OXFORD, Conn.--(BUSINESS WIRE)--Oct. 30, 2014--
RBC Bearings Incorporated (Nasdaq: ROLL), a leading international
manufacturer of highly-engineered precision plain, roller and ball
bearings for the industrial, defense and aerospace industries, today
reported results for the second quarter of fiscal year 2015.
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Increased net sales by more than 10.0% year-over-year
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Increased adjusted net income by 11.5% compared to same period last
year
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Announced consolidation plan to improve scale and alignment in our
large bearing operations
Second Quarter Highlights
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($ in millions)
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Fiscal 2015
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Fiscal 2014
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Change
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GAAP
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Adjusted (1)
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GAAP
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Adjusted (1)
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GAAP
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Adjusted (1)
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Net sales
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$112.6
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$112.6
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$102.0
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$102.0
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10.4%
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10.4%
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Gross margin
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$39.8
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$43.5
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$40.6
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$40.6
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-2.1%
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7.1%
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Gross margin %
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35.3%
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38.6%
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39.8%
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39.8%
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Operating income
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$18.3
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$24.7
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$21.5
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$22.8
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-15.0%
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8.2%
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Operating income %
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16.3%
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21.9%
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21.1%
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22.4%
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Net income
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$13.2
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$16.5
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$14.1
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$14.8
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-6.2%
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11.5%
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Diluted EPS
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$0.57
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$0.70
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$0.61
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$0.64
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-6.6%
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9.4%
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(1) Results exclude items in reconciliation below.
Six Month Highlights
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($ in millions)
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Fiscal 2015
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Fiscal 2014
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Change
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GAAP
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Adjusted (1)
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GAAP
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Adjusted (1)
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GAAP
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Adjusted (1)
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Net sales
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$225.5
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$225.5
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$204.6
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$204.6
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10.2%
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10.2%
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Gross margin
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$83.6
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$87.3
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$81.1
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$81.1
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3.1%
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7.7%
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Gross margin %
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37.1%
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38.7%
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39.6%
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39.6%
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Operating income
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$42.5
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$48.9
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$43.8
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$45.7
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-3.0%
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6.9%
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Operating income %
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18.8%
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21.7%
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21.4%
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22.3%
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Net income
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$29.3
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$32.5
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$29.2
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$30.0
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0.1%
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8.6%
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Diluted EPS
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$1.25
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$1.39
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$1.26
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$1.29
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-0.8%
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7.8%
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(1) Results exclude items in reconciliation below.
“We are very pleased with our performance for the quarter as well as the
outlook for the year,” said Dr. Michael J. Hartnett, Chairman and Chief
Executive Officer. “Both our aerospace and industrial businesses are
performing well and the structured changes made this quarter will bring
improved scale and alignment to our large bearing operations.”
Second Quarter Results
Net sales for the second quarter of fiscal 2015 were $112.6 million, an
increase of 10.4% from $102.0 million in the second quarter of fiscal
2014. The increase in net sales was mainly the result of a 16.5%
increase in industrial sales driven by construction, oil and gas, the
general industrial markets, and the inclusion of CMP. Aerospace and
defense increased 6.0% mainly due to commercial aircraft build rates.
Gross margin for the second quarter was $39.8 million compared to $40.6
million for the same period last year. Excluding the impact of
consolidation and restructuring charge, gross margin would have been
$43.5 million compared to $40.6 million for the same period last year.
Adjusted gross margin as a percentage of net sales was 38.6% in the
second quarter of fiscal 2015 compared to 39.8% for the same period last
year.
SG&A for the second quarter of fiscal 2015 was $18.5 million, an
increase of $1.4 million from $17.1 million for the same period last
year. The increase of $1.4 million was primarily attributable to an
increase of $0.5 million in personnel-related expenses, $0.7 million in
incentive stock compensation expenses, and $0.8 million associated with
the addition of two acquisitions. This was offset by a decrease of $0.3
million in professional fees and a $0.3 million decrease in other items.
As a percentage of net sales, SG&A was 16.5% for the second quarter of
fiscal 2015 compared to 16.8% for the same period last year.
Other operating expenses for the second quarter of fiscal 2015 totaled
$2.9 million, an increase of $1.0 million, compared to $1.9 million for
the same period last year. For the second quarter of fiscal 2015 other
operating expenses consisted of $0.5 million of amortization of
intangibles and $2.7 million in costs associated with consolidation and
restructuring, offset by $0.3 million of other income. For the same
period last year, other operating expenses consisted of $0.4 million of
amortization of intangibles, $0.9 million in costs associated with
consolidation and restructuring, $0.4 million associated with
acquisitions and $0.2 million of other items.
