RBC Bearings Incorporated — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Second quarter net sales reached $524.6 million, a 15.2% increase from $455.3 million in the prior year period.
• Gross margin was 45.6% for the quarter, up from 44.1% in the prior year; adjusted gross margin was 45.6% compared to 44.9% last year.
• Net income was $93.8 million, representing 17.9% of net sales, compared to $60.0 million (13.2% of sales) in the prior year.
• Adjusted net income was $118.7 million, up 30.2% from $91.2 million in the prior year.
• Diluted EPS was $2.96 (GAAP) and $3.74 (adjusted), compared to $1.90 and $2.88 respectively in the prior year.
• Operating income was $131.6 million (25.1% of sales) GAAP and $132.7 million (25.3% adjusted), compared to $97.8 million and $105.0 million respectively in the prior year.
• Adjusted EBITDA was $175.0 million, up from $145.3 million in the prior year.
• SG&A expenses were $83.4 million (15.9% of sales), down from 17.0% of sales in the prior year.
• Interest expense, net, decreased to $9.3 million from $13.4 million in the prior year.
• Effective income tax rate was 23.4% for the quarter, compared to 28.0% in the prior year.
• Six-month net sales totaled $1,044.1 million, a 17.1% increase from $891.3 million.
• Six-month gross margin percentage was 46.6% (GAAP and adjusted), up from 44.4% (GAAP) and 45.1% (adjusted) in the prior year.
• Six-month net income was $195.3 million (GAAP) and $241.7 million (adjusted), compared to $128.5 million and $180.8 million respectively in the prior year.
• Six-month diluted EPS was $6.16 (GAAP) and $7.62 (adjusted), compared to $4.07 and $5.72 respectively in the prior year.
• Cash provided by operating activities for the six months ended September 26, 2026, was $278.2 million, compared to $208.4 million in the prior year.
• Capital expenditures for the six months were $45.6 million, compared to $32.4 million in the prior year.
• Net cash used in investing activities was $69.6 million for the six months, compared to $307.4 million in the prior year.
• Net cash used in financing activities was $176.4 million for the six months, compared to net cash provided of $154.0 million in the prior year.
• Cash balance increased to $89.3 million as of September 26, 2026, from $57.3 million as of March 28, 2026.
• Total debt decreased significantly, with the current portion of long-term debt dropping from $173.8 million to $0.7 million, and long-term debt decreasing from $701.7 million to $709.8 million.

Guidance and Future Outlook:

• The Company expects third quarter fiscal 2027 net sales to be between $520.0 million and $525.0 million, representing 12.7% to 13.7% growth over the prior year's $461.6 million.
• Gross margin for the third quarter is expected to range from 45.5% to 45.75%.
• SG&A as a percentage of net sales is expected to range from 16.25% to 16.5% in the third quarter.
• Management stated that the next six months are positioned to show an even better second half.

Business Segments and Product Lines:

• Aerospace & Defense segment net sales increased 15.8% to $230.2 million in the second quarter.
• Industrial segment net sales increased 14.8% to $294.4 million in the second quarter, with organic growth of 14.0%.
• The PSC acquisition, closed on August 10, 2026, contributed $2.0 million to Industrial segment net sales.
• Backlog increased to $2.4 billion as of September 26, 2026, from $2.3 billion as of March 28, 2026, and $1.6 billion as of September 27, 2025.

Market and Competitive Landscape:

• The Company operates in an environment described by management as "tailor-made" for its products.
• Revenues in both Aerospace & Defense and Industrial products grew at mid-teen levels.
• Gross margins expanded year-over-year.

Risks and Challenges:

• Forward-looking statements note risks including general economic conditions, geopolitical factors including import/export tariffs, and future levels of aerospace & defense and industrial market activity.
• Risks include future financial performance, use of information technology systems, debt levels, goodwill levels, market acceptance of new products, raw material pricing, and competitive environment changes.
• Risks also include increases in interest rates and the ability to acquire and integrate complementary businesses.

Management Commentary and Tone:

• Dr. Michael J. Hartnett, Chairman and CEO, stated the Company is operating in an environment tailor-made for its products.
• Management highlighted that backlog increased and considerable debt was retired.
• Management expressed thrill regarding the positioning for an even better second half of the fiscal year.

Other Key Points:

• The Term Loan was fully repaid during the second quarter of fiscal 2027.
• Gross margin for the second quarter was favorably impacted by $1.7 million of tariff refunds.
• Other operating expenses included $21.3 million of amortization of intangible assets, $1.1 million of restructuring costs, and $1.6 million of other items.
• The Company acquired PSC, included within the Industrial segment, for $2.0 million in net sales contribution.
• Acquisition of business cash outflow for the six months was $24.2 million, compared to $275.0 million in the prior year.
• The Company will host a webcast on October 30, 2026, at 11:00 a.m. ET to discuss results.