RBC Bearings INC

Previous wording

We are a well-known 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 54 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. We have a fiscal year consisting of 52 or 53 weeks, ending on the Saturday closest to March 31. Based on this policy, fiscal 2025 had 52 weeks and fiscal 2024 had 52 weeks.

Current wording

We are a well-known international manufacturer of highly engineered precision bearings, components and essential systems for the Aerospace & Defense and Industrial markets. 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 65 facilities in 11 countries, of which 44 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 had 52 weeks and fiscal 2025 had 52 weeks.

Previous wording

We use 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. For fiscal year 2024, we estimate approximately $6.9 of sales classified as industrial distribution for fiscal year 2024 would now be classified as industrial OEM. Fiscal year 2024 was not recast to reflect this change.

Current wording

We use 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.

Previous wording

We have demonstrated expertise in acquiring and integrating bearing and precision engineered component manufacturers that have complementary products or distribution channels and have provided significant margin enhancement. We have consistently increased the profitability of acquired businesses through a process of methods and systems improvement coupled with the introduction of complementary and proprietary new products. Since 1992 we have completed 29 acquisitions, which have broadened our end markets, products, customer base and geographic reach.

Current wording

We have demonstrated expertise in acquiring and integrating bearing and precision engineered component manufacturers that have complementary products or distribution channels and have provided significant margin enhancement. We have consistently increased the profitability of acquired businesses through a process of methods and systems improvement coupled with the introduction of complementary and proprietary new products. Since 1992 we have completed 30 acquisitions, including VACCO, which we acquired on July 18, 2025. These acquisitions have broadened our end markets, products, customer base and geographic reach.

Previous wording

For the fiscal year ended March 29, 2025, 63.8% of our net sales were attributable to the Industrial segment while the Aerospace/Defense segment contributed 36.2% of our net sales. Our net sales increased 4.9% year over year due to an increase of 14.1% in Aerospace and Defense segment sales and a 0.2% increase in Industrial segment sales.

Current wording

For the fiscal year ended March 28, 2026, 57.9% of our net sales were attributable to the Industrial segment while the Aerospace & Defense segment contributed 42.1% of our net sales. Our net sales increased 14.3% year over year due to sales increases in both the Aerospace & Defense and Industrial segments. VACCO, which was acquired on July 18, 2025, accounted for $83.9 of net sales in fiscal 2026. VACCO is part of our Aerospace & Defense segment.

Previous wording

Aerospace and Defense segment sales increased 14.1% year over year. Commercial aerospace increased 13.3%, demonstrating the continued recovery and early stages of a growth cycle. Defense sales, which represent approximately 32.4% of segment sales during the year, were up 15.9% for the year. Our backlog in this market is significant and deliveries are expected to continue to grow in the coming years.

Current wording

Aerospace & Defense segment sales increased 32.9% year over year. Commercial aerospace increased 17.8%, due to the increased build rates from large OEMs. defense sales, which represented approximately 40.0% of segment sales during the year, were up 64.5% for the year. Excluding net sales from VACCO, defense sales were up 22.9% year over year. Our backlog in this segment is significant and deliveries are expected to continue to grow in the coming years.

Previous wording

Industrial segment sales increase 0.2% year over year, led by a 1.4% increase in distribution and aftermarket sales. Sales to OEMs were down 2.1% year over year, primarily driven by softness in the energy and semicon markets.

Current wording

Industrial segment sales increased 3.8% year over year, led by a 4.8% increase in distribution and aftermarket sales. Sales to OEMs were up 1.5% year over year, primarily driven by aggregate & cement, warehousing, grain and food & beverage.

