RBC Bearings closed fiscal 2026 with another quarter of double-digit sales and earnings growth, then pointed to a similarly strong start to fiscal 2027, underscoring continued demand for highly engineered bearings, components and systems used in aerospace, defense and industrial markets.

The company said Friday that it expects net sales of approximately $500.0 million to $510.0 million in the first quarter of fiscal 2027, compared with $436.0 million in the prior-year quarter. That range implies year-over-year growth of 14.7% to 17.0%. Excluding about $28.0 million of expected net sales from VACCO, the defense and aerospace systems business acquired in July 2025, RBC Bearings projected sales growth of 8.3% to 10.6%.

The guidance was the clearest forward-looking signal in the company’s latest earnings release. It suggested that RBC Bearings expects continued growth beyond acquisition effects, while also reflecting the expanding contribution from a business that has increased the company’s exposure to aerospace and defense programs. Management also forecast adjusted gross margin of 45.25% to 45.5% for the fiscal first quarter and selling, general and administrative expense of 16.50% to 16.75% of sales.

For the fiscal fourth quarter ended March 28, net sales rose 18.3% to $518.0 million from $437.7 million a year earlier. Aerospace and defense sales increased 41.2%, while industrial sales rose 5.5%. The quarter included $30.0 million of sales from VACCO. The results placed RBC Bearings’ reported revenue above the level summarized by Seeking Alpha’s earnings transcript page, which showed revenue of $518.0 million exceeding expectations by $11.23 million and adjusted EPS of $3.62 beating by $0.30.

Net income attributable to common stockholders was $91.7 million, or $2.89 a diluted share, compared with $72.7 million, or $2.30 a share, in the prior-year period. On an adjusted basis, net income was $114.9 million, up from $89.3 million, while adjusted diluted earnings per share rose to $3.62 from $2.83.

Margins remained a key part of the quarter’s earnings story. Gross margin was $230.0 million, or 44.4% of sales, compared with $193.4 million, or 44.2%, a year earlier. Adjusted gross margin was $234.9 million, or 45.3% of sales, compared with $193.4 million, or 44.2%, in the year-earlier quarter. Operating income increased to $119.1 million from $100.7 million, while adjusted operating income rose to $124.3 million from $101.6 million.

The company’s adjusted EBITDA margin also expanded. Adjusted EBITDA was 32.6% of sales in the fourth quarter, compared with 31.9% a year earlier. The improvement reflected operating leverage on higher sales, particularly in aerospace and defense, while industrial growth turned positive enough to support overall expansion despite remaining much slower than the aerospace and defense segment.

For the full fiscal year, RBC Bearings reported net sales of $1.87 billion, an increase of 14.3% from $1.64 billion in fiscal 2025. Aerospace and defense sales rose 32.9% for the year, while industrial sales increased 3.8%. Net income attributable to common stockholders increased to $287.6 million, or $9.09 a diluted share, from $233.8 million, or $7.70 a share, in the prior year. Adjusted net income attributable to common stockholders rose to $392.0 million from $303.8 million, and adjusted diluted earnings per share increased 23.8% to $12.39 from $10.01.

Adjusted EBITDA for fiscal 2026 was $605.3 million, up from $519.8 million in fiscal 2025. Adjusted EBITDA as a percentage of sales increased to 32.4% from 31.8%. RBC Bearings’ adjusted gross margin for the year was 45.2%, compared with 44.4% in fiscal 2025, while GAAP gross margin was flat at 44.4%.

Chairman and Chief Executive Michael Hartnett said the company ended fiscal 2026 with a strong quarter driven by continued expansion in aerospace and defense and accelerating growth in industrial. He said management remained encouraged by the operating environment and momentum across the business heading into fiscal 2027.

The scale of the order book sharpened that outlook. RBC Bearings said backlog was $2.3 billion at March 28, compared with $2.1 billion at Dec. 27 and $900 million at March 29, 2025. The year-over-year increase gives the company a larger base of scheduled work as it enters the new fiscal year, though backlog conversion in aerospace and defense can depend on customer production schedules, defense procurement timing, supply-chain availability and program-specific delivery cadence.

The company’s aerospace and defense exposure has become increasingly central to the earnings narrative. Aerospace and defense revenue growth of more than 40% in the fourth quarter followed a year in which the segment grew nearly 33%. Those rates are substantially above the industrial segment’s growth, leaving RBC Bearings more dependent on sustained strength in aircraft, engine, space, marine and defense-related applications. The VACCO acquisition amplified that mix shift, adding specialized products for defense and aerospace customers and contributing $30.0 million in fourth-quarter sales.

