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Oct 01, 2022
RBC Bearings Q2 2023 Earnings Report
Reported strong revenue growth driven by both industrial and aerospace sectors, with excellent execution and improved supply chain performance leading to record-breaking operating results.
Key Takeaways
RBC Bearings reported a significant increase in net sales for the second quarter of fiscal 2023, driven by strong performance in both the industrial and aerospace sectors. The acquisition of Dodge contributed substantially to the industrial segment's growth. Increased gross margin and operating income reflect improved manufacturing and supply chain efficiencies. Net income and EPS also showed substantial improvement compared to the same period last year.
Net sales increased by 129.4% to $369.2 million, including 9.9% organic growth.
Industrial segment net sales increased by 290.7%, including $192.3 million from Dodge acquisition.
Aerospace/Defense segment net sales increased by 11.4%.
Diluted EPS was $1.31, compared to a loss of $0.07 in the same quarter last year.
Forward Guidance
The Company expects net sales to be approximately $348.0 million to $360.0 million in the third quarter of fiscal 2023, compared to $267.0 million last year, a growth rate of 30.4% to 34.9%.
Positive Outlook
- Net sales are expected to be between $348.0 million and $360.0 million.
- Growth rate is projected to be between 30.4% and 34.9% compared to the previous year.
- The company has entered into a three-year USD-denominated interest rate swap to protect from interest rate volatility.
- The swap has an effective date of December 30, 2022, and is comprised of a $600.0 million notional with a maturity of three years.
- RBC will receive a variable rate based on one-month USD-SOFR CME Term and will pay a fixed rate of 4.455%.
Challenges Ahead
- Third quarter typically has fewer production days than the fourth quarter.
- Interest expense, net, was $18.3 million for the second quarter of fiscal 2023 compared to $15.8 million for the same period last year.
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