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 2017.
First Quarter Highlights
($ in
millions)
Fiscal 2017 Fiscal 2016 Change GAAP
Adjusted (1) GAAP Adjusted (1) GAAP
Adjusted (1) Net sales $154.6 $154.6
$142.3 $142.3 8.6% 8.6% Gross margin
$57.3 $57.6 $52.8 $55.1 8.5% 4.6% Gross margin % 37.0% 37.3% 37.1%
38.7% Operating income $29.2 $29.6 $22.4 $29.5 30.7% 0.4% Operating
income % 18.9% 19.2% 15.7% 20.7% Net income $18.0 $18.1 $13.4 $18.5
34.6% -2.1% Diluted EPS $0.76 $0.77 $0.57 $0.78 33.3% -1.3%
(1) Results exclude items in reconciliation below.
“Our results demonstrated solid execution and continued strong
operating performance to begin our fiscal year,” said Dr. Michael
J. Hartnett, Chairman and Chief Executive Officer. “Continued
strength in the aerospace sector in both commercial OEM and
aftermarket activity was aided by another quarter of growth in
industrial sales. We continue to be pleased with our healthy
backlog and opportunities for organic growth.”
First Quarter ResultsNet
sales for the first quarter of fiscal 2017 were $154.6 million
compared to $142.3 million in the first quarter of fiscal 2016.
Industrial sales increased 3.1% mainly driven by marine and partly
offset by energy. Aerospace sales increased 11.8% mainly driven by
commercial aircraft OEM and aftermarket, while being partly offset
by defense.
Gross margin for the first quarter of fiscal 2017 was $57.3
million compared to $52.8 million for the same period last year.
Gross margin as a percentage of net sales was 37.0% in the first
quarter of fiscal 2017 compared to 37.1% for the same period last
year. Excluding the impact of the inventory purchase accounting,
gross margin would have been $57.6 million for the first quarter of
fiscal 2017 compared to $55.1 million for the same period last
year. Adjusted gross margin as a percentage of net sales was 37.3%
compared to 38.7% for the same period last year.
SG&A for the first quarter of fiscal 2017 was $25.8 million
compared to $23.7 million for the same period last year. As a
percentage of net sales, SG&A was 16.7% for the first quarter
of fiscal 2017 compared to 16.7% for the same period last year.
Other operating expenses for the first quarter of fiscal 2017
totaled $2.2 million compared to $6.7 million for the same period
last year. For the first quarter of fiscal 2017 other operating
expenses were comprised mainly of $2.2 million of amortization of
intangibles. 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 2017 was $29.2
million compared to operating income of $22.4 million for the same
period last year. Excluding costs associated with acquisition
activity, operating income would have been $29.6 million for the
first quarter of fiscal 2017 compared to $29.5 million for the same
period last year. Excluding these adjustments, operating income as
a percentage of net sales would have been 19.2% compared to 20.7%
for the same period last year.
Interest expense, net was $2.3 million for the first quarter of
fiscal 2017 compared to $1.7 million for the same period last year.
For the first quarter of fiscal 2017 interest expense, net
consisted of interest expense of $1.9 million and deferred debt
fees of $0.4 million.
Other non-operating expense for the first quarter of fiscal 2017
was $0.1 million. In the first quarter fiscal 2016 other
non-operating expenses 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 2017 was $8.8
million compared to $6.6 million for the same period last year. The
effective income tax rate for the first quarter of fiscal 2016 was
32.7% compared to 33.1% for the same period last year. Both fiscal
year 2017 and 2016 included a discrete tax benefit of $0.2 million
and $0.1 million, respectively. Excluding this tax benefit, fiscal
year 2017 effective tax rate would have been 33.5% compared to
33.6% for the same period last year.
Net income for the first quarter of fiscal 2017 was $18.0
million compared to $13.4 million for the same period last year. On
an adjusted basis, net income for the first quarter of fiscal 2017
would have been $18.1 million compared to $18.5 million for the
same period last year.
Diluted EPS for the first quarter of fiscal 2017 was 76
cents per share compared to 57 cents per share for the same period
last year. On an adjusted basis diluted EPS for the first quarter
of fiscal 2017 would have been 77 cents per share compared
to diluted EPS of 78 cents per share for the same period last
year.
