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, could materially reduce our revenues, cash flows and profitability; (f) our results could be impacted by U.S. governmental trade policies and tariffs relating to the components and supplies we import from foreign vendors and foreign governmental trade policies and tariffs relating to 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 VACCO) 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 …

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, could materially reduce our revenues, cash flows and profitability; (f) our results could be impacted by U.S. governmental trade policies and tariffs relating to the components and supplies we import from foreign vendors and foreign governmental trade policies and tariffs relating to 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 VACCO) 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 …

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 aerospace, defense and industrial 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 bearing categories, we focus primarily on the higher end of the bearing market where we believe our value-added manufacturing and engineering capabilities enable us to differentiate ourselves from our competitors and enhance profitability. We believe our unique expertise has enabled us to garner leading positions in many of the product markets in which we primarily compete. With 60 facilities in 11 countries, of which 43 are manufacturing facilities, we have been able to significantly broaden our end markets, products, customer base and geographic reach. We have a fiscal year consisting of 52 or 53 weeks, ending on the Saturday closest to March 31. Based on this policy, fiscal 2026 will have 52 weeks and fiscal 2025 had 52 weeks. Both the second quarter of fiscal 2026 and the second quarter of fiscal 2025 had 13 weeks.

Current wording

We are a leading international manufacturer of highly engineered precision bearings, components and essential systems for the aerospace, defense, and industrial 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 bearing categories, we focus primarily on the higher end of the bearing market where we believe our value-added manufacturing and engineering capabilities enable us to differentiate ourselves from our competitors and enhance profitability. We believe our unique expertise has enabled us to garner leading positions in many of the product markets in which we primarily compete. With 62 facilities in 11 countries, of which 42 are manufacturing facilities, we have been able to significantly broaden our end markets, products, customer base, and geographic reach. We have a fiscal year consisting of 52 or 53 weeks, ending on the Saturday closest to March 31. Based on this policy, fiscal 2026 will have 52 weeks and fiscal 2025 had 52 weeks. Both the third quarter of fiscal 2026 and the third quarter of fiscal 2025 had 13 weeks.

Previous wording

Our net sales for the three-month period ended September 27, 2025 increased 14.4% compared to the same period last fiscal year. The increase in net sales was a result of a 38.8% increase in our Aerospace/Defense segment and a 0.7% increase in our Industrial segment. $24.7 of sales included this quarter came from VACCO, all of which were included in the Aerospace/Defense segment. Our backlog, as of September 27, 2025 was $1.6 billion, which included $0.5 billion of VACCO backlog, compared to $0.9 billion as of March 29, 2025. Our backlog includes orders with specific conditions (such as the timing of delivery or the requirement to obtain funding approvals prior to commencing work) and/or that are cancellable at the customer’s discretion.

Current wording

Our net sales for the three-month period ended December 27, 2025 increased 17.0% compared to the same period last fiscal year. The increase in net sales was a result of a 41.5% increase in our Aerospace/Defense segment and a 3.1% increase in our Industrial segment. $29.2 of sales included within this quarter came from VACCO. Our backlog as of December 27, 2025 was $2.1 billion, which included $0.5 billion of VACCO backlog, compared to $0.9 billion of total backlog as of March 29, 2025. Our backlog includes orders with specific conditions (such as the timing of delivery or the requirement to obtain funding approvals prior to commencing work) and/or that are cancellable at the customer’s discretion. As of December 27, 2025, approximately $1.1 billion of our backlog is related to the marine business.

Previous wording

We continue to see the expansion of our commercial aerospace business, which experienced a 21.6% increase in net sales for the three-month period ended September 27, 2025, which included $0.4 of sales from VACCO, 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 the increase in our backlog. Defense sales, which represented approximately 41.6% of segment sales during the quarter, were up 73.3% year over year, which included $24.3 of net sales from VACCO. 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. Our industrial business continued to demonstrate strength in distribution across several major end markets, including mining and metals, warehousing, and aggregate & cement.

Current wording

We continue to see the expansion of our commercial aerospace business, which experienced a 21.5% increase in net sales for the three-month period ended December 27, 2025, 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 the increase in our backlog. Defense sales, which represented approximately 40.6% of segment sales during the quarter, were up 86.2% year over year. We expect this growth to continue throughout the current fiscal year and beyond as we are adding capacity to fulfill the substantial number of defense orders in our backlog. Our industrial business continued to demonstrate strength in distribution across several major end markets, including food & beverage, warehousing, and aggregate & cement.

