Rexnord LLC Reports Third Quarter Results for Fiscal 2008

Call scheduled for Wednesday, February 6, 2008 at 10:00 a.m.
Eastern Time
MILWAUKEE--(Business Wire)--
Rexnord LLC, a leading diversified, multi-platform industrial
company comprised of key platforms in power transmission and water
management products, today reported summary results for the third
quarter ended December 29, 2007. The prior year third quarter results
were impacted by the Canal Street accident, which adversely impacted
sales and operating earnings. The estimated impact is included in a
table below. Throughout this release, we will refer to "core sales
growth" which is defined as growth in year-over-year sales in both
existing and acquired businesses and adjusting the prior year third
quarter for the mid-point of the adverse impact of the Canal Street
accident.

Third Quarter Highlights:

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-- Third quarter sales were $449.1 million, an increase of $166.0
million or 58.6% over the prior year third quarter; third
quarter consolidated core sales growth was 10.9%

-- Power Transmission ("PT") third quarter sales were $334.0
million, an increase of $50.9 million or 18.0% over the
prior year third quarter; PT core sales growth in the third
quarter was 11.1%

-- Water Management ("WM") third quarter sales were $115.1
million; WM core sales growth in the third quarter was 10.2%

-- Third quarter income from operations was $78.6 million, or
17.5% of sales, compared to $18.2 million, or 6.4% of sales in
the prior year third quarter

-- Third quarter Adjusted EBITDA was $92.8 million, or 20.7% of
sales, an increase of 24.6% compared to the prior year third
quarter Pro Forma Adjusted EBITDA(1) of $74.5 million; prior
year third quarter reported Adjusted EBITDA was $51.2 million.

-- PT third quarter Adjusted EBITDA was $72.1 million, or
21.6% of sales, an increase of $16.5 million or 29.7% over
the prior year quarter;

-- WM third quarter Adjusted EBITDA was $22.9 million, or
19.9% of sales

-- Debt to EBITDA (pro forma for the Zurn transaction) was 5.6x
at the end of the third quarter, compared to 6.2x at the end of
March 2007; net debt (debt less cash) declined by $86.0 million
in the third quarter and $127.0 million through the first nine
months of fiscal 2008; net debt leverage as of the end of the
third quarter was 5.1x.
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(1) Pro Forma Adjusted EBITDA is defined in the company's credit
agreement and includes reported prior year third quarter Adjusted
EBITDA of $51.2 million, plus the EBITDA of the acquired Zurn business
of $19.7 million, plus other pro forma adjustment related to Jacuzzi
acquisition of $3.6 million.

Bob Hitt, Rexnord's Chief Executive Officer, said, "We are pleased
with the financial results we've posted in the third quarter and first
nine months of our fiscal 2008. Our solid core growth and expanding
operating margins have allowed us to continue to generate solid cash
flows and we continue to reduce our leverage. Our consolidated core
growth (year-over-year sales in both existing and acquired businesses
and adjusted for the mid-point of the impact of the Canal Street
accident) of 10.9% in the quarter continued to be balanced, as power
transmission sales grew by 11.1% and water management sales grew by
10.2% on a pro-forma basis in the third quarter. Fiscal year to date,
consolidated core growth is 9.5%, with power transmission posting core
growth of 9.3% and water management delivering pro-forma core growth
of 10.1%."

Rexnord third quarter Adjusted EBITDA of $92.8 million, or 20.7%
of sales, grew 24.6 % compared to the prior year third quarter Pro
Forma Adjusted of $74.5 million. Adjusted EBITDA in the third quarter
of fiscal 2008 includes the adverse impact of $0.2 million of
severance costs related to an organizational re-alignment within the
PT segment. On December 5, 2007, we reached a final settlement with
our insurance carrier related to both our business interruption and
property and casualty policies related to the Canal Street accident.
As a result, we recorded the benefit of an additional $2.8 million of
recoveries under business interruption policies associated with the
Canal Street accident for the period from April 1, 2007 through
October 27, 2007, the date that we determined and agreed with our
insurance carrier that we had fully recovered from the accident.

