RBC Bearings Incorporated (Nasdaq: ROLL, ROLLP), a leading
international manufacturer of highly engineered precision bearings,
components and essential systems for the industrial, defense and
aerospace industries, today reported results for the fourth quarter
of fiscal year 2022.
Key Highlights
- Fourth quarter net sales of $358.9 million increased 123.9%
over last year; organic net sales up 10.4%.
- Fourth quarter gross margin of $137.5 million, 38.3%; adjusted
gross margin of $144.3 million, 40.2% compared to 39.1% for the
same period last year.
- Fourth quarter EBITDA of 25.6%; adjusted EBITDA of 29.1% vs
last year adjusted EBITDA of 28.6%.
- First quarter outlook shows net sales of $355.0 million to
$365.0 million, a growth rate of 127.3% to 133.7%.
- Fourth Quarter GAAP diluted EPS $0.92, adjusted diluted EPS
$1.26, and adjusted cash diluted EPS $2.15.
Fourth Quarter Financial
Highlights
($ in millions)
Fiscal 2022
Fiscal 2021
Change
GAAP
Adjusted (1)
GAAP
Adjusted (1)
GAAP
Adjusted (1)
Net sales
$358.9
$160.3
123.9%
Gross margin
$137.5
$144.3
$62.5
$62.7
120.1%
130.1%
Gross margin %
38.3%
40.2%
39.0%
39.1%
Operating income
$57.8
$70.4
$29.7
$32.5
94.5%
116.4%
Operating income %
16.1%
19.6%
18.6%
20.3%
Net income
$32.2
$42.0
$25.0
$27.4
29.0%
53.5%
Net income available to common
stockholders
$26.5
$36.3
$25.0
$27.4
6.0%
32.5%
Diluted EPS
$0.92
$1.26
$0.99
$1.08
-7.1%
16.7%
(1) Results exclude items in
reconciliation below.
Twelve Month Financial
Highlights
($ in millions)
Fiscal 2022
Fiscal 2021
Change
GAAP
Adjusted (1)
GAAP
Adjusted (1)
GAAP
Adjusted (1)
Net sales
$942.9
$609.0
54.8%
Gross margin
$357.1
$371.8
$234.1
$237.2
52.5%
56.8%
Gross margin %
37.9%
39.4%
38.4%
38.9%
Operating income
$130.1
$177.0
$111.5
$120.2
16.7%
47.2%
Operating income %
13.8%
18.8%
18.3%
19.7%
Net income
$65.1
$118.0
$89.6
$96.9
-27.4%
21.7%
Net income available to common
stockholders
$53.1
$105.9
$89.6
$96.9
-40.8%
9.3%
Diluted EPS
$1.95
$3.89
$3.58
$3.87
-45.5%
0.5%
(1) Results exclude items in
reconciliation below.
“The record performance of our Company in the fourth quarter
demonstrated the value created by the merger of Dodge Industrial
with RBC Bearings. We are very encouraged with the speed of
integration and management cohesion achieved by these two
extraordinary and complementary businesses,” said Dr. Michael J.
Hartnett, Chairman and Chief Executive Officer.
Fourth Quarter Results
Net sales for the fourth quarter of fiscal 2022 were $358.9
million, an increase of 123.9% from $160.3 million in the fourth
quarter of fiscal 2021. Net sales for our Industrial segment
increased 297.3%, including sales of approximately $181.9 million
from Dodge, while our Aerospace/Defense segment increased 8.9%.
Gross margin for the fourth quarter of fiscal 2022 was $137.5
million compared to $62.5 million for the same period last year. On
an adjusted basis, gross margin was $144.3 million for the fourth
quarter of fiscal 2022 compared to an adjusted $62.7 million for
the same quarter last year.
SG&A for the fourth quarter of fiscal 2022 was $56.0
million, an increase of $28.6 million from $27.4 million for the
same period last year. As a percentage of net sales, SG&A was
15.6% for the fourth quarter of fiscal 2022 compared to 17.1% for
the same period last year.
Other operating expenses for the fourth quarter of fiscal 2022
totaled $23.7 million compared to $5.3 million for the same period
last year. For the fourth quarter of fiscal 2022, other operating
expenses included $17.2 million of amortization of intangible
assets, $5.7 million of costs associated with the Dodge
acquisition, and $0.8 million of other items. For the fourth
quarter of fiscal 2021, other operating expenses included $2.5
million of amortization of intangible assets, $1.5 million of costs
associated with a cyber event, $1.0 million of restructuring costs
and related items, and $0.3 million of other costs.
