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)
|
3
|
||
ITEM
1.
|
Unaudited
Consolidated Financial Statements
|
3
|
ITEM
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
12
|
ITEM
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
19
|
ITEM
4.
|
Controls
and Procedures
|
20
|
Changes
in Internal Control over Financial Reporting
|
20
|
|
Part
II - OTHER INFORMATION
|
21
|
|
ITEM
1.
|
Legal
Proceedings
|
21
|
ITEM
1A.
|
Risk
Factors
|
21
|
ITEM
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
21
|
ITEM
3.
|
Defaults
Upon Senior Securities
|
22
|
ITEM
4.
|
Submission
of Matters to a Vote of Security Holders
|
22
|
ITEM
5.
|
Other
Information
|
22
|
Exhibits
|
22
|
September 27,
2008
|
March 29,
2008
|
||||||
ASSETS
|
(Unaudited)
|
||||||
Current assets:
|
|||||||
Cash
|
$
|
9,262
|
$
|
9,859
|
|||
Accounts
receivable, net of allowance for doubtful accounts of $1,099
at September 27, 2008 and $1,018 at March 29,
2008
|
66,836
|
66,137
|
|||||
Inventory
|
131,136
|
123,820
|
|||||
Deferred
income taxes
|
5,404
|
5,567
|
|||||
Prepaid
expenses and other current assets
|
9,589
|
9,976
|
|||||
Total
current assets
|
222,227
|
215,359
|
|||||
Property,
plant and equipment, net
|
79,718
|
73,243
|
|||||
Goodwill
|
32,832
|
31,821
|
|||||
Intangible
assets, net of accumulated amortization of $4,348 at September
27, 2008 and $3,583 at March 29, 2008
|
13,266
|
11,404
|
|||||
Other
assets
|
4,995
|
5,285
|
|||||
Total
assets
|
$
|
353,038
|
$
|
337,112
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
25,196
|
$
|
24,851
|
|||
Accrued
expenses and other current liabilities
|
16,167
|
13,489
|
|||||
Current
portion of long-term debt
|
1,190
|
750
|
|||||
Total
current liabilities
|
42,553
|
39,090
|
|||||
Long-term
debt, less current portion
|
50,000
|
57,000
|
|||||
Deferred
income taxes
|
6,303
|
6,064
|
|||||
Other
non-current liabilities
|
11,353
|
11,048
|
|||||
Total
liabilities
|
110,209
|
113,202
|
|||||
Stockholders'
equity:
|
|||||||
Preferred
stock, $.01 par value; authorized shares: 10,000,000 at September
27, 2008
and March 29, 2008; none issued and outstanding
|
—
|
—
|
|||||
Common
stock, $.01 par value; authorized shares: 60,000,000 at September
27, 2008
and March 29, 2008; issued and outstanding shares: 21,796,486 at
September
27, 2008 and 21,782,186 at March 29, 2008
|
218
|
218
|
|||||
Additional
paid-in capital
|
185,742
|
184,285
|
|||||
Accumulated
other comprehensive income (loss)
|
(987
|
)
|
1,312
|
||||
Retained
earnings
|
61,959
|
41,688
|
|||||
Treasury
stock, at cost, 129,032 shares at September 27, 2008 and 113,322
shares at
March 29, 2008
|
(4,103
|
)
|
(3,593
|
)
|
|||
Total
stockholders' equity
|
242,829
|
223,910
|
|||||
Total
liabilities and stockholders' equity
|
$
|
353,038
|
$
|
337,112
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
September 27,
2008
|
September 29,
2007
|
September 27,
2008
|
September 29,
2007
|
||||||||||
Net
sales
|
$
|
94,294
|
$
|
78,232
|
$
|
186,674
|
$
|
158,055
|
|||||
Cost
of sales
|
64,077
|
51,995
|
125,902
|
104,373
|
|||||||||
Gross
margin
|
30,217
|
26,237
|
60,772
|
53,682
|
|||||||||
Operating
expenses:
|
|||||||||||||
Selling,
general and administrative
|
13,952
|
11,888
|
27,079
|
23,190
|
|||||||||
Other,
net
|
1,097
|
354
|
1,479
|
716
|
|||||||||
Total
operating expenses
|
15,049
|
12,242
|
28,558
|
23,906
|
|||||||||
Operating
income
|
15,168
|
13,995
|
32,214
|
29,776
|
|||||||||
