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 December ~~30, 2017~~26, 2020

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

For the transition period from to.

Commission File Number: 333-124824

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

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

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

(203) 267-7001

~~(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		Nasdaq NMS

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 ~~Website,~~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 ☐	~~(Do not check if a smaller reporting company)~~☐	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 January ~~26, 2018,~~22, 2021, RBC Bearings Incorporated had ~~24,289,481~~25,139,635 shares of Common Stock outstanding.

TABLE OF CONTENTS

Part I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

RBC Bearings Incorporated

Consolidated Balance Sheets

(dollars in thousands, except share and per share data)

December 30,
2017
April 1,
2017

ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 43,822 $ 38,923
Accounts receivable, net of allowance for doubtful accounts of $1,476 at December 30, 2017 and $1,213 at April 1, 2017 109,923 109,700
Inventory 303,013 289,594
Prepaid expenses and other current assets 13,304 9,743
Total current assets 470,062 447,960
Property, plant and equipment, net 190,313 183,625
Goodwill 268,123 268,042
Intangible assets, net of accumulated amortization of $36,606 at December 30, 2017 and $30,191 at April 1, 2017 185,923 196,801
Other assets 14,729 12,419
Total assets $ 1,129,150 $ 1,108,847

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 43,643 $ 34,392
Accrued expenses and other current liabilities 39,521 44,532
Current portion of long-term debt 17,976 14,214
Total current liabilities 101,140 93,138
Deferred income taxes 10,827 12,036
Long-term debt, less current portion 179,977 255,586
Other non-current liabilities 38,662 31,043
Total liabilities 330,606 391,803

Stockholders’ equity:
Preferred stock, $.01 par value; authorized shares: 10,000,000 at December 30, 2017 and April 1, 2017; none issued and outstanding — —
Common stock, $.01 par value; authorized shares: 60,000,000 at December 30, 2017 and April 1, 2017; issued and outstanding shares: 25,000,672 at December 30, 2017 and 24,757,803 at April 1, 2017 250 248
Additional paid-in capital 331,819 312,474
Accumulated other comprehensive loss (4,345 ) (9,823 )
Retained earnings 510,301 448,693
Treasury stock, at cost, 713,201 shares at December 30, 2017 and 667,931 shares at April 1, 2017 (39,481 ) (34,548 )
Total stockholders’ equity 798,544 717,044
Total liabilities and stockholders’ equity $ 1,129,150 $ 1,108,847
December 26,
2020
March 28,
2020

(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 126,192 $ 103,255
Marketable securities 75,539 —
Accounts receivable, net of allowance for doubtful accounts of $1,874 at December 26, 2020 and $1,627 at March 28, 2020 106,506 128,995
Inventory 372,104 367,494
Prepaid expenses and other current assets 12,001 12,262
Total current assets 692,342 612,006
Property, plant and equipment, net 212,702 219,846
Operating lease assets, net 36,880 28,953
Goodwill 278,472 277,776
Intangible assets, net of accumulated amortization of $61,054 at December 26, 2020 and $55,732 at March 28, 2020 157,320 162,747
Other assets 31,266 20,584
Total assets $ 1,408,982 $ 1,321,912

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 39,936 $ 51,038
Accrued expenses and other current liabilities 36,386 40,580
Current operating lease liabilities 5,963 5,708
Current portion of long-term debt 6,127 6,429
Total current liabilities 88,412 103,755
Deferred income taxes 19,391 16,560
Long-term debt, less current portion 14,366 16,583
Long-term operating lease liabilities 31,347 23,396
Other non-current liabilities 50,659 43,619
Total liabilities 204,175 203,913

Stockholders' equity:
Preferred stock, $.01 par value; authorized shares: 10,000,000 at December 26, 2020 and March 28, 2020, respectively; none issued or outstanding — —
Common stock, $.01 par value; authorized shares: 60,000,000 at December 26, 2020 and March 28, 2020, respectively; issued shares: 26,011,098 and 25,881,415 at December 26, 2020 and March 28, 2020, respectively 260 259
Additional paid-in capital 434,346 412,400
Accumulated other comprehensive loss (510 ) (6,898 )
Retained earnings 833,898 769,219
Treasury stock, at cost, 881,096 shares and 838,982 shares at December 26, 2020 and March 28, 2020, respectively (63,187 ) (56,981 )
Total stockholders' equity 1,204,807 1,117,999
Total liabilities and stockholders' equity $ 1,408,982 $ 1,321,912

See accompanying notes.

