UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
|
|
FORM
10-Q
|
|
x QUARTERLY
REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended June 28, 2008
|
|
OR
|
|
o TRANSITION
REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ______ to ______
|
|
Commission
File Number: 333-124824
|
|
RBC
Bearings Incorporated
(Exact
name of registrant as specified in its charter)
|
|
Delaware
(State
or other jurisdiction of incorporation or organization)
|
95-4372080
(I.R.S.
Employer Identification No.)
|
One
Tribology Center
Oxford,
CT
(Address
of principal executive offices)
|
06478
(Zip
Code)
|
(203)
267-7001
(Registrant’s
telephone number, including area code)
|
|
Indicate
by check mark whether the registrant (1) has filed all reports required
to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject
to
such filing requirements for the past 90 days. Yes x
No
o
Indicate
by check mark whether the registrant is a large accelerated filer,
an
accelerated filer, a non-accelerated filer or a smaller reporting
company.
See the definitions of “large accelerated filer,” “accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
One):
Large
Accelerated filer x
Accelerated
filer o
Non-accelerated
filer o
Smaller
reporting company o
Indicate
by check mark whether the registrant is a shell company (as defined
in
Rule 12b-2 of the Exchange Act). Yes o
No
x
|
|
As
of July 30, 2008, RBC Bearings Incorporated had 21,783,686 shares
of
Common Stock outstanding.
|
3
|
|
3
|
|
12
|
|
17
|
|
18
|
|
18
|
|
19
|
|
19
|
|
19
|
|
20
|
|
20
|
|
20
|
|
20
|
June
28, 2008
|
March
29, 2008
|
||||||
ASSETS
|
(Unaudited)
|
||||||
Current
assets:
|
|||||||
Cash
|
$
|
13,397
|
$
|
9,859
|
|||
Accounts
receivable, net of allowance for doubtful accounts of $1,100
at June 28, 2008 and $1,018 at March 29, 2008
|
64,044
|
66,137
|
|||||
Inventory
|
129,549
|
123,820
|
|||||
Deferred
income taxes
|
4,793
|
5,567
|
|||||
Prepaid
expenses and other current assets
|
6,330
|
9,976
|
|||||
Total
current assets
|
218,113
|
215,359
|
|||||
Property,
plant and equipment, net
|
76,729
|
73,243
|
|||||
Goodwill
|
32,488
|
31,821
|
|||||
Intangible
assets, net of accumulated amortization of $3,957 at June 28,
2008 and $3,583 at March 29, 2008
|
13,090
|
11,404
|
|||||
Other
assets
|
4,941
|
5,285
|
|||||
Total
assets
|
$
|
345,361
|
$
|
337,112
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
26,308
|
$
|
24,851
|
|||
Accrued
expenses and other current liabilities
|
15,336
|
13,489
|
|||||
Current
portion of long-term debt
|
750
|
750
|
|||||
Total
current liabilities
|
42,394
|
39,090
|
|||||
Long-term
debt, less current portion
|
50,500
|
57,000
|
|||||
Deferred
income taxes
|
6,367
|
6,064
|
|||||
Other
non-current liabilities
|
11,554
|
11,048
|
|||||
Total
liabilities
|
110,815
|
113,202
|
|||||
Stockholders'
equity:
|
|||||||
Preferred
stock, $.01 par value; authorized shares: 10,000,000 at June 28,
2008 and
March 29, 2008; none issued and outstanding
|
—
|
—
|
|||||
Common
stock, $.01 par value; authorized shares: 60,000,000 at June 28,
2008 and
March 29, 2008; issued and outstanding shares: 21,782,186 shares
at June
28, 2008 and March 29, 2008, respectively
|
218
|
218
|
|||||
Additional
paid-in capital
|
184,837
|
184,285
|
|||||
Accumulated
other comprehensive income
|
1,058
|
1,312
|
|||||
Retained
earnings
|
52,371
|
41,688
|
|||||
Treasury
stock, at cost, 123,553 shares at June 28, 2008 and 113,322 shares
at
March 29, 2008
|
(3,938
|
)
|
(3,593
|
)
|
|||
Total
stockholders' equity
|
234,546
|
223,910
|
|||||
Total
liabilities and stockholders' equity
|
$
|
345,361
|
$
|
337,112
|
|||
Three
Months Ended
|
|||||||
June
28,
2008
|
June
30,
2007
|
||||||
Net
sales
|
$
|
92,380
|
$
|
79,823
|
|||
Cost
of sales
|
61,825
|
52,378
|
|||||
Gross
margin
|
