In the table FY2025 Q2 Outlook - Modeling Items, the row
Gross margin (as a percentage of net sales) should read 43.00% -
44.00% (instead of 43.00% - 4.00%).
The updated release reads:
RBC BEARINGS INCORPORATED ANNOUNCES FISCAL FIRST QUARTER 2025
RESULTS
RBC Bearings Incorporated (NYSE: RBC, RBCP), a leading
international manufacturer of highly engineered precision bearings,
components and essential systems for the industrial, defense and
aerospace industries, today reported results for the first quarter
fiscal 2025.
First Quarter Financial
Highlights
- First quarter net sales of $406.3 million increased 5.0% over
last year, Aerospace/Defense up 23.7% and Industrial down
3.5%.
- Gross margin of 45.3% for the first quarter of fiscal 2025
compared to 43.4% last year.
- First quarter net income attributable to common stockholders as
a percentage of net sales of 13.7% vs 11.4% last year.
- Adjusted EBITDA as a percentage of net sales of 33.0% vs 31.1%
last year.
- First quarter free cash flow conversion of 144.0% vs 110.0%
last year.
Three Month Financial
Highlights
($ in millions)
Fiscal 2025
Fiscal 2024
Change
GAAP
Adjusted (1)
GAAP
Adjusted (1)
GAAP
Adjusted (1)
Net sales
$406.3
$387.1
5.0%
Gross margin
$184.0
$167.9
9.6%
Gross margin %
45.3%
43.4%
Operating income
$97.5
$97.5
$85.0
$85.3
14.7%
14.3%
Operating income %
24.0%
24.0%
22.0%
22.0%
Net income
$61.4
$80.2
$50.0
$67.7
22.8%
18.5%
Net income attributable to common
stockholders
$55.7
$74.5
$44.3
$62.0
25.7%
20.2%
Diluted EPS
$1.90
$2.54
$1.52
$2.13
25.0%
19.2%
(1) Results exclude items in
reconciliation below.
“RBC continued to deliver strong operational performance in the
first quarter with 5.0% sales growth, 11.3% adjusted EBITDA growth
and 19.2% adjusted diluted earnings per share growth,” said Dr.
Michael J. Hartnett, Chairman and Chief Executive Officer.
“Customer demand for our capacity in the Aerospace and Defense end
market remains robust, as evidenced by our 23.7% revenue growth,
and our Industrial business continued to execute well and remains
well poised for any acceleration in industrial end markets as we
progress through the remainder of the year. Profit performance in
the quarter was notable and continues to be driven by ongoing
absorption of our aerospace and defense capacity and continued
Dodge synergies, which are tailwinds that we believe will continue
to benefit us through the remainder of the fiscal year.”
First Quarter Results
Net sales for the first quarter of fiscal 2025 were $406.3
million, an increase of 5.0% from $387.1 million in the first
quarter of fiscal 2024. Net sales for the Industrial segment
decreased 3.5%, while net sales for the Aerospace/Defense segment
increased 23.7%. Gross margin for the first quarter of fiscal 2025
was $184.0 million compared to $167.9 million for the same period
last year.
SG&A for the first quarter of fiscal 2025 was $67.6 million,
an increase of $2.9 million from $64.7 million for the same period
last year. As a percentage of net sales, SG&A was 16.6% for the
first quarter of fiscal 2025 compared to 16.7% for the same period
last year.
Other operating expenses for the first quarter of fiscal 2025
totaled $18.9 million compared to $18.2 million for the same period
last year. For the first quarter of fiscal 2025, other operating
expenses included $17.8 million of amortization of intangible
assets and $1.1 million of other items. For the first quarter of
fiscal 2024, other operating expenses included $17.5 million of
amortization of intangible assets and $0.7 million of other
items.
Operating income for the first quarter of fiscal 2025 was $97.5
million compared to $85.0 million for the same period last year. On
an adjusted basis, operating income was $97.5 million for the first
quarter of fiscal 2025 compared to $85.3 million for the same
period last year. Refer to the tables below for details on the
adjustments made to operating income to arrive at adjusted
operating income.
Interest expense, net, was $17.2 million for the first quarter
of fiscal 2025 compared to $20.5 million for the same period last
year.
Income tax expense for the first quarter of fiscal 2025 was
$18.5 million compared to $14.0 million for the same period last
year. The effective income tax rate for the first quarter of fiscal
2025 was 23.1% compared to 21.9% for the same period last year.
