UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~January 1,~~December 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~to .~~to.

Commission File Number: 001-40840

RBC BEARINGS INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware		95-4372080
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One Tribology Center Oxford, CT		06478
(Address of principal executive offices)		(Zip Code)

(203) 267-7001
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	~~ROLL~~RBC	~~Nasdaq NMS~~The New York Stock Exchange
5.00% Series A Mandatory Convertible Preferred Stock, par value $0.01 per share	~~ROLLP~~RBCP	~~Nasdaq NMS~~The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February ~~4, 2022,~~3, 2023, RBC Bearings Incorporated had ~~28,876,359~~29,021,918 shares of Common Stock and 4,600,000 shares of Preferred Stock outstanding.

TABLE OF CONTENTS

Part I -		FINANCIAL INFORMATION		1

Item 1.	Consolidated Financial Statements		1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2120
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		3433
Item 4.	Controls and Procedures		34
	Changes in Internal Control over Financial Reporting		34

Part II -		OTHER INFORMATION		35

Item 1.	Legal Proceedings		35
Item 1A.	Risk Factors		35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		3735
Item 3.	Defaults Upon Senior Securities		3736
Item 4.	Mine Safety Disclosures		3736
Item 5.	Other Information		3736
Item 6.	Exhibits		3836

Part I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

RBC Bearings Incorporated

Consolidated Balance Sheets

(dollars in thousands, except per share data)

	January 1, 2022			April 3, 2021			December 31, 2022			April 2, 2022
	(Unaudited)						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	255,503		$	151,086		$	82,036		$	182,862
Marketable securities		—			90,249
Accounts receivable, net of allowance for doubtful accounts of $2,619 as of January 1, 2022 and $1,792 as of April 3, 2021		199,785			110,472
Accounts receivable, net of allowance for doubtful accounts of $3,537 as of December 31, 2022 and $2,737 as of April 2, 2022								214,536			247,487
Inventory		510,175			364,147			577,627			516,140
Prepaid expenses and other current assets		21,774			12,248			27,572			15,748
Total current assets		987,237			728,202			901,771			962,237
Property, plant and equipment, net		396,164			208,264			375,763			386,732
Operating lease assets, net		42,816			35,664			42,015			44,535
Goodwill		1,886,874			277,536			1,869,238			1,902,104
Intangible assets, net		1,524,715			154,399			1,468,673			1,511,515
Other noncurrent assets		37,244			30,195			35,421			38,294
Total assets	$	4,875,050		$	1,434,260		$	4,692,881		$	4,845,417

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	140,374		$	36,336		$	136,722		$	158,606
Accrued expenses and other current liabilities		131,169			43,564			136,162			145,252
Current operating lease liabilities		7,974			5,726			8,244			8,059
Current portion of long-term debt		63,519			2,612			1,544			1,543
Total current liabilities		343,036			88,238			282,672			313,460
Long-term debt, less current portion		1,726,734			13,495			1,462,534			1,686,798
Long-term operating lease liabilities		35,076			29,982			34,535			36,680
Deferred income taxes		307,819			17,178			303,999			315,463
Other noncurrent liabilities		127,411			55,416			128,215			120,408
Total liabilities		2,540,076			204,309			2,211,955			2,472,809

Stockholders’ equity:
Preferred stock, $.01 par value; authorized shares: 10,000,000 as of January 1, 2022 and April 3, 2021, respectively; issued shares: 4,600,000 and 0 as of January 1, 2022 and April 3, 2021, respectively		46			—
Common stock, $.01 par value; authorized shares: 60,000,000 as of January 1, 2022 and April 3, 2021, respectively; issued shares: 29,798,240 and 26,110,320 as of January 1, 2022 and April 3, 2021, respectively		298			261
Preferred stock, $.01 par value; authorized shares: 10,000,000 as of December 31, 2022 and April 2, 2022; issued shares: 4,600,000 as of December 31, 2022 and April 2, 2022								46			46
Common stock, $.01 par value; authorized shares: 60,000,000 as of December 31, 2022 and April 2, 2022; issued shares: 29,980,270 and 29,807,208 as of December 31, 2022 and April 2, 2022, respectively								300			298
Additional paid-in capital		1,531,552			445,073			1,585,701			1,564,261
Accumulated other comprehensive loss		(10,896	)		(10,409	)		(12,683	)		(5,800	)
Retained earnings		885,456			858,852			986,473			886,155
Treasury stock, at cost, 923,340 shares and 884,701 shares as of January 1, 2022 and April 3, 2021, respectively		(71,482	)		(63,826	)
Treasury stock, at cost, 961,374 shares and 928,322 shares as of December 31, 2022 and April 2, 2022, respectively								(78,911	)		(72,352	)
Total stockholders’ equity		2,334,974			1,229,951			2,480,926			2,372,608
Total liabilities and stockholders’ equity	$	4,875,050		$	1,434,260		$	4,692,881		$	4,845,417

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Operations

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended						Nine Months Ended				Three Months Ended					Nine Months Ended
	January 1, 2022			December 26, 2020			January 1, 2022		December 26, 2020		December 31, 2022		January 1, 2022			December 31, 2022		January 1, 2022
Net sales	$	266,953		$	145,861		$	584,058	$	448,689	$	351,625	$	266,953		$	1,074,872	$	584,058
Cost of sales		173,608			90,273			364,476		277,052		205,585		173,608			636,533		364,476
Gross margin		93,345			55,588			219,582		171,637		146,040		93,345			438,339		219,582
Operating expenses:
Selling, general and administrative		43,196			25,739			102,672		78,591		56,782		41,702			170,129		113,137
Other, net		35,778			3,308			44,693		11,328		18,866		35,778			61,331		44,693
Total operating expenses		78,974			29,047			147,365		89,919		75,648		77,480			231,460		157,830
Operating income		14,371			26,541			72,217		81,718		70,392		15,865			206,879		61,752
Interest expense, net		11,848			327			27,937		1,095		20,901		11,848			55,032		27,937
Other non-operating (income)/expense		1,395			(50	)		639		203
Other non-operating expense												1,539		1,395			2,490		639
Income before income taxes		1,128			26,264			43,641		80,420		47,952		2,622			149,357		33,176
Provision for income taxes		1,191			4,695			10,776		15,741		11,688		2,076			31,853		9,944
Net income/(loss)		(63	)		21,569			32,865		64,679
Net income												36,264		546			117,504		23,232
Preferred stock dividends		5,751			—			6,261		—		5,686		5,751			17,186		6,261
Net income/(loss) available to common stockholders	$	(5,814	)	$	21,569		$	26,604	$	64,679
Net income/(loss) attributable to common stockholders											$	30,578	$	(5,205	)	$	100,318	$	16,971

Net income/(loss) per share available to common stockholders:
Net income/(loss) per share attributable to common stockholders:
Basic	$	(0.20	)	$	0.87		$	1.01	$	2.61	$	1.06	$	(0.18	)	$	3.49	$	0.64
Diluted	$	(0.20	)	$	0.86		$	1.00	$	2.59	$	1.05	$	(0.18	)	$	3.45	$	0.63
Weighted average common shares:
Basic		28,618,495			24,861,792			26,379,984		24,816,451		28,805,305		28,618,495			28,744,732		26,379,984
Diluted		28,618,495			25,060,812			26,663,990		24,985,848		29,120,318		28,618,495			29,053,608		26,757,811

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Comprehensive Income/(Loss)

(dollars in thousands)

(Unaudited)

	Three Months Ended					Nine Months Ended					Three Months Ended						Nine Months Ended
	January 1, 2022			December 26, 2020		January 1, 2022			December 26, 2020		December 31, 2022			January 1, 2022			December 31, 2022			January 1, 2022
Net income/(loss)	$	(63	)	$	21,569	$	32,865		$	64,679
Net income											$	36,264		$	546		$	117,504		$	23,232
Pension and postretirement liability adjustments, net of taxes ⁽¹⁾		318			260		954			779		535			318			1,605			954
Change in fair value of derivatives												(1,116	)		—			(1,116	)		—
Foreign currency translation adjustments		(1,951	)		3,823		(1,441	)		5,609		8,106			(1,951	)		(7,372	)		(1,441	)
Total comprehensive income/(loss)	$	(1,696	)	$	25,652	$	32,378		$	71,067	$	43,789		$	(1,087	)	$	110,621		$	22,745

⁽¹⁾

These adjustments were net of tax expense of ~~$82~~$148 and ~~$79~~$82 for the three-month periods ended December 31, 2022 and January 1, 2022, ~~and December 26, 2020,~~ respectively and ~~$247~~$444 and ~~$237~~$247 for the nine-month periods ended December 31, 2022 and January 1, 2022, ~~and December 26, 2020,~~ respectively.

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Stockholders’ Equity

(dollars in thousands)

(Unaudited)

	Common Stock					Preferred Stock				Additional Paid-in			Accumulated Other Comprehensive			Retained			Treasury Stock						Total Stockholders’			Common Stock				Preferred Stock				Additional Paid-in		Accumulated Other Comprehensive			Retained			Treasury Stock						Total Stockholders’
	Shares			Amount		Shares		Amount		Capital			Income/(Loss)			Earnings			Shares			Amount			Equity			Shares		Amount		Shares		Amount		Capital		Income/(Loss)			Earnings			Shares			Amount			Equity
Balance at April 3, 2021		26,110,320		$	261		—	$	—	$	445,073		$	(10,409	)	$	858,852			(884,701	)	$	(63,826	)	$	1,229,951
Balance at April 2, 2022																													29,807,208	$	298		4,600,000	$	46	$	1,564,261	$	(5,800	)	$	886,155			(928,322	)	$	(72,352	)	$	2,372,608
Net income		—			—		—		—		—			—			25,999			—			—			25,999			—		—		—		—		—		—			37,438			—			—			37,438
Share-based compensation		—			—		—		—		5,772			—			—			—			—			5,772
Repurchase of common stock		—			—		—		—		—			—			—			(31,572	)		(6,264	)		(6,264	)
Exercise of equity awards		135,518			2		—		—		16,679			—			—			—			—			16,681
Change in net prior service cost and actuarial losses, net of tax expense of $83		—			—		—		—		—			318			—			—			—			318
Issuance of restricted stock, net of forfeitures		91,056			—		—		—		—			—			—			—			—			—
Currency translation adjustments		—			—		—		—		—			1,919			—			—			—			1,919
Balance at July 3, 2021		26,336,894		$	263		—	$	—	$	467,524		$	(8,172	)	$	884,851			(916,273	)	$	(70,090	)	$	1,274,376
Net income		—			—		—		—		—			—			6,929			—			—			6,929
Share-based compensation		—			—		—		—		6,224			—			—			—			—			6,224
Preferred stock issuance, net of issuance costs		—			—		4,600,000		46		445,407			—			—			—			—			445,453
Common stock issuance, net of issuance costs		3,450,000			35		—		—		605,642			—			—			—			—			605,677
Stock-based compensation																													—		—		—		—		3,819		—			—			—			—			3,819
Preferred stock dividends		—			—		—		—		—			—			(510	)		—			—			(510	)		—		—		—		—		—		—			(5,750	)		—			—			(5,750	)
Repurchase of common stock		—			—		—		—		—			—			—			(406	)		(92	)		(92	)		—		—		—		—		—		—			—			(30,469	)		(5,984	)		(5,984	)
Exercise of equity awards		1,332			—		—		—		131			—			—			—			—			131			13,713		1		—		—		1,459		—			—			—			—			1,460
Change in net prior service cost and actuarial losses, net of taxes of $82		—			—		—		—		—			318			—			—			—			318
Change in net prior service cost and actuarial losses, net of tax expense of $148																													—		—		—		—		—		535			—			—			—			535
Issuance of restricted stock, net of forfeitures		(1,064	)		—		—		—		—			—			—			—			—			—			56,955		—		—		—		—		—			—			—			—			—
Currency translation adjustments		—			—		—		—		—			(1,409	)		—			—			—			(1,409	)		—		—		—		—		—		(6,485	)		—			—			—			(6,485	)
Balance at October 2, 2021		29,787,162		$	298		4,600,000	$	46	$	1,524,928		$	(9,263	)	$	891,270			(916,679	)	$	(70,182	)	$	2,337,097
Net income/(loss)		—			—		—		—		—			—			(63	)		—			—			(63	)
Share-based compensation		—			—		—		—		6,038			—			—			—			—			6,038
Balance at July 2, 2022																													29,877,876	$	299		4,600,000	$	46	$	1,569,539	$	(11,750	)	$	917,843			(958,791	)	$	(78,336	)	$	2,397,641
Net income																													—		—		—		—		—		—			43,802			—			—			43,802
Stock-based compensation																													—		—		—		—		4,354		—			—			—			—			4,354
Preferred stock dividends		—			—		—		—		—			—			(5,751	)		—			—			(5,751	)		—		—		—		—		—		—			(5,750	)		—			—			(5,750	)
Repurchase of common stock		—			—		—		—		—			—			—			(6,661	)		(1,300	)		(1,300	)		—		—		—		—		—		—			—			(63	)		(15	)		(15	)
Exercise of equity awards		9,759			—		—		—		905			—			—			—			—			905			89,509		1		—		—		8,562		—			—			—			—			8,563
Change in net prior service cost and actuarial losses, net of taxes of $82		—			—		—		—		—			318			—			—			—			318
Change in net prior service cost and actuarial losses, net of tax expense of $148																													—		—		—		—		—		535			—			—			—			535
Issuance of restricted stock, net of forfeitures		1,319			—		—		—		—			—			—			—			—			—			8,529		—		—		—		—		—			—			—			—			—
Preferred stock issuance, net of issuance costs		—			—		—		—		(134	)		—			—			—			—			(134	)
Common stock issuance, net of issuance costs		—			—		—		—		(185	)		—			—			—			—			(185	)
Currency translation adjustments		—			—		—		—		—			(1,951	)		—			—			—			(1,951	)		—		—		—		—		—		(8,993	)		—			—			—			(8,993	)
Balance at January 1, 2022		29,798,240		$	298		4,600,000	$	46	$	1,531,552		$	(10,896	)	$	885,456			(923,340	)	$	(71,482	)	$	2,334,974
Balance at October 1, 2022																													29,975,914	$	300		4,600,000	$	46	$	1,582,455	$	(20,208	)	$	955,895			(958,854	)	$	(78,351	)	$	2,440,137
Net income																													—		—		—		—		—		—			36,264			—			—			36,264
Stock-based compensation																													—		—		—		—		2,874		—			—			—			—			2,874
Preferred stock dividends																													—		—		—		—		—		—			(5,686	)		—			—			(5,686	)
Repurchase of common stock																													—		—		—		—		—		—			—			(2,520	)		(560	)		(560	)
Exercise of equity awards																													3,714		—		—		—		372		—			—			—			—			372
Change in net prior service cost and actuarial losses, net of tax expense of $148																													—		—		—		—		—		535			—			—			—			535
Issuance of restricted stock, net of forfeitures																													642		—		—		—		—		—			—			—			—			—
Change in fair value of derivatives																													—		—		—		—		—		(1,116	)		—			—			—			(1,116	)
Currency translation adjustments																													—		—		—		—		—		8,106			—			—			—			8,106
Balance at December 31, 2022																													29,980,270	$	300		4,600,000	$	46	$	1,585,701	$	(12,683	)	$	986,473			(961,374	)	$	(78,911	)	$	2,480,926

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Stockholders’ Equity (continued)

(dollars in thousands)

(Unaudited)

	Common Stock					Additional Paid-in		Accumulated Other Comprehensive			Retained		Treasury Stock						Total Stockholders’			Common Stock					Preferred Stock				Additional Paid-in			Accumulated Other Comprehensive			Retained			Treasury Stock						Total Stockholders’
	Shares			Amount		Capital		Income/(Loss)			Earnings		Shares			Amount			Equity			Shares			Amount		Shares		Amount		Capital			Income/(Loss)			Earnings			Shares			Amount			Equity
Balance at March 28, 2020		25,881,415		$	259	$	412,400	$	(6,898	)	$	769,219		(838,982	)	$	(56,981	)	$	1,117,999
Balance at April 3, 2021																							26,110,320		$	261		—	$	—	$	462,616		$	(10,409	)	$	843,456			(884,701	)	$	(63,826	)	$	1,232,098
Net income		—			—		—		—			22,689		—			—			22,689			—			—		—		—		—			—			24,038			—			—			24,038
Share-based compensation		—			—		5,438		—			—		—			—			5,438
Stock-based compensation																							—			—		—		—		7,182			—			—			—			—			7,182
Repurchase of common stock		—			—		—		—			—		(31,179	)		(4,391	)		(4,391	)		—			—		—		—		—			—			—			(31,572	)		(6,264	)		(6,264	)
Exercise of equity awards		4,200			—		231		—			—		—			—			231			135,518			2		—		—		16,679			—			—			—			—			16,681
Change in net prior service cost and actuarial losses, net of taxes of $79		—			—		—		260			—		—			—			260
Change in net prior service cost and actuarial losses, net of tax expense of $83																							—			—		—		—		—			318			—			—			—			318
Issuance of restricted stock, net of forfeitures		56,157			—		—		—			—		—			—			—			91,056			—		—		—		—			—			—			—			—			—
Currency translation adjustments		—			—		—		409			—		—			—			409			—			—		—		—		—			1,919			—			—			—			1,919
Balance at June 27, 2020		25,941,772		$	259	$	418,069	$	(6,229	)	$	791,908		(870,161	)	$	(61,372	)	$	1,142,635
Net income		—			—		—		—			20,421		—			—			20,421
Share-based compensation		—			—		5,231		—			—		—			—			5,231
Balance at July 3, 2021																							26,336,894		$	263		—	$	—	$	486,477		$	(8,172	)	$	867,494			(916,273	)	$	(70,090	)	$	1,275,972
Net loss																							—			—		—		—		—			—			(1,352	)		—			—			(1,352	)
Stock-based compensation																							—			—		—		—		16,773			—			—			—			—			16,773
Preferred stock issuance, net of issuance costs																							—			—		4,600,000		46		445,407			—			—			—			—			445,453
Common stock issuance, net of issuance costs																							3,450,000			35		—		—		605,642			—			—			—			—			605,677
Preferred stock dividends																							—			—		—		—		—			—			(510	)		—			—			(510	)
Repurchase of common stock		—			—		—		—			—		(62	)		(8	)		(8	)		—			—		—		—		—			—			—			(406	)		(92	)		(92	)
Exercise of equity awards		31,200			1		2,188		—			—		—			—			2,189			1,332			—		—		—		131			—			—			—			—			131
Change in net prior service cost and actuarial losses, net of taxes of $79		—			—		—		259			—		—			—			259
Change in net prior service cost and actuarial losses, net of tax expense of $82																							—			—		—		—		—			318			—			—			—			318
Issuance of restricted stock, net of forfeitures		(2,299	)		—		—		—			—		—			—			—			(1,064	)		—		—		—		—			—			—			—			—			—
Currency translation adjustments		—			—		—		1,377			—		—			—			1,377			—			—		—		—		—			(1,409	)		—			—			—			(1,409	)
Balance at September 26, 2020		25,970,673		$	260	$	425,488	$	(4,593	)	$	812,329		(870,223	)	$	(61,380	)	$	1,172,104
Balance at October 2, 2021																							29,787,162		$	298		4,600,000	$	46	$	1,554,430		$	(9,263	)	$	865,632			(916,679	)	$	(70,182	)	$	2,340,961
Net income		—			—		—		—			21,569		—			—			21,569			—			—		—		—		—			—			546			—			—			546
Share-based compensation		—			—		5,173		—			—		—			—			5,173
Stock-based compensation																							—			—		—		—		4,544			—			—			—			—			4,544
Preferred stock issuance, net of issuance costs																							—			—		—		—		(134	)		—			—			—			—			(134	)
Common stock issuance, net of issuance costs																							—			—		—		—		(185	)		—			—			—			—			(185	)
Preferred stock dividends																							—			—		—		—		—			—			(5,751	)		—			—			(5,751	)
Repurchase of common stock		—			—		—		—			—		(10,873	)		(1,807	)		(1,807	)		—			—		—		—		—			—			—			(6,661	)		(1,300	)		(1,300	)
Exercise of equity awards		40,199			—		3,685		—			—		—			—			3,685			9,759			—		—		—		905			—			—			—			—			905
Change in net prior service cost and actuarial losses, net of taxes of $79		—			—		—		260			—		—			—			260
Change in net prior service cost and actuarial losses, net of tax expense of $82																							—			—		—		—		—			318			—			—			—			318
Issuance of restricted stock, net of forfeitures		226			—		—		—			—		—			—			—			1,319			—		—		—		—			—			—			—			—			—
Currency translation adjustments		—			—		—		3,823			—		—			—			3,823			—			—		—		—		—			(1,951	)		—			—			—			(1,951	)
Balance at December 26, 2020		26,011,098		$	260	$	434,346	$	(510	)	$	833,898		(881,096	)	$	(63,187	)	$	1,204,807
Balance at January 1, 2022																							29,798,240		$	298		4,600,000	$	46	$	1,559,560		$	(10,896	)	$	860,427			(923,340	)	$	(71,482	)	$	2,337,953

