RBC Bearings INC

Previous wording

The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation: (a) the bearing and engineered products industries are highly competitive, and this competition could reduce our profitability or limit our ability to grow; (b) the loss of a major customer, or a material adverse change in a major customer’s business, could result in a material reduction in our revenues, cash flows and profitability; (c) weakness in any of the industries in which our customers operate, as well as the cyclical nature of our customers' businesses generally, could materially reduce our revenues, cash flows and profitability; (d) future reductions or changes in U.S. government spending could negatively affect our business; (e) fluctuating supply and costs of subcomponents, raw materials and energy resources, or the imposition of import tariffs, could materially reduce our revenues, cash flows and profitability; (f) our results could be impacted by governmental trade policies and tariffs relating to our supplies imported from foreign vendors or our finished goods exported to other countries; (g) some of our products are subject to certain approvals and government regulations and the loss of such approvals, or our failure to comply with such regulations, could materially reduce our revenues, cash flows and profitability; (h) the retirement of commercial aircraft could reduce our revenues, cash flows and profitability; (i) work stoppages and other labor problems could materially reduce our ability to operate our business; (j) unexpected equipment failures, catastrophic events or capacity constraints could increase our costs and reduce our sales due to production curtailments or shutdowns; (k) we may not be able to continue to make the acquisitions necessary for us to realize our growth strategy; (l) businesses that we have acquired (such as Dodge) or that we may acquire in the future may have liabilities that are not known to us; (m) goodwill and indefinite-lived intangibles comprise a significant portion of our total assets, and if we determine that goodwill and indefinite-lived intangibles have become impaired in the future, our results of operations and financial condition in such years may be materially and adversely affected; (n) we depend he…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation: (a) the bearing and engineered products industries are highly competitive, and this competition could reduce our profitability or limit our ability to grow; (b) the loss of a major customer, or a material adverse change in a major customer’s business, could result in a material reduction in our revenues, cash flows and profitability; (c) weakness in any of the industries in which our customers operate, as well as the cyclical nature of our customers' businesses generally, could materially reduce our revenues, cash flows and profitability; (d) future reductions or changes in U.S. government spending could negatively affect our business; (e) fluctuating supply and costs of subcomponents, raw materials and energy resources, or the imposition of import tariffs, could materially reduce our revenues, cash flows and profitability; (f) our results could be impacted by governmental trade policies and tariffs relating to our supplies imported from foreign vendors or our finished goods exported to other countries; (g) some of our products are subject to certain approvals and government regulations and the loss of such approvals, or our failure to comply with such regulations, could materially reduce our revenues, cash flows and profitability; (h) the retirement of commercial aircraft could reduce our revenues, cash flows and profitability; (i) work stoppages and other labor problems could materially reduce our ability to operate our business; (j) unexpected equipment failures, catastrophic events or capacity constraints could increase our costs and reduce our sales due to production curtailments or shutdowns; (k) we may not be able to continue to make the acquisitions necessary for us to realize our growth strategy; (l) businesses that we have acquired (such as Dodge) or that we may acquire in the future may have liabilities that are not known to us; (m) goodwill and indefinite-lived intangibles comprise a significant portion of our total assets, and if we determine that goodwill and indefinite-lived intangibles have become impaired in the future, our results of operations and financial condition in such years may be materially and adversely affected; (n) we depend he…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We are a leading international manufacturer of highly engineered precision bearings, components and essential systems for the industrial, aerospace and defense industries. Our precision solutions are integral to the manufacture and operation of most machines and mechanical systems, reduce wear to moving parts, facilitate proper power transmission, and reduce damage and energy loss caused by friction. While we manufacture products in all major bearings categories, we focus primarily on the higher end of the bearing and engineered component markets where we believe our value-added manufacturing and engineering capabilities enable us to differentiate ourselves from our competitors and enhance profitability. We believe our expertise has enabled us to garner leading positions in many of the product markets in which we primarily compete. With 52 facilities in 11 countries, of which 37 are manufacturing facilities, we have been able to significantly broaden our end markets, products, customer base and geographic reach.

Current wording

We are a leading international manufacturer of highly engineered precision bearings, components and essential systems for the industrial, aerospace and defense industries. Our precision solutions are integral to the manufacture and operation of most machines and mechanical systems, reduce wear to moving parts, facilitate proper power transmission, and reduce damage and energy loss caused by friction. While we manufacture products in all major bearings categories, we focus primarily on the higher end of the bearing and engineered component markets where we believe our value-added manufacturing and engineering capabilities enable us to differentiate ourselves from our competitors and enhance profitability. We believe our expertise has enabled us to garner leading positions in many of the product markets in which we primarily compete. With 53 facilities in 11 countries, of which 38 are manufacturing facilities, we have been able to significantly broaden our end markets, products, customer base and geographic reach.

