Press Releases

OXFORD, Conn.--(BUSINESS WIRE)--Nov. 3, 2017-- RBC Bearings Incorporated (Nasdaq: ROLL), a leading international manufacturer of highly-engineered precision bearings and components for the industrial, defense and aerospace industries, today reported results for the second quarter of fiscal year 2018.

Second Quarter Highlights

Six Month Highlights

“Our solid second quarter operating performance was driven by strong industrial sales growth, combined with continued gross margin improvements across the organization,” said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer. “We are able to maintain our improved margin profile as a result of our cost initiatives, manufacturing process improvements, and consolidation programs. Moving forward, our backlog remains strong and we are confident in our ability to maintain the strong momentum throughout the second half of the year.”

Second Quarter Results
Net sales for the second quarter of fiscal 2018 were $164.3 million, an increase of 6.7% from $153.9 million in the second quarter of fiscal 2017. Net sales for the aerospace markets decreased 1.2% and the industrial markets increased by 22.9%. Gross margin for the second quarter of fiscal 2018 was $61.8 million compared to $56.7 million for the same period last year. Gross margin as a percentage of net sales was 37.6% in the second quarter of fiscal 2018 compared to 36.9% for the same period last year.

SG&A for the second quarter of fiscal 2018 was $27.6 million, an increase of $2.4 million from $25.2 million for the same period last year. As a percentage of net sales, SG&A was 16.8% for the second quarter of fiscal 2018 compared to 16.4% for the same period last year.

Other operating expenses for the second quarter of fiscal 2018 totaled $8.9 million compared to $2.0 million for the same period last year. For the second quarter of fiscal 2018, other operating expenses were comprised mainly of $6.5 million related to restructuring of our Canadian operation and $2.4 million of amortization of intangible assets. Other operating expenses last year consisted primarily of $2.4 million in amortization of intangibles offset by $0.4 million of other income.

Operating income for the second quarter of fiscal 2018 was $25.3 million compared to operating income of $29.6 million for the same period last year. Excluding costs associated with restructuring of our Canadian operation, operating income would have been $31.8 million for the second quarter of fiscal 2018 compared to an adjusted $29.8 million for the same period last year. Excluding these adjustments, operating income as a percentage of net sales would have been 19.3% compared to 19.3% for the same period last year.

Interest expense, net was $1.9 million for the second quarter of fiscal 2018 compared to $2.3 million for the same period last year.

Income tax expense for the second quarter of fiscal 2018 was $8.5 million compared to $8.9 million for the same period last year. Our effective income tax rate for the second quarter of fiscal 2018 was 36.4% compared to 32.9% for the same period last year. The effective income tax rate was impacted by discrete tax benefit of $0.9 million associated with the restructuring of our Canadian operation and other state discrete tax benefits of $0.1 million.

Net income for the second quarter of fiscal 2018 was $14.8 million compared to $18.2 million for the same period last year. On an adjusted basis, net income would have been $20.3 million for the second quarter of fiscal 2018, compared to an adjusted net income of $18.4 million for the same period last year.

Diluted EPS for the second quarter of fiscal 2018 was 61 cents per share compared to 77 cents per share for the same period last year. On an adjusted basis, diluted EPS for the second quarter of fiscal 2018 would have been 83 cents per share compared to an adjusted diluted EPS of 78 cents per share for the same period last year, an increase of 6.4%.

Backlog, as of September 30, 2017, was $390.2 million compared to $341.8 million as of October 1, 2016.

Restructuring of Canadian Operation
In the second quarter of fiscal 2018, the Company reached a decision to restructure its manufacturing operation in Montreal, Canada. After completing its obligations, the Company expects to close its Montreal location and consolidate certain residual assets into other locations by the end of this fiscal year. As a result, the Company recorded an after-tax charge of $5.6 million associated with the restructuring in the second quarter of fiscal 2018 attributable to the Engineered Products segment. The $5.6 million charge includes $1.3 million impairment of fixed assets and $5.2 million impairment of intangible assets offset by $0.9 million tax benefit. The total expected impact of this restructuring will be between $7.0 million and $7.5 million in after-tax charges. The Company expects a positive cash flow result of approximately $4.4 million from this action.

Outlook for the Third Quarter Fiscal 2018
The Company expects net sales to be approximately $162.0 million to $163.0 million in the third quarter fiscal 2018. This would result in a growth rate of approximately 10.5% to 11.1% on a year over year basis.

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 844-419-1755 (international callers dial 216-562-0468) and provide conference ID # 9098489. An audio replay of the call will be available from 2:00 p.m. ETNovember 3rd, 2017 until 1:00 p.m. ETNovember 10th, 2017. The replay can be accessed by dialing 855-859-2056 (international callers dial 404-537-3406) and providing conference call ID # 9098489. 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 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. 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 U.S. GAAP. A reconciliation of the non-GAAP measures disclosed in the press release with the most comparable U.S. 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 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 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, tax legislation and changes, the Company’s ability to meet its debt obligations, the Company’s ability to acquire and integrate complementary businesses, 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.

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Source: RBC Bearings Incorporated

RBC Bearings
Daniel A. Bergeron, 203-267-5028
dbergeron@rbcbearings.com
or
Alpha IR Group
Michael Cummings, 617-461-1101
investors@rbcbearings.com