Previous wording

The Company expects net sales to be approximately $454.0 to $462.0 in the third quarter of fiscal 2026, compared to $394.4 in the third quarter of the prior year, for a growth rate of 15.1% to 17.1%. Organically (excluding net sales from VACCO) net sales are expected to grow 7.4% to 9.5% compared to the third quarter of the prior year.

Current wording

The Company expects net sales to be approximately $495.0 to $505.0 in the fourth quarter of fiscal 2026, compared to $437.7 in the fourth quarter of the prior year, for a growth rate of 13.1% to 15.4%. Excluding net sales from VACCO, net sales are expected to grow 6.4% to 8.7% compared to the fourth quarter of the prior year.

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 27, 2025, we had cash of $91.2, of which approximately $29.6 was cash held by our foreign operations. Following the end of the quarter we used $40.0 of our domestic cash to make a prepayment on the Term Loan.

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 the foreseeable future, including at least the next 12 months. As of December 27, 2025, we had cash of $107.6, of which approximately $32.6 was cash held by our foreign operations.

Previous wording

Our net sales for the three-month period ended September 27, 2025 increased 14.4% compared to the same period last fiscal year. Net sales in our Industrial segment increased 0.7% against a strong quarter in the prior fiscal year. Net sales to aggregate & cement, food & beverage, grain, warehousing, and parcel & baggage markets increased during the period while machine tools and OEM oil producer sales showed weakness compared to the prior year. Net sales in our Aerospace/Defense segment increased 38.8% year over year, including approximately $24.7 of net sales from VACCO. The 38.8% increase in sales was led by Defense sales, which were up 73.3% compared to the same period in the prior fiscal year, driven by marine and the acquisition of VACCO, which contributed $24.3 of net sales to these end markets. Commercial OEM and the aftermarket sales increased 21.6% compared to the same period in the prior fiscal year, including $0.4 of net sales from VACCO. The increase in commercial aerospace sales reflected growth in orders from large OEMs as build rates escalated.

Current wording

Our net sales for the three-month period ended December 27, 2025 increased 17.0% compared to the same period last fiscal year. Net sales in our Industrial segment increased 3.1% year over year. Net sales to the aggregate & cement, food & beverage, and warehousing markets increased during the period while mining and grain sales showed weakness compared to the prior year. Net sales in our Aerospace/Defense segment increased 41.5% year over year, led by Defense sales, which were up 86.2% compared to the same period in the prior fiscal year, driven by marine and the acquisition of VACCO. Commercial OEM and aftermarket sales increased 21.5% compared to the same period in the prior fiscal year. The increase in commercial aerospace sales reflected growth in orders from large OEMs as build rates escalated.

Previous wording

Net income attributable to common stockholders for the second quarter of fiscal 2026 was $60.0 compared to $48.5 for the same period last fiscal year.

Current wording

Net income attributable to common stockholders for the third quarter of fiscal 2026 was $67.4 compared to $56.9 for the same period last fiscal year.

Previous wording

Our net sales for the six-month period ended September 27, 2025 increased 10.8% compared to the same period last fiscal year. Net sales in our Industrial segment increased 3.1% compared to the prior fiscal year. Net sales to aggregate and cement, and warehousing, parcel & baggage markets increased during the period. Net sales in our Aerospace/Defense segment increased 24.3% year over year, including $24.7 of net sales from VACCO. The increase in sales was led by Defense sales, which were up 41.3% compared to the same period in the prior fiscal year, driven by marine and the acquisition of VACCO, which contributed $24.3 of net sales to these end markets. Commercial OEM and the aftermarket sales increased 15.6% compared to the same period in the prior fiscal year, including $0.4 of net sales from VACCO. The increase in commercial aerospace sales reflected growth in orders from large OEMs as build rates escalated, as well as expansion in the aftermarket.