Operating income for the fourth quarter of fiscal 2022 was $57.8
million compared to $29.7 million for the same period last year.
Excluding approximately $12.5 million of acquisition costs,
adjusted operating income for the fourth quarter of fiscal 2022 was
$70.4 million. Excluding $1.5 million of costs associated with a
cyber event, and other restructuring charges and related items of
$1.3 million, adjusted operating income for the fourth quarter of
fiscal 2021 was $32.5 million. Adjusted operating income as a
percentage of net sales was 19.6% for the fourth quarter of fiscal
2022 compared to 20.3% for the same period last year.
Interest expense, net, was $13.6 million for the fourth quarter
of fiscal 2022 compared to $0.3 million for the same period last
year. The increase in interest cost during the period is a result
of the quarterly impact of the permanent financing in place
associated with the Dodge acquisition.
Income tax expense for the fourth quarter of fiscal 2022 was
$11.9 million compared to $4.7 million for the same period last
year. The effective income tax rate for the fourth quarter of
fiscal 2022 was 26.9% compared to 15.8% for the same period last
year. The fiscal 2022 fourth quarter income tax expense included
$0.1 million of tax benefits from share-based stock compensation
and $0.6 million of discrete tax benefit primarily due to a
decrease in the reserves for unrecognized tax positions pertaining
primarily to the statute of limitations expiration. The tax rate
for the fourth quarter was negatively impacted by the inclusion of
certain pre-tax acquisition related charges that are not deductible
for tax purposes. Income tax expense for the fourth quarter of
fiscal 2021 included $1.4 million of tax benefits from share-based
stock compensation.
Net income for the fourth quarter of fiscal 2022 was $32.2
million compared to net income of $25.0 million for the same period
last year. On an adjusted basis, net income was $42.0 million for
the fourth quarter of fiscal 2022 compared to $27.4 million for the
same period last year. Net income available to common stockholders
for the fourth quarter of fiscal 2022 was $26.5 million compared to
$25.0 million for the same period last year. On an adjusted basis,
net income available to common stockholders for the fourth quarter
of fiscal 2022 was $36.3 million compared to $27.4 million for the
same period last year.
Diluted EPS for the fourth quarter of fiscal 2022 was $0.92 per
share compared to $0.99 per share for the same period last year. On
an adjusted basis, diluted EPS was $1.26 per share for the fourth
quarter of fiscal 2022 compared to $1.08 per share for the same
period last year.
Backlog as of April 2, 2022 was $603.1 million compared to
$394.8 million as of April 3, 2021 and $552.7 million as of January
1, 2022.
Outlook for the First Quarter Fiscal
2023
The Company expects net sales to be approximately $355.0 million
to $365.0 million in the first quarter of fiscal 2023, compared to
$156.2 million last year, a growth rate of 127.3% to 133.7%.
Live Webcast
RBC Bearings Incorporated will host a webcast on Thursday, May
26th 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 #8884584. An audio replay of the call will be
available from 2:00 p.m. ET May 26th, 2022, until 2:00 p.m. ET June
2nd, 2022. The replay can be accessed by dialing 855-859-2056
(international callers dial 404-537-3406) and providing conference
call ID #8884584. 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.
Adjusted Gross Margin and Adjusted Operating Income
Adjusted gross margin excludes the impact of acquisition related
fair value adjustments to inventory. Adjusted operating income
excludes acquisition expenses including the impact of
acquisition-related fair value adjustments in connection with
purchase, restructuring and other similar charges, gains or losses
on extinguishment of debt, and other non-operational, non-cash or
non-recurring losses. We believe that adjusted gross margin and
adjusted operating income are useful in assessing our financial
performance by excluding items that are not indicative of our core
operating performance or that may obscure trends useful in
evaluating our continuing results of operations.
Adjusted Net Income and Adjusted Earnings Per Share
Adjusted net income and adjusted earnings per share (calculated
on a diluted basis) exclude acquisition expenses including the
impact of acquisition-related fair value adjustments in connection
with purchase, restructuring and other similar charges, gains or
losses on divestitures, discontinued operations, gains or losses on
extinguishment of debt, and other non-operational, non-cash or
non-recurring losses, net of their income tax impact. We believe
that adjusted net income and adjusted earnings per share are useful
in assessing our financial performance by excluding items that are
not indicative of our core operating performance or that may
obscure trends useful in evaluating our continuing results of
operations.
