RBC Bearings Incorporated Announces Fiscal 2011 First Quarter Results

OXFORD, Conn., Aug 05, 2010 (BUSINESS WIRE) -- RBC Bearings Incorporated /quotes/comstock/15*!roll (ROLL 34.21, +1.91, +5.91%) , a leading international manufacturer of highly-engineered precision plain, roller and ball bearings for the industrial, defense and aerospace industries, today reported results for the first quarter of fiscal year 2011.

First Quarter Highlights
---------------------------------------------------------------------
 ($ in millions)          Q1 Fiscal 2011            Q1 Fiscal 2010               Change
                       GAAP     Adjusted (1)     GAAP     Adjusted (1)     GAAP    Adjusted (1)
                     ---------  -------------  ---------  -------------  --------  -------------
Net sales            $82.4                     $63.7                     29.3 %
Gross margin         $26.3       $27.1         $19.9       $20.4         31.9 %      33.1 %
Gross margin %        31.9 %      32.9 %        31.2 %      32.0 %
Operating income     $14.0       $13.9          $7.8        $8.5         80.6 %      64.0 %
Net income            $9.1        $9.2          $5.1        $5.3         78.8 %      73.4 %
Diluted EPS          $0.41       $0.42         $0.23       $0.25         78.3 %      68.0 %
(1) Results exclude items listed in reconciliation below.

"We are pleased to deliver strong results to begin fiscal 2011 as we continue to benefit from demand improvements in the diversified industrial segments," said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer. "As expected, we were able to deliver expanded adjusted operating margins on a year-over-year and sequential basis due to the leverage in our cost base. We are encouraged by the substantial increase in demand shown from our industrial products and the improved fundamentals of our aerospace markets. As a result we have a favorable outlook for year over year revenue expansion over the next several quarters."

First Quarter Results

Net sales for the first quarter of fiscal 2011 were $82.4 million, an increase of 29.3% from $63.7 million in the first quarter of fiscal 2010. The increase in net sales was mainly the result of a 96.5% increase in industrial sales driven by strong orders in construction and mining, semiconductor, military vehicles, and the general industrial markets. Aerospace and defense was slightly off the prior year with a decrease in volume of 8.1% driven mainly by the aerospace aftermarket and business jet market. Gross margin for the first quarter was $26.3 million compared to $19.9 million for the same period last year. Gross margin as a percentage of net sales was 31.9% in the first quarter of fiscal 2011 compared to 31.2% for the same period last year.

Operating income for the first quarter of fiscal 2011 was $14.0 million, an increase of 80.6% compared to operating income of $7.8 million for the same period last year. As a percentage of net sales, operating income was 17.1% compared to 12.2% for the same period last year. Operating income, excluding adjustments, was $13.9 million, an increase of 64.0% compared to the same period last year. As a percentage of sales, operating income, excluding adjustments, was 16.9% compared to 13.3% for the same period last year.

Interest expense, net for the first quarter of fiscal 2011 was $0.4 million, a decrease of $0.1 million, from $0.5 million for the same period last year.

Other non-operating expense (income) was $0.4 million for the first quarter of fiscal 2011. This was mainly comprised of foreign exchange losses on inter-company activity between our U.S. and International divisions.

Net income for the first quarter of fiscal 2011 increased 78.8% to $9.1 million compared to $5.1 million for the same period last year. Excluding adjustments, net income increased 73.4% to $9.2 million compared to $5.3 million for the same period last year.

Backlog, as of July 3, 2010, was $167.0 million compared to $157.9 million on April 3, 2010 and $170.9 million as of June 27, 2009.

Live Webcast

RBC Bearings Incorporated will host a webcast at 11:00 a.m. ET today 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 866-788-0543 (international callers dial 857-350-1681) and enter conference ID # 22619448. An audio replay of the call will be available from 2:00 p.m. ET on Thursday, August 5th, until 11:59 p.m. ET on Thursday, August 12th. The replay can be accessed by dialing 888-286-8010 (international callers dial 617-801-6888) and entering conference call ID # 35725341.

Non-GAAP Financial Measures

In addition to disclosing results of operations that are determined in accordance with generally accepted accounting principles ("GAAP"), this press release also discloses non-GAAP results of operations that exclude certain charges. 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. A reconciliation of the non-GAAP measures disclosed in the press release with the most comparable GAAP measures are included in the financial table attached to this press release.