May 26, 2011 at 08:00 AM EDT
RBC Bearings Incorporated Announces Fiscal 2011 Fourth Quarter Results

RBC Bearings Incorporated (Nasdaq: ROLL), a leading international manufacturer of highly-engineered precision plain, roller and ball bearings for the industrial, defense and aerospace industries, today reported results for the fourth quarter ended April 2, 2011.

Fourth Quarter Highlights

Q4 Fiscal 2011Q4 Fiscal 2010Change

($ in millions)

GAAP Adjusted (1) GAAP Adjusted (1) GAAP Adjusted (1)
Net sales $ 88.9 $ 79.8 11.4 %
Gross margin $ 30.3 $ 31.1 $ 25.1 $ 25.8 20.6 % 20.6 %
Gross margin % 34.1 % 34.9 % 31.5 % 32.3 %
Operating income $ 16.1 $ 16.8 $ 11.5 $ 12.9 39.4 % 30.8 %
Net income $ 9.9 $ 10.4 $ 9.7 $ 8.1 2.1 % 29.3 %
Diluted EPS $ 0.44 $ 0.47 $ 0.44 $ 0.37 0.0 % 27.0 %
(1) Results exclude items in reconciliation below.

Fiscal Year 2011 Highlights

Fiscal Year 2011Fiscal Year 2010Change

($ in millions)

GAAP Adjusted (1) GAAP Adjusted (1) GAAP Adjusted (1)
Net sales $ 335.6 $ 274.7 22.2 %
Gross margin $ 109.8 $ 112.7 $ 84.6 $ 87.2 29.8 % 29.2 %
Gross margin % 32.7 % 33.6 % 30.8 % 31.7 %
Operating income $ 56.2 $ 58.2 $ 34.7 $ 38.7 62.1 % 50.3 %
Net income $ 34.9 $ 37.0 $ 24.4 $ 24.3 43.0 % 52.3 %
Diluted EPS $ 1.58 $ 1.68 $ 1.12 $ 1.12 41.1 % 50.0 %
(1) Results exclude items in reconciliation below.

“We are very pleased with the results of our fourth quarter. Both sales and operation efficiencies showed significant gains over last year and are the result of continued improvement in demand for products from our core markets, new product introductions and the maturing of many operating efficiency initiatives,” said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer. “We expect further strengthening of our core markets thru our fiscal year and are pleased to be planning an expansion of production rates in many of our plants.”

Fourth Quarter Results

Net sales for the fourth quarter of fiscal 2011 were $88.9 million, an increase of 11.4% from $79.8 million in the fourth quarter of fiscal 2010. The increase of 11.4% was driven by an increase of 18.5% in our industrial business and 4.6% in net sales in our aerospace and defense business. Gross margin for the fourth quarter was $30.3 million compared to $25.1 million for the same period last year. Gross margin as a percentage of net sales was 34.1% in the fourth quarter of fiscal 2011 compared to 31.5% for the same period last year. The increase in gross margin percentage was mainly driven by the current recovery in our industrial and aerospace businesses offset by costs associated with our expansion into large bearing products. Gross margin as a percentage of net sales, excluding $0.7 million of large bearing expansion costs, was 34.9% compared to 32.3% for the same adjusted period last year.

Operating income increased 39.4% to $16.1 million for the fourth quarter of fiscal 2011 compared to $11.5 million for the same period last year. As a percentage of net sales, operating income was 18.1% compared to 14.4% for the same period last year. Operating income excluding costs associated with the expansion into large bearing products and restructuring and moving costs was $16.8 million, an increase of 30.8% compared to adjusted operating income for the same period last year. As a percentage of net sales, operating income, excluding these charges, was 18.9% compared to 16.1% for the same adjusted period last year.

Interest expense, net for the fourth quarter of fiscal 2011 was $0.6 million compared to $0.5 million for the same period last year.

Other non-operating expense was $0.3 million for the fourth quarter of fiscal 2011. This was mainly comprised of foreign exchange losses.

