RBC Bearings Incorporated (Nasdaq: ROLL, ROLLP), a leading
international manufacturer of highly engineered precision bearings
and components for the industrial, defense and aerospace
industries, today reported results for the second quarter of fiscal
year 2022.
Key Highlights
- Second quarter net sales of $160.9 million increased 10.0% over
last year and were at the high end of our guidance range of $158.0
million to $162.0 million.
- Second quarter adjusted gross margin of $63.4 million, 39.4%,
was up 8.2% over the same period last year (GAAP gross margin
38.8%).
- Second quarter year to date adjusted gross margin of $127.2
million, 40.1%, was up 7.7% over the same period last year (GAAP
gross margin 39.8%).
- Third quarter outlook shows net sales of $245.0 million to
$255.0 million including two months of Dodge, a growth rate of
68.0% to 74.8%.
- Cash provided by operating activities was $40.2 million for the
second quarter compared to $26.1 million last year.
Second Quarter Financial
Highlights
($ in millions)
Fiscal 2022
Fiscal 2021
Change
GAAP
Adjusted (1)
GAAP
Adjusted (1)
GAAP
Adjusted (1)
Net sales
$160.9
$146.3
10.0%
Gross margin
$62.5
$63.4
$56.6
$58.6
10.4%
8.2%
Gross margin %
38.8%
39.4%
38.7%
40.0%
Operating income
$27.1
$30.5
$26.4
$29.9
2.9%
2.2%
Operating income %
16.9%
19.0%
18.0%
20.4%
Net income
$6.9
$23.5
$20.4
$23.2
-66.1%
1.3%
Net income available to common
stockholders
$6.4
$23.0
$20.4
$23.2
-68.6%
-0.9%
Diluted EPS
$0.25
$0.89
$0.82
$0.93
-69.5%
-4.3%
Diluted EPS - Pre-Offering
$0.92
$0.93
-1.1%
(1) Results exclude items in
reconciliation below.
Six Month Financial
Highlights
($ in millions)
Fiscal 2022
Fiscal 2021
Change
GAAP
Adjusted (1)
GAAP
Adjusted (1)
GAAP
Adjusted (1)
Net sales
$317.1
$302.8
4.7%
Gross margin
$126.2
$127.2
$116.0
$118.0
8.8%
7.7%
Gross margin %
39.8%
40.1%
38.3%
39.0%
Operating income
$57.8
$61.8
$55.2
$59.8
4.8%
3.4%
Operating income %
18.2%
19.5%
18.2%
19.8%
Net income
$32.9
$49.8
$43.1
$46.8
-23.6%
6.4%
Net income available to common
stockholders
$32.4
$49.3
$43.1
$46.8
-24.8%
5.3%
Diluted EPS
$1.27
$1.93
$1.73
$1.88
-26.6%
2.7%
Diluted EPS - Pre-Offering
$1.96
$1.88
4.3%
(1) Results exclude items in
reconciliation below.
“We are pleased with our second quarter results which
demonstrated exceptional growth in our industrial markets and
strong order flow for our aerospace and defense products. We began
expanding capacity in the aerospace and defense plants during the
period to support this expanded demand,” said Dr. Michael J.
Hartnett, Chairman and Chief Executive Officer. “As we consider the
second half of our fiscal year, we expect robust strength for
industrial products and strong and continuing growth in aerospace
and defense.”
Second Quarter Results
Net sales for the second quarter of fiscal 2022 were $160.9
million, an increase of 10.0% from $146.3 million in the second
quarter of fiscal 2021. Net sales for the industrial markets
increased 31.1% while aerospace market net sales declined 4.4%.
Gross margin for the second quarter of fiscal 2022 was $62.5
million compared to $56.6 million for the same period last year. On
an adjusted basis, gross margin was $63.4 million for the second
quarter of fiscal 2022 compared to an adjusted $58.6 million for
the same quarter last year.
SG&A for the second quarter of fiscal 2022 was $29.7
million, an increase of $3.7 million from $26.0 million for the
same period last year. The increase was primarily due to higher
personnel-related costs of $2.4 million, $1.0 million of additional
share-based compensation and $0.3 million of other items. As a
percentage of net sales, SG&A was 18.4% for the second quarter
of fiscal 2022 compared to 17.8% for the same period last year.
Other operating expenses for the second quarter of fiscal 2022
totaled $5.7 million compared to $4.2 million for the same period
last year. For the second quarter of fiscal 2022, other operating
income consisted primarily of $2.8 million of amortization of
intangibles, $1.4 million of acquisition costs, $1.1 million of
restructuring costs and related items and $0.4 million of other
items. For the second quarter of fiscal 2021, other operating
expenses consisted primarily of $1.5 million of restructuring costs
and related items, $2.6 million of amortization of intangible
assets and $0.1 million of other items.