Previous wording

Our net sales for the three-month period ended September 28, 2024 increased 3.2% compared to the same period last fiscal year. The increase in net sales was a result of a 12.5% increase in our Aerospace/Defense segment partially offset by a 1.4% decrease in our Industrial segment. Our backlog, as of September 28, 2024 was $864.0 compared to $821.5 as of March 30, 2024.

Current wording

Our net sales for the three-month period ended December 28, 2024 increased 5.5% compared to the same period last fiscal year. The increase in net sales was a result of a 10.7% increase in our Aerospace/Defense segment and 2.7% increase in our Industrial segment. Our backlog, as of December 28, 2024 was $896.5 compared to $821.5 as of March 30, 2024.

Previous wording

We are continuing to see the expansion of our commercial aerospace business, which experienced a 10.3% increase in net sales for the three-month period ended September 28, 2024 versus the same period last fiscal year. We anticipate this growth to continue through the rest of the current fiscal year and beyond. Orders have continued to grow as evidenced by our backlog. Defense sales, which represented approximately 33.3% of segment sales during the quarter, were up 17.3% quarter over quarter. We expect this growth to continue throughout the current fiscal year and beyond as we are gearing up to fulfill the substantial number of defense orders in our backlog. Though sales in our Industrial segment have decreased compared to the comparable period in the prior year, our margins have continued to improve driven by continuous operational improvements and product mix.

Current wording

We are continuing to see the expansion of our commercial aerospace business, which experienced a 14.6% increase in net sales for the three-month period ended December 28, 2024 versus the same period last fiscal year. We anticipate growth in these markets to continue through the rest of the current fiscal year and beyond. Orders have continued to grow as evidenced by our backlog. Defense net sales, which represented approximately 30.9% of segment net sales during the quarter, were up 3.0% quarter over quarter. We expect this growth to continue throughout the current fiscal year and beyond as we are gearing up to fulfill the substantial number of defense orders in our backlog. Net sales in our Industrial segment have increased 2.7% compared to the comparable period in the prior year and our margins have continued to improve driven by continuous operational improvements and product mix.

Previous wording

The Company expects net sales to be approximately $390.0 to $400.0 in the third quarter of fiscal 2025, an increase of 4.3% to 7.0% compared to the third quarter of fiscal 2024.

Current wording

The Company expects net sales to be approximately $434.0 to $444.0 in the fourth quarter of fiscal 2025, an increase of 4.9% to 7.3% compared to the fourth quarter of 2024.

Previous wording

We believe that operating cash flows and available credit under the Revolving Credit Facility will provide adequate resources to fund internal growth initiatives for the foreseeable future, including at least the next 12 months. As of September 28, 2024, we had cash and cash equivalents of $89.1, of which approximately $22.8 was cash held by our foreign subsidiaries.

Current wording

We believe that operating cash flows and available credit under the Revolving Credit Facility will provide adequate resources to fund internal growth initiatives for at least the next 12 months. As of December 28, 2024, we had cash and cash equivalents of$60.6, of which approximately $22.4 was cash held by our foreign subsidiaries. We paid down $100.0 of the Term Loan during the third quarter of fiscal 2025.

Previous wording

Our net sales for the three-month period ended September 28, 2024 increased 3.2% compared to the same period last fiscal year. Net sales in our Industrial segment decreased 1.4% quarter over quarter. While stable overall, we saw strength in the mining and metals and warehousing markets offset by weakness in semicon and oil and gas sales compared to the prior year. Net sales in our Aerospace/Defense segment increased 12.5% quarter over quarter, led by defense sales, which increased 17.3% compared to the same period in the prior year, driven by aerospace and marine. Aerospace commercial OEM and the aftermarket were up 10.3% compared to the same period in the prior year. Net sales during the quarter ended September 28, 2024 were adversely effected by a temporary stoppage of shipping and receiving activities at certain of our facilities due to local flooding caused by Hurricane Helene, as well as a shipping slowdown to one of our commercial aerospace OEM customers that is experiencing a labor strike. We estimate the impact to net sales from these events to have been between $4.0 and $5.0 during the quarter.

Current wording

Our net sales for the three-month period ended December 28, 2024 increased 5.5% compared to the same period last fiscal year. Net sales in our Industrial segment increased 2.7% quarter over quarter. We saw strength in the logistics and warehousing, food and beverage, aggregate and cement and grain markets offset by weakness in machine tools, semicon and oil and gas sales markets compared to the prior year. Net sales in our Aerospace/Defense segment increased 10.7% quarter over quarter. Defense net sales increased 3.0% compared to the same period in the prior year, driven by aerospace and marine. Aerospace commercial OEM and the aftermarket were up 14.6% compared to the same period in the prior year as commercial air travel continues to trend upwards.

Previous wording

Net income attributable to common stockholders for the second quarter of fiscal 2025 was $48.5 compared to $45.9 for the same period last fiscal year.

Current wording

Net income attributable to common stockholders for the third quarter of fiscal 2025 was $56.9 compared to $40.8 for the same period last fiscal year.