Previous wording

For the fourth quarter of fiscal 2025, 64.1% of our net sales was attributable to the Industrial segment compared to approximately 35.9% for the Aerospace/Defense segment. Approximately $191.5 of Industrial segment sales in the fourth quarter of fiscal 2025 were to distribution and aftermarket compared to approximately $186.8 in the prior year while approximately $88.9 were made directly to OEMs in the fourth quarter of fiscal 2025 compared to approximately $84.5 in the prior year. Net sales in the Aerospace/Defense segment increased $14.9, or 10.6%, for the fourth quarter of fiscal 2025 compared to the same period last fiscal year. Commercial aerospace net sales, which consisted of $85.9 of OEM and $23.3 of distribution and aftermarket, increased by 11.6% compared to the fourth quarter of fiscal 2024 when OEM net sales were $78.2 and distribution and aftermarket net sales were $19.7. This was driven by a continuing recovery as build rates and orders grew in the OEM market and aftermarket demand remained strong. Our defense markets net sales, which consisted of $38.1 of OEM and $10.0 of distribution and aftermarket, increased 8.2% compared to the fourth quarter of fiscal 2024 when OEM net sales were $34.2 and distribution and aftermarket net sales were $10.3.

Current wording

Of our net sales for the fourth quarter of fiscal 2026, 57.1% was attributable to the Industrial segment compared to 42.9% for the Aerospace & Defense segment. Approximately $200.0 of Industrial segment sales in the fourth quarter of fiscal 2026 were to distribution and aftermarket compared to approximately $191.5 in the prior year while approximately $95.9 were made directly to OEMs in the fourth quarter of fiscal 2026 compared to approximately $88.9 in the prior year. Net sales in the Aerospace & Defense segment increased $64.8, or 41.2%, for the fourth quarter of fiscal 2026 compared to the same period last fiscal year. Excluding net sales from VACCO, net sales increased in this segment by 22.8%. Commercial aerospace net sales, which consisted of $106.6 of OEM and $22.9 of distribution and aftermarket, increased by 18.5% compared to the fourth quarter of fiscal 2025 when OEM net sales were $85.9 and distribution and aftermarket net sales were $23.3. This was driven by increased build rates in the OEM market and aftermarket demand remained strong. Our fiscal 2026 fourth quarter defense markets’ net sales, which consisted of $74.0 of OEM and $18.6 of distribution and aftermarket, increased 92.5% compared to the fourth quarter of fiscal 2025 when OEM net sales were $38.1 and distribution and aftermarket net sales were $10.0. Excluding net sales from VACCO, defense net sales were up 35.0% compared to the same period in the prior year.

Previous wording

The Company forecasts net sales to be approximately $424.0 to $434.0 in the first quarter of fiscal 2026, compared to $406.3 in the first quarter of fiscal 2025, which represents a growth rate of 4.4% to 6.8%.

Current wording

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

Previous wording

Our backlog as of March 29, 2025 was $940.7 compared to $821.5 as of March 30, 2024. This increase reflects continued growth, most notably in our commercial aerospace and marine defense end markets

Current wording

Our backlog as of March 28, 2026 was $2.3 billion, which included $0.6 billion of VACCO backlog and $1.1 billion of marine related backlog, compared to a total of $0.9 billion as of March 29, 2025. This increase reflects continued growth, most notably in our commercial aerospace and marine defense end markets.

Previous wording

We experienced solid operating cash flow generation during fiscal 2025 (as discussed in the “Liquidity and Capital Resources” section below). We believe that operating cash flows and available credit under our revolving bank credit facilities will provide adequate resources to fund internal growth initiatives for the foreseeable future, including at least the next 12 months. As of March 29, 2025, we had cash of $36.8, of which, $23.7 was cash held by our foreign operations.

Current wording

We experienced solid operating cash flow generation during fiscal 2026 (as discussed in the “Liquidity and Capital Resources” section below). We believe that operating cash flows and available credit under our revolving bank credit facilities will provide adequate resources to fund internal growth initiatives for the foreseeable future, including at least the next 12 months. As of March 28, 2026, we had cash of $57.3, of which, $33.1 was cash held by our foreign operations.

Previous wording

Approximately 98% of the Company’s revenue was generated from the sale of products to customers in the Industrial and Aerospace/Defense markets for each of the years ended March 29, 2025 and March 30, 2024. The remaining 2% of the Company’s revenue for each of the last two fiscal years was derived from services performed for customers, which included repair and refurbishment work performed on customer-controlled assets as well as design and test work.

