Regal Rexnord Corporation (RRX) Earnings Call Transcript & Summary

With Rexnord's PMC business and after we rebranded the company as Regal Rexnord, and we're very pleased to be hosting this from Milwaukee, Wisconsin today. It's the headquarters of the PMC -- sorry, the Motion Control Solutions business. I'm Rakesh Sachdev. I'm the Chairman of the Board of Directors, and as Chairman, I'm pleased to now call this meeting to order. And with the meeting now in session, I would like to introduce our Chief Executive Officer, Louis Pinkham. Louis?

Thank you, Rakesh. This is a momentous meeting. As Rakesh noted, it is the first annual meeting for Regal Rexnord Corporation, and we are holding it at the newly formed Motion Control Solutions segment Headquarter in Milwaukee, Wisconsin. Again, welcome to everyone in attendance. I would like to introduce some of our attendees. I will ask each of those introduced to please stand. First, I am pleased to introduce you to Regal Rexnord's Board of Directors. Please join me in welcoming our retiring Director, Dean Foate, who has been with the Board for 17 years and has provided sound counsel and support over that period. Thank you, Dean. Jan Bertsch, 2 years with the Board. Steve Burt, 12 years with the Board. Anesa Chaibi, 7 years with the Board. Ted Crandall, 7 months on the Regal Rexnord Board and 6 years on the Rexnord Board. Chris Doerr, 19 years on the Board. Mike Hilton, 2 years on the Board. Rakesh Sachdev, 15 years on the Board. Curt Stoelting, 16 years on the Board. And Robin Walker-Lee, 7 months on the Regal Rexnord Board and 6 years on the Rexnord Board. Welcome, and thank you. Also attending in-person are our Vice President and Chief Financial Officer, Rob Rehard; our Vice President and Chief Human Resources Officer, Cheryl Lewis; our Vice President, General Counsel and Secretary, Tom Valentyn; our Vice President and Chief Information Officer, John Avampato; our Vice President and Business Development and Strategy Leader, Justin Baier; the segment President of our Motion Control Solutions segment, Kevin Zaba; and the Motion Control Solutions Integration President, Jerry Morton. Attending via webcast are the following Regal Rexnord officers: Commercial Systems and Climate Solutions segment Presidents, Scott Brown and John Kunze; and 2 additional members of Regal Rexnord's Executive Leadership team, Gennaro Colacino, our Vice President of the Regal Rexnord Business System; and Jason Longley, Vice President of FP&A. Our Vice President Investor Relations, Rob Barry, is also online, making sure our webcast reaches all interested parties. Finally, I would like to introduce you to Sean Conroy, who is here representing Regal Rexnord's external auditor, Deloitte & Touche; and Jessie Lochmann Allen of Foley & Lardner, who is Regal Rexnord's external SEC counsel. Thank you to the Board, our officers and key Executives and to the others I just mentioned and to all Regal Rexnord associates for your service to and support of Regal Rexnord. To all shareholders, proper notice of this meeting was provided on March 17, 2022. Tom Valentyn will now conduct the official portion of the meeting. Tom?

Good morning, everyone. As Louis said, my name is Tom Valentyn. I'm the company's General Counsel and Secretary, and I welcome you to the official portion of the Regal Rexnord 2022 Annual Meeting of Shareholders. On released, Sarah Apple, who was appointed as the Inspector of Elections of this meeting. And also please note that the rules of order for the meeting are available at the registration table located in the reception area. That regard, I offer a point of order as a courtesy to our shareholders who are unable to access the meeting. We are providing live webcast and audio access. Please note that shareholders are not able to vote or revoke a proxy through the webcast or audio access nor participate actively. Shareholders are strongly encouraged to vote as instructed in the notice of the annual meeting. On March 17, 2022, we mailed notice of Internet availability of our proxy statement, 2021 Annual Report and form of proxy cards, the holders of our common stock as of March 4, 2022, which was the record date of this meeting. Copies of these documents are also available for review by shareholders at the registration table. Miss Apple provided a tabulation of the number of shares represented in person or by proxy at this meeting. Based on that tabulation, as you can see from the slide, I confirm that a quorum of shares entitled to vote is present. Legal notice of the meeting has been given, and there is a quorum of our common stock present. This meeting is, therefore, lawfully convened and ready to transact business. In accordance with the notice, this annual meeting is being held for the following purposes: to elect Jan Bertsch, Stephen Burt, Anesa Chaibi, Ted Crandall, Chris Doerr, Mike Hilton, Louis Pinkham, Rakesh Sachdev, Curt Stoelting and Robin Walker-Lee as Directors of the company for terms expiring at the 2023 Annual Meeting of Shareholders; also to consider a shareholder advisory vote on the compensation of the company's named executive officers as disclosed in the company's 2022 proxy statement; and third, to ratify the selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for the year ending December 31, 2022. Is there a motion to act on the proposal set forth in the meeting notice?

[indiscernible]

Is there a second?

I second the motion.

Thank you. If you already submitted a proxy or transmitted your voting instructions by phone or Internet, your shares will be voted as you indicated. If you've not voted and wish to do so in person or if you wish to change your vote or revoke your proxy in person, then please proceed to the registration table and complete a shareholder ballot, sign it and hand it to the Inspector of Elections. Is there any shareholder here who wishes to vote or the changes of the vote? [Voting]

Seeing none, the voting on these proposals is now closed. With the tabulations provided this morning by the Inspector of Elections, I'm able to confirm that a large majority of shareholders, an overwhelming percentage of the shares represented at this meeting in person or by proxy, have voted in favor of all 3 proposals. Specifically, each of the Directors nominated for election have been elected as Directors of the company for terms expiring at the 2023 Annual Meeting of shareholders. The shareholders approved by advisory vote, the compensation of the company's named executive officers as disclosed in the notes proxy statement, and the selection of Deloitte & Touche as the company's independent public accounting firm at the year ending December 31, 2022, has been ratified. Since there's no further business to be conducted, let me now close the formal portion of this meeting by entertaining a motion to adjourn.

I move to adjourn the meeting.

Is there a second?

I second the motion.

All in favor, please signify by saying, aye. [Voting]

Any opposed? [Voting]

The motion is carried, and the formal portion of the meeting...

Is now adjourned.

The meeting is adjourned. I now ask please welcome Louis back to the podium.

As we mentioned at the start of this meeting, 2021 has been a year of significant positive transformation for Regal Rexnord. Not only did we close the merger of our legacy Power Transmission Solutions business with the Rexnord PMC business to form our new Motion Control Solutions segment, but we also completed our acquisition of the Arrowhead Systems business as a foundational element of our new automation solutions business unit. Standing here today, it truly feels like we are one Regal Rexnord. We are confident that our strong cultural fit will not only enable us to realize the expected synergies from these transactions, both cost and revenues, but will also position us to continue delivering strong returns for our shareholders. Consistent with our commitment to driving increased shareholder value, we were pleased to announce yesterday that our Board of Directors declared a dividend of $0.35 per share, which represents an increase of 6% from last quarter. You can expect Regal Rexnord to continue to live by our core values and drive a business focused on technology differentiation, improving sustainability through our products and operating with a world-class business system led by top talent. I am truly excited about our future. On behalf of Regal Rexnord team worldwide, I want to thank all of our stakeholders, including our associates, our customers and our shareholders for their commitment to and confidence in Regal Rexnord. Thank you all for attending or listening to this meeting today. I look forward to providing a review of our first quarter results later this week during our scheduled earnings call. Please stay safe and healthy, and thank you. Have a good day.