Shop Now!OXFORD, Conn.--(BUSINESS WIRE)--Sept. 15, 2005--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 first quarter ended July 2, 2005.
First Quarter Highlights
- 17.4% growth in revenue year-over-year to $66.0 million
- 26.1% growth in gross margin to $19.3 million
- 37.1% growth in adjusted operating income to $10.6 million
- Net income of $3.3 million compared to a net loss of $3.8 million in the year ago period
"We are very pleased to report strong performance in our first earnings report since completing our initial public offering in August," stated Dr. Michael J. Hartnett, Chairman, President, and Chief Executive Officer. "Our Company delivered excellent financial results, with strength across all sectors, especially aerospace and defense, propelling us to double digit revenue and earnings growth."
First Quarter Results
Net sales for the first quarter of fiscal 2006 were $66.0 million, an increase of 17.4% from $56.2 million in the first quarter of fiscal 2005. Gross profit for the fiscal first quarter rose 26.1% to $19.3 million compared to $15.3 million for the comparable period last year. Gross margin as a percentage of net sales improved to 29.2% in the first quarter of fiscal 2006, compared to 27.2% for the same period last year.
Operating income excluding non-recurring management fees, stock option compensation expense and non-cash disposal of fixed assets, increased 37.1% to $10.6 million for the first quarter of fiscal 2006 compared to $7.7 million for the comparable period last year. Adjusted operating income, as a percentage of net sales, was 16.0% for the first quarter of fiscal 2006 compared to 13.8% for the same period last year.
For the first quarter of fiscal year 2006, the Company reported net income of $3.3 million, compared to a net loss of $3.8 million in the same period last year.
Segment Results
Our Plain Bearing segment achieved net sales of $26.4 million for the first quarter fiscal 2006, an increase of $4.9 million, compared to $21.5 million for the same period last year. Our Roller Bearing segment achieved net sales of $24.4 million for the first quarter of fiscal 2006, an increase of $2.4 million, compared to $22.0 million for the same period last year. Our Ball Bearing segment achieved net sales of $10.6 million, an increase of $1.5 million, compared to $9.1 million for the same period last year. Our Other segment achieved net sales of $4.5 million for the first quarter fiscal 2006, an increase of $0.9 million, compared to $3.6 million for the same period last year.
Initial Public Offering
In August 2005, RBC Bearings completed its initial public offering of approximately 10.5 million shares, including the exercise by the underwriters of the over-allotment option, at a price of $14.50 per share, raising approximately $102.0 million in primary proceeds. In addition, we amended our credit agreement to reduce the interest rates on our term loan and revolving credit facility by 100 basis points and to increase the size of our term loan by $40.0 million. Proceeds from these two transactions were used to reduce debt and redeem preferred stock. After giving effect to the IPO, we had approximately 16.5 million shares of common stock outstanding and 2.8 million options as of August 15, 2005.
Acquisition of Southwest Products Company
On September 2, 2005, RBC Bearings acquired the assets of Southwest Products Company in Irwindale, California for approximately $2.2 million. The new business unit, to be named RBC Southwest Products, Inc., manufactures a line of spherical bearings, journal bearings and push-pull controls for military weapon systems and military and commercial aerospace applications. The company generated revenues of approximately $5.4 million in its most recent calendar year. We anticipate that the acquisition will be accretive to our earnings in fiscal 2006.
"The purchase of Southwest Products Company further solidifies RBC's position as a premier supplier of specialty and standard bearings for commercial and military airframe and aerospace subsystem manufacturers," said Dr. Hartnett.
Outlook
"2006 is shaping up to be a very good year for RBC Bearings. Trends in our diverse end markets remain promising, customer relationships continue to expand and our people are more energized than ever after the initial public offering," concluded Dr. Hartnett.
Based on current market conditions, the Company expects financial performance in its second fiscal quarter of 2006 to be as follows:
- Net sales in the range of $62.0 - $65.0 million
- Operating income in the range of $10.0 - $10.4 million after adding back $5.2 million of one-time compensation expense, $0.1 million of stock option compensation expense, and $0.1 million of non-recurring management fees
RBC Bearings Incorporated will host a webcast at 10:30 a.m. ET today to discuss the quarterly results. To access the webcast, go to the investor relations portion of the Company's web site, 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 800-599-9795 (international callers dial 617-786-2905) and enter conference call ID # 89308291. An audio replay of the call will be available beginning at 12:30 p.m. ET on Thursday September 15, until 11:59 p.m. ET on Thursday, September 22. The replay can be accessed by dialing 888-286-8010 and entering conference call ID # 92559070.
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 charges. These non-GAAP measures adjust for charges that 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 is 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 1,700 people in 18 facilities located throughout North America and Europe.
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 any projections of earnings; revenue or other financial items, 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; 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 Registration Statement on Form S-1 initially filed on May 11, 2005, as amended. The Company does not intend, and undertakes no obligation, to update or alter any forward-looking statement.
RBC Bearings Incorporated
Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
Three Months Ended
---------------------
July 2, July 3,
2005 2004
---------- ----------
Net sales $66,001 $56,195
Cost of sales 46,725 40,902
---------- ----------
Gross margin 19,276 15,293
Operating expenses:
Selling, general and administrative 8,494 7,614
Other, net 384 1,763
---------- ----------
Total operating expenses 8,878 9,377
Operating income 10,398 5,916
Interest expense, net 5,129 5,079
Loss on early extinguishment of debt - 6,944
Other non-operating expense - 1
---------- ----------
Income (loss) before income taxes 5,269 (6,108)
Provision for (benefit from) income taxes 1,924 (2,286)
---------- ----------
Net income (loss) 3,345 (3,822)
Preferred stock dividends (599) (553)
Participation rights of preferred stock in
undistributed earnings (630) -
---------- ----------
Net income (loss) available to common
stockholders $2,116 $(4,375)
========== ==========
Net income (loss) per common share:
Basic:
Class A common stock $0.34 $(0.71)
Class B common stock $0.34 $(0.71)
Diluted:
Class A common stock $0.22 $(0.71)
Class B common stock $0.00 $(0.71)
Weighted average common shares:
Basic:
Class A common stock 6,202,517 6,188,653
Class B common stock 250 250
Diluted:
Class A common stock 9,694,653 6,188,653
Class B common stock 1,302,005 250
Reconciliation of Reported Operating Income to
Adjusted Operating Income:
Three Months Ended
---------------------
July 2, July 3,
2005 2004
---------- ----------
Reported operating income $10,398 $5,916
Compensation expense, employee stock options 82 81
Management service fees, Whitney LLP 113 113
Disposal of fixed assets - 1,618
---------- ----------
Adjusted operating income $10,593 $7,728
Selected Financial Data:
Three Months Ended
---------------------
July 2, July 3,
2005 2004
---------- ----------
Depreciation and amortization $2,488 $2,458
Cash provided by operating activities $5,197 $1,951
Capital expenditures $2,630 $1,527
Total debt $215,442 $220,079
Backlog $136,400 $112,299
CONTACT: RBC Bearings
Daniel A. Bergeron, 203-267-5028
dbergeron@rbcbearings.com
or
Ashton Partners
Lauren Murphy, 800-281-1163
investors@rbcbearings.com
SOURCE: RBC Bearings