Previous wording

Our net sales for the six-month period ended September 28, 2024 increased 4.1% compared to the same period last fiscal year. Net sales in our Industrial segment decreased 2.5% year over year. This reflected a pattern of sustained strong performance in areas including the food and beverage, mining and metals, power generation, logistics and warehousing and grain markets offset by semicon and oil and gas. Net sales in our Aerospace/Defense segment increased 18.0% year over year, led by the defense sector which was up 27.3% compared to the same period in the prior year while net sales to the commercial aerospace sector were up 13.7%. The increase in the defense sector reflects continued strength and stability from our large OEMs and the aftermarket.

Current wording

Our net sales for the nine-month period ended December 28, 2024 increased 4.5% compared to the same period last fiscal year. Net sales in our Industrial segment decreased 0.8% year over year. This reflected a pattern of sustained strong performance in areas including the food and beverage, mining and metals, power generation, logistics and warehousing and grain markets offset by aggregate and cement, semicon and oil and gas. Net sales in our Aerospace/Defense segment increased 15.5% year over year, led by the defense sector which was up 18.7% compared to the same period in the prior year while net sales to the commercial aerospace sector were up 14.0%. The increase in the defense sector reflects continued strength and stability from our large OEMs and the aftermarket.

Previous wording

Net income attributable to common stockholders for the six months ended September 28, 2024 was $104.2 compared to $90.2 for the same period last fiscal year.

Current wording

Net income attributable to common stockholders for the nine months ended December 28, 2024 was $161.1 compared to $131.0 for the same period last fiscal year.

Previous wording

Gross margin was 44.5% of net sales for the first six months of fiscal 2025 compared to 43.2% for the same period last fiscal year. The increase in gross margin as a percentage of net sales was mostly driven by volumes and sustained manufacturing efficiencies.

Current wording

Gross margin was 44.4% of net sales for the first nine months of fiscal 2025 compared to 42.9% for the same period last fiscal year. The increase in gross margin as a percentage of net sales was mostly driven by volumes and sustained manufacturing efficiencies.

Previous wording

SG&A for the second quarter of fiscal 2025 was $69.5, or 17.5% of net sales, as compared to $60.5, or 15.7% of net sales, for the same period of fiscal 2024. The increase in SG&A was primarily driven by increased personnel costs, stock compensation costs, travel costs and other professional fees.

Current wording

SG&A for the third quarter of fiscal 2025 was $70.1, or 17.8% of net sales, as compared to $63.9, or 17.1% of net sales, for the same period of fiscal 2024. The increase in SG&A was primarily driven by increased personnel costs, stock compensation costs, travel costs and professional fees.

Previous wording

SG&A expenses increased by $11.9 to $137.1 for the first six months of fiscal 2025 compared to $125.2 for the same period last year. The increase in SG&A for the first six months of fiscal 2025 was primarily related to increases in professional fees, stock compensation costs, travel costs and personnel costs.

Current wording

SG&A expenses increased by $18.1 to $207.2 for the first nine months of fiscal 2025 compared to $189.1 for the same period last year. The increase in SG&A for the first nine months of fiscal 2025 was primarily related to increases in professional fees, stock compensation costs, travel costs and personnel costs.

Previous wording

Other operating expenses for the second quarter of fiscal 2025 totaled $18.2 compared to $18.0 for the same period last fiscal year. For the second quarter of fiscal 2025, other operating expenses included $17.9 of amortization of intangible assets and $0.5 of restructuring costs offset by $0.2 of other items. For the second quarter of fiscal 2024, other operating expenses included $17.6 of amortization of intangible assets, $0.3 of restructuring costs and $0.1 of other items.

Current wording

Other operating expenses for the third quarter of fiscal 2025 totaled $19.2 compared to $18.9 for the same period last fiscal year. For the third quarter of fiscal 2025, other operating expenses included $17.9 of amortization of intangible assets and $1.3 of other items. For the third quarter of fiscal 2024, other operating expenses included $17.7 of amortization of intangible assets, $0.1 of restructuring costs and $1.1 of other items.

Previous wording

Other operating expenses for the first six months of fiscal 2025 totaled $37.1 compared to $36.2 for the same period last fiscal year. For the first six months of fiscal 2025, other operating expenses were comprised primarily of $35.7 of amortization of intangible assets, $0.5 of restructuring costs, and $0.9 of other items. For the first six months of fiscal 2024, other operating expenses were comprised primarily of $35.1 of amortization of intangible assets, $0.6 of restructuring costs, and $0.5 of other items.

Current wording

Other operating expenses for the first nine months of fiscal 2025 totaled $56.3 compared to $55.1 for the same period last fiscal year. For the first nine months of fiscal 2025, other operating expenses were comprised primarily of $53.6 of amortization of intangible assets, $0.6 of restructuring costs, and $2.1 of other items. For the first nine months of fiscal 2024, other operating expenses were comprised primarily of $52.8 of amortization of intangible assets, $0.7 of restructuring costs, and $1.6 of other items.

