RBC Bearings Inc. (NASDAQ:ROLL) Q2 2020 Earnings Conference Call - Final Transcript

Nov 01, 2019 • 11:00 am ET

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RBC Bearings Inc. (NASDAQ:ROLL) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Michael Hartnett

introduce additional manufacturing capacity and convert new contracts to revenues. At this point in our year as we enter our third quarter most of our aerospace businesses are well -- are booked well into 2021. When the 737 Max receive its FAA certifications we hope in calendar Q4 and production is accelerated. We expect our aircraft products growth rate to steepened further. Today we are beginning to see the impact of the Max in the Q3 outlook as we are beginning to feel the effects of the reduced production rate for that plane implants where production is not constrained. We continue to add both capacity and new processes and support of our customers' requirements and should be well positioned in this regard for FY '21 and beyond. With regards to our second quarter we are expecting sales between $177 million and $179 million which results in an organic growth rate of approximately 4% over last year.

I will now turn the call over to Dan for more details on the financial performance.

Executive
Daniel Bergeron

Thanks Mike, SG&A for the second quarter of fiscal 2020 was $30.8 million compared to $29.3 million for the same period last year. The increase was mainly due to a $1 million of additional incentive stock compensation higher personnel costs of about $0.4 million and $0.1 million of other items. As a percentage of net sales SG&A was 16.9% the second quarter of fiscal 2020 compared to 17% at the same period last year. Other operating expense for the second quarter of fiscal 2020 was expense of $3 million compared to expense of $2.6 million for the same period last year. For the second quarter of fiscal 2020 other operating expenses were comprised mainly of $2.3 million and the amortization of intangible assets and $0.9 million of acquisition costs offset by other income of $0.2 million. Other operating expense for the same period of last year consisted mainly of $2.6 million in the amortization of intangible assets. Operating income was $37.3 million for the second quarter of fiscal 2020 compared to operating income of $35.9 million for the same period in fiscal 2019. On an adjusted basis operating income would have been $38.4 million for the second quarter of fiscal 2020 compared to adjusted operating income of $35.9 million for the second quarter of fiscal 2019.

For the second quarter of fiscal 2020, the company reported net income of $31.3 million compared to net income of $30.1 million for the same period last year. On an adjusted basis, net income would have been $32.3 million for the second quarter of fiscal 2020 compared to adjusted net income of $30.2 million for the same period last year. Diluted earnings per share was $1.26 per share for the second quarter of fiscal 2020 compared to $1.22 per share for the same period last year on an adjusted basis alluded earnings per share for the second quarter of fiscal 2020 was $1.30 per share compared to an adjusted diluted EPS of