RBC Bearings(RBC) - 2025 Q3 - Quarterly Report

Financial Performance - Net sales for the three-month period ended December 28, 2024, increased by 5.5% to $394.4 million compared to$ 373.9 million in the same period last fiscal year [116]. - Net income attributable to common stockholders for the third quarter of fiscal 2025 was $56.9 million, a 39.6% increase from$ 40.8 million in the prior year [117]. - For the nine-month period ended December 28, 2024, total net sales increased by 4.5% to $1,198.6 million compared to$ 1,146.6 million in the prior year [118]. - Net income attributable to common stockholders for the nine months ended December 28, 2024, was $161.1 million, a 23.0% increase from$ 131.0 million in the same period last fiscal year [119]. Sales Segments - The Aerospace/Defense segment saw a 10.7% increase in net sales, while the Industrial segment increased by 2.7% quarter over quarter [110]. - Total net sales for the Aerospace/Defense segment in Q3 fiscal 2025 were $143.2 million, an increase of$ 14.0 million or 10.7% from $129.2 million in Q3 fiscal 2024 [135]. - For the first nine months of fiscal 2025, total net sales in the Aerospace/Defense segment were$ 435.5 million, an increase of $58.5 million or 15.5% from$ 377.0 million in the same period last year [137]. - Total net sales for the three months ended December 28, 2024, were $251.2 million, an increase of$ 6.5 million or 2.7% compared to $244.7 million in the same period last year [139]. Gross Margin - Gross margin for the third quarter of fiscal 2025 improved to 44.3% of net sales, up from 42.3% in the same quarter of fiscal 2024 [121]. - Gross margin for the Aerospace/Defense segment in Q3 fiscal 2025 was$ 57.9 million, representing 40.5% of segment net sales, down from 41.2% in the same period last year [136]. - Gross margin as a percentage of segment net sales for the first nine months of fiscal 2025 was 40.8%, up from 40.1% in the same period last year, driven by efficiencies and favorable product mix [138]. - Gross margin for the same period improved to 46.5% of net sales, up from 42.8% in the comparable period, driven by product mix and manufacturing efficiencies [140]. Expenses - SG&A expenses for Q3 fiscal 2025 were $70.1 million, an increase of$ 6.2 million or 9.8% compared to $63.9 million in Q3 fiscal 2024, representing 17.8% of net sales [123]. - For the first nine months of fiscal 2025, SG&A expenses totaled$ 207.2 million, up $18.1 million or 9.6% from$ 189.1 million in the same period last year, accounting for 17.3% of net sales [124]. - Other operating expenses for Q3 fiscal 2025 were $19.2 million, a slight increase of$ 0.3 million or 1.3% from $18.9 million in Q3 fiscal 2024, representing 4.8% of net sales [125]. - Corporate SG&A expenses for the three months ended December 28, 2024, increased to$ 25.5 million, representing 6.5% of total net sales, compared to $21.4 million or 5.7% in the same period last year [144]. Interest and Tax Expenses - Interest expense, net for Q3 fiscal 2025 was$ 14.2 million, down $5.1 million or 26.9% from$ 19.3 million in Q3 fiscal 2024, constituting 3.6% of net sales [128]. - For the first nine months of fiscal 2025, interest expense, net was $47.0 million, a decrease of$ 12.9 million or 21.6% from $59.9 million in the same period last year, representing 3.9% of net sales [129]. - Income tax expense for Q3 fiscal 2025 was$ 16.8 million, compared to $10.2 million in Q3 fiscal 2024, with an effective tax rate of 22.5% versus 18.1% [132]. Cash Flow and Capital Expenditures - The company generated$ 224.4 million from operating activities in the first nine months of fiscal 2025, an increase of $29.2 million compared to$ 195.2 million in the same period of fiscal 2024 [169]. - Cash used in investing activities decreased to $35.6 million in fiscal 2025 from$ 42.7 million in fiscal 2024, primarily due to a $19.3 million decrease in business acquisition costs [173]. - Cash used in financing activities increased to$ 191.3 million in fiscal 2025 from $147.0 million in fiscal 2024, mainly due to$ 60.4 million more in payments related to the Revolving Credit Facility [174]. - Capital expenditures for the first nine months of fiscal 2025 were $35.6 million, up from$ 23.7 million in the same period of the prior fiscal year, with expectations of an additional $10.0 to$ 15.0 million in capital expenditures for the remainder of fiscal 2025 [175]. Debt and Financial Instruments - The company has a $1.3 billion Term Loan and a$ 500 million Revolving Credit Facility, with $500 million outstanding under the Term Loan as of December 28, 2024 [150][157]. - The company entered into an Interest Rate Swap with a notional amount of$ 600 million to hedge against interest rate fluctuations, with a fixed rate of 4.455% [165]. - A Cross Currency Swap was established with a notional amount of CHF 69.4 million ( $80 million) to hedge against foreign exchange rate fluctuations related to its European subsidiary [167]. - The company has$ 3.7 million of outstanding standby letters of credit under the Revolving Credit Facility [178]. Future Outlook - The company expects net sales for the fourth quarter of fiscal 2025 to be between $434.0 million and$ 444.0 million, representing a growth of 4.9% to 7.3% compared to the fourth quarter of 2024 [112]. - The company expects operating cash flows and available credit to adequately fund internal growth initiatives for at least the next 12 months [146]. - The company plans to fund capital expenditures principally through existing cash and internally generated funds, with potential additional expenditures related to acquisitions [175]. - The company expects to save $23.0 million annually due to the retirement of 4,600,000 shares of MCPS and the conversion into common stock [168]. Currency Impact - Approximately 12% of net sales were impacted by foreign currency fluctuations for both the three- and nine-month periods ended December 28, 2024 [182].