Previous wording

Interest expense, net, consists of interest charged on the Company’s debt arrangements and amortization of deferred financing fees, offset by interest income (see “Liquidity and Capital Resources” below). Interest expense, net, was $15.6 for the second quarter of fiscal 2025 compared to $20.1 for the same period last fiscal year. The decrease in interest expense between the periods was related to the debt reduction efforts made by the Company over the past fiscal year, the Interest Rate Swap (which has enabled us to manage interest costs as approximately 82% of our debt bears interest at a fixed rate, after giving effect to the Interest Rate Swap), and the Cross Currency Swap. See “Liquidity and Capital Resources” below for more information regarding the Interest Rate Swap and the Cross Currency Swap.

Current wording

Interest expense, net, consists of interest charged on the Company’s debt arrangements and amortization of deferred financing fees, offset by interest income (see “Liquidity and Capital Resources” below). Interest expense, net, was $14.2 for the third quarter of fiscal 2025 compared to $19.3 for the same period last fiscal year. The decrease in interest expense between the periods was due to the debt reduction efforts made by the Company over the past fiscal year and the effects of the Interest Rate Swap and the Cross Currency Swap. See “Liquidity and Capital Resources” below for more information regarding the Interest Rate Swap and the Cross Currency Swap.

Previous wording

Interest expense, net, was $32.8 for the first six months of fiscal 2025 compared to $40.6 for the same period last fiscal year. The decrease was mainly attributable to our debt reduction efforts, as well as the Interest Rate Swap and the Cross Currency Swap, which have enabled us to manage interest costs.

Current wording

Interest expense, net, was $47.0 for the first nine months of fiscal 2025 compared to $59.9 for the same period last fiscal year. The decrease was mainly attributable to our debt reduction efforts, as well as the Interest Rate Swap and the Cross Currency Swap, which have enabled us to manage interest costs.

Previous wording

Other non-operating expenses were $1.1 for the second quarter of fiscal 2025 compared to $0.8 for the same period in the prior year and consisted primarily of post-retirement benefit costs and foreign exchange gains and losses.

Current wording

Other non-operating income was $1.8 for the first nine months of fiscal 2025 and consisted primarily of a $4.0 legal settlement partially offset by post-retirement benefit costs and foreign exchange gains and losses. Other non-operating expenses were $0.4 for the first nine months of fiscal 2024 and consisted primarily of post-retirement benefit costs and foreign exchange gains and losses partially offset by $1.6 of insurance proceeds received.

Previous wording

Income tax expense for the three-month period ended September 28, 2024 was $15.2 compared to $15.2 for the three-month period ended September 30, 2023. Our effective income tax rate for the three-month period ended September 28, 2024 was 21.9% compared to 22.7% for the three-month period ended September 30, 2023. The effective income tax rate for the three-month period ended September 28, 2024 of 21.9% included $1.1 of tax benefits associated with stock-based compensation which was slightly offset by $0.1 of other tax expenses. The effective income tax rate without discrete items for the three-month period ended September 28, 2024 would have been 23.4%. The effective income tax rate for the three-month period ended September 30, 2023 of 22.7% included $0.1 of tax benefits associated with stock-based compensation. The effective income tax rate without discrete items for the three-month period ended September 30, 2023 would have been 22.8%.

Current wording

Income tax expense for the three-month period ended December 28, 2024 was $16.8 compared to $10.2 for the three-month period ended December 30, 2023. Our effective income tax rate for the three-month period ended December 28, 2024 was 22.5% compared to 18.1% for the three-month period ended December 30, 2023. The effective income tax rate for the three-month period ended December 28, 2024 of 22.5% included $0.8 of tax benefits associated with stock-based compensation. The effective income tax rate without discrete items for the three-month period ended December 28, 2024 would have been 23.5%. The effective income tax rate for the three-month period ended December 30, 2023 of 18.1% included $1.9 of tax benefits associated with stock-based compensation partially offset by $0.2 of other items. The effective income tax rate without discrete items for the three-month period ended December 30, 2023 would have been 21.2%.

Previous wording

Income tax expense for the six-month period ended September 28, 2024 was $33.7 compared to $29.2 for the six-month period ended September 30, 2023. Our effective income tax rate for the six-month period ended September 28, 2024 was 22.6% compared to 22.3% for the six-month period ended September 30, 2023. The effective income tax rate for the six-month period ended September 28, 2024 of 22.6% included $1.7 of tax benefits associated with stock-based compensation which was slightly offset by $0.1 of other tax expenses. The effective income tax rate without discrete items for the six-month period ended September 28, 2024 would have been 23.6%. The effective income tax rate for the six-month period ended September 30, 2023 of 22.3% included $0.5 of tax benefits associated with stock-based compensation. The effective income tax rate without discrete items for the six-month period ended September 30, 2023 would have been 22.7%.