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)

	Nine Months Ended						Nine Months Ended
	January 1, 2022			December 26, 2020			December 31, 2022			January 1, 2022
Cash flows from operating activities:
Net income	$	32,865		$	64,679		$	117,504		$	23,232
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		37,355			24,812			85,811			37,355
Deferred income taxes		778			2,580			(10,513	)		(54	)
Amortization of deferred financing costs		17,600			365			6,164			17,600
Share-based compensation		18,034			15,842
Loss/(gain) on disposition of assets		68			965
Stock-based compensation								11,047			28,499
Loss on disposition of assets								132			68
Loss on extinguishment of debt		890			-			-			890
Consolidation, restructuring, and other noncash charges		2,378			2,313			318			2,378
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(5,929	)		23,285			32,268			(5,929	)
Inventory		(8,531	)		(4,717	)		(62,771	)		(8,531	)
Prepaid expenses and other current assets		(10,298	)		(251	)		(12,166	)		(10,298	)
Other noncurrent assets		(225	)		(11,724	)		7,369			(225	)
Accounts payable		34,215			(11,400	)		(21,018	)		34,215
Accrued expenses and other current liabilities		6,003			(4,575	)		(9,692	)		6,003
Other noncurrent liabilities		8,223			8,412			4,805			8,223
Net cash provided by operating activities		133,426			110,586			149,258			133,426

Cash flows from investing activities:
Purchase of property, plant and equipment		(21,761	)		(8,809	)
Capital expenditures								(29,577	)		(21,761	)
Proceeds from sale of assets		22			18			518			22
Purchase of marketable securities		(29,982	)		(75,075	)		-			(29,982	)
Proceeds from sale of marketable securities		120,483			-			-			120,483
Acquisition of business, net of cash acquired		(2,908,241	)		245			-			(2,908,241	)
Net cash provided by/(used in) investing activities		(2,839,479	)		(83,621	)
Purchase price adjustments for acquisition of business								27,466			-
Net cash used in investing activities								(1,593	)		(2,839,479	)

Cash flows from financing activities:
Proceeds received from issuance of common stock		605,492			-			-			605,492
Proceeds received from issuance of preferred stock		445,319			-			-			445,319
Proceeds received from term loans, net of financing costs		1,286,230			-			-			1,286,230
Proceeds received from senior notes, net of financing costs		494,200			-			-			494,200
Finance fees paid in connection with credit facilities and senior notes		(20,000	)		-			(57	)		(20,000	)
Repayments of term loans		(9,952	)		(3,287	)		(230,000	)		(9,952	)
Repayments of revolving credit facilities		-			(773	)
Repayments of notes payable		(380	)		(379	)		(364	)		(380	)
Principal payments on finance lease obligations		(679	)		-			(3,196	)		(679	)
Preferred stock dividends paid								(17,250	)		-
Exercise of stock options		17,717			6,105			10,395			17,717
Repurchase of common stock		(7,656	)		(6,206	)		(6,559	)		(7,656	)
Net cash provided by/(used in) financing activities		2,810,291			(4,540	)		(247,031	)		2,810,291

Effect of exchange rate changes on cash		179			512			(1,460	)		179

Cash and cash equivalents:
Increase during the period		104,417			22,937
Increase/(Decrease) during the period								(100,826	)		104,417
Cash and cash equivalents, at beginning of period		151,086			103,255			182,862			151,086
Cash and cash equivalents, at end of period	$	255,503		$	126,192		$	82,036		$	255,503

Supplemental disclosures of cash flow information:
Cash paid for:
Income taxes	$	12,405		$	12,880		$	47,694		$	12,405
Interest		4,925			737			54,940			4,925

See accompanying notes.

RBC Bearings Incorporated

Notes to Unaudited Interim Consolidated Financial Statements

(dollars in thousands, except per share data)

1. Basis of Presentation

The interim consolidated financial statements included herein have been prepared by RBC Bearings Incorporated, a Delaware corporation (collectively with its subsidiaries, the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange ~~Commission.~~Commission (“SEC”). The interim financial statements included with this report have been prepared on a consistent basis with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form ~~10-K~~10-K/A for the fiscal year ended April ~~3, 2021.~~2, 2022 (our “Annual Report”). We condensed or omitted certain information and footnote disclosures normally included in our annual audited financial statements, which we prepared in accordance with U.S. Generally Accepted Accounting Principles ~~(U.S. GAAP)~~(“GAAP”). As used in this report, the terms “we,” “us,” “our,” “RBC” and the “Company” mean RBC Bearings Incorporated and its subsidiaries, unless the context indicates another meaning.

These statements reflect all adjustments, accruals, and estimates, consisting only of items of a normal recurring nature, that are, in the opinion of management, necessary for the fair presentation of the consolidated financial condition and consolidated results of operations for the interim periods presented. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in ~~the~~our Annual ~~Report on Form 10-K.~~Report.

The results of operations for the three- and nine-month periods ended ~~January 1,~~December 31, 2022 are not necessarily indicative of the operating results for the entire fiscal year ending April ~~2, 2022.~~1, 2023. The three- and nine-month periods ended December 31, 2022 and January 1, 2022 ~~and December 26, 2020~~each included ~~13 weeks, 39 weeks,~~ 13 weeks and 39 weeks, respectively. The amounts shown are in thousands, unless otherwise indicated.

2. Significant Accounting Policies

The Company’s significant accounting policies are detailed in “Note 2 - Summary of Significant Accounting Policies” of our Annual ~~Report on Form 10-K for the year ended April 3, 2021.~~Report.

Significant changes to our accounting policies as a result of adopting new accounting standards are discussed below.

~~Recent Accounting Standards Adopted~~

~~In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12,~~ ~~Income Taxes (Topic 740)~~: ~~Simplifying the Accounting for Income Taxes~~. The objective of this standard update is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. This ASU also attempts to improve consistent application of and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This standard update is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this ASU effective April 4, 2021 and the impact of adoption was not material to the Company’s financial position, results of operations or liquidity.

~~In August 2020, the FASB issued ASU No. 2020-06, Debt -~~ Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in this ASU simplify the complexity associated with applying U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exception for contracts in an entity’s own equity. This ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company early adopted this ASU in fiscal 2022.

The adoption of this ASU did not have a material impact on our financial position, results of operations or liquidity. Adoption of this ASU did simplify the accounting of the 5.00% Series A Mandatory Convertible Preferred Stock (“MCPS”) referred to in Note 5 by removing the requirement to assess the financial instrument for beneficial conversion features and clarifying how diluted EPS should be calculated using the “if-converted” method. Refer to Note 6 for further details regarding the “if-converted” method.

~~In October 2021, the FASB issued ASU No. 2021-08,~~ ~~Business Combinations (~~~~Topic 840):~~ ~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.~~ The amendments in this ASU require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements in accordance with U.S. GAAP. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company early adopted this ASU in fiscal 2022 and the impact of adoption was not material to the Company’s financial position, results of operations or liquidity.

Recent Accounting Standards ~~Yet to Be~~ Adopted

In March 2020, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ~~ASU~~Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The objective of the standard is to address operational challenges likely to arise in accounting for contract modifications and hedge accounting due to reference rate reform. The amendments in this ASU provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The standard update is effective for all entities as of March 12, 2020 through December 31, 2022. ~~An entity~~This guidance is available immediately and may ~~elect~~be implemented in any period prior to the guidance expiration on December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company adopted this ASU during the third quarter of our fiscal year and elected to apply the ~~amendments~~practical expedient which allows us to account for ~~contract modifications by topic or industry subtopic~~the modification of the New Credit Agreement discussed in Note 10 to the financial statements as if the modification was not substantial. The impact of ~~any date from~~ the ~~beginning~~adoption of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020. Once elected for a topic or industry subtopic, the amendments in this standard update must be applied prospectively for all eligible contract modifications for that topic or industry subtopic. An entity may elect to apply the amendments for eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. If an entity elects to apply any of the amendments for an eligible hedging relationship existing as of the beginning of the interim period that includes March 12, 2020, any adjustments asdid not have a result of those elections must be reflected as of the beginning of that interim period. If an entity elects to apply any of the amendments for a new hedging relationship entered into between the beginning of the interim period that includes March 12, 2020 and March 12, 2020, any adjustments as a result of those elections must be reflected as of the beginning of the hedging relationship. The Company has not yet assessed thematerial impact ~~of adoption will have~~ on the Company’s consolidated financial statements.

Recent Accounting Standards Yet to Be Adopted

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832). ASU 2021-10 is intended to increase transparency of government assistance by requiring entities to disclose the types of government assistance, the entity’s accounting for government assistance, and the effect of the government assistance on an entity’s financial statements. This new guidance is effective for all entities for annual reporting periods beginning after December 15, 2021. The Company is currently evaluating the impact of the new guidance.

Other new pronouncements issued but not effective until after April ~~2, 2022~~1, 2023 are not expected to have a material impact on our financial position, results of operations or liquidity.

3. Revenue from Contracts with Customers

Disaggregation of Revenue

The following table disaggregates total revenue by end market which is how we view our reportable segments (see Note 12):

	Three Months Ended				Nine Months Ended
	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020		Three Months Ended				Nine Months Ended
									December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022
Aerospace/Defense	$	93,203	$	93,267	$	276,483	$	299,833	$	105,532	$	93,203	$	308,479	$	276,483
Industrial		173,750		52,594		307,575		148,856		246,093		173,750		766,393		307,575
	$	266,953	$	145,861	$	584,058	$	448,689
Total									$	351,625	$	266,953	$	1,074,872	$	584,058

The following table disaggregates total revenue by geographic origin:

	Three Months Ended				Nine Months Ended
	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020		Three Months Ended				Nine Months Ended
									December 31, 2022		January 1, 2022		December 31, 2022		January 1, 2022
United States	$	233,900	$	130,082	$	517,764	$	402,808	$	311,509	$	233,900	$	946,913	$	517,764
International		33,053		15,779		66,294		45,881		40,116		33,053		127,959		66,294
	$	266,953	$	145,861	$	584,058	$	448,689
Total									$	351,625	$	266,953	$	1,074,872	$	584,058

The following table illustrates the approximate percentage of revenue recognized for performance obligations satisfied over time versus the amount of revenue recognized for performance obligations satisfied at a point in time:

	Three Months Ended						Nine Months Ended
	January 1, 2022			December 26, 2020			January 1, 2022			December 26, 2020			Three Months Ended						Nine Months Ended
													December 31, 2022			January 1, 2022			December 31, 2022			January 1, 2022
Point-in-time		98	%		96	%		97	%		96	%		98	%		98	%		98	%		97	%
Over time		2	%		4	%		3	%		4	%		2	%		2	%		2	%		3	%
		100	%		100	%		100	%		100	%
Total														100	%		100	%		100	%		100	%

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of orders meeting the definition of a contract for which work has not been performed or has been partially performed and excludes unexercised contract options. The duration of the majority of our contracts, as defined by ASC Topic 606, is less than one year. The Company has elected to apply the practical expedient, which allows ~~companies~~the Company to exclude remaining performance obligations with an original expected duration of one year or less. The aggregate amount of the transaction price allocated to remaining performance obligations for such contracts with a duration of more than one year was approximately ~~$289,870~~$342,081 at ~~January 1,~~December 31, 2022. The Company expects to recognize revenue on approximately ~~59%~~62% and 86% of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter.

Contract Balances -

The timing of revenue recognition, invoicing and cash collections affect accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) on the consolidated balance sheets. These assets and liabilities are reported on the consolidated balance sheets on an individual contract basis at the end of each reporting period.

Contract Assets (Unbilled Receivables) - Pursuant to the over-time revenue recognition model, revenue may be recognized prior to the customer being invoiced. An unbilled receivable is recorded to reflect revenue that is recognized when (1) the cost-to-cost method is applied and (2) such revenue exceeds the amount invoiced to the customer.

As of ~~January 1,~~December 31, 2022 and April ~~3, 2021,~~2, 2022, current contract assets were ~~$4,499~~$5,011 and ~~$5,584,~~$3,882, respectively, and included within prepaid expenses and other current assets on the consolidated balance sheets. The ~~decrease~~increase in contract assets was primarily due to ~~amounts billed to customers during the period partially offset by~~ the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations prior to ~~billing.~~billing, partially offset by amounts billed to customers during the period. As of ~~January 1,~~December 31, 2022 and April ~~3, 2021,~~2, 2022, the Company did not have any contract assets classified as noncurrent on the consolidated balance sheets. ~~There were $0 and $77 of impairment losses related to the Company’s contract assets during the three and nine months ended January 1, 2022, respectively.~~

Contract Liabilities (Deferred Revenue) - The Company may receive a customer advance or deposit, or have an unconditional right to receive a customer advance, prior to revenue being recognized. Since the performance obligations related to such advances may not have been satisfied, a contract liability is established. Advance payments are not considered a significant financing component as the timing of the transfer of the related goods or services is at the discretion of the customer.

As of ~~January 1,~~December 31, 2022 and April ~~3, 2021,~~2, 2022, current contract liabilities were ~~$14,038~~$17,474 and ~~$16,998,~~$19,556, respectively, and included within accrued expenses and other current liabilities on the consolidated balance sheets. The decrease in current contract liabilities was primarily due to ~~the amount of advanced~~revenue recognized on customer contracts, partially offset by advance payments received and ~~reclassifications between current and~~the reclassification of a portion of advance payments received from the noncurrent ~~contract liabilities based on anticipated timing of performance obligations and revenue recognized during the period. $2,205~~portion of contract ~~liabilities~~liabilities. For the three and nine months ended December 31, 2022, the Company recognized revenues of $2,589 and $10,063, respectively, that were ~~acquired during~~included in the ~~quarter~~contract liability balance as ~~part~~ of ~~the Dodge acquisition (see Note 13).~~April 2, 2022. For the three and nine months ended January 1, 2022, the Company recognized revenues ~~related to contract liabilities~~ of $3,783 and $10,562, ~~respectively. For~~respectively, that were included in the ~~three and nine months ended December 26, 2020, the Company recognized revenues related to~~ contract ~~liabilities of $2,291 and $10,056, respectively.~~ liability balance at April 3, 2021.

As of ~~January 1,~~December 31, 2022 and April ~~3, 2021,~~2, 2022, noncurrent contract liabilities were ~~$8,072~~$17,819 and ~~$3,754,~~$10,401, respectively, and included within other noncurrent liabilities on the consolidated balance sheets. The increase in noncurrent contract liabilities was primarily due to ~~the amount of advanced~~advance payments received, ~~and reclassifications between~~partially offset by the reclassification of a portion of advance payments received to the current ~~and noncurrent~~portion of contract ~~liabilities based on anticipated timing of performance obligations and revenue recognized during the period.~~ liabilities.

~~Accounts Receivable~~Variable Consideration ~~- As of January 1, 2022 and April 3, 2021, accounts receivable with customers, net, were $199,785 and $110,472, respectively.~~

~~Variable Consideration~~

The amount of consideration to which the Company expects to be entitled in exchange for ~~the~~ goods and services is not generally subject to significant variations. However, the Company does offer certain customers rebates, prompt payment discounts, end-user discounts, the right to return eligible products, and/or other forms of variable consideration. The Company estimates this variable consideration using the expected value amount, which is based on historical experience. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company adjusts the estimate of revenue at the earlier of when the amount of consideration the Company expects to receive changes or when the consideration becomes fixed. Accrued customer rebates were ~~$37,314~~$38,284 and ~~$2,674~~$35,234 at ~~January 1,~~December 31, 2022 and April ~~3, 2021,~~2, 2022, respectively, and are included within accrued expenses and other current liabilities on the consolidated balance sheets.

4. Accumulated Other Comprehensive ~~Income~~ Income/(Loss)

The components of comprehensive ~~income~~ income/(loss) that relate to the Company are net ~~income,~~income/(loss), foreign currency translation adjustments, changes in fair value of derivatives, and pension plan and postretirement benefits.

The following summarizes the activity within each component of accumulated other comprehensive ~~income~~ income/(loss), net of taxes:

	Currency Translation			Change in Fair Value of Derivatives			Pension and Postretirement Liability			Total
Balance at April 2, 2022	$	860		$	—		$	(6,660	)	$	(5,800	)
Other comprehensive loss before reclassifications		(7,372	)		—			—			(7,372	)
Amounts recorded in/reclassified from accumulated other comprehensive income/(loss)		—			(1,116	)		1,605			489
Net current period other comprehensive income/(loss)		(7,372	)		(1,116	)		1,605			(6,883	)
Balance at December 31, 2022	$	(6,512	)	$	(1,116	)	$	(5,055	)	$	(12,683	)

5. Net Income/(Loss) Per Share Attributable to Common Stockholders

Currency
Translation

Pension and
Postretirement
Liability
Total
Balance at April 3, 2021 $ 445 $ (10,854 ) $ (10,409 )
Other comprehensive income (loss) before reclassifications (1,441 ) (1,441 )
Amounts recorded in/reclassified from accumulated other comprehensive income (loss) 954 954
Net current period other comprehensive income (loss) (1,441 ) 954 (487 )
Balance at January 1, 2022 $ (996 ) $ (9,900 ) $ (10,896 )

~~5. Stockholders’ Equity~~

~~Preferred Stock~~

~~We are authorized to issue 10,000,000 shares of preferred stock, $0.01 par value~~Basic net income/(loss) per share in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by our stockholders.

On September 24, 2021, we completed an offering of 4,600,000 shares of 5.00% Series A Mandatory Convertible Preferred Stock (“MCPS”) in a public offering registered under the Securities Act of 1933, as amended (the “Securities Act”), including 600,000 shares issued pursuant to the full exercise of the option granted to the underwriters of the MCPS offering to purchase additional shares solely to cover over-allotments. The trading symbol for the MCPS is “ROLLP.” The net proceeds from the offering were approximately $445,273 after deducting underwriting discounts and commissions and offering expenses. On November 1, 2021, the Company used the proceeds to fund a portion of the cash purchase price for the acquisition of the Dodge Mechanical Power Transmission business (“Dodge”) from ABB Asea Brown Boveri Ltd.

Holders of MCPS are entitled to receive, when, as and if declared by our Board of Directors, or an authorized committee thereof, out of funds legally available for payment, cumulative dividends at the annual rate of 5.00% of the liquidation preference of $100 per share, payable in cash or, subject to certain limitations, by delivery of shares of common stock or any combination of cash and shares of common stock, at our election; provided, however, that any unpaid dividends on the MCPS will continue to accumulate as described in the Certificate of Designations that sets forth the rights, preferences and privileges of the MCPS. During the third quarter of fiscal 2022, the Company had accrued dividends of $5,751, which were included in the dividend payment to be made on January 15, 2022.