Hitt added, "We've delivered a solid financial performance through
the first nine months of fiscal 2008, both from a growth perspective
as well as operationally. We're also pleased with the progress we've
made strategically over the past year as we have re-positioned the
company towards a diverse, multi-platform industrial company with
leadership positions in both power transmission and water management.
As we look ahead to the fourth quarter, we're anticipating a slower
general economic environment including a continuation of a declining
commercial construction put-in-place environment. However, we are
cautiously optimistic about our ability to outperform our competition
and the market based on the positioning of our businesses. A couple of
reasons for our optimism are: our backlog is solid - up to a record
$479 million, an increase of 13% from March 2007; our leadership
positions within power transmission in the growing end-markets of
mining, energy, aggregates and aerospace; the relatively low levels of
inventory within the industrial distribution channel which sells power
transmission components; our strong new product pipeline in water
management - which is centered around water conservation and green
building; and perhaps most importantly our business system, RBS -
which allows us to continually focus on eliminating waste and
improving productivity throughout our businesses while driving
customer satisfaction. The solid fundamental execution of our strategy
over the past year allowed us to acquire, with cash flow from
operations, GA Industries on January 31, 2008 - which will expand our
water management platform by providing us exposure to the key end
markets of water and wastewater treatment. Finally, I want to
recognize everyone who played a role in the recovery from the Canal
Street accident. The tremendous recovery in less than a year from the
tragic accident on December 6, 2006 is a testament to the resilience
of the organization and demonstrates the commitment of our employees
to satisfy our customers."

The leverage ratio as of December 29, 2007 was 5.6x, which
compares to 6.8x at the time Apollo Management acquired the Company
("the Apollo acquisition") on July 21, 2006 and 6.2x at March 2007.
The last twelve months ("LTM") Pro Forma Adjusted EBITDA is $363.4
million.

Hitt concluded, "As we look forward to the fourth quarter of
fiscal year 2008, we will continue to focus on the needs of our
customers while continuing to reduce our leverage by focusing on
driving growth, expanding margins and generating cash to reduce our
debt."

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Canal Street Accident
Business Interruption
Impact Estimate Summary
----------------------- ----------------
Nine Months
Quarter Ended Ended
December 29, December 29, Memo:
Fiscal 2008 2007 2007 Accident to Date
----------------------- -------------- -------------- ----------------
($4.5 - $6.5) ($43.5 - $54.5)
Sales $0.0 million million million
($2.0 - $2.8) ($18.0 - $24.8)
Operating Income $0.0 million million million

Less: Recoveries to
date under insurance
policies related to
Business Interruption $2.8 million $11.1 million $21.1 million
----------------

Nine Months
Quarter Ended Ended
December 30, December 30,
Fiscal 2007 2006 2006
----------------------- -------------- --------------
($15.0 - ($15.0 -
$20.0) $20.0)
Sales million million
($6.0 - $10.0) ($6.0 - $10.0)
Operating Income million million

Less: Recoveries to
date under insurance
policies related to
Business Interruption $0.0 million $0.0 million

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Third Quarter - 10.9% core sales growth (adjusted to include prior
year WM pro-forma results & adjusting for mid-point of Canal Street
accident); Adjusted EBITDA $92.8 million or 20.7% of sales

Sales in the third quarter of fiscal 2008 were $449.1 million, an
increase of $166.0 million or 58.6% from the prior year third quarter.
PT sales in the third quarter of fiscal 2008 were $334.0 million, an
increase of $50.9 million or 18.0% from the prior year third quarter.
While difficult to determine, the Company estimates that prior year
third quarter sales were adversely impacted by approximately $15.0 to
$20.0 million due to the Canal Street accident. The PT growth was
driven by strength in our power transmission products end markets of
mining, energy, aggregates and aerospace. The balance of the sales
increase was a result of the inclusion of the WM platform, which
accounted for $115.1 million of the year-over-year growth. Third
quarter sales in the WM platform of $115.1 million represent core
growth of 10.2% over the prior year pro forma period (three months
ending December 31, 2006 - prior to the acquisition by Rexnord) and
declined sequentially from the second quarter of fiscal 2008 based on
normal seasonal patterns related to commercial construction activity.
Foreign currency fluctuations also favorably impacted sales by
approximately $13.3 million during the quarter as the Euro and
Canadian dollar strengthened against the U.S. dollar compared to the
prior year.

Adjusted EBITDA in the third quarter was $92.8 million, an
increase of 81.3% or $41.6 million over the third quarter of fiscal
2007. Adjusted EBITDA margins in the third quarter increased 260 basis
points to 20.7% compared to the third quarter of fiscal 2007. PT
Adjusted EBITDA in the third quarter was $72.1 million or 21.6% of
sales, an increase of 29.7%. PT Adjusted EBITDA includes $0.2 million
of severance costs related to an organizational re-alignment. WM
Adjusted EBITDA in the third quarter was $22.9 million, or 19.9% of
sales.