Operating income for the second quarter of fiscal 2022 was $27.1
million compared to $26.4 million for the same period last year.
Excluding $2.0 million of other restructuring charges and related
items and $1.4 million of acquisition costs, adjusted operating
income for the second quarter of fiscal 2022 was $30.5 million.
Excluding other restructuring charges and related items of $3.5
million, adjusted operating income for the second quarter of fiscal
2021 was $29.9 million. Adjusted operating income as a percentage
of net sales was 19.0% for the second quarter of fiscal 2022
compared to 20.4% for the same period last year.
Interest expense, net was $15.8 million for the second quarter
of fiscal 2022 compared to $0.3 million for the same period last
year. During the second quarter of fiscal 2022, the Company
incurred approximately $15.5 million in costs associated with the
amortization of a bridge financing commitment obtained in support
of the Dodge acquisition.
Income tax expense for the second quarter of fiscal 2022 was
$4.7 million compared to $5.4 million for the same period last
year. The effective income tax rate for the second quarter of
fiscal 2022 was 40.5% compared to 20.9% for the same period last
year. The fiscal 2022 second quarter income tax expense included
$0.1 million of tax benefits from share-based stock compensation
offset by the establishment of a $1.9 million valuation allowance
for capital loss carryforwards we don’t expect to recognize and
$0.1 million of other items. Income tax expense for the second
quarter of fiscal 2021 included $0.4 million of tax benefits from
share-based stock compensation.
Net income for the second
quarter of fiscal 2022 was $6.9 million compared to $20.4 million
for the same period last year. On an adjusted basis, net income was
$23.5 million for the second quarter of fiscal 2022 compared to
$23.2 million for the same period last year. Net income available
to common stockholders for the second quarter of fiscal 2022 was
$6.4 million compared to $20.4 million for the same period last
year. On an adjusted basis, net income available to common
stockholders for the second quarter of fiscal 2022 was $23.0
million compared to $23.2 million for the same period last
year.
Diluted EPS for the second
quarter of fiscal 2022 was $0.25 per share compared to $0.82 per
share for the same period last year. On an adjusted basis, diluted
EPS was $0.89 per share for the second quarter of fiscal 2022
compared to $0.93 per share for the same period last year. Diluted
EPS before the offering of common and preferred stock would have
been an adjusted $0.92 per share for the second quarter of fiscal
2022 compared to $0.93 per share for the same period last
year.
Backlog as of October 2, 2021 was $456.7 million compared to
$403.0 million as of September 26, 2020 and $420.2 million as of
July 3, 2021.
Dodge Acquisition
On November 1, 2021, the Company completed the acquisition of
Dodge for $2.9 billion in cash, subject to certain purchase price
adjustments. The acquisition was financed with approximately $1.1
billion of cash which included $605.7 million from the sale of
common equity and $445.5 million from the sale of mandatorily
convertible preferred stock (“MCPS”), $1.3 billion of senior debt
and $500.0 million of unsecured debt.
Outlook for the Third Quarter Fiscal
2022
The Company expects net sales to be approximately $245.0 million
to $255.0 million in the third quarter of fiscal 2022 including two
months of Dodge, compared to $145.9 million last year, a growth
rate of 68.0% to 74.8%.
Live Webcast
RBC Bearings Incorporated will
host a webcast on Friday, November 12th 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
#7460907. An audio replay of the call will be available from 1:00
p.m. ET November 12, 2021 until 1:00 p.m. ET November 19, 2021. The
replay can be accessed by dialing 855-859-2056 (international
callers dial 404-537-3406) and providing conference call ID
#7460907. 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, the COVID-19 pandemic, geopolitical
factors, future levels of aerospace and 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 Six Months Ended October
2, September 26, October 2, September 26,
2021
2020
2021
2020
Net sales
$
160,900
$
146,335
$
317,105
$
302,828
Cost of sales
98,436
89,739
190,868
186,779
Gross margin
62,464
56,596
126,237
116,049
Operating expenses: Selling, general and administrative
29,674
26,023
59,476
52,852
Other, net
5,667
4,210
8,915
8,020
Total operating expenses
35,341
30,233
68,391
60,872
Operating income
27,123
26,363
57,846
55,177
Interest expense, net
15,770
343
16,089