Current wording

Approximately 95% of the Company’s revenue was generated from the sale of products to customers in the Aerospace & Defense and Industrial markets for each of the years ended March 28, 2026 and March 29, 2025. The remaining 5% of the Company’s revenue for each of the last two fiscal years was derived from services performed for customers, which included repair and refurbishment work performed on customer-controlled assets as well as design and test work.

Previous wording

Less than half of our factory costs, depending on product mix, are attributable to raw materials, purchased components and outside processing. When we experience raw material inflation, we attempt to offset these cost increases by changing our buying patterns, expanding our vendor network and passing through price increases when possible. Although we experienced cost inflation on raw material, labor and overhead for this fiscal year, we were able to mitigate it through pricing and strategic sourcing efforts.

Current wording

Less than half of our factory costs, depending on product mix, are attributable to raw materials, purchased components and outside processing. When we experience raw material inflation, we attempt to offset these cost increases by changing our buying patterns, expanding our vendor network and passing through price increases when possible. Although we experienced cost inflation on raw material, labor and overhead for this fiscal year, we were able to mitigate it through pricing, insourcing and strategic sourcing efforts.

Previous wording

Net sales for the fiscal year ended March 29, 2025 increased $76.0, or 4.9%, compared to fiscal 2024. This increase was the result of a 0.2% increase in our Industrial segment, while net sales in our Aerospace/Defense segment increased 14.1% year over year. Industrial segment sales experienced the strongest contribution to growth in the metals and mining, warehousing and logistics, and food and beverage markets. Within Aerospace/Defense, total commercial aerospace net sales increased 13.3% and defense net sales increased 15.9% year over year. The commercial aerospace increase reflects the continued recovery in the market over the last year.

Current wording

Net sales for the fiscal year ended March 28, 2026 increased $234.6, or 14.3%, compared to fiscal 2025. Excluding $83.9 of net sales from VACCO, net sales increased by 9.2% compared to the prior year. This increase was the result of a 3.8% increase in our Industrial segment, while net sales in our Aerospace & Defense segment increased 32.9% year over year. Industrial segment sales experienced the strongest contribution to growth in the aggregate & cement, warehousing and logistics, food & beverage and grain markets. Within Aerospace & Defense, total commercial aerospace net sales increased 17.8% and defense net sales increased 64.5% year over year. Commercial aerospace net sales, which consisted of $387.4 of OEM and $85.0 of distribution and aftermarket, increased by 17.8% compared to fiscal 2025 when OEM net sales were $317.8 and distribution and aftermarket net sales were $83.1. The OEM markets have continued to improve as build rates have steadily increased over the last several months. Our defense market net sales, which consisted of $237.1 of OEM and $78.5 of distribution and aftermarket, increased by 64.5% compared to fiscal 2025 when OEM net sales were $146.3 and distribution and aftermarket net sales were $45.6. The increase in defense sales was led by marine, missiles and guided munitions and reflects continued growth in demand which is evident by our growing backlog. The acquisition of VACCO also contributed to the sales growth. Excluding VACCO, net sales increased by 19.1% for the Aerospace & Defense segment.

Previous wording

Net income attributable to common stockholders increased by $46.9 to $233.8 for fiscal 2025 compared to fiscal 2024. The net income attributable to common stockholders of $233.8 in fiscal 2025 was impacted by $1.5 of restructuring and consolidation charges, $59.8 of interest expense, $12.4 of preferred stock dividends, and $65.7 of income tax expense. The net income attributable to common stockholders of $186.9 in fiscal 2024 was impacted by $3.0 of restructuring and consolidation charges, $78.7 of interest expense, $23.0 of preferred stock dividends, and $51.9 of income tax expense.

Current wording

Net income attributable to common stockholders increased by $53.8 to $287.6 for fiscal 2026 compared to fiscal 2025. The net income attributable to common stockholders of $287.6 in fiscal 2026 was impacted by $14.8 of acquisition and related costs, $6.2 of restructuring and consolidation charges, $49.8 of interest expense, and $81.7 of income tax expense. The net income attributable to common stockholders of $233.8 in fiscal 2025 was impacted by $1.5 of restructuring and consolidation charges, $59.8 of interest expense, $12.4 of preferred stock dividends, and $65.7 of income tax expense.