During the third quarter, we recorded $2.8 million of recoveries
under the Company's business interruption insurance policy. This
represents the business interruption impact related to fiscal 2008.
While difficult to determine, the Company estimates that Adjusted
EBITDA was not impacted during the third quarter of fiscal 2008 and
was adversely impacted by approximately $6.0 to $10.0 million in the
prior year third quarter as a result of the Canal Street accident.

Gross profit margins in the third quarter of fiscal 2008 expanded
320 basis points to 32.9% of net sales, to $147.6 million. LIFO
expense unfavorably impacted third quarter gross profit margins by
approximately 10 basis points whereas the prior year quarter's gross
profit margin of 29.7% was adversely impacted by net inventory
purchase accounting adjustments and LIFO income of approximately 90
basis points. Third quarter of fiscal 2008 gross profit margins were
also negatively impacted by $0.1 million of severance costs related to
an organizational re-alignment within the PT segment.

SG&A expense in the third quarter of fiscal 2008 declined 90 basis
points to 16.5% of net sales and includes $0.1 million of severance
costs related to an organizational re-alignment within the PT segment.

Nine months of Fiscal 2008 - 9.5% core sales growth (adjusted to
include prior year WM pro-forma results & adjusting for mid-point of
Canal Street accident); Adjusted EBITDA margins to 20.2% of sales

Sales in the first nine months of fiscal 2008 were $1,351.2
million, an increase of $481.6 million or 55.4% over sales in the
first nine months of fiscal 2007. PT sales in the first nine months of
fiscal 2008 were $969.7 million, an increase of $100.1 million or
11.5% from the first nine months of fiscal 2007. The PT growth was
driven by strength in our power transmission products end markets of
mining, energy, aggregates and aerospace. The balance of the sales
increase was a result of the inclusion of the WM platform, which
accounted for $381.5 million of the year-over-year growth. Foreign
currency fluctuations also favorably impacted sales by approximately
$25.7 million during the first nine months as the Euro and Canadian
dollar strengthened against the U.S. dollar compared to the prior
year. The Canal Street accident reduced production and shipments from
the Canal Street facility, creating a business interruption that we
estimate adversely impacted sales in the first nine months of fiscal
2008 by approximately $4.5 to $6.5 million. The Company estimates that
prior year's first nine months sales were adversely impacted by
approximately $15.0 to $20.0 million due to the Canal Street accident.

Adjusted EBITDA in the first nine months of fiscal 2008 was $273.5
million, an increase of 73.1% or $115.5 million over the first nine
months of fiscal 2007. Adjusted EBITDA margins in the first nine
months of fiscal 2008 increased 200 basis points to 20.2% compared to
the first nine months of fiscal 2007. PT Adjusted EBITDA in the first
nine months of fiscal 2008 was $197.7 million or 20.4% of sales, an
increase of 16.3% over the first nine months of fiscal 2007 and
includes $4.4 million of severance costs related to an organizational
re-alignment. WM Adjusted EBITDA in the first nine months of fiscal
2008 was $83.1 million, or 21.8% of sales.

While difficult to determine, the Company estimates that Adjusted
EBITDA was adversely impacted by approximately $2.0 to $2.8 million in
the first nine months of fiscal 2008 as a result of the Canal Street
accident and resulting business interruption. The Company estimates
that Adjusted EBITDA was adversely impacted by approximately $6.0 to
$10.0 million in the first nine months of the prior year. During the
first nine months of fiscal 2008, we recorded $11.1 million of
recoveries under the Company's business interruption insurance policy.

Gross profit margins in the first nine months of fiscal 2008
expanded 210 basis points to 32.5% of net sales, or to $438.8 million.
During the first nine months of fiscal 2008, net inventory purchase
accounting adjustments and LIFO income unfavorably impacted gross
profit margins by approximately 40 basis points. Gross profit margins
through the first nine months of the prior year of 30.4% were
unfavorably impacted by net inventory purchase accounting adjustments
and LIFO income by 100 basis points. Gross profit margins for the
first nine months of fiscal 2008 were also negatively impacted by 20
basis points due to $2.7 million of severance costs related to an
organizational re-alignment within the PT segment.