Live WebcastRBC 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 877-788-4721
(international callers dial 530-379-4726 and enter conference ID #
49089044. An audio replay of the call will be available from 2:00
p.m. ET August 4, 2016 until 11:59 p.m. ET August 11, 2016. The
replay can be accessed by dialing 855-859-2056 (international
callers dial 404-537-3406 and entering conference call ID #
49089044. Investors are advised to dial into the call at least ten
minutes prior to the call to register.
Non-GAAP Financial
MeasuresIn 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 BearingsRBC
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
StatementsCertain 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, aerospace and defense manufacturing
activity, customer relationships, future financial performance,
market acceptance of new or enhanced versions of the Company’s
products, the pricing of raw materials, currency fluctuations,
changes in the competitive and regulatory environments in which the
Company’s businesses operate, the outcome of pending or future
litigation and governmental proceedings and approvals, the ability
to achieve satisfactory operating results in the integration of
acquired companies, loss of key personnel, 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 July 2, June
27, 2016 2015
Net sales $ 154,579 $ 142,308 Cost of sales 97,328
89,544 Gross margin 57,251 52,764 Operating
expenses: Selling, general and administrative 25,796 23,725 Other,
net 2,234 6,678 Total operating
expenses 28,030 30,403 Operating income 29,221 22,361
Interest expense, net 2,293 1,711 Other non-operating (income)
expense 118 606 Income before income
taxes 26,810 20,044 Provision for income taxes 8,770
6,640 Net income $ 18,040 $ 13,404
Net income per common share: Basic $ 0.77 $ 0.58 Diluted $
0.76 $ 0.57 Weighted average common shares: Basic 23,320,579
23,162,560 Diluted 23,626,751 23,536,364
Three Months Ended Reconciliation of Reported Gross
Margin to July 2, June 27, Adjusted Gross
Margin: 2016 2015
Reported gross margin $ 57,251
$ 52,764 Inventory purchase accounting adjustment 382
2,331 Adjusted gross margin $ 57,633 $ 55,095
Three Months Ended
Reconciliation of Reported Operating Income to July
2, June 27, Adjusted Operating Income:
2016 2015 Reported
operating income $ 29,221
$ 22,361 Inventory purchase accounting adjustment 382 2,331
Integration and restructuring - 790 Acquisition costs -
3,998 Adjusted operating income $ 29,603
$ 29,480
Reconciliation of Reported Net Income and Net Income
Three Months Ended Per Common Share to Adjusted Net
Income and July 2, June 27, Adjusted Net
Income Per Common Share: 2016
2015 Reported net income $ 18,040
$ 13,404 Inventory purchase accounting adjustment (1) 257 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 (215 )
(101 ) Adjusted net income $ 18,082 $ 18,469
(1) After tax impact. Adjusted net income per common share:
Basic $ 0.78 $ 0.80 Diluted $ 0.77 $ 0.78 Weighted average
common shares: Basic 23,320,579 23,162,560 Diluted 23,626,751
23,536,364
Three Months Ended July
2, June 27, Segment Data, Net External Sales:
2016 2015 Plain
bearings segment $ 70,450 $ 65,677 Roller bearings segment 27,834
30,580 Ball bearings segment 13,710 12,819 Engineered products
segment 42,585 33,232 $ 154,579
$ 142,308
Three Months
Ended July 2, June 27, Selected Financial
Data: 2016 2015
Depreciation and amortization $ 6,740 $ 5,663
Incentive stock compensation expense $ 2,774 $ 2,132
Adjusted operating income plus
depreciation/amortization
plus incentive stock compensation expense $ 39,117 $
37,275 Cash provided by operating activities $ 19,212
$ 22,189 Capital expenditures $ 5,166 $ 5,270 Total
debt $ 343,808 $ 427,446 Cash $ 37,261 $ 61,562 Total
debt minus cash $ 306,547 $ 365,884 Repurchase of common
stock $ 3,426 $ 2,182 Backlog $ 352,556 $ 340,804
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version on businesswire.com: http://www.businesswire.com/news/home/20160804005212/en/
RBC BearingsDaniel A. Bergeron,
203-267-5028dbergeron@rbcbearings.comorAlpha IR GroupMichael
Cummings, 617-982-0475investors@rbcbearings.com
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