Current wording

Our net sales for the nine-month period ended December 27, 2025 increased 12.9% compared to the same period last fiscal year. Net sales in our Industrial segment increased 3.1% compared to the prior fiscal year. Net sales to the aggregate & cement, food & beverage, forest products, and warehousing markets increased during the period while power generation and semicon showed weakness compared to the prior year. Net sales in our Aerospace/Defense segment increased 30.0% year over year. The increase in sales was led by Defense sales, which were up 55.1% compared to the same period in the prior fiscal year, driven by marine and the acquisition of VACCO. Commercial OEM and aftermarket sales increased 17.6% compared to the same period in the prior fiscal year. The increase in commercial aerospace sales reflected growth in orders from large OEMs as build rates escalated, as well as expansion in the aftermarket.

Previous wording

Net income attributable to common stockholders for the six months ended September 27, 2025 was $128.5 compared to $104.2 for the same period last fiscal year.

Current wording

Net income attributable to common stockholders for the nine months ended December 27, 2025 was $195.9 compared to $161.1 for the same period last fiscal year.

Previous wording

Gross margin remained strong at 44.1% of net sales for the second quarter of fiscal 2026 compared to 43.7% for the second quarter of fiscal 2025. Gross margin for the second quarter of fiscal 2026 included $0.4 in restructuring costs related to inventory rationalization efforts at one of our manufacturing plants and $3.3 of unfavorable purchase accounting adjustments associated with the VACCO acquisition.

Current wording

Gross margin remained strong at 44.3% of net sales for the third quarter of fiscal 2026 compared to 44.3% for the third quarter of fiscal 2025. The increase in gross margin was primarily driven by volume. Gross margin for the third quarter of fiscal 2026 included $4.2 of unfavorable purchase accounting adjustments associated with the VACCO acquisition.

Previous wording

Gross margin remained strong at 44.4% of net sales for the six months ended September 27, 2025 compared to 44.5% for the same period last fiscal year. Gross margin in fiscal 2026 was impacted by $3.3 in restructuring costs related to inventory rationalization efforts at one of our manufacturing plants and $3.3 of unfavorable purchase accounting adjustments associated with the VACCO acquisition.

Current wording

Gross margin remained strong at 44.4% of net sales for the nine months ended December 27, 2025 compared to 44.4% for the same period last fiscal year. The increase in gross margin was primarily driven by volume. Gross margin in fiscal 2026 was impacted by $2.9 in restructuring costs related to inventory rationalization efforts at one of our manufacturing plants and $7.5 of unfavorable purchase accounting adjustments associated with the VACCO acquisition.

Previous wording

SG&A for the second quarter of fiscal 2026 was $77.4, or 17.0% of net sales, as compared to $69.5, or 17.5% of net sales, for the same period of fiscal 2025. The increase in SG&A is primarily driven by our continued investment in human capital as we grow the business and $2.9 from the inclusion of VACCO.

Current wording

SG&A for the third quarter of fiscal 2026 was $77.9, or 16.9% of net sales, as compared to $70.1, or 17.8% of net sales, for the same period of fiscal 2025. The increase in SG&A was primarily driven by our continued investment in human capital as we grow the business and $4.1 from the inclusion of VACCO.

Previous wording

SG&A for the six months ended September 27, 2025 was $151.3, or 17.0% of net sales, as compared to $137.1, or 17.0% of net sales, for the same period of fiscal 2025. The increase in SG&A was primarily driven by increased personnel costs and $2.9 from the inclusion of VACCO.

Current wording

SG&A for the nine months ended December 27, 2025 was $229.2, or 16.9% of net sales, as compared to $207.2, or 17.3% of net sales, for the same period of fiscal 2025. The increase in SG&A was primarily driven by increased personnel costs and $7.0 from the inclusion of VACCO.

Previous wording

Other operating expenses for the second quarter of fiscal 2026 totaled $25.4 compared to $18.2 for the same period last fiscal year. For the second quarter of fiscal 2026, other operating expenses included $20.7 of amortization of intangible assets, $2.6 of restructuring costs, $0.9 of acquisition costs and $1.2 of other expense items. $2.7 of the amortization expense incurred during the period was related to acquired intangible assets from the VACCO deal. 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.

Current wording

Other operating expenses for the third quarter of fiscal 2026 totaled $23.5 compared to $19.2 for the same period last fiscal year. For the third quarter of fiscal 2026, other operating expenses included $21.0 million of amortization of intangible assets, $0.4 million of acquisition costs, $0.2 of restructuring costs and $1.9 million of other items. $3.7 of the amortization expense was related to acquired intangible assets from the VACCO deal. For the third quarter of fiscal 2025, other operating expenses included $17.9 of amortization of intangible assets, $0.1 of restructuring costs and $1.2 of other items.

