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 or that we may acquire in the future may have liabilities that are not known to us; (m) goodwill and indefinite-lived intangibles comprise a significant portion of our total assets, and if we determine that goodwill and indefinite-lived intangibles have become impaired in the future, our results of operations and financial condition in such years may be materially and adverse…

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 66 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 2027 will have 53 weeks and fiscal 2026 had 52 weeks. Both the first quarter of fiscal 2027 and the first quarter of fiscal 2026 had 13 weeks.

Current wording

We are a leading international manufacturer of highly engineered precision bearings, components and essential systems for the industrial, aerospace and defense 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 67 facilities in 11 countries, of which 45 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 2027 will have 53 weeks and fiscal 2026 had 52 weeks. Both the second quarter of fiscal 2027 and the second quarter of fiscal 2026 had 13 weeks.

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 30 acquisitions, including VACCO, which we acquired on July 18, 2025. These acquisitions 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 31 acquisitions, including PSC, which we acquired on August 10, 2026. These acquisitions have broadened our end markets, products, customer base and geographic reach.

Previous wording

Our net sales for the three-month period ended June 27, 2026 increased 19.2% compared to the same period last fiscal year. The increase in net sales was a result of a 36.9% increase in our Aerospace & Defense segment and a 8.4% increase in our Industrial segment. Backlog as of June 27, 2026, was $2.3 billion compared to $2.3 billion as of March 28, 2026 and $1.0 billion as of June 28, 2025.

Current wording

Our net sales for the three-month period ended September 26, 2026 increased 15.2% compared to the same period last fiscal year. The increase in net sales was a result of a 15.8% increase in our Aerospace & Defense segment and a 14.8% increase in our Industrial segment, including approximately $2.0 of net sales from PSC. Backlog as of September 26, 2026, was $2.4 billion compared to $2.3 billion as of March 28, 2026 and $1.6 billion as of September 27, 2025.

Previous wording

We are continuing to see the expansion of the commercial aerospace business, which experienced a 21.8% increase in net sales for the three-month period ended June 27, 2026, which included $1.6 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 since this time last year. Defense sales, which represented approximately 42.4% of segment sales during the quarter, were up 64.6% quarter over quarter, which included $31.7 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, notably including semicon, grain, and food and beverage.

Current wording

We are continuing to see the expansion of the commercial aerospace business, which experienced a 17.4% increase in net sales for the three-month period ended September 26, 2026 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 since this time last year. Defense sales, which represented approximately 40.8% of segment sales during the quarter, were up 13.6% quarter over quarter. We expect this growth to continue throughout the current fiscal year and beyond as we are increasing capacity to fulfill the substantial number of defense orders in our backlog. Our Industrial business continued to demonstrate strength across most major end markets, notably including semiconductor equipment, grain, aggregate & cement, mining & metals, and food & beverage.

Previous wording

The Company expects net sales to be approximately $505.0 to $515.0 in the second quarter of fiscal 2027, an increase of 10.9% to 13.1% compared to the second quarter of fiscal 2026.

Current wording

The Company expects net sales to be approximately $520.0 to $525.0 in the third quarter of fiscal 2027, an increase of 12.7% to 13.7% compared to the third quarter of fiscal 2026. Gross margin is expected to be in the range of 45.5% to 45.75% and SG&A as a percentage of net sales is expected to be in the range of 16.25% to 16.5%.

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 June 27, 2026, we had cash of $124.5, of which approximately $47.4 was cash held by our foreign operations. Since June 27, 2026, we used $50.0 of our domestic cash to pay down 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 September 26, 2026, we had cash of $89.3, of which approximately $47.5 was cash held by our foreign operations.

Previous wording

Net sales for the three-month period ended June 27, 2026 increased $83.5, or 19.2%, compared to the same period last fiscal year. Net sales in our Industrial segment increased 8.4% quarter over quarter against a strong quarter in the prior fiscal year. Growth was driven from semicon, grain, and food and beverage compared to the prior year. Net sales in our Aerospace & Defense segment increased 36.9% quarter over quarter, led by defense sales, which were up 64.6% compared to the same period in the prior fiscal year, driven by missiles and the acquisition of VACCO, which contributed $31.7 of net sales to these end markets. Commercial OEM and aftermarket sales increased 21.8% 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 and the acquisition of VACCO, which contributed $1.6 of net sales to these end markets. Space sales increased to $25.1 in the first quarter of fiscal 2027 compared to $7.5 for the same period in the prior year.