Current wording

Income tax expense for the nine-month period ended December 28, 2024 was $50.5 compared to $39.4 for the nine-month period ended December 30, 2023. Our effective income tax rate for the nine-month period ended December 28, 2024 was 22.5% compared to 21.0% for the nine-month period ended December 30, 2023. The effective income tax rate for the nine-month period ended December 28, 2024 of 22.5% included $2.5 of tax benefits associated with stock-based compensation which was slightly offset by $0.1 of other tax expenses. The effective income tax rate without discrete items for the nine-month period ended December 28, 2024 would have been 23.6%. The effective income tax rate for the nine-month period ended December 30, 2023 of 21.0% included $2.4 of tax benefits associated with stock-based compensation partially offset by $0.2 of other items. The effective income tax rate without discrete items for the nine-month period ended December 30, 2023 would have been 22.2%.

Previous wording

Net sales increased $15.9, or 12.5%, for the three months ended September 28, 2024 compared to the same period last fiscal year. Our commercial aerospace markets, which consisted of $75.4 of OEM and $20.1 of distribution and aftermarket, increased by 10.3% compared to fiscal 2024 when OEM net sales were $67.5 and distribution and aftermarket net sales were $19.2. This was driven by strong execution on the incremental orders we have seen in recent periods in the OEM markets and expansion in the aftermarket. Our defense markets, which consisted of $35.5 of OEM and $12.2 of distribution and aftermarket, increased by 17.3% compared to fiscal 2024 when OEM net sales were $34.9 and distribution and aftermarket net sales were $5.7. The increase in defense sales was driven by marine, helicopters and missiles.

Current wording

Net sales increased $14.0, or 10.7%, for the three months ended December 28, 2024 compared to the same period last fiscal year. Our commercial aerospace markets, which consisted of $78.0 of OEM and $20.9 of distribution and aftermarket, increased by 14.6% compared to fiscal 2024 when OEM net sales were $67.2 and distribution and aftermarket net sales were $19.1. This was driven by strong execution on the orders we have seen in recent periods in both the OEM markets and in the aftermarket. Our defense markets, which consisted of $32.5 of OEM and $11.8 of distribution and aftermarket, increased by 3.0% compared to fiscal 2024 when OEM net sales were $35.9 and distribution and aftermarket net sales were $7.0. The increase in defense sales was driven by marine, helicopters and missiles.

Previous wording

Net sales increased $44.5, or 18.0%, for the first six months of fiscal 2025 compared to the same period last fiscal year. The 18.0% increase was primarily driven by a 27.3% increase in our defense market, while our commercial aerospace market was up 13.7% year over year. Commercial aerospace, which consisted of $153.9 of OEM and $38.9 of distribution and aftermarket, increased by 13.7% compared to fiscal 2024 when OEM net sales were $133.1 and distribution and aftermarket net sales were $36.5. Our defense markets, which consisted of $75.7 of OEM and $23.8 of distribution and aftermarket, increased by 27.3% compared to fiscal 2024 when OEM net sales were $65.2 and distribution and aftermarket net sales were $13.0.

Current wording

Net sales increased $58.5, or 15.5%, for the first nine months of fiscal 2025 compared to the same period last fiscal year. The 15.5% increase was primarily driven by a 18.7% increase in our defense market, while our commercial aerospace market was up 14.0% year over year. Commercial aerospace, which consisted of $231.9 of OEM and $59.8 of distribution and aftermarket, increased by 14.0% compared to fiscal 2024 when OEM net sales were $200.3 and distribution and aftermarket net sales were $55.6. Our defense markets, which consisted of $108.2 of OEM and $35.6 of distribution and aftermarket, increased by 18.7% compared to fiscal 2024 when OEM net sales were $101.1 and distribution and aftermarket net sales were $20.0.

Previous wording

Gross margin as a percentage of segment net sales was 41.0% for the second quarter of fiscal 2025 compared to 39.5% for the same period last fiscal year. The increase in gross margin as a percentage of net sales was primarily driven by efficiencies achieved at the plants in part due to increased sales volumes and favorable product mix.

Current wording

Gross margin as a percentage of segment net sales was 40.8% for the third quarter of fiscal 2025 compared to 40.1% for the same period last fiscal year. The increase in gross margin as a percentage of net sales was primarily driven by efficiencies achieved at the plants in part due to increased sales volumes and favorable product mix.

Previous wording

Net sales decreased $3.6 for the three months ended September 28, 2024 compared to the same period last fiscal year. We saw strength in the mining and metals, logistics and warehousing, grain, food and beverage and power generation markets offset by weakness in the semiconductor and oil and gas markets. Industrial OEM sales were $82.7 and $84.7 for the three month periods ended September 28, 2024 and September 30, 2023, respectively. Industrial sales to distribution and the aftermarket were $172.0 and $173.6 for the three month periods ended September 28, 2024 and September 30, 2023, respectively.

