RBC Bearings Incorporated is an international manufacturer and marketer of highly engineered precision bearings, components and essential systems for the Industrial and Aerospace & Defense markets. The bearing, gearing and engineered component industry is a fragmented multi-billion-dollar market. Demand in the diversified industrial market is influenced by growth factors in industrial machinery and equipment shipments, and construction, mining, energy, food and beverage, packaging and canning, semiconductor, and general industrial activity. In the commercial aerospace market, new aircraft build rates along with carrier traffic volumes worldwide determine demand. Activity in the defense market is influenced by modernization programs necessitating spending on new equipment, as well as continued utilization of deployed equipment supporting aftermarket demand.

The Company's principal competitors include SKF, New Hampshire Ball Bearings, Regal Rexnord, NORD and Timken. The Company believes it has leading market positions in many of the specialized product markets in which it primarily competes. The Company believes its expertise has enabled it to garner leading positions in many of the product markets in which it primarily competes. The Company's largest industrial customers include Caterpillar, Komatsu and Halliburton and various aftermarket distributors including Motion Industries, Applied Industrial, Baldwin Supply, BDI and Purvis Industries. The Company's largest Aerospace & Defense customers include the DOD, Boeing, Airbus, Newport News Shipbuilding, Lockheed Martin, Northrop Grumman, Raytheon, Blue Origin and SpaceX and various aftermarket distributors including National Precision Bearing.

The Company generates revenue from the sale of highly engineered precision bearings, components and essential systems to customers in the Industrial and Aerospace & Defense markets. Approximately 95% of the Company's revenue was generated from the sale of products to customers for each of the years ended March 28, 2026 and March 29, 2025. The remaining 5% of the Company's revenue for each of the last two fiscal years was derived from services performed for customers, which included repair and refurbishment work performed on customer-controlled assets as well as design and test work. The Company sells to a wide variety of original equipment manufacturers (OEMs) and distributors who are widely dispersed geographically.

The Industrial segment represented 58% of net sales for the fiscal year ended March 28, 2026. This segment manufactures bearings, gearing and engineered components for a wide range of diversified industrial markets, including multi-industry manufacturing, construction, metals and mining, aggregate and cement, food and beverage, oil and natural resource extraction, forest products, warehousing and logistics, grain, transportation, packaging and canning, semiconductor equipment, power generation, waste and water management, and other general industrial markets. Net sales for the Industrial segment were $1,082.9 ¹ for fiscal 2026, compared to $1,043.5 ² in fiscal 2025. Gross margin for the Industrial segment was $509.5 ³, or 47.0% ⁴ of net sales, in fiscal 2026 compared to $483.0 ⁵, or 46.3% ⁶ of sales, in fiscal 2025.

The Aerospace & Defense segment represented 42% of net sales for the fiscal year ended March 28, 2026. This segment supplies bearings and engineered components for use in commercial, private, and military aircraft and aircraft engines, guided weaponry, space and satellites, vision and optical systems, and military marine and ground applications. Net sales for the Aerospace & Defense segment were $788.0 ⁷ for fiscal 2026, compared to $592.8 ⁸ in fiscal 2025. Gross margin was $320.7 ⁹, or 40.7% ¹⁰ of net sales, in fiscal 2026 compared to $243.1 ¹¹, or 41.0% ¹² of sales, in fiscal 2025. Gross margin in fiscal 2026 was affected by $13.2 ¹³ of purchase accounting adjustments related to the VACCO acquisition.

On July 18, 2025, the Company acquired the issued and outstanding capital stock of VACCO from ESCO Technologies Inc. for $276.7 ¹⁴. The purchase price was paid with cash, $200.0 ¹⁵ of which was drawn from the Revolving Credit Facility, and the remaining $76.7 ¹⁶ was paid from cash on hand. VACCO, which is based in South El Monte, California, is a manufacturer of valves, manifolds, regulators, filters and other precision components and subsystems for space and naval defense applications. In fiscal 2022, the Company incurred $1,800.0 ¹⁷ of total debt to finance the acquisition of Dodge Industrial. In July 2025, the Company incurred $200.0 ¹⁸ of debt to finance the acquisition of VACCO Industries. As of March 28, 2026, total debt was $875.5 ¹⁹. The Company has a $100.0 ²⁰ common stock repurchase plan that it has never executed under. On October 15, 2024, each then-outstanding share of the MCPS converted into 0.4413 ²¹ shares of common stock, resulting in the retirement of the MCPS and the issuance of 2,029,955 ²² shares of common stock.

