UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-40840

RBC BEARINGS INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware		95-4372080
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One Tribology Center
Oxford, CT		06478
(Address of principal executive offices)		(Zip Code)

(203) 267-7001
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol		Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share		RBC		The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 25, 2024, RBC Bearings Incorporated had 31,409,360 shares of Common Stock outstanding.

TABLE OF CONTENTS

Part I -	FINANCIAL INFORMATION	1

Item 1.	Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33

Part II -	OTHER INFORMATION	34

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	35

Part I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

RBC Bearings Incorporated

Consolidated Balance Sheets

(dollars in millions)

	September 28, 2024			March 30, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	89.1		$	63.5
Accounts receivable, net of allowances of $4.1 as of September 28, 2024 and $4.4 as of March 30, 2024		255.4			255.2
Inventory		646.7			622.8
Prepaid expenses and other current assets		31.0			24.0
Total current assets		1,022.2			965.5
Property, plant and equipment, net		362.5			361.0
Operating lease assets, net		47.9			41.4
Goodwill		1,875.9			1,874.9
Intangible assets, net		1,359.5			1,391.9
Other noncurrent assets		44.8			43.9
Total assets	$	4,712.8		$	4,678.6

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	127.4		$	116.2
Accrued expenses and other current liabilities		156.7			167.3
Current operating lease liabilities		8.0			7.0
Current portion of long-term debt		1.8			3.8
Total current liabilities		293.9			294.3
Long-term debt, less current portion		1,099.7			1,188.1
Noncurrent operating lease liabilities		40.5			35.3
Deferred income taxes		274.3			284.2
Other noncurrent liabilities		121.1			124.8
Total liabilities		1,829.5			1,926.7

Stockholders’ equity:
Preferred stock, $.01 par value; authorized shares: 10,000,000 as of September 28, 2024 and March 30, 2024, respectively; issued shares and outstanding: 4,598,500 and 4,600,000 as of September 28, 2024 and March 30, 2024, respectively		0.0			0.0
Common stock, $.01 par value; authorized shares: 60,000,000 at September 28, 2024 and March 30, 2024, respectively; issued shares and outstanding: 30,411,361 and 30,227,444 as of September 28, 2024 and March 30, 2024, respectively		0.3			0.3
Additional paid-in capital		1,658.6			1,625.2
Accumulated other comprehensive income		2.9			0.7
Retained earnings		1,321.0			1,216.8
Treasury stock, at cost; 1,043,730 shares and 1,015,053 shares as of September 28, 2024 and March 30, 2024, respectively		(99.5	)		(91.1	)
Total stockholders’ equity		2,883.3			2,751.9
Total liabilities and stockholders’ equity	$	4,712.8		$	4,678.6

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Operations

(dollars in millions, except per share data)

(Unaudited)

	Three Months Ended				Six Months Ended
	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Net sales	$	397.9	$	385.6	$	804.2	$	772.7
Cost of sales		224.1		219.3		446.4		438.5
Gross margin		173.8		166.3		357.8		334.2
Operating expenses:
Selling, general and administrative		69.5		60.5		137.1		125.2
Other, net		18.2		18.0		37.1		36.2
Total operating expenses		87.7		78.5		174.2		161.4
Operating income		86.1		87.8		183.6		172.8
Interest expense, net		15.6		20.1		32.8		40.6
Other non-operating expense		1.1		0.8		1.5		1.3
Income before income taxes		69.4		66.9		149.3		130.9
Provision for income taxes		15.2		15.2		33.7		29.2
Net income		54.2		51.7		115.6		101.7
Preferred stock dividends		5.7		5.8		11.4		11.5
Net income attributable to common stockholders	$	48.5	$	45.9	$	104.2	$	90.2

Net income per common share attributable to common stockholders:
Basic	$	1.67	$	1.59	$	3.58	$	3.13
Diluted	$	1.65	$	1.58	$	3.55	$	3.10
Weighted average common shares:
Basic		29,124,564		28,885,411		29,089,692		28,866,142
Diluted		29,336,466		29,138,596		29,316,493		29,126,670

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Comprehensive Income

(dollars in millions)

(Unaudited)

	Three Months Ended						Six Months Ended
	September 28, 2024			September 30, 2023			September 28, 2024			September 30, 2023
Net income	$	54.2		$	51.7		$	115.6		$	101.7
Pension and postretirement liability adjustments, net of taxes ⁽¹⁾		0.6			(0.0	)		0.6			0.5
Change in fair value of interest rate swap ⁽²⁾		(1.8	)		0.5			(1.9	)		5.3
Change in fair value of cross currency swap⁽³⁾		(2.1	)		—			(2.1	)		—
Foreign currency translation adjustments		6.6			(5.0	)		5.6			(1.9	)
Total comprehensive income	$	57.5		$	47.2		$	117.8		$	105.6

(1)

These adjustments were net of tax expense of $0.1 and tax benefit of $0.0 for the three-month periods ended September 28, 2024, and September 30, 2023, respectively and net of tax expense of $0.1 and $0.2 for the six-month periods ended September 28, 2024, and September 30, 2023, respectively.

