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 2021.
First Quarter
Financial Highlights
Fiscal 2021
Fiscal 2020
Change
($ in millions)
GAAP
Adjusted (1)
GAAP
Adjusted (1)
GAAP
Adjusted (1)
Net sales
$156.5
$182.7
-14.3%
Gross margin
$59.5
$70.7
-15.9%
Gross margin %
38.0%
38.7%
Operating income
$28.8
$29.9
$38.5
$38.5
-25.1%
-22.2%
Operating income %
18.4%
19.1%
21.1%
21.1%
Net income
$22.7
$23.6
$30.5
$30.5
-25.6%
-22.7%
Diluted EPS
$0.91
$0.95
$1.23
$1.23
-26.0%
-22.8%
(1) Results exclude items in
reconciliation below.
“Our first quarter was one of the most unusual, ever! Our
primary objective was to protect our employees from the threats the
pathogen posed by creating safe workplaces, our second objective
was to operate our facilities efficiently in this environment of
extreme government induced uncertainty, and our third objective was
to confirm, by account, that product produced would be sold” said
Dr. Michael J. Hartnett, Chairman and Chief Executive Officer. “I
am very pleased with the results and thank all our employees for
their support and goodwill on behalf of RBC Bearings during this
challenging period for everyone”.
First Quarter Results Net
sales for the first quarter of fiscal 2021 were $156.5 million, a
decrease of 14.3% from $182.7 million in the first quarter of
fiscal 2020, and organic net sales decreased 15.5% year over year.
Net sales for the aerospace markets decreased 14.9% while
industrial market net sales declined 13.3% or 16.6% on an organic
basis. Gross margin for the first quarter of fiscal 2021 was $59.5
million compared to $70.7 million for the same period last
year.
SG&A for the first quarter of fiscal 2021 was $26.8 million,
a decrease of $3.3 million from $30.1 million for the same period
last year. The decrease was primarily due to lower
personnel-related costs of $4.1 million offset by $0.8 million of
other items. As a percentage of net sales, SG&A was 17.1% for
the first quarter of fiscal 2021 compared to 16.5% for the same
period last year.
Other operating expenses for the first quarter of fiscal 2021
totaled $3.8 million compared to $2.1 million for the same period
last year. For the first quarter of fiscal 2021, other operating
expenses consisted primarily of $2.5 million of amortization of
intangible assets, $1.1 million of restructuring costs and related
items and $0.2 million of other items. For the first quarter of
fiscal 2020, other operating expenses were comprised mainly of $2.3
million in amortization of intangible assets offset by $0.2 million
of other income.
Operating income for the first quarter of fiscal 2021 was $28.8
million compared to $38.5 million for the same period last year.
Excluding other restructuring charges and related items of $1.1
million, adjusted operating income for the first quarter of fiscal
2021 was $29.9 million. Adjusted operating income as a percentage
of net sales was 19.1% for the first quarter of fiscal 2021
compared to 21.1% for the same period last year.
Interest expense, net was $0.4 million for the first quarter of
fiscal 2021 compared to $0.5 million for the same period last
year.
Income tax expense for the first quarter of fiscal 2021 was $5.7
million compared to $7.3 million for the same period last year. The
effective income tax rate for the first quarter of fiscal 2021 was
20.0% compared to 19.3% for the same period last year. The current
quarter income tax expense included $0.3 million of benefit from
share-based stock compensation along with $0.1 million tax benefit
associated with the release of unrecognized tax positions related
to a statute of limitations expiration. Income tax expense for the
same period last year was impacted by $0.5 million of benefit
associated with share-based stock compensation and $0.2 million of
discrete and other tax benefits.
Net income for the first
quarter of fiscal 2021 was $22.7 million compared to $30.5 million
for the same period last year. On an adjusted basis, net income was
$23.6 million for the first quarter of fiscal 2021 compared to
$30.5 million for the same period last year.
Diluted EPS for the first
quarter of fiscal 2021 was $0.91 per share compared to $1.23 per
share for the same period last year. On an adjusted basis, diluted
EPS was $0.95 for the first quarter of fiscal 2021 compared to
$1.23 per share for the same period last year.
Backlog as of June 27, 2020 was $431.9 million compared to
$459.4 million as of June 29, 2019.
Liquidity The Company ended
the first quarter of fiscal 2021 with a strong cash balance and
liquidity position. Cash at June 27, 2020 was $143.6 million and
the Company had approximately $259.3 million of undrawn revolving
credit on its two bank facilities. The Company ended the quarter
with total debt of $23.1 million and was in full compliance with
all covenants under its credit agreements.