Previous wording

Other operating expenses for fiscal 2025 totaled $76.9 compared to $74.8 for fiscal 2024. For fiscal 2025, other operating costs consisted primarily of $71.8 of amortization expense, $1.5 of plant consolidation and restructuring costs, $1.2 of bad debt expense and $2.4 of other items. For fiscal 2024, other operating expenses consisted primarily of $70.4 of amortization expense, $2.7 of plant consolidation and restructuring costs, $0.2 of bad debt expense, $0.3 of acquisition costs, $0.6 of losses on disposal of assets, and $0.6 of other items.

Current wording

Other operating expenses for fiscal 2026 totaled $93.1 compared to $76.9 for fiscal 2025. For fiscal 2026, other operating costs consisted of $81.0 of amortization expense, $1.6 of acquisition costs, $4.1 of restructuring costs, $1.1 of bad debt expense and $5.3 of other items. Of the amortization expense incurred during the period, $10.3 was related to acquired intangible assets from the VACCO acquisition. For fiscal 2025, other operating expenses consisted of $71.8 of amortization expense, $1.5 of restructuring costs, $1.2 of bad debt expense and $2.4 of other items.

Previous wording

Interest expense, net, consists of interest charged on the Company’s debt agreements and amortization of deferred financing fees, offset by interest income. Interest expense, net was $59.8 for fiscal 2025 compared to $78.7 for fiscal 2024. The decrease in interest expense is primarily related 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, consists of interest charged on the Company’s debt agreements and amortization of deferred financing fees, offset by interest income. Interest expense, net was $49.8 for fiscal 2026 compared to $59.8 for fiscal 2025. The decrease in interest expense between the periods was due to the reduction of the principal balance on our Term Loan (as defined in “Liquidity and Capital Resources—Liquidity—Domestic Credit Facility”), partially offset by the impact of a $200.0 draw on the Revolving Credit Facility (as defined in “Liquidity and Capital Resources—Liquidity—Domestic 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

Other non-operating income for fiscal 2025 totaled $1.8, consisting primarily of a $4.0 legal settlement partially offset by post-retirement benefit costs and foreign exchange gains and losses. Non-operating costs incurred during fiscal 2024 were $1.7, consisting primarily of post-retirement benefit costs.

Current wording

Other non-operating expense for fiscal 2026 totaled $1.9, consisting primarily of post-retirement benefit costs and foreign exchange gains and losses. Non-operating income during fiscal 2025 was $1.8, consisting primarily of a $4.0 legal settlement partially offset by post-retirement benefit costs and foreign exchange gains and losses.

Previous wording

Income tax expense for fiscal 2025 was $65.7 compared to $51.9 for fiscal 2024. Our effective income tax rate for fiscal 2025 was 21.1% compared to 19.8% for fiscal 2024. The effective income tax rates are different from the U.S. statutory rate due to the U.S. credits for increasing research activities and foreign-derived intangible income provision, which decrease the rate, and differences in foreign and state income taxes, which increase the rate. The effective income tax rate for fiscal 2025 of 21.1% included discrete items totaling a benefit of $7.6 which is substantially related to a benefit associated with stock-based compensation, a reduction in unrecognized tax benefits due to the expiration of the statute of limitations, and benefits related to the release of a valuation allowance and an adjustment related to state remeasurements. The effective income tax rate for fiscal 2025 without these discrete items would have been 23.5%. The effective income tax rate for fiscal 2024 of 19.8% included discrete items totaling a benefit of $8.2 which is substantially related to a benefit associated with stock-based compensation, a reduction in unrecognized tax benefits due to the expiration of the statute of limitations, and the accrual of deferred tax assets related to state tax modifications. The effective income tax rate for fiscal 2024 without these discrete items would have been 22.9%.