~~The MCPS has a liquidation preference of $100 per share plus accrued and unpaid dividends. As of January 1, 2022, the MCPS had an aggregate liquidation preference of $466,261.~~

Subject to certain exceptions, no dividend or distribution will be declared or paid on shares of our common stock, and no common stock will be purchased, redeemed or otherwise acquired for consideration by us or any of our subsidiaries unless, in each case, all accumulated and unpaid dividends for all preceding dividend periods have been declared and paid, or a sufficient amount of cash or number of shares of common stock has been set apart for the payment of such dividends, on all outstanding shares of MCPS. In the event of our voluntary or involuntary liquidation, winding-up or dissolution, no distribution of our assets may be made to holders of our common stock until we have paid holders of MCPS, each of which will be entitled to receive a liquidation preference in the amount of $100 per share plus accumulated and unpaid dividends.

Unless earlier converted or redeemed, each share of MCPS will automatically convert, for settlement on or about October 15, 2024, into between 0.4413 and 0.5405 shares of common stock, subject to customary anti-dilution adjustments. The conversion rate that will apply to mandatory conversions will be determined based on the average of the daily volume-weighted average prices over the 20 consecutive trading days beginning on, and including, the 21st scheduled trading day immediately before October 15, 2024. The conversion rate applicable to mandatory conversions may in certain circumstances be increased to compensate holders of the MCPS for certain unpaid accumulated dividends.

~~Common Stock~~

We are authorized to issue 60,000,000 shares of common stock, $0.01 par value per share. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends, if and when declared by our Board of Directors, and to share ratably in our assets legally available for distribution to our stockholders in the event of liquidation after giving effect to any liquidation preference for the benefit of the MCPS or any other preferred stock then outstanding. Holders of common stock have no preemptive, subscription, redemption, or conversion rights. The holders of common stock do not have cumulative voting rights. The holders of a majority of the shares of common stock can elect all of the directors and can control our management and affairs.

On September 24, 2021, we completed an offering of 3,450,000 shares of common stock in a public offering registered under the Securities Act at an offering price of $185 per share, including 450,000 shares issued pursuant to the full exercise of the option granted to the underwriters of the offering to purchase additional shares. The net proceeds from the offering were approximately $605,457 after deducting underwriting discounts and commissions and offering expenses. On November 1, 2021, the Company used the proceeds to fund a portion of the cash purchase price for the acquisition of Dodge.

~~6. Net Income Per Share Available to Common Stockholders~~

~~Basic net income per share available~~attributable to common stockholders is computed by dividing net ~~income available~~income/(loss) attributable to common stockholders by the weighted-average number of common shares outstanding.

Diluted net ~~income~~income/(loss) per share ~~available~~attributable to common stockholders is computed by dividing net ~~income available~~income/(loss) attributable to common stockholders by the sum of the weighted-average number of common shares and dilutive common share equivalents then outstanding using the treasury stock method. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and the conversion of ~~MCPS~~the outstanding 5.00% Series A Mandatory Convertible Preferred Stock (“MCPS”) to common shares.

We exclude outstanding stock options, stock awards and the MCPS from the calculations if the effect would be anti-dilutive. The dilutive effect of the MCPS is calculated using the if-converted method. The if-converted method assumes that these securities were converted to shares of common stock at the later of the September 24, 2021 issuance date or the beginning of the reporting period to the extent that the effect is dilutive. If the effect is anti-dilutive, we calculate net ~~income~~income/(loss) per share ~~available~~attributable to common stockholders by adjusting net ~~income~~income/(loss) in the numerator for the effect of the cumulative MCPS dividends for the respective period.

For the three- and nine-month periods ended ~~January 1,~~December 31, 2022, the effect of assuming the conversion of the 4,600,000 shares of MCPS into shares of common stock was anti-dilutive, and therefore excluded from the calculation of diluted earnings per share ~~available~~attributable to common stockholders. Accordingly, net ~~income~~income/(loss) was reduced by cumulative MCPS dividends, as presented in our consolidated statement of operations, for purposes of calculating net ~~income available~~income/(loss) attributable to common stockholders.

For the three months ended December 31, 2022, 91,816 employee stock options and 1,085 restricted shares were excluded from the calculation of diluted earnings per share attributable to common stockholders. For the nine months ended December 31, 2022, 111,446 employee stock options and 1,085 restricted shares were excluded from the calculation of diluted earnings per share attributable to common stockholders. The inclusion of these employee stock options and restricted shares would have been anti-dilutive.

For the three months ended January 1, 2022, all employee stock options and restricted shares were excluded from the calculation of diluted earnings per share ~~available~~attributable to common stockholders as the Company generated a loss for the period. For the nine months ended January 1, 2022, 164,265 employee stock options and 200 restricted shares were excluded from the calculation of diluted earnings per share available to common stockholders. For the three months ended December 26, 2020, 443,294 employee stock options and 1,000 restricted shares were excluded from the calculation of diluted earnings per share available to common stockholders. For the nine months ended December 26, 2020, 480,631 employee stock options and 1,280 restricted shares were excluded from the calculation of diluted earnings per share availableattributable to common stockholders. The inclusion of these employee stock options and restricted shares would have been anti-dilutive.

The table below reflects the calculation of weighted-average shares outstanding for each period presented as well as the computation of basic and diluted net ~~income~~income/(loss) per share ~~available~~attributable to common stockholders. ~~Since we were in a loss position for the three months ended January 1, 2022, basic net loss per share was the same as diluted net loss per share.~~

	Three Months Ended					Nine Months Ended
	December 31, 2022		January 1, 2022			December 31, 2022		January 1, 2022

Net income	$	36,264	$	546		$	117,504	$	23,232
Preferred stock dividends		5,686		5,751			17,186		6,261
Net income/(loss) attributable to common stockholders	$	30,578	$	(5,205	)	$	100,318	$	16,971

Denominator for basic net income/(loss) per share attributable to common stockholders — weighted-average shares outstanding		28,805,305		28,618,495			28,744,732		26,379,984
Effect of dilution due to employee stock awards		315,013		—			308,876		377,827
Denominator for diluted net income/(loss) per share attributable to common stockholders — weighted-average shares outstanding		29,120,318		28,618,495			29,053,608		26,757,811

Basic net income/(loss) per share attributable to common stockholders	$	1.06	$	(0.18	)	$	3.49	$	0.64

Diluted net income/(loss) per share attributable to common stockholders	$	1.05	$	(0.18	)	$	3.45	$	0.63

6. Fair Value

Three Months Ended Nine months Ended

January 1,
2022

December 26,
2020

January 1,
2022

December 26,
2020

Net income/(loss) $ (63 ) $ 21,569 $ 32,865 $ 64,679
Preferred stock dividends 5,751 — 6,261 —
Net income/(loss) available to common stockholders $ (5,814 ) $ 21,569 $ 26,604 $ 64,679

Denominator for basic net income/(loss) per share available to common stockholders — weighted-average shares outstanding 28,618,495 24,861,792 26,379,984 24,816,451
Effect of dilution due to employee stock awards — 199,020 284,006 169,397
Effect of dilution due to MCPS — — — —
Denominator for diluted net income/(loss) per share available to common stockholders — weighted-average shares outstanding 28,618,495 25,060,812 26,663,990 24,985,848

Basic net income/(loss) per share available to common stockholders $ (0.20 ) $ 0.87 $ 1.01 $ 2.61

Diluted net income/(loss) per share available to common stockholders $ (0.20 ) $ 0.86 $ 1.00 $ 2.59

~~7. Cash and Cash Equivalents~~Fair value is defined as the price that would be expected to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The FASB provides accounting rules that classify the inputs used to measure fair value into the following hierarchy:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3 – Unobservable inputs for the asset or liability.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

As a result of the occurrence of triggering events such as purchase accounting for acquisitions, the Company measures certain assets and liabilities based on Level 3 inputs.

Recurring Fair Value Measurements

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, trade accounts payable, short-term borrowings, long-term debt, and a derivative in the form of an interest rate swap. Due to their short-term nature, the carrying value of cash and cash equivalents, accounts receivable, trade accounts payable, accrued expenses and short-term borrowings are a reasonable estimate of their fair value. Long-term assets held on our balance sheets related to benefit plan obligations are measured at fair value. The fair value of the Company’s long-term fixed-rate debt, based on quoted market prices, was $436,175 and $463,750 at December 31, 2022 and April 2, 2022, respectively. The carrying value of this debt was $493,040 at December 31, 2022 and $492,396 at April 2, 2022. The fair value of long-term fixed-rate debt was measured using Level 1 inputs. Due to the nature of fair value calculations for variable-rate debt, the carrying value of the Company’s long-term variable-rate debt is a reasonable estimate of its fair value. The fair value of the interest rate swap was $1,116 at December 31, 2022, measured using Level 2 inputs. This amount is included in other noncurrent liabilities and accumulated other comprehensive income on the Company’s consolidated balance sheets, and in the Company’s consolidated statements of comprehensive income.

The Company ~~considers all highly liquid investments purchased~~does not believe it has significant concentrations of risk associated with ~~an original maturity of three months or less~~the counterparties to ~~be cash equivalents. The Company maintains~~ its cash accounts primarily with Bank of America, N.A., JPMorgan Chase & Co., HSBC Holdings plc, Credit Suisse Group AG, and Wells Fargo & Company. The Company has not experienced any losses in such accounts.financial instruments.

8.7. Inventory

Inventories are stated at the lower of cost or net realizable value, using the first-in, first-out method, and are summarized below:

	January 1, 2022		April 3, 2021		December 31, 2022		April 2, 2022
Raw materials	$	106,737	$	57,764	$	130,040	$	112,651
Work in process		117,063		86,183		131,946		122,983
Finished goods		286,375		220,200		315,641		280,506
	$	510,175	$	364,147	$	577,627	$	516,140

9.8. Goodwill and Intangible Assets

Goodwill

Goodwill balances, by segment, consist of the following:

	Aerospace/Defense		Industrial			Total
April 2, 2022	$	194,124	$	1,707,980		$	1,902,104
Acquisition ⁽¹⁾		—		(28,710	)		(28,710	)
Translation adjustments		—		(4,156	)		(4,156	)
December 31, 2022	$	194,124	$	1,675,114		$	1,869,238

Plain Roller Ball Engineered Products Aerospace/Defense Industrial Total
April 3, 2021 $ 79,597 $ 16,007 $ 5,623 $ 176,309 — — $ 277,536
Allocation in the third quarter of fiscal 2022 ⁽¹⁾ (79,597 ) (16,007 ) (5,623 ) (176,309 ) 194,124 83,412 —
Acquisition ⁽²⁾ — — — — — 1,611,470 1,611,470
Translation adjustments — — — — — (2,132 ) (2,132 )
January 1, 2022 — — — — $ 194,124 $ 1,692,750 $ 1,886,874

⁽¹⁾

~~Represents reallocation of~~Purchase accounting adjustments to goodwill ~~as a result of our change in segments in the third quarter of fiscal 2022. See Note 12 for further details.~~

⁽²⁾

~~Goodwill~~ associated with the acquisition of Dodge discussed further in Note 13.

We evaluate our reportable operating segments periodically, as well as when changes in our operating segments occur. For changes in reportable segments, we reassign goodwill using a relative fair value allocation approach as mentioned in tickmark 1 above. As a result of this change in segments during the quarter, the Company performed an interim goodwill impairment analysis and determined that the estimated fair values of the segments exceeded their carrying values (including goodwill). As such, there was no impairment as a result of this change.

Intangible Assets

		January 1, 2022				April 3, 2021				Weighted	December 31, 2022				April 2, 2022
	Weighted Average Useful Lives	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization		Average Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Product approvals	24	$	50,878	$	16,199	$	50,878	$	14,691	24	$	50,878	$	18,125	$	50,878	$	16,680
Customer relationships and lists ⁽¹⁾	24		1,294,952		39,999		109,762		28,253	24		1,293,592		92,923		1,294,577		53,376
Trade names ⁽¹⁾	25		216,346		12,786		16,333		10,392	25		216,341		21,945		216,340		15,073
Distributor agreements	5		722		722		722		722	—		—		—		722		722
Patents and trademarks	16		12,545		6,594		11,612		6,211	16		13,131		7,018		12,342		6,607
Domain names	10		437		437		437		437	10		437		437		437		437
Other⁽¹⁾	3		5,521		4,230		3,745		2,665	4		14,715		4,254		9,720		4,887
			1,581,401		80,967		193,489		63,371			1,589,094		144,702		1,585,016		97,782
Non-amortizable repair station certifications	n/a		24,281		—		24,281		—	n/a		24,281		—		24,281		—
Total	24	$	1,605,682	$	80,967	$	217,770	$	63,371	24	$	1,613,375	$	144,702	$	1,609,297	$	97,782

⁽¹⁾

~~Includes $1,185,000 of customer relationships, $200,000 of trade names and $82 of software intangibles resulting from the Dodge acquisition.~~

Amortization expense for definite-lived intangible assets during the three-month periods ended December 31, 2022 and January 1, 2022 was $17,400 and ~~December 26, 2020 were~~ $12,133, ~~and $2,594,~~ respectively. Amortization expense for definite-lived intangible assets during the nine-month periods ended December 31, 2022 and January 1, 2022 was $51,459 and ~~December 26, 2020 were~~ $17,542, ~~and $7,683,~~ respectively. These amounts are included in other, net on the Company’s consolidated statements of operations. Estimated amortization expense for the remainder of fiscal ~~2022~~2023 and the five succeeding fiscal years and thereafter is as follows:

Remainder of Fiscal 2022	$	16,735
Fiscal 2023		67,403
Remainder of Fiscal 2023			$	17,385
Fiscal 2024		67,273		69,270
Fiscal 2025		66,570		69,204
Fiscal 2026		64,081		67,248
Fiscal 2027		63,489		66,185
Fiscal 2028 and thereafter		1,154,883
Fiscal 2028				64,259
Fiscal 2029 and thereafter				1,090,841

~~10. Debt~~9. Accrued Expenses and Other Current Liabilities

The ~~balances payable under all borrowing facilities~~significant components of accrued expenses and other current liabilities are as follows:

	December 31, 2022		April 2, 2022
Employee compensation and related benefits	$	39,244	$	34,697
Taxes		8,053		11,706
Contract liabilities		17,474		19,556
Accrued rebates		38,284		35,234
Workers’ compensation and insurance		869		1,144
Acquisition costs		1,239		4,568
Current finance lease liabilities		4,693		3,863
Accrued preferred stock dividends		4,856		4,919
Interest		4,920		10,987
Audit fees		544		599
Legal		1,141		450
Returns and warranties		7,075		7,889
Other		7,770		9,640
	$	136,162	$	145,252

10. Debt

January 1,
2022

April 3,
2021

Revolver and term loan facilities $ 1,302,082 $ 11,657
Senior notes 500,000 —
Debt issuance costs (22,298 ) (1,216 )
Other 10,469 5,666
Total debt 1,790,253 16,107
Less: current portion 63,519 2,612
Long-term debt $ 1,726,734 $ 13,495

The current portion of long-term debt as of January 1, 2022 included the current portion of the Term Loan Facility, a mortgage held at one of our foreign entities and a note payable for purchased equipment. The current portion of long-term debt as of April 3, 2021 included the current portion of the Foreign Term Loan and a mortgage held at one of our foreign entities.

Domestic Credit Facility

On November 1, 2021 RBC Bearings Incorporated, our top holding company, and our Roller Bearing Company of America, Inc. subsidiary (“RBCA”) entered into a Credit Agreement (the “New 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, and terminated the Company’s prior ~~Credit Agreement,~~credit agreement, which was entered into with Wells Fargo in ~~2015 (the “2015 Credit Agreement”).~~2015. The New Credit Agreement provides the Company with (a) a $1,300,000 term loan facility (the “Term Loan Facility”), which was used to fund a portion of the cash purchase price for the acquisition of our Dodge business unit and to pay related fees and expenses, and (b) a $500,000 revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Facilities”). Debt issuance costs associated with the New Credit Agreement totaled $14,947 and ~~will be~~are being amortized over the life of the New Credit Agreement. ~~When the 2015 Credit Agreement was terminated the Company wrote off $890 of previously unamortized debt issuance costs.~~

~~Amounts~~Prior to December 2022, amounts outstanding under the Facilities generally ~~bear~~bore 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 ~~1/2 of 1.00%~~0.50% and (iii) the one-month ~~LIBOR~~London interbank offered rate (LIBOR) rate plus 1.00% or (b) the LIBOR rate plus a specified margin, depending on the type of borrowing being made. The applicable margin iswas based on the ~~Company's~~Company’s consolidated ratio of total net debt to consolidated EBITDA from time to time. ~~Currently,~~In December 2022 the ~~Company's~~New Credit Agreement was amended to replace LIBOR with the secured overnight financing rate administered by the Federal Reserve Bank of New York (“SOFR”) so that borrowings under the Facilities denominated in U.S. dollars bear interest at a rate per annum equal to Term SOFR (as defined in the New Credit Agreement) plus a credit spread adjustment of 0.10% plus a margin isranging from 0.75% ~~for base rate loans and 1.75% for LIBOR rate loans.~~to 2.00% depending on the Company’s consolidated ratio of total net debt to consolidated EBITDA. The Facilities are subject to a ~~“LIBOR”~~SOFR floor of 0.00% and contain “hard-wired” LIBOR replacement provisions as set forth in the New Credit Agreement. We are also required to pay a commitment fee on the unutilized portion of the Revolving Credit Facility as well as letter of credit fees on any amounts secured by the revolver.. As of ~~January 1,~~December 31, 2022, the Company’s margin was 0.50% for base rate loans and 1.50% for SOFR loans. The Company’s commitment fee rate ~~is 0.25%~~was 0.20% and the letter of credit fee rate ~~is 1.75%~~was 1.50%.

The Term Loan ~~Facility and the Revolving Credit~~ Facility will mature on November 2, 2026 ~~(the “Maturity Date”).~~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. Commencing one full fiscal quarter after the execution of the New Credit Agreement, the Term Loan Facility~~penalty, which will ~~amortize in~~offset future quarterly ~~installments with the balance payable on the Maturity Date unless otherwise extended in accordance with the terms of the Term Loan Facility.~~amortization installments. The required future principal payments on the Term Loan Facility are ~~approximately $16,250~~$0 for the remainder of fiscal ~~2022, $65,000 for fiscal~~ 2023, ~~$73,125~~$0 for fiscal 2024, ~~$105,625~~and $0 for fiscal 2025, ~~$138,125~~due to prepayments previously made, and approximately $27,500 for fiscal 2026, and ~~$901,875~~$942,500 for fiscal 2027. The Revolving Credit Facility will mature on November 2, 2026, at which time all amounts outstanding under the Revolving Credit Facility will be payable.

The New Credit Agreement requires the Company to comply with various covenants, including the following financial ~~covenants beginning with the test period ending December 31, 2021:~~covenants: (a) a maximum ~~Total Net Leverage Ratio~~total net leverage ratio of 5.50:1.00, which maximum ~~Total Net Leverage Ratio shall~~ratio will decrease during certain subsequent test periods as set forth in the New 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 ~~Borrower~~Company by 0.50:1.00 for a period of 12 months after the consummation of a material acquisition), and (b) a minimum ~~Interest Coverage Ratio~~interest coverage ratio of 2.00:1.00. As of December 31, 2022, the Company was in compliance with all debt covenants.

The New Credit Agreement allows the Company to, among other things, make distributions to ~~shareholders,~~stockholders, repurchase its stock, incur other debt or liens, or acquire or dispose of assets provided that the Company complies with certain requirements and limitations of the New Credit Agreement.

The Company’s domestic subsidiaries have guaranteed the Company’s obligations under the New Credit Agreement, and the Company’s obligations and the domestic subsidiaries’ guaranty are secured by a pledge of substantially all of the domestic assets of the Company and its domestic subsidiaries.