Industrial demand, by contrast, remained positive but more measured. The 5.5% fourth-quarter increase and 3.8% full-year increase suggest that RBC Bearings is still growing in the segment, but at a pace closer to underlying industrial production and customer capital spending trends. For investors, that distinction matters because industrial sales can be more exposed to inventory cycles, manufacturing activity and interest-rate-sensitive capital projects, while aerospace and defense demand is often supported by longer program backlogs and replacement cycles.

Cost structure also remains in focus. SG&A expense was $86.9 million in the fourth quarter, up $14.8 million from $72.1 million a year earlier. As a share of sales, SG&A was 16.8%, compared with 16.5% in the prior-year quarter. Other operating expenses were $24.0 million, compared with $20.6 million a year earlier, including $21.4 million of amortization of intangible assets, $0.2 million of acquisition costs, $0.1 million of restructuring costs and $2.3 million of other items.

Interest expense declined, offering another earnings support. Net interest expense was $11.2 million in the fourth quarter, compared with $12.8 million a year earlier, with the company attributing the decrease primarily to debt reduction efforts. That improvement helped lift net income, though tax items also affected reported results. The effective tax rate was 15.8% in the fourth quarter, compared with 17.4% a year earlier. Excluding discrete items, the company said the effective tax rate would have been 23.8%.

RBC Bearings’ results also highlight the continued importance of non-GAAP measures in how the company presents its operating performance. The company uses adjusted gross margin, adjusted operating income, adjusted net income, adjusted EPS and adjusted EBITDA to exclude items such as amortization related to acquired intangible assets, stock-based compensation, restructuring charges, acquisition costs and other items. Management said those measures help investors evaluate ongoing performance, while also cautioning that non-GAAP results should be considered in addition to, not as a substitute for, GAAP figures.

From an earnings perspective, the gap between GAAP and adjusted EPS remains material. Fourth-quarter diluted EPS was $2.89 on a GAAP basis and $3.62 on an adjusted basis. For the full fiscal year, GAAP diluted EPS was $9.09 and adjusted diluted EPS was $12.39. The difference reflects, among other factors, acquisition-related amortization and other adjustments tied to the company’s expansion strategy.

The fiscal first-quarter outlook suggests management expects the company to stay on a high-growth trajectory immediately after the record year. At the midpoint of the guidance range, first-quarter sales would be $505.0 million, up 15.8% from the prior-year quarter. Excluding VACCO, the midpoint would imply organic or comparable sales growth near the high-single-digit to low-double-digit range, depending on mix and timing.

That outlook places attention on whether adjusted gross margin can remain above 45% as the company integrates acquired operations, manages supply costs and scales production. RBC Bearings’ forecast for adjusted gross margin of 45.25% to 45.5% would be broadly consistent with the 45.3% adjusted gross margin reported in the fourth quarter and slightly above the 45.2% adjusted margin for fiscal 2026. Maintaining that level would indicate that revenue growth is not coming at the expense of pricing discipline or manufacturing efficiency.

The company’s fiscal 2026 performance also reflected cash conversion. RBC Bearings reported free cash flow of $254.2 million for the year, compared with $221.4 million in fiscal 2025. Fourth-quarter free cash flow was $67.5 million. Cash generation is relevant because RBC Bearings has used acquisitions to broaden its product portfolio and end-market reach, while also citing debt reduction as a factor behind lower interest expense.

RBC Bearings’ May 15 SEC filing included the same press release as an exhibit and showed the earnings release was furnished under an 8-K report of unscheduled material events or corporate event. The company also filed its annual report the same day, giving investors a fuller record of fiscal 2026 performance and risk factors as the new fiscal year begins.

The principal risk to the outlook is that strong backlog and aerospace demand do not eliminate execution pressure. The company cited uncertainties including general economic conditions, geopolitical factors including import and export tariffs, future aerospace and defense and industrial market activity, raw material pricing, debt levels, information technology systems, acquisition integration and competitive conditions. Those factors could affect the pace at which backlog converts into revenue or the margins attached to that revenue.

Still, the latest earnings release gives RBC Bearings a solid setup entering fiscal 2027. The company is guiding for double-digit first-quarter sales growth, its adjusted margin outlook remains above 45%, and backlog has more than doubled from a year earlier. For the market, the next test will be whether aerospace and defense strength, VACCO contribution and improving industrial demand can sustain earnings growth beyond the first quarter without eroding the margin gains achieved in fiscal 2026.