RBC Bearings Incorporated

Greetings. Welcome to RBC Bearing's Fiscal 2025 First Quarter Earnings Call. At this time, all participants are in 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, Rob Moffitt, the Director of Investor Relations. Please go ahead.

Good morning. And thank you for joining us for RBC Bearing's Fiscal First Quarter 2025 Earnings Call. I'm Rob Moffitt, Director of Investor Relations. And with me on the call today are Dr. Michael Hartnett, Chairman, President, and Chief Executive Officer, Samuel Bergeron, Director, Vice President, and Chief Operating Officer, and Rob 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 Bearing'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. With that, I'll now turn the call over to Dr. Hartnett.

Thank you, Rob, and good morning to everyone, and thanks for joining us. I'm going to start today's call with a quick review of our quarter and fiscal year and hand it over to Rob for some detailed color on the numbers. Then I'll finish with some high-level thoughts on the industry, RBC's positioning, and some in our fiscal 25 outlook. First quarter sales came in at $406.3 million, a 5% increase over last year. Strong performance from our aerospace and defense sector showed a 23.7% expansion, where our industrial business contracted slightly at 3.5%. In aerospace and defense, sales expanded approximately $30 million quarter to quarter, year over year, with $149.1 million the quarterly result. The defense sector led with a 38.1% expansion rate. Unquestionably, we can expect continued strong showings from our A&D sector through the balance of the year. On the industrial side, we held our own against our peers, showing a small contraction of 3.5% in sales. Sales were 257.2 million. Weakened sector performance was seen in oil and gas, semiconductor machinery, and some general industrial markets. We currently expect and plan for these markets to strengthen in the second half of the year. Adjusted gross margin for the quarter came in at $184 million, 45.3% of sales, and almost two full percentage points above last year. Clearly, our manufacturing plants are executing extremely well. We are operating well within our sweet spot in this regard and many completed synergies and improvement projects contributed to this performance. Still many more productive concepts and plans are in the breach and or active today. And these are very productive and promising areas for us to prospect. I'd like to acknowledge and thank our teams for this quarter's performance. Clearly, it is they who are the reason for RBC's continued successes. As a result, adjusted net income was $2.54 a share and adjusted EBITDA was 33% of revenues. Obviously, we're very pleased with this performance and we really can't think of a better way to start our fiscal year. Net cash provided by the operating activities was $97.4 million versus $61.7 million last year, a 57.9% increase. This allowed us to reduce debt another $60 million during the period, bringing the EBITDA to net debt ratio to approximately 2.1 times, another sweet spot. Overall, we expect more of the same performance from the Aerospace and Defense Group through the year end. Some ups and downs in this regard as a result of normal seasonal impacts of holidays, vacations, and supply chain. On the industrial side, we are planning to see strengthening in the second half of the year and are setting our plans today accordingly. RBC is well positioned to support additional demand from both industrial and aerospace defense customers, as well as space customers. We have the production capacity, the trained and skilled workforce forces in place, and are in the process of augmenting plant capacities to accommodate additional business awards. I'll now turn the call over to Rob for more details on our financial performance.