As of ~~January 1,~~December 31, 2022, ~~$1,300,000~~$970,000 was outstanding under the Term Loan Facility and approximately ~~$3,550~~$3,675 of the Revolving Credit Facility was being utilized to provide letters of credit to secure the Company’s obligations relating to certain insurance programs, and the Company had the ability to borrow up to an additional ~~$496,450~~$496,325 under the Revolving Credit Facility. The Term Loan is reported at carrying value on the consolidated balance sheets. As the Term Loan is variable-rate debt, the carrying value approximates fair value. The Term Loan is classified within Level 2 of the fair value hierarchy.

Senior Notes

On October 7, 2021, RBCA issued $500,000 aggregate principal amount of 4.375% Senior Notes due 2029 (the “Senior Notes”). The net proceeds from the issuance of the Senior Notes were approximately $491,992 after deducting initial purchasers’ discounts and commissions and offering expenses. On November 1, 2021, the Company used the proceeds to fund a portion of the cash purchase price for the acquisition of Dodge.

The Senior Notes were issued pursuant to an indenture ~~dated as of October 7, 2021 (the “Indenture”), between RBCA and~~with Wilmington Trust, National Association, as ~~trustee.~~trustee (the “Indenture”). The Indenture contains covenants limiting the ability of the Company to (i) incur additional indebtedness or guarantee indebtedness, (ii) declare or pay dividends, redeem stock or make other distributions to stockholders, (iii) make investments, (iv) create liens or use assets as security in other transactions, (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of its assets, (vi) enter into transactions with affiliates, and (vii) sell or transfer certain assets. These covenants contain various exceptions, limitations and qualifications. At any time that the Senior Notes are rated investment grade, certain of these covenants will be suspended.

The Senior Notes are guaranteed jointly and severally on a senior unsecured basis by RBC Bearings and certain of RBCA’s existing and future ~~wholly-owned~~wholly owned domestic subsidiaries that also guarantee the New Credit Agreement.

Interest on the Senior Notes accrues ~~from October 7, 2021~~ at a rate of 4.375% and ~~will be~~is payable semi–annually in cash in arrears on April 15 and October 15 of each ~~year, commencing April 15, 2022.~~year.

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. In addition, at any time prior to October 15, 2024, the Company may redeem some or all of the Senior Notes at a price equal to 100% of the principal amount, plus a “make–whole” premium, 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.

The Senior Notes are reported at carrying value on the consolidated balance sheets. The fair value of the Senior Notes as of January 1, 2022 was $510,790 and was computed based on quoted market prices (observable inputs). The Senior Notes are classified within Level 2 of the fair value hierarchy.Foreign Borrowing Arrangements

~~Foreign Term Loan and Revolving Credit Facility~~

~~On August 15, 2019, one~~One of our foreign subsidiaries, Schaublin SA (“Schaublin”), entered into two separate credit agreements ~~(the “Foreign Credit Agreements”)~~in 2019 with Credit Suisse (Switzerland) Ltd. (the “Foreign Credit Agreements”) to (i) finance the acquisition of our Swiss Tool business unit, and (ii) provide future working capital. The Foreign Credit Agreements provided Schaublin with a CHF 15,000 (approximately $15,383) term loan, ~~(the “Foreign Term Loan”),~~ which ~~expires on July 31, 2024~~was extinguished in February 2022, and a CHF 15,000 (approximately $15,383) revolving credit facility, which was terminated in October 2022. Schaublin now has a separate CHF 5,000 (approximately $5,407 USD) revolving credit facility (the ~~“Foreign~~“New Foreign Revolver”)~~, which continues in effect until terminated by either Schaublin or~~ with Credit ~~Suisse. Debt issuance costs~~Suisse to provide future working capital, if necessary. As of December 31, 2022, $0 had been borrowed from the New Foreign Revolver. Fees associated with the New Foreign ~~Credit Agreements totaled CHF 270 (approximately $277) and will be amortized throughout~~Revolver are nominal if the ~~life of the Foreign Credit Agreements. As of January 1, 2022, approximately $76 in unamortized debt issuance costs remained.~~facility is not utilized.

~~Amounts outstanding under~~A summary of the ~~Foreign Term Loan and~~Company’s debt is presented in the Foreign Revolver generally bear interest at LIBOR plus a specified margin. The applicable margin is based on Schaublin’s ratio of total net debt to consolidated EBITDA at each measurement date. Currently, Schaublin’s margin is 1.00%.table below:

	December 31, 2022			April 2, 2022
Revolver and term loan facilities	$	970,000		$	1,200,000
Senior notes		500,000			500,000
Debt issuance costs		(14,787	)		(20,895	)
Other		8,865			9,236
Total debt		1,464,078			1,688,341
Less: current portion		1,544			1,543
Long-term debt	$	1,462,534		$	1,686,798

11. Income Taxes

The Foreign Credit Agreements require Schaublin to comply with various covenants, which are tested annually on March 31. These covenants include, among other things, a financial covenant to maintain a ratio of consolidated net debt to adjusted EBITDA not greater than 2.50 to 1 as of March 31, 2021 and thereafter. Schaublin is also required to maintain an economic equity of CHF 20,000 at all times. The Foreign Credit Agreements allow Schaublin to, among other things, incur other debt or liens and acquire or dispose of assets provided that Schaublin complies with certain requirements and limitations of the Foreign Credit Agreements. As of January 1, 2022, Schaublin was in compliance with all such covenants.

Schaublin’s parent company, Schaublin Holding, has guaranteed Schaublin’s obligations under the Foreign Credit Agreements. Schaublin Holding’s guaranty and the Foreign Credit Agreements are secured by a pledge of the capital stock of Schaublin. In addition, the Foreign Term Loan is secured with pledges of the capital stock of the top company and the two operating companies in the Swiss Tool System group of companies.

As of January 1, 2022, there was approximately $2,082 outstanding under the Foreign Term Loan and no amounts outstanding under the Foreign Revolver, and Schaublin had the ability to borrow up to $16,439 under the Foreign Revolver. Schaublin’s required future principal payments are approximately $0 for the remainder of fiscal 2022, $0 for fiscal 2023 through fiscal 2024 and $2,082 for fiscal 2025.

~~11. Income Taxes~~

The Company files income tax returns in numerous U.S. and foreign jurisdictions, with returns subject to examination for varying periods, but generally back to and including the year ending ~~April 2, 2005.~~March 30, 2019, although certain tax credits generated in earlier years are open under statute from March 29, 2008. The Company is no longer subject to U.S. federal tax examination by the Internal Revenue Service for years ending before March ~~31, 2018.~~30, 2019.

The effective income tax rates for the three-month periods ended December 31, 2022 and January 1, 2022, were 24.4% and ~~December 26, 2020 were 105.6% and 17.9%~~79.2%, respectively. In addition to discrete items, the effective income tax rates for both these periods were different from the U.S. statutory rates due to the foreign-derived intangible income provision and U.S. credit for increasing research activities, which decreased the rate, and state income taxes, foreign income taxes, and nondeductible stock-based compensation, which increased the rate. In the quarter ended, January 1, 2022, the Company’s tax rate was also increased by non-deductible transaction costs incurred in the Dodge acquisition.

The effective income tax rate for the three-month period ended December 31, 2022 of 24.4% included $253 of tax benefits associated with stock-based compensation, partially offset by $218 of other items. The effective income tax rate without discrete items for the three-month period ended December 31, 2022 would have been 24.5%. The effective income tax rate for the three-month period ended January 1, 2022 of 79.2% included $473 of tax benefits associated with stock-based compensation, partially offset by $146 of other items. The effective income tax rate without discrete items for the three-month period ended January 1, 2022 would have been 91.6%. The Company believes it is reasonably possible that some of its unrecognized tax positions may be effectively settled within the next 12 months due to the closing of audits and the statute of limitations expiring in various jurisdictions. The decrease in the Company’s unrecognized tax positions, pertaining primarily to federal and state credits and state tax, is estimated to be approximately $3,086.

Income tax expense for the nine-month period ended December 31, 2022 was $31,853 compared to $9,944 for the nine-month period ended January 1, 2022. Our effective income tax rate for the nine-month period ended December 31, 2022 was 21.3% compared to 30.0% for the nine-month period ended January 1, 2022. In addition to discrete items, the effective income tax rates for both these periods are different from the U.S. statutory rates due to the foreign-derived intangible income provision and U.S. credit for increasing research activities, which decrease the rate, and state income taxes, ~~which~~foreign income taxes, and nondeductible stock-based compensation, that increase the rate. ~~The effective rate is higher in~~In the ~~three-month period~~quarter ended, January 1, 2022, ~~because of~~the Company’s tax rate was also increased by non-deductible transaction costs incurred in ~~connection with~~ the Dodge ~~acquisition and executive compensation deductions that may be disallowed under Section 162(m).~~acquisition.

The effective income tax rate for the three-month period ended January 1, 2022 of 105.6% includes $473 of tax benefits associated with share-based compensation partially offset by $146 of other items. The effective income tax rate without discrete items for the three-month period ended January 1, 2022 would have been 134.6%. The effective income tax rate for the three-month period ended December 26, 2020 of 17.9% included $1,003 of tax benefits associated with share-based compensation. The effective income tax rate without discrete items for the three-month period ended December 26, 2020 would have been 21.4%. The Company believes it is reasonably possible that some of its unrecognized tax positions may be effectively settled within the next twelve months due to the closing of audits and the statute of limitations expiring in varying jurisdictions. The decrease in the Company’s unrecognized tax positions reserve, pertaining primarily to federal and state credits and state tax, is estimated to be approximately $1,429 over the next 12 months.

The effective income tax rate for the nine-month period ended January 1, 2022 was 24.7% compared to 19.6% for the nine-month period ended December 26, 2020. The effective income tax rate for the nine-month period ended January 1, 2022 of 24.7% includes $2,703 of tax benefits associated with share-based compensation and partially offset by the establishment of a $1,853 valuation allowance for capital loss carryforwards we do not expect to recognize. The effective income tax rate without these benefits and other items for the nine-month period ended January 1, 2022 would have been 26.4%. The effective income tax rate for the nine-month period ended December ~~26, 2020~~31, 2022 of ~~19.6%~~21.3% included ~~$1,682~~$3,228 of tax benefits associated with ~~share-based compensation.~~stock-based compensation partially offset by $30 of other items. The effective income tax rate without these benefits and other items for the nine-month period ended December ~~26, 2020~~31, 2022 would have been ~~21.5%~~23.5%. The effective income tax rate for the nine-month period ended January 1, 2022 of 30.0% included $2,703 of tax benefits associated with stock-based compensation offset by the establishment of a $1,853 valuation allowance for capital loss carryforwards we don’t expect to recognize and $86 of other items. The effective income tax rate without these benefits, valuation allowance and other items for the nine-month period ended January 1, 2022 would have been 32.3%.

12. Reportable Segments

The Company ~~previously reported~~operates through operating segments and reports its financial results under 4 operating segments: Plain Bearings; Roller Bearings; Ball Bearings; and Engineered Products. During the third quarter of fiscal 2022, the Company completed the acquisition of Dodge, which has resulted in a change in the internal organization of the Company andbased on how its chief operating decision maker makes operating decisions, assesses the performance of the business, and allocates resources. ~~Accordingly, the Company’s financial results will now be reported in two new~~These reportable operating ~~segments:~~segments are Aerospace/Defense and ~~Industrial:~~Industrial and are described below.

Aerospace/Defense.This segment represents the end markets for the Company’s highly engineered bearings and precision components used in commercial aerospace, defense aerospace, and sea and ground defense applications.

Industrial.This segment represents the end markets for the Company’s highly engineered bearings and precision components used in various industrial applications including: power transmission; construction, mining, energy and specialized equipment manufacturing; semiconductor production equipment manufacturing; agricultural machinery, commercial truck and automotive manufacturing; and tool holding.

~~Financial information for fiscal 2021 has been recast to conform to the new segment presentation.~~

Segment performance is evaluated based on segment net sales and gross margin. Items not allocated to segment operating income include corporate administrative expenses and certain other amounts. Identifiable assets by reportable segment consist of those directly identified with the segment’s operations.

	Three Months Ended						Nine Months Ended
	December 31, 2022			January 1, 2022			December 31, 2022			January 1, 2022
Net External Sales
Aerospace/Defense	$	105,532		$	93,203		$	308,479		$	276,483
Industrial		246,093			173,750			766,393			307,575
	$	351,625		$	266,953		$	1,074,872		$	584,058
Gross Margin
Aerospace/Defense	$	41,650		$	37,454		$	121,283		$	112,666
Industrial		104,390			55,891			317,056			106,916
	$	146,040		$	93,345		$	438,339		$	219,582
Selling, General & Administrative Expenses
Aerospace/Defense	$	7,778		$	7,111		$	22,718		$	21,646
Industrial		29,150			18,171			89,223			29,836
Corporate		19,854			16,420			58,188			61,655
	$	56,782		$	41,702		$	170,129		$	113,137
Operating Income
Aerospace/Defense	$	32,081		$	28,518		$	93,065		$	84,629
Industrial		59,255			23,215			172,600			62,414
Corporate		(20,944	)		(35,868	)		(58,786	)		(85,291	)
	$	70,392		$	15,865		$	206,879		$	61,752

	December 31, 2022		April 2, 2022
Total Assets
Aerospace/Defense	$	796,363	$	776,505
Industrial		3,793,892		3,920,957
Corporate		102,626		147,955
	$	4,692,881	$	4,845,417

Three Months Ended

Nine Months Ended

January 1,
2022

December 26,
2020

January 1,
2022

December 26,
2020

Net External Sales
Aerospace/Defense $ 93,203 $ 93,267 $ 276,483 $ 299,833
Industrial 173,750 52,594 307,575 148,856
$ 266,953 $ 145,861 $ 584,058 $ 448,689
Gross Margin
Aerospace/Defense $ 37,486 $ 38,056 $ 112,666 $ 121,960
Industrial 55,859 17,532 106,916 49,677
$ 93,345 $ 55,588 $ 219,582 $ 171,637
Selling, General & Administrative Expenses
Aerospace/Defense $ 7,114 $ 7,116 $ 21,646 $ 21,483
Industrial 18,168 4,396 29,836 13,019
Corporate 17,914 14,227 51,190 44,089
$ 43,196 $ 25,739 $ 102,672 $ 78,591
Operating Income
Aerospace/Defense $ 28,543 $ 28,630 $ 84,629 $ 93,646
Industrial 23,197 12,904 62,414 35,247
Corporate (37,369 ) (14,993 ) (74,826 ) (47,175 )
$ 14,371 $ 26,541 $ 72,217 $ 81,718

January 1,
2022

April 3,
2021

Total Assets
Aerospace/Defense $ 856,071 $ 792,280
Industrial 3,818,541 357,353
Corporate 200,438 284,627
$ 4,875,050 $ 1,434,260

13. Dodge Acquisition

On November 1, 2021, the Company completed the acquisition of Dodge for approximately $2,908,241, net of cash acquired and subject to certain adjustments. The purchase price was paid with (i) ~~$1,285,053~~$1,285,761 of borrowing under the Term Loan Facility, net of issuance costs, ~~(see Note 10),~~ (ii) ~~$1,050,730~~$1,050,811 of net proceeds from ~~the~~ common stock and MCPS offerings, ~~(see Note 5),~~ (iii) ~~$491,992~~$494,200 of net proceeds from the Senior Notes offering, ~~(see Note 10),~~ and (iv) approximately ~~$80,466~~$77,469 of cash on hand. Since the close of the transaction, purchase price adjustments totaling $28,710 have been recorded.

In the acquisition, the Company purchased 100% of the capital stock of certain entities, including Dodge Mechanical Power Transmission Company Inc. (now known as Dodge Industrial, Inc.), and certain other assets relating to ABB Asea Brown Boveri ~~Ltd’s~~Ltd.’s mechanical power transmission business.

With ~~headquarters~~offices in Greenville, South Carolina, Dodge is a leading manufacturer of mounted bearings, gearings and mechanical products with market-leading brand recognition. Dodge manufactures a complete line of mounted bearings, enclosed gearing and power transmission components across a diverse set of industrial end markets. Dodge primarily operates across the construction and mining aftermarket, and the food & beverage, warehousing and general machinery verticals, with sales predominately in the Americas.

When the Company entered into the Dodge acquisition agreement in July 2021, its obligation to pay the purchase price was supported by a $2,800,000 bridge financing commitment (the “Bridge Commitment”), which was replaced prior to the closing of the acquisition by the equity and debt financings described in Notes 5 and 10 and cash on hand.

Acquisition costs incurred infor the ~~three- and nine- month periods~~fiscal year ended ~~January 1,~~April 2, 2022 totaled ~~$20,141 and $21,574~~$22,598 and were recorded as period expenses and included within other, net within the consolidated statements of operations.

Remaining acquisition-related costs incurred for the three and nine months ended December 31, 2022 were immaterial. This acquisition was accounted for as a purchase transaction. The ~~preliminary~~ purchase price allocation ~~is subject to change pending a final valuation~~was completed during the third quarter of ~~the assets and liabilities acquired.~~fiscal 2023. The assets acquired and liabilities assumed were recorded based on their fair values at the date of acquisition as follows:

	November 1, 2021		November 1, 2021
Cash and cash equivalents	$	81,868	$	81,868
Accounts receivable		83,532		83,533
Inventory		137,652		136,062
Prepaid expenses and other current assets		1,261		1,261
Property, plant and equipment		168,606		165,109
Operating lease assets		9,768		9,768
Goodwill		1,611,470		1,596,083
Other intangible assets		1,385,082		1,385,082
Other noncurrent assets		2,714		3,697
Accounts payable		69,757		(69,263	)
Accrued rebates		29,352		(30,184	)
Accrued expenses and other current liabilities		43,948		(44,766	)
Deferred tax liabilities		289,792		(298,618	)
Other noncurrent liabilities		58,995		(56,989	)
Net assets acquired		2,990,109		2,962,643
Less cash received		81,868		81,868
Net consideration	$	2,908,241	$	2,880,775

The goodwill associated with this acquisition is the result of expected synergies from combining the operations of the acquired business with the Company’s operations, and intangible assets that do not qualify for separate recognition, such as an assembled workforce. ~~The majority~~$44,941 of the acquired goodwill is ~~not~~ deductible for tax purposes.

The fair value of the identifiable intangible assets of $1,385,082, consisting primarily of customer relationships and trade ~~name,~~names, was determined using the income approach. Specifically, a multi-period, excess earnings method was utilized for the customer relationships and the relief-from-royalty method was utilized for the trade name. The fair value of the customer relationships, $1,185,000, is being amortized based on the economic pattern of benefit over a period of 24 years; the fair value of the trade ~~name,~~names, $200,000, is being amortized on a straight-line basis over a ~~26 year~~26-year term. These amortization periods represent the estimated useful lives of the assets.

The results of operations for Dodge have been included in the Company’s financial statements for the period subsequent to the completion of the acquisition on November 1, 2021. Dodge contributed $174,765 of revenue and $37,532 of operating income for the three months ended December 31, 2022. Dodge contributed $544,505 of revenue and $106,178 of operating income for the nine months ended December 31, 2022. Dodge contributed $109,976 of revenue and $5,348 of operating income for both the ~~quarter~~three and nine months ended January 1, 2022.

The following table reflects the unaudited pro forma operating results of the Company for the three- and nine-month fiscal periods ended January 1, 2022, ~~and December 26, 2020,~~ which gives effect to the acquisition of Dodge as if ~~the Company~~it had been acquired on March 29, 2020. The pro forma results are based on assumptions that the Company believes are reasonable under the circumstances. The pro forma results are not necessarily indicative of the operating results that would have occurred had the ~~acquisitions~~acquisition been effective March 29, 2020, nor are they intended to be indicative of results that may occur in the future. The underlying pro forma information includes the historical financial results of the Company and the acquired business adjusted for certain items such as amortization of acquired intangible assets and acquisition costs incurred. The pro forma information does not include the effects of any synergies, cost reduction initiatives or anticipated integration costs related to the acquisitions.