Current wording

Our net sales for the three-month period ended September 26, 2026 increased $69.3, or 15.2%, compared to the same period last fiscal year. The increase in net sales is attributable to increased volumes through the plants, coupled with favorable contract renewals and related inflationary adjustments. Net sales in our Industrial segment increased 14.8% quarter over quarter, including approximately $2.0 of net sales from PSC, which was acquired on August 10, 2026. Growth was solid across our core industries. Some standouts were semiconductor equipment, grain, aggregate & cement, mining & metals, and food & beverage. Net sales in our Aerospace & Defense segment increased 15.8% quarter over quarter. This was supported by defense sales, which were up 13.6% compared to the same period in the prior fiscal year, driven by marine and spares. Commercial OEM and aftermarket sales increased 17.4% compared to the same period in the prior fiscal year. The increase in aerospace sales reflected growth in orders from large OEMs as build rates escalated, as well as expansion in the aftermarket. Space sales continued to grow due to demand from OEMs, increasing to approximately $21.9 in the second quarter of fiscal 2027 compared to approximately $18.9 for the same period in the prior fiscal year.

Previous wording

Net income for the first quarter of fiscal 2027 was $101.5 compared to $68.5 for the same period last fiscal year.

Current wording

Net income for the second quarter of fiscal 2027 was $93.8 compared to $60.0 for the same period last fiscal year.

Previous wording

SG&A for the first quarter of fiscal 2027 was $85.8, or 16.5% of net sales, as compared to $73.9, or 16.9% of net sales, for the same period of fiscal 2026. The increase in SG&A was primarily driven by the inclusion of VACCO and increased personnel costs.

Current wording

SG&A for the second quarter of fiscal 2027 was $83.4, or 15.9% of net sales, as compared to $77.4, or 17.0% of net sales, for the same period of fiscal 2026. The increase in SG&A was primarily driven by personnel costs.

Previous wording

Other operating expenses for the first quarter of fiscal 2027 totaled $21.2 compared to $20.2 for the same period last fiscal year. For the first quarter of fiscal 2027, other operating expenses consisted of $21.0 of amortization of intangible assets and $0.4 of restructuring costs offset by $0.2 of other items. For the first quarter of fiscal 2026, other operating expenses included $17.9 of amortization of intangible assets, $1.2 of restructuring costs, $0.1 of acquisition costs and $1.0 of other expense items.

Current wording

Other operating expenses for the second quarter of fiscal 2027 totaled $24.0 compared to $25.4 for the same period last fiscal year. For the second quarter of fiscal 2027, other operating expenses consisted of $21.3 of amortization of intangible assets, $1.1 of restructuring costs and $1.6 of other items. 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.

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 (see “Liquidity and Capital Resources” below). Interest expense, net, was $10.1 for the first quarter of fiscal 2027 compared to $12.2 for the same period last fiscal year. The decrease in interest expense between the periods was due to the reduction of the principal balance on the Term Loan and lower interest rates, partially offset by the impact of a $200.0 draw on the Revolving Credit Facility during the second quarter of fiscal 2026 to pay a portion of the VACCO acquisition purchase price. In addition, the Cross Currency Swap has enabled us to better manage interest costs. See “Liquidity and Capital Resources – Liquidity” for more information about the Term Loan, the Revolving Credit Facility, and the Cross Currency Swap.

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 (see “Liquidity and Capital Resources” below). Interest expense, net, was $9.3 for the second quarter of fiscal 2027 compared to $13.4 for the same period last fiscal year. The decrease in interest expense between the periods was due to the reduction of the principal balance on the Term Loan and lower interest rates. See “Liquidity and Capital Resources – Liquidity” for more information about the Term Loan, the Revolving Credit Facility, and the Cross Currency Swap.

Previous wording

Other non-operating expenses were $0.5 for the first quarter of fiscal 2027 compared to $1.2 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 $0.3 for the first six months of fiscal 2027 compared to $2.2 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 June 27, 2026 was $28.7 compared to $19.2 for the three-month period ended June 28, 2025. Our effective income tax rate for the three-month period ended June 27, 2026 was 22.1% compared to 21.9% for the three-month period ended June 28, 2025. The effective income tax rate for the three-month period ended June 27, 2026 of 22.1% included $1.4 of tax benefits associated with stock-based compensation and $0.1 of other items. The effective income tax rate without discrete items for the three-month period ended June 27, 2026 would have been 23.2%. The effective income tax rate for the three-month period ended June 28, 2025 of 21.9% included $2.3 of discrete tax benefits associated with stock-based compensation partially offset by $1.3 of other items. The effective income tax rate without discrete items for the three-month period ended June 28, 2025 would have been 23.1%.

