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.
