RBC Bearings Incorporated Announces Fiscal 2007 Third Quarter Results.OXFORD, Conn. -- RBC RBC red blood cell. RBC or rbc abbr. red blood cell RBC, n See red blood cell count. RBC red blood cells; red blood (cell) count (see blood count). Bearings Incorporated (Nasdaq: ROLL), a leading international manufacturer of highly-engineered precision plain, roller and ball bearings ball bearings n → roulement m à billes for the industrial, defense and aerospace industries, today reported results for the third quarter ended December 30, 2006. Third Quarter Highlights [TABLE OMITTED] "We achieved strong performance this quarter as we continued to experience increased demand from many of our end markets," said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer. "During the third quarter, our business performed very well and showed significant improvements in gross margin, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , net income and free cash flow. We are pleased with the progress in these areas which is the result of many years of effort to improve our manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. , expand our product offering, and improve our market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" . I believe that today the Company is showing excellent momentum in all these areas as we enter our last fiscal quarter." Third Quarter Results Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the third quarter of fiscal 2007 were $76.5 million, an increase of 13.6% from $67.4 million in the third quarter of fiscal 2006. Gross margin for the third quarter rose 20.5% to $24.5 million compared to $20.4 million for the same period last year. Gross margin as a percentage of net sales improved to 32.1% in the third quarter of fiscal 2007 compared to 30.2% for the same period last year. Operating income increased 32.9% to $14.3 million for the third quarter of fiscal 2007 compared to $10.8 million for the same period last year. Operating income as a percentage of net sales was 18.7% for the third quarter of fiscal 2007 compared to 16.0% for the same period last year. Operating income excluding stock compensation expense, Nice facility consolidation expense, gain on the sale of Nice building, and disposal of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → was $13.8 million, an increase of 27.5% compared to adjusted operating income for the same period last year. As a percentage of net sales, operating income excluding these charges was 18.1% compared to 16.1% for the same adjusted period last year. Interest expense, net for the third quarter of fiscal 2007 was $1.2 million, a decrease of $1.8 million, from $3.0 million for the same period last year. For the third quarter of fiscal 2007, the Company reported net income of $9.4 million compared to $5.1 million in the same period last year. Net income excluding the after tax impact of stock compensation expense, Nice facility consolidation expense, gain on the sale of the Nice building, disposal of fixed assets, and the CDSOA CDSOA Continued Dumping and Subsidy Offset Act of 2000 payment increased 60.2% to $8.2 million compared to $5.1 million for the same adjusted period last year. Nine Month Results Net sales for the nine month period ended December 30, 2006 were $225.0 million, an increase of 13.2% from $198.8 million for the nine month period ended December 31, 2005. Gross margin rose 20.0% to $71.6 million compared to $59.6 million for the same nine month period last year. Gross margin as a percentage of net sales improved to 31.8% for the first nine months of fiscal 2007 compared to 30.0% for the same period last year. For the nine month period ended December 30, 2006, the Company reported operating income of $40.4 million compared to $26.3 million for the same period last year. Operating income excluding stock compensation expense, Nice facility consolidation expense, gain on the sale of the Nice building and disposal of fixed assets increased 27.4% to $40.6 million for the nine months ended December 30, 2006 compared to $31.9 million for the comparable adjusted period last year. Operating income as a percentage of sales excluding these charges was 18.1% for the first nine months of fiscal 2007 compared to 16.0% for the same adjusted period last year. Interest expense, net for the nine month period ended December 30, 2006 was $4.6 million, a decrease of $8.0 million, from $12.6 million for the same period last year. Net income for the nine month period ended December 30, 2006 was $21.8 million compared to net income of $6.5 million for the same period last year. Net income excluding the after tax impact of stock compensation expense, Nice facility consolidation expense, gain on the sale of the Nice building, disposal of fixed assets, loss on early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt, and the CDSOA payment, increased 85.7% to $23.4 million for the first nine months of fiscal 2007 compared to $12.6 million for the same adjusted period last year. Gain on Sale of Nice Building On December 18, 2006, the Company completed the final phase of the Nice Bearings consolidation plan with the sale of its facility located in Kulpsville, Pennsylvania Kulpsville is a census-designated place (CDP) in Montgomery County, Pennsylvania, United States. The population was 8,005 at the 2000 census. Geography Kulpsville is located at (40.243993, -75. . The asset was sold for approximately $3.9 million and the Company realized a gain on the sale of approximately $0.8 million before taxes. CDSOA Payment On December 1, 2006, the Company received approximately $1.2 million in payments under the U.S. Continued Dumping and Subsidy Offset Act "CDSOA" for 2006. The CDSOA distributes antidumping an·ti·dump·ing adj. Intended to discourage importation and sale of foreign-made goods at prices substantially below domestic prices for the same items. 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 expense(income)" on the Consolidated Statements of Operations. Consolidation of Tapered ta·per n. 1. A small or very slender candle. 