Headquartered in Beloit, Wisconsin,
) recently issued a public offering of 2,750,000 shares of its
common stock. The electrical and mechanical motion control
products manufacturer also intends to provide the underwriters an
option to buy up to an added 412,500 shares of common stock in
order to cover over-allotments.
Underwriters to this offering are Credit Suisse Securities
(USA) LLC, a subsidiary of
) and Robert W. Baird & Co. Incorporated. The proceeds from
the offerings are expected to aid the company's future
acquisitions along with other general corporate and working
The latest capital raising initiatives are likely to help the
company minimize its total debt burden to a considerable extent.
Further, the company will be able to raise its capital ratios
with this capital spending which in turn will facilitate the
company's future growth prospects and acquisition opportunities.
The strategic efforts are also aimed at increasing the liquidity
of the company.
However, even though liquidity will improve in the short-term
for the company, an increase in the number of outstanding shares
may prove to be an extra burden for Regal-Beloit in the long run,
considering its steady and regular dividend payout strategy.
Earlier, the company had reported adjusted diluted earnings
per share of $1.32 in the third quarter of 2012 compared to $1.31
per share in the year-ago quarter and $1.50 in the second quarter
of 2012. The results failed to meet the Zacks Consensus Estimate
of $1.37 per share.
Exiting the third quarter, Regal-Beloit's cash and cash
equivalents were $185.8 million versus $190.9 million in the
previous quarter. Long-term debt at the end of 3Q12 was $781.7
million versus $899.8 million at the end of the previous
In a different story, the company recently announced to pay
its third-quarter dividend of $0.19 per share. The dividend will
be paid on January 18, 2013, to shareholders of record as of
December 28, 2012.
Regal-Beloit is operating in a highly competitive industry.
Some of the competitors in electric motor, power generation and
mechanical motion control markets are
Emerson Electric Co.
) who enjoy greater financial and other resources than the
The current Zacks Consensus Estimates of Regal-Beloit for the
fourth quarter of 2012 and for 2012 are 73 cents and $4.71,
representing year-over-year growth of (21.0%) and 0.1%,
respectively. The company currently retains a Zacks #3 Rank,
which translates into a short-term 'Hold' rating. However, we are
maintaining a long-term 'Neutral' recommendation on the
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