	Three Months Ended				Nine Months Ended				Three Months Ended		Nine Months Ended
	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020		January 1, 2022		January 1, 2022

Net sales	$	319,100	$	287,116	$	968,680	$	852,757	$	319,100	$	968,680
Net income	$	17,958	$	25,013	$	72,623	$	40,764	$	18,567	$	62,990
Basic net income per share available to common stockholders	$	0.45	$	0.72	$	2.27	$	1.28
Diluted net income per share available to common stockholders	$	0.45	$	0.72	$	2.25		1.27

Upon closing, the Company entered into a transition services agreement ~~("TSA"~~(the “Dodge TSA”) with ABB, pursuant to which ABB agreed to support the information technology, human resources and benefits, finance, tax and treasury functions of the Dodge business for six to ~~twelve~~12 months. ~~The Company has~~Substantially all services under the ~~option to extend~~Dodge TSA terminated on November 1, 2022. Costs associated with the ~~support period~~Dodge TSA were $1,241 and $8,945 for ~~up to a maximum~~the three and nine months ended December 31, 2022, respectively, and are included in other, net on the Company’s consolidated statement of an additional year for certain IT services. RBC has the right to terminate individual services at any point over the renewal term. All services are expected to be terminated by the end of the second quarter of fiscal 2023.operations. Since the purchase of the Dodge business on November 1, 2021, costs associated with the Dodge TSA were ~~$3,325~~$16,948 through ~~January 1, 2022 and were included in other, net on the Company's consolidated statement of operations.~~December 31, 2022.

14. Derivative Financial Instruments

The ~~acquisition~~Company is exposed to certain risks relating to its ongoing business operations, including market risks relating to fluctuations in interest rates. Derivative financial instruments are recognized on the consolidated balance sheets as either assets or liabilities and are measured at fair value. Changes in the fair values of ~~Dodge resulted~~derivatives are recorded each period in ~~additional lease obligations.~~earnings or accumulated other comprehensive income, depending on whether a derivative is effective as part of a hedged transaction. Gains and losses on derivative instruments reported in accumulated other comprehensive income (loss) are subsequently included in earnings in the periods in which earnings are affected by the hedged item. The ~~Company’s total lease obligations, including leases acquired, are $3,029~~Company does not use derivative instruments for speculative purposes.

On October 28, 2022, the ~~remainder~~Company entered into a three-year USD-denominated interest rate swap (the “Swap”) with a third-party financial counterparty under the New Credit Agreement (see Note 10). The Swap was executed to protect the Company from interest rate volatility on our variable-rate Term Loan Facility. The Swap has an effective date of ~~fiscal~~December 30, 2022 ~~$11,880 for fiscal 2023, $10,093 for fiscal 2024, $8,605 for fiscal 2025, $8,024 for fiscal 2026, $8,175 for fiscal 2027~~ and ~~$71,063 thereafter.~~is comprised of a $600,000 notional with a maturity of three years. RBC will receive a variable rate based on one-month Term SOFR and will pay a fixed rate of 4.455%. The notional on the Swap will amortize as follows:

Year 1: $600,000

Year 2: $400,000

Year 3: $100,000

The Swap has been designated as a cash flow hedge of the variability of the first unhedged interest payments (the hedged transactions) paid over the hedging relationship’s specified time period of three years attributable to the borrowing’s contractually specified interest index on the hedged principal of its general borrowing program or replacement or refinancing thereof. The fair value of the Swap has been disclosed in Note 6. The accumulated other comprehensive income derivative component balance was a $1,116 loss at December 31, 2022. The gain/loss reclassified from accumulated other comprehensive income into earnings will be recorded as interest income/expense on the Swap and will be included in the operating section of the Company’s consolidated statements of cash flows.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement as to Forward-Looking Information

The objective of the discussion and analysis is to provide material information relevant to an assessment of the financial condition and results of operations of the ~~registrant~~Company including an evaluation of the amounts and certainty of cash flows from operations and from outside sources.

The information in this discussion contains “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 which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts, included in this quarterly report on Form 10-Q regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management are “forward-looking statements” as the term is defined in the Private Securities Litigation Reform Act of 1995.

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) our results have been and are likely to continue to be impacted by the COVID-19 pandemic; (d) 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; (e) future reductions or changes in U.S. government spending could negatively affect our business; (f) fluctuating supply and costs of subcomponents, raw materials and energy resources, or the imposition of import tariffs, could materially reduce our revenues, cash flows and profitability; (g) our results could be impacted by governmental trade policies and tariffs relating to our supplies imported from foreign vendors or our finished goods exported to other countries; (h) 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; (i) the retirement of commercial aircraft could reduce our revenues, cash flows and profitability; (j) work stoppages and other labor problems could materially reduce our ability to operate our business; (k) unexpected equipment failures, catastrophic events or capacity constraints could increase our costs and reduce our sales due to production curtailments or shutdowns; (l) we may not be able to continue to make the acquisitions necessary for us to realize our growth strategy; (m) businesses that we have acquired (such as Dodge) or that we may acquire in the future may have liabilities that are not known to us; (n) 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 adversely affected; (o) we depend heavily on our senior management and other key personnel, the loss of whom could materially affect our financial performance and prospects; (p) our international operations are subject to risks inherent in such activities; (q) currency translation risks may have a material impact on our results of operations; (r) we are subject to changes in legislative, regulatory and legal developments involving income and other taxes; (s) we may be required to make significant future contributions to our pension plan; (t) we may incur material losses for product liability and recall-related claims; (u) environmental and health and safety laws and regulations impose substantial costs and limitations on our operations, and environmental compliance may be more costly than we expect; (v) our intellectual property and proprietary information are valuable, and any inability to protect them could adversely affect our business and results of operations; in addition, we may be subject to infringement claims by third parties; (w) cancellation of orders in our backlog could negatively impact our revenues, cash flows and profitability; (x) if we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud; (y) litigation could adversely affect our financial condition; (z) changes in accounting standards or changes in the interpretations of existing standards could affect our financial results; (aa) risks associated with utilizing information technology systems could adversely affect our operations; (bb) our quarterly performance can be affected by the timing of government product inspections and approvals; (cc) we may not be able to efficiently integrate Dodge into our operations; (dd) we may fail to realize some or all of the anticipated benefits of the Dodge acquisition or those benefits may take longer to realize than expected; (ee) we incurred substantial debt in order to complete the Dodge acquisition, which could constrain our business and exposes us to the risk of defaults under our debt instruments; and (ff) increases in interest rates would increase the cost of servicing the Term Loan Facility and could reduce our profitability. Additional information regarding these and other risks and uncertainties is contained in our periodic filings with the SEC, including, without limitation, the risks identified under the heading “Risk Factors” set forth in ~~the~~our Annual ~~Report on Form 10-K for the year ended April 3, 2021.~~Report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. We do not intend, and undertake no obligation, to update or alter any forward-looking statement. The following section is qualified in its entirety by the more detailed information, including our financial statements and the notes thereto, ~~which~~that appears elsewhere in this Quarterly Report.

Overview

We are a well-known international manufacturer and maker of ~~highly-engineered~~highly engineered bearings and precision components. 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 bearings categories, we focus primarily on the higher end of the bearing and engineered component markets where we believe our value-added manufacturing and engineering capabilities enable us to differentiate ourselves from our competitors and enhance profitability. We believe our expertise has enabled us to garner leading positions in many of the product markets in which we primarily compete. With 5356 facilities in 10 countries, of which 3837 are manufacturing facilities, we have been able to significantly broaden our end markets, products, customer base and geographic reach.

Previously we operated under four reportable business segments – Plain Bearings, Roller Bearings, Ball Bearings, and Engineered Products – but the Dodge acquisition has resulted in a change in the internal organization of the Company and how our chief operating decision maker makes operating decisions, assesses the performance of the business, and allocates resources so that we now operate under two reportable business segments – Aerospace/Defense and Industrial:

●

Aerospace/Defense. This segment represents the end markets for the Company’s highly engineered bearings and precision components used in commercial aerospace, defense aerospace, and ~~sea~~marine and ground defense applications.

●

Industrial. This segment represents the end markets for the Company’s highly engineered bearings, gearings and precision components used in various industrial applications including: power transmission; construction, mining, energy and specialized equipment manufacturing; semiconductor production equipment manufacturing; agricultural machinery, commercial truck and automotive manufacturing; and tool holding.

Financial information for fiscal ~~2021~~2022 has been recast to conform to the new segment presentation.

The markets for our products are cyclical, and we have endeavored to mitigate this cyclicality by entering into single and sole-source relationships and long-term purchase agreements, through diversification across multiple market segments within the Aerospace/Defense and Industrial segments, by increasing sales to the aftermarket, and by focusing on developing highly customized solutions.

Currently, our strategy is built around maintaining our role as a leading manufacturer of ~~highly-engineered~~highly engineered bearings and precision components through the following efforts:

●

Developing innovative solutions. By leveraging our design and manufacturing expertise and our extensive customer relationships, we continue to develop new products for markets in which there are substantial growth opportunities.

●

Expanding customer base and penetrating end markets. We continually seek opportunities to access new customers, geographic locations and bearing platforms with existing products or profitable new product opportunities.

●

Increasing aftermarket sales.We believe that increasing our aftermarket sales of replacement parts will further enhance the continuity and predictability of our revenues and enhance our profitability. Such sales include sales to third party distributors and sales to OEMs for replacement products and aftermarket services. The acquisition of Dodge has had a profound impact on our sales volumes to distributors and other aftermarket customers. We ~~will~~expect to further increase the percentage of our revenues derived from the replacement market by continuing to implement several initiatives.

●

Pursuing selective acquisitions. The acquisition of businesses that complement or expand our operations has been and continues to be an important element of our business strategy. We believe that there will continue to be consolidation within the industry that may present us with acquisition opportunities.

Outlook

Our net sales for the three-month period ended ~~January 1,~~December 31, 2022 increased ~~83.0%~~31.7% compared to the same period last fiscal ~~year; excluding~~year, which included only two months of sales attributable to the Dodge ~~sales in the third quarter of fiscal 2022, net sales were up 7.6% period over period.~~division. The increase in net sales was a result of a ~~230.4%~~41.6% increase in our Industrial segment ~~while sales~~and 13.2% increase in our Aerospace/Defense segment. Excluding sales from Dodge, our Industrial segment ~~were flat.~~increased 11.8% year over year. Our backlog, as of ~~January 1,~~December 31, 2022, was ~~$552.7~~$613.6 million compared to ~~$394.8~~$603.1 million as of April ~~3, 2021.~~2, 2022.

~~Although we experienced a comparative increase in our~~We are continuing to see the recovery of the commercial aerospace business, which increased by 24.2% for the three-month period ended December 31, 2022 versus the same period last fiscal year. We anticipate this growth to continue throughout the rest of the fiscal year ~~the overall recovery of this space has been marginally slower than anticipated. The orders~~and beyond. Orders have ~~started~~continued to ~~fill in however,~~grow as ~~noted in~~evidenced by our ~~backlog increase over recent periods.~~backlog. Defense sales, which represented approximately ~~38.0%~~31.7% of segment sales ~~this period,~~during the quarter, were down ~~more than 10.0%~~4.8% year over year. This iswas in part due to the timing of delivery on parts that require government approval ~~and/or completion of certain milestone achievements~~ prior to ~~invoicing.~~revenue being recognized.

~~Excluding Dodge~~The increase in our Industrial sales ~~sales to our industrial segment increased 21.3% year over year. This reflects~~reflected a pattern of sustained growth ~~in our industrial sales,~~over the last fiscal year, with strong results in several areas. ~~Mining increased by more than 50.0% year over year, driven by strong order activity from large OEM customers.~~ Our ~~oil and gas~~energy business ~~this~~during the quarter ~~showed the start~~continued a pattern of ~~a strong recovery~~growth which is expected to continue into future periods. ~~Other notable strengths in industrial were in semiconductor and general industrial markets.~~

On November 1, 2021, RBC completed the acquisition of Dodge, which operates in our Industrial segment, with a significant amount of their sales derived from customers in industrial distribution. Including the positive impact of this acquisition, the

The Company expects net sales to be approximately ~~$340.0~~$375.0 million to ~~$350.0~~$385.0 million in the fourth quarter of fiscal ~~2022.~~2023.

We experienced strong cash flow generation during the third quarter of fiscal ~~2022 (as~~2023 as discussed in the section “Liquidity and Capital Resources” ~~below). With the addition of Dodge, we~~below. We expect this trend to continue ~~throughout~~into the fourth quarter of the fiscal year as customer demand continues to be significant. We believe that operating cash flows and available credit under the Revolving Credit Facility ~~and Foreign Revolver~~ will provide adequate resources to fund internal growth initiatives for the foreseeable future, including at least the next 12 months. ~~For further discussion regarding the funding of the Dodge acquisition, refer to Part I, Item 1 – Notes 5, 10 and 13.~~ As of ~~January 1,~~December 31, 2022, we had cash and cash equivalents of ~~$255.5~~$82.0 million, of which approximately ~~$29.4~~$30.8 million was cash held by our foreign operations.

Results of Operations

(dollars in millions)

	Three Months Ended											Three Months Ended
	January 1, 2022			December 26, 2020		$ Change			% Change			December 31, 2022		January 1, 2022			$ Change		% Change
Total net sales	$	267.0		$	145.9	$	121.1			83.0	%	$	351.6	$	267.0		$	84.6		31.7	%

Net income/(loss) available to common stockholders	$	(5.8	)	$	21.6	$	(27.4	)		(127.0	)%
Net income/(loss) attributable to common stockholders												$	30.6	$	(5.2	)	$	35.8		687.5	%

Net income/(loss) per share available to common stockholders: diluted	$	(0.20	)	$	0.86
Net income/(loss) per share attributable to common stockholders: diluted												$	1.05	$	(0.18	)
Weighted average common shares: diluted		28,618,495			25,060,812								29,120,318		28,618,495

Our net sales for the three-month period ended ~~January 1,~~December 31, 2022 increased ~~83.0%~~31.7% compared to the same period last fiscal year; ~~excluding~~on an organic basis (excluding Dodge sales ~~in the third quarter of fiscal 2022,~~for both periods), net sales were up ~~7.6% period~~12.7% year over ~~period. The increase in net~~year. Net sales ~~was a result of a 230.4% increase~~ in our Industrial ~~segment. Sales to~~segment increased 41.6% year over year; excluding Dodge, Industrial segment sales increased 11.8% year over year. This reflected a pattern of sustained growth, with strong results in areas including the energy and general industrial markets. Net sales in our Aerospace/Defense segment ~~were~~increased 13.2% year over year, led by ~~aircraft~~commercial OEM, which was up ~~10.5%~~22.8% compared to the same period in the prior ~~year. Sales~~year while sales to the defense sector were down principally as a result of production delays, rendering the Aerospace/Defense segment to be even with the prior year. Excluding Dodge sales, sales to our industrial segment increased 21.3% year over year. This reflects a pattern of sustained growth in our industrial sales, with strong results in areas including the semiconductor, mining, energy, and general industrial markets. Within aerospace, we experienced an4.8%. The increase in ~~our~~ commercial aerospace ~~business while~~reflected recovery in orders from large OEMs as build rates escalate and our expansion in the ~~defense end markets~~aftermarket. Defense sales were ~~down as compared~~negatively impacted by the timing of delivery on parts that require government approval and/or completion of certain milestone achievements prior to ~~the same period last year.~~revenue being recognized.

Net income ~~available~~attributable to common stockholders for the third quarter of fiscal ~~2022~~2023 was ~~a loss of $5.8~~$30.6 million compared to ~~income of $21.6~~a $5.2 million net loss for the same period last fiscal year. Net income for the third quarter of fiscal 2023 was affected by approximately $1.2 million of pre-tax transition services costs associated with the Dodge acquisition. Net income for the third quarter of fiscal 2022 was affected by approximately $7.0 million of pre-tax inventory purchase accounting adjustments associated with the Dodge acquisition and $23.5 million of other costs associated with the acquisition of Dodge, interest expense of $11.9 million, and tax expense of $1.2 million. Net income for the third quarter of fiscal 2021 was affected by $1.1 million of after-tax restructuring costs and related items primarily associated with the consolidation of certain manufacturing facilities, as well as $0.2 million of losses on foreign exchange, partially offset by $1.0 million of tax benefits associated with share-based compensation.Dodge.

	Nine Months Ended
	December 31, 2022		January 1, 2022		$ Change		% Change
Total net sales	$	1,074.9	$	584.1	$	490.8		84.0	%

Net income attributable to common stockholders	$	100.3	$	17.0	$	83.3		491.1	%

Net income per share attributable to common stockholders: diluted	$	3.45	$	0.63
Weighted average common shares: diluted		29,053,608		26,757,811

Nine months Ended

January 1,
2022

December 26,
2020
$ Change % Change
Total net sales $ 584.1 $ 448.7 $ 135.4 30.2 %

Net income available to common stockholders $ 26.6 $ 64.7 $ (38.1 ) (58.9 )%

Net income per share available to common stockholders: diluted $ 1.00 $ 2.59
Weighted average common shares: diluted 26,663,990 24,985,848

~~Net~~Our net sales ~~increased $135.4 million, or 30.2%~~ for the nine-month period ended ~~January 1,~~December 31, 2022 ~~over~~increased 84.0% compared to the same period last ~~year. The increase in~~fiscal year; on an organic basis (excluding Dodge sales for both periods), net sales ~~was mainly~~were up 11.9% year over year. Net sales in our Industrial segment increased 149.2% year over year; excluding Dodge, Industrial segment sales increased 12.3% year over year. This reflects a pattern of sustained growth, with strong results in areas including the ~~result of a 106.6% increase in Industrial sales partially offset by a 7.8% decrease in Aerospace/Defense sales. The increase in Industrial sales was felt across many end markets, notably in~~semiconductor, mining, energy, and general industrial markets. ~~The decrease~~Net sales in our Aerospace/Defense segment increased 11.6% year over year, led by commercial OEM, which was up 25.3% compared to the same period in the prior year while sales ~~was realized~~to the defense sector were down 7.3%. The increase in ~~both our commercial and defense markets. While the first half of the year reflected difficult results in aerospace and defense, we have seen an improvement in our~~ commercial aerospace ~~end market, which has slowed~~reflected the ~~decline~~recovery in ~~this segment. This trend is expected to continue to improve~~build rates from large OEMs and stability in ~~future periods.~~the aftermarket. Defense sales were negatively impacted by the timing of shipments associated with our marine business.

Net income attributable to common stockholders for the nine months ended ~~January 1,~~December 31, 2022 was ~~$26.6~~$100.3 million compared to ~~$64.7~~$17.0 million for the same period last fiscal year. Net income for the nine-month period in fiscal 2023 was affected by approximately $8.9 million of pre-tax transition services costs associated with the Dodge acquisition. Net income for the nine-month period in fiscal 2022 was affected by approximately $7.0 million of pre-tax inventory purchase accounting adjustments associated with the Dodge acquisition and $24.9 million of other costs associated with the acquisition of Dodge, interest expense of $27.9 million and tax expense of $10.8 million. Net income for the nine-month period in fiscal 2021 was affected by $0.8 million of capacity inefficiencies driven by the decrease in volume, $5.9 million costs associated with the consolidation of certain manufacturing facilities, and $15.7 million of tax expense.Dodge.

