RBC Bearings Incorporated Q1 FY2026 earnings call

• Financial Results: First quarter sales $436 million, up 7.3% y-o-y. Gross margin 44.8%, adjusted diluted EPS $2.84. Free cash flow $104.3 million, a record.
• Segment Details: A&D had 10.4% growth, industrial 5.5% growth. Industrial gross margins 46%, A&D 42.3% (adjusted).
• VACCO Acquisition: Recently acquired VACCO, marine business of VACCO driven by U.S. submarine fleet build-out. Synergy in engineering, manufacturing, etc.
• Backlog: First time backlog exceeded $1 billion, $100 million industrial.
• Outlook: Strong year ahead, well-positioned in markets, strong balance sheet, 5-year plan in place.

Aerospace and Defense (A&D): Total sales up 10.4% year-over-year, with commercial aerospace up 9.6% and defense up 11.9%. Aircraft aftermarket expanded 22.6%, defense aftermarket contributed well. Industrial: Grew 5.5% year-over-year, with distribution and aftermarket up 10%. Oil and gas and semiconductor weak, but other markets like aggregate, metals and mining, etc., contributed. Backlog for industrial was $100 million.

• Q2 revenue guidance $445M to $455M, y-o-y growth 11.8% to 14.4%.
• Gross margins projected 44% to 44.25%, SG&A 17% to 17.25%.
• VACCO expected to add $15M to $20M revenue in Q2, gross margins 25% to 30%.
• Capital allocation focused on delevering by paying off $200M revolver draw by end of fiscal year.

• Supply chain risks, particularly with specialty alloys. Some exotics materials may have long lead times.
• Impact of tariffs on P&L, with adjustments made but uncertainty remains.

Q: Details on 5-year outlook A: Planning by major business, lining up sales by account, capacity expansion, etc.

Q: VACCO modeling details A: Early days, Q2 impact outlined, A&D segment, margins early Q: Commercial aerospace trends A: Build rates positive, content expansion negotiations Q: Industrial backlog and stimulus A: Industrial distribution up 10%, stimulus benefits small industrial customers Q: VACCO integration and margins A: Early integration, similar to Sargent acquisition, margin progression expected Q: Aerospace contract renewals and pricing A: Reputation from execution helps with long-term agreements