For the fourth quarter of fiscal 2011, the Company reported net income of $9.9 million compared to net income of $9.7 million in the same period last year. Excluding the after-tax costs associated with the expansion into large bearing products, restructuring and moving costs, and the foreign exchange loss, net income increased 29.3% to $10.4 million compared to $8.1 million for the same adjusted period last year.

Fiscal Year 2011 Results

Net sales for fiscal 2011 were $335.6 million, an increase of 22.2% from $274.7 million for the same period last year. Gross margin for fiscal 2011 was $109.8 million compared to $84.6 million for the same period last year. Gross margin as a percentage of net sales was 32.7% for fiscal 2011 compared to 30.8% for the same period last year. The increase in gross margin percentage was mainly driven by the current recovery in our industrial and aerospace businesses offset by costs associated with the expansion into large bearing products. Gross margin as a percentage of net sales, excluding $2.9 million of large bearing expansion costs, was 33.6% compared to 31.7% for the same adjusted period last year.

For fiscal 2011, the Company reported operating income of $56.2 million compared to $34.7 million for the same period last year. Operating income excluding costs associated with the expansion into large bearing products and restructuring and moving costs offset by a net gain on sale of assets was $58.2 million for fiscal 2011 compared to $38.7 million for the same adjusted period last year. Operating income as a percentage of net sales excluding these charges was 17.3% for fiscal 2011 compared to 14.1% for the same adjusted period last year.

Interest expense, net for fiscal 2011 was $1.8 million compared to $1.8 million for the same period last year.

Other non-operating expense was a loss of $1.5 million for fiscal 2011. This was mainly comprised of foreign exchange losses.

Net income for fiscal 2011 was $34.9 million compared to net income of $24.4 million for the same period last year. Excluding the after-tax costs associated with the expansion into large bearing products, restructuring and moving costs and the foreign exchange loss offset by a net gain on sale of assets and the CDSOA payment, net income was $37.0million compared to $24.3 million for the same adjusted period last year.

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 866-383-7989 (international callers dial 617-597-538) and enter conference ID # 66143562. An audio replay of the call will be available from 2:00 p.m. ET on Thursday, May 26th until 11:59 p.m. ET on Thursday, June 2nd. The replay can be accessed by dialing 888-286-8010 (international callers dial 617-801-6888) and entering conference call ID #38110092. 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 generally accepted accounting principles (“GAAP”), this press release also discloses non-GAAP results of operations that exclude certain charges. These non-GAAP measures adjust for charges 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 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 requiring sophisticated design, testing, and manufacturing capabilities for the diversified industrial, aerospace and defense markets. Headquartered in Oxford, Connecticut, RBC Bearings currently employs approximately 1,950 people and operates 23 manufacturing facilities in four countries.

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 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 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, 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 Annual Report filed on Form 10-K. The Company does not intend, and undertakes no obligation, to update or alter any forward-looking statement.

RBC Bearings Incorporated
Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
(Unaudited)
Three Months EndedTwelve Months Ended
April 2,April 3,April 2,April 3,
2011201020112010
Net sales $ 88,898 $ 79,832 $ 335,625 $ 274,702
Cost of sales 58,579 54,702 225,851 190,136
Gross margin 30,319 25,130 109,774 84,566
Operating expenses:
Selling, general and administrative 13,898 12,680 52,706 47,367
Other, net 367 935 875 2,529
Total operating expenses 14,265 13,615 53,581 49,896
Operating income 16,054 11,515 56,193 34,670
Interest expense, net 626 484 1,791 1,807
Other non-operating expense (income) 252 295 1,525 (147 )
Income before income taxes 15,176 10,736 52,877 33,010
Provision for income taxes 5,309 1,071 18,009 8,625
Net income $ 9,867 $ 9,665 $ 34,868 $ 24,385
Net income per common share:
Basic $ 0.45 $ 0.45 $ 1.61 $ 1.13
Diluted $ 0.44 $ 0.44 $ 1.58 $ 1.12
Weighted average common shares:
Basic 21,788,514 21,590,597 21,678,626 21,590,421
Diluted 22,232,269 21,781,792 22,078,711 21,747,082