Net income for the first quarter of fiscal 2025 was $61.4
million compared to $50.0 million for the same period last year. On
an adjusted basis, net income was $80.2 million for the first
quarter of fiscal 2025 compared to $67.7 million for the same
period last year. Refer to the tables below for details on the
adjustments made to net income to arrive at adjusted net income.
Net income attributable to common stockholders for the first
quarter of fiscal 2025 was $55.7 million compared to $44.3 million
for the same period last year. On an adjusted basis, net income
attributable to common stockholders for the first quarter of fiscal
2025 was $74.5 million compared to $62.0 million for the same
period last year.
Diluted EPS attributable to common stockholders for the first
quarter of fiscal 2025 was $1.90 compared to $1.52 for the same
period last year. On an adjusted basis, diluted EPS attributable to
common stockholders was $2.54 for the first quarter of fiscal 2025
compared to $2.13 for the same period last year.
Backlog as of June 29, 2024, was $825.8 million compared to
$821.5 million as of March 30, 2024 and $765.2 million as of July
1, 2023.
Preferred Stock Conversion in Fiscal
2025
The Company’s Series A mandatory convertible preferred stock is
set to automatically convert to common stock on October 15, 2024,
at which point the Company will no longer be required to pay a 5.0%
dividend ($5.7 million per quarter), which reduces net income
attributable to common stockholders. This will lead to $23.0
million of annual cash savings in future periods. Fiscal 2025 will
include the final three quarterly dividend payments, the first of
which was made in the first quarter.
If the preferred stock conversion were to have taken place
during the first quarter of fiscal 2025, it would have resulted in
an additional 2,029,980 shares of outstanding common stock. If
these 2,029,980 shares were added to the total diluted shares
outstanding in lieu of the preferred stock quarterly dividend of
$5.7 million, diluted EPS for this quarter would have been $1.96
rather than the reported $1.90, and adjusted diluted EPS would have
been $2.56 rather than the reported $2.54.
Outlook for the Second Quarter Fiscal
2025
The Company expects net sales to be approximately $395.0 million
to $405.0 million in the second quarter of fiscal 2025, compared to
$385.6 million last year, a growth rate of 2.4% to 5.0%.
Live Webcast
RBC Bearings Incorporated will host a webcast on Friday, August
2nd, 2024, at 11:00 a.m. ET to discuss the quarterly results. To
access the webcast, go to the investor relations portion of the
Company’s website, www.rbcbearings.com, and click on the webcast
icon. If you do not have access to the Internet and wish to listen
to the call, dial 877-407-4019 (international callers dial +1
201-689-8337) and provide conference ID # 13747958. Investors are
advised to dial into the call at least ten minutes prior to the
call to register. An audio replay of the call will be available
from 2:00 p.m. ET August 2nd, 2024, until 2:00 p.m. ET August 16th,
2024. The replay can be accessed by dialing 877-660-6853
(international callers dial +1 201-612-7415) and providing
conference ID # 13747958.
Non-GAAP Financial
Measures
In addition to disclosing results of operations that are
determined in accordance with U.S. generally accepted accounting
principles (GAAP), this press release also discloses non-GAAP
results of operations that exclude certain items. These non-GAAP
measures adjust for items that management believes are unusual, as
well as other non-cash items including but not limited to
depreciation, amortization, and equity-based incentive
compensation. Management believes that the presentation of these
non-GAAP measures provides useful information to investors
regarding the Company’s results of operations as these non-GAAP
measures allow investors to better evaluate ongoing business
performance. Investors should consider non-GAAP measures in
addition to, not as a substitute for, financial measures prepared
in accordance with GAAP. A reconciliation of the non-GAAP measures
disclosed in this press release with the most comparable GAAP
measures are included in the financial table attached to this press
release.
Free Cash Flow Conversion Free cash flow conversion measures our
ability to convert operating profits into free cash flow and is
calculated as free cash flow (cash provided by operating activities
less capital expenditures) divided by net income.
Adjusted Gross Margin and Adjusted Operating Income Adjusted
gross margin excludes the impact of restructuring costs associated
with the closing of a plant. Adjusted operating income excludes
acquisition expenses (including the impact of acquisition-related
fair value adjustments in connection with purchase), restructuring
and other similar charges, and other non-operational, non-cash or
non-recurring losses. We believe that adjusted operating income is
useful in assessing our financial performance by excluding items
that are not indicative of our core operating performance or that
may obscure trends useful in evaluating our continuing results of
operations.