(2)

These adjustments were net of tax benefit of $0.5 and net of tax expense of $0.1 for the three-month periods ended September 28, 2024, and September 30, 2023, respectively and net of tax benefit of $0.5 and net of tax expense of $1.5 for the six-month periods ended September 28, 2024, and September 30, 2023, respectively.

(3)

These adjustments were net of tax benefit of $0.6 for the three- and six-month periods ended September 28, 2024.

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Stockholders’ Equity

(dollars in millions)

(Unaudited)

	Common Stock					Preferred Stock					Additional Paid-in		Accumulated Other Comprehensive			Retained			Treasury Stock						Total Stockholders’
	Shares			Amount		Shares			Amount		Capital		Income/(Loss)			Earnings			Shares			Amount			Equity

Balance at March 30, 2024		30,227,444		$	0.3		4,600,000		$	0.0	$	1,625.2	$	0.7		$	1,216.8			(1,015,053	)	$	(91.1	)	$	2,751.9
Net income		—			—		—			—		—		—			61.4			—			—			61.4
Stock-based compensation		—			—		—			—		4.2		—			—			—			—			4.2
Preferred stock dividends		—			—		—			—		—		—			(5.7	)		—			—			(5.7	)
Repurchase of common stock		—			—		—			—		—		—			—			(27,208	)		(8.0	)		(8.0	)
Exercise of equity awards		8,642			—		—			—		1.2		—			—			—			—			1.2
Change in pension and post-retirement plan benefit adjustments, net of tax benefit of $0.0		—			—		—			—		—		0.0			—			—			—			0.0
Issuance of restricted stock, net of forfeitures		27,399			—		—			—		—		—			—			—			—			—
Change in fair value of interest rate swap, net of tax benefit of $0.0		—			—		—			—		—		(0.1	)		—			—			—			(0.1	)
Currency translation adjustments		—			—		—			—		—		(1.0	)		—			—			—			(1.0	)
Balance at June 29, 2024		30,263,485		$	0.3		4,600,000		$	0.0	$	1,630.6	$	(0.4	)	$	1,272.5			(1,042,261	)	$	(99.1	)	$	2,803.9
Net income		—			—		—			—		—		—			54.2			—			—			54.2
Stock-based compensation		—			—		—			—		4.0		—			—			—			—			4.0
Preferred stock dividends		—			—		—			—		—		—			(5.7	)		—			—			(5.7	)
Repurchase of common stock		—			—		—			—		—		—			—			(1,469	)		(0.4	)		(0.4	)
Early conversion of mandatory convertible preferred stock to common stock		661			—		(1,500	)		—		—		—			—			—			—			—
Exercise of equity awards		147,484			—		—			—		24.0		—			—			—			—			24.0
Change in pension and post-retirement plan benefit adjustments, net of tax expense of $0.1		—			—		—			—		—		0.6			—			—			—			0.6
Issuance of restricted stock, net of forfeitures		(269	)		—		—			—		—		—			—			—			—			—
Change in fair value of interest rate swap, net of tax benefit of $0.5		—			—		—			—		—		(1.8	)		—			—			—			(1.8	)
Change in fair value of cross currency swap, net of tax benefit of $0.6		—			—		—			—		—		(2.1	)		—			—			—			(2.1	)
Currency translation adjustments		—			—		—			—		—		6.6			—			—			—			6.6
Balance at September 28, 2024		30,411,361		$	0.3		4,598,500		$	0.0	$	1,658.6	$	2.9		$	1,321.0			(1,043,730	)	$	(99.5	)	$	2,883.3

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Stockholders’ Equity

(dollars in millions)

(Unaudited)