RBC Bearings Incorporated

Consolidated Statements of Operations

(dollars in thousands, except share and per share data)

(Unaudited)

Three Months EndedTwelve Months Ended
April 2,April 3,April 2,April 3,
Reconciliation of Reported Gross Margin to2011201020112010
Adjusted Gross Margin:
Reported gross margin $ 30,319 $ 25,130 $ 109,774 $ 84,566
Large bearing expansion costs 741 629 2,879 2,640
Adjusted gross margin $ 31,060 $ 25,759 $ 112,653 $ 87,206
Three Months EndedTwelve Months Ended

Reconciliation of Reported Operating Income to Adjusted Operating Income:

April 2,
2011

April 3,
2010

April 2,
2011

April 3,
2010

Reported operating income $ 16,054 $ 11,515 $ 56,193 $ 34,670
Large bearing expansion costs 741 629 2,879 2,640
Restructuring and moving costs 35 525 219 1,197
(Gain) loss on disposition or sale of assets (10 ) 186 (1,076 ) 215
Adjusted operating income $ 16,820 $ 12,855 $ 58,215 $ 38,722
Reconciliation of Reported Net Income andThree Months EndedTwelve Months Ended

Net Income Per Common Share to Adjusted Net Income
and Adjusted Net Income Per Common Share:

April 2,
2011

April 3,
2010
April 2,
2011
April 3,
2010
Reported net income $ 9,867 $ 9,665 $ 34,868 $ 24,385
Large bearing expansion costs (1) 482 410 1,898 1,737
Restructuring and moving costs (1) 23 342 144 788
(Gain) loss on disposition or sale of assets (1) (7 ) 121 (710 ) 141
CDSOA payment (1) - - (123 ) (122 )
Foreign exchange loss (gain) (1) 64 192 926 26
Advanced energy manufacturing tax credit - (2,665 ) - (2,665 )
Adjusted net income $ 10,429 $ 8,065 $ 37,003 $ 24,290
(1) Item was tax effected at the effective tax rate.
Adjusted net income per common share:
Basic $ 0.48 $ 0.37 $ 1.71 $ 1.13
Diluted $ 0.47 $ 0.37 $ 1.68 $ 1.12
Adjusted weighted average common shares:
Basic 21,788,514 21,590,597 21,678,626 21,590,421
Diluted 22,232,269 21,781,792 22,078,711 21,747,082
RBC Bearings Incorporated
Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
(Unaudited)

Three Months Ended

Twelve Months Ended
April 2,April 3,April 2,April 3,
Segment Data, Net External Sales:2011201020112010
Roller bearings segment $ 25,662 $ 21,330 $ 98,942 $ 73,164
Plain bearings segment 45,262 40,324 168,777 134,303
Ball bearings segment 10,100 11,718 40,637 45,442
Other segment 7,874 6,460 27,269 21,793
$ 88,898 $ 79,832 $ 335,625 $ 274,702
Three Months EndedTwelve Months Ended
April 2,April 3,April 2,April 3,
Selected Financial Data:2011201020112010
Depreciation and amortization $ 3,204 $ 2,875 $ 12,971 $ 11,830
Incentive stock compensation expense $ 1,017 $ 904 $ 4,057 $ 3,182
Cash provided by operating activities $ 9,581 $ 6,180 $ 49,956 $ 41,153
Capital expenditures $ 3,188 $ 2,398 $ 10,440 $ 9,906
Total debt $ 31,296 $ 38,453
Cash and short-term investments $ 67,887 $ 28,623
Backlog $ 196,697 $ 157,918

Contacts:

RBC Bearings
Daniel A. Bergeron, 203-267-5028
dbergeron@rbcbearings.com
or
FD
Michael Cummings, 617-897-1542
investors@rbcbearings.com
Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here