General Overview

RBC Bearings is a well-known international manufacturer of highly engineered precision bearings, components and essential systems for the aerospace, defense and industrial industries. The company operates in two reportable business segments - Aerospace/Defense and Industrial.

Financial Performance

• In fiscal year 2025, RBC Bearings’ net sales increased 4.9% to $1,636.3 million compared to the prior year. This was driven by a 14.1% increase in Aerospace/Defense segment sales and a 0.2% increase in Industrial segment sales.
• Net income attributable to common stockholders increased 25.0% to $233.8 million in fiscal 2025 compared to $186.9 million in fiscal 2024.
• Gross margin expanded from 43.0% in fiscal 2024 to 44.4% in fiscal 2025, reflecting improved product mix, pricing and cost efficiencies.
• SG&A expenses increased 10.2% to $279.3 million, primarily due to higher personnel, IT and professional fees.
• Interest expense decreased 23.9% to $59.8 million due to debt reduction efforts and interest rate management strategies.
• The effective tax rate was 21.1% in fiscal 2025 compared to 19.8% in fiscal 2024, with the increase primarily due to the impact of discrete items.

Segment Performance

• Aerospace/Defense segment net sales increased 14.1% to $592.8 million, driven by 13.3% growth in commercial aerospace and 15.9% growth in defense markets. Gross margin expanded to 41.0%.
• Industrial segment net sales increased 0.2% to $1,043.5 million, with a 1.4% increase in distribution and aftermarket sales partially offset by a 2.1% decline in OEM sales. Gross margin improved to 46.3%.

Liquidity and Capital Resources

• As of March 29, 2025, RBC Bearings had $36.8 million in cash, of which $23.7 million was held by foreign operations.
• The company has a $1.3 billion term loan and a $500 million revolving credit facility, which it used to fund the Dodge Industrial acquisition. It also issued $500 million in senior notes.
• Operating cash flow increased to $293.6 million in fiscal 2025 from $274.7 million in the prior year.
• Capital expenditures were $49.8 million in fiscal 2025 and are expected to be 3.0-3.5% of net sales in fiscal 2026.

Outlook

• For fiscal 2026, the company forecasts net sales of $424.0 to $434.0 million in the first quarter, representing growth of 4.4% to 6.8% compared to the prior year period.
• The company’s backlog increased to $940.7 million as of March 29, 2025, up from $821.5 million a year earlier, reflecting continued growth in commercial aerospace and defense markets.
• The company believes its operating cash flows and available credit will provide adequate resources to fund internal growth initiatives for the foreseeable future.