30,555
|
27,445
|
|||||
Operating
expenses:
|
|||||||
Selling,
general and administrative
|
13,127
|
11,302
|
|||||
Other,
net
|
382
|
362
|
|||||
Total
operating expenses
|
13,509
|
11,664
|
|||||
Operating
income
|
17,046
|
15,781
|
|||||
Interest
expense, net
|
681
|
980
|
|||||
Loss
on early extinguishment of debt
|
319
|
—
|
|||||
Other
non-operating income
|
(83
|
)
|
(114
|
)
|
|||
Income
before income taxes
|
16,129
|
14,915
|
|||||
Provision
for income taxes
|
5,446
|
5,090
|
|||||
Net
income
|
$
|
10,683
|
$
|
9,825
|
|||
Net
income per common share:
|
|||||||
Basic
|
$
|
0.50
|
$
|
0.46
|
|||
Diluted
|
$
|
0.49
|
$
|
0.45
|
|||
Weighted
average common shares:
|
|||||||
Basic
|
21,561,375
|
21,377,482
|
|||||
Diluted
|
21,782,020
|
21,882,470
|
|||||
Three
Months Ended
|
|||||||
June
28,
2008
|
June
30,
2007
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
10,683
|
$
9,825
|
|||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Depreciation
|
2,792
|
2,172
|
|||||
Deferred
income taxes
|
1,077
|
1,786
|
|||||
Amortization
of intangible assets
|
374
|
241
|
|||||
Amortization
of deferred financing costs
|
59
|
51
|
|||||
Stock-based
compensation
|
552
|
350
|
|||||
Loss
on disposition of assets
|
30
|
10
|
|||||
Loss
on early extinguishment of debt (non-cash portion)
|
319
|
—
|
|||||
Changes
in operating assets and liabilities, net of acquisitions:
|
|||||||
Accounts
receivable
|
3,139
|
(3,091
|
)
|
||||
Inventory
|
(3,981
|
)
|
(3,798
|
)
|
|||
Prepaid
expenses and other current assets
|
3,666
|
(1,122
|
)
|
||||
Other
non-current assets
|
33
|
(2
|
)
|
||||
Accounts
payable
|
1,249
|
4,362
|
|||||
Accrued
expenses and other current liabilities
|
1,114
|
246
|
|||||
Other
non-current liabilities
|
607
|
2,400
|
|||||
Net
cash provided by operating activities
|
21,713
|
13,430
|
|||||
Cash
flows from investing activities:
|
|||||||
Purchase
of property, plant and equipment
|
(4,569
|
)
|
(6,623
|
)
|
|||
Acquisition
of businesses, net of cash acquired
|
(6,579
|
)
|
(4,360
|
)
|
|||
Proceeds
from sale of assets
|
18
|
4
|
|||||
Net
cash used in investing activities
|
(11,130
|
)
|
(10,979
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Net
increase (decrease) in revolving credit facility
|
9,000
|
(4,000
|
)
|
||||
Exercise
of stock options
|
—
|
1,043
|
|||||
Repurchase
of common stock
|
(345
|
)
|
—
|
||||
Retirement
of industrial revenue bonds
|
(15,500
|
)
|
—
|
||||
Principal
payments on capital lease obligations
|
(48
|
)
|
(51
|
)
|
|||
Net
cash used in financing activities
|
(6,893
|
)
|
(3,008
|
)
|
|||
Effect
of exchange rate changes on cash
|
(152
|
)
|
(12
|
)
|
|||
Cash
and cash equivalents:
|
|||||||
Increase
(decrease) during the period
|
3,538
|
(569
|
)
|
||||
Cash,
at beginning of period
|
9,859
|
5,184
|
|||||
Cash,
at end of period
|
$
|
13,397
|
$
|
4,615
|
|||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
paid during the period for:
|
|||||||
Interest
|
$
|
630
|
$
|
935
|
|||
Income
taxes
|
$
|
1,112
|
$
|
510
|
|||
·
|
Recognize,
with certain exceptions, 100 percent of the fair values of assets
acquired, liabilities assumed, and noncontrolling interests in
acquisitions of less than a 100 percent controlling interest when
the
acquisition constitutes a change in control of the acquired
entity.
|
·
|
Measure
acquirer shares issued in consideration for a business combination
at fair
value on the acquisition date.
|
·
|
Recognize
contingent consideration arrangements at their acquisition-date fair
values, with subsequent changes in fair value generally reflected
in
earnings.
|
·
|
With
certain exceptions, recognize preacquisition loss and gain contingencies
at their acquisition-date fair
values.
|
·
|
Capitalize
in-process research and development (IPR&D) assets
acquired.