Previous wording

Other operating expenses for the first six months of fiscal 2026 totaled $45.6 compared to $37.1 for the same period last fiscal year. For the first six months of fiscal 2026, other operating expenses were comprised primarily of $38.6 of amortization of intangible assets, $3.8 of restructuring costs, $1.0 of acquisition costs and $2.2 of other items. 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.

Current wording

Other operating expenses for the first nine months of fiscal 2026 totaled $69.1 compared to $56.3 for the same period last fiscal year. For the first nine months of fiscal 2026, other operating expenses were comprised primarily of $59.6 of amortization of intangible assets, $1.4 of acquisition costs, $4.0 of restructuring costs and $4.1 of other items. $6.4 of the amortization expense incurred during the period was related to acquired intangible assets from the VACCO deal. 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.

Previous wording

Interest expense, net, was $13.4 for the second quarter of fiscal 2026 compared to $15.6 for the same period last fiscal year. The decrease in interest expense between the periods was due to the debt reduction efforts, partially offset by the impact of a $200.0 draw on the Revolving Credit Facility to fund part of the VACCO acquisition. In addition, the Cross Currency Swap has enabled us to better manage interest costs.

Current wording

Interest expense, net, was $13.0 for the third quarter of fiscal 2026 compared to $14.2 for the same period last fiscal year. The decrease in interest expense between the periods was due to the reduction of the Term Loan, partially offset by the impact of a $200.0 draw on the Revolving Credit Facility during the second quarter of fiscal 2026 to fund part of the VACCO acquisition. In addition, the Cross Currency Swap has enabled us to better manage interest costs.

Previous wording

Interest expense, net, was $25.6 for the first six months of fiscal 2026 compared to $32.8 for the same period last fiscal year. The decrease was mainly attributable to our debt reduction efforts, partially offset by the impact of a $200.0 draw on the Revolver to fund the VACCO acquisition. In addition, the Cross Currency Swap has enabled us to better manage interest costs.

Current wording

Interest expense, net, was $38.6 for the first nine months of fiscal 2026 compared to $47.0 for the same period last fiscal year. The decrease was mainly attributable to the reduction of the Term Loan, partially offset by the impact of a $200.0 draw on the Revolver to fund the VACCO acquisition. In addition, the Cross Currency Swap has enabled us to better manage interest costs.

Previous wording

Other non-operating expenses were $1.0 for the second quarter of fiscal 2026 compared to $1.1 for the same period in the prior fiscal year and consisted primarily of post-retirement benefit costs and foreign exchange gains and losses.

Current wording

Other non-operating expenses were $0.7 for the third quarter of fiscal 2026 compared to $3.3 of other non-operating income for the same period in the prior fiscal year and consisted primarily of post-retirement benefit costs and foreign exchange gains and losses.

Previous wording

Other non-operating expenses were $2.2 for the first six months of fiscal 2026 compared to $1.5 for the same period in the prior fiscal year and consisted primarily of post-retirement benefit costs and foreign exchange gains and losses.

Current wording

Other non-operating expenses were $2.9 for the first nine months of fiscal 2026 compared to $1.8 of other non-operating income for the same period in the prior fiscal year and consisted primarily of post-retirement benefit costs and foreign exchange gains and losses.

Previous wording

Income tax expense for the three-month period ended September 27, 2025 was $23.4 compared to $15.2 for the three-month period ended September 28, 2024. Our effective income tax rate for the three-month period ended September 27, 2025 was 28.0% compared to 21.9% for the three-month period ended September 28, 2024. The effective income tax rate for the three-month period ended September 27, 2025 of 28.0% included $0.3 of tax benefits associated with stock-based compensation offset by $2.4 of other items, including a $2.3 change to deferred taxes related to the acquisition of VACCO. The effective income tax rate without discrete items for the three-month period ended September 27, 2025 would have been 25.6%. The effective income tax rate for the three-month period ended September 28, 2024 of 21.9% included $1.1 of discrete 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%.