Gross Margin

	Three Months Ended											Three Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

Gross Margin	$	93.3		$	55.6		$	37.7		67.9	%	$	146.0		$	93.3		$	52.7		56.5	%
% of net sales		35.0	%		38.1	%							41.5	%		35.0	%

Gross margin was ~~35.0%~~41.5% of net sales for the third quarter of fiscal ~~2022~~2023 compared to ~~38.1%~~35.0% for the third quarter of fiscal ~~2021. Gross~~2022. The increase in gross margin ~~for the third quarter~~as a percentage of ~~fiscal 2022 included the unfavorable impact of~~net sales was driven by increased volumes and efficiencies achieved and approximately $7.0 million of inventory purchase accounting adjustments associated with the Dodge ~~acquisition.~~acquisition during the third quarter of fiscal 2022.

	Nine months Ended											Nine Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

Gross Margin	$	219.6		$	171.6		$	48.0		27.9	%	$	438.3		$	219.6		$	218.7		99.6	%
% of net sales		37.6	%		38.3	%							40.8	%		37.6	%

Gross margin was ~~37.6%~~40.8% of net sales for the first nine months of fiscal ~~2022~~2023 compared to ~~38.3%~~37.6% for the same period last fiscal year. Gross margin for the nine-month period of fiscal 2022 ~~included the unfavorable impact of~~was impacted by approximately $7.0 million of inventory purchase accounting adjustments associated with the Dodge acquisition and approximately $0.9 million of ~~other inventory rationalization~~restructuring costs associated with consolidation efforts at one of our facilities. Gross margin for the nine-month period of fiscal 2021 was impacted by $0.8 million of capacity inefficiencies driven by the decrease in volume and $2.8 million in inventory rationalization costs associated with the consolidation of certain manufacturingdomestic facilities.

Selling, General and Administrative

	Three Months Ended
	December 31, 2022			January 1, 2022			$ Change		% Change

SG&A	$	56.8		$	41.7		$	15.1		36.2	%
% of net sales		16.1	%		15.6	%

Three Months Ended

January 1,
2022

December 26,
2020

$
Change

%
Change

SG&A
$
43.2 $ 25.7 $ 17.5 68.1 %
% of net sales 16.2 % 17.6 %

SG&A for the third quarter of fiscal ~~2022~~2023 was ~~$43.2~~$56.8 million, or ~~16.2%~~16.1% of net sales, as compared to ~~$25.7~~$41.7 million, or ~~17.6%~~15.6% of net sales, for the same period of fiscal ~~2021.~~2022. The increase in SG&A ~~for~~was primarily driven by an additional month of costs associated with the Dodge business in the third quarter of fiscal 2023 compared to the same quarter in fiscal 2022 ~~includes approximately $12.0 million of costs from the Dodge business. The remainder of the increase is primarily associated with an increase in~~and increased personnel costs, ~~year over year.~~freight costs, IT costs and other professional fees.

	Nine months Ended											Nine Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

SG&A	$	102.7		$	78.6		$	24.1		30.1	%	$	170.1		$	113.1		$	57.0		50.4	%
% of net sales		17.6	%		17.5	%							15.8	%		19.4	%

SG&A expenses increased by ~~$24.1~~$57.0 million to ~~$102.7~~$170.1 million for the first nine months of fiscal ~~2022~~2023 compared to ~~$78.6~~$113.1 million for the same period last fiscal year. The increase in SG&A was primarily driven by increased personnel costs, selling costs and administrative costs associated with the Dodge acquisition. SG&A as a percentage of sales was comparatively higher for the first nine months of fiscal 2022 ~~includes approximately $12.0~~primarily due to $17.5 million ~~of costs from~~more stock-based compensation recognized during the ~~Dodge business. The remainder of the increase is primarily associated with an increase in personnel costs year over year.~~period.

Other, Net

	Three Months Ended											Three Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change			% Change

Other, net	$	35.8		$	3.3		$	32.5		984.8	%	$	18.9		$	35.8		$	(16.9	)		(47.3	)%
% of net sales		13.4	%		2.3	%							5.4	%		13.4	%

Other operating expenses for the third quarter of fiscal ~~2022~~2023 totaled ~~$35.8~~$18.9 million compared to ~~$3.3~~$35.8 million for the same period last fiscal year. For the third quarter of fiscal 2023, other operating expenses included $1.2 million of Dodge TSA costs and other costs associated with the Dodge acquisition, $17.4 million of amortization of intangible assets, and $0.3 million of other items. For the third quarter of fiscal 2022, other operating expenses included ~~$23.5~~$20.2 million of costs associated with the Dodge acquisition, $3.3 million of Dodge TSA costs, $12.1 million of amortization of intangible assets and $0.2 million of other items. For the third quarter of fiscal 2021, other operating expenses included $2.6 million of amortization of intangible assets, $0.5 million of restructuring costs and related items, and $0.2 million of other costs.

	Nine months Ended											Nine Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

Other, net	$	44.7		$	11.3		$	33.4		295.6	%	$	61.3		$	44.7		$	16.6		37.2	%
% of net sales		7.7	%		2.5	%							5.7	%		7.7	%

Other operating expenses for the first nine months of fiscal ~~2022~~2023 totaled ~~$44.7~~$61.3 million compared to ~~$11.3~~$44.7 million for the same period last fiscal year. For the first nine months of fiscal 2023, other operating expenses were comprised mainly of $8.9 million of Dodge TSA costs and other costs associated with the Dodge acquisition, $51.5 million of amortization of intangible assets, and $0.9 million of other items. For the first nine months of fiscal 2022, other operating expenses were comprised mainly of ~~$24.9~~$21.6 million of costs associated with the Dodge acquisition, $3.3 million of Dodge TSA costs, $17.5 million ofin amortization of ~~intangible assets,~~intangibles, $1.7 million of restructuring and related items, and $0.6 million of other items. For the first nine months of fiscal 2021, other operating expenses were comprised mainly of $7.7 million in amortization of intangibles, $3.1 million of restructuring and related items, $0.4 million of additions to the allowance for doubtful accounts, and $0.1 million of other items.

Interest Expense, Net

	Three Months Ended											Three Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

Interest expense, net	$	11.9		$	0.3		$	11.6		3,866.7	%	$	20.9		$	11.9		$	9.0		76.4	%
% of net sales		4.4	%		0.2	%							5.9	%		4.4	%

Interest expense, net, generally 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 ~~$11.9~~$20.9 million for the third quarter of fiscal ~~2022~~2023 compared to ~~$0.3~~$11.9 million for the same period last fiscal year. During the third quarter of fiscal 2022, the Company incurred approximately $1.1 million in costs associated with the amortization of fees for ~~the Bridge Commitment~~a bridge financing commitment established in ~~association~~connection with the Dodge acquisition ~~(see Note 13~~during the third quarter of ~~Part 1, Item 1 above),~~fiscal 2022, which was replaced ~~during the quarter~~ with the ~~permanent financings discussed~~Term Loan Facility, Revolving Credit Facility and Senior Notes in ~~Notes 5 and 9 of Part 1, Item 1 above.~~the same quarter. The increase in interest ~~cost during~~expense from fiscal 2022 to fiscal 2023 was primarily due to an additional month of interest expense associated with the ~~period is a result of~~Term Loan Facility and Revolving Credit Facility and the ~~quarterly impact of the permanent financing~~increase in ~~place.~~LIBOR from fiscal 2022 to fiscal 2023.

	Nine months Ended											Nine Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

Interest expense, net	$	27.9		$	1.1		$	26.8		2,436.4	%	$	55.0		$	27.9		$	27.1		97.0	%
% of net sales		4.7	%		0.2	%							5.1	%		4.7	%

Interest expense, net was $55.0 million for the first nine months of fiscal 2023 compared to $27.9 million for the first nine months of fiscal ~~2022 compared to $1.1 million for the first nine months of fiscal 2021.~~2022. During the nine months ended January 1, 2022 the Company incurred approximately $16.6 million in costs associated with the amortization of fees for the ~~Bridge Commitment~~bridge financing commitment mentioned above and $11.3 million of interest expense on outstanding financing. The increase in interest expense from fiscal 2022 to fiscal 2023 was primarily due to seven more months of interest expense associated with the Term Loan Facility and Revolving Credit Facility and the increase in LIBOR from fiscal 2022 to fiscal 2023.

Other ~~Non-operating Expense~~Non-Operating Expense/(Income)

	Three Months Ended											Three Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

Other non-operating expense	$	1.4		$	(0.1	)	$	1.5		1,500.0	%
Other non-operating expense /(income)												$	1.5		$	1.4		$	0.1		10.3	%
% of net sales		0.5	%		0.0	%							0.4	%		0.5	%

Other non-operating expenses were ~~$1.4~~$1.5 million for the third quarter of fiscal ~~2022~~2023 compared to ~~$0.1~~$1.4 million of income for the same period in the prior year and consisted primarily of post-retirement benefit costs and foreign exchange gains and losses.

	Nine Months Ended
	December 31, 2022			January 1, 2022			$ Change		% Change

Other non-operating expense /(income)	$	2.5		$	0.6		$	1.9		289.7	%
% of net sales		0.2	%		0.1	%

Other non-operating expenses were $2.5 million for the first nine months of fiscal 2023 compared to $0.6 million of income for the same period in the prior year. For the ~~third quarter~~first nine months of fiscal ~~2022,~~2023, other non-operating expenses were comprised of ~~$0.9~~$2.6 million of ~~charges associated with the elimination of a domestic debt facility, $0.4 million of post retirement~~post-retirement benefit costs, ~~and $0.1 million of other items. For the third quarter of fiscal 2021, other non-operating income was comprised of $0.5 million of gains on marketable securities,~~ partially offset by ~~$0.2~~$0.1 million of foreign exchange ~~loss and $0.2 million of other items.~~

Nine months Ended
January 1,
2022 December 26,
2020 $
Change %
Change

Other non-operating expense $ 0.6 $ 0.2 $ 0.4 200.0 %
% of net sales 0.1 % 0.0 %

~~Other non-operating expenses were $0.6 million for the first nine months of fiscal 2022 compared to $0.2 million for the same period in the prior year.~~gain. For the first nine months of fiscal 2022, other non-operating expenses were comprised of $0.9 million of charges associated with the elimination of a debt facility, $0.6 million of ~~post retirement~~post-retirement benefit costs, $0.1 million of foreign exchange loss, and $0.2 million of other items partially offset by $1.2 million of income associated with short-term marketable securities. For the first nine months of fiscal 2021, other non-operating expenses were comprised of $0.4 million of foreign exchange loss and $0.3 million of other items, partially offset by $0.5 million of gains on marketable securities.

Income Taxes

							Three Months Ended
	Three Months Ended						December 31, 2022			January 1, 2022
	January 1, 2022			December 26, 2020
Income tax expense	$	1.2		$	4.7		$	11.7		$	2.1
Effective tax rate		105.6	%		17.9	%		24.4	%		79.2	%

Income tax expense for the three-month period ended ~~January 1,~~December 31, 2022 was ~~$1.2~~$11.7 million compared to ~~$4.7~~$2.1 million for the three-month period ended ~~December 26, 2020.~~January 1, 2022. Our effective income tax rate for the three-month period ended December 31, 2022 was 24.4% compared to 79.2% for the three-month period ended January 1, ~~2022 was 105.6% compared to 17.9%~~2022. The effective income tax rate for the three-month period ended December ~~26, 2020.~~31, 2022 of 24.4% included $0.3 million of tax benefits associated with stock-based compensation offset by $0.2 million of other items. The effective income tax rate without discrete items would have been 24.5%. The effective income tax rate for the three-month period ended January 1, 2022 of ~~105.6%~~79.2% included $0.5 million of tax benefits associated with ~~share-based~~stock-based compensation offset by $0.1 million of other items. The effective income tax rate without discrete items for the three-month period ended January 1, 2022 would have been 91.6%. The effective income tax rate differed from the statutory rate primarily due to nondeductible stock-based compensation expense recognized in the period, and state and foreign taxes that increased the rate while R&D credits and the foreign-derived intangible income provision decreased the rate. In the quarter ended, January 1, 2022, the Company’s tax rate was also increased by non-deductible transaction costs incurred in the Dodge acquisition.

	Nine Months Ended
	December 31, 2022			January 1, 2022

Income tax expense	$	31.9		$	9.9
Effective tax rate		21.3	%		30.0	%

Income tax expense for the nine-month period ended December 31, 2022 was $31.9 million compared to $9.9 million for the nine-month period ended January 1, 2022. Our effective income tax rate for the nine-month period ended December 31, 2022 was 21.3% compared to 30.0% for the nine-month period ended January 1, 2022. The effective income tax rate for the nine-month period ended December 31, 2022 of 21.3% included $3.2 million of tax benefits associated with stock-based compensation partially offset by $0.1 million of ~~discrete tax expense;~~other items; the effective income tax rate without these items would have been 134.6%. The tax rate for the third quarter was negatively impacted by the inclusion of certain pre-tax acquisition related charges that are not deductible for tax purposes. The effective income tax rate for the three-month period ended December 26, 2020 of 17.9% includes $1.0 million of tax benefit associated with share-based compensation. The effective income tax rate without these benefits and other items ~~for the three-month period ended December 26, 2020~~ would have been ~~21.4%~~23.5%.

Nine months Ended
January 1,
2022 December 26,
2020

Income tax expense $ 10.8 $ 15.7
Effective tax rate 24.7 % 19.6 %

Income tax expense for the nine-month period ended January 1, 2022 was $10.8 million compared to $15.7 million for the nine-month period ended December 26, 2020. Our effective income tax rate for the nine-month period ended January 1, 2022 was 24.7% compared to 19.6% for the nine-month period ended December 26, 2020. The effective income tax rate for the nine-month period ended January 1, 2022 of ~~24.7%~~30.0% included $2.7 million of tax benefits associated with ~~share-based~~stock-based compensation ~~partially~~ offset by the establishment of a $1.9 million ~~of discrete tax expense primarily associated with establishing a~~ valuation allowance ~~on a~~for capital loss carryforward; the effective income tax rate without these benefits would have been 26.4%. The tax rate for the nine months ended January 1, 2022 was negatively impacted by the inclusion of certain pre-tax acquisition related charges that are not deductible for tax purposes. The effective income tax rate for the nine-month period ended December 26, 2020 of 19.6% includes $1.7carryforwards we don’t expect to recognize and $0.1 million of ~~tax benefit associated with share-based compensation.~~other items. The effective income tax rate without these benefits, valuation allowance and other items for the nine-month period ended ~~December 26, 2020~~January 1, 2022 would have been ~~21.5%~~32.3%. The effective income tax rate differed from the statutory rate primarily due to nondeductible stock-based compensation expense recognized in the period, and state and foreign taxes that increased the rate while R&D credits and the foreign-derived intangible income provision decreased the rate. In the nine-month period ended, January 1, 2022, the Company’s tax rate was also increased by non-deductible transaction costs incurred in the Dodge acquisition.

Segment Information

We previously reported our financial results under four operating segments (Plain Bearings; Roller Bearings; Ball Bearings; and Engineered Products), but the Dodge acquisition has resulted in a change in the internal organization of the Company and how our chief operating decision maker makes operating decisions, assesses the performance of the business, and allocates resources. Accordingly, we ~~will~~ now report our financial results under two operating segments: Aerospace/Defense; and Industrial. Financial information for fiscal ~~2021~~2022 has been recast to conform to the new segment presentation. We use segment net sales and gross margin as the primary ~~measurement~~measurements to assess the financial performance of each reportable segment.

Aerospace/Defense Segment

Three Months Ended

January 1,
2022

December 26,
2020

$
Change

%
Change

Total net sales $ 93.2 $ 93.3 $ (0.1 ) (0.1 )%

Gross margin $ 37.5 $ 38.1 $ (0.6 ) (1.5 )%
% of segment net sales 40.2 % 41.6 %

SG&A $ 7.1 $ 7.1 $ (0.0 ) (0.0 )%
% of segment net sales 7.6 % 7.6 %

	Three Months Ended
	December 31, 2022			January 1, 2022			$ Change		% Change

Total net sales	$	105.5		$	93.2		$	12.3		13.2	%

Gross margin	$	41.7		$	37.5		$	4.2		11.2	%
% of segment net sales		39.5	%		40.2	%

SG&A	$	7.8		$	7.1		$	0.7		9.4	%
% of segment net sales		7.4	%		7.6	%

Net sales ~~decreased $0.1~~increased $12.3 million, or ~~0.1%~~13.2%, for the three months ended ~~January 1,~~December 31, 2022 compared to the same period last fiscal year. Commercial aerospace increased during the period ~~7.5%~~24.2% year over year. The ~~aerospace~~commercial OEM ~~component~~business was up ~~10.5%~~22.8%, demonstrating ~~early signs of a~~continued recovery as build rates and orders escalate in the OEM markets. ~~This was further evidenced by continuing expansion of our backlog during the period.~~ Our defense markets, which ~~represent about 38.0%~~represented approximately 31.7% of segment sales, decreased by approximately ~~10.3%~~4.8% during the period. These markets were impacted by the timing of deliveries to certain government customers ~~which~~that require ~~sign off~~sign-off or achievement of certain milestones prior to shipment. Overall distribution and aftermarket sales, which ~~represent a little less than 20.0%~~represented 17.3% of segment sales, ~~were down 14.8%~~increased 16.8% year over year.

Gross margin as a percentage of segment net sales was ~~40.2%~~39.5% for the third quarter of fiscal ~~2022~~2023 compared to ~~41.6%~~40.2% for the same period last fiscal year. The decrease in gross margin as a percentage of net sales was driven by product ~~mix during the period.~~mix.

	Nine months Ended												Nine Months Ended
	January 1, 2022			December 26, 2020			$ Change			% Change			December 31, 2022			January 1, 2022			$ Change		% Change

Total net sales	$	276.5		$	299.8		$	(23.3	)		(7.8	)%	$	308.5		$	276.5		$	32.0		11.6	%

Gross margin	$	112.7		$	122.0		$	(9.3	)		(7.6	)%	$	121.3		$	112.7		$	8.6		7.6	%
% of segment net sales		40.8	%		40.1	%								39.3	%		40.8	%

SG&A	$	21.7		$	21.5		$	0.2			0.8	%	$	22.7		$	21.7		$	1.0		5.0	%
% of segment net sales		7.8	%		7.2	%								7.4	%		7.8	%

Net sales ~~decreased $23.4~~increased $32.0 million, or ~~7.8%~~11.6%, for the nine months ended ~~January 1,~~December 31, 2022 compared to the same period last fiscal year. The ~~7.8% decrease~~11.6% increase was primarily driven by a ~~7.5% decrease~~24.1% increase in our commercial aerospace market, both OEM and aftermarket, while our defense market iswas down ~~7.7%~~7.3% year over year ~~for reasons outlined above.~~due to the timing of shipments related to our marine business. During the year, ~~as evidenced in the quarter discussion above,~~ we ~~have noted~~saw improvement in the sales and orders to our commercial aerospace ~~customers. Although the recovery has taken longer than previously anticipated, our~~customers as build rates continued to grow. Our backlog and recent results reflect the early stages of this process which we expect to continue to see in ~~the future.~~upcoming quarters. Overall distribution and aftermarket sales were ~~down 16.9%~~up 11.5% year over ~~year as excess channel inventory is consumed.~~year.

Gross margin as a percentage of net sales ~~increased~~decreased to ~~40.8%~~39.3% for the first nine months of fiscal ~~2022~~2023 compared to ~~40.1%~~40.8% for the same period last fiscal year. ~~Gross~~The decrease in gross margin ~~for the nine-month period ended January 1, 2022~~percentage was ~~impacted by approximately $0.9 million of inventory rationalization costs associated with a consolidation efforts at one of our facilities.~~due to product mix.