3

RBC Bearings Incorporated
Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
(Unaudited)

Three Months Ended

Nine Months Ended

December 30,
2017

December 31,
2016

December 30,
2017

December 31,
2016

Net sales $ 166,858 $ 146,656 $ 495,072 $ 455,178
Cost of sales 102,193 94,271 306,687 288,811
Gross margin 64,665 52,385 188,385 166,367
Operating expenses:
      Selling, general and administrative 28,162 25,712 83,535 76,696
      Other, net 3,380 6,144 14,649 10,367
Total operating expenses 31,542 31,856 98,184 87,063
Operating income 33,123 20,529 90,201 79,304
Interest expense, net 1,761 2,111 5,704 6,659
Other non-operating expense 26 (216 ) 462 51
Income before income taxes 31,336 18,634 84,035 72,594
Provision for income taxes 7,504 5,864 23,571 23,556
Net income $ 23,832 $ 12,770 $ 60,464 $ 49,038
Net income per common share:
Basic $ 0.99 $ 0.54 $ 2.53 $ 2.09
Diluted $ 0.97 $ 0.54 $ 2.49 $ 2.07
Weighted average common shares:
Basic 23,985,925 23,581,921 23,912,474 23,457,717
Diluted 24,446,115 23,813,780 24,322,165 23,719,121
Three Months Ended Nine Months Ended
December 26,
2020 December 28,
2019 December 26,
2020 December 28,
2019
Net sales $ 145,861 $ 177,019 $ 448,689 $ 541,618
Cost of sales 90,273 106,308 277,052 329,099
Gross margin 55,588 70,711 171,637 212,519
Operating expenses:
Selling, general and administrative 25,739 30,719 78,591 91,580
Other, net 3,308 2,526 11,328 7,674
Total operating expenses 29,047 33,245 89,919 99,254
Operating income 26,541 37,466 81,718 113,265
Interest expense, net 327 466 1,095 1,486
Other non-operating expense (income) (50 ) 217 203 581
Income before income taxes 26,264 36,783 80,420 111,198
Provision for income taxes 4,695 6,268 15,741 18,914
Net income $ 21,569 $ 30,515 $ 64,679 $ 92,284
Net income per common share:
Basic $ 0.87 $ 1.24 $ 2.61 $ 3.75
Diluted $ 0.86 $ 1.22 $ 2.59 $ 3.71
Weighted average common shares:
Basic 24,861,792 24,699,461 24,816,451 24,595,179
Diluted 25,060,812 24,981,480 24,985,848 24,898,635

See accompanying notes.

4

RBC Bearings Incorporated
Consolidated Statements of Comprehensive Income
(dollars in thousands)
(Unaudited)

Three Months Ended

Nine Months Ended

December 30,
2017

December 31,
2016

December 30,
2017

December 31,
2016

Net income $ 23,832 $ 12,770 $ 60,464 $ 49,038
Pension and postretirement liability adjustments, net of taxes 196 234 588 701
Foreign currency translation adjustments 470 (3,954 ) 4,890 (5,759 )
Total comprehensive income $ 24,498 $ 9,050 $ 65,942 $ 43,980
Three Months Ended Nine Months Ended
December 26,
2020 December 28,
2019 December 26,
2020 December 28,
2019
Net income $ 21,569 $ 30,515 $ 64,679 $ 92,284
Pension and postretirement liability adjustments, net of taxes ⁽¹⁾
260 178 779 534
Foreign currency translation adjustments 3,823 1,624 5,609 2,297
Total comprehensive income $ 25,652 $ 32,317 $ 71,067 $ 95,115

⁽¹⁾ These adjustments were net of tax expense of $79 and $55 for the three-month periods ended December 26, 2020 and December 28, 2019, respectively and $237 and $164 for the nine-month periods ended December 26, 2020 and December 28, 2019, respectively.
See accompanying notes.