Current wording

Income tax expense for the three-month period ended December 27, 2025 was $21.9 compared to $16.8 for the three-month period ended December 28, 2024. Our effective income tax rate for the three-month period ended December 27, 2025 was 24.6% compared to 22.5% for the three-month period ended December 28, 2024. The effective income tax rate for the three-month period ended December 27, 2025 of 24.6% included $0.5 of discrete tax benefits associated with stock-based compensation offset by $2.0 of other items, including a $0.7 change to deferred taxes associated with new state tax filings and $1.1 from estimated liabilities and interest in those states for prior years. The effective income tax rate without discrete items for the three-month period ended December 27, 2025 would have been 22.9%. The effective income tax rate for the three-month period ended December 28, 2024 of 22.5% included $0.8 of discrete 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%.

Previous wording

Income tax expense for the six-month period ended September 27, 2025 was $42.6 compared to $33.7 for the six-month period ended September 28, 2024. Our effective income tax rate for the six-month period ended September 27, 2025 was 24.9% compared to 22.6% for the six-month period ended September 28, 2024. The effective income tax rate for the six-month period ended September 27, 2025 of 24.9% included $2.6 of tax benefits associated with stock-based compensation offset by $3.6 of other tax expenses, including a $2.3 change to deferred taxes related to the acquisition of VACCO. The effective income tax rate without discrete items for the six-month period ended September 27, 2025 would have been 24.3%. 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%.

Current wording

Income tax expense for the nine-month period ended December 27, 2025 was $64.5 compared to $50.5 for the nine-month period ended December 28, 2024. Our effective income tax rate for the nine-month period ended December 27, 2025 was 24.8% compared to 22.5% for the nine-month period ended December 28, 2024. The effective income tax rate for the nine-month period ended December 27, 2025 of 24.8% included $4.5 of discrete tax benefits associated with stock-based compensation offset by $7.0 of other discrete tax expenses, including a $2.3 change to deferred taxes related to the acquisition of VACCO, a $0.7 change to deferred taxes associated with new state filings and $1.1 from estimated liabilities and interest in those states for prior years. The effective income tax rate without discrete items for the nine-month period ended December 27, 2025 would have been 23.8%. 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%.

Previous wording

We report our financial results under two operating segments: Aerospace/Defense and Industrial. The CODM uses gross margin as the primary measurement to assess the financial performance of each reportable segment. End market and channel sales within our segments are based on internal definitions and metrics considered by management and are periodically reviewed and updated prospectively.

Current wording

We report our financial results under two operating segments: Aerospace/Defense and Industrial. The CODM uses gross margin as the primary measurement of profitability of each reportable segment. End market and channel sales within our segments are based on internal definitions and metrics considered by management and are periodically reviewed and updated prospectively.

Previous wording

Net sales increased $55.6, or 38.8%, for the three months ended September 27, 2025 compared to the same period last fiscal year. Our commercial aerospace markets, which consisted of $96.5 of OEM sales and $19.7 of distribution and aftermarket sales, increased by 21.6% compared to fiscal 2025 when OEM net sales were $75.4 and distribution and aftermarket net sales were $20.1. The OEM markets have continued to improve as build rates have steadily increased over the last several months. Our defense markets, which consisted of $62.5 of OEM and $20.1 of distribution and aftermarket, increased by 73.3% compared to fiscal 2025 when OEM net sales were $35.5 and distribution and aftermarket net sales were $12.2. The increase in defense sales was driven by marine and missiles and reflects continued growth in demand which is evident by our growing backlog. Net sales for the three months ended September 27, 2025 included $24.7 of net sales from VACCO, of which $0.4 were to commercial OEM markets, $18.7 were to defense OEM markets, and $5.6 were to defense distribution and aftermarket.

Current wording

Net sales increased $59.3, or 41.5%, for the three months ended December 27, 2025 compared to the same period last fiscal year. Our commercial aerospace markets, which consisted of $100.7 of OEM net sales and $19.4 of distribution and aftermarket net sales, increased by 21.5% compared to fiscal 2025 when OEM net sales were $78.0 and distribution and aftermarket net sales were $20.9. The OEM markets have continued to improve as build rates have steadily increased over the last several months. Our defense markets, which consisted of $60.0 of OEM net sales and $22.4 of distribution and aftermarket net sales, increased by 86.2% compared to fiscal 2025 when OEM net sales were $32.5 and distribution and aftermarket net sales were $11.8. The increase in defense sales was driven by marine and missiles and reflects continued growth in demand which is evident by our growing backlog. The acquisition of VACCO also contributed to the sales growth.