Industrial Segment

	Three Months Ended											Three Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

Total net sales	$	173.8		$	52.6		$	121.2		230.4	%	$	246.1		$	173.8		$	72.3		41.6	%

Gross margin	$	55.9		$	17.5		$	38.4		218.6	%	$	104.4		$	55.9		$	48.5		86.8	%
% of segment net sales		32.2	%		33.3	%							42.4	%		32.2	%			��

SG&A	$	18.2		$	4.4		$	13.8		313.3	%	$	29.2		$	18.2		$	11.0		60.4	%
% of segment net sales		10.5	%		8.4	%							11.8	%		10.5	%

Net sales increased ~~$121.2~~$72.3 million, or ~~230.4%~~41.6%, for the three months ended ~~January 1,~~December 31, 2022 compared to the same period last fiscal year. The increase was primarily due to ~~two months~~the inclusion of a full quarter of Dodge sales in fiscal ~~2022~~2023 and continued strong performance across the majority of our industrial markets. Excluding Dodge sales ~~of $110.0 million,~~from both periods, organic net sales increased ~~$11.2 million, or 21.3%,~~11.8% period over period. This increase was driven by performance in ~~semiconductor,~~ energy ~~mining,~~ and the general industrial markets. Sales to distribution and the aftermarket ~~reflected more than 60.0%~~represented 67.7% of our quarterly industrial sales. These distribution and aftermarket sales increased ~~445.1%~~54.7% compared to the same quarter in the prior year and ~~15.5% on an organic basis.~~7.8% organically.

Gross margin for the three months ended ~~January 1,~~December 31, 2022 was ~~32.2%~~42.4% of net sales, compared to ~~33.3%~~32.2% in the comparable period in fiscal ~~2021.~~2022. The improved gross margin ~~for the third quarter of fiscal 2022 included~~was due to price and volume increases and also the unfavorable impact of $7.0 million of inventory purchase accounting adjustments associated with the Dodge ~~acquisition. Gross margin for~~acquisition during the third quarter of fiscal ~~2021 was impacted by approximately $0.8 million of inventory rationalization costs associated with the consolidation of certain manufacturing facilities.~~2022.

	Nine months Ended											Nine Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

Total net sales	$	307.6		$	148.9		$	158.7		106.6	%	$	766.4		$	307.6		$	458.8		149.2	%

Gross margin	$	106.9		$	49.7		$	57.2		115.2	%	$	317.1		$	106.9		$	210.2		196.5	%
% of segment net sales		34.8	%		33.4	%							41.4	%		34.8	%

SG&A	$	29.8		$	13.0		$	16.8		129.2	%	$	89.2		$	29.8		$	59.4		199.0	%
% of segment net sales		9.7	%		8.7	%							11.6	%		9.7	%

Net sales increased ~~$158.7~~$458.8 million, or ~~106.6%~~149.2%, for the nine months ended ~~January 1,~~December 31, 2022 compared to the same period last fiscal year. The increase was primarily due to ~~two~~nine months of Dodge sales in fiscal 2023 compared to two months in fiscal 2022 and strong performance across our industrial markets. Excluding Dodge sales, net sales increased ~~$48.7~~$24.3 million, or ~~32.7%~~12.3%, period over period. Sales to distribution and the aftermarket increased ~~182.6%~~224.1% over last fiscal year, and ~~28.3%~~6.6% on an organic basis. The overall segment increase, excluding the addition of Dodge, was driven by performance in semiconductor, energy, mining, and the general industrial markets.

Gross margin for the nine months ended ~~January 1,~~December 31, 2022 was ~~34.8%~~41.4% of net sales, compared to ~~33.4%~~34.8% in the ~~comparable~~same period in fiscal ~~2021.~~2022. The increase in gross margin is driven by price and volume increases and the fact that gross margin for the first nine months of fiscal 2022 included the unfavorable impact of $7.0 million of inventory purchase accounting adjustments associated with the Dodge acquisition. Gross margin for the first nine months of fiscal 2021 was impacted by approximately $2.8 million in inventory rationalization costs associated with the consolidation of certain manufacturing facilities..

Corporate

	Three Months Ended											Three Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change		% Change

SG&A	$	17.9		$	14.2		$	3.7		25.9	%	$	19.9		$	16.4		$	3.5		20.9	%
% of total net sales		6.7	%		9.8	%							5.6	%		6.2	%

Corporate SG&A was ~~$17.9~~$19.9 million, or ~~6.7%~~5.6% of sales, for the third quarter of fiscal ~~2022~~2023 compared to ~~$14.2~~$16.4 million, or ~~9.8%~~6.2% of sales, for the same period last fiscal year. The year over year increase was primarily due to ~~an increase~~increases in personnel costs and professional ~~fees during the period.~~fees.

	Nine months Ended											Nine Months Ended
	January 1, 2022			December 26, 2020			$ Change		% Change			December 31, 2022			January 1, 2022			$ Change			% Change

SG&A	$	51.2		$	44.1		$	7.1		16.1	%	$	58.2		$	61.7		$	(3.5	)		(5.6	)%
% of total net sales		8.8	%		9.8	%							5.4	%		10.6	%

Corporate SG&A ~~increased $7.1~~decreased $3.5 million for the nine months ended ~~January 1,~~December 31, 2022 compared to the same period last fiscal year due to ~~an increase~~a $17.5 million decrease in stock-based compensation expense, partially offset by increases in personnel costs and professional ~~fees, and travel related costs.~~fees.

Liquidity and Capital Resources

(dollars in millions in tables)

Our business is capital-intensive. Our capital requirements include manufacturing equipment and materials. In addition, we have historically fueled our growth, in part, through acquisitions, including the Dodge acquisition completed on November 1, 2021. We have historically met our working capital, capital expenditure ~~requirements~~ and acquisition funding needs through our net cash flows provided by operations, various debt arrangements and ~~sale~~sales of equity to investors. We believe that operating cash flows and available credit under the Revolving Credit Facility ~~and Foreign Revolver~~ will provide adequate resources to fund internal growth initiatives for the foreseeable future. For further discussion regarding the funding of the Dodge acquisition, refer to Part I, Item 1 – ~~Notes 5, 10 and~~Note 13.

Our ability to meet future working capital, capital ~~expenditures~~expenditure and debt service requirements will depend on our future financial performance, which will be affected by a range of economic, competitive and business factors, particularly interest rates, cyclical changes in our end markets and prices for steel and our ability to pass through price increases on a timely basis, many of which are outside of our control. In addition, future acquisitions could have a significant impact on our liquidity position and our need for additional funds.

From time to time, we evaluate our existing facilities and operations and their strategic importance to us. If we determine that a given facility or operation does not have future strategic importance, we may sell, relocate, consolidate or otherwise dispose of ~~those~~that facility or operations. Although we believe our operations would not be materially impaired by such dispositions, relocations or consolidations, we could incur significant cash or non-cash charges in connection with them.

Liquidity

As of ~~January 1,~~December 31, 2022, we had cash and cash equivalents of ~~$255.5~~$82.0 million, of which approximately ~~$29.4 million~~$30.8 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.

Domestic Credit Facility

~~The Company~~On November 1, 2021 RBC Bearings Incorporated, our top holding company, and RBCA, our top operating subsidiary, entered into the New Credit Agreement with Wells Fargo, as Administrative Agent, Collateral Agent, Swingline Lender and Letter of Credit Issuer and the other lenders party thereto, ~~on November 1, 2021~~ and terminated the ~~2015 Credit Agreement.~~Company’s prior credit agreement, which was entered into with Wells Fargo in 2015. The New Credit Agreement provides the Company with (a) ~~the~~a $1,300.0 million ~~Term~~term loan facility (the “Term Loan ~~Facility,~~Facility”), which was used to fund a portion of the cash purchase price for the acquisition of Dodge and to pay related fees and expenses, and (b) ~~the~~a $500.0 million ~~Revolving~~revolving credit facility (the “Revolving Credit ~~Facility.~~Facility” and together with the Term Loan Facility, the “Facilities”). Debt issuance costs associated with the New Credit Agreement totaled $14.9 million and ~~will be~~are being amortized over the life of the New Credit Agreement. ~~When the 2015 Credit Agreement was terminated the Company wrote off $890 of previously unamortized debt issuance costs relating to the 2015 Credit Agreement.~~

~~Amounts~~

Prior to December 2022, amounts outstanding under the Facilities generally ~~bear~~bore 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 ~~1/2 of 1.00%~~0.50% and (iii) the one-month ~~LIBOR~~London interbank offered rate (LIBOR) rate plus 1.00% or (b) the LIBOR rate plus a specified margin, depending on the type of borrowing being made. The applicable margin iswas based on the ~~Company's~~Company’s consolidated ratio of total net debt to consolidated EBITDA from time to time. ~~Currently,~~In December 2022 the ~~Company's~~New Credit Agreement was amended to replace LIBOR with the secured overnight financing rate administered by the Federal Reserve Bank of New York (“SOFR”) so that borrowings under the Facilities denominated in U.S. dollars bear interest at a rate per annum equal to Term SOFR (as defined in the New Credit Agreement) plus a credit spread adjustment of 0.10% plus a margin isranging from 0.75% ~~for base rate loans and 1.75% for LIBOR rate loans.~~to 2.00% depending on the Company’s consolidated ratio of total net debt to consolidated EBITDA. The Facilities are subject to a ~~“LIBOR”~~SOFR floor of 0.00% ~~and contain “hard-wired” LIBOR replacement provisions as set forth in the New Credit Agreement.~~. As of ~~January 1,~~December 31, 2022, the Company’s margin was 0.50% for base rate loans and 1.50% for SOFR loans. The Company’s commitment fee rate ~~is 0.25%~~was 0.20% and the letter of credit fee rate ~~is 1.75%~~was 1.50%.

The Term Loan Facility ~~and the Revolving Credit Facility~~ will mature on November 2, ~~2026.~~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. Commencing one full fiscal quarter after the execution of the New Credit Agreement,~~penalty, which will offset future quarterly amortization installments. The required future principal payments on the Term Loan Facility are $0 for the remainder of fiscal 2023, $0 for fiscal 2024, and $0 for fiscal 2025, due to prepayments previously made, and approximately $27.5 million for fiscal 2026, and $942.5 million for fiscal 2027. The Revolving Credit Facility will ~~amortize in quarterly installments as set forth in Part I, Item 1 – Note 10, with~~mature on November 2, 2026, at which time all amounts outstanding under the ~~balance payable on the Maturity Date unless otherwise extended in accordance with the terms of the Term Loan Facility.~~Revolving Credit Facility will be payable.

The New Credit Agreement requires the Company to comply with various covenants, including the following financial ~~covenants beginning with the test period ending December 31, 2021:~~covenants: (a) a maximum ~~Total Net Leverage Ratio~~total net leverage ratio of 5.50:1.00, which maximum ~~Total Net Leverage Ratio shall~~ratio will decrease during certain subsequent test periods as set forth in the New 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 ~~Borrower~~Company by 0.50:1.00 for a period of ~~twelve (12)~~12 months after the consummation of a material acquisition), and (b) a minimum ~~Interest Coverage Ratio~~interest coverage ratio of 2.00:1.00. As of December 31, 2022, the Company was in compliance with all debt covenants.

As of ~~January 1,~~December 31, 2022, ~~$1,300.0~~$970.0 million was outstanding under the Term Loan Facility and ~~none~~approximately $3.7 million of the Revolving Credit Facility was being utilized to provide letters of credit to secure the Company’s obligations relating to certain insurance programs, and the Company had the ability to borrow up to an additional ~~$496.5~~$496.3 million under the Revolving Credit Facility.

Senior Notes

On October 7, 2021, RBCA issued $500.0 million aggregate principal amount of the Senior ~~Notes and used the approximately $492.0 million of~~Notes. The net proceeds from the issuance ~~(after~~of the Senior Notes were approximately $492.0 million after deducting initial purchasers’ discounts and commissions and offering ~~expenses)~~expenses. On November 1, 2021, the Company used the proceeds to fund a portion of the cash purchase price for the acquisition of Dodge.

The Senior Notes were issued pursuant to the Indenture, ~~with Wilmington Trust, National Association, as trustee. The Indenture~~which contains covenants limiting the ability of the Company to (i) incur additional indebtedness or guarantee indebtedness, (ii) declare or pay dividends, redeem stock or make other distributions to stockholders, (iii) make investments, (iv) create liens or use assets as security in other transactions, (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of its assets, (vi) enter into transactions with affiliates, and (vii) sell or transfer certain assets. These covenants contain various exceptions, limitations and qualifications. At any time that the Senior Notes are rated investment grade, certain of these covenants will be suspended.

Foreign ~~Term Loan and~~ Revolving Credit Facility

~~Our~~The New Foreign ~~Credit Agreements~~Revolver is a CHF 5.0 million (approximately $5.4 million USD) revolving credit facility with Credit Suisse (Switzerland) Ltd. ~~provided us with financing~~ to ~~acquire Swiss Tool in 2019 and~~ provide future working capital, ~~for Schaublin, our foreign subsidiary. The~~if necessary. As of December 31, 2022, $0 had been borrowed from the New Foreign Credit Agreements provide (a) the Foreign Term Loan, a CHF 15.0 million (approximately $15.4 million) term loan, which expires on July 31, 2024, and (b) the Foreign Revolver, a CHF 15.0 million (approximately $15.4 million) revolving credit facility, which continues in effect until terminated by either Schaublin or Credit Suisse. Debt issuance costsRevolver. Fees associated with the New Foreign ~~Credit Agreements totaled CHF 0.3 million (approximately $0.3 million) and~~Revolver are ~~being amortized throughout~~nominal if the ~~life of the Foreign Credit Agreements. As of January 1, 2022, approximately $0.1 million in unamortized debt issuance costs remain.~~facility is not utilized.

Amounts outstanding under the Foreign Term Loan and the Foreign Revolver generally bear interest at LIBOR plus a specified margin. The applicable margin is based on Schaublin’s ratio of total net debt to consolidated EBITDA at each measurement date. Currently, Schaublin’s margin is 1.00%.Interest Rate Swap

The ~~Foreign Credit Agreements require Schaublin~~Company is exposed to ~~comply with various covenants, which are tested annually on March 31. These covenants include, among other things, a financial covenant~~certain risks relating to ~~maintain a ratio of consolidated net debt~~its ongoing business operations, including market risks relating to adjusted EBITDA not greater than 2.50 to 1 as of March 31, 2021 and thereafter. Schaublin is also required to maintain an economic equity of CHF 20.0 million at all times. The Foreign Credit Agreements allow Schaublin to, among other things, incur other debt or liens and acquire or dispose of assets provided that Schaublin complies with certain requirements and limitations of the Foreign Credit Agreements. As of January 1, 2022, Schaublin wasfluctuations in ~~compliance with all such covenants.~~interest rates.

~~Schaublin’s parent company, Schaublin Holding, has guaranteed Schaublin’s obligations~~On October 28, 2022, the Company entered into a three-year USD-denominated interest rate swap (“the Swap”) from a third-party financial counterparty under the ~~Foreign~~New Credit ~~Agreements. Schaublin Holding’s guaranty and~~Agreement. The Swap was executed to protect the ~~Foreign Credit Agreements are secured by a pledge of the capital stock of Schaublin. In addition, the Foreign~~Company from interest rate volatility on our variable-rate Term Loan Facility. The Swap has an effective date of December 30, 2022 and is ~~secured~~comprised of a $600.0 million notional with ~~pledges~~a maturity of three years. RBC will receive a variable rate based on one-month Term SOFR and will pay a fixed rate of 4.455%. The notional on the ~~capital stock of the top company and the three operating companies in the Swiss Tool System group of companies.~~Swap will amortize as follows:

~~As of January 1, 2022, there was approximately $2.1~~Year 1: $600.0 million ~~outstanding under the Foreign Term Loan and no amounts outstanding under the Foreign Revolver. Schaublin has the ability to borrow up to an additional $16.1~~

Year 2: $400.0 million ~~under the Foreign Revolver as of January 1, 2022. Schaublin’s required future principal payments are approximately $0 for the remainder of fiscal 2022, $0 for fiscal 2023 and fiscal 2024 and $2.1~~

Year 3: $100.0 million ~~for fiscal 2025.~~

Cash Flows

Nine-month Period Ended ~~January 1,~~December 31, 2022 Compared to the Nine-month Period Ended ~~December 26, 2020~~January 1, 2022

The following table summarizes our cash flow activities:

	FY22			FY21			$ Change				FY23			FY22			$ Change
Net cash provided by (used in):
Net cash provided by/(used in):										Net cash provided by/(used in):
Operating activities	$	133.4		$	110.6		$	22.8			$	149.3		$	133.4		$	15.9
Investing activities		(2,839.5	)		(83.6	)		(2,755.9	)			(1.6	)		(2,839.5	)		2,837.9
Financing activities		2,810.3			(4.6	)		2,814.9				(247.0	)		2,810.3			(3,057.3	)
Effect of exchange rate changes on cash		0.2			0.5			(0.3	)			(1.5	)		0.2			(1.7	)
Increase in cash and cash equivalents	$	104.4		$	22.9		$	81.5
Increase/(decrease) in cash and cash equivalents											$	(100.8	)	$	104.4		$	(205.2	)

During the first nine months of fiscal ~~2022,~~2023, we generated cash of ~~$133.4~~$149.3 million from operating activities compared to ~~$110.6~~$133.4 million of cash generated during the same period of fiscal ~~2021.~~2022. The increase of ~~$22.8~~$15.9 million ~~for fiscal 2022~~ was mainly a result of an increase in net income of $94.3 million and a favorable change in non-cash activity of $6.2 million partially offset by the ~~favorable~~unfavorable impact of athe net change in operating assets and liabilities of ~~$24.4 million and a favorable change in non-cash charges of $30.2 million, offset by a decrease in net income of $31.8~~$84.6 million. It is important to note that our net income was affected by approximately $21.6 million of non-recurring costs related to the Dodge acquisition. Further, cash flows from operating activities only include two months of cash flow activity from Dodge. The ~~favorable~~unfavorable change in operating assets and liabilities is detailed in the table below, while the increase in non-cash charges resulted from ~~$17.2~~a $48.5 million increase in depreciation and amortization and a $0.1 million increase in the loss on disposal of assets, partially offset by unfavorable changes of $17.5 million of stock-based compensation charges, $11.4 million of amortization of deferred financing costs, ~~$2.2~~$10.5 million ~~of share-based compensation charges, $12.6 million of depreciation and amortization and~~in deferred taxes, $0.9 million ~~of costs~~ related to the extinguishment of debt ~~partially offset by unfavorable changes of $1.8 million~~ in ~~deferred taxes~~the prior year and ~~$0.9~~$2.1 million of ~~loss on disposition of assets.~~consolidation, restructuring, and other noncash charges.

The following chart summarizes the ~~favorable~~unfavorable change in operating assets and liabilities of $84.6 million for fiscal 2023 versus fiscal 2022 and the favorable change of $24.4 million for fiscal 2022 versus fiscal ~~2021 and the favorable change of $19.1 million for fiscal 2021 versus fiscal 2020.~~2021.

	FY22			FY21			FY23			FY22
Cash provided by (used in):
Cash provided by/(used in):
Accounts receivable	$	(29.2	)	$	13.0		$	38.2		$	(29.2	)
Inventory		(3.8	)		16.0			(54.2	)		(3.8	)
Prepaid expenses and other current assets		(10.1	)		1.8			(1.9	)		(10.1	)
Other noncurrent assets		11.5			(5.3	)		7.6			11.5
Accounts payable		45.6			(11.4	)		(55.2	)		45.6
Accrued expenses and other current liabilities		10.6			(0.5	)		(15.7	)		10.6
Other noncurrent liabilities		(0.2	)		5.5			(3.4	)		(0.2	)
Total change in operating assets and liabilities:	$	24.4		$	19.1		$	(84.6	)	$	24.4

During the first nine months of fiscal ~~2022,~~2023, we used ~~$2,839.5~~$1.6 million for investing activities as compared to ~~$83.6~~using $2,839.5 million ~~used~~ during the first nine months of fiscal ~~2021.~~2022. This ~~increase~~decrease in cash used compared to the prior year was attributable to ~~the acquisition~~$2,935.7 million less cash used for acquisitions, $30.0 million less purchases of ~~Dodge for $2,908.2~~marketable securities and $0.5 million ~~and an increase in capital expenditures of $13.0 million partially offset by~~more proceeds from the sale of ~~$120.5~~assets partially offset by a $7.8 million ~~of highly liquid marketable securities during the current period~~increase in capital expenditures and ~~$45.1~~$120.5 million less in ~~purchase~~proceeds from the sale of marketable ~~securities compared to the same period in the prior year. The prior year also included $0.3 million of purchase accounting adjustments related to the acquisition of Swiss Tool.~~securities.