Current wording

Income tax expense for fiscal 2026 was $81.7 compared to $65.7 for fiscal 2025. Our effective income tax rate for fiscal 2026 was 22.1% compared to 21.1% for fiscal 2025. The effective income tax rates are different from the U.S. statutory rate due to the U.S. credits for increasing research activities and foreign-derived intangible income provision, which decrease the rate, and differences in foreign and state income taxes, which increase the rate. The effective income tax rate for fiscal 2026 of 22.1% included discrete items totaling a benefit of $6.2 which is substantially related to a benefit associated with stock-based compensation, changes in valuation allowances, and one-time adjustments to record deferred tax liabilities for foreign subsidiaries. The effective income tax rate for fiscal 2026 without these discrete items would have been 23.8%. The effective income tax rate for fiscal 2025 of 21.1% included discrete items totaling a benefit of $7.6 which is substantially related to a benefit associated with stock-based compensation, a reduction in unrecognized tax benefits due to the expiration of the statute of limitations, and benefits related to the release of a valuation allowance and an adjustment related to state remeasurements. The effective income tax rate for fiscal 2025 without these discrete items would have been 23.5%.

Previous wording

Gross margin was $243.1, or 41.0% of net sales, in fiscal 2025 compared to $208.8, or 40.2% of sales, for the same period in fiscal 2024. We anticipate additional margin expansion in the upcoming year as the growing orders for commercial products are expected to increase volumes flowing through our manufacturing facilities driving cost efficiencies.

Current wording

Gross margin was $320.7, or 40.7% of net sales, in fiscal 2026 compared to $243.1, or 41.0% of sales, for the same period in fiscal 2025. We anticipate additional margin expansion in the upcoming year as the growing orders for commercial products are expected to increase volumes flowing through our manufacturing facilities driving cost efficiencies. Expected synergies from the VACCO acquisition should also contribute to margin expansion. Gross margin in fiscal 2026 was affected by $13.2 of purchase accounting adjustments related to the VACCO acquisition.

Previous wording

Net sales increased $2.6, or 0.2%, during fiscal 2025 compared to the same period last year. The continued strong performance was driven by the mining and general industrial markets. Sales to distribution and the aftermarket were $717.4 in fiscal 2025 compared to $707.6 in the prior year, a 1.4% year over year increase. OEM sales were $326.1 for fiscal 2025 compared to $333.3 in the prior year. The 2.1% decrease in OEM sales compared to the prior year was primarily due to softness in the machinery, oil and gas, and semiconductor equipment end markets.

Current wording

Net sales increased $39.4, or 3.8%, during fiscal 2026 compared to the same period last year. The continued strong performance was driven by the aggregate and cement, warehousing, food & beverage and grain markets, partially offset by softness in the mining & metals, power generation and oil & gas end markets. Sales to distribution and the aftermarket were $751.9 in fiscal 2026 compared to $717.4 in the prior year, a 4.8% year-over-year increase. OEM sales increased 1.5% to $331.0 for fiscal 2026 compared to $326.1 in the prior year.

Previous wording

Gross margin was $483.0, or 46.3% of net sales, in fiscal 2025 compared to $461.7, or 44.4% of sales, for the same period in fiscal 2024. The expansion in margin year over year was attributable to manufacturing efficiencies and product mix.

Current wording

Gross margin was $509.5, or 47.0% of net sales, in fiscal 2026 compared to $483.0, or 46.3% of sales, for the same period in fiscal 2025. The expansion in margin year over year was attributable to manufacturing efficiencies and product mix.

Previous wording

Corporate SG&A for fiscal 2025 increased $17.3 or 20.8% compared to fiscal 2024 due to increased spending in IT and personnel-related costs. As a percentage of net sales, Corporate SG&A was relatively flat year over year.

Current wording

Corporate SG&A for fiscal 2026 increased $16.3 or 16.3% compared to fiscal 2025 due to increased spending in IT and personnel-related costs. As a percentage of net sales, Corporate SG&A was relatively flat year over year.