Previous wording

Gross margin as a percentage of segment net sales was 38.7% for the second quarter of fiscal 2026 compared to 39.7% for the same period last fiscal year. Gross margin for the second quarter of fiscal 2026 was unfavorably impacted by a $3.3 purchase accounting adjustment related to the VACCO acquisition. The decrease in gross margin as a percentage of net sales was primarily driven by this, partially offset by efficiencies achieved at the plants in part due to increased sales volumes and favorable product mix. The effects of the purchase accounting are expected to cease during the first quarter of fiscal 2027. Including the impact of purchasing accounting, VACCO contributed $3.2 of gross margin in the second quarter of fiscal 2026.

Current wording

Gross margin as a percentage of segment net sales was 40.1% for the third quarter of fiscal 2026 compared to 40.5% for the same period last fiscal year. Gross margin for the third quarter of fiscal 2026 was unfavorably impacted by a $4.2 purchase accounting adjustment related to the VACCO acquisition. The decrease in gross margin as a percentage of net sales was primarily driven by this, partially offset by efficiencies achieved at the plants in part due to increased sales volumes and favorable product mix. The effects of the purchase accounting are expected to cease during the first quarter of fiscal 2027. Including the impact of purchasing accounting, VACCO contributed $5.9 of gross margin in the third quarter of fiscal 2026.

Previous wording

Net sales increased $71.1, or 24.3%, for the first six months of fiscal 2026 compared to the same period last fiscal year. The 24.3% increase was primarily driven by a 41.3% increase in our defense market, while our commercial aerospace market was up 15.6% year over year. Commercial aerospace net sales, which consisted of $180.1 of OEM net sales and $42.7 of distribution and aftermarket net sales, increased by 15.6% compared to fiscal 2025 when OEM net sales were $153.9 and distribution and aftermarket net sales were $38.9. Our defense markets, which consisted of $103.1 of OEM net sales and $37.5 of distribution and aftermarket net sales, increased by 41.3% compared to fiscal 2025 when OEM net sales were $75.7 and distribution and aftermarket net sales were $23.8. Net sales for the six months ended September 27, 2025 included $24.7 of net sales from VACCO, of which $0.4 were to commercial OEM markets, $18.7 were to defense OEM markets, and $5.6 were to defense distribution and aftermarket.

Current wording

Net sales increased $130.4, or 30.0%, for the first nine months of fiscal 2026 compared to the same period last fiscal year. The 30.0% increase was primarily driven by a 55.1% increase in our defense markets, while our commercial aerospace markets were up 17.6% year over year. Commercial aerospace net sales, which consisted of $280.8 of OEM net sales and $62.1 of distribution and aftermarket net sales, increased by 17.6% compared to fiscal 2025 when OEM net sales were $231.9 and distribution and aftermarket net sales were $59.8. Our defense markets, which consisted of $163.1 of OEM net sales and $59.9 of distribution and aftermarket net sales, increased by 55.1% compared to fiscal 2025 when OEM net sales were $108.2 and distribution and aftermarket net sales were $35.6. The acquisition of VACCO also contributed to the sales growth.

Previous wording

Gross margin as a percentage of segment net sales was 40.5% for the second quarter of fiscal 2026 compared to 41.0% for the same period last fiscal year. Gross margin for the second quarter of fiscal 2026 was unfavorably impacted by a $3.3 purchase accounting adjustment related to the VACCO acquisition partially offset by increased efficiencies achieved at the plants due to increased sales volumes and favorable product mix. VACCO contributed $3.2 of gross margin in the second quarter of fiscal 2026.

Current wording

Gross margin as a percentage of segment net sales was 40.3% for the third quarter of fiscal 2026 compared to 40.8% for the same period last fiscal year. Gross margin for the first nine months of fiscal 2026 was unfavorably impacted by a $7.5 purchase accounting adjustment related to the VACCO acquisition partially offset by increased efficiencies achieved at the plants due to increased sales volumes and favorable product mix. VACCO contributed $9.1 of gross margin in the first nine months of fiscal 2026.