Current wording

Net sales increased $6.5 for the three months ended December 28, 2024 compared to the same period last fiscal year. We saw strength in the logistics and warehousing, food and beverage, aggregate and cement and grain markets offset by weakness in the machine tools, semicon and oil and gas markets. Industrial OEM net sales were $72.7 and $79.4 for the three month periods ended December 28, 2024 and December 30, 2023, respectively. Industrial net sales to distribution and the aftermarket were $178.5 and $165.3 for the three month periods ended December 28, 2024 and December 30, 2023, respectively.

Previous wording

Gross margin for the three months ended September 28, 2024 was 46.0% of net sales, compared to 44.8% in the comparable period in fiscal 2024. The improved gross margin was due to product mix and manufacturing efficiencies achieved at the plants.

Current wording

Gross margin for the three months ended December 28, 2024 was 46.5% of net sales, compared to 42.8% in the comparable period in fiscal 2024. The improved gross margin was due to product mix and manufacturing efficiencies achieved at the plants.

Previous wording

Net sales decreased $13.0, or 2.5%, for the first six months of fiscal 2025 compared to the same period last fiscal year. We saw strength in the mining and metals, logistics and warehousing, grain, food and beverage and power generation markets offset by weakness in the semiconductor and oil and gas markets. Industrial OEM sales were $164.5 and $169.4 for the six month periods ended September 28, 2024 and September 30, 2023, respectively. Industrial sales to distribution and the aftermarket were $347.4 and $355.5 for the six month periods ended September 28, 2024 and September 30, 2023, respectively.

Current wording

Net sales decreased $6.5, or 0.8%, for the first nine months of fiscal 2025 compared to the same period last fiscal year. We saw strength in the mining and metals, logistics and warehousing, power generation, food and beverage and grain markets offset by weakness in the semicon, machine tools, aggregate and cement, and oil and gas markets. Industrial OEM net sales were $237.2 and $248.8 for the nine month periods ended December 28, 2024 and December 30, 2023, respectively. Industrial net sales to distribution and the aftermarket were $525.9 and $520.8 for the nine month periods ended December 28, 2024 and December 30, 2023, respectively.

Previous wording

Gross margin for the first six months of fiscal 2025 was 46.5% of net sales, compared to 45.0% in the same period last fiscal year. The increase in gross margin was driven by manufacturing efficiencies and product mix.

Current wording

Gross margin for the first nine months of fiscal 2025 was 46.5% of net sales, compared to 44.3% in the same period last fiscal year. The increase in gross margin was driven by manufacturing efficiencies and product mix.

Previous wording

Corporate SG&A was $26.0, or 6.5% of net sales, for the second quarter of fiscal 2025 compared to $19.6, or 5.1% of net sales, for the same period last fiscal year. The quarter over quarter increase was primarily due to increases in professional fees, stock compensation costs, travel costs and personnel costs.

Current wording

Corporate SG&A was $25.5, or 6.5% of net sales, for the third quarter of fiscal 2025 compared to $21.4, or 5.7% of net sales, for the same period last fiscal year. The quarter over quarter increase was primarily due to increases in professional fees, stock compensation costs, travel costs and personnel costs.

Previous wording

Corporate SG&A increased $8.0 for the first six months of fiscal 2025 compared to the same period last fiscal year due to increases in personnel costs, professional fees, travel costs and stock compensation costs.

Current wording

Corporate SG&A increased $12.1 for the first nine months of fiscal 2025 compared to the same period last fiscal year due to increases in personnel costs, professional fees, travel costs and stock compensation costs.

Previous wording

Our capital requirements include manufacturing equipment and materials. We have historically fueled our growth, in part, through acquisitions, including the Dodge acquisition completed in fiscal 2022 and the Specline acquisition completed in fiscal 2024. We have historically met our working capital, capital expenditure and acquisition funding needs through our net cash flows provided by operations, various debt arrangements and public sales of equity. We believe that operating cash flows and available credit under the Revolving Credit Facility (which expires in November 2026) will provide adequate resources to fund internal growth initiatives for the foreseeable future.

Current wording

Our capital requirements include manufacturing equipment and materials. We have historically fueled our growth, in part, through acquisitions. We have historically met our working capital, capital expenditure and acquisition funding needs through our net cash flows provided by operations, various debt arrangements and public sales of equity. We believe that operating cash flows and available credit under the Revolving Credit Facility (which expires in November 2026) will provide adequate resources to fund internal growth initiatives for at least the next 12 months.

Previous wording

As of September 28, 2024, we had cash and cash equivalents of $89.1, of which approximately $22.8 was cash held by our foreign subsidiaries. We expect that our undistributed foreign earnings will be re-invested indefinitely for working capital, internal growth, and acquisitions for and by certain of our foreign subsidiaries.

Current wording

As of December 28, 2024, we had cash and cash equivalents of $60.6, of which approximately $22.4 was cash held by our foreign subsidiaries. We expect that our undistributed foreign earnings will be re-invested indefinitely for working capital, internal growth, and acquisitions for and by certain of our foreign subsidiaries.

