RBC Bearings Incorporated

RBC Barron's fourth quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Josh Carroll, with Investor Relations. Please go ahead.

Thank you, Operator. Good morning, and thank you for joining us for RBC Barron's fiscal 2023 fourth quarter earnings conference call. With me on the call today are Dr. Michael Hartnett, 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 of the SEC for a more detailed discussion of the risk that could impact the company's future operating results in 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. With that, I'll now turn the call over to Dr. Hartman.

Thank you, Josh, and good morning and welcome to all. Net sales for the fourth quarter of fiscal 2023 were $394.4 million versus $358.9 million for the same period last year. an increase of 9.9%. For the fourth quarter of our 2023, sales of industrial products represented 69% of our net sales and aerospace products, 31%. Gross margin for the quarter was $166.5 million or 42.2% of net sales. This compares with $137.5 million or 38.3% for the same period last year. Adjusted operating income was 88.6 million, 22.5% of net sales compared to last year's 71.9 million and 20% respectively. Adjusted EPS came in at $2.13 a share. Adjusted EBITDA was 121.1 million, 30.7% of net sales compared to 104.4 million and 29.1% of net sales for the same period last year. On the industrial businesses, during the period, the industrial sales growth was 7.4% against some strong comps from last year. Dodge was our leader with 9.2% expansion rate on combined OEM and distribution sales. The latter showed a low teens expansion rate for Dodge. Overall, the industrials were up high single digits with sector growth mitigated somewhat by Europe. On aerospace and defense, overall we saw a rate of expansion of 16% with aero OEM up 25% and aero commercial distribution up 42.8%. The demand drivers here continue to be the large plane builders and their supply chain in support of production for Boeing and Airbus 737, 787, A320, and A330 principally, as well as other producers of business jets and a myriad of subcontractors needed to support the industry. Additional volume increases were felt from our space initiatives And we saw demand for products to support the new field of air taxis beginning to trickle in. As mentioned in previous calls, we expect to see increased demand creating double digit growth from the plane builders for many quarters to come as they continue to aggressively expand build rates. We continue to add resources and planning to support these increased rates. as well as we expect expanded work statements. To summarize, for the period, RBC saw growth in revenue of 9.9% and an adjusted EBITDA expansion of 16% against the same quarter last year. Regarding our first quarter of 2024, we are expecting sales to be somewhere between $380 and $390 million range. And I'll now turn the call over to Rob for more detail on the financial performance.