RBC Bearings Incorporated reported better-than-expected results for third-quarter fiscal 2022 (ended Jan 1, 2022). The company’s earnings surpassed the Zacks Consensus Estimate by 6.06% and quarterly sales beat the same by 5.46%.
Adjusted earnings in the quarter under review were 70 cents per share, surpassing the Zacks Consensus Estimate of 66 cents. However, the bottom line declined 22.2% from the year-ago figure of 90 cents, as higher costs and expenses more than offset the positive impacts of higher revenues.
Revenue Details
In the quarter under review, RBC Bearings’ revenues were $267 million, reflecting an increase of 83% from the year-ago quarter. Organic sales in the quarter grew 7.6%, excluding the impacts of the DODGE buyout.
Exiting the reported quarter, the company had a backlog of $552.7 million, up 21% sequentially.
RBC Bearings’ revenues surpassed the Zacks Consensus Estimate of $253 million and were higher than the company’s projection of $245-$255 million.
On a geographical basis, ROLL’s revenues from the United States increased 79.8% year over year to $233.9 million. Then again, revenues generated from intentional operations totaled $33.1 million, increasing 109.5% from the year-ago quarter.
In the quarter under review, RBC Bearings acquired the DODGE mechanical power transmission division of Asea Brown Boveri Ltd. The deal was announced in July 2021 and was valued at $2.9 billion in cash. With the buyout, RBC Bearings has changed its reportable segments from the previous four — Plain Bearings, Roller Bearings, Ball Bearings and Engineered Products — to the present two segments — Aerospace/Defense and Industrial.
Its segmental performance for the fiscal third quarter is briefly discussed below:
Industrial revenues of $173.8 million (representing 65.1% of the quarter’s revenues) were up 230.4% year over year. Excluding the impacts of the DODGE buyout, the segment’s sales increased 21.3% year over year on the back of strength in mining, general industrial, semiconductor and energy markets.
Aerospace/Defense revenues totaled $93.2 million (representing 34.9% of the quarter’s revenues), decreasing 0.1% year over year. The segment suffered from weakness in defense markets, with sales declining 10.3% year over year. This was partially offset by a 7.5% increase in commercial aerospace sales and 10.5% growth in aerospace OEM component sales.
Margin Profile
In the reported quarter, RBC Bearings’ cost of sales increased 92.3% year over year to $173.6 million, representing 65% of net sales compared with 61.9% a year ago. Gross profit (adjusted) increased 77.8% to $100.3 million. Margin decreased 110 basis points (bps) to 37.6%.
Selling, general and administrative expenses of $43.2 million were up 67.8% year over year, representing 16.2% of the quarter’s net sales. Adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) were $71.4 million, increasing 73.9% year over year. The EBITDA margin is at 26.7%, down 140 bps year over year.
Adjusted operating income increased 60.7% to $44.8 million. Adjusted margin declined 230 bps to 16.8%. Net interest expenses were $11.9 million compared with $0.3 million in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the fiscal third quarter, RBC Bearings had cash and cash equivalents of $255.5 million, down from $1,348.6 million at the end of the previous quarter. Long-term debt was $1,726.7 million, up from $7.1 million in the previous quarter.
In the first nine months of fiscal 2022, the company generated net cash of $133.4 million from operating activities, increasing 20.7% from the previous-year period. Capital expenditure was $21.8 million, increasing 147% year over year.
In the first nine months of the year, the company repurchased shares for $7.7 million, increasing 23.4% year over year.
Outlook
For the fourth quarter of fiscal 2022 (ending March 2022), RBC Bearings anticipates net sales of $340-$350 million (including the impact of Dodge buyout). This represents an increase of 112.1-118.3% from the year-ago figure of $160.3 million.
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RBC Bearings Incorporated reported better-than-expected results for third-quarter fiscal 2022 (ended Jan 1, 2022). The company’s earnings surpassed the Zacks Consensus Estimate by 6.06% and quarterly sales beat the same by 5.46%.
Adjusted earnings in the quarter under review were 70 cents per share, surpassing the Zacks Consensus Estimate of 66 cents. However, the bottom line declined 22.2% from the year-ago figure of 90 cents, as higher costs and expenses more than offset the positive impacts of higher revenues.
Revenue Details
In the quarter under review, RBC Bearings’ revenues were $267 million, reflecting an increase of 83% from the year-ago quarter. Organic sales in the quarter grew 7.6%, excluding the impacts of the DODGE buyout.
Exiting the reported quarter, the company had a backlog of $552.7 million, up 21% sequentially.
RBC Bearings’ revenues surpassed the Zacks Consensus Estimate of $253 million and were higher than the company’s projection of $245-$255 million.
On a geographical basis, ROLL’s revenues from the United States increased 79.8% year over year to $233.9 million. Then again, revenues generated from intentional operations totaled $33.1 million, increasing 109.5% from the year-ago quarter.
In the quarter under review, RBC Bearings acquired the DODGE mechanical power transmission division of Asea Brown Boveri Ltd. The deal was announced in July 2021 and was valued at $2.9 billion in cash. With the buyout, RBC Bearings has changed its reportable segments from the previous four — Plain Bearings, Roller Bearings, Ball Bearings and Engineered Products — to the present two segments — Aerospace/Defense and Industrial.
Its segmental performance for the fiscal third quarter is briefly discussed below:
Industrial revenues of $173.8 million (representing 65.1% of the quarter’s revenues) were up 230.4% year over year. Excluding the impacts of the DODGE buyout, the segment’s sales increased 21.3% year over year on the back of strength in mining, general industrial, semiconductor and energy markets.
Aerospace/Defense revenues totaled $93.2 million (representing 34.9% of the quarter’s revenues), decreasing 0.1% year over year. The segment suffered from weakness in defense markets, with sales declining 10.3% year over year. This was partially offset by a 7.5% increase in commercial aerospace sales and 10.5% growth in aerospace OEM component sales.
Margin Profile
In the reported quarter, RBC Bearings’ cost of sales increased 92.3% year over year to $173.6 million, representing 65% of net sales compared with 61.9% a year ago. Gross profit (adjusted) increased 77.8% to $100.3 million. Margin decreased 110 basis points (bps) to 37.6%.
Selling, general and administrative expenses of $43.2 million were up 67.8% year over year, representing 16.2% of the quarter’s net sales. Adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) were $71.4 million, increasing 73.9% year over year. The EBITDA margin is at 26.7%, down 140 bps year over year.
Adjusted operating income increased 60.7% to $44.8 million. Adjusted margin declined 230 bps to 16.8%. Net interest expenses were $11.9 million compared with $0.3 million in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the fiscal third quarter, RBC Bearings had cash and cash equivalents of $255.5 million, down from $1,348.6 million at the end of the previous quarter. Long-term debt was $1,726.7 million, up from $7.1 million in the previous quarter.
In the first nine months of fiscal 2022, the company generated net cash of $133.4 million from operating activities, increasing 20.7% from the previous-year period. Capital expenditure was $21.8 million, increasing 147% year over year.
In the first nine months of the year, the company repurchased shares for $7.7 million, increasing 23.4% year over year.
Outlook
For the fourth quarter of fiscal 2022 (ending March 2022), RBC Bearings anticipates net sales of $340-$350 million (including the impact of Dodge buyout). This represents an increase of 112.1-118.3% from the year-ago figure of $160.3 million.
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