Industry News
RBC Bearings Incorporated (ROLL), a leading international manufacturer of highly engineered precision bearings and components for the industrial, defense and aerospace industries, today reported results for the first quarter of fiscal year 2020.
Key Highlights
- Net sales of $182.7 million up 3.8% for the quarter and 6.5% on an organic basis
- Operating income as a percentage of sales of 21.1% up from 20.5% in the first quarter last year
- Adjusted fully diluted EPS of $1.23 up from $1.15 in the first quarter last year
First Quarter Financial Highlights
($ in millions) | Fiscal 2020 | Fiscal 2019 | Change | |||||||||
GAAP | Adjusted (1) | GAAP | Adjusted (1) | GAAP | Adjusted (1) | |||||||
Net sales | $182.7 | $176.0 | 3.8% | |||||||||
Gross margin | $70.7 | $67.7 | 4.4% | |||||||||
Gross margin % | 38.7% | 38.5% | ||||||||||
Operating income | $38.5 | $36.0 | 6.9% | |||||||||
Operating income % | 21.1% | 20.5% | ||||||||||
Net income | $30.5 | $30.5 | $27.5 | $28.1 | 11.0% | 8.7% | ||||||
Diluted EPS | $1.23 | $1.23 | $1.12 | $1.15 | 9.8% | 7.0% | ||||||
(1) Results exclude items in reconciliation below. | ||||||||||||
“We are pleased with our operating performance during the first quarter of fiscal 2020 as revenue was within our expectations.” said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer. “Double digit revenue growth from the aerospace market helped drive total organic net sales growth of 6.5%. Our revenue and earnings momentum, paired with a robust backlog, have us on track for a strong fiscal year 2020.”
First Quarter Results
Net sales for the first quarter of fiscal 2020 were $182.7 million, an increase of 3.8% from $176.0 million in the first quarter of fiscal 2019 and organic net sales increased 6.5% year over year. Net sales for the aerospace markets increased 11.3% in total and 16.3% on an organic basis. Industrial market sales declined 7.2%. Gross margin for the first quarter of fiscal 2020 was $70.7 million compared to $67.7 million for the same period last year. Gross margin as a percentage of net sales was 38.7% in the first quarter of fiscal 2020 compared to 38.5% for the same period last year.
SG&A for the first quarter of fiscal 2020 was $30.1 million, an increase of $0.5 million from $29.6 million for the same period last year. The increase was primarily due to $1.0 million of additional share-based compensation costs and other items of $0.1 million partially offset by lower professional fees of $0.6 million. As a percentage of net sales, SG&A was 16.5% for the first quarter of fiscal 2020 compared to 16.8% for the same period last year.
Other operating expenses for the first quarter of fiscal 2020 totaled $2.1 million compared to $2.2 million for the same period last year. For the first quarter of fiscal 2020, other operating expenses consisted primarily of $2.3 million in amortization of intangible assets offset by $0.2 million of other income. For the first quarter of fiscal 2019, other operating expenses were comprised mainly of $2.4 million of amortization of intangible assets, partially offset by $0.2 million of other income.
Operating income for the first quarter of fiscal 2020 was $38.5 million compared to operating income of $36.0 million for the same period last year. Operating income as a percentage of net sales was 21.1% for the first quarter of fiscal 2020 compared to 20.5% for the same period last year.
Interest expense, net was $0.5 million for the first quarter of fiscal 2020 compared to $1.7 million for the same period last year.
Income tax expense for the first quarter of fiscal 2020 was $7.3 million compared to $5.8 million for the same period last year. The effective income tax rate for the first quarter of fiscal 2020 was 19.3% compared to 17.4% for the same period last year. The income tax expense includes approximately $0.5 million of benefit from incentive stock compensation compared to $1.3 million for the same period last year.
Net income for the first quarter of fiscal 2020 was $30.5 million compared to $27.5 million for the same period last year. On an adjusted basis, net income was $30.5 million for the first quarter of fiscal 2020, compared to $28.1 million for the same period last year.
Diluted EPS for the first quarter of fiscal 2020 was $1.23 per share compared to $1.12 per share for the same period last year. On an adjusted basis, diluted EPS for the first quarter of fiscal 2020 was $1.23 per share compared to an adjusted diluted EPS of $1.15 per share for the same period last year, an increase of 7.0%.
Backlog as of June 29, 2019 was $459.4 million compared to $419.2 million as of June 30, 2018.
Outlook for the Second Quarter Fiscal 2020
The Company expects net sales to be approximately $180.0 million to $182.0 million in the second quarter of fiscal 2020. This would result in a growth rate of 4.1% to 5.3% on a year-over-year basis and 6.5% to 7.7% excluding $3.9 million in sales associated with our Miami division, which was sold in the third quarter of fiscal 2019.
