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 first quarter of fiscal
year 2016.
First Quarter Highlights
Fiscal 2016 Fiscal 2015
Change
($ in millions)
GAAP Adjusted (1) GAAP Adjusted (1) GAAP
Adjusted (1) Net sales $142.3
$142.3
$113.0 $113.0 26.0% 26.0% Gross margin $52.8 $55.1
$43.8 $43.8 20.4% 25.7% Gross margin % 37.1% 38.7% 38.8% 38.8%
Operating income $22.4 $29.5 $24.2 $24.2 -7.6% 21.8% Operating
income % 15.7% 20.7% 21.4% 21.4% Net income $13.4 $18.5 $16.0 $16.0
-16.3% 15.3% Diluted EPS $0.57 $0.78 $0.69 $0.69 -17.4% 13.0%
(1) Results exclude items in reconciliation below.
“We achieved solid operating performance in the first quarter,”
said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer.
“The Sargent integration is going well, and our expanded and
strengthened offering is aiding our performance across the cyclical
businesses we serve. Overall, we are off to a good start to our
fiscal year and we are confident in our ability to further execute
as evidenced by our solid backlog levels and earnings growth.”
First Quarter Results
Net sales for the first quarter of fiscal 2016 were $142.3
million compared to $113.0 million in the first quarter of fiscal
2015. Industrial sales increased 2.9% and aerospace sales increased
44.7%. Overall net sales for the quarter were negatively impacted
by $1.0 million due to foreign exchange on a year over year
comparison.
Gross margin for the first quarter of fiscal 2016 was $52.8
million compared to $43.8 million for the same period last year.
Gross margin as a percentage of net sales was 37.1% in the first
quarter of fiscal 2016 compared to 38.8% for the same period last
year. Excluding the impact of the inventory purchase accounting,
gross margin would have been $55.1 million for the first quarter of
fiscal 2016 compared to $43.8 million for the same period last
year. Adjusted gross margin as a percentage of net sales was 38.7%
compared to 38.8% for the same period last year.
SG&A for the first quarter of fiscal 2016 was $23.7 million
compared to $19.0 million for the same period last year. As a
percentage of net sales, SG&A was 16.7% for the first quarter
of fiscal 2016 compared to 16.8% for the same period last year.
Other operating expenses for the first quarter of fiscal 2016
totaled $6.7 million compared to $0.6 million for the same period
last year. For the first quarter of fiscal 2016 other operating
expenses were comprised mainly of $1.8 million of amortization of
intangibles, $4.0 million of acquisition related costs, $0.8
million of integration and restructuring costs and $0.1 million of
other items.
Operating income for the first quarter of fiscal 2016 was $22.4
million compared to operating income of $24.2 million for the same
period last year. Excluding costs associated with acquisition
activity, operating income would have been $29.5 million for the
first quarter of fiscal 2016 compared to $24.2 million for the same
period last year. Excluding these adjustments, operating income as
a percentage of net sales would have been 20.7% compared to 21.4%
for the same period last year.
Interest expense, net was $1.7 million for the first quarter of
fiscal 2016 compared to $0.2 million for the same period last year.
For the first quarter of fiscal 2016 interest expense, net
consisted of interest expense of $1.4 million and deferred debt
fees of $0.3 million.
Other non-operating expense for the first quarter of fiscal 2016
was $0.7 million. This was mainly comprised of $0.2 million
associated with early extinguishment of debt, $0.3 million of
foreign exchange translation loss and $0.2 million of other
items.
Income tax expense for the first quarter of fiscal 2016 was $6.6
million compared to $8.2 million for the same period last year. Our
effective income tax rate for the first quarter of fiscal 2016 was
33.1% compared to 34.0% for the same period last year.
Net income for the first quarter of fiscal 2016 was $13.4
million compared to $16.0 million for the same period last year. On
an adjusted basis, net income for the first quarter of fiscal 2016
would have been $18.5 million compared to $16.0 million for the
same period last year.
Diluted EPS for the first quarter of fiscal 2016 was 57 cents
per share compared to 69 cents per share for the same period last
year. On an adjusted basis diluted EPS for the first quarter of
fiscal 2016 would have been 78 cents per share compared to diluted
EPS of 69 cents per share for the same period last year.
