OXFORD - RBC Bearings Incorporated (NYSE: RBC, RBCP), a leading international manufacturer of highly engineered precision bearings, components and essential systems for the industrial, defense and aerospace industries, today reported results for the fourth quarter and full year fiscal 2024.
Fourth Quarter Financial Highlights
Fourth quarter net sales of $413.7 million increased 4.9% over last year, Aerospace/Defense up 16.8% and Industrial down 0.4%.
Gross margin of 43.1% for the fourth quarter of fiscal 2024 compared to 42.2% last year.
Fourth quarter net income attributable to common stockholders as a percentage of net sales of 13.5% vs 11.0% last year; Adjusted EBITDA as a percentage of net sales of 31.4% vs 30.7% last year.
Fourth quarter free cash flow conversion of 113.3% vs 120.0% last year.
Fiscal 2024 Financial Highlights
Fiscal 2024 net sales of $1,560.3 million increased 6.2% over last year, Aerospace/Defense up 20.7% and Industrial up 0.2%.
Gross margin of 43.0% for fiscal 2024 compared to 41.2% last year.
Fiscal 2024 net income attributable to common stockholders as a percentage of net sales of 12.0% vs 9.8% last year; Adjusted EBITDA as a percentage of net sales of 30.9% vs 29.5% last year.
Free cash flow conversion of 115.0% in fiscal 2024 vs 107.2% in fiscal 2023.
Fourth Quarter Results
Net sales for the fourth quarter of fiscal 2024 were $413.7 million, an increase of 4.9% from $394.4 million in the fourth quarter of fiscal 2023. Net sales for the Industrial segment decreased 0.4%, while net sales for the Aerospace/Defense segment increased 16.8%. Gross margin for the fourth quarter of fiscal 2024 was $178.3 million compared to $166.5 million for the same period last year.
SG&A for the fourth quarter of fiscal 2024 was $64.4 million, an increase of $4.8 million from $59.6 million for the same period last year. As a percentage of net sales, SG&A was 15.6% for the fourth quarter of fiscal 2024 compared to 15.1% for the same period last year.
Other operating expenses for the fourth quarter of fiscal 2024 totaled $19.7 million compared to $20.7 million for the same period last year. For the fourth quarter of fiscal 2024, other operating expenses included $17.7 million of amortization of intangible assets, $2.0 million of restructuring costs and $0.1 million of acquisition costs offset by $0.1 million of other income items. For the fourth quarter of fiscal 2023, other operating expenses included $17.7 million of amortization of intangible assets, $2.5 million of restructuring costs, and $0.5 million of other items.
Operating income for the fourth quarter of fiscal 2024 was $94.2 million compared to $86.1 million for the same period last year. On an adjusted basis, operating income was $96.3 million for the fourth quarter of fiscal 2024 compared to $88.6 million for the same period last year.
Interest expense, net, was $18.8 million for the fourth quarter of fiscal 2024 compared to $21.7 million for the same period last year.
Income tax expense for the fourth quarter of fiscal 2024 was $12.5 million compared to $11.2 million for the same period last year. The effective income tax rate for the fourth quarter of fiscal 2024 was 16.8% compared to 18.5% for the same period last year. The effective income tax rate for the three-month period ended March 30, 2024 of 16.8% included $5.9 million of discrete tax benefits associated with stock-based compensation windfalls, a reduction in unrecognized tax benefits due to the expiration of the statute of limitations, and the accrual of deferred tax assets related to state tax modifications; the effective income tax rate without these net benefits would have been 24.7%. The effective income tax rate for the three-month period ended April 1, 2023 of 18.5% included $1.9 million of discrete tax benefits associated with stock-based compensation and other items; the effective income tax rate without these benefits would have been 21.7%.
Diluted EPS attributable to common stockholders for the fourth quarter of fiscal 2024 was $1.91 compared to $1.49 for the same period last year. On an adjusted basis, diluted EPS attributable to common stockholders was $2.47 for the fourth quarter of fiscal 2024 compared to $2.13 for the same period last year.
Backlog as of March 30, 2024, was $726.1 million compared to $652.1 million as of December 30, 2023 and $663.8 million as of April 1, 2023. The $726.1 million backlog amount excluded $95.4 million of orders that we expected to fulfill beyond 12 months from March 30, 2024; the $652.1 million backlog amount excluded $118.6 million of orders that we expected to fulfill beyond 12 months from December 30, 2023; the $663.8 million backlog amount excluded $95.6 million of orders that we expected to fulfill beyond 12 months from April 1, 2023. Beginning in fiscal year 2025, we will disclose our full backlog for periods presented.
Preferred Stock Conversion in Fiscal 2025
The Company's Series A mandatory convertible preferred stock is set to automatically convert on October 15, 2024, at which point the Company will no longer be required to pay a 5.0% dividend ($5.7 million per quarter), which reduces net income attributable to common stockholders. This will lead to $23.0 million of annual cash savings in future periods. Fiscal 2025 will include the final three quarterly dividend payments.
If the preferred stock conversion were to have taken place during the fourth quarter of fiscal 2024, it would have resulted in an additional 2,029,980 shares of outstanding common stock. If these 2,029,980 shares were added to the total diluted shares outstanding in lieu of the preferred stock quarterly dividend of $5.7 million, diluted EPS for this quarter would have been $1.97 rather than the reported $1.91, and adjusted diluted EPS would have been $2.49 rather than the reported $2.47.
Outlook for the First Quarter Fiscal 2025
The Company expects net sales to be approximately $415.0 million to $420.0 million in the first quarter of fiscal 2025, compared to $387.1 million this year, a growth rate of 7.2% to 8.5%.
Live Webcast
RBC Bearings Incorporated will host a webcast on Friday, May 17th, 2024, 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 877-407-4019 (international callers dial +1 201-689-8337) and provide conference ID 13746497. An audio replay of the call will be available from 2:00 p.m. ET May 17th, 2024, until 2:00 p.m. ET May 31st, 2024. The replay can be accessed by dialing 877-660-6853 (international callers dial +1 201-612-7415) and providing conference ID 13746497. 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, as well as other non-cash items including but not limited to depreciation, amortization, and equity-based incentive compensation. 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.
About RBC Bearings
RBC Bearings Incorporated is an international manufacturer and marketer of highly engineered precision bearings, components and essential systems. 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, geopolitical factors, future levels of aerospace/defense and industrial market activity, future financial performance, our debt level, our level of goodwill, 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 acquire and integrate complementary businesses, and risks and uncertainties listed or disclosed in our 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 on Form 10-K filed with the SEC. The Company does not intend, and undertakes no obligation, to update or alter any forward-looking statements.
Contact:
Rob Moffatt
Director of Investor Relations
Email: investors@rbcbearings.com
RBC BEARINGS INCORPORATED 