Previous wording

Initially, amounts outstanding under the Facilities generally bore interest, at the Company’s option, at either, (a) a base rate determined by reference to the higher of (i) Wells Fargo’s prime lending rate, (ii) the federal funds effective rate plus 1/2 of 1.00% and (iii) the one-month LIBOR rate plus 1.00% or (b) the LIBOR rate plus a specified margin, depending on the type of borrowing being made. The applicable margin was based on the Company’s consolidated ratio of total net debt to consolidated EBITDA (as defined in the Credit Agreement) from time to time. In December 2022, the Credit Agreement was amended to replace LIBOR with the secured overnight financing rate administered by the Federal Reserve Bank of New York (i.e., SOFR) so that borrowings under the Facilities denominated in U.S. dollars bear interest at a rate per annum equal to Term SOFR (as defined in the Credit Agreement) plus a credit spread adjustment of 0.10%, plus a margin ranging from 0.75% to 2.00% depending on the Company’s consolidated ratio of total net debt to consolidated EBITDA. The Facilities are subject to a SOFR floor of 0.00%. As of September 28, 2024, the Company’s margin was 1.00% for SOFR loans, the commitment fee rate was 0.175%, and the letter of credit fee rate was 1.00%. A portion of the Term Loan is subject to the Interest Rate Swap.

Current wording

Amounts outstanding under the Facilities generally bear interest, at the Company’s option, at either, (a) a base rate determined by reference to the higher of (i) Wells Fargo’s prime lending rate, (ii) the federal funds effective rate plus 0.50% and (iii) Term SOFR (as defined in the Credit Agreement based on SOFR, the secured overnight financing rate administered by the Federal Reserve Bank of New York) plus 1.00% or (b) Term SOFR plus a credit spread adjustment of 0.10% plus a margin ranging from 0.75% to 2.00% depending on the Company’s consolidated ratio of total net debt to consolidated EBITDA (as defined in the Credit Agreement). The Facilities are subject to a SOFR floor of 0.00%. As of December 28, 2024, the Company’s margin was 1.00% for SOFR loans, the commitment fee rate was 0.175%, and the letter of credit fee rate was 1.00%. A portion of the Term Loan is subject to the Interest Rate Swap.

Previous wording

The Term Loan matures in November 2026 and amortizes in quarterly installments with the balance payable on the maturity date. The Company can elect to prepay some or all of the outstanding balance from time to time without penalty, which will offset future quarterly amortization installments. Due to prepayments previously made, the required future principal payments on the Term Loan are $0 for fiscal 2025, $0 for fiscal 2026, and $600.0 for fiscal 2027. The Revolving Credit Facility expires in November 2026, at which time all amounts outstanding under the Revolving Credit Facility will be payable.

Current wording

The Term Loan matures in November 2026 and amortizes in quarterly installments with the balance payable on the maturity date. The Company can elect to prepay some or all of the outstanding balance from time to time without penalty, which will offset future quarterly amortization installments. Due to prepayments previously made, the required future principal payments on the Term Loan are $0 for fiscal 2025, $0 for fiscal 2026, and $500.0 for fiscal 2027. The Revolving Credit Facility expires in November 2026, at which time all amounts outstanding under the Revolving Credit Facility will be payable.

Previous wording

As of September 28, 2024, $600.0 was outstanding under the Term Loan and $3.7 of the Revolving Credit Facility was being utilized to provide letters of credit to secure the Company’s obligations relating to certain insurance programs. The Company had the ability to borrow an additional $496.3 under the Revolving Credit Facility as of September 28, 2024. On September 30, 2024, the Company paid $32.0 on the Term Loan.

Current wording

As of December 28, 2024, $500.0 was outstanding under the Term Loan and $3.7 of the Revolving Credit Facility was being utilized to provide letters of credit to secure the Company’s obligations relating to certain insurance programs. The Company had the ability to borrow an additional $496.3 under the Revolving Credit Facility as of December 28, 2024. During the three month period ended December 28, 2024, the Company borrowed, $40.0 from the Revolving Credit Facility in order pay down the Term Loan. The $40.0 borrowed from the Revolver was then completely repaid before the end of the fiscal quarter.

Previous wording

The Senior Notes will mature on October 15, 2029. The Company may redeem some or all of the Senior Notes at any time on or after October 15, 2024 at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If the Company sells certain of its assets or experiences specific kinds of changes in control, the Company must offer to purchase the Senior Notes.

Current wording

The Senior Notes will mature on October 15, 2029. The Company may redeem some or all of the Senior Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If the Company sells certain of its assets or experiences specific kinds of changes in control, the Company must offer to purchase the Senior Notes.