5

RBC Bearings Incorporated
Consolidated Statements of Stockholders' Equity
(dollars in thousands)
(Unaudited)
Common Stock Additional
Paid-in Accumulated
Other
Comprehensive Retained
Treasury Stock
Total
Stockholders'
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
Net income — — — — 22,689 — — 22,689
Share-based compensation — — 5,438 — — — — 5,438
Repurchase of common stock — — — — — (31,179 ) (4,391 ) (4,391 )
Exercise of equity awards 4,200 — 231 — — — — 231
Change in net prior service cost and actuarial losses, net of taxes of $79 — — — 260 — — — 260
Issuance of restricted stock, net of forfeitures 56,157 — — — — — — —
Currency translation adjustments — — — 409 — — — 409
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
Repurchase of common stock — — — — — (62 ) (8 ) (8 )
Exercise of equity awards 31,200 1 2,188 — — — — 2,189
Change in net prior service cost and actuarial losses, net of taxes of $79 — — — 259 — — — 259
Issuance of restricted stock, net of forfeitures (2,299 ) — — — — — — —
Currency translation adjustments — — — 1,377 — — — 1,377
Balance at September 26, 2020 25,970,673 $ 260 $ 425,488 $ (4,593 ) $ 812,329 (870,223 ) $ (61,380 ) $ 1,172,104
Net income — — — — 21,569 — — 21,569
Share-based compensation — — 5,173 — — — — 5,173
Repurchase of common stock — — — — — (10,873 ) (1,807 ) (1,807 )
Exercise of equity awards 40,199 — 3,685 — — — — 3,685
Change in net prior service cost and actuarial losses, net of taxes of $79 — — — 260 — — — 260
Issuance of restricted stock, net of forfeitures 226 — — — — — — —
Currency translation adjustments — — — 3,823 — — — 3,823
Balance at December 26, 2020 26,011,098 $ 260 $ 434,346 $ (510 ) $ 833,898 (881,096 ) $ (63,187 ) $ 1,204,807
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'
Shares Amount Capital Income/(Loss) Earnings Shares Amount Equity
Balance at March 30, 2019 25,607,196 $ 256 $ 378,655 $ (7,467 ) $ 641,894 (752,913 ) $ (44,772 ) $ 968,566
Net income — — — — 30,499 — — 30,499
Share-based compensation — — 4,802 — — — — 4,802
Repurchase of common stock — — — — — (69,877 ) (9,514 ) (9,514 )
Exercise of equity awards 4,356 1 275 — — — — 276
Change in net prior service cost and actuarial losses, net of taxes of $54 — — — 178 — — — 178
Issuance of restricted stock, net of forfeitures 86,490 — — — — — — —
Impact from adoption of ASU 2018-02 — — — (1,289 ) 1,289 — — —
Currency translation adjustments — — — 2,542 — — — 2,542
Balance at June 29, 2019 25,698,042 $ 257 $ 383,732 $ (6,036 ) $ 673,682 (822,790 ) $ (54,286 ) $ 997,349
Net income — — — — 31,270 — — 31,270
Share-based compensation — — 5,059 — — — — 5,059
Repurchase of common stock — — — — — (2,048 ) (334 ) (334 )
Exercise of equity awards 138,898 1 10,184 — — — — 10,185
Change in net prior service cost and actuarial losses, net of taxes of $55 — — — 178 — — — 178
Issuance of restricted stock, net of forfeitures 5,677 — — — — — — —
Currency translation adjustments — — — (1,869 ) — — — (1,869 )
Balance at September 28, 2019 25,842,617 $ 258 $ 398,975 $ (7,727 ) $ 704,952 (824,838 ) $ (54,620 ) $ 1,041,838
Net income — — — — 30,515 — — 30,515
Share-based compensation — — 5,135 — — — — 5,135
Repurchase of common stock — — — — — (10,249 ) (1,700 ) (1,700 )
Exercise of equity awards 18,419 1 1,615 — — — — 1,616
Change in net prior service cost and actuarial losses, net of taxes of $55 — — — 178 — — — 178
Issuance of restricted stock, net of forfeitures 2,110 — — — — — — —
Currency translation adjustments — — — 1,624 — — — 1,624
Balance at December 28, 2019 25,863,146 $ 259 $ 405,725 $ (5,925 ) $ 735,467 (835,087 ) $ (56,320 ) $ 1,079,206
See accompanying notes.