Adjusted Net Income Attributable to Common Stockholders and
Adjusted Earnings Per Share Attributable to Common Stockholders
Adjusted net income attributable to common stockholders and
adjusted earnings per share attributable to common stockholders
(calculated on a diluted basis) exclude non-cash expenses for
amortization related to acquired intangible assets, stock-based
compensation, amortization of deferred finance fees, acquisition
expenses (including the impact of acquisition-related fair value
adjustments in connection with purchase), restructuring and other
similar charges, gains or losses on divestitures, discontinued
operations, gains or losses on extinguishment of debt, and other
non-operational, non-cash or non-recurring losses, net of their
income tax impact. We believe that adjusted net income and adjusted
earnings per share are useful in assessing our financial
performance by excluding items that are not indicative of our core
operating performance or that may obscure trends useful in
evaluating our continuing results of operations.
Adjusted EBITDA We use the term “Adjusted EBITDA” to describe
net income adjusted for the items summarized in the “Reconciliation
of GAAP to Non-GAAP Financial Measures” table below. Adjusted
EBITDA is intended to show our unleveraged, pre-tax operating
results and therefore reflects our financial performance based on
operational factors, excluding non-operational, non-cash or
non-recurring losses or gains. In view of our debt level, Adjusted
EBITDA aids our investors in understanding our compliance with our
debt covenants. Management and various investors use the ratio of
total debt less cash to Adjusted EBITDA, or “net debt leverage,” as
a measure of our financial strength and ability to incur
incremental indebtedness when making investment decisions and
evaluating us against peers. Lastly, management and various
investors use the ratio of the change in Adjusted EBITDA divided by
the change in net sales (referred to as “incremental margin” in the
case of an increase in net sales or “decremental margin” in the
case of a decrease in net sales) as an additional measure of our
financial performance and some investors utilize it when making
investment decisions and evaluating us against peers.
Adjusted EBITDA is not a presentation made in accordance with
GAAP, and our definition of Adjusted EBITDA may vary from the
definition used by others in our industry. Adjusted EBITDA should
not be considered as an alternative to net income, income from
operations, or any other performance measures derived in accordance
with GAAP. Adjusted EBITDA has important limitations as an
analytical tool, and you should not consider it in isolation, or as
a substitute for analysis of our results as reported under GAAP.
For example, Adjusted EBITDA does not reflect (a) our capital
expenditures, future requirements for capital expenditures or
contractual commitments; (b) changes in, or cash requirements for,
our working capital needs; (c) the significant interest expenses,
or the cash requirements necessary to service interest or principal
payments, on our debt; (d) tax payments that represent a reduction
in cash available to us; (e) any cash requirements for the assets
being depreciated and amortized that may have to be replaced in the
future; or (f) the impact of earnings or charges resulting from
matters that we and the lenders under our credit agreement may not
consider indicative of our ongoing operations. In particular, our
definition of Adjusted EBITDA adds back certain non-cash,
non-operating or non-recurring charges that are deducted in
calculating net income, even though these are expenses that may
recur or vary greatly, are difficult to predict, and can represent
the effect of long-term strategies as opposed to short-term
results. In addition, certain of these expenses can represent the
reduction of cash that could be used for other corporate purposes.
Further, although not included in the calculation of Adjusted
EBITDA below, the measure may at times (i) include estimated cost
savings and operating synergies related to operational changes
ranging from acquisitions to dispositions to restructurings and/or
(ii) exclude one-time transition expenditures that we anticipate we
will need to incur to realize cost savings before such savings have
occurred.
About RBC Bearings
RBC Bearings Incorporated is an international manufacturer and
marketer of highly engineered precision bearings, components and
essential systems. Founded in 1919, the Company is primarily
focused on producing highly technical or regulated bearing products
and components requiring sophisticated design, testing, and
manufacturing capabilities for the diversified industrial,
aerospace and defense markets. The Company is headquartered in
Oxford, Connecticut.