	Common Stock				Preferred Stock				Additional Paid-in		Accumulated Other Comprehensive			Retained			Treasury Stock						Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Income/(Loss)			Earnings			Shares			Amount			Equity
Balance at April 1, 2023		29,989,948	$	0.3		4,600,000	$	0.0	$	1,589.9	$	(4.1	)	$	1,029.9			(966,398	)	$	(80.1	)	$	2,535.9
Net income		—		—		—		—		—		—			50.0			—			—			50.0
Stock-based compensation		—		—		—		—		4.9		—			—			—			—			4.9
Preferred stock dividends		—		—		—		—		—		—			(5.7	)		—			—			(5.7	)
Repurchase of common stock		—		—		—		—		—		—			—			(32,804	)		(6.8	)		(6.8	)
Exercise of equity awards		11,772		—		—		—		1.0		—			—			—			—			1.0
Change in pension and post-retirement plan benefit adjustments, net of tax expense of $0.2		—		—		—		—		—		0.5			—			—			—			0.5
Issuance of restricted stock, net of forfeitures		54,627		—		—		—		—		—			—			—			—			—
Change in fair value of interest rate swap, net of tax expense of $1.4		—		—		—		—		—		4.8			—			—			—			4.8
Currency translation adjustments		—		—		—		—		—		3.1			—			—			—			3.1
Balance at July 1, 2023		30,056,347	$	0.3		4,600,000	$	0.0	$	1,595.8	$	4.3		$	1,074.2			(999,202	)	$	(86.9	)	$	2,587.7
Net income		—		—		—		—		—		—			51.7			—			—			51.7
Stock-based compensation		—		—		—		—		3.3		—			—			—			—			3.3
Preferred stock dividends		—		—		—		—		—		—			(5.8	)		—			—			(5.8	)
Repurchase of common stock		—		—		—		—		—		—			—			(736	)		(0.2	)		(0.2	)
Exercise of equity awards		14,013		—		—		—		2.0		—			—			—			—			2.0
Change in pension and post-retirement plan benefit adjustments, net of tax benefit of $0.0		—		—		—		—		—		(0.0	)		—			—			—			(0.0	)
Issuance of restricted stock, net of forfeitures		13,885		—		—		—		—		—			—			—			—			—
Change in fair value of interest rate swap, net of tax expense of $0.1		—		—		—		—		—		0.5			—			—			—			0.5
Currency translation adjustments		—		—		—		—		—		(5.0	)		—			—			—			(5.0	)
Balance at September 30, 2023		30,084,245	$	0.3		4,600,000	$	0.0	$	1,601.1	$	(0.2	)	$	1,120.1			(999,938	)	$	(87.1	)	$	2,634.2

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Cash Flows

(dollars in millions)

(Unaudited)

	Six Months Ended
	September 28, 2024			September 30, 2023
Cash flows from operating activities:
Net income	$	115.6		$	101.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		60.2			59.7
Deferred income taxes		(10.2	)		(6.5	)
Amortization of deferred financing costs		1.0			1.6
Stock-based compensation		13.1			9.1
Noncash operating lease expense		3.2			3.5
Loss on disposition of assets		0.1			0.4
Consolidation, restructuring, and other noncash charges		-			0.6
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		0.8			(3.7	)
Inventory		(20.7	)		(24.8	)
Prepaid expenses and other current assets		(7.0	)		(0.7	)
Other noncurrent assets		(2.0	)		(2.0	)
Accounts payable		11.0			(16.0	)
Accrued expenses and other current liabilities		(16.2	)		(7.7	)
Other noncurrent liabilities		(8.5	)		(0.4	)
Net cash provided by operating activities		140.4			114.8

Cash flows from investing activities:
Capital expenditures		(25.2	)		(14.2	)
Proceeds from sale of assets		-			0.4
Acquisition of business/purchase price adjustments for acquisition		-			(18.7	)
Net cash used in investing activities		(25.2	)		(32.5	)

Cash flows from financing activities:
Proceeds received from revolving credit facility		-			18.0
Repayment of revolving credit facility		(20.4	)		-
Repayments of term loans		(75.0	)		(90.0	)
Repayments of notes payable		(1.3	)		(1.3	)
Proceeds from mortgage		4.5			-
Principal payments on finance lease obligations		(2.1	)		(1.6	)
Preferred stock dividends paid		(11.5	)		(11.5	)
Exercise of stock options		25.2			3.0
Repurchase of common stock		(8.4	)		(7.0	)
Net cash used in financing activities		(89.0	)		(90.4	)

Effect of exchange rate changes on cash		(0.6	)		(0.7	)

Cash and cash equivalents:
Increase/(decrease) during the period		25.6			(8.8	)
Cash and cash equivalents, at beginning of period		63.5			65.4
Cash and cash equivalents, at end of period	$	89.1		$	56.6

Supplemental disclosures of cash flow information:
Cash paid for:
Income taxes	$	57.9		$	42.4
Interest		28.8			39.1

See accompanying notes.