RBC Bearings Incorporated
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)

Nine Months Ended

December 30,
2017

December 31,
2016

Cash flows from operating activities:
Net income $ 60,464 $ 49,038
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 14,155 13,557
Excess tax benefits from stock-based compensation — (4,870 )
Deferred income taxes (321 ) 3,717
Amortization of intangible assets 7,041 6,921
Amortization of deferred financing costs 1,068 1,068
Stock-based compensation 9,897 8,914
(Gain) loss on disposal of fixed assets (1 ) 2,457
Gain on acquisition — (293 )
Impairment charges 5,577 1,443
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 701 3,954
Inventory (12,035 ) (7,293 )
Prepaid expenses and other current assets (4,555 ) (5,238 )
Other non-current assets (3,308 ) (2,282 )
Accounts payable 9,040 1,466
Accrued expenses and other current liabilities (3,340 ) 2,123
Other non-current liabilities 8,113 (107 )
Net cash provided by operating activities 92,496 74,575

Cash flows from investing activities:
Purchase of property, plant and equipment (20,542 ) (14,415 )
Proceeds from sale of assets 33 107
Business acquisition — (651 )
Net cash used in investing activities (20,509 ) (14,959 )

Cash flows from financing activities:
Repayments of revolving credit facility (62,750 ) (61,500 )
Repayments of term loans (10,000 ) (7,500 )
Payments of notes payable (359 ) (353 )
Exercise of stock options 9,450 11,567
Excess tax benefits from stock-based compensation — 4,870
Repurchase of common stock (4,933 ) (4,750 )
Net cash used in financing activities (68,592 ) (57,666 )

Effect of exchange rate changes on cash 1,504 (1,686 )

Cash and cash equivalents:
Increase during the period 4,899 264
Cash, at beginning of period 38,923 39,208
Cash, at end of period $ 43,822 $ 39,472
Nine Months Ended
December 26,
2020 December 28,
2019
Cash flows from operating activities:
Net income $ 64,679 $ 92,284
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 17,129 16,209
Deferred income taxes 2,580 249
Amortization of intangible assets 7,683 7,066
Amortization of deferred financing costs 365 365
Share-based compensation 15,842 14,996
Other non-cash charges 3,278 90
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 23,285 10,283
Inventory (4,717 ) (20,739 )
Prepaid expenses and other current assets (251 ) (2,049 )
Other non-current assets (11,724 ) (6,426 )
Accounts payable (11,400 ) 22
Accrued expenses and other current liabilities (4,575 ) (4,092 )
Other non-current liabilities 8,412 2,937
Net cash provided by operating activities 110,586 111,195

Cash flows from investing activities:
Purchase of property, plant and equipment (8,809 ) (27,562 )
Proceeds from sale of assets 18 300
Purchase of marketable securities (75,075 ) -
Acquisition of business 245 (33,842 )
Net cash used in investing activities (83,621 ) (61,104 )