Interest
expense, net
|
650
|
919
|
1,331
|
1,899
|
|||||||||
Loss
on early extinguishment of debt
|
—
|
27
|
319
|
27
|
|||||||||
Other
non-operating expense (income)
|
249
|
(238
|
)
|
166
|
(352
|
)
|
|||||||
Income
before income taxes
|
14,269
|
13,287
|
30,398
|
28,202
|
|||||||||
Provision
for income taxes
|
4,681
|
4,538
|
10,127
|
9,628
|
|||||||||
Net
income
|
$
|
9,588
|
$
|
8,749
|
$
|
20,271
|
$
|
18,574
|
|||||
Net
income per common share:
|
|||||||||||||
Basic
|
$
|
0.44
|
$
|
0.41
|
$
|
0.94
|
$
|
0.87
|
|||||
Diluted
|
$
|
0.44
|
$
|
0.40
|
$
|
0.93
|
$
|
0.85
|
|||||
Weighted
average common shares:
|
|||||||||||||
Basic
|
21,567,551
|
21,431,498
|
21,564,463
|
21,404,490
|
|||||||||
Diluted
|
21,761,677
|
21,813,063
|
21,771,849
|
21,800,754
|
Six Months Ended
|
|||||||
September 27,
2008
|
September 29,
2007
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
|
20,271
|
$
|
18,574
|
|||
Adjustments
to reconcile net income to net cash provided by operating activities:
|
|||||||
Depreciation
|
5,651
|
4,411
|
|||||
Excess
tax benefits from stock-based compensation
|
(99
|
)
|
—
|
||||
Deferred
income taxes
|
404
|
1,803
|
|||||
Amortization
of intangible assets
|
765
|
535
|
|||||
Amortization
of deferred financing costs
|
115
|
109
|
|||||
Stock-based
compensation
|
1,105
|
514
|
|||||
Loss
on disposition of assets
|
375
|
23
|
|||||
Loss
on early extinguishment of debt (non-cash portion)
|
319
|
27
|
|||||
Changes
in operating assets and liabilities, net of acquisitions:
|
|||||||
Accounts
receivable
|
(520
|
)
|
1,086
|
||||
Inventory
|
(6,820
|
)
|
(7,686
|
)
|
|||
Prepaid
expenses and other current assets
|
393
|
(1,311
|
)
|
||||
Other
non-current assets
|
(1,107
|
)
|
(346
|
)
|
|||
Accounts
payable
|
403
|
1,774
|
|||||
Accrued
expenses and other current liabilities
|
2,313
|
2,463
|
|||||
Other
non-current liabilities
|
375
|
1,614
|
|||||
Net
cash provided by operating activities
|
23,943
|
23,590
|
|||||
Cash
flows from investing activities:
|
|||||||
Purchase
of property, plant and equipment
|
(11,020
|
)
|
(11,129
|
)
|
|||
Acquisition
of businesses, net of cash acquired
|
(6,579
|
)
|
(7,947
|
)
|
|||
Proceeds
from sale of assets
|
525
|
14
|
|||||
Net
cash used in investing activities
|
(17,074
|
)
|
(19,062
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Net
increase (decrease) in revolving credit facility
|
9,000
|
(4,000
|
)
|
||||
Exercise
of stock options
|
253
|
1,384
|
|||||
Excess
tax benefits from stock-based compensation
|
99
|
—
|
|||||
Repurchase
of common stock
|
(510
|
)
|
(235
|
)
|
|||
Retirement
of industrial revenue bonds
|
(15,500
|
)
|
(1,155
|
)
|
|||
Payments
on notes payable
|
(60
|
)
|
—
|
||||
Principal
payments on capital lease obligations
|
(97
|
)
|
(95
|
)
|
|||
Financing
fees paid in connection with senior credit facility
|
(5
|
)
|
(20
|
)
|
|||
Net
cash used in financing activities
|
(6,820
|
)
|
(4,121
|
)
|
|||
Effect
of exchange rate changes on cash
|
(646
|
)
|
181
|
||||
Cash
and cash equivalents:
|
|||||||
(Decrease)
increase during the period
|
(597
|
)
|
588
|
||||
Cash,
at beginning of period
|
9,859
|
5,184
|
|||||
Cash,
at end of period
|
$
|
9,262
|
$
|
5,772
|
|||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
paid during the period for:
|
|||||||
Interest
|
$
|
1,218
|
$
|
1,548
|
|||
Income
taxes
|
$
|
9,840
|
$
|
1,891
|
·
|
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.
