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 2020.
Key Highlights
- Net sales of $182.7 million up 3.8% for the
quarter and 6.5% on an organic basis
- Operating income as a percentage of sales
of 21.1% up from 20.5% in the first quarter last year
- Adjusted fully diluted EPS of $1.23 up from
$1.15 in the first quarter last year
First Quarter Financial
Highlights
($ in millions)
Fiscal 2020
Fiscal 2019
Change
GAAP
Adjusted (1)
GAAP
Adjusted (1)
GAAP
Adjusted (1)
Net sales
$182.7
$176.0
3.8%
Gross margin
$70.7
$67.7
4.4%
Gross margin %
38.7%
38.5%
Operating income
$38.5
$36.0
6.9%
Operating income %
21.1%
20.5%
Net income
$30.5
$30.5
$27.5
$28.1
11.0%
8.7%
Diluted EPS
$1.23
$1.23
$1.12
$1.15
9.8%
7.0%
(1) Results exclude items in
reconciliation below.
“We are pleased with our operating performance during the first
quarter of fiscal 2020 as revenue was within our expectations.”
said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer.
“Double digit revenue growth from the aerospace market helped drive
total organic net sales growth of 6.5%. Our revenue and earnings
momentum, paired with a robust backlog, have us on track for a
strong fiscal year 2020.”
First Quarter Results Net
sales for the first quarter of fiscal 2020 were $182.7 million, an
increase of 3.8% from $176.0 million in the first quarter of fiscal
2019 and organic net sales increased 6.5% year over year. Net sales
for the aerospace markets increased 11.3% in total and 16.3% on an
organic basis. Industrial market sales declined 7.2%. Gross margin
for the first quarter of fiscal 2020 was $70.7 million compared to
$67.7 million for the same period last year. Gross margin as a
percentage of net sales was 38.7% in the first quarter of fiscal
2020 compared to 38.5% for the same period last year.
SG&A for the first quarter of fiscal 2020 was $30.1 million,
an increase of $0.5 million from $29.6 million for the same period
last year. The increase was primarily due to $1.0 million of
additional share-based compensation costs and other items of $0.1
million partially offset by lower professional fees of $0.6
million. As a percentage of net sales, SG&A was 16.5% for the
first quarter of fiscal 2020 compared to 16.8% for the same period
last year.
Other operating expenses for the first quarter of fiscal 2020
totaled $2.1 million compared to $2.2 million for the same period
last year. For the first quarter of fiscal 2020, other operating
expenses consisted primarily of $2.3 million in amortization of
intangible assets offset by $0.2 million of other income. For the
first quarter of fiscal 2019, other operating expenses were
comprised mainly of $2.4 million of amortization of intangible
assets, partially offset by $0.2 million of other income.
Operating income for the first quarter of fiscal 2020 was $38.5
million compared to operating income of $36.0 million for the same
period last year. Operating income as a percentage of net sales was
21.1% for the first quarter of fiscal 2020 compared to 20.5% for
the same period last year.
Interest expense, net was $0.5 million for the first quarter of
fiscal 2020 compared to $1.7 million for the same period last
year.
Income tax expense for the first quarter of fiscal 2020 was $7.3
million compared to $5.8 million for the same period last year. The
effective income tax rate for the first quarter of fiscal 2020 was
19.3% compared to 17.4% for the same period last year. The income
tax expense includes approximately $0.5 million of benefit from
incentive stock compensation compared to $1.3 million for the same
period last year.
Net income for the first
quarter of fiscal 2020 was $30.5 million compared to $27.5 million
for the same period last year. On an adjusted basis, net income was
$30.5 million for the first quarter of fiscal 2020, compared to
$28.1 million for the same period last year.
Diluted EPS for the first
quarter of fiscal 2020 was $1.23 per share compared to $1.12 per
share for the same period last year. On an adjusted basis, diluted
EPS for the first quarter of fiscal 2020 was $1.23 per share
compared to an adjusted diluted EPS of $1.15 per share for the same
period last year, an increase of 7.0%.