SG&A expense in the first nine months of fiscal 2008 declined 100
basis points to 16.8% of net sales and includes $1.7 million of
severance costs related to an organizational re-alignment within the
PT segment.

Leverage declines to 5.6x at December 29, 2007; Net debt declines
by $127.0 million from March 2007

At the end of the third quarter the Company had total debt of
$2,024.6 million, a reduction of $22.3 million from the end of fiscal
year 2007. The Company also had cash on hand of $160.8 million as of
December 29, 2007, an increase of $85.6 million in the third quarter
and $104.7 million from March 31, 2007. The Company's leverage ratio
(Debt to EBITDA as defined in the Company's credit agreement) as of
December 29, 2007 was 5.6x, compared to 6.2x at the end of March 2007
and 6.8x as of the date of the Apollo acquisition on July 21, 2006.
Net debt leverage as of the end of the third quarter was 5.1x.

Canal Street Facility Accident Update

In the third quarter, the Company finalized insurance matters
related to the Canal Street accident. Since the date of the accident,
the Company received cash from its insurance carrier totaling $71.4
million, including $18.6 million in the third quarter of fiscal 2008
and $34.4 million in fiscal 2008. Of the total amount received, $21.1
million has been allocated to business interruption for losses
incurred through October 27, 2007. The Company did not experience, and
does not expect to experience, any material adverse impact to
liquidity, cash or its leverage profile as a result of the accident.

Acquisition of GA Industries, Inc.

On January 31, 2008, Zurn Industries, LLC, a wholly-owned
subsidiary of Rexnord LLC, indirectly acquired GA Industries, Inc. for
a cash purchase price of approximately $76.0 million. With this
acquisition, we further expand our presence in water and wastewater
markets, specifically in municipal, hydropower, and industrial
environments. GA Industries, Inc. is comprised of GA Industries and
Rodney Hunt Company, Inc. GA Industries is a manufacturer of automatic
control valves, check valves and air valves. Rodney Hunt Company, Inc.
is a leader in the design and manufacturer of sluice/slide gates, cone
valves and actuation systems.

Continued Dumping and Subsidy Offset Act (CDSOA)

The Company, as a producer of ball bearing products in the United
States participated in the distribution of monies collected by Customs
and Border Protection ("CBP") from antidumping cases under the CDSOA.
As a result of providing relevant information to CBP regarding
historical manufacturing, personnel and development costs for calendar
2007, the Company received its pro rata share of the total CDSOA
distribution which amounted to $1.4 million in the three months ended
December 29, 2007. Similarly, a recovery of $8.8 million was recorded
during the three months ended December 30, 2006 related to the
submission of calendar 2006 and prior years' data to CBP. These
recoveries are included in other income, net on the consolidated
statement of operations.

In February 2006, U.S. Legislation was enacted that ends CDSOA
distributions to US manufacturers for imports covered by anti-dumping
duty orders entering the U.S. after September 30, 2007. Because monies
will continue to be collected by CBP until September 30, 2007 and for
prior year entries, the Company may receive some additional
distributions beyond 2007; however, because of the pending cases, the
2006 legislation and the administrative operation of the law, the
Company cannot reasonably estimate the amount of CDSOA payments, if
any, that it may receive in future years.

EBITDA and Adjusted EBITDA

Rexnord considers EBITDA and Adjusted EBITDA as indicators of
operating performance.

EBITDA represents earnings before interest, taxes, depreciation
and amortization. EBITDA is presented because it is an important
supplemental measure of performance and it is frequently used by
analysts, investors and other interested parties in the evaluation of
companies in our industry. EBITDA is also presented and compared by
analysts and investors in evaluating the performance of issuers of
"high yield" securities because it is a common measure of the ability
to meet debt service obligations. Other companies in our industry
may calculate EBITDA differently. EBITDA is not a measurement of
financial performance under generally accepted accounting principles
and should not be considered as an alternative to cash flow from
operating activities or as a measure of liquidity or an alternative to
net income as indicators of operating performance or any other
measures of performance derived in accordance with generally accepted
accounting principles. Because EBITDA is calculated before recurring
cash charges, including interest expense and taxes, and is not
adjusted for capital expenditures or other recurring cash requirements
of the business, it should not be considered as a measure of
discretionary cash available to invest in the growth of the business.
See the Consolidated Statements of Cash Flows included in the attached
financial statements.

