RBC Bearings Incorporated

Good day, and thank you for standing by. Welcome to the RBC Barron's fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Josh Carroll, Investor Relations. Please go ahead.

Good morning, and thank you for joining us for RBC Barron's Fiscal 2022 Fourth Quarter and Full Year Earnings Conference Call. With me on the call today is Dr. Michael Arvin, Chairman, President, and Chief Executive Officer, Daniel Bergeron, Director, Vice President, and Chief Operating Officer, and Robert Sullivan, Vice President and Chief Financial 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 Barron's 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 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. Hartman.

Okay, thank you, Josh, and good morning and welcome. I'll present the highlights of our fourth quarter, and following me, Rob and Dan will discuss some of the details of this summary. RBC's bearings net sales for the third quarter of fiscal 2022 For the fourth quarter of 2022, we're $358.9 million versus $160.3 million for the same period last year, an increase of 123.9%. For the fourth fiscal quarter of 2022, sales of industrial products represented 71% of our net sales and aerospace products represented 29% of revenues. Adjusted gross margin for the quarter was $144.3 million or 40.2% of net sales. This compares to $67.2 million or 39.1% for the same period last year. Adjusted operating income was $70.4 million, 19.6% of net sales. This compares to last year's $32.5 million or 20.3%, a 116% increase. Adjusted diluted EPS was $1.26 a share, and cash EPS was $2.15 per share for the three-month period. Revenues adjusted diluted EPS and cash EPS for the full year were $942.9 million, $3.89 per share, and $6.51 per share, respectively. Five months of Dodge Industrial Revenue, which was our period of ownership, were $291.9 million, and RBC's revenues, net of Dodge Industrial's revenues for the full year, were $651 million. Adjusted EBITDA for the fourth quarter was $104.4 million, 29.1% of net sales, compared to 45.9 million and 28.6% for the same period last year, a 127% increase. It's very clear we are thrilled with the record performance of the business this quarter and with the overall speed of integration and management cohesion of these two extraordinary and complementary businesses. Now let's talk a little bit about our sectors, industrial and aerospace. During the period, demand for industrial products continued to exceed both our capacity and that of some of our suppliers. We have worked through these constraints tirelessly over the past many months and see some relief as we head into our second quarter. The problem will continue to test us during the next few months and will reduce impact on our revenues. Our industrial businesses were up about 300% on a quarter-over-quarter basis, mainly because of the Dodge acquisition completed in November. The base for classic RBC industrial businesses expanded approximately 16% for both the OEM and distribution, with both OEM and distribution expanding in the mid-teens range. As stated earlier, the total industrial revenues were $253.9 million, and demand from all industrial markets served was very strong. Turning now to aerospace and defense, the fourth quarter fiscal 2022 net sales were up by 8.8%, led by aircraft OEM, which expanded at 21%. We are experiencing a sea change in demand for aircraft OEMs, from both Boeing and Airbus as they increase their build rates for the single aisle on the 737 and the A320 ships. This is complemented by the introduction of new products that we are supplying for both of these planes. Looking ahead, each successive quarter stands more robust than the last, reflecting the rate increases planned by the major builders. Consequently, we're seeing a stepped increase in demand from our commercial plane manufacturers. This will impact successive quarters this year and through next fiscal year and beyond. We are currently adding to our installed capacity to accommodate these higher volumes of single aisle production and for the new products that we're producing for these fleets. We look forward to the increased build rates of the widebody jets next year as our content per plane is several multiples of those for the narrowbodies. Increased production rates for the 787 and 777 freighter planned for 2023 and beyond are welcome and will be meaningful to us for the next several years. On defense, our defense OEM business revenues were down about 2%, which is more reflective of timing on shipments than demand for these products. OEM demand for defense priority programs is substantial in building for us today. These products are normally complex and highly engineered and requiring longer engineering and manufacturing cycles, hence lumpier revenues through the quarters. The defense and aircraft market sectors were about flat with last year, although we have seen a plurive MRO defense products in recent demand for MRO defense products in recent weeks. I'm sure that doesn't surprise anyone. Following this activity, we're expecting to see increased spending from the military in the quarters ahead as we are still within production lead times in the fiscal year. Any defense bolts would show up as soon as our fourth quarter. Regarding our fourth quarter, we are expecting sales to be between $355 and $365 million. And I'll turn now the call over to Rob for more detail on the financial performance.