Rbc Bearings Incorporated · NYSE:RBC
Rbc Bearings — Baird Industrial Conference 2006
25 slides from Rbc Bearings's conference presentation, Nov 9, 2006
Slide 1: Baird Industrial Conference
Baird Industrial Conference Dr. Michael J. Hartnett, President and CEO November 8, 2006
Slide 2: Safe Harbor Statement
Safe Harbor Statement This document contains, or may be deemed to contain, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are “forward-looking
Slide 3: RBC Overview
RBC Overview
Slide 4: RBC Overview
RBC Overview Leading international manufacturer of highly–engineered, custom, performance–critical bearings IPO in August 2005 Secondary in April 2006 18 facilities worldwide 1,800 employees worldwide 15 acquisitions in 15 years Fiscal 2006: Net Sales up13%, Adjusted Operating Income up 30% Fiscal 2
Slide 5: Investment Highlights
Two-thirds of net sales from products with #1 or #2 market position Significant barriers to entry Stable recurring revenue base Broad diversification across customers and end markets Strong growth drivers for core business Multiple new growth opportunities Track record of successfully integrating ne
Slide 6: Business Overview
Business Overview
Slide 7: Precision Industrial Applications
Precision Industrial Applications
Slide 8: Precision Aircraft Bearings
Precision Aircraft Bearings
Slide 9: Significant Barriers to Entry – "The Moat"
Significant Barriers to Entry – “The Moat” Specialized products Market requires high service levels, extensive technical support, short lead times and small production runs Highly engineered and proprietary products Approximately 40% of sales from sole–source or proprietary products requiring diffic
Slide 10: Stable Recurring Revenue Base – "The Franchise"
Stable Recurring Revenue Base – “The Franchise” Extensive installed base of proprietary products Require frequent replacement Strong, long–term customer relationships Focus on customer service and aftermarket support Long–term contracts and sole–source agreements Aftermarket sales represent approxim
Slide 11: Strong Customer Base
Strong Customer Base Aerospace Defense Industrial Aftermarket Serve a broad range of end markets and many blue chip customers, adding value through specialty precision bearing applications
Slide 12: Demonstrated Acquisition Model
Demonstrated Acquisition Model Acquisition Track Record: 15 successful acquisitions in 15 years Average purchase multiple of 6.0x at acquisition and 2.1x pro forma Acquisition Criteria: Small, undervalued Complementary products / channels Significant margin potential Cash flow enhancing Post Acquisi
Slide 13: Growth Strategy
Growth Strategy 12
Slide 14: Strong Outlook for RBC's Core Business
Strong Outlook for RBC’s Core Business Poor Good Excellent P G E ______________ Note: Shading indicates RBC revenue driver. Market Segment FY'07 Cycle Direction Industrial OEM Machine Tool and Specific Equipment G+ Mid Steady ++ Construction and Mining E Mid Steady + Pumps and Hydraulics E Semicondu
Slide 15: Multiple New Growth Opportunities
Multiple New Growth Opportunities Large pipeline of important new platforms New products for existing platforms Increasing aftermarket penetration Boeing 787 Airbus A380 Airbus A400 Air Cargo GE90 SNECMA GE90 Black Hawk Apache Harrier Aircraft J Star JSF PWA F100 McMaster Carr Applied Materials
Slide 16: Selected Growth Opportunities
Selected Growth Opportunities Airbus Boeing Commercial Airplanes Primary supplier of wing bearings Sole US provider of airframe bearing products A400, A380 program under development 456 planes to be delivered in CY'06 (+21% yoy) Primary supplier of wing bearings Major supplier of airframe bearings f
Slide 17: Selected Growth Opportunities
Selected Growth Opportunities Strategically manage inventory to better respond to, and capitalize on, distributor demand (“one-stop supplier”) Expand our base of independent distributors through RBC e-Shop™ Geographically expand our sales force Increase use of Internet-based sales RBC’s Position 35%
Slide 18: Financial Overview
Financial Overview Ww
Slide 19: A Track Record of Growth
A Track Record of Growth 10-Year Net Sales CAGR = 13% ($mm) Global Recession Net Sales Fiscal Year Ended March __________________ ( $82.2 $93.4 $136.0 $147.9 $177.1 $176.4 $168.3 $172.9 $187.3 $243.0 $274.5 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 20
Slide 20: Strong Current Momentum
Strong Current Momentum Revenue ($mm) 13% Adjusted Operating Income (1) Adjusted Net Income (2) __________________ See reconciliation of Reported Operating Income to Adjusted Operating Income – slide 23 See reconciliation of Reported Net Income to Adjusted Net Income – slide 23 44% 30% ($mm) ($mm) $
Slide 21: Strong Current Momentum
Strong Current Momentum Revenue ($mm) 13% Adjusted Operating Income (1) Adjusted Net Income (2) 102% 27% ($mm) ($mm) __________________ See reconciliation of Reported Operating Income to Adjusted Operating Income – slide 24 See reconciliation of Reported Net Income to Adjusted Net Income – slide 24
Slide 22: Appendix
Appendix 21
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to disclosing results of operations that are determined in accordance with generally accepted accounting principles (“GAAP”), this document also discloses non-GAAP results of operations that exclude certain charges. These non-GAAP measures adjust for charges t
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures April 1, April 2, Reconciliation of Reported Operating 2006 2005 Income to Adjusted Operating Income: Reported operating income 38,579 $ 32,139 $ Stock options compensation expense 365 420 Non-recurring compensation expense 5,200 - Management service fee
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures September 30, October 1, Reconciliation of Reported Operating Income to 2006 2005 Adjusted Operating Income: Reported operating income 26,108 $ 15,491 $ Stock options compensation expense 252 142 Non-recurring compensation expense - 5,200 Management serv