Previous wording

Net sales increased $1.8, or 0.7%, for the three months ended September 27, 2025 compared to the same period last fiscal year. We saw improvements in many of our end markets, including aggregate & cement, food & beverage, grain, warehousing, and parcel & baggage markets, partially offset by softness in machine tools and OEM oil producers. Industrial OEM sales were $78.7 and $82.7 for the three month periods ended September 27, 2025 and September 28, 2024, respectively. Industrial sales to distribution and the aftermarket were $177.8 and $172.0 for the three month periods ended September 27, 2025 and September 28, 2024, respectively.

Current wording

Net sales increased $7.9, or 3.1%, for the three months ended December 27, 2025 compared to the same period last fiscal year. We saw improvements in many of our end markets, including aggregate & cement, food & beverage, and warehousing, partially offset by softness in mining and grain. Industrial OEM sales were $77.9 and $72.7 for the three month periods ended December 27, 2025 and December 28, 2024, respectively. Industrial sales to distribution and the aftermarket were $181.2 and $178.5 for the three month periods ended December 27, 2025 and December 28, 2024, respectively.

Previous wording

Gross margin for the three months ended September 27, 2025 was 48.2% of net sales, compared to 46.0% in the comparable period in fiscal 2025. Gross margin for the three months ended September 27, 2025 was impacted by $0.4 in restructuring costs related to inventory rationalization efforts at one of our manufacturing plants.

Current wording

Gross margin for the three months ended December 27, 2025 was 47.5% of net sales, compared to 46.5% in the comparable period in fiscal 2025. The improved gross margin is primarily driven by product mix.

Previous wording

Net sales increased $16.0, or 3.1%, for the first six months of fiscal 2026 compared to the same period last fiscal year. We saw strength in many of our end markets, including the mining and metals, aggregates & cement, logistics and warehousing, grain, and food & beverage markets offset by weakness in the power generation, machine tools and OEM oil producer markets. Industrial OEM sales were $157.2 and $164.5 for the six month periods ended September 27, 2025 and September 28, 2024, respectively. Industrial sales to distribution and the aftermarket were $370.7 and $347.4 for the six month periods ended September 27, 2025 and September 28, 2024, respectively.

Current wording

Net sales increased $23.9, or 3.1%, for the first nine months of fiscal 2026 compared to the same period last fiscal year. We saw strength in many of our end markets, including aggregate & cement, food & beverage, forest products, and warehousing, partially offset by weakness in power generation and semicon. Industrial OEM sales were $235.1 and $237.2 for the nine month periods ended December 27, 2025 and December 28, 2024, respectively. Industrial sales to distribution and the aftermarket were $551.9 and $525.9 for the nine month periods ended December 27, 2025 and December 28, 2024, respectively.

Previous wording

Gross margin for the first six months of fiscal 2026 was 47.1% of net sales, compared to 46.5% in the same period last fiscal year. Gross margin for the six months ended September 27, 2025 was impacted by $3.3 in restructuring costs related to inventory rationalization efforts at one of our manufacturing plants. The increase in gross margin was driven by manufacturing efficiencies and product mix.

Current wording

Gross margin for the first nine months of fiscal 2026 was 47.3% of net sales, compared to 46.5% in the same period last fiscal year. Gross margin for the nine months ended December 27, 2025 was impacted by $2.9 in restructuring costs related to inventory rationalization efforts at one of our manufacturing plants. The increase in gross margin was driven by manufacturing efficiencies and product mix.

Previous wording

Corporate SG&A was $28.9, or 6.3% of net sales, for the second quarter of fiscal 2026 compared to $26.0, or 6.5% of net sales, for the same period last fiscal year. The quarter over quarter increase was primarily due to an increase in personnel costs, partially offset by a reduction in professional fees.

Current wording

Corporate SG&A was $26.5, or 3.9% of net sales, for the third quarter of fiscal 2026 compared to $25.5, or 6.5% of net sales, for the same period last fiscal year. The quarter over quarter increase was primarily due to an increase in stock compensation costs, partially offset by a reduction in personnel costs.

Previous wording

Corporate SG&A increased $7.0 for the first six months of fiscal 2026 compared to the same period last fiscal year due to increases in personnel costs and stock compensation costs, partially offset by a reduction in professional fees.