2. A long wax-coated wick used to light candles or gas lamps. 3. A source of feeble light. 4. a. Bearing Manufacturing Facilities In January 2007 the Company began the consolidation of its tapered bearing manufacturing capacity. The Company plans to discontinue manufacturing tapered bearings in its Glasgow, Kentucky Glasgow is a city in Barren County, Kentucky, United States. The population was 14,200 at the 2000 census. It is the county seat of Barren CountyGR6. The town is well known for its annual Scottish Highland Games. facility and consolidate the remaining manufacturing into other Company manufacturing facilities. The consolidation is anticipated to result in gross margin improvement for this product line from a negative to a positive result over the next 12 months. This consolidation will result in a charge of approximately $5.0 million primarily in the fourth quarter of fiscal year 2007. Approximately $2.5 million of this charge will be a non-cash impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of fixed assets. Outlook "As we look forward to the end of fiscal 2007, we remain focused on delivering profitable growth, and our emphasis on new product innovation and continuous process improvement will help us to deliver on both the top and bottom-line. Our market position and engineering capabilities will allow us to expand our niche applications and effectively serve our strong customer base," concluded Dr. Hartnett. Based on current market conditions, the Company expects financial performance in its fourth quarter of fiscal 2007 to be as follows, excluding charges for the consolidation of the tapered bearing capacity: * Net sales in the range of $78.0 - $80.0 million * Operating income in the range of $13.5 - $14.5 million Live Webcast RBC Bearings Incorporated will host a webcast at 10:30 a.m. ET today to discuss the quarterly results. To access the webcast, go to the investor relations Investor relations The process by which the corporation communicates with its investors. portion of the Company's web site, 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 800-435-1261 (international callers dial 617-614-4076) and enter conference call ID # 36402806. An audio replay of the call will be available from 12:30 p.m. ET on Thursday, February 8, until 11:59 p.m. ET on Thursday, February 22. The replay can be accessed by dialing 888-286-8010 (international callers dial 617-801-6888) and entering conference call ID # 15919744. Non-GAAP Financial Measures In addition to disclosing results of operations that are determined in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "), this press release also discloses non-GAAP results of operations that exclude certain charges. These non-GAAP measures adjust for charges that Management believes are unusual. 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. About RBC Bearings RBC Bearings Incorporated is an international manufacturer and marketer of highly engineered precision bearings and components. Founded in 1919, the Company is primarily focused on producing highly technical or regulated bearing products requiring sophisticated design, testing, and manufacturing capabilities for the diversified industrial, aerospace and defense markets. Headquartered in Oxford, Connecticut Oxford is a town located in western New Haven County, Connecticut, United States. The population was 9,821 at the 2000 Census. There are several areas in Oxford: Quaker Farms, Riverside and Oxford Center. , RBC Bearings currently employs approximately 1,850 people and operates 16 manufacturing facilities in three countries. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for Forward Looking Statements Certain statements in this press release contain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ." All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including the section of this press release entitled "Outlook"; any projections of earnings, revenue or other financial items relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company, any statement of the plans, strategies and objectives of management for future operations; any statements concerning proposed future growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. in the markets we serve; any statements of belief; any characterization of and the Company's ability to control contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. ; anticipated trends in the Company's businesses; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words "may", "estimate", "intend", "continue", "believe", "expect", "anticipate" and other similar words. Although the Company believes that the expectations reflected in any forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties beyond the control of the Company. These risks and uncertainties include, but are not limited to, risks and uncertainties relating to general economic conditions, geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. factors, future levels of general industrial manufacturing activity, future financial performance, market acceptance of new or enhanced versions of the Company's products, the pricing of raw materials, changes in the competitive environments in which the Company's businesses operate, the outcome of pending or future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and governmental proceedings and approvals, estimated legal costs, increases in interest rates, the Company's ability to meet its debt obligations, and risks and uncertainties listed or disclosed in the Company's reports filed with the Securities and Exchange Commission, including, without limitation, the risks identified under the heading "Risk Factors" set forth in the Company's Annual Report filed on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. on June 16, 2006. The Company does not intend, and undertakes no obligation, to update or alter any forward-looking statement. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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