RBC Bearings Incorporated

Notes to Unaudited Interim Consolidated Financial Statements

(dollars in millions, except per share data)

1. Basis of Presentation

The interim consolidated financial statements included herein have been prepared by RBC Bearings Incorporated, a Delaware corporation (collectively with its subsidiaries, the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The interim financial statements included with this report have been prepared on a consistent basis with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2024 (our “Annual Report”). We condensed or omitted certain information and footnote disclosures normally included in our annual audited financial statements, which we prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). As used in this report, the terms “we,” “us,” “our,” “RBC” and the “Company” mean RBC Bearings Incorporated and its subsidiaries, unless the context indicates another meaning.

These financial statements reflect all adjustments, accruals, and estimates, consisting only of items of a normal recurring nature, that are, in the opinion of management, necessary for the fair presentation of the consolidated financial condition and consolidated results of operations for the interim periods presented. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in our Annual Report.

The results of operations for the three- and six-month periods ended September 28, 2024 are not necessarily indicative of the operating results for the entire fiscal year ending March 29, 2025. The three-month periods ended September 28, 2024 and September 30, 2023 each included 13 weeks. The six-month periods ended September 28, 2024 and September 30, 2023 each included 26 weeks. All dollar amounts contained in these financial statements and footnotes are stated in millions, except for per share data.

2. Significant Accounting Policies

The Company’s significant accounting policies are detailed in “Note 2 - Summary of Significant Accounting Policies” of our Annual Report.

Significant changes to our accounting policies as a result of adopting new accounting standards are discussed below.

Recent Accounting Standards Adopted

Not Applicable.

Recent Accounting Standards Yet to Be Adopted

In November 2023, Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. As of September 28, 2024, the Company is evaluating the impact the standard will have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024. As of September 28, 2024, the Company is evaluating the impact the standard will have on its consolidated financial statements.

3. Revenue from Contracts with Customers

Disaggregation of Revenue

The following table disaggregates total revenue by end market which is how we view our reportable segments (see Note 12):

	Three Months Ended				Six Months Ended
	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Aerospace/Defense	$	143.2	$	127.3	$	292.3	$	247.8
Industrial		254.7		258.3		511.9		524.9
Total	$	397.9	$	385.6	$	804.2	$	772.7

The following table disaggregates total revenue by geographic origin:

	Three Months Ended				Six Months Ended
	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
United States	$	352.4	$	342.0	$	712.5	$	683.3
International		45.5		43.6		91.7		89.4
Total	$	397.9	$	385.6	$	804.2	$	772.7

The following table illustrates the approximate percentage of revenue recognized for performance obligations satisfied over time versus the amount of revenue recognized for performance obligations satisfied at a point in time:

	Three Months Ended						Six Months Ended
	September 28, 2024			September 30, 2023			September 28, 2024			September 30, 2023
Point-in-time		98	%		98	%		97	%		98	%
Over time		2	%		2	%		3	%		2	%
Total		100	%		100	%		100	%		100	%

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of orders meeting the definition of a contract for which work has not been performed or has been partially performed and excludes unexercised contract options. The duration of the majority of our contracts, as defined by ASC Topic 606, is less than one year. The Company has elected to apply the practical expedient, which allows the Company to exclude remaining performance obligations with an original expected duration of one year or less. The aggregate amount of the transaction price allocated to remaining performance obligations for such contracts with a duration of more than one year was approximately $487.3 at September 28, 2024. The Company expects to recognize revenue on approximately 64% and 90% of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter.

Contract Balances

The timing of revenue recognition, invoicing and cash collections affects accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) on the consolidated balance sheets. These assets and liabilities are reported on the consolidated balance sheets on an individual contract basis at the end of each reporting period.

Contract Assets (Unbilled Receivables) - Pursuant to the over-time revenue recognition model, revenue may be recognized prior to the customer being invoiced. An unbilled receivable is recorded to reflect revenue that is recognized when (1) the cost-to-cost method is applied and (2) such revenue exceeds the amount invoiced to the customer.

As of September 28, 2024 and March 30, 2024, current contract assets were $8.2 and $6.9, respectively, and included within prepaid expenses and other current assets on the consolidated balance sheets. The increase in contract assets was primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations prior to billing, partially offset by amounts billed to customers during the period. As of September 28, 2024 and March 30, 2024, the Company did not have any contract assets classified as noncurrent on the consolidated balance sheets.

Contract Liabilities (Deferred Reve

SEC Form 10-Q filed by RBC Bearings Incorporated