RBC Bearings Incorporated

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2020 RBC Bearings Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, Please press star zero. I would now like to hand the conference over to your speaker today, Brooks Hamilton of Alpha IR Group. Thank you. Please go ahead, sir.

Good morning, and thank you for joining us for RBC Bearings Fiscal 2020 Fourth Quarter Earnings Conference Call. With me on the call today are Dr. Michael J. Hartnett, Chairman, President, and Chief Executive Officer, and Daniel A. Bergeron, Vice President, Chief Financial Officer, and Chief Operating Officer. Before beginning today's call, let me remind you that some of the statements made today will 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 conditions. These factors are also described in greater detail in the press release and on the company's website. In addition, reconciliation between GAAP and non-GAAP financial information is included as part of the release and is available on the company's website. Now, I'll turn the call over to Dr. Hartnett.

Thank you, Brooks, and good morning. Net sales for the fourth quarter of fiscal 2020 were $185.8 million. Dollars versus $182.2 million for the same period last year, a 2% increase. The fourth quarter fiscal 2020, sales of industrial products represented 36% of our net sales, and aerospace products, 64% of our net sales. Gross margin for the quarter was $76.6 million, or 41.2% of net sales, a record reflecting years of work on methods improvement, Improvements in Capitalization and Mixed Management. This compares to 73.0 million or 40.1% for the same period last year, a 5% increase overall. Operating income was 43 million, a 23.1% of net sales. IPTA was 56.3 million, a 6.2% increase over last year. The quarter started as the best of times and finish with the plague of government interference in the economy and COVID uncertainty. We were able to execute a normal quarter from an operating perspective by taking extraordinary measures to protect the health and well-being of our employees by adopting strict procedures for environmental management as published by the Center for Disease Control. As a result, we were able to accommodate the needs of our customers, operate our plants in a manner where our employees knew they worked in a zone of safety. Sales for the industrial products were down 1.9% from last year. The prime variance from last year fell in the natural resources markets of mining and oil. Sales to industrial aftermarket were about the same as last year, down just less than 1%. Overall. Aerospace and defense markets continue to perform well for the first two months of the period, and demand lessened in March. The fourth quarter organic net sales were up 4.3%. Aerospace sales were driven by both OEM and defense, which accounted for one-third of the sales we classified in the aerospace segment. Aero and defense OEM were up 2.1%, from an organic basis, Defense OEM was up 7%. Important contributors were helicopters, aero engines, space, and missiles. The uncertainty around today's 737 MAX outlet continued, but now had taken second priority to the challenges and industry uncertainty presented by the COVID epidemic. The major airframe producers appeared to gain their footing in May, providing strong direction on continued production rates by model to us. We are now reworking our production schedules to integrate those directions into a production and sales plan over the next several quarters. Regarding our first quarter of fiscal 21, we are expecting sales to be in the range of $150 to $155 million. We have a very substantial amount of order book, and the issue often occurs around customer credits and whether or not whether or not the customers are on time with their payments, which seems to be in the aerospace sector somewhat of a problem right now. I'll now turn the call over to Dan for more detail on our financial performance.