Current wording

Corporate SG&A increased $8.0 for the first nine months of fiscal 2026 compared to the same period last fiscal year due to increases in personnel costs and stock compensation costs, partially offset by a reduction in professional fees.

Previous wording

As of September 27, 2025, we had cash of $91.2, of which approximately $29.6 was cash held by our foreign operations. We expect that our undistributed foreign earnings will be re-invested indefinitely for working capital, internal growth, and acquisitions for and by our foreign subsidiaries, with the exception of our Canadian operations as there are no current plans to expand the sales operations within that jurisdiction. As discussed in further detail below, we also have the ability to borrow money from our existing credit facilities.

Current wording

As of December 27, 2025, we had cash of $107.6, of which approximately $32.6 was cash held by our foreign operations. We expect that our undistributed foreign earnings will be re-invested indefinitely for working capital, internal growth, and acquisitions for and by our foreign subsidiaries, with the exception of our Canadian operations as there are no current plans to expand the sales operations within that jurisdiction. As discussed in further detail below, we also have the ability to borrow money from our existing credit facilities.

Previous wording

Amounts outstanding under the Facilities generally bear interest at either, at the Company’s option, (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 plus 1.00% or (b) Term SOFR plus a credit spread adjustment of 0.10% plus a margin ranging from 0.75% to a cap of 1.75% in the case of loans under the Revolving Credit Facility and 2.00% in the case of the Term Loan, 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 27, 2025, the Company’s margin was 0.75% for SOFR loans, the commitment fee rate was 0.175%, and the letter of credit fee rate was 0.75%. A portion of the Term Loan is subject to a fixed-rate interest swap.

Current wording

Amounts outstanding under the Facilities generally bear interest at either, at the Company’s option, (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 plus 1.00% or (b) Term SOFR plus a credit spread adjustment of 0.10% plus a margin ranging from 0.75% to a cap of 1.75% in the case of loans under the Revolving Credit Facility and 2.00% in the case of the Term Loan, 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 December 27, 2025, 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%.

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 2026, and $368.0 for fiscal 2027. The Revolving Credit Facility expires in October 2030, 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 2026, and $288.0 for fiscal 2027. The Revolving Credit Facility expires in October 2030, at which time all amounts outstanding under the Revolving Credit Facility will be payable.

Previous wording

The Credit Agreement requires the Company to comply with various covenants, including a maximum Total Net Leverage Ratio (as defined in the Credit Agreement) of 4.50:1.00 (provided that, such maximum ratio may be increased by the Company by 0.50:1.00 for a period of 12 months after the consummation of a material acquisition (provided that there may be only one such increase in effect at any one time)).

Current wording

The Credit Agreement requires the Company to comply with various covenants, including a maximum Total Net Leverage Ratio (as defined in the Credit Agreement) of 4.50:1.00 (provided that, such maximum ratio may be increased by the Company to 0.50:1.00 for a period of 12 months after the consummation of a material acquisition (provided that there may be only one such increase in effect at any one time)).

Previous wording

As of September 27, 2025, $368.0 was outstanding under the Term Loan, $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, and $200.0 of the Revolving Credit Facility had been used to fund the purchase of VACCO. The Company had the ability to borrow an additional $296.3 under the Revolving Credit Facility as of September 27, 2025. On September 30, 2025, the Company paid $40.0 on the Term Loan.

Current wording

As of December 27, 2025, $288.0 was outstanding under the Term Loan, $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, and $200.0 of the Revolving Credit Facility had been used to fund the purchase of VACCO. The Company had the ability to borrow an additional $296.3 under the Revolving Credit Facility as of December 27, 2025.

Previous wording

The Foreign Credit Line provides Schaublin SA with a CHF 5.0 (approximately $6.1 USD) credit line to provide future working capital, if necessary. As of September 27, 2025, $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 provides Schaublin SA with a CHF 5.0 (approximately $6.2 USD) credit line to provide future working capital, if necessary. As of December 27, 2025, $0.1 was being utilized to provide a bank guarantee. Fees associated with the Foreign Credit Line are nominal.

Previous wording

The Company is exposed to market risks relating to fluctuations in interest rates.

Current wording

Because the Company is exposed to market risks relating to fluctuations in interest rates, the Company maintained the Interest Rate Swap prior to its expiration on December 30, 2025. At this time we have not yet determined if we will enter into a new interest rate swap arrangement.