RBC Bearings Incorporated Announces Fiscal 2014 First Quarter Results
Oxford, CT - RBC Bearings Incorporated, an 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 2014.
First Quarter Highlights
| Q1 FY 2014 | Q1 FY 2013 | Change | |||||||||||||||||||||||||
| ($ in millions) | GAAP | Adjusted (1) | GAAP | Adjusted (1) | GAAP | Adjusted (1) | |||||||||||||||||||||
| Net sales | $102.7 | $103.3 | -0.6% | ||||||||||||||||||||||||
| Gross margin | $40.5 | $38.4 | 5.3% | ||||||||||||||||||||||||
| Gross margin % | 39.4% | 37.2% | |||||||||||||||||||||||||
| Operating income | $22.3 | $22.9 | $22.0 | $22.0 | 1.4% | 4.2% | |||||||||||||||||||||
| Operating income % | 21.7% | 22.3% | 21.3% | 21.3% | |||||||||||||||||||||||
| Net income | $15.1 | $15.2 | $17.2 | $13.9 | -11.9% | 8.7% | |||||||||||||||||||||
| Diluted EPS | $0.65 | $0.66 | $0.76 | $0.62 | -14.5% | 6.5% | |||||||||||||||||||||
| (1) Results exclude items in reconciliation below. | |||||||||||||||||||||||||||
“The first quarter of fiscal 2014 demonstrated a strong shift in demand to our aircraft products,” said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer. “We are pleased with the volumes achieved, the outlook of our current markets, and our record improvement in operating margins.”
First Quarter Results
Net sales for the first quarter of fiscal 2014 were $102.7 million, a decrease of 0.6% from $103.3 million in the first quarter of fiscal 2013. The decrease in net sales was mainly the result of a 22.0% decrease in industrial sales driven by OEM volume declines in mining, oil and gas, and military vehicles, largely offset by a 22.2% increase in aerospace and defense driven by commercial aircraft build rates and the aerospace aftermarket. Gross margin for the first quarter was $40.5 million compared to $38.4 million for the same period last year. Gross margin as a percentage of net sales was 39.4% in the first quarter of fiscal 2014 compared to 37.2% for the same period last year.
SG&A for the first quarter of fiscal 2014 was $17.0 million, an increase of $0.9 million over the same period last year. As a percentage of net sales, SG&A was 16.5% for the first quarter compared to 15.6% for the same period last year.
Other operating expenses for the first quarter of fiscal 2014 totaled $1.2 million, an increase of $0.8 million, compared to $0.4 million for the same period last year. For the first quarter of fiscal 2014 other operating expenses consisted of $0.6 million associated with the consolidation and restructuring of the large bearing facilities, $0.4 million of amortization of intangibles and $0.2 million in other expenses. For the same period last year, other operating expenses consisted of $0.4 million of amortization of intangibles.
Operating income for the first quarter of fiscal 2014 was $22.3 million, an increase of 1.4% compared to operating income of $22.0 million for the same period last year. As a percentage of net sales, operating income was 21.7% compared to 21.3% for the same period last year. Excluding costs associated with the consolidation and restructuring of the large bearing facilities, operating income for the first quarter of fiscal 2014 would have been $22.9 million compared to $22.0 million for the same period last year. As a percentage of net sales excluding these costs, operating income would have been 22.3% compared to 21.3% for the same period last year.
Interest expense, net for the first quarter of fiscal 2014 was $0.2 million compared to $0.2 million for the same period last year.
Other non-operating income was $0.2 million for the first quarter of fiscal 2014 compared to other non-operating income of $3.3 million for the same period last year. The income in the first quarter of fiscal 2014 was mainly due to foreign exchange gains. In the first quarter of fiscal 2013 the income of $3.3 million was mainly due to the receipt of $3.6 million in CDSOA payments offset by $0.3 million of foreign exchange losses.
Income tax expense for the first quarter of fiscal 2014 was $7.1 million compared to $7.9 million for the same period last year. Our effective income tax rate for the first quarter of fiscal 2014 was 32.1% compared to 31.6% for the same period last year. The effective income tax rates for the first quarter of fiscal 2014 and 2013 includes a $0.4 million and $0.9 million benefit due to the reversal of unrecognized tax benefits associated with the conclusion of state income tax audits and the expiration of federal and state statutes of limitation. The effective income tax rates without these discrete items would have been 33.8% for the first quarter fiscal 2014 compared to 35.0% for the same period last year.
Net income for the first quarter of fiscal 2014 was $15.1 million compared to $17.2 million for the same period last year. Excluding the after tax impact of the consolidation and restructuring of the large bearing facilities, CDSOA payment and the discrete tax benefits, net income would have been $15.2 million for the first quarter of fiscal 2014, an increase of 8.7% compared to $13.9 million for the same period last year.
Diluted EPS for the first quarter of fiscal 2014 was 65 cents per share compared to 76 cents per share for the same period last year. Excluding the consolidation and restructuring of the large bearing facilities, the after tax impact of the CDSOA payment and the discrete tax benefits, diluted EPS for the first quarter of fiscal 2014 would have been 66 cents per share compared to 62 cents per share for the same period last year, an increase of 6.5%.
CDSOA Payment
In the first quarter of fiscal 2013, the Company received approximately $3.6 million in payments under the U.S. Continued Dumping and Subsidy Offset Act (“CDSOA”). The CDSOA distributes antidumping duties paid by overseas companies to qualified domestic firms hurt by unfair trade. This payment has been classified below “Operating income” in “Other non-operating (income) expense” on the Consolidated Statement of Operations. For further information please refer to the press release and 8-K filing dated April 26, 2012.