Cash flows from financing activities:
Proceeds received from revolving credit facilities - 9,435
Proceeds received from term loans - 15,383
Repayments of revolving credit facilities (773 ) (45,411 )
Repayments of term loans (3,287 ) -
Repayments of notes payable (379 ) (352 )
Finance fees paid in connection with credit facilities and term loans - (276 )
Exercise of stock options 6,105 12,077
Repurchase of common stock (6,206 ) (11,548 )
Net cash used in financing activities (4,540 ) (20,692 )

Effect of exchange rate changes on cash 512 1,045

Cash and cash equivalents:
Increase during the period 22,937 30,444
Cash and cash equivalents, at beginning of period 103,255 29,884
Cash and cash equivalents, at end of period $ 126,192 $ 60,328

Supplemental disclosures of cash flow information:
Cash paid for:
Income taxes $ 12,880 $ 21,569
Interest 737 1,029

See accompanying notes.

6

RBC Bearings Incorporated
Notes to Unaudited Interim Consolidated Financial Statements
(dollars in thousands, except share and 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. 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 for the fiscal year ended ~~April 1, 2017.~~March 28, 2020. 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). As used in this report, the terms ~~“we”, “us”, “our”,~~“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, ~~which~~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 Annual Report on Form 10-K.

The results of operations for the ~~three month period~~three- and nine-month periods ended December ~~30, 2017~~26, 2020 are not necessarily indicative of the operating results for the entire fiscal year ending ~~March 31, 2018.~~April 3, 2021. The ~~three month~~three- and nine-month periods ended December ~~30, 2017~~26, 2020 and December ~~31, 2016~~28, 2019 each include 13 ~~weeks.~~weeks and 39 weeks, respectively. The amounts shown are in thousands, unless otherwise indicated.

~~Critical~~2. Significant Accounting Policies

~~Revenue Recognition.~~~~In accordance with SEC Staff~~The Company's significant accounting policies are detailed in “Note 2 - Summary of Significant Accounting ~~Bulletin 101 “Revenue Recognition in Financial Statements~~Policies” of our Annual Report on Form 10-K for the year ended March 28, 2020. Significant changes to our accounting policies as ~~amended by Staff Accounting Bulletin 104,” we recognize revenues principally from the sale~~a result of ~~products at the point of passage of title, which is at the time of shipment, except for certain customers for which it occurs when the products reach their destination.~~adopting new accounting standards are discussed below.

We also recognize revenue on a Ship-In-Place basis for three customers who have required that we hold the product after final production is complete. In this case, a written agreement has been executed (at the customer’s request) whereby the customer accepts the risk of loss for product that is invoiced under the Ship-In-Place arrangement. For each transaction for which revenue is recognized under a Ship-In-Place arrangement, all final manufacturing inspections have been completed and customer acceptance has been obtained. In the three months ended December 30, 2017, 1.8% of the Company’s total net sales were recognized under Ship-In-Place transactions.
Recent Accounting ~~Pronouncements~~Standards Adopted