During the first nine months of fiscal ~~2022,~~2023, we ~~generated $2,810.3~~used $247.0 million ~~from~~in financing activities compared to ~~$4.6~~$2,810.3 million ~~used~~generated during the first nine months of fiscal ~~2021.~~2022. This ~~increase in~~decrease from cash generated to cash used was primarily attributable to ~~$1,286.2 million of net~~ proceeds received ~~from~~during the ~~Term Loan Facility, $494.2 million~~first nine months of ~~net proceeds received from the Senior Notes,~~fiscal 2022 related to $605.5 million ~~of net proceeds received~~ from the issuance of common stock, ~~during the current period,~~ $445.3 million ~~of net proceeds received~~ from the issuance of preferred stock, ~~during~~$1,286.2 million from the ~~current period,~~Term Loan Facility, and ~~$11.6~~$494.2 million from the Senior Notes. During fiscal 2023 there were $220.0 million more payments made on outstanding debt, $17.3 million cash dividends paid on preferred stock, $7.3 million fewer exercises of ~~share-based~~stock-based awards, and $2.5 million more in principal payments made on finance lease obligations, partially offset by ~~$20.0~~$19.9 million ofless in finance fees paid in connection with credit facilities and ~~senior notes in the current period, $5.8~~term loans and $1.1 million ~~more payments made on outstanding debt, $1.4 million more treasury stock purchases and $0.7 million in principal payments made on finance lease obligations during the current fiscal year.~~fewer repurchases of common stock.

Capital Expenditures

Our capital expenditures were ~~$14.9~~$6.5 million and ~~$21.8~~$29.6 million for the three- and nine-month periods ended ~~January 1,~~December 31, 2022, respectively. We expect to make additional capital expenditures of ~~$7.0~~$5.0 million to ~~$12.0~~$10.0 million during the remainder of fiscal ~~2022~~2023 in connection with our existing business. 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.

Obligations and Commitments

The Company’s fixed contractual obligations and commitments are primarily comprised of our debt obligations disclosed in Part I, Item 1- Note 10 of this report. We also have lease obligations which are materially consistent with what we disclosed in our Form 10-K for the fiscal year ended April 3, 2021 with the exception of what we’ve disclosed within Note 10 included in Part I, Item 1 of this report and additional lease obligations resulting from the acquisition of Dodge. The Company’s total lease obligations are $3.0 million for the remainder of fiscal 2022, $11.9 million for fiscal 2023, $10.1 million for fiscal 2024, $8.6 million for fiscal 2025, $8.0 million for fiscal 2026, $8.2 million for fiscal 2027 and $71.1 million thereafter.Annual Report.

Other Matters

Critical Accounting Policies and Estimates

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,~~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 ~~fiscal 2021~~ Annual Report ~~on Form 10-K~~ describe the significant accounting estimates and policies used in preparation of ~~the Consolidated Financial Statements.~~our consolidated financial statements. Actual results in these areas could differ from management’s estimates. There ~~have been~~were no significant changes in our critical accounting estimates during the first nine months of fiscal ~~2022 other than the following:~~2023.

~~Valuation of Business Combinations~~

We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume based on their fair values at the date of acquisition, including identifiable intangible assets, which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate to goodwill any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired. Transaction costs associated with these acquisitions are expensed as incurred through other, net on the consolidated statements of operations.

Off-Balance Sheet Arrangements

~~As of January 1, 2022, we had no significant off-balance sheet arrangements other than $3.6~~The Company has $3.7 million of outstanding standby letters of credit, all of which ~~were~~are under the Revolving Credit Facility. We also have a contractual obligation for licenses related to the implementation and upgrade of an enterprise resource planning (“ERP”) system for Dodge. These license costs of $10.5 million will be incurred over a five-year period.

Other than the items noted above, we had no significant off-balance sheet arrangements as of December 31, 2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks, which arise during the normal course of business from changes in interest rates and foreign currency exchange rates.

Interest Rates. We currently have variable rate debt outstanding under ~~our credit agreements.~~the Term Loan Facility. We regularly evaluate the impact of interest rate changes on our net income and cash flow and take action to limit our exposure when appropriate. As discussed in Note 14 in Part I, Item I of this report, we entered into the Swap on October 28, 2022, which became effective on December 30, 2022.

Foreign Currency Exchange Rates. Our operations in the following countries utilize the following currencies as their functional currency:

●	Australia – Australian dollar	●	India – rupee
●	Canada – Canadian dollar	●	Mexico – peso
●	China – Chinese yuan	●	Poland – zloty
●	France – euro	●	Switzerland – Swiss franc
●	Germany – euro

As a result, we are exposed to risk associated with fluctuating currency exchange rates between the U.S. dollar and these currencies. Foreign currency transaction gains and losses are included in earnings. Approximately ~~12%~~11% and ~~11%~~12% of our net sales were impacted by foreign currency fluctuations for both the three- and nine-month periods ended December 31, 2022, respectively, compared to 12% and 11% for the three- and nine-month periods ended January 1, 2022, ~~respectively, compared to 11% and 10% for the three- and nine-month periods ended December 26, 2020,~~ respectively. Foreign currency transaction exposure arises primarily from the transfer of foreign currency from one subsidiary to another within the group, and to foreign currency denominated trade receivables. Unrealized currency translation gains and losses are recognized upon translation of the foreign operations’ balance sheets to U.S. dollars. Because our financial statements are denominated in U.S. dollars, changes in currency exchange rates between the U.S. dollar and other currencies have had, and will continue to have, an impact on our earnings. We periodically enter into derivative financial instruments in the form of forward exchange contracts to reduce the effect of fluctuations in exchange rates on certain third-party sales transactions denominated in non-functional currencies. Based on the accounting guidance related to derivatives and hedging activities, we record derivative financial instruments at fair value. For derivative financial instruments designated and qualifying as cash flow hedges, the effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income, and is reclassified into earnings when the hedged transaction affects earnings. As of ~~January 1,~~December 31, 2022, wethe Company had no ~~derivatives.~~forward exchange contracts.

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, ~~has~~ evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of ~~1934 (the “Exchange Act”))~~1934) as of ~~January~~December 31, 2022. This evaluation excluded the Dodge business acquired on November 1, ~~2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that,~~2021 as we are currently in the process of ~~January 1, 2022, our disclosure~~integrating the internal controls and procedures ~~were (1) designed~~of Dodge into our internal controls over financial reporting. As provided under the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations of the SEC, we will include the internal controls and procedures of Dodge in our annual assessment of the effectiveness of internal control over financial reporting for our 2023 fiscal year.

Remediation of Material Weakness

To address the previously reported material weakness in internal control over financial reporting described in Part I, Item 4 of the Company’s Form 10-Q for the quarterly period ended July 2, 2022, the Company enhanced and revised the design of existing controls and procedures to properly review employment agreements involving equity awards to ensure that information relating to our Company required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported to our Chief Executive Officer and Chief Financial Officer within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission, and (2) effective, in that they ~~provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements~~are accounted for ~~external purposes~~ in accordance with ~~generally accepted~~the latest accounting ~~principles.~~pronouncements. The Company’s internal audit department will test the operating effectiveness of management’s controls during the fiscal year.

Changes in Internal Control over Financial Reporting

NoExcept for the changes related to the Company’s remediation efforts described above, no change in ~~our~~the Company’s internal control over financial reporting occurred during the ~~three-month period ended January 1, 2022~~third quarter of fiscal 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange ~~Act)~~Act of 1934).

As discussed ~~within~~in Note 13 included ~~within~~in Part I, Item 1 of this report, we acquired Dodge on November 1, 2021. We are currently in the process of integrating the internal controls and procedures of Dodge into our internal controls over financial reporting. As provided under the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations of the ~~Securities and Exchange Commission,~~SEC, we will include the internal controls and procedures of Dodge in our annual assessment of the effectiveness of our internal control over financial reporting for our 2023 fiscal year.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in litigation and administrative proceedings, which arise in the ordinary course of our business. We do not believe that any litigation or proceeding in which we are currently involved, either individually or in the aggregate, is likely to have a material adverse effect on our business, financial condition, operating results, cash flow or prospects.

Item 1A. Risk Factors

There have been no material changes to our risk factors and uncertainties since the ~~most recent~~ filing of our ~~Form 10-K, besides those noted below.~~Annual Report with the SEC on August 5, 2022. For a discussion of the risk factors, refer to Part I, Item 2, “Cautionary Statement as to Forward-Looking Information” contained in this quarterly report and Part I, Item 1A, “Risk Factors,” contained in ~~the Company’s~~our Annual ~~Report on Form 10-K for the fiscal year ended April 3, 2021.~~Report.

~~Quarterly performance can be affected by the timing of government product inspections and approvals.~~

A portion of our quarterly revenue is associated with contracts with the U.S. government that require onsite inspection and approval of the products by government personnel before we may ship the products, and we have no control over the timing of those inspections and approvals. If products scheduled for delivery in one quarter are not inspected or approved until the following quarter, the delay would adversely affect our sales and profitability for the quarter in which the shipments were scheduled.

~~We may fail to realize some or all of the anticipated benefits of the Dodge acquisition or those benefits may take longer to realize than expected.~~

We believe that there are significant benefits and synergies to be realized through leveraging the products, scale and combined enterprise customer bases of RBC and Dodge. However, the efforts to realize these benefits and synergies will be a complex process and may disrupt both companies’ existing operations if not implemented in a timely and efficient manner. The full benefits of the Dodge acquisition, including any anticipated sales or growth opportunities, may not be realized as expected or may not be achieved within the time frames we anticipate, or at all. Any data on the expected synergies from the Dodge acquisition included in the unaudited pro forma condensed combined financial information that was included in our Current Report on Form 8-K filed with the SEC on September 20, 2021 is based on various adjustments, assumptions and preliminary estimates. Such data have not been prepared, reviewed or analyzed by a third-party and may not be an accurate indication of the actual synergies we will realize, if any, from the Dodge acquisition and the integration of Dodge into our business. Failure to achieve the anticipated benefits of the acquisition could adversely affect our results of operations or cash flows.

~~We may not be able to efficiently integrate Dodge into our operations.~~

The future success of the Dodge acquisition, including its anticipated benefits and cost savings, depends, in part, on our ability to optimize our operations and integrate Dodge, its systems, operations and personnel into our existing business. These activities will require time and involve dedication of various resources of the Company that would otherwise be dedicated to our existing operations. These integration efforts may accordingly adversely affect our other operations to the extent such efforts take resources or attention away from our other operations. If we experience difficulties in the integration process, the anticipated benefits of the Dodge acquisition may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on us for an undetermined period. There can be no assurance that we will realize the operational or financial gains from the Dodge acquisition that we anticipated when originally determining to acquire Dodge.

~~Additional challenges, risks and uncertainties we may encounter as part of the integration process include the following:~~

●

~~we may face significant costs of integration and compliance with any laws or regulations applicable to Dodge or our combined company;~~

●

~~we may experience delays in the integration of management teams, strategies, operations, products and services;~~

●

~~there may be differences in business backgrounds, corporate cultures and management philosophies that may delay the successful integration of Dodge’s management personnel into our operations;~~

●

~~we may be unable to retain key Dodge employees;~~

●

~~we may not be able to create and enforce uniform standards, controls, procedures, policies and information systems across our combined company;~~

●

we may face challenges in integrating complex systems, technology, networks and other assets of Dodge into our operations in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies;

●

~~there may be potential unknown liabilities and unforeseen increased expenses associated with the Dodge acquisition, including costs to integrate Dodge beyond current estimates; and~~

●

~~we may experience disruptions of, or the loss of momentum in, our or Dodge’s ongoing businesses or inconsistencies in standards, controls, procedures and policies.~~

Any of these factors could adversely affect our or Dodge’s ability to maintain relationships with customers, suppliers, employees and other constituencies or our ability to achieve the anticipated benefits of the Dodge acquisition, which could reduce earnings or otherwise adversely affect our business and financial results.

~~We incurred substantial debt in order to complete the Dodge acquisition, which could constrain our business and exposes us to the risk of defaults under our debt instruments.~~

As of January 1, 2022, we had approximately $1,790.3 million of total debt, net of deferred issuance costs, as a result of the completion of the Dodge acquisition. This debt could or will have important consequences, including, but not limited to:

●

~~this debt requires us to make significant interest and principal payments in the future;~~

●

a substantial portion of our cash flow from operations will be used to repay the principal and interest on our debt, thereby reducing the funds available to us for other purposes including for strategic acquisitions, working capital, capital expenditures, and general corporate purposes;

●

~~our flexibility in planning for and reacting to changes in our business, the competitive landscape and the markets in which we operate may be limited; and~~

●

~~we may be placed at a competitive disadvantage relative to other companies in our industry with less debt or comparable debt on more favorable terms.~~

Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our financial and operating performance and no assurance can be given that our business will generate sufficient cash flow to service our debt.

Additionally, our ability to comply with the financial and other covenants contained in our debt instruments could be affected by, among other things, changes in our results of operations, the incurrence of additional indebtedness, the pricing of our products, our success at implementing cost reduction initiatives, our ability to successfully implement our overall business strategy, or changes in industry-specific or general economic conditions which are beyond our control. The breach of any of these covenants could result in a default or event of default under the New Credit Agreement and the indenture that governs the Notes, which, if not cured or waived, could result in our being required to repay these borrowings before their due date. If we are forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, our prospects, business, financial condition, results of operations and cash flows could be materially and adversely affected and could cause us to become bankrupt or otherwise insolvent. In addition, these covenants may restrict our ability to engage in transactions that we believe would otherwise be in the best interests of our business and stockholders.

~~Increases in interest rates would increase the cost of servicing Term Loan Facility and could reduce our profitability.~~

The $1,300.0 million outstanding under the Term Loan Facility bears interest at a variable rate. As a result, increases in interest rates would increase the cost of servicing the Term Loan Facility, and could materially reduce our profitability and cash flows. We have not entered into interest rate cap agreements on the Term Loan Facility. In addition, a transition away from the London Interbank Offered Rate (LIBOR) as a benchmark for establishing the applicable interest rate may affect the cost of servicing the Term Loan Facility. The Financial Conduct Authority of the United Kingdom has announced that it plans to no longer persuade or compel banks to submit rates for the calculation of LIBOR at some point in the future. Although the Term Loan Facility provides for alternative base rates, such alternative base rates may or may not be related to LIBOR, and the consequences of the phase–out of LIBOR cannot be entirely predicted at this time. The Credit Agreement for the Term Loan Facility includes language which would allow us to modify the rate used if and when the LIBOR phase-out occurs. The Company is currently evaluating whether or not to enter into an interest rate swap agreement to hedge our risk.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Use of Proceeds

Not applicable.

Issuer Purchases of Equity Securities

In 2019, our Board of Directors authorized us to repurchase up to $100.0 million of our common stock from time to time on the open market, in block trade transactions, and through privately negotiated transactions, in compliance with SEC Rule 10b-18 depending on market conditions, alternative uses of capital, and other relevant factors. Purchases may be commenced, suspended, or discontinued at any time without prior notice.

Total share repurchases under the 2019 plan for the three months ended ~~January 1,~~December 31, 2022 are as follows:

Period Total
number
of shares
purchased Average
price paid
per share Number of
shares
purchased
as part of the
publicly
announced
program Approximate
dollar value
of shares still
available to be
purchased
under the
program
(000’s)
10/03/2021 – 10/30/2021 171 $ 226.32 171 $ 81,184
10/31/2021 – 11/27/2021 — — — 81,184
11/28/2021 – 01/01/2022 6,490 194.34 6,490 $ 79,923
Total 6,661 $ 195.16 6,661

Period	Total number of shares purchased		Average price paid per share		Number of shares purchased as part of the publicly announced program		Approximate dollar value of shares still available to be purchased under the program (000’s)
10/02/2022 – 10/29/2022		90	$	216.26		90	$	73,035
10/30/2022 – 11/26/2022		176		252.34		176		72,991
11/27/2022 – 12/31/2022		2,254		220.18		2,254	$	72,495
Total		2,520	$	222.29		2,520

During the third quarter of fiscal 2023, we did not issue any common stock that was not registered under the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Exhibit Number		Exhibit Description
31.01		Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a).
31.02		Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a).
32.01		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*
32.02		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).~~

This certification accompanies this Quarterly Report on Form 10-Q, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing.

~~SIGNATURES~~

~~Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.~~

~~RBC Bearings Incorporated~~
	~~(Registrant)~~

~~By:~~	~~/s/ Michael J. Hartnett~~
	~~Name:~~	~~Michael J. Hartnett~~
	~~Title:~~	~~Chief Executive Officer~~
	~~Date:~~	~~February 10, 2022~~

~~By:~~	~~/s/ Robert M. Sullivan~~
	~~Name:~~	~~Robert M. Sullivan~~
	~~Title:~~	~~Chief Financial Officer~~
	~~Date:~~	~~February 10, 2022~~

~~EXHIBIT INDEX~~

Exhibit Number		~~Exhibit Description~~
~~31.01~~		~~Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a).~~
~~31.02~~		~~Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a).~~
~~32.01~~		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*
~~32.02~~		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*
~~101.INS~~		~~Inline XBRL Instance Document.~~
~~101.SCH~~		~~Inline XBRL Taxonomy Extension Schema Document.~~
~~101.CAL~~		~~Inline XBRL Taxonomy Extension Calculation Linkbase Document.~~
~~101.DEF~~		~~Inline XBRL Taxonomy Extension Definition Linkbase Document.~~
~~101.LAB~~		~~Inline XBRL Taxonomy Extension Label Linkbase Document.~~
~~101.PRE~~		~~Inline XBRL Taxonomy Extension Presentation Linkbase Document.~~
~~104~~		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

40SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

RBC Bearings Incorporated
(Registrant)

By:	/s/ Michael J. Hartnett
	Name:	Michael J. Hartnett
	Title:	Chief Executive Officer
	Date:	February 9, 2023

By:	/s/ Robert M. Sullivan
	Name:	Robert M. Sullivan
	Title:	Chief Financial Officer
	Date:	February 9, 2023

EXHIBIT INDEX

Exhibit Number		Exhibit Description
31.01		Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a).
31.02		Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a).
32.01		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*
32.02		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

0001324948 us-gaap:SeniorNotesMember 2021-10-25 2021-11-01 iso4217:USD xbrli:shares

	Plain			Roller			Ball			Engineered Products			Aerospace/Defense		Industrial			Total
April 3, 2021	$	79,597		$	16,007		$	5,623		$	176,309			—		—		$	277,536
Allocation in the third quarter of fiscal 2022 ⁽¹⁾		(79,597	)		(16,007	)		(5,623	)		(176,309	)		194,124		83,412			—
Acquisition ⁽²⁾		—			—			—			—			—		1,611,470			1,611,470
Translation adjustments		—			—			—			—			—		(2,132	)		(2,132	)
January 1, 2022		—			—			—			—		$	194,124	$	1,692,750		$	1,886,874

Period	Total number of shares purchased		Average price paid per share		Number of shares purchased as part of the publicly announced program		Approximate dollar value of shares still available to be purchased under the program (000’s)
10/03/2021 – 10/30/2021		171	$	226.32		171	$	81,184
10/31/2021 – 11/27/2021		—		—		—		81,184
11/28/2021 – 01/01/2022		6,490		194.34		6,490	$	79,923
Total		6,661	$	195.16		6,661