Earnings Roundup: RBC Bearings and Rexnord post fiscal 2008 results
Industrial Distribution staff -- Industrial Distribution, 5/28/2008 7:44:00 AM
Two manufacturers, RBC Bearings Inc. and Rexnord LLC, posted sales and earnings results for the fourth quarter and full year of fiscal 2008.RBC Bearings Inc.
RBC posted sales of $336.6 million during fiscal 2008, up 8 percent compared with $306.1 million during the prior year.
Net income for the Oxford, Conn.-based bearings manufacturer rose 13.7 percent to $92.1 million, compared with $81 million during fiscal 2007.
Fourth-quarter sales jumped 41.1 percent to $40.2 million, compared with $28.5 million during the same period on the prior year. Quarterly net income surged 79.2 percent to $12 million, compared with $6.7 million during the fourth quarter of fiscal 2007.
RBC said its full-year sales increased 12 percent excluding revenues from its class 8 heavy truck business, which saw decreased demand. Excluding the after-tax impacts of plant relocation () and other items, net income rose 22.3 percent.
The results also include about $300,000 in payments related to the U.S. Continued Dumping and Subsidy Offset Act, which protects companies from underpriced priced imports “dumped” into the market by overseas firms.
“Our results were highlighted by adjusted net income growth of 22.3 percent and continued expansion of our operating margins over fiscal 2007. We broadened our customer base and end market offerings with the successful completion of several acquisitions, which we expect will add approximately $19 million to our revenues in fiscal 2009,” chairman and CEO Michael Hartnett said. “As we look ahead, we remain optimistic that our core markets will continue to expand and that our operations have become well-aligned with market forces. Initiatives in sales and marketing management, combined with our acquisitions and operational improvements in manufacturing over the past few years, have insured our ability to support profitable growth for fiscal 2009 and beyond.”
RBC said it expects sales of up to $93 million for the first quarter of fiscal 2009, with operating income of up to $18 million.
Rexnord LLC
Rexnord’s sales rose 47.6 percent to $1.85 billion, compared with $1.26 billion during the prior year.
Net income for fiscal 2008 rose to $40.9 million for the Milwaukee-based power transmission products maker, compared with a net loss of $36.7 million during fiscal 2007.
Fourth-quarter sales rose 30.1 percent to $502.3 million, compared with $386.1 million during the same period in the prior year. Quarterly net income of $11.7 million rose 67.1 percent to $11.7 million, compared with $7 million during the fourth quarter of fiscal 2007.
“Our solid fourth quarter performance completes what has been a record year in fiscal 2008 for Rexnord, in terms of growth, margin expansion and cash flow generation. Our core sales growth of 8 percent in the fourth quarter and 9.1 percent in fiscal 2008 demonstrates the success we’ve had in positioning the company around delivering sustainable, core growth in both our platforms,” CEO Bob Hitt said. “[I]n the fourth quarter, we completed the previously announced acquisition of GA Industries, which expands our presence into the end market of water and wastewater treatment and positions our water management platform for continued growth.
“As we look ahead into the next year, the underlying economic conditions will be tougher than what they were throughout the past fiscal year, as residential and commercial construction continue to experience unprecedented declines in starts and square footage put-in-place, coupled with double-digit material cost inflation in various metals and transport costs across most of our business,” Hitt added. “While we’re certain this will present some challenges, we are confident that the sustainable competitive advantages we’ve built in both platforms, coupled with our diversity, business system … and focus on operational execution should allow us to outperform our competition and post solid financial results in fiscal 2009. …We’re also closely monitoring inventory levels in the distribution channels for our products in the aftermarket, to ensure they remain healthy as well as proactively addressing the impact of material cost inflation in our businesses.”
Rexnord attributed the record results in part to its recovery from a fatal explosion at its Milwaukee Falk Corp. plant in December 2006, which killed three workers and injured 46. The company said it received $71.4 million in total insurance payments from the accident.
Rexnord also said it sold its French division, Rexnord SAS, to members of its management team for about $1.37. Under the terms of the deal, the sale of the 140-employee business incurred a pretax loss of about $11.2 million during the fourth quarter. The deal also includes provisions that provide Rexnord with direct access to regional distributors in France, in return for agreeing to purchase locally manufactured coupling product lines and components.
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