Current wording

Income tax expense for the three-month period ended September 26, 2026 was $28.7 compared to $23.4 for the three-month period ended September 27, 2025. Our effective income tax rate for the three-month period ended September 26, 2026 was 23.4% compared to 28.0% for the three-month period ended September 27, 2025. The effective income tax rate for the three-month period ended September 26, 2026 of 23.4% included $0.5 of discrete tax benefits associated with stock-based compensation partially offset by $0.4 of expense related to other items. The effective income tax rate without discrete items for the three-month period ended September 26, 2026 would have been 23.5%. 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%.

Previous wording

Net sales increased $60.8, or 36.9% for the three months ended June 27, 2026 compared to the same period last fiscal year. Our commercial aerospace markets, which consisted of $108.7 of OEM sales and $21.2 of distribution and aftermarket sales, increased by 21.8% compared to fiscal 2026 when OEM net sales were $83.6 and distribution and aftermarket net sales were $23.0. The OEM markets have continued to improve as build rates have steadily increased over the last several months. Our defense markets, which consisted of $70.3 of OEM and $25.2 of distribution and aftermarket, increased by 64.6% compared to fiscal 2026 when OEM net sales were $40.6 and distribution and aftermarket net sales were $17.4. The increase in defense sales was driven by military aircraft and reflects continued growth in demand which is evident by our growing backlog. The acquisition of VACCO also contributed to the sales growth.

Current wording

Net sales increased $31.4, or 15.8% for the three months ended September 26, 2026 compared to the same period last fiscal year. The increase in net sales is attributable to increased volumes through the plants, coupled with favorable contract renewals and related inflationary adjustments. Our commercial aerospace markets, which consisted of $114.9 of OEM net sales and $21.5 of distribution and aftermarket net sales, increased by 17.4% compared to fiscal 2026 when OEM net sales were $96.5 and distribution and aftermarket net sales were $19.7. The OEM markets have continued to improve as build rates have steadily increased over the last several months. Our defense markets, which consisted of $67.5 of OEM net sales and $26.3 of distribution and aftermarket net sales, increased by 13.6% compared to fiscal 2026 when OEM net sales were $62.5 and distribution and aftermarket net sales were $20.1. The increase in defense net sales was driven by military aircraft and reflects continued growth in demand which is evident by our growing backlog. VACCO contributed $26.6 of net sales to the Aerospace & Defense segment in the second quarter of fiscal 2027 compared to $24.7 in the prior year.

Previous wording

Gross margin as a percentage of segment net sales was 44.5% for the first quarter of fiscal 2026 compared to 42.6% for the same period last fiscal year. The increase in gross margin as a percentage of net sales was primarily driven by efficiencies achieved at the plants in part due to increased sales volumes and favorable product mix. The better volumes allowed us to better absorb our overhead costs.

Current wording

Gross margin as a percentage of segment net sales was 42.2% for the second quarter of fiscal 2027 compared to 38.7% for the same period last fiscal year. The increase in gross margin as a percentage of net sales was primarily driven by efficiencies achieved at the plants in part due to increased sales volumes and favorable product mix. Gross margin for the second quarter of fiscal 2026 was unfavorably impacted by a $3.3 purchase accounting adjustment related to the VACCO acquisition.

Previous wording

Net sales increased $22.7, or 8.4%, for the three months ended June 27, 2026 compared to the same period last fiscal year. We saw improvements in nearly all of our end markets, including semicon, grain, and food and beverage and warehousing. Industrial OEM sales were $95.3 and $78.5 for the three month periods ended June 27, 2026 and June 28, 2025, respectively. Industrial sales to distribution and the aftermarket were $198.8 and $192.9 for the three month periods ended June 27, 2026 and June 28, 2025, respectively.

