize our prepared comments, we will move to Q&A and then I’ll give a few closing comments. Overall we felt good about our operating performance for the fourth quarter as our results exceeded our guidance. Chuck will go over the details of why our performance exceeded our expectations, but the bottom line from an operating perspective is that EPC along with a number of our other businesses performed well in the quarter offsetting weakness in HVAC in China. With regards to the EPC acquisition, we are now deep into the integration process working on mining synergies while rationalizing productions and platforms and we continue on the track to meet or exceed our expectations. As you know, this is the largest acquisition in the company’s history and the integration continues to go well. In terms of our operating performance during the quarter, we achieved record fourth quarter revenues and record fourth quarter free cash flow. Our C&I, Mechanical, Unico and EPC businesses performed well in the quarter offsetting headwinds in our HVAC and China businesses.
In HVAC, our volume was down related to an unusually warm winter, the reduction of high efficiency consumer incentives, and the R22 dry ship, mix shift. Outside of our operating performance, highlights in the quarter included; first, launch of 20 new products, nine of which were energy efficient products.Second, we were awarded supplier of the year, and most innovative supplier of the year by two of our top 20 customers. Third, we were able to reduce the warranty accrual that we took in the second quarter by $15.4 million. Fourth, we restructured portions of our European and Australian operation to yield benefits in 2012. And finally, we continued a smooth integration of EPC and we are on track to achieve our first-year synergy run rate target $10 million. With that, I will turn over to Chuck Hinrichs. Charles A. Hinrichs Thank you, Mark, and good morning everyone. I will start with slide number six, comparing our actual fourth quarter 2011 results to our earlier guidance. You recall, our earlier fourth quarter EPS guidance was $0.70 per share, excluding the EPC inventory purchase accounting adjustment estimated at $0.25 per share. Our actual adjusted EPS of $0.93 per share compares very well to our earlier EPC guidance – EPS guidance of $0.70. Both EPS numbers then exclude the EPC inventory purchase accounting adjustments as shown. The schedule then adjust the actual fourth quarter EPS by adding the $0.23 decrease in the incremental warranty reserve expense and deducting the $0.10 per share restructuring charges neither of which were in our original guidance. The last row reconciles to our GAAP EPS, the actual fourth quarter EPS of $0.80 and the GAAP guidance of $0.45 per share. Next slide provide some color on our fourth quarter results compared to our guidance. First, EPC performed very well in the quarter. We started to realize synergies and EPC had lower SG&A expenses during the fourth quarter. Read the rest of this transcript for free on seekingalpha.com