Outlook for the Second Quarter Fiscal
2021 The Company expects net sales to be approximately
$148.0 million to $152.0 million in the second quarter of fiscal
2021, compared to $181.9 million last year.
Live Webcast RBC Bearings Incorporated will host a webcast
on Friday, August 7th at 11:00 a.m. ET 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 # 1175036. An
audio replay of the call will be available from 1:45 p.m. ET August
7, 2020 until 1:45 p.m. ET August 14, 2020. The replay can be
accessed by dialing 855-859-2056 (international callers dial
404-537-3406) and providing conference call ID # 1175036. 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 GAAP. A
reconciliation of the non-GAAP measures disclosed in this 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 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
following: 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,” “would,” “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, COVID-19 pandemic, 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.
RBC Bearings Incorporated Consolidated Statements of
Operations(dollars in thousands, except share and per share
data) (Unaudited) Three Months Ended
June 27,2020 June 29,2019 Net sales
$
156,493
$
182,690
Cost of sales
97,040
111,996
Gross margin
59,453
70,694
Operating expenses: Selling, general and administrative
26,829
30,087
Other, net
3,810
2,117
Total operating expenses
30,639
32,204
Operating income
28,814
38,490
Interest expense, net
425
547
Other non-operating expense (income)
42
169
Income before income taxes
28,347
37,774
Provision for income taxes
5,658
7,275
Net income
$
22,689
$
30,499
Net income per common share: Basic
$
0.92
$
1.24
Diluted
$
0.91
$
1.23
Weighted average common shares: Basic
24,763,903
24,501,707
Diluted
24,933,941
24,807,307
Three Months Ended Reconciliation of Reported
Operating Income to Adjusted Operating Income: June
27,2020 June 29,2019 Reported operating
income
$
28,814
$
38,490
Restructuring costs and related items
1,119
-
Adjusted operating income
$
29,933
$
38,490
Reconciliation of Reported Net Income and Net Income
Three Months Ended Per Common Share to Adjusted Net
Income and Adjusted Net Income Per Common Share: June
27,2020 June 29,2019 Reported net income
$
22,689
$
30,499
Restructuring costs and related items (1)
896
-
Foreign exchange translation loss (1)
61
283
Discrete and other tax items benefit
(25
)
(233
)
Adjusted net income
$
23,621
$
30,549
(1) After tax impact. Adjusted net income per common share:
Basic
$
0.95
$
1.25
Diluted
$
0.95
$
1.23
Weighted average common shares: Basic
24,763,903
24,501,707
Diluted
24,933,941
24,807,307
Three Months Ended Segment Data, Net External
Sales: June 27,2020 June 29,2019
Plain bearings segment
$
78,875
$
87,489
Roller bearings segment
22,900
36,859
Ball bearings segment
18,840
17,710
Engineered products segment
35,878
40,632
$
156,493
$
182,690
Three Months Ended Selected Financial
Data: June 27,2020 June 29,2019
Depreciation and amortization
$
8,396
$
7,520
Share-based stock compensation expense
5,438
4,802
Adjusted operating income plus depreciation/amortization
plus share-based stock compensation expense
$
43,767
$
50,812
Cash provided by operating activities
$
48,359
$
40,136
Capital expenditures
$
3,875
$
12,040
Total debt
$
23,124
$
26,743
Cash and short-term investments
$
143,615
$
32,713
Repurchase of common stock
$
4,391
$
9,514
Backlog
$
431,948
$
459,413
Three Months Ended Reconciliation of Total
Net Sales to Organic Sales: June 27,2020 June
29,2019 Net sales
$
156,493
$
182,690
Swiss Tool - acquisition
(2,185
)
-
Organic net sales
$
154,308
$
182,690
Three Months Ended Reconciliation of
Aerospace Net Sales to Organic Sales: June
27,2020 June 29,2019 Net sales
$
98,982
$
116,319
Swiss Tool - acquisition
-
-
Organic net sales
$
98,982
$
116,319
Three Months Ended Reconciliation of
Industrial Net Sales to Organic Sales: June
27,2020 June 29,2019 Net sales
$
57,511
$
66,371
Swiss Tool - acquisition
(2,185
)
-
Organic net sales
$
55,326
$
66,371
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005262/en/
RBC Bearings Ernest Hawkins 203-267-5010
Ehawkins@rbcbearings.com
Alpha IR Group Michael Cummings 617-461-1101
investors@rbcbearings.com
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