Adjusted EBITDA represents EBITDA plus the additional adjustments
noted in the table below. Adjusted EBITDA is presented because it
better represents ongoing business performance than EBITDA, since the
adjustments reflect earnings and expenses considered as
non-representative of ongoing business for the reasons specified
below. Adjusted EBITDA is not a measurement of financial performance
under generally accepted accounting principles and should not be
considered as an alternative to cash flow from operating activities or
as a measure of liquidity or an alternative to net income as
indicators of operating performance or any other measures of
performance derived in accordance with generally accepted accounting
principles. See the Consolidated Statements of Cash Flows included in
the attached financial statements.

About Rexnord

Headquartered in Milwaukee, Wisconsin, Rexnord is a leading,
diversified multi-platform industrial company comprised of two key
platforms: Power Transmission and Water Management with approximately
7,400 employees worldwide. Rexnord power transmission products include
gears, couplings, industrial bearings, flattop, aerospace bearings and
seal, industrial chain, and special components. Our water management
products are sold primarily under the Zurn and Wilkins brand names and
our products include specification drainage, water control, PEX and
commercial brass. Additional information about the Company can be
found at www.rexnord.com and www.zurn.com.

Conference Call Details

Rexnord will hold a conference call on February 6, 2008 at 10:00
a.m. Eastern Time to discuss its fiscal year 2008 third quarter
results, provide a general business update and respond to investor
questions. Rexnord CEO Robert Hitt and CFO George Moore will co-host
the call. The conference call can be accessed via telephone as
follows:

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Domestic toll-free #: (888) 271-8596
International toll #: (913) 312-1522
Access Code: 2382747
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If you are unable to participate during the live teleconference, a
replay of the conference call will be available until 1:00 p.m.
Eastern Time, February 14, 2008. To access the replay, please dial
(888) 203-1112 (domestic) or (719) 457-0820 (international) with
access code 2382747.

Information in this release may involve guidance, expectations,
beliefs, plans, intentions or strategies regarding the future. These
forward-looking statements involve risks and uncertainties. All
forward-looking statements included in this release are based upon
information available to Rexnord LLC as of the date of the release,
and Rexnord LLC assumes no obligation to update any such
forward-looking statements. The statements in this release are not
guarantees of future performance and actual results could differ
materially from current expectations. Numerous factors could cause or
contribute to such differences. Please refer to the Company's reports
filed from time to time with the Securities and Exchange Commission
for a further discussion of the factors and risks associated with the
business.

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RBS Global, Inc. and Subsidiaries
Consolidated Statements of Operations
(in millions)

Third Quarter Ended
--------------------------

December 29, December 30,
2007 2006
------------ ------------
(Unaudited) (Unaudited)
Net sales $ 449.1 $ 283.1
Cost of sales 301.5 199.0
------------ ------------
Gross profit 147.6 84.1
Selling, general and administrative
expenses 74.1 49.4
(Gain) loss on Canal Street facility
accident, net (17.4) 7.9
Transaction-related costs - -
Amortization of intangible assets 12.3 8.6
------------ ------------
Income (loss) from operations 78.6 18.2
Non-operating (expense) income:
Interest expense, net (47.7) (35.3)
Other income (expense), net - 7.6
------------ ------------
Income (loss) before income taxes 30.9 (9.5)
Provision (benefit) for income taxes 11.1 (5.0)
------------ ------------
Net income (loss) $ 19.8 $ (4.5)
============ ============

Nine Months and Periods Ended
----------------------------------------
Predecessor
-----------
Period from
Period from April 1,
July 22, 2006
2006 through through
December 29, December 30, July 21,
2007 2006 2006
------------ ------------- -----------
(Unaudited) (Unaudited) (Unaudited)
Net sales $ 1,351.2 $ 535.4 $ 334.2
Cost of sales 912.4 367.3 237.7
------------ ------------- -----------
Gross profit 438.8 168.1 96.5
Selling, general and
administrative expenses 227.5 92.1 63.1
(Gain) loss on Canal Street
facility accident, net (29.2) 7.9 -
Transaction-related costs - - 62.7
Amortization of intangible
assets 37.7 16.0 5.0
------------ ------------- -----------
Income (loss) from
operations 202.8 52.1 (34.3)
Non-operating (expense)
income:
Interest expense, net (145.2) (63.7) (21.0)
Other income (expense),
net (5.5) 7.0 (0.4)
------------ ------------- -----------
Income (loss) before income
taxes 52.1 (4.6) (55.7)
Provision (benefit) for
income taxes 22.9 (0.5) (16.1)
------------ ------------- -----------
Net income (loss) $ 29.2 $ (4.1) $ (39.6)
============ ============= ===========

