Premium machine tools & accessories company RBC Bearings Inc. (NASDAQ:ROLL) reported strong results for fourth-quarter fiscal 2016. The impressive results came on the back of robust operating performance as well as strong business of aerospace sector in both aftermarket activity and commercial original equipment manufacturing.
Diluted earnings for the quarter of 86 cents per share surpassed the Zacks Consensus Estimate of 83 cents. The bottom line also surged 17.8% year over year.
For full-year fiscal 2016, adjusted earnings came in at $3.14 per share, higher than the year-ago level of $2.74.
Net sales of $162.3 million surged 43.1% year over year. The top line also surpassed the Zacks Consensus Estimate of $160 million.
RBC Bearings’ cost of sales during the quarter was $101.9 million, up 48.7% year over year. This metric represents 62.8% of aggregate revenues.
Adjusted gross margin fell 240 basis points (bps) year over year to 37.2%. Total operating expenses were $29.5 million, up 50.9% year over year.
RBC Bearings exited the quarter with backlog of $346.4 million compared with $209.6 million as of Mar 28, 2015.
For full-year fiscal 2016, net sales were $597.5 million, down from $445.3 million recorded in the year-ago comparable period.
Other Financial Fundamentals
RBC Bearings exited the quarter with total debt of $363.7 million, much higher than $9.2 million in the year-ago period.
In the fiscal fourth-quarter, RBC Bearings generated $21.6 million of cash from its operating activities, up from $9.4 million in the prior-year quarter. Capital spending increased 23.9% year over year to $6.2 million.
Segmental Performance
Plain Bearings revenues grew 23.7% year over year to $73.1 million; while Roller Bearings sales fell 12.7% to $28 million. Ball Bearings sales were $14.9 million, up approximately 0.5% year over year. Engineered Products sales totaled $46.3 million, considerably higher than $7.5 million generated in the year-ago period.
Outlook
RBC Bearings continues to project a positive outlook. The company expects the newly acquired Sargent Aerospace & Defense business to support growth in revenues and margins, going ahead. The company also intends to enhance its earnings and backlog on the back of greater operational efficiency in the future.
Stocks to Consider
RBC Bearings presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Gorman-Rupp Co. (NYSE:GRC) , Kadant Inc. (NYSE:KAI) and Luxfer Holdings PLC (NYSE:LXFR) . All the three stocks presently sport a Zacks Rank #1 (Strong Buy).
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