Adjusted Cash Net Income and Adjusted Cash Earnings Per
Share
Adjusted cash net income and adjusted cash earnings per share
excludes non-cash expenses for depreciation and amortization of
fixed and intangible assets, stock compensation and amortization of
deferred finance fees, net of their income tax impact. We believe
that adjusted cash net income and adjusted cash earnings per share
are useful in assessing our financial performance by excluding
items that do not affect the cash available to common stockholders
before capital expenditures.
EBITDA
EBITDA represents earnings from continuing operations before
interest and other debt related activities, taxes, depreciation and
amortization and stock compensation expense. EBITDA is presented
because it is an important supplemental measure of performance and
it is frequently used by analysts, investors and other interested
parties in the evaluation of companies in our industry. EBITDA is
also presented and compared by analysts and investors in evaluating
our ability to meet debt service obligations. Other companies in
our industry may calculate EBITDA differently. EBITDA is not a
measurement of financial performance under GAAP and should not be
considered as an alternative to cash flow from operating activities
or as a measure of liquidity or an alternative to net income as
indicators of operating performance or any other measures of
performance derived in accordance with GAAP. Because EBITDA is
calculated before recurring cash charges, including interest
expense and taxes, and is not adjusted for capital expenditures or
other recurring cash requirements of the business, it should not be
considered as a measure of discretionary cash available to invest
in the growth of the business.
Adjusted EBITDA
Adjusted EBITDA is the term we use to describe EBITDA adjusted
for the items summarized in the Reconciliation of GAAP to Non-GAAP
Financial Measures table below. Adjusted EBITDA is intended to show
our unleveraged, pre-tax operating results and therefore reflects
our financial performance based on operational factors, excluding
non-operational, non-cash or non-recurring losses or gains. In view
of our debt level, it is also provided to aid investors in
understanding our compliance with our debt covenants. Adjusted
EBITDA is not a presentation made in accordance with GAAP, and our
use of the term Adjusted EBITDA varies from others in our industry.
Adjusted EBITDA should not be considered as an alternative to net
income, income from operations or any other performance measures
derived in accordance with GAAP. Adjusted EBITDA has important
limitations as an analytical tool, and you should not consider it
in isolation, or as a substitute for, analysis of our results as
reported under GAAP. For example, Adjusted EBITDA does not reflect:
(a) our capital expenditures, future requirements for capital
expenditures or contractual commitments; (b) changes in, or cash
requirements for, our working capital needs; (c) the significant
interest expenses, or the cash requirements necessary to service
interest or principal payments, on our debt; (d) tax payments that
represent a reduction in cash available to us; (e) any cash
requirements for the assets being depreciated and amortized that
may have to be replaced in the future; or (f) the impact of
earnings or charges resulting from matters that we and the lenders
under our credit agreement may not consider indicative of our
ongoing operations. In particular, our definition of Adjusted
EBITDA allows us to add back certain non-cash, non-operating or
non-recurring charges that are deducted in calculating net income,
even though these are expenses that may recur, vary greatly and are
difficult to predict and can represent the effect of long-term
strategies as opposed to short-term results. In addition, certain
of these expenses can represent the reduction of cash that could be
used for other corporate purposes. Further, although not included
in the calculation of Adjusted EBITDA below, the measure may at
times allow us to add estimated cost savings and operating
synergies related to operational changes ranging from acquisitions
to dispositions to restructurings and/or exclude one-time
transition expenditures that we anticipate we will need to incur to
realize cost savings before such savings have occurred. Further,
management and various investors use the ratio of total debt less
cash to Adjusted EBITDA (which includes a full pro-forma
last-twelve-month impact of acquisitions), or "net debt leverage",
as a measure of our financial strength and ability to incur
incremental indebtedness when making key investment decisions and
evaluating us against peers. Lastly, management and various
investors use the ratio of the change in Adjusted EBITDA divided by
the change in net sales (referred to as “incremental margin” in the
case of an increase in net sales or “decremental margin” in the
case of a decrease in net sales) as an additional measure of our
financial performance and is utilized when making key investment
decisions and evaluating us against peers.
About RBC Bearings
RBC Bearings Incorporated is an international manufacturer and
marketer of highly engineered precision bearings, components and
essential systems. Founded in 1919, the Company is primarily
focused on producing highly technical or regulated 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, the COVID-19 pandemic, geopolitical
factors, future levels of aerospace/defense and industrial market
activity, future financial performance, our debt leverage, the
integration of our recent Dodge acquisition, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220526005286/en/
RBC Bearings Robert Sullivan 203-267-5014
RSullivan@rbcbearings.com
Alpha IR Group Michael Cummings 617-461-1101
investors@rbcbearings.com
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