For the fiscal year ended March 28, 2026, total net sales were $1,870.9 ²³, compared to $1,636.3 ²⁴ in fiscal 2025, an increase of 14.3% ²⁵. Net income attributable to common stockholders was $287.6 ²⁶ for fiscal 2026, compared to $233.8 ²⁷ in fiscal 2025, an increase of 23.0% ²⁸. Diluted net income per common share attributable to common stockholders was $9.09 ²⁹ for fiscal 2026, compared to $7.70 ³⁰ in fiscal 2025. Gross margin was 44.4% ³¹ of sales for fiscal 2026, consistent with 44.4% ³² in the prior year. Net cash provided by operating activities was $415.7 ³³ in fiscal 2026, compared to $293.6 ³⁴ in fiscal 2025.

The Company forecasts net sales to be approximately $500.0 to $510.0 ³⁵ in the first quarter of fiscal 2027, compared to $436.0 ³⁶ in the first quarter of fiscal 2026, which represents a growth rate of 14.7% to 17.0% ³⁷. Excluding $28.0 ³⁸ of expected net sales from VACCO, net sales are expected to grow 8.3% to 10.6% ³⁹. Adjusted gross margin is expected to be in the range of 45.25% to 45.5% ⁴⁰ and SG&A as a percentage of net sales is expected to be in the range of 16.50% to 16.75% ⁴¹.

Aerospace & Defense segment sales increased 32.9% ⁴² year over year. Commercial aerospace increased 17.8% ⁴³, due to the increased build rates from large OEMs. Defense sales, which represented approximately 40.0% ⁴⁴ of segment sales during the year, were up 64.5% ⁴⁵ for the year. Excluding net sales from VACCO, defense sales were up 22.9% ⁴⁶ year over year. The Company's backlog in this segment is significant and deliveries are expected to continue to grow in the coming years. The Company believes that growth and margin expansion in this market will be driven primarily by expanding its international presence, new commercial aircraft introductions, new products, share gains, and the refurbishment and maintenance of existing commercial and military aircraft.

Industrial segment sales increased 3.8% ⁴⁷ year over year, led by a 4.8% ⁴⁸ increase in distribution and aftermarket sales. Sales to OEMs were up 1.5% ⁴⁹ year over year, primarily driven by aggregate & cement, warehousing, grain and food & beverage. The Company believes opportunities exist for growth and margin improvement in this market as a result of the introduction of new products, the expansion of aftermarket sales, and continued manufacturing process improvements.

Gross margin was 44.4% ⁵⁰ of sales for fiscal 2026 compared to 44.4% ⁵¹ for the same period last year. The increase in gross margin was primarily driven by volume. Gross margin in fiscal 2026 was impacted by $2.1 ⁵² in restructuring costs related to inventory rationalization efforts at one of the Company's manufacturing plants and $13.2 ⁵³ of unfavorable purchase accounting adjustments associated with the VACCO acquisition. SG&A as a percentage of net sales was 16.9% ⁵⁴ compared to 17.1% ⁵⁵ in the prior fiscal year. The Company anticipates additional margin expansion in the upcoming year for the Aerospace & Defense segment as growing orders for commercial products are expected to increase volumes flowing through manufacturing facilities driving cost efficiencies, and expected synergies from the VACCO acquisition should also contribute to margin expansion.

The Company's plants currently run on a full first shift with second and third shifts at select locations to meet the demands of customers. The Company believes that current capacity levels and future annual estimated capital expenditures on equipment up to approximately 3.5% to 4.0% ⁵⁶ of net sales should permit it to effectively meet demand levels for the foreseeable future. The Company expects to make capital expenditures of approximately 3.5% to 4.0% ⁵⁷ of net sales during fiscal 2027 in connection with its existing business. Capital expenditures in fiscal 2026 were $73.1 ⁵⁸ compared to $49.8 ⁵⁹ in fiscal 2025.

Research and development costs for the creation of new and improved products, processes and services were approximately $34.4 ⁶⁰, $33.0 ⁶¹ and $33.0 ⁶², for fiscal years 2026, 2025 and 2024, respectively. The Company expects to make capital expenditures of approximately 3.5% to 4.0% ⁶³ of net sales during fiscal 2027 in connection with its existing business. The Company has a $100.0 ⁶⁴ common stock repurchase plan that it has never executed under. The Company does not expect to pay cash dividends on the common stock in the foreseeable future.

The Company's backlog as of March 28, 2026 was $2.3 billion ⁶⁵ compared to $0.9 billion ⁶⁶ as of March 29, 2025. The backlog as of March 28, 2026 included $0.6 billion ⁶⁷ of VACCO backlog and $1.1 billion ⁶⁸ of marine related backlog. The Company's top ten customers collectively accounted for approximately 35% ⁶⁹, 44% ⁷⁰ and 44% ⁷¹ of net sales during fiscal 2026, 2025 and 2024, respectively. In fiscal 2026, approximately 1% ⁷² of net sales were made directly, and the Company estimates that approximately an additional 7% ⁷³ of net sales were made indirectly, to the U.S. government.