|
·
|
Expense,
as incurred, acquisition-related transaction
costs.
|
·
|
Capitalize
acquisition-related restructuring costs only if the criteria in SFAS
146
are met as of the acquisition date.
|
·
|
Recognize
changes that result from a business combination transaction in an
acquirer’s existing income tax valuation allowances and tax uncertainty
accruals as adjustments to income tax
expense.
|
1. |
Acquisition
|
2. |
Net
Income Per Common Share
|
|
Three
Months Ended
|
||||||
June
28, 2008
|
June
30, 2007
|
||||||
Net
income
|
$
|
10,683
|
$
|
9,825
|
|||
Denominator
for basic net income per common share—weighted-average
shares
|
21,561,375
|
21,377,482
|
|||||
Effect
of dilution due to employee stock options
|
220,645
|
504,988
|
|||||
Denominator
for diluted net income per common share — weighted-average
shares
|
21,782,020
|
21,882,470
|
|||||
Basic
net income per common share
|
$
|
0.50
|
$
|
0.46
|
|||
Diluted
net income per common share
|
$
|
0.49
|
$
|
0.45
|
3. |
Inventory
|
June
28, 2008
|
March
29, 2008
|
||||||
Raw
materials
|
$
|
11,505
|
$
|
11,561
|
|||
Work
in process
|
41,206
|
38,488
|
|||||
Finished
goods
|
76,838
|
73,771
|
|||||
$
|
129,549
|
$
|
123,820
|
4. |
Comprehensive
Income
|
Three
Months Ended
|
|||||||
June
28,
2008
|
June
30,
2007
|
||||||
Net
income
|
$
|
10,683
|
$
|
9,825
|
|||
Net
prior service cost and actuarial losses, net of tax benefit of
$8
|
(14
|
)
|
—
|
||||
Change
in fair value of derivatives, net of taxes of $312
|
504
|
—
|
|||||
Foreign
currency translation adjustments
|
(744
|
)
|
(77
|
)
|
|||
Total
comprehensive income
|
$
|
10,429
|
$
|
9,748
|
5. |
Debt
|
June
28, 2008
|
March
29, 2008
|
||||||
KeyBank
Credit Agreement
|
|||||||
Five-year
senior secured revolving credit facility; amounts outstanding bear
interest at the prime rate or LIBOR, plus a specified margin, depending
on
the type of borrowing being made (prime rate 5.00% and 5.25% at June
28,
2008 and March 29, 2008, respectively, and LIBOR 2.50% and 2.69%
at June
28, 2008 and March 29, 2008, respectively)
|
$
|
50,000
|
$
|
41,000
|
|||
Note
Payable, payable
through September 2009
|
1,250
|
1,250
|
|||||
Industrial
Development Revenue Bonds
|
|||||||
Series
1994 A, bears interest at a variable rate payable monthly through
September 2017
|
—
|
7,700
|
|||||
Series
1994 B, bears interest at a variable rate, payable monthly through
December 2017
|
—
|
3,000
|
|||||
Series
1999, bearing interest at variable rates, payable monthly through
April
2024
|
—
|
4,800
|
|||||
Total
Debt
|
51,250
|
57,750
|
|||||
Less:
Current Portion
|
750
|
750
|
|||||
Long-Term
Debt
|
$
|
50,500
|
$
|
57,000
|
6. |
Income
Taxes
|
7. |
Reportable
Segments
|
Three
Months Ended
|
|||||||
June
28,
2008
|
June
30,
2007
|
||||||
Net
External Sales
|
|||||||
Roller
|
$
|
24,957
|
$
|
23,643
|
|||
Plain
|
43,715
|
37,720
|
|||||
Ball
|
15,046
|
13,421
|
|||||
Other
|
8,662
|
5,039
|
|||||
$
|
92,380
|
$
|
79,823
|
||||
Operating
Income
|
|||||||
Roller
|
$
|
7,088
|
$
|
7,219
|
|||
Plain
|
11,087
|
10,045
|
|||||
Ball
|
3,610
|
3,457
|
|||||
Other
|
981
|
617
|
|||||
Corporate
|
(5,720
|
)
|
(5,557
|
)
|
|||
$
|
17,046
|
$
|
15,781
|
||||
Geographic
External Sales
|
|||||||
Domestic
|
$
|
77,098
|
$
|
68,253
|
|||
Foreign
|
15,282
|
11,570
|
|||||
$
|
92,380
|
$
|
79,823
|
Intersegment
Sales
|
|||||||
Roller
|
$
|
2,466
|
$
|
2,156
|
|||
Plain
|
651
|
269
|
|||||
Ball
|
1,981
|
1,576
|
|||||
Other
|
4,683
|
4,370
|
|||||
$
|
9,781
|
$
|
8,371
|
Three
Months Ended
|
|||||||
June
28,
2008
|
June
30,
2007
|
||||||
Statement
of Operations Data:
|
|||||||
Net
sales
|
100.0
|
%
|
100.0
|
%
|
|||
Gross
margin
|
33.1
|
34.4
|
|||||
Selling,
general and administrative
|
14.2
|
14.2
|
|||||
Other,
net
|
0.4
|
0.4
|
|||||
Operating
income
|
18.5
|
19.8
|
|||||
Interest
expense, net
|
0.7
|
1.2
|
|||||
Loss
on early extinguishment of debt