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RBS Global, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in Millions, except share amounts)

December 29, 2007 March 31, 2007
----------------- --------------
Assets (Unaudited)
Current assets:
Cash $ 160.8 $ 56.1
Receivables, net 259.4 254.4
Inventories, net 375.9 384.3
Other current assets 32.1 26.3
----------------- --------------
Total current assets 828.2 721.1

Property, plant and equipment, net 419.2 437.1
Intangible assets, net 920.1 987.7
Goodwill 1,273.8 1,294.2
Insurance for asbestos claims 136.0 136.0
Pension assets 113.2 114.6
Other assets 82.0 82.5
----------------- --------------
Total assets $ 3,772.5 $ 3,773.2
================= ==============

Liabilities and stockholders'
equity
Current liabilities:
Current portion of long-term debt $ 1.8 $ 2.2
Trade payables 127.5 154.4
Income taxes payable 4.1 3.5
Deferred income taxes 14.7 16.9
Compensation and benefits 63.8 52.9
Current portion of pension
obligations 2.6 9.4
Current portion of postretirement
benefit obligation 5.0 4.9
Interest payable 56.5 30.5
Other current liabilities 91.3 74.8
----------------- --------------
Total current liabilities 367.3 349.5

Long-term debt 2,022.8 2,044.7
Pension obligations 62.0 68.8
Postretirement benefit obligations 50.2 52.3
Deferred income taxes 343.6 381.3
Reserve for asbestos claims 136.0 136.0
Other liabilities 48.4 41.0
----------------- --------------
Total liabilities 3,030.3 3,073.6
Stockholders' equity:
Common stock, $0.01 par value;
3,000 shares were authorized and
1,000 shares were issued and
outstanding at December 29,
2007; 100,000 shares were
authorized and 1,000 shares were
issued and outstanding at March
31, 2007 0.1 0.1
Additional paid in capital 698.9 693.3
Retained earnings 32.1 2.9
Accumulated other comprehensive
income 11.1 3.3
----------------- --------------
Total stockholders' equity 742.2 699.6
----------------- --------------
Total liabilities and stockholders'
equity $ 3,772.5 $ 3,773.2
================= ==============

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RBS Global, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in millions)

Nine Months and Periods Ended
--------------------------------------
Predecessor
-----------
Period from Period from
July 22, April 1,
2006 2006
through through
December 29, December July 21,
2007 30, 2006 2006
------------ ----------- -----------
Operating activities (Unaudited) (Unaudited) (Unaudited)
Net income (loss) $ 29.2 $ (4.1) $ (39.6)
Adjustments to reconcile net
income (loss) to cash
provided by (used for)
operating activities:
Depreciation 39.6 22.3 14.0
Amortization of intangible
assets 37.7 16.0 5.0
Accretion of bond premium (0.7) - -
Amortization of deferred
financing costs 7.8 3.3 1.1
Loss (gain) on
dispositions of property,
plant and equipment 0.2 0.5 (1.3)
Non-cash write-off of
deferred financing fees - - 20.5
Equity in earnings of
unconsolidated affiliates (0.3) - -
Other non-cash credits (0.2) - -
Stock-based compensation
expense 5.6 2.7 -
Changes in operating
assets and liabilities:
Receivables 1.4 0.9 12.4
Inventories 14.1 9.6 (18.1)
Other assets 2.5 7.8 (1.3)
Accounts payable (30.0) (9.8) (17.2)
Accrued transaction
fees - (18.6) 18.6
Accruals and other 55.4 26.3 1.5
------------ ----------- -----------
Cash provided by (used for)
operating activities 162.3 56.9 (4.4)

Investing activities
Expenditures for property,
plant and equipment (37.1) (18.2) (11.7)
Proceeds from dispositions of
property, plant and equipment 0.3 1.1 1.6
Acquisitions, net of cash
acquired - (1,011.6) (5.6)
------------ ----------- -----------
Cash used for investing
activities (36.8) (1,028.7) (15.7)