Safe Harbor for Forward Looking
Statements
Certain statements in this press release contain
“forward-looking statements.” All statements other than statements
of historical fact are “forward-looking statements” for purposes of
federal and state securities laws, including the following: the
section of this press release entitled “Outlook”; any projections
of earnings, revenue or other financial items relating to the
Company, any statement of the plans, strategies and objectives of
management for future operations; any statements concerning
proposed future growth rates in the markets we serve; any
statements of belief; any characterization of and the Company’s
ability to control contingent liabilities; anticipated trends in
the Company’s businesses; and any statements of assumptions
underlying any of the foregoing. Forward-looking statements may
include the words “may,” “would,” “estimate,” “intend,” “continue,”
“believe,” “expect,” “anticipate,” and other similar words.
Although the Company believes that the expectations reflected in
any forward-looking statements are reasonable, actual results could
differ materially from those projected or assumed in any of our
forward-looking statements. Our future financial condition and
results of operations, as well as any forward-looking statements,
are subject to change and to inherent risks and uncertainties
beyond the control of the Company. These risks and uncertainties
include, but are not limited to, risks and uncertainties relating
to general economic conditions, geopolitical factors, future levels
of aerospace/defense and industrial market activity, future
financial performance, our use of information technology systems,
our disclosure controls and procedures and internal control over
financial reporting, our debt level, our level of goodwill, market
acceptance of new or enhanced versions of the Company’s products,
the pricing of raw materials, changes in the competitive
environments in which the Company’s businesses operate, increases
in interest rates, the Company’s ability to acquire and integrate
complementary businesses, and risks and uncertainties listed or
disclosed in our reports filed with the Securities and Exchange
Commission, including, without limitation, the risks identified
under the heading “Risk Factors” set forth in the Company’s most
recent Annual Report on Form 10-K filed with the SEC. The Company
does not intend, and undertakes no obligation, to update or alter
any forward-looking statements.
RBC Bearings Incorporated
Consolidated Statements of
Operations
(dollars in millions, except per share
data)
Three Months Ended
(Unaudited)
June 29,
July 1,
2024
2023
Net sales
$
406.3
$
387.1
Cost of sales
222.3
219.2
Gross margin
184.0
167.9
Operating expenses:
Selling, general and administrative
67.6
64.7
Other, net
18.9
18.2
Total operating expenses
86.5
82.9
Operating income
97.5
85.0
Interest expense, net
17.2
20.5
Other non-operating expense
0.4
0.5
Income before income taxes
79.9
64.0
Provision for income taxes
18.5
14.0
Net income
61.4
50.0
Preferred stock dividends
5.7
5.7
Net income attributable to common
stockholders
$
55.7
$
44.3
Net income per common share attributable
to common stockholders:
Basic
$
1.92
$
1.53
Diluted
$
1.90
$
1.52
Weighted average common shares:
Basic
29,054,820
28,846,874
Diluted
29,294,998
29,114,819
Segment Data:
Three Months Ended
June 29,
July 1,
Net External Sales:
2024
2023
Aerospace and defense segment
$
149.1
$
120.5
Industrial segment
257.2
266.6
Total net external sales
$
406.3
$
387.1
Three Months Ended
Reconciliation of Reported Operating
Income to
June 29,
July 1,
Adjusted Operating Income:
2024
2023
Reported operating income
$
97.5
$
85.0
Restructuring and consolidation
-
0.3
Adjusted operating income
$
97.5
$
85.3
Three Months Ended
Reconciliation of Reported Net Income
to Adjusted Net
June 29,
July 1,
Income Attributable to Common
Stockholders:
2024
2023
Reported net income
$
61.4
$
50.0
Restructuring and consolidation
-
0.3
M&A related amortization
16.4
16.3
Stock compensation expense
6.5
5.4
Amortization of deferred finance fees
0.6
0.9
Tax impact of adjustments and other tax
matters
(4.7)
(5.2)
Adjusted net income
