Q2 2025 RBC Bearings Inc Earnings Call Transcript
Key Points
- RBC Bearings Inc (RBC) reported a 3.2% increase in net sales for the second quarter, driven by strong performance in the Aerospace and Defense (A&D) segment.
- The A&D segment saw a 12.5% year-over-year growth, with defense sales up 17.3% and commercial aerospace sales up 10.3%.
- Gross margin improved to 43.7% of sales, a 55 basis point increase year-over-year, attributed to increased absorption in A&D capacity and ongoing synergies from the Dodge acquisition.
- Net income rose by 6% year-over-year, translating into an adjusted EPS of $2.29 per share, up from $2.17 per share last year.
- RBC Bearings Inc (RBC) reduced its debt by over $35 million in the quarter, with a year-to-date debt reduction of $128.7 million, positioning the balance sheet well for future acquisitions.
- The industrial segment experienced a 1.4% decline year-over-year, with OEM sales down 2.5% and aftermarket sales down 0.9%.
- Unexpected headwinds, including a Boeing strike and the impact of Hurricane Beryl, resulted in a revenue impact of $4 million to $5 million during the period.
- Cash from operations decreased to $43 million compared to $53 million last year, primarily due to the timing and scope of cash tax payments.
- Adjusted EBITDA margin decreased by 66 basis points year-over-year to 31%, despite being above the full-year 2024 margin.
- The company faces uncertainty regarding Boeing's production rates, particularly for the 737, which could impact future revenue projections.
Good morning, and thank you for joining us for RBC Bearings fiscal second-quarter 2025 earnings call. I'm Rob Moffatt, Director of Corporate Development and Investor Relations. And with me on today's call are Dr. Michael Hartnett, Chairman, President and Chief Executive Officer; Daniel Bergeron, Director, Vice President and Chief Operating Officer; and Rob Sullivan, Vice President and Chief Financial Officer.
As a reminder, some of the statements made today may be forward-looking and are made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected or implied due to a variety of factors. We refer you to RBC Bearings' recent filings with the SEC for a more detailed discussion of the risks that could impact the company's future operating results and financial condition. These factors are also listed in the press release along with a reconciliation between GAAP and non-GAAP financial information.
With that, I'll now turn the call over to Dr. Hartnett. Thanks.
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