Acquisition
On April 24, 2015, the Company completed the acquisition of
Sargent Aerospace & Defense from Dover Corporation for $500.0
million financed through a combination of cash on hand and senior
debt. With headquarters in Tucson, Arizona, Sargent is a leader in
precision-engineered products and solutions for aircraft airframes
and engines, rotorcraft, submarines and land vehicles. Sargent
manufactures, sells and services hydraulic valves and actuators,
specialty bearings, specialty fasteners, seal rings & alignment
joints and engineered components. The acquisition is included in
the Plain Bearings Segment and Engineered Products Segment.
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
866-510-0707 (international callers dial 617-597-5376) and enter
conference ID # 69969422. An audio replay of the call will be
available from 3:00 p.m. ET August 6, 2015 until 11:59 p.m. ET
August 13, 2015. The replay can be accessed by dialing 888-286-8010
(international callers dial 617-801-6888) and entering conference
call ID # 41736530. 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. 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, 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.
RBC Bearings Incorporated Consolidated Statements of
Operations (dollars in thousands, except share and per share
data) (Unaudited) Three
Months Ended June 27, June 28, 2015
2014 Net sales $ 142,308 $
112,984 Cost of sales 89,544 69,163
Gross margin 52,764 43,821 Operating expenses: Selling,
general and administrative 23,725 18,996 Other, net 6,678
614 Total operating expenses 30,403 19,610
Operating income 22,361 24,211 Interest expense, net
1,711 224 Other non-operating (income) expense 606
(267 ) Income before income taxes 20,044 24,254 Provision
for income taxes 6,640 8,234 Net income
$ 13,404 $ 16,020 Net income per common share:
Basic $ 0.58 $ 0.70 Diluted $ 0.57 $ 0.69 Weighted average
common shares: Basic 23,162,560 23,005,437 Diluted 23,536,364
23,364,455 Dividends per share: $ - $ 2.00
Three Months Ended Reconciliation of Reported
Gross Margin to June 27, June 28, Adjusted
Gross Margin: 2015 2014
Reported gross margin $ 52,764
$ 43,821 Inventory purchase accounting adjustment 2,331
- Adjusted gross margin $ 55,095 $
43,821
Three Months
Ended Reconciliation of Reported Operating Income to
June 27, June 28, Adjusted Operating Income:
2015 2014 Reported
operating income $ 22,361
$ 24,211 Inventory purchase accounting adjustment 2,331 -
Integration and restructuring 790 - Acquisition costs 3,998
- Adjusted operating income $ 29,480 $
24,211
Reconciliation
of Reported Net Income and Net Income Three Months Ended
Per Common Share to Adjusted Net Income and June 27,
June 28, Adjusted Net Income Per Common Share:
2015 2014 Reported net
income $ 13,404
$ 16,020 Inventory purchase accounting adjustment (1) 1,559 -
Integration and restructuring (1) 528 - Acquisition costs (1) 2,674
- Loss on extinguishment of debt (1) 127 - Foreign exchange
translation loss (1) 278 - Discrete tax benefit (101 )
- Adjusted net income $ 18,469 $ 16,020
(1) After tax impact. Adjusted net income per common share:
Basic $ 0.80 $ 0.70 Diluted $ 0.78 $ 0.69 Weighted average
common shares: Basic 23,162,560 23,005,437 Diluted 23,536,364
23,364,455 Dividends per share: $ - $ 2.00
Three Months Ended June 27, June 28,
Segment Data, Net External Sales: 2015
2014 Plain bearings segment $ 65,677 $
59,873 Roller bearings segment 30,580 31,765 Ball bearings segment
12,819 13,545 Engineered products segment 33,232
7,801 $ 142,308 $ 112,984
Three Months Ended June 27, June
28, Selected Financial Data: 2015
2014 Depreciation and amortization $
5,663 $ 4,058 Incentive stock compensation expense $ 2,132 $
1,767 Cash provided by operating activities $ 22,189 $
26,921 Capital expenditures $ 5,270 $ 3,488 Total
debt $ 427,446 $ 10,258 Cash $ 61,562 $ 104,537 Total
debt minus cash $ 365,884 $ (94,279 ) Cash dividends paid to
shareholders $ - $ 46,014 Repurchase of common stock $ 2,182
$ 948 Backlog $ 340,804 $ 219,776
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version on businesswire.com: http://www.businesswire.com/news/home/20150806005075/en/
RBC BearingsDaniel A. Bergeron,
203-267-5028dbergeron@rbcbearings.comorAlpha IR GroupMichael
Cummings, 617-982-0475investors@rbcbearings.com
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