UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of report: August 6, 2015 (Date of earliest event reported:  August 6, 2015)

 

RBC BEARINGS INCORPORATED

(Exact name of registrant as specified in its charter)

 

Delaware 333-124824 95-4372080

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

One Tribology Center

Oxford, CT 06478

(Address of principal executive offices) (Zip Code)

 

(203) 267-7001

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Page 1
 

  

Section 2 - Financial Information 

 

Item 2.02.  Results of Operations and Financial Condition.

 

On August 6, 2015, RBC Bearings Incorporated (the “Company”) issued a press release announcing its financial results for the quarter ended June 27, 2015 and certain other information.  This press release has been furnished as Exhibit 99.1 to this report and is incorporated herein by this reference.

 

The information in this report, including the exhibit hereto, is furnished pursuant to Item 2.02 of Form 8-K, and is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. The information contained herein and in the accompanying exhibit is not incorporated by reference in any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit 99.1    Press Release of RBC Bearings Incorporated dated August 6, 2015.

 

  

 

 

SIGNATURES

 

According to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

Date: August 6, 2015

 

  RBC BEARINGS INCORPORATED
     
  By:  /s/ Thomas J. Williams
    Name:  Thomas J. Williams
    Title: Corporate General Counsel & Secretary

 

Page 2



 

Exhibit 99.1

 

Press release

 

RBC Bearings Incorporated Announces Fiscal 2016 First Quarter Results

 

Oxford, CT – August 6, 2015 – 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.

 

 

Contacts

 

RBC Bearings

Daniel A. Bergeron

203-267-5028

dbergeron@rbcbearings.com

 

Alpha IR Group

Michael Cummings

617-982-0475

investors@rbcbearings.com

 

 
 

 

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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