Regal Rexnord — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the quarter ended September 30, 2026, were $1,588 million, a 6% increase versus the prior year; year-to-date sales were $4,625.5 million, up 4.9% versus the prior year.
• GAAP net loss attributable to Regal Rexnord Corporation was $12.5 million for the quarter, compared to net income of $79.6 million in the prior year; year-to-date GAAP net income was $168.4 million versus $215.9 million in the prior year.
• Adjusted EBITDA was $351.3 million for the quarter, up 4% versus the prior year ($339.4 million); year-to-date Adjusted EBITDA was $1,022.4 million versus $978.5 million in the prior year.
• Adjusted EBITDA excluding IEEPA tariff refunds was $337 million for the quarter.
• GAAP net loss included an $119.3 million non-cash goodwill impairment charge related to the autonomous mobile solutions ("AMS") business in the AMC segment.
• Net debt to Adjusted EBITDA (including synergies) ended the quarter at 2.9x.
• Free cash flow was $193.7 million for the quarter and $345.4 million year-to-date.
• Cash and cash equivalents were $449.6 million as of September 30, 2026.
• Total debt was $4,452.2 million, consisting of $24.7 million in current maturities and $4,427.5 million in long-term debt.

Guidance and Future Outlook:

• 2026 GAAP Diluted EPS guidance was lowered and narrowed to a range of $3.76 to $4.06.
• 2026 Adjusted Diluted EPS guidance was raised and narrowed to a range of $10.60 to $10.90, with a midpoint of $10.75.
• The company is conducting a comprehensive portfolio review to direct capital to the most attractive opportunities.

Business Segments and Product Lines:

• Automation & Motion Control (AMC): Net sales were $500.6 million, up 24.5% (25.2% organic). Growth was driven by data centers, including $25 million in E-Pod sales, and discrete automation. Adjusted EBITDA margin was 19.2%.
• Industrial Powertrain Solutions (IPS): Net sales were $649.5 million, down 1.9% (1.8% organic), driven by weakness in metals and mining, partially offset by strength in discrete automation and energy markets. Adjusted EBITDA margin was 26.0%.
• Power Efficiency Solutions (PES): Net sales were $437.9 million, up 1.2% (0.4% organic). Growth in commercial HVAC was partially offset by weakness in residential HVAC and pool markets. Adjusted EBITDA margin was 19.7%.
• Orders were up 6% daily versus prior year; orders excluding data centers grew 13%.
• Commercial HVAC orders grew 47%, aided by new air moving solutions.
• Discrete automation orders grew 26%.

Market and Competitive Landscape:

• Data center sales increased 307% for the quarter, or 169% excluding E-Pods.
• The company identified secular demand tailwinds in end markets including discrete automation, food & beverage, aerospace & defense, medical, data center, energy, and general industrial.

Risks and Challenges:

• The company faces risks related to the integration of the Altra Transaction, including the ability to achieve expected synergies and operating efficiencies.
• Substantial indebtedness resulting from the Altra Transaction may impact financial flexibility.
• Risks include fluctuations in commodity prices, raw material costs, and foreign currency exchange rates.
• Potential impacts from trade policy changes, including tariffs and import/export restrictions, are noted.
• The company disclosed a goodwill impairment charge related to the AMS business, indicating challenges in that specific segment.

Management Commentary and Tone:

• CEO Aamir Paul stated that third-quarter execution showed steady progress and that adjusted EBITDA excluding IEEPA refunds was slightly ahead of expectations.
• Paul noted healthy order demand across the portfolio and expressed confidence in the company's ability to deliver on potential.
• Management announced the exploration of the sale of the autonomous mobile solutions business in the AMC segment as part of a strategic portfolio review.
• The CEO emphasized a focus on improving operational performance, sharpening the growth agenda, and building a stronger growth mindset.

Other Key Points:

• The company is exploring the sale of its autonomous mobile solutions business within the AMC segment.
• A $119.3 million goodwill impairment charge was recorded in the quarter, impacting GAAP results but excluded from Adjusted EBITDA.
• IEEPA tariff refunds provided a net benefit of $14.7 million to Adjusted EBITDA for the quarter and $46.6 million for the nine months ended September 30, 2026.
• Cash dividends declared per share were $0.35 for the quarter.
• The company held a conference call on November 3, 2026, with CEO Aamir Paul and EVP & CFO Rob Rehard.