Milwaukee, WI - Rexnord Corporation released results for the first quarter of fiscal 2014.
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%)."
First Quarter Fiscal 2014 Segment Highlights
Process & Motion Control
Process & Motion Control ("PMC") net sales were $315 million in the first quarter of fiscal 2014 and $314 million in the first quarter of fiscal 2013. Core net sales were flat year-over-year as sales growth in our food and beverage and non-US mining end-markets was offset by soft global demand in the majority of our remaining end-markets.
PMC Adjusted EBITDA in the first quarter was $71 million and Adjusted EBITDA as a percentage of net sales was 22.5% compared to 23.6% in the prior year first quarter. The current quarter margin reflects investments we have made to drive share gains in strategic geographies.
Water Management
Water Management net sales increased 8% from the prior year to $194 million in the first quarter of fiscal 2014. Core net sales increased 8% year-over-year as a result of market share gains in our Water Management end-markets and increased alternative market sales in our non-residential construction end-markets.
Water Management Adjusted EBITDA in the first quarter was $30 million and Adjusted EBITDA as a percentage of net sales was 15.3%, which is consistent with our fourth quarter 2013 margin on slightly lower seasonal sales.
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