Current wording

Net sales increased $37.9, or 14.8%, for the three months ended September 26, 2026 compared to the same period last fiscal year. The increase in net sales reflects higher volumes through our plants and improved net commercial realization, supported by inflationary market adjustments and favorable competitive dynamics. We saw improvements in nearly all of our end markets, including semiconductor equipment, grain, food & beverage, aggregate & cement and mining & metals. Industrial OEM net sales were $97.8 and $78.7 for the three month periods ended September 26, 2026 and September 27, 2025, respectively. Industrial net sales to distribution and the aftermarket were $196.6 and $177.8 for the three month periods ended September 26, 2026 and September 27, 2025, respectively. Net sales for the three months ended September 26, 2026 included $2.0 of net sales from PSC. VACCO contributed $0.5 of net sales to the Industrial segment in the second quarter of fiscal 2027 compared to $0.0 in the prior year.

Previous wording

Gross margin for the three months ended June 27, 2026 was 50.2% of net sales, compared to 46.1% in the comparable period in fiscal 2026. The increase in gross margin as a percentage of net sales was primarily driven by sales volumes which have allowed us to better absorb our manufacturing overhead costs.

Current wording

Gross margin for the three months ended September 26, 2026 was 48.2% of net sales, compared to 48.2% in the comparable period in fiscal 2026. 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.

Previous wording

Corporate SG&A was $32.8, or 6.3% of net sales, for the first quarter of fiscal 2027 compared to $27.3, or 6.3% of net sales, for the same period last fiscal year. The quarter over quarter increase was primarily due to an increase in personnel costs.

Current wording

Corporate SG&A was $30.0, or 5.7% of net sales, for the second quarter of fiscal 2027 compared to $28.9, or 6.3% of net sales, for the same period last fiscal year. The quarter-over-quarter increase was primarily due to an increase in personnel costs.

Previous wording

As of June 27, 2026, we had cash of $124.5, of which approximately $47.4 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 discussed in further detail below, we also have the ability to borrow money from our existing credit facilities.

Current wording

As of September 26, 2026, we had cash of $89.3, of which approximately $47.5 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 discussed in further detail below, we also have the ability to borrow money from our existing credit facilities.

Previous wording

The Credit Agreement, which was entered into in fiscal 2022 and amended in fiscal 2023 and again on October 28, 2025, provides the Company with (a) the $1,300.0 Term Loan, which was used to fund a portion of the purchase price for the acquisition of Dodge and to pay related fees and expenses, and (b) the $500.0 Revolving Credit Facility.

Current wording

The Credit Agreement, which was entered into in fiscal 2022 and amended in fiscal 2023 and again on October 28, 2025, provides the Company with (a) the $1,300.0 Term Loan, which was used to fund a portion of the purchase price for the acquisition of Dodge and to pay related fees and expenses, and (b) the $500.0 Revolving Credit Facility. The Term Loan was repaid during the quarter ended September 26, 2026 and all related debt issuance costs were fully amortized.

Previous wording

Amounts outstanding under the Facilities generally bear interest, at the Company’s option, at either (a) a base rate determined by reference to the higher of (i) Wells Fargo’s prime lending rate, (ii) the federal funds effective rate plus 0.50% and (iii) Term SOFR 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 June 27, 2026, 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%.

Current wording

Amounts outstanding under the Revolving Credit Facility generally bear interest, at the Company’s option, at either (a) a base rate determined by reference to the higher of (i) Wells Fargo’s prime lending rate, (ii) the federal funds effective rate plus 0.50% and (iii) Term SOFR 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%, depending on the Company’s consolidated ratio of total net debt to consolidated EBITDA. The Revolving Credit Facility is subject to a SOFR floor of 0.00%. As of September 26, 2026, 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%.

Previous wording

Originally the Revolving Credit Facility was to expire in November 2026 but on October 28, 2025, the Credit Agreement was amended to, among other things, (i) extend the expiration date of the Revolving Credit Facility to October 2030, (ii) eliminate the minimum interest coverage ratio covenant from the Credit Agreement, and (iii) reduce the margin cap within the pricing grid on Term SOFR-based loans under the Revolving Credit Facility from 2.00% to 1.75%. All amounts outstanding under the Revolving Credit Facility will be payable on its expiration date.

Current wording

Originally the Revolving Credit Facility was to expire in November 2026 but on October 28, 2025, the Credit Agreement was amended to, among other things, (i) extend the expiration date to October 2030, (ii) eliminate the minimum interest coverage ratio covenant from the Credit Agreement, and (iii) reduce the margin cap within the pricing grid on Term SOFR-based loans from 2.00% to 1.75%. All amounts outstanding under the Revolving Credit Facility will be payable on its expiration date.