Previous wording

As of March 29, 2025, we had cash of $36.8, of which, approximately $23.7 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 on 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 March 28, 2026, we had cash of $57.3, of which, approximately $33.1 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 on 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

In fiscal 2022, RBC Bearings Incorporated, our top holding company, and our Roller Bearing Company of America, Inc. subsidiary (“RBCA”) entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent, Collateral Agent, Swingline Lender and Letter of Credit Issuer and the other lenders party thereto. The Credit Agreement provides the Company with (a) a $1,300.0 term loan (the “Term Loan”), which was used to fund a portion of the cash purchase price for the acquisition of Dodge Industrial and to pay related fees and expenses, and (b) a $500.0 revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan, the “Facilities”). Debt issuance costs associated with the Credit Agreement totaled $14.9 and are being amortized over the life of the Credit Agreement.

Current wording

In fiscal 2022, RBC Bearings Incorporated, our top holding company, and our Roller Bearing Company of America, Inc. subsidiary (“RBCA”) entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), and the other lenders party thereto. The Credit Agreement provides the Company with (a) a $1,300.0 term loan (the “Term Loan”), which was used to fund a portion of the cash purchase price for the acquisition of Dodge Industrial and to pay related fees and expenses, and (b) a $500.0 revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan, the “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 (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 within the Credit Agreement) from time to time. The Facilities are subject to a SOFR floor of 0.00%. As of March 29, 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%. A portion of the Term Loan is subject to a fixed-rate interest swap as discussed in Note 12.

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 (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 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 (as defined in the Credit Agreement) from time to time. The Facilities are subject to a SOFR floor of 0.00%. As of March 28, 2026, 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 0.75%.

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 $413.0 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 $173.0 for fiscal 2027.

Previous wording

The Credit Agreement requires the Company to comply with various covenants, including the following financial covenants: (a) a maximum Total Net Leverage Ratio (as defined within the Credit Agreement) of 5.00:1.00, which maximum Total Net Leverage Ratio shall decrease during certain subsequent test periods as set forth in the Credit Agreement (provided that, no more than once during the term of the Facilities, such maximum ratio applicable at such time may be increased by the Company by 0.50:1.00 for a period of twelve (12) months after the consummation of a material acquisition); and (b) a minimum Interest Coverage Ratio of 2.00:1.00. As of March 29, 2025 the Company was in compliance with all debt covenants.

Current wording

The Credit Agreement requires the Company to comply with various covenants, including a maximum Total Net Leverage Ratio (as defined within 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)). As of March 28, 2026 the Company was in compliance with all debt covenants.

Previous wording

As of March 29, 2025, $413.0 was outstanding under the Term Loan, $5.0 was outstanding under the Revolving Credit Facility 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 up to an additional $491.3 under the Revolving Credit Facility as of March 29, 2025.

Current wording

As of March 28, 2026, $173.0 was outstanding under the Term Loan, $200.0 was outstanding under the Revolving Credit Facility (used to fund a portion of the purchase price for VACCO), 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 $296.3 under the Revolving Credit Facility as of March 28, 2026.

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. The Company may also redeem up to 40% of the Senior Notes using the proceeds of certain equity offerings completed before October 15, 2024, at a redemption price equal to 104.375% of the principal amount thereof, 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 any time 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

One of our foreign subsidiaries, Schaublin SA, has a CHF 5.0 (approximately $5.5 USD) credit line (the “Foreign Credit Line”) with Credit Suisse (Switzerland) Ltd. to provide future working capital, if necessary. As of March 29, 2025, $0.1 was being utilized to provide a bank guarantee. Fees associated with the Foreign Credit Line are nominal.

Current wording

One of our foreign subsidiaries, Schaublin SA, has a CHF 5.0 (approximately $6.1 USD) credit line with Credit Suisse (Switzerland) Ltd. to provide future working capital, if necessary. As of March 28, 2026, $0.1 was being utilized to provide a bank guarantee. Fees associated with this credit line are nominal.

Previous wording

In July 2024, Swiss Tool Systems, one of our foreign subsidiaries, purchased the building where it operates for CHF 7.1 (approximately $8.4 USD) and took out a 10-year fixed-rate mortgage on the building for CHF 4.0 (approximately $4.5 USD).