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
September 27,
2008
|
September 29,
2007
|
September 27,
2008
|
September 29,
2007
|
||||||||||
Net
income
|
$
|
9,588
|
$
|
8,749
|
$
|
20,271
|
$
|
18,574
|
|||||
Denominator
for basic net income per common share—weighted-average shares
|
21,567,551
|
21,431,498
|
21,564,463
|
21,404,490
|
|||||||||
Effect
of dilution due to employee stock options
|
194,126
|
381,565
|
207,386
|
396,264
|
|||||||||
Denominator
for diluted net income per common share — weighted-average
shares
|
21,761,677
|
21,813,063
|
21,771,849
|
21,800,754
|
|||||||||
Basic
net income per common share
|
$
|
0.44
|
$
|
0.41
|
$
|
0.94
|
$
|
0.87
|
|||||
Diluted
net income per common share
|
$
|
0.44
|
$
|
0.40
|
$
|
0.93
|
$
|
0.85
|
September 27, 2008
|
March 29, 2008
|
||||||
Raw
materials
|
$
|
12,155
|
$
|
11,561
|
|||
Work
in process
|
42,034
|
38,488
|
|||||
Finished
goods
|
76,947
|
73,771
|
|||||
$
|
131,136
|
$
|
123,820
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
September 27,
2008
|
September 29,
2007
|
September 27,
2008
|
September 29,
2007
|
||||||||||
Net income
|
$
|
9,588
|
$
|
8,749
|
$
|
20,271
|
$
|
18,574
|
|||||
Net
prior service cost and actuarial losses, net of taxes
|
(13
|
)
|
28
|
(27
|
)
|
28
|
|||||||
Change
in fair value of derivatives, net of taxes
|
(87
|
)
|
—
|
417
|
—
|
||||||||
Foreign
currency translation adjustments
|
(1,945
|
)
|
980
|
(2,689
|
)
|
903
|
|||||||
Total
comprehensive income
|
$
|
7,543
|
$
|
9,757
|
$
|
17,972
|
$
|
19,505
|
September 27, 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
September
27, 2008 and March 29, 2008, respectively, and LIBOR 3.69% and
2.69% at
September 27, 2008 and March 29, 2008, respectively)
|
$
|
50,000
|
$
|
41,000
|
|||
Note
Payable, payable
through September 2009
|
1,190
|
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
|
51,190
|
57,750
|
|||||
Less:
Current Portion
|
1,190
|
750
|
|||||
Long-Term
Debt
|
$
|
50,000
|
$
|
57,000
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
September 27,
2008
|
September 29,
2007
|
September 27,
2008
|
September 29,
2007 |
||||||||||
Net
External Sales
|
|||||||||||||
Roller
|
$
|
25,666
|
$
|
23,107
|
$
|
50,623
|
$
|
46,750
|
|||||
Plain
|
43,181
|
36,175
|
86,896
|
73,895
|
|||||||||
Ball
|
16,555
|
13,832
|
31,601
|
27,253
|
|||||||||
Other
|
8,892
|
5,118
|
17,554
|
10,157
|
|||||||||
$
|
94,294
|
$
|
78,232
|
$
|
186,674
|
$
|
158,055
|
||||||
Operating
Income
|
|||||||||||||
Roller
|
$
|
6,770
|
$
|
6,666
|
$
|
13,858
|
$
|
13,885
|
|||||
Plain
|
10,955
|
9,566
|
22,042
|
19,611
|
|||||||||
Ball
|
3,631
|
3,204
|
7,241
|
6,661
|
|||||||||
Other
|
272
|
392
|
1,253
|
1,009
|
|||||||||
Corporate
|
(6,460
|
)
|
(5,833
|
)
|
(12,180
|
)
|
(11,390
|
)
|
|||||
$
|
15,168
|
$
|
13,995
|
$
|
32,214
|
$
|
29,776
|
||||||
Geographic
External Sales
|
|||||||||||||
Domestic
|
$
|
80,182
|
$
|
66,708
|
$
|
157,280
|
$
|
134,961
|
|||||
Foreign
|
14,112
|
11,524
|
29,394
|
23,094
|
|||||||||
$
|
94,294
|
$
|
78,232
|
$
|
186,674
|
$
|
158,055
|
||||||
Intersegment
Sales
|
|||||||||||||