Previous wording

The Foreign Credit Line is a CHF 5.0 (approximately $5.9 USD) credit line with Credit Suisse (Switzerland) Ltd. to provide our Swiss subsidiary, Schaublin SA, future working capital, if necessary. As of September 28, 2024, $0.1 was being utilized to provide a bank guarantee. Fees associated with the Foreign Credit Line are nominal.

Current wording

The Foreign Credit Line is a CHF 5.0 (approximately $5.4 USD) credit line with Credit Suisse (Switzerland) Ltd. to provide our Swiss subsidiary, Schaublin SA, future working capital, if necessary. As of December 28, 2024, $0.1 was being utilized to provide a bank guarantee. Fees associated with the Foreign Credit Line are nominal.

Previous wording

To hedge against this risk, in fiscal 2023, the Company entered into the Interest Rate Swap with a third-party financial counterparty under the Credit Agreement. The Interest Rate Swap was executed to protect the Company from interest rate volatility on our variable-rate Term Loan. The Interest Rate Swap became effective December 30, 2022 and is comprised of a $600.0 notional with a maturity of three years. The notional was $400.0 as of September 28, 2024. We receive a variable rate based on one-month Term SOFR and pay a fixed rate of 4.455%. As of September 28, 2024, approximately 82% of our debt bore interest at a fixed rate after giving effect to the Interest Rate Swap in place. The notional on the Interest Rate Swap amortizes as follows:

Current wording

To hedge against this risk, in fiscal 2023, the Company entered into the Interest Rate Swap with a third-party financial counterparty under the Credit Agreement. The Interest Rate Swap was executed to protect the Company from interest rate volatility on our variable-rate Term Loan. The Interest Rate Swap became effective December 30, 2022 and is comprised of a $600.0 notional with a maturity of three years. The notional was $400.0 as of December 28, 2024. We receive a variable rate based on one-month Term SOFR and pay a fixed rate of 4.455%. The notional on the Interest Rate Swap amortizes as follows:

Previous wording

During the first six months of fiscal 2025, we generated cash of $140.4 from operating activities compared to $114.8 during the same period of fiscal 2024. The increase of $25.6 was the result of an increase in net income of $13.9 and a favorable change in operating assets and liabilities of $12.7, partially offset by the unfavorable impact of non-cash activity of $1.0. The favorable change in operating assets and liabilities is detailed in the table below. The change in non-cash activity was driven by $4.0 more in stock-based compensation and $0.5 more in depreciation and amortization, offset by $3.7 more in deferred taxes, $0.6 less in amortization of deferred financing costs, $0.6 less in consolidation and restructuring charges, $0.3 less in losses on asset dispositions and $0.3 less in noncash operating lease expense.

Current wording

During the first nine months of fiscal 2025, we generated cash of $224.4 from operating activities compared to $195.2 during the same period of fiscal 2024. The increase of $29.2 was the result of an increase in net income of $25.2, a favorable change in operating assets and liabilities of $1.7 and the favorable impact of non-cash activity of $2.3. The favorable change in operating assets and liabilities is detailed in the table below. The change in non-cash activity was driven by $7.0 more in stock-based compensation and $0.3 more in depreciation and amortization, offset by $2.6 more in deferred taxes, $0.6 less in amortization of deferred financing costs, $0.6 less in consolidation and restructuring charges, $0.7 less in losses on asset dispositions and $0.5 less in noncash operating lease expense.

Previous wording

During the first six months of fiscal 2025, we used $25.2 for investing activities as compared to $32.5 used in the first six months of fiscal 2024. This decrease in cash used was primarily attributable to a $18.7 decrease in business acquisition costs while capital expenditures increased $11.0 period over period.

Current wording

During the first nine months of fiscal 2025, we used $35.6 for investing activities as compared to $42.7 used in the first nine months of fiscal 2024. This decrease in cash used was primarily attributable to a $19.3 decrease in business acquisition costs and $0.3 fewer proceeds from the sale of assets while capital expenditures increased $11.9 period over period.

Previous wording

During the first six months of fiscal 2025, we used cash of $89.0 for financing activities compared to $90.4 in the first six months of fiscal 2024. This decrease in cash used was primarily attributable to $22.2 more exercises of stock-based awards and $4.5 received from proceeds related to the Swiss Tool mortgage, partially offset by $18.0 less in proceeds received in drawdowns from our revolving credit facility, $5.4 more payments made on outstanding debt, $0.5 more principal payments made on finance lease obligations and $1.4 more repurchases of common stock.

Current wording

During the first nine months of fiscal 2025, we used cash of $191.3 for financing activities compared to $147.0 in the first nine months of fiscal 2024. This increase in cash used was primarily attributable to $60.4 more in payments related to the Revolving Credit Facility, $25.0 more payments made on outstanding debt, $0.7 more principal payments made on finance lease obligations and $1.0 more repurchases of common stock partially offset by $16.2 more exercises of stock-based awards, $22.0 in proceeds related to the Revolving Credit Facility, and $4.5 in proceeds related to the Swiss Tool mortgage.