$
80.2
$
67.7
Preferred stock dividends
5.7
5.7
Adjusted net income attributable to
common stockholders
$
74.5
$
62.0
Adjusted net income per common share
attributable
to common stockholders:
Basic
$
2.56
$
2.15
Diluted
$
2.54
$
2.13
Weighted average common shares:
Basic
29,054,820
28,846,874
Diluted
29,294,998
29,114,819
Three Months Ended
Reconciliation of Reported Net Income
to
June 29,
July 1,
Adjusted EBITDA:
2024
2023
Reported net income
$
61.4
$
50.0
Interest expense, net
17.2
20.5
Provision for income taxes
18.5
14.0
Stock compensation expense
6.5
5.4
Depreciation and amortization
30.0
29.7
Other non-operating expense
0.4
0.5
Restructuring and consolidation
-
0.3
Adjusted EBITDA
$
134.0
$
120.4
Consolidated Balance Sheets
(dollars in millions, except per share
data)
June 29,
March 30,
2024
2024
Assets
Cash and cash equivalents
$
76.8
$
63.5
Accounts receivable, net of allowance for
doubtful accounts
254.7
255.2
Inventory
635.0
622.8
Prepaid expenses and other current
assets
27.7
24.0
Total current assets
994.2
965.5
Property, plant and equipment, net
356.8
361.0
Operating lease assets, net
50.9
41.4
Goodwill
1,874.2
1,874.9
Intangible assets, net
1,375.9
1,391.9
Other noncurrent assets
44.5
43.9
Total assets
$
4,696.5
$
4,678.6
Liabilities and Stockholders'
Equity
Liabilities
Accounts payable
$
127.5
$
116.2
Accrued expenses and other current
liabilities
190.5
167.3
Current operating lease liabilities
8.5
7.0
Current portion of long-term debt
3.8
3.8
Total current liabilities
330.3
294.3
Long-term debt, less current portion
1,127.6
1,188.1
Non-current operating lease
liabilities
42.9
35.3
Deferred income taxes
280.2
284.2
Other noncurrent liabilities
111.6
124.8
Total liabilities
1,892.6
1,926.7
Stockholders' equity
Preferred stock, $.01 par value
0.0
0.0
Common stock, $.01 par value
0.3
0.3
Additional paid‑in capital
1,630.6
1,625.2
Accumulated other comprehensive
income/(loss)
(0.4)
0.7
Retained earnings
1,272.5
1,216.8
Treasury stock, at cost
(99.1)
(91.1)
Total stockholders' equity
2,803.9
2,751.9
Total liabilities and stockholders'
equity
$
4,696.5
$
4,678.6
Consolidated Statements of Cash
Flows
(dollars in millions)
(Unaudited)
June 29,
July 1,
2024
2023
Cash flows from operating
activities:
Net income
$
61.4
$
50.0
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
30.0
29.7
Deferred income taxes
(4.1)
(2.6)
Amortization of deferred financing
costs
0.6
0.9
Stock-based compensation
6.5
5.4
Noncash operating lease expense
1.7
1.7
Loss on disposition of assets
-
0.2
Consolidation, restructuring, and other
noncash charges
-
0.3
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
0.5
(12.0)
Inventory
(12.1)
(15.6)
Prepaid expenses and other current
assets
(3.8)
(2.1)
Other noncurrent assets
(0.6)
(2.6)
Accounts payable
11.3
(6.8)
Accrued expenses and other current
liabilities
23.9
13.0
Other noncurrent liabilities
(17.9)
2.2
Net cash provided by operating
activities
97.4
61.7
Cash flows from investing
activities:
Capital expenditures
(9.0)
(6.7)
Proceeds from sale of assets
-
0.2
Net cash used in investing activities
(9.0)
(6.5)
Cash flows from financing
activities:
Repayments of term loans
(60.0)
(50.0)
Repayments of notes payable
(1.1)
(1.1)
Principal payments on finance lease
obligations
(1.1)
(1.0)
Preferred stock dividends paid
(5.7)
(5.7)
Exercise of stock options
1.2
1.0
Repurchase of common stock
(8.0)
(6.8)
Net cash used in financing activities
(74.7)
(63.6)
Effect of exchange rate changes on
cash
(0.4)
(0.3)
Cash and cash equivalents:
Increase / (decrease) during the
period
13.3
(8.7)
Cash and cash equivalents, at beginning of
period
63.5
65.4
Cash and cash equivalents, at end of
period
$
76.8
$
56.7
Supplemental disclosures of cash flow
information:
Cash paid for:
Income taxes
$
12.5
$
1.1
Interest
22.0
25.1
FY2025 Q2 Outlook - Modeling
Items:
Net sales
$395.0 - $405.0
Gross margin (as a percentage of net
sales)
43.00% - 44.00%
SG&A (as a percentage of net
sales)
17.25% -17.75%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240802051463/en/
Rob Moffatt Director of Investor Relations
investors@rbcbearings.com
RBC Bearings (NYSE:RBC)
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