768
Other non-operating (income)/expense
(291)
211
(756)
253
Income before income taxes
11,644
25,809
42,513
54,156
Provision for income taxes
4,715
5,388
9,585
11,046
Net income
6,929
20,421
32,928
43,110
Preferred stock dividends
510
-
510
-
Net income available to common stockholders
$
6,419
$
20,421
$
32,418
$
43,110
Net income per share available to common stockholders: Basic
$
0.25
$
0.82
$
1.28
$
1.74
Diluted
$
0.25
$
0.82
$
1.27
$
1.73
Weighted average common shares: Basic
25,500,393
24,823,658
25,260,728
24,793,245
Diluted
25,775,794
24,957,158
25,544,088
24,944,608
Three Months Ended Six Months Ended
Reconciliation of Reported Gross Margin to October 2,
September 26, October 2, September 26,
Adjusted Gross Margin:
2021
2020
2021
2020
Reported gross margin
$
62,464
$
56,596
$
126,237
$
116,049
Restructuring and consolidation
929
1,994
929
1,994
Adjusted gross margin
$
63,393
$
58,590
$
127,166
$
118,043
Three Months Ended Six Months Ended
Reconciliation of Reported Operating Income to October
2, September 26, October 2, September 26,
Adjusted Operating Income:
2021
2020
2021
2020
Reported operating income
$
27,123
$
26,363
$
57,846
$
55,177
Acquisition costs
1,433
-
1,433
-
Restructuring and consolidation
1,987
3,514
2,544
4,633
Adjusted operating income
$
30,543
$
29,877
$
61,823
$
59,810
Reconciliation of Reported Net Income and Net Income
Three Months Ended Six Months Ended Per Common
Share to Adjusted Net Income and October 2, September
26, October 2, September 26, Adjusted Net
Income Per Common Share:
2021
2020
2021
2020
Reported net income
$
6,929
$
20,421
$
32,928
$
43,110
Acquisition and related financing costs (1)
13,049
-
13,049
-
Restructuring and consolidation (1)
1,534
2,780
2,003
3,676
Foreign exchange translation loss (1)
61
115
72
176
Discrete and other tax items benefit
1,952
(102)
1,792
(127)
Adjusted net income
$
23,525
$
23,214
$
49,844
$
46,835
Preferred stock dividends
510
-
510
-
Adjusted net income available to common stockholders
$
23,015
$
23,214
$
49,334
$
46,835
(1) After tax impact. Tax rate of 22.8% applied in the
three months ended October 2, 2021.
Adjusted net income per common share: Basic
$
0.90
$
0.94
$
1.95
$
1.89
Diluted
$
0.89
$
0.93
$
1.93
$
1.88
Diluted - Pre-Offering
$
0.92
$
0.93
$
1.96
$
1.88
Weighted average common shares: Basic
25,500,393
24,823,658
25,260,728
24,793,245
Diluted
25,775,794
24,957,158
25,544,088
24,944,608
Diluted - Pre-Offering (1)
25,434,586
24,957,158
25,373,484
24,944,608
(1) Excludes the three- and six-month impact of the common stock
and MCPS offerings of 341,208 and 170,604 weighted average shares,
respectively.
Three Months Ended Six Months Ended October 2,
September 26, October 2, September 26,
Segment Data, Net External Sales:
2021
2020
2021
2020
Plain bearings segment
$
74,079
$
71,053
$
147,400
$
149,928
Roller bearings segment
27,309
21,579
52,556
44,479
Ball bearings segment
24,431
21,099
47,559
39,939
Engineered products segment
35,081
32,604
69,590
68,482
$
160,900
$
146,335
$
317,105
$
302,828
Three Months Ended Six Months Ended
October 2, September 26, October
2, September 26, Selected Financial Data:
2021
2020
2021
2020
Depreciation and amortization
$
8,645
$
8,437
$
16,857
$
16,833
Share-based stock compensation expense
6,224
5,231
11,996
10,669
Adjusted operating income plus depreciation/amortization
plus share-based stock compensation expense
$
45,412
$
43,545
$
90,676
$
87,312
Cash provided by operating activities
$
40,181
$
26,120
$
93,474
$
74,479
Capital expenditures
$
3,515
$
2,133
$
6,882
$
6,008
Total debt
$
7,605
$
20,392
Cash on hand
$
297,481
$
166,352
Cash from equity offerings
1,051,130
-
Total cash
$
1,348,611
$
166,352
Repurchase of common stock
$
6,356
$
4,399
Backlog
$
456,741
$
402,958
Three Months Ended Six
Months Ended October 2, September 26,
October 2, September 26, Net External Sales by
Channel (1)
2021
2020
2021
2020
Aerospace: Commercial - OEM
$
42,700
$
46,285
$
85,581
$
101,745
Commercial - Aftermarket/Distribution
11,088
10,853
23,327
26,297
Defense
29,494
30,003
55,267
58,081
83,282
87,141
164,175
186,123
Industrial: OEM and Marine
53,660
40,232
104,390
79,600
Aftermarket/Distribution
23,958
18,962
48,540
37,105
77,618
59,194
152,930
116,705
$
160,900
$
146,335
$
317,105
$
302,828
(1) End markets in each period presented are based on internal
definitions and metrics considered by management and are
periodically reviewed and updated when evaluating the performance
of the business.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211112005365/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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