In ~~May 2017,~~September 2016, the Financial Accounting Standards Board ~~(“FASB”)~~(FASB) issued Accounting Standards Update ~~(“ASU”)~~(ASU) No. ~~2017-09, “Compensation~~2016-13, Financial Instruments – ~~Stock Compensation~~Credit Losses (Topic ~~718)~~326): ~~Scope~~Measurement of ~~Modification Accounting”~~Credit Losses on Financial Instruments, which changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the former incurred loss approach with a new expected credit loss impairment model. The new model applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt instruments, net investments in leases, loan commitments and standby letters of credit. Upon initial recognition of the exposure, the expected credit loss model requires entities to estimate the credit losses expected over the life of an ~~effort~~exposure (or pool of exposures). The estimate of expected credit losses considers historical information, current information and reasonable and supportable forecasts, including estimates of prepayments. Financial instruments with similar risk characteristics are grouped together when estimating expected credit losses. ASU 2016-13 does not prescribe a specific method to ~~reduce diversity~~make the estimate, so its application requires significant judgment. The Company adopted this accounting standard update in ~~practice as~~the first quarter of fiscal 2021 and it relates to applying modification accounting for changes to the terms and conditions of share-based payment awards. This ASU is effective for public companies for the financial statements issued for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The adoption of this ASU isdid not ~~expected to~~ have a material impact on the ~~Company’s~~Company's consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”, in an effort to improve the presentation of these costs within the income statement. Under current GAAP, all components of both net periodic pension cost and net periodic postretirement cost are included within selling, general and administrative costs on the income statement. This ASU would require entities to include only the service cost component within selling, general and administrative costs whereas all other components would be included within other non-operating expense. In addition, only the service cost component would be eligible for capitalization when applicable (for example, as a cost of internally manufactured inventory or a self-constructed asset). The amendments in this Update should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. This ASU is effective for public companies for the financial statements issued for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company has not determined the effect that the adoption of the pronouncement may have on its financial position and/or results of operations.

In January 2017, the FASB issued ASU No. 2017-04, ~~“Intangibles—~~Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill ~~Impairment”~~Impairment. The objective of this standard update is to simplify the subsequent measurement of goodwill, eliminating Step 2 from the goodwill impairment test. Under this ASU, an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting ~~unit’s~~unit's fair value, assuming the loss recognized does not exceed the total amount of goodwill for the reporting unit. The standard update is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The adoption of this ASU ~~is not expected to have a material impact on the Company’s consolidated financial statements.~~
In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740)”, in an effort to improve the accounting for the income tax consequences of intra-equity transfers of assets other than inventory. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This ASU establishes the requirement that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective for public companies for the financial statements issued for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Earlier application is permitted as of the beginning of an interim or annual reporting period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company has not determined the effect that the adoption of the pronouncement may have on its financial position and/or results of operations.
In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This ASU is effective for public companies for the financial statements issued for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Earlier application is permitted as of the beginning of an interim or annual reporting period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company has not determined the effect that the adoption of the pronouncement may have on its statements of cash flows.
In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting” which amends ASC Topic 718, Compensation - Stock Compensation. This ASU includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The Company adopted this standard on April 2, 2017. As a result of the adoption, the Company began recording the tax effects associated with stock-based compensation through the income statement on a prospective basis which resulted in a tax benefit of $3.9 million for the first nine months of fiscal 2018. Prior to adoption, these amounts would have been recorded as an increase to additional paid-in capital. This change may create volatility in the Company’s effective tax rate. The adoption of this standard also resulted in a cumulative effect change to opening retained earnings of $1.1 million for previously unrecognized excess tax benefits.
In addition, the Company will prospectively classify all tax-related cash flows resulting from share-based payments, including the excess tax benefits related to the settlement of stock-based awards, as cash flows from operating activities in the statement of cash flows. Prior to the adoption of this standard, these were shown as cash inflows from financing activities and cash outflows from operating activities.