Roller
|
$
|
2,763
|
$
|
2,125
|
$
|
5,229
|
$
|
4,281
|
|||||
Plain
|
411
|
233
|
1,062
|
502
|
|||||||||
Ball
|
2,211
|
1,857
|
4,192
|
3,433
|
|||||||||
Other
|
5,020
|
4,201
|
9,703
|
8,571
|
|||||||||
$
|
10,405
|
$
|
8,416
|
$
|
20,186
|
$
|
16,787
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
September 27,
2008
|
September 29,
2007
|
September 27,
2008
|
September 29,
2007
|
||||||||||
Statement
of Operations Data:
|
|||||||||||||
Net
sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|||||
Gross
margin
|
32.0
|
33.5
|
32.6
|
34.0
|
|||||||||
Selling,
general and administrative
|
14.8
|
15.2
|
14.5
|
14.7
|
|||||||||
Other,
net
|
1.1
|
0.4
|
0.8
|
0.4
|
|||||||||
Operating
income
|
16.1
|
17.9
|
17.3
|
18.9
|
|||||||||
Interest
expense, net
|
0.7
|
1.2
|
0.7
|
1.2
|
|||||||||
Loss
on early extinguishment of debt
|
—
|
—
|
0.2
|
—
|
|||||||||
Other
non-operating income
|
0.3
|
(0.3
|
)
|
0.1
|
(0.2
|
)
|
|||||||
Income
before income taxes
|
15.1
|
17.0
|
16.3
|
17.9
|
|||||||||
Provision
for income taxes
|
4.9
|
5.8
|
5.4
|
6.1
|
|||||||||
Net
income
|
10.2
|
11.2
|
10.9
|
11.8
|
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)
|
|||||||||
06/29/2008–07/26/2008
|
—
|
—
|
—
|
$
|
7,113
|
||||||||
07/27/2008–08/23/2008
|
5,479
|
$
|
30.08
|
5,479
|
6,948
|
||||||||
08/24/2008–09/27/2008
|
—
|
—
|
—
|
$
|
6,948
|
||||||||
Total
|
5,479
|
$
|
30.08
|
5,479
|
Exhibit
Number
|
Exhibit Description
|
|
31.01
|
|
Certification
of Chief Executive Officer Pursuant to Securities Exchange Act
Rule 13a-14(a).
|
31.02
|
|
Certification
of Chief Financial Officer Pursuant to Securities Exchange Act
Rule 13a-14(a).
|
32.01
|
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 and
Securities Exchange Act Rule 13a-14(b).*
|
32.02
|
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and
Securities Exchange Act
Rule 13a-14(b).*
|
RBC
Bearings Incorporated
|
||
(Registrant)
|
||
By:
|
/s/
Dr. Michael J. Hartnett
|
|
Name:
|
Dr.
Michael J. Hartnett
|
|
Title:
|
Chief
Executive Officer
|
|
Date:
|
November
6, 2008
|
|
By:
|
/s/
Daniel A. Bergeron
|
|
Name:
|
Daniel
A. Bergeron
|
|
Title:
|
Chief
Financial Officer
|
|
Date:
|
November
6, 2008
|
Exhibit
Number
|
Exhibit Description
|
|
31.01
|
|
Certification
of Chief Executive Officer Pursuant to Securities Exchange Act
Rule 13a-14(a).
|
31.02
|
|
Certification
of Chief Financial Officer Pursuant to Securities Exchange Act
Rule 13a-14(a).
|
32.01
|
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 and
Securities Exchange Act Rule 13a-14(b).*
|
32.02
|
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and
Securities Exchange Act
Rule 13a-14(b).*
|
Date:
November 6, 2008
|
By:
|
/s/
Dr. Michael J. Hartnett
|
|
|
|
Dr.
Michael J. Hartnett
|
|
|
|
President
and Chief Executive
Officer
|
Date:
November 6, 2008
|
By:
|
/s/
Daniel A. Bergeron
|
|
|
|
Daniel
A. Bergeron
|
|
|
|
Chief
Financial Officer
|
|
/s/
Dr. Michael J. Hartnett
|
|
|
Dr.
Michael J. Hartnett
|
|
|
President
and Chief Executive
Officer
|
|
/s/
Daniel A. Bergeron
|
|
|
Daniel
A. Bergeron
|
|
|
Chief
Financial Officer
|