Current wording

In July 2024, Swiss Tool Systems, one of our foreign subsidiaries, purchased the building where it operates for CHF 7.1 (approximately $8.4 USD) and took out a 10-year, 2.9% fixed-rate mortgage on the building for CHF 4.0 (approximately $4.5 USD).

Previous wording

Prior to October 15, 2024, the Company had outstanding 4,600,000 shares of 5.00% Series A Mandatory Convertible Preferred Stock (“MCPS”) to which we paid a quarterly dividend aggregating $5.75, but on that date each then-outstanding share of the MCPS converted into 0.4413 shares of common stock, resulting in the retirement of the MCPS and the issuance of 2,029,955 shares of common stock. Because the MCPS is no longer outstanding, the Company will not pay MCPS dividends in the future, resulting in a cash savings of $23.0 per year.

Current wording

Prior to October 15, 2024, the Company had outstanding 4,600,000 shares of 5.00% Series A Mandatory Convertible Preferred Stock (“MCPS”) to which we paid a quarterly dividend aggregating $5.75, but on that date each then-outstanding share of the MCPS converted into 0.4413 shares of common stock, resulting in the retirement of the MCPS and the issuance of 2,029,955 shares of common stock, and the cessation of the Company paying related dividends.

Previous wording

During fiscal 2025, we generated cash of $293.6 from operating activities compared to $274.7 for fiscal 2024. The increase of $18.9 was mainly the result of a $36.3 increase in net income partially offset by a $6.2 unfavorable change in non-cash activity and net unfavorable change in operating assets and liabilities of $11.2. The unfavorable change in operating assets and liabilities is detailed in the table below. The change in non-cash activity was primarily driven by $0.7 more depreciation and amortization and $11.0 more stock-based compensation partially offset by $0.6 less amortization of deferred financing costs, a $14.5 unfavorable change in deferred taxes, $0.5 less non-cash operating lease expense, $0.2 less losses on the disposition of assets, and $2.1 less in restructuring and other non-cash charges.

Current wording

During fiscal 2026, we generated cash of $415.7 from operating activities compared to $293.6 for fiscal 2025. The increase of $122.1 was the result of a $41.4 increase in net income, a $56.8 favorable change in non-cash activity and net favorable change in operating assets and liabilities of $23.9. The favorable change in operating assets and liabilities is detailed in the table below. The change in non-cash activity was driven by $8.8 more depreciation and amortization, $6.1 more stock-based compensation, $0.6 more amortization of deferred financing costs, $37.7 more deferred taxes, $0.9 more non-cash operating lease expense, $0.2 of additional losses on the disposition of assets and $2.5 more restructuring and other non-cash charges.

Previous wording

During fiscal 2025, we used cash of $270.4 for financing activities compared to $223.5 in fiscal 2024. This change was primarily due to $82.4 more repayments on our revolving credit facilities and $37.0 more repayments on the Term Loan partially offset by $46.7 more proceeds from our revolving credit facilities, $14.5 more proceeds from the exercise of employee stock options, $4.5 proceeds from a mortgage, and $5.8 less preferred stock dividends paid.

Current wording

During fiscal 2026, we used cash of $43.3 for financing activities compared to $270.4 in fiscal 2025. This change was primarily attributable to $133.0 of additional proceeds received from the Revolving Credit Facility. Additionally, we had $22.0 less of payments made on the Term Loan, $17.2 less of preferred stock dividends paid, and $77.4 less of revolving credit facilities payments, partially offset by $1.8 more of financing fees paid, $10.7 less of exercises of stock-based awards, $4.9 more of repurchases of common stock, $0.5 more payments of finance lease obligations, $0.1 more repayments of notes payable and $4.5 less of proceeds received from mortgage.

Previous wording

Our capital expenditures in fiscal 2025 were $49.8 compared to $33.2 in fiscal 2024. We expect to make capital expenditures of approximately 3.0% to 3.5% of net sales during fiscal 2026 in connection with our existing business. We funded our fiscal 2025 capital expenditures, and expect to fund fiscal 2026 capital expenditures, principally through existing cash and internally generated funds. We may also make substantial additional capital expenditures in connection with acquisitions.