Financing activities
Proceeds from issuance of
long-term debt - 1,430.7 16.9
Repayments of long-term debt (21.8) (813.7) (8.5)
Payment of financing fees (0.6) (55.2) (0.2)
Payment of tender premium - (23.1) -
Capital contributions - 438.0 -
Proceeds from issuance of
common stock - 1.6 -
------------ ----------- -----------
Cash (used for) provided by
financing activities (22.4) 978.3 8.2
Effect of exchange rate
changes on cash 1.6 0.6 0.2
------------ ----------- -----------
Increase (decrease) in cash 104.7 7.1 (11.7)
Cash at beginning of period 56.1 10.8 22.5
------------ ----------- -----------
Cash at end of period $ 160.8 $ 17.9 $ 10.8
============ =========== ===========

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RBS Global, Inc. and Subsidiaries
Reconciliation of EBITDA and Adjusted EBITDA
Third Quarter
(in millions)
(Unaudited)

Quarter Ended Quarter Ended
December 29, December 30,
2007 2006
-------------- -------------

Net income (loss) $ 19.8 $ (4.5)
Interest expense, net 47.7 35.3
Provision (benefit) for income taxes 11.1 (5.0)
Depreciation and amortization 26.7 21.8
-------------- -------------
EBITDA $ 105.3 $ 47.6
============== =============

Adjustments to EBITDA:
(Gain) loss on Canal Street facility
accident, net $ (17.4) $ 7.9
Business Interruption insurance
recoveries 2.8 -
Stock option expense, net 1.8 1.5
Impact of inventory fair value adjustment - 3.2
LIFO expense (income) 0.3 (0.7)
Required reserve adjustment related to
predecessor - (0.7)
CDSOA recovery (1.4) (8.8)
Other expense, net 1.4 1.2
-------------- -------------
Subtotal of adjustment to EBITDA (12.5) 3.6
-------------- -------------
Adjusted EBITDA $ 92.8 $ 51.2
============== =============

*T

Notes to Reconciliation of EBITDA and Adjusted EBITDA

(1) Adjustments to EBITDA

We define Adjusted EBITDA as net income plus interest, income
taxes, depreciation and amortization, plus adjustments for
restructuring, stock based compensation expense, other expense, LIFO
(income) expense and nonrecurring items. For the quarter ended
December 29, 2007, the $17.4 million gain on Canal Street accident
consists of $18.6 million of recoveries offset by $1.2 million of
incremental expenses and impairments, net. The $18.6 million is
allocated between $2.8 million of recoveries under our business
interruption policy and $15.8 million under our property and casualty
insurance policies. Other expense, net for the quarter ended
December 29, 2007, consists of management fee expense of $0.8 million,
losses on sale of fixed assets of $0.1 million, foreign currency
transaction losses of $0.4 million, earnings in unconsolidated
affiliates of $0.1 million and other miscellaneous expense of $0.2
million. For the quarter ended December 30, 2006, the loss on Canal
Street accident consists of $7.9 million of incremental expenses.
Other expense, net for the quarter ended December 30, 2006, consists
of management fee expense of $0.5 million, losses on the sale of fixed
assets of $0.5 million, foreign currency transaction losses of $0.1
million and other miscellaneous expense of $0.1 million.

-0-
*T

RBS Global, Inc. and Subsidiaries
Reconciliation of EBITDA and Adjusted EBITDA
Nine Months and Periods Ended
(in millions)
(Unaudited)

Nine Months and Periods Ended
----------------------------------------
Predecessor Combined
------------ -------------
Period from
Period from April 1,
Nine Months July 22, 2006 Nine Months
Ended 2006 through through Ended
December 29, December 30, July 21, December 30,
2007 2006 2006 2006
------------- ------------- ------------ -------------

Net income
(loss) $ 29.2 $ (4.1) $ (39.6) $ (43.7)
Interest
expense, net 145.2 63.7 21.0 84.7
Provision
(benefit) for
income taxes 22.9 (0.5) (16.1) (16.6)
Depreciation
and
amortization 77.3 38.3 19.0 57.3
------------- ------------- ------------ -------------
EBITDA $ 274.6 $ 97.4 $ (15.7) $ 81.7
============= ============= ============ =============