|
0.3
|
—
|
|||||
Other
non-operating income
|
—
|
(0.1
|
)
|
||||
Income
before income taxes
|
17.5
|
18.7
|
|||||
Provision
for income taxes
|
5.9
|
6.4
|
|||||
Net
income
|
11.6
|
%
|
12.3
|
%
|
Period
|
Total
number
of
shares
Purchased
|
Average
price
paid
per
share
|
Number
of
shares
purchased
as
part of the
publicly
announced
program
|
Approximate
dollar
value
of
shares still
available
to be
purchased
under
the
program
(000’s)
|
|||||||||
03/30/2008-04/26/2008
|
—
|
—
|
—
|
$
|
7,458
|
||||||||
04/27/2008-05/24/2008
|
231
|
$
|
37.42
|
231
|
7,450
|
||||||||
05/25/2008-06/28/2008
|
10,000
|
33.64
|
10,000
|
$
|
7,113
|
||||||||
Total
|
10,231
|
$
|
33.75
|
10,231
|
|
|
|
|
|
Exhibit
Number
|
Exhibit Description
|
|
|
Certification
of Chief Executive Officer Pursuant to Securities Exchange Act
Rule 13a-14(a).
|
|
|
Certification
of Chief Financial Officer Pursuant to Securities Exchange Act
Rule 13a-14(a).
|
|
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 and
Securities Exchange Act Rule 13a-14(b).*
|
|
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and
Securities Exchange Act Rule 13a-14(b).*
|
|
* |
This
certification accompanies this Quarterly Report on Form 10-Q, is not
deemed filed with the SEC and is not to be incorporated by reference
into
any filing of the Company under the Securities Act of 1933, as amended,
or
the Securities Exchange Act of 1934, as amended (whether made before
or
after the date of this Quarterly Report on Form 10-Q), irrespective
of any general incorporation language contained in such
filing.
|
RBC
Bearings Incorporated
|
|||||
(Registrant)
|
|||||
By:
|
/s/
Dr. Michael J. Hartnett
|
|
|||
Name:
|
Dr.
Michael J. Hartnett
|
||||
Title:
|
Chief
Executive Officer
|
||||
Date:
|
August
7, 2008
|
||||
By:
|
/s/
Daniel A. Bergeron
|
|
|||
Name:
|
Daniel
A. Bergeron
|
||||
Title:
|
Chief
Financial Officer
|
||||
Date:
|
August
7, 2008
|
|
|
|
Exhibit
Number
|
Exhibit Description
|
|
|
Certification
of Chief Executive Officer Pursuant to Securities Exchange Act
Rule 13a-14(a).
|
|
|
Certification
of Chief Financial Officer Pursuant to Securities Exchange Act
Rule 13a-14(a).
|
|
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 and
Securities Exchange Act Rule 13a-14(b).*
|
|
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and
Securities Exchange Act Rule 13a-14(b).*
|
|
* |
This
certification accompanies this Quarterly Report on Form 10-Q, is not
deemed filed with the SEC and is not to be incorporated by reference
into
any filing of the Company under the Securities Act of 1933, as amended,
or
the Securities Exchange Act of 1934, as amended (whether made before
or
after the date of this Quarterly Report on Form 10-Q), irrespective
of any general incorporation language contained in such
filing.
|
Date:
August 7, 2008
|
By:
|
/s/
Dr. Michael J. Hartnett
|
|
|
|
Dr.
Michael J. Hartnett
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President
and Chief Executive Officer
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Date:
August 7, 2008
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By:
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/s/
Daniel A. Bergeron
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Daniel
A. Bergeron
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Chief
Financial Officer
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/s/
Dr. Michael J. Hartnett
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Dr.
Michael J. Hartnett
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President
and Chief Executive Officer
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/s/
Daniel A. Bergeron
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Daniel
A. Bergeron
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Chief
Financial Officer
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