Current wording

Our capital expenditures in fiscal 2026 were $73.1 compared to $49.8 in fiscal 2025. We expect to make capital expenditures of approximately 3.5% to 4.0% of net sales during fiscal 2027 in connection with our existing business. We funded our fiscal 2026 capital expenditures, and expect to fund fiscal 2027 capital expenditures, principally through existing cash and internally generated funds. We may also make substantial additional capital expenditures in connection with acquisitions.

Previous wording

Revenue Recognition. The performance obligations for the majority of RBC’s product sales are satisfied at the point in time in which the products are shipped. The Company has determined that the customer obtains control upon shipment of the product based on the shipping terms (i.e. when it ships from RBC’s dock or when the product arrives at the customer’s dock) and recognizes revenue when control has transferred to the customer. Once a customer has obtained control, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. Approximately 98% of the Company’s revenue was recognized in this manner based on sales for the fiscal years ended March 29, 2025 and March 30, 2024.

Current wording

Revenue Recognition. The performance obligations for the majority of RBC’s product sales are satisfied at the point in time in which the products are shipped. The Company has determined that the customer obtains control upon shipment of the product based on the shipping terms (i.e. when it ships from RBC’s dock or when the product arrives at the customer’s dock) and recognizes revenue when control has transferred to the customer. Once a customer has obtained control, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. Approximately 95% and 98% of the Company’s revenue was recognized in this manner based on sales for the fiscal years ended March 28, 2026 and March 29, 2025, respectively.

Previous wording

*Goodwill and Indefinite-Lived Intangible Assets.*Goodwill (representing the excess of the amount paid to acquire a company over the estimated fair value of the net assets acquired) and indefinite-lived intangible assets are not amortized but instead are tested for impairment annually, or when events or circumstances indicate that the carrying value of such asset may not be recoverable. Separate tests are performed for goodwill and indefinite lived intangible assets. The Company performs the annual impairment testing during the fourth quarter of each fiscal year. We completed a quantitative test of impairment on the indefinite lived intangible assets with no impairment noted in fiscal year 2025. The determination of any goodwill impairment is made at the reporting unit level. The Company determines the fair value of a reporting unit and compares it to its carrying amount. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company applies the income approach (discounted cash flow method) in testing goodwill for impairment. The key assumption used in the discounted cash flow method used to estimate fair value is gross margin, which is affected by expectations about future market or economic conditions. The fair value of the reporting units exceeds the carrying value by a minimum of 13.8% at each of the two reporting units. Assuming no growth in gross margin within the model would not result in impairment of goodwill for any of our reporting units. Although no changes are expected, if the actual results of the Company are less favorable than the assumptions the Company makes regarding estimated cash flows, the Company may be required to record an impairment charge in the future.

Current wording

*Goodwill and Indefinite-Lived Intangible Assets.*Goodwill (representing the excess of the amount paid to acquire a company over the estimated fair value of the net assets acquired) and indefinite-lived intangible assets are not amortized but instead are tested for impairment annually, or when events or circumstances indicate that the carrying value of such asset may not be recoverable. Separate tests are performed for goodwill and indefinite lived intangible assets. The Company performs the annual impairment testing during the fourth quarter of each fiscal year. We completed a quantitative test of impairment on the indefinite lived intangible assets with no impairment noted in fiscal year 2026. The determination of any goodwill impairment is made at the reporting unit level. The Company determines the fair value of a reporting unit and compares it to its carrying amount. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company applies the income approach (discounted cash flow method) in testing goodwill for impairment. The key assumptions used in the discounted cash flow method used to estimate fair value include gross margin, discount rate, and long-term growth rate, which is affected by expectations about future market or economic conditions. The fair value of the reporting units exceeds the carrying value by a minimum of 38.8% at each of the two reporting units. Assuming no growth in gross margin within the model would not result in impairment of goodwill for any of our reporting units. Although no changes are expected, if the actual results of the Company are less favorable than the assumptions the Company makes regarding estimated cash flows, the Company may be required to record an impairment charge in the future.