The Company is subject to risks including fluctuating supply and costs of subcomponents, raw materials, particularly steel, and energy resources. The Company currently pays import tariffs on raw materials sourced outside the U.S. The international trade situation is very fluid and subject to rapid change, including litigation, as the U.S. increases, decreases, suspends or reinstates tariffs against various countries and products and those countries respond. The Company's international operations are subject to risks inherent in such activities such as currency devaluations, logistical and communication challenges, costs of complying with a variety of foreign laws and regulations, and general economic conditions in foreign markets. Approximately 11% ⁷⁴ of net sales were generated by international operations in fiscal 2026.

Management's message emphasizes the Company's position as a leading international manufacturer of highly engineered precision bearings, components and essential systems, with a strategy built around developing innovative solutions, expanding the customer base and penetrating end markets, increasing aftermarket sales, and pursuing selective acquisitions. The Company has demonstrated expertise in acquiring and integrating bearing and precision engineered component manufacturers, having completed 30 acquisitions since 1992, including VACCO, which was acquired on July 18, 2025. For the fiscal year ended March 28, 2026, 57.9% of net sales were attributable to the Industrial segment while the Aerospace & Defense segment contributed 42.1% of net sales. Net sales increased 14.3% year over year. The Company forecasts net sales to be approximately $500.0 to $510.0 ⁸⁰ in the first quarter of fiscal 2027, compared to $436.0 ⁸¹ in the first quarter of fiscal 2026, which represents a growth rate of 14.7% to 17.0% ⁸². Adjusted gross margin is expected to be in the range of 45.25% to 45.5% ⁸³ and SG&A as a percentage of net sales is expected to be in the range of 16.50% to 16.75% ⁸⁴. The Company believes that operating cash flows and available credit under its revolving bank credit facilities will provide adequate resources to fund internal growth initiatives for the foreseeable future.

For the fiscal year ended March 28, 2026, total net sales were $1,870.9 ⁸⁵ compared to $1,636.3 ⁸⁶ in fiscal 2025. Net income attributable to common stockholders was $287.6 ⁸⁷ compared to $233.8 ⁸⁸ in the prior year. Diluted net income per common share attributable to common stockholders was $9.09 ⁸⁹ compared to $7.70 ⁹⁰ in fiscal 2025. Gross margin was $830.2 ⁹¹ or 44.4% ⁹² of sales, compared to $726.1 ⁹³ or 44.4% ⁹⁴ in fiscal 2025. Operating income was $421.0 ⁹⁵ compared to $369.9 ⁹⁶ in the prior year. Net cash provided by operating activities was $415.7 ⁹⁷ compared to $293.6 ⁹⁸ in fiscal 2025. As of March 28, 2026, the Company had cash of $57.3 ⁹⁹ and total debt of $875.5 ¹⁰⁰. The net income attributable to common stockholders of $287.6 ¹⁰¹ in fiscal 2026 was impacted by $14.8 ¹⁰² of acquisition and related costs, $6.2 ¹⁰³ of restructuring and consolidation charges, $49.8 ¹⁰⁴ of interest expense, and $81.7 ¹⁰⁵ of income tax expense. The net income attributable to common stockholders of $233.8 ¹⁰⁶ in fiscal 2025 was impacted by $1.5 ¹⁰⁷ of restructuring and consolidation charges, $59.8 ¹⁰⁸ of interest expense, $12.4 ¹⁰⁹ of preferred stock dividends, and $65.7 ¹¹⁰ of income tax expense. For the Industrial segment, net sales were $1,082.9 ¹¹¹ and gross margin was $509.5 ¹¹² or 47.0% ¹¹³. For the Aerospace & Defense segment, net sales were $788.0 ¹¹⁴ and gross margin was $320.7 ¹¹⁵ or 40.7% ¹¹⁶.

The bearings, engineered components and essential systems industries are highly competitive, and the Company competes with many U.S. and non-U.S. companies, some of which benefit from lower labor costs and fewer regulatory burdens. The loss of a major customer could materially reduce revenues, as the top ten customers collectively accounted for approximately 35% ⁷⁵ of net sales during fiscal 2026. Fluctuating supply and costs of raw materials, particularly steel, and energy resources could materially reduce revenues, cash flows and profitability, and the Company currently pays import tariffs on raw materials sourced outside the U.S. The Company incurred substantial debt to finance the Dodge and VACCO acquisitions, with total debt of $875.5 ⁷⁶ as of March 28, 2026, which could constrain the business and exposes the Company to the risk of defaults under its debt instruments. Goodwill and indefinite-lived intangibles comprise a significant portion of total assets, with $2,003.4 ⁷⁷ of goodwill and $24.3 ⁷⁸ of indefinite-lived intangibles as of March 28, 2026, representing approximately 40% ⁷⁹ of total assets, and if impaired, could materially and adversely affect results of operations and financial condition.