Operating income for the second quarter of fiscal 2015 was $18.3 million
compared to operating income of $21.5 million for the same period last
year. Excluding costs associated with the consolidation and
restructuring, operating income would have been $24.7 million for the
second quarter of fiscal 2015 compared to $22.8 million for the same
period last year. Excluding these adjustments, operating income as a
percentage of net sales would have been 21.9% compared to 22.4% for the
same period last year.
Interest expense, net was $0.3 million for both the second quarter of
fiscal 2015 and the same period last year.
Income tax expense for the second quarter of fiscal 2015 was $5.0
million compared to $7.2 million for the same period last year. Our
effective income tax rate for the second quarter of fiscal 2015 was
27.3% compared to 33.6% for the same period last year. The effective
income tax rate for the second quarter of fiscal 2015 includes discrete
tax benefits of $3.1 million associated with the consolidation and
restructuring of the company’s U.K. manufacturing facility. The
effective income tax rate without consolidation and restructuring
charges and the discrete tax benefit would have been 32.9%
Net income for the second quarter of fiscal 2015 was $13.2 million
compared to $14.1 million for the same period last year. Excluding the
after tax impact of costs associated with consolidation and
restructuring of facilities net income would have been $16.5 million for
the second quarter of fiscal 2015, compared to an adjusted net income of
$14.8 million for the same period last year.
Diluted EPS for the second quarter of fiscal 2015 was 57 cents per share
compared to 61 cents per share for the same period last year. Excluding
the after tax impact of costs associated with consolidation and
restructuring of facilities, diluted EPS for the second quarter of
fiscal 2015 would have been 70 cents per share compared to an adjusted
diluted EPS of 64 cents per share for the same period last year, an
increase of 9.4%.
Backlog, as of September 27, 2014, was $218.0 million compared to $222.3
million as of September 28, 2013.
Consolidation and Restructuring
In the second quarter of fiscal 2015, the Company reached a decision to
consolidate the manufacturing capacity of its United Kingdom facility
into other manufacturing facilities. This decision was based on the
Company’s intent to better align its manufacturing abilities and product
development. The consolidation of this facility into the European and
South Carolina operations will strengthen and bring improved
manufacturing scale to those operations. As a result, the Company
recorded a pre-tax charge of $6.4 million which includes $3.7 million of
inventory rationalization costs, $1.3 million in impairment of
intangible assets, $0.4 million loss on fixed asset disposals, $0.3
million in employee related costs, and $0.7 million in other costs. The
pre-tax charge of $6.4 million was offset with an associated discrete
tax benefit of $3.1 million.
Live Webcast
RBC Bearings Incorporated will host a webcast at 11:00 a.m. ET today 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 866-700-5192 (international callers
dial 617-213-8833) and enter conference ID # 90280580. An audio replay
of the call will be available from 3:00 p.m. ET on Thursday, October
30th until 11:59 p.m. ET on Thursday, November 6th. The replay can be
accessed by dialing 888-286-8010 (international callers dial
617-801-6888) and entering conference call ID # 53395148. Investors are
advised to dial into the call at least ten minutes prior to the call to
register.
Non-GAAP Financial Measures
In addition to disclosing results of operations that are determined in
accordance with 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. 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 the press release
with the most comparable GAAP measures are included in the financial
table attached to this press release.
About RBC Bearings
RBC Bearings Incorporated is an international manufacturer and marketer
of highly engineered precision bearings and components. Founded in 1919,
the Company is primarily focused on producing highly technical or
regulated bearing products requiring sophisticated design, testing, and
manufacturing capabilities for the diversified industrial, aerospace,
and defense markets. Headquartered in Oxford, Connecticut, RBC Bearings
currently employs approximately 2,525 people and operates 25
manufacturing facilities in four countries.
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 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,”
“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 general industrial
manufacturing activity, future financial performance, 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, the outcome of pending or future
litigation and governmental proceedings and approvals, estimated legal
costs, increases in interest rates, the Company’s ability to meet its
debt obligations, and risks and uncertainties listed or disclosed in the
Company’s 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
filed on Form 10-K. The Company does not intend, and undertakes no
obligation, to update or alter any forward-looking statements.
Source: RBC Bearings Incorporated
RBC Bearings
Daniel A. Bergeron, 203-267-5028
dbergeron@rbcbearings.com
or
Alpha
IR Group
Michael Cummings, 617-982-0475
investors@rbcbearings.com
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