Previous wording

In connection with the amendment, new debt issuance costs totaled $1.8. Additionally, $0.6 of previously unamortized debt issuance costs associated with the Revolving Credit Facility will now be associated with the new arrangement. The total of $2.4 of debt issuance costs will be amortized through the new term of October 2030. The remaining portion of original debt issuance costs associated with the Term Loan of $1.6 will continue to be amortized through the end of the Term Loan in November 2026. As of June 27, 2026, there were $0.6 and $2.1 of unamortized debt issuance costs associated with the Term Loan and Revolving Credit Facility, respectively.

Current wording

New debt issuance costs in connection with the amendment totaled $1.8. Additionally, $0.6 of previously unamortized debt issuance costs associated with the Revolving Credit Facility will now be associated with the new arrangement. The total of $2.4 of debt issuance costs will be amortized through the new term of October 2030. As of September 26, 2026, there were $2.0 of unamortized debt issuance costs associated with the Revolving Credit Facility.

Previous wording

As of June 27, 2026, $96.0 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 June 27, 2026.

Current wording

As of September 26, 2026, $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 September 26, 2026. Since September 26, 2026, the Company has paid $45.0 on the Revolving Credit Facility, reducing the outstanding balance to $155.0.

Previous wording

One of our foreign subsidiaries, Schaublin SA, has a CHF 5.0 (approximately $6.0 USD) credit line with Credit Suisse (Switzerland) Ltd. to provide future working capital, if necessary. As of June 27, 2026, $0.1 was being utilized to provide a bank guarantee. Fees associated with this credit line are nominal.

Current wording

One of our foreign subsidiaries, Schaublin SA, has a CHF 5.0 (approximately $5.9) credit line with Credit Suisse (Switzerland) Ltd. to provide future working capital, if necessary. As of September 26, 2026, $0.1 was being utilized to provide a bank guarantee. Fees associated with this credit line are nominal.

Previous wording

In April 2026, Schaublin, entered into a CHF 9.8 (approximately $12.1 USD) secured credit line agreement with UBS Switzerland AG, and on April 27, 2026, Schaublin borrowed CHF 6.7 (approximately $8.3 USD) to finance the expansion of a facility in Poland. The line has an annual fixed interest rate of 2.00% and expires in April 2036, at which time all outstanding amounts will be due.

Current wording

In April 2026, Schaublin, entered into a CHF 9.8 (approximately $11.9) secured credit line agreement with UBS Switzerland AG, and on April 27, 2026, Schaublin borrowed CHF 6.7 (approximately $8.3) to finance the expansion of a facility in Poland. The line has an annual fixed interest rate of 2.00% and expires in April 2036, at which time all outstanding amounts will be due.

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, 2.9% 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) and took out a 10-year, 2.9% fixed-rate mortgage on the building for CHF 4.0 (approximately $4.5).

Previous wording

On August 12, 2024, the Company entered into the Cross Currency Swap with a third-party financial counterparty. The objective of the Cross Currency Swap is to economically hedge the Company’s net investment in its lower-tier European subsidiary, Schaublin, against adverse changes in the Swiss franc/U.S. dollar exchange rate. The Cross Currency Swap is based upon a net investment of CHF 69.4 ($80.0 USD) notional amount with a three-year maturity date. RBC receives a fixed U.S. dollar amount on a month-to-month basis based upon a fixed annual rate of 2.77% of the notional amount. At maturity, RBC will net-settle the principal of the Cross Currency Swap in cash with the counterparty. The Cross Currency Swap has been designated as a net investment hedge on an after-tax basis.

Current wording

On August 12, 2024, the Company entered into the Cross Currency Swap with a third-party financial counterparty. The objective of the Cross Currency Swap is to economically hedge the Company’s net investment in its lower-tier European subsidiary, Schaublin, against adverse changes in the Swiss franc/U.S. dollar exchange rate. The Cross Currency Swap is based upon a net investment of CHF 69.4 ($80.0) notional amount with a three-year maturity date. RBC receives a fixed U.S. dollar amount on a month-to-month basis based upon a fixed annual rate of 2.77% of the notional amount. At maturity, RBC will net-settle the principal of the Cross Currency Swap in cash with the counterparty. The Cross Currency Swap has been designated as a net investment hedge on an after-tax basis.