Adjustments to
EBITDA:
(Gain) loss on
Canal Street
facility
accident, net $ (29.2) $ 7.9 $ - $ 7.9
Business
Interruption
insurance
recoveries 11.1 - - -
Transaction
costs - - 62.7 62.7
Stock option
expense, net 5.6 2.7 - 2.7
Impact of
inventory fair
value
adjustment 19.0 17.2 - 17.2
LIFO (income)
expense (13.1) (9.9) 1.2 (8.7)
Required
reserve
adjustment
related to
predecessor - (1.2) 2.3 1.1
CDSOA recovery (1.4) (8.8) - (8.8)
Other expense,
net 6.9 1.8 0.4 2.2
------------- ------------- ------------ -------------
Subtotal of
adjustment to
EBITDA (1.1) 9.7 66.6 76.3
------------- ------------- ------------ -------------
Adjusted EBITDA $ 273.5 $ 107.1 $ 50.9 $ 158.0
============= ============= ============ =============

*T

Notes to Reconciliation of EBITDA and Adjusted EBITDA

(1) Adjustments to EBITDA

We define Adjusted EBITDA as net income plus interest, income
taxes, depreciation and amortization, plus adjustments for
restructuring, stock based compensation expense, other expense, LIFO
(income) expense and nonrecurring items. For the nine months ended
December 29, 2007, the $29.2 million gain on Canal Street accident
consists of $34.4 million of recoveries offset by $5.2 million of
incremental expenses and impairments, net. The $34.4 million is
allocated between $11.1 million of recoveries under our business
interruption policy and $23.3 million under our property and casualty
insurance policies. Other expense, net for the nine months ended
December 29, 2007, consists of management fee expense of $2.3 million,
losses on the sale of fixed assets of $0.2 million, foreign currency
transaction losses of $4.7 million and earnings in unconsolidated
affiliates of $0.3 million. For the nine months ended December 30,
2006, transaction-related costs of $62.7 million consists entirely of
seller-related expenses incurred in connection with the sale of the
Company to Apollo. The loss on Canal Street accident consists of $7.9
million of incremental expenses. Other expense, net for the nine
months ended December 30, 2006, consists of management fee expense of
$1.5 million, gains on the sale of fixed assets of $0.8 million,
foreign currency transaction losses of $1.3 million and other
miscellaneous expenses of $0.2 million.

-0-
*T

RBS Global, Inc. and Subsidiaries
Supplemental Unaudited Data
(In Millions)
(unaudited)

Fiscal 2007
-----------------------------------------
Q1 Q2 Q3 Q4 Total
-----------------------------------------
Net sales
Power Transmission $288.4 $298.1 $283.1 $316.6 $1,186.2
Water Management - - - 69.5 69.5
Corporate - - - - -
------- ------- ------- ------- ---------
Total $288.4 $298.1 $283.1 $386.1 $1,255.7
======= ======= ======= ======= =========

Adjusted EBITDA
Power Transmission $56.0 $58.4 $55.6 $71.5 $241.5
Water Management - - - 14.0 14.0
Corporate (4.0) (3.6) (4.4) (4.7) (16.7)
------- ------- ------- ------- ---------
Total $52.0 $54.8 $51.2 $80.8 $238.8
======= ======= ======= ======= =========

Adjusted EBITDA %
Power Transmission 19.4% 19.6% 19.6% 22.6% 20.4%
Water Management n/a n/a n/a 20.1% 20.1%
Total (including
Corporate) 18.0% 18.4% 18.1% 20.9% 19.0%

Fiscal 2008
-----------------------------------------
Q1 Q2 Q3 Q4 Total
-----------------------------------------
Net sales
Power Transmission $309.8 $325.9 $334.0 $969.7
Water Management 138.4 128.0 115.1 381.5
Corporate - - - -
------- ------- ------- ------- ---------
Total $448.2 $453.9 $449.1 $1,351.2
======= ======= ======= ======= =========

Adjusted EBITDA
Power Transmission $59.2 $66.4 $72.1 $197.7
Water Management 30.6 29.6 22.9 83.1
Corporate (2.8) (2.3) (2.2) (7.3)
------- ------- ------- ------- ---------
Total $87.0 $93.7 $92.8 $273.5
======= ======= ======= ======= =========

Adjusted EBITDA %
Power Transmission 19.1% 20.4% 21.6% 20.4%
Water Management 22.1% 23.1% 19.9% 21.8%
Total (including
Corporate) 19.4% 20.6% 20.7% 20.2%
*T

Rexnord LLC
George C. Moore
Executive Vice President and Chief
Financial Officer
414.643.3000

Copyright Business Wire 2008