Backlog as of June 29, 2019 was $459.4 million compared to
$419.2 million as of June 30, 2018.
Outlook for the Second Quarter Fiscal
2020 The Company expects net sales to be approximately
$180.0 million to $182.0 million in the second quarter of fiscal
2020. This would result in a growth rate of 4.1% to 5.3% on a
year-over-year basis and 6.5% to 7.7% excluding $3.9 million in
sales associated with our Miami division, which was sold in the
third quarter of fiscal 2019.
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 844-419-1755 (international callers dial 216-562-0468) and
provide conference ID # 4589055. An audio replay of the call will
be available from 1:45 p.m. ET August 1st, 2019 until 1:45 p.m. ET
August 8th, 2019. The replay can be accessed by dialing
855-859-2056 (international callers dial 404-537-3406) and
providing conference call ID # 4589055. 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, 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 29, June 30,
2019
2018
Net sales
$
182,690
$
175,985
Cost of sales
111,996
108,246
Gross margin
70,694
67,739
Operating expenses: Selling, general and administrative
30,087
29,575
Other, net
2,117
2,166
Total operating expenses
32,204
31,741
Operating income
38,490
35,998
Interest expense, net
547
1,711
Other non-operating (income) expense
169
1,034
Income before income taxes
37,774
33,253
Provision for income taxes
7,275
5,786
Net income
$
30,499
$
27,467
Net income per common share: Basic
$
1.24
$
1.14
Diluted
$
1.23
$
1.12
Weighted average common shares: Basic
24,501,707
24,140,778
Diluted
24,807,307
24,543,589
Three Months Ended June 29, June
30, Reconciliation of Reported Net Income and Net Income Per
Common Share to Adjusted Net Income and Adjusted Net Income Per
Common Share:
2019
2018
Reported net income
$
30,499
$
27,467
Foreign exchange translation loss (gain) (1)
283
(100
)
Loss on extinguishment of long-term debt (1)
-
815
Discrete and other tax reserve loss (benefit)
(233
)
(73
)
Adjusted net income
$
30,549
$
28,109
(1) After tax impact. Adjusted net income per common share:
Basic
$
1.25
$
1.16
Diluted
$
1.23
$
1.15
Weighted average common shares: Basic
24,501,707
24,140,778
Diluted
24,807,307
24,543,589
Three Months Ended June 29,
June 30, Segment Data, Net External Sales:
2019
2018
Plain bearings segment
$
87,489
$
78,525
Roller bearings segment
36,859
35,870
Ball bearings segment
17,710
18,074
Engineered products segment
40,632
43,516
$
182,690
$
175,985
Three Months Ended June 29, June
30, Selected Financial Data:
2019
2018
Depreciation and amortization
$
7,520
$
7,313
Share-based stock compensation expense
$
4,802
$
3,766
Operating income plus depreciation/amortization plus
share-based stock compensation expense
$
50,812
$
47,077
Cash provided by operating activities
$
40,136
$
33,835
Capital expenditures
$
12,040
$
6,993
Total debt
$
26,743
$
144,293
Cash and short-term investments
$
32,713
$
55,656
Repurchase of common stock
$
9,514
$
1,491
Backlog
$
459,413
$
419,249
Three Months Ended June
29, June 30, Reconciliation of Total Net Sales to
Organic Sales:
2019
2018
Net sales
$
182,690
$
175,985
Miami division - divestiture
-
(4,503
)
Organic net sales
$
182,690
$
171,482
Three Months Ended June 29, June
30, Reconciliation of Aerospace Net Sales to Organic
Sales:
2019
2018
Net sales
$
116,319
$
104,491
Miami division - divestiture
-
(4,503
)
Organic net sales
$
116,319
$
99,988
Three Months Ended June 29, June
30, Reconciliation of Industrial Net Sales to Organic
Sales:
2019
2018
Net sales
$
66,371
$
71,494
Miami division - divestiture
-
-
Organic net sales
$
66,371
$
71,494
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190801005155/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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