The adoption of the ASU also resulted in the Company removing the excess tax benefits from the assumed proceeds available to repurchase shares when calculating diluted earnings per share on a prospective basis. The revised calculation increased the diluted weighted average common shares outstanding by approximately 0.1 million shares in the period of adoption. The Company also made an accounting policy election to continue to estimate forfeitures as it did prior to adoption.
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The core principal of ASU 2016-02 is that an entity should recognize on its balance sheet assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on the lease classification as a finance or operating lease. This new accounting guidance is effective for public companies for fiscal years beginning after December 15, 2018 under a modified retrospective approach and early adoption is permitted. The Company is currently evaluating the impact this adoption will have on its consolidated financial statements.
In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” This update requires the company to measure inventory using the lower of cost and net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU applies to companies measuring inventory using methods other than the last-in, first-out (LIFO) and retail inventory methods, including but not limited to the first-in, first-out (FIFO) or average costing methods. The Company adopted this ASU on a prospective basis on April 2, 2017 and it did not have a material impact on the Company’s consolidated financial statements.
Recent Accounting Standards Yet to Be Adopted
In ~~May 2014,~~December 2019, the FASB issued ASU No. ~~2014-09, “Revenue from Contracts with Customers~~2019-12, Income Taxes (Topic ~~606)”~~740): Simplifying the Accounting for Income Taxes. The objective of this standard update is to ~~remove inconsistent practices with regards~~simplify the accounting for income taxes by removing certain exceptions to ~~revenue recognition between U.S. GAAP and IFRS. The standard intends~~the general principles in Topic 740. This ASU also attempts to improve ~~comparability~~consistent application of ~~revenue recognition practices across entities, industries, jurisdictions~~ and ~~capital markets. The provisions~~simplify GAAP for other areas of ~~ASU No. 2014-09 will be~~Topic 740 by clarifying and amending existing guidance. This standard update is effective for ~~interim and annual periods~~fiscal years beginning after December 15, ~~2017, with early~~2020, including interim periods within those fiscal years. The Company is currently evaluating the effect that the adoption ~~permitted for annual periods beginning after December 15, 2016.~~of this ASU will have on the Company’s consolidated financial statements.

Other new pronouncements issued but not effective until after April 3, 2021 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 ~~guidance permits use~~Company operates under four business segments with similar economic characteristics, including nature of ~~either a retrospective or cumulative effect transition method. Based upon~~ the ~~FASB’s decision to approve a one-year delay in implementation,~~products and production processes, distribution patterns and classes of customers. Revenue is disaggregated within these business segments by our two principal end markets: aerospace and industrial. Comparative information of the ~~new standard is now effective~~Company’s overall revenues for the ~~Company in fiscal~~three- and nine-month periods ended December 26, 2020 and December 28, 2019 ~~with early adoption permitted, but~~are as follows:
Principal End Markets
Three Months Ended
December 26, 2020 December 28, 2019
Aerospace Industrial Total Aerospace Industrial Total
Plain $ 48,676 $ 20,645 $ 69,321 $ 67,753 $ 19,123 $ 86,876
Roller 10,122 12,286 22,408 17,332 14,497 31,829
Ball 6,964 13,711 20,675 6,103 12,372 18,475
Engineered Products 15,895 17,562 33,457 24,958 14,881 39,839
$ 81,657 $ 64,204 $ 145,861 $ 116,146 $ 60,873 $ 177,019
Nine Months Ended
December 26, 2020 December 28, 2019
Aerospace Industrial Total Aerospace Industrial Total
Plain $ 159,068 $ 60,181 $ 219,249 $ 205,346 $ 59,026 $ 264,372
Roller 34,026 32,861 66,887 54,288 46,985 101,273
Ball 21,297 39,317 60,614 16,619 36,990 53,609
Engineered Products 53,389 48,550 101,939 73,596 48,768 122,364
$ 267,780 $ 180,909 $ 448,689 $ 349,849 $ 191,769 $ 541,618

Remaining Performance Obligations
Remaining performance obligations represent the transaction price of orders meeting the definition of a contract under Accounting Standards Codification (ASC) 606 for which work has not ~~earlier~~been performed or has been partially performed and excludes unexercised contract options. The duration of many of our contracts, as defined by ASC 606, is less than ~~fiscal 2018.~~one year. The Company has ~~concluded it will utilize~~elected to apply the ~~modified retrospective method upon adopting this standard.~~practical expedient that allows companies to exclude remaining performance obligations with an original expected duration of one year or less. Performance obligations having a duration of more than one year are concentrated in contracts for certain products and services provided to the U.S. government or its contractors. 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 $255,459 at December 26, 2020. The Company expects to recognize revenue on approximately 59% and 87% 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 affects accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) on the consolidated balance sheets.
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. Current contract assets are included within prepaid expenses and other current assets on the consolidated balance sheets