Previous wording

During the first three months of fiscal 2027, we generated cash of $171.8 from operating activities compared to $120.0 during the same period of fiscal 2026. The increase of $51.8 was the result of an increase in net income of $33.0, a favorable change in operating assets and liabilities of $14.8 and a favorable impact of non-cash activity of $4.0. The favorable change in operating assets and liabilities is detailed in the table below. The change in non-cash activity was driven by $0.1 more stock-based compensation, $3.7 more depreciation and amortization, $0.2 more noncash operating lease expense, $3.2 increase of deferred taxes, and $0.6 gain on asset dispositions, offset by $3.8 less restructuring costs.

Current wording

During the first six months of fiscal 2027, we generated cash of $278.2 from operating activities compared to $208.4 during the same period of fiscal 2026. The increase of $69.8 was the result of an increase in net income of $66.8 and a favorable change in operating assets and liabilities of $9.5 partially offset by an unfavorable impact of non-cash activity of $6.5. The favorable change in operating assets and liabilities is detailed in the table below. The change in non-cash activity was driven by $4.9 more depreciation and amortization, $0.9 more stock-based compensation, $0.3 more noncash operating lease expense and $0.2 more deferred financing costs offset by a $9.3 decrease of deferred taxes, $3.4 less restructuring costs and $0.1 less asset dispositions.

Previous wording

The following table summarizes the impact on cash flow from operating assets and liabilities for the first quarter of fiscal 2027 versus the first quarter of fiscal 2026.

Current wording

The following table summarizes the impact on cash flow from operating assets and liabilities for the second quarter of fiscal 2027 versus the second quarter of fiscal 2026.

Previous wording

During the first three months of fiscal 2027, we used cash of $24.9 for investing activities as compared to $15.7 used in the first three months of fiscal 2026. This increase in cash used was attributable to a $9.2 increase in capital expenditures.

Current wording

During the first six months of fiscal 2027, we used cash of $69.6 for investing activities as compared to $307.4 used in the first six months of fiscal 2026. This decrease in cash used was attributable to a $250.8 decrease in acquisition activity and $0.2 more proceeds from the sale of assets partially offset by $13.2 more capital expenditures.

Previous wording

During the first three months of fiscal 2027, we used cash of $79.4 for financing activities compared to $7.9 in the first three months of fiscal 2026. This increase in cash used was primarily attributable to $77.0 more in payments made on the Term Loan, $0.1 more in repayments of notes payable, and $9.1 less in exercises of stock-based awards partially offset by $5.0 less of repayments of revolving credit facilities, $1.4 less repurchases of common stock and $8.3 more in proceeds received from revolving credit facilities.

Current wording

During the first six months of fiscal 2027, cash used in financing activity was $176.4 compared to $154.0 of cash provided by financing activity in the first six months of fiscal 2026. This increase in cash used was primarily attributable to $191.7 less of proceeds received from revolving credit facilities, $128.0 more in payments made on the Term Loan, $17.0 less in exercises of stock-based awards, and $0.1 more in repayments of notes payable partially offset by $5.0 less of repayments of revolving credit facilities, $1.3 less repurchases of common stock and $0.1 less in principal payments on finance lease obligations.

Previous wording

Our capital expenditures were $24.9 for the three-month period ended June 27, 2026 compared to $15.7 for the three-month period ended June 28, 2025. We expect that capital expenditures for fiscal 2027 will be between 4.0% to 4.5% of our net sales for the fiscal year. We expect to fund these 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 were $45.6 for the six-month period ended September 26, 2026 compared to $32.4 for the six-month period ended September 27, 2025. We expect that capital expenditures for fiscal 2027 will be between 4.0% to 4.5% of our net sales for the fiscal year. We expect to fund these capital expenditures principally through existing cash and internally generated funds. We may also make substantial additional capital expenditures in connection with acquisitions.

Previous wording

Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We believe the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Notes to the Consolidated Financial Statements in our Annual Report describe the significant accounting estimates and policies used in preparation of our consolidated financial statements. Actual results in these areas could differ from management’s estimates. There were no significant changes in our critical accounting estimates during the first quarter of fiscal 2027.

Current wording

Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We believe the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Notes to the Consolidated Financial Statements in our Annual Report describe the significant accounting estimates and policies used in preparation of our consolidated financial statements. Actual results in these areas could differ from management’s estimates. There were no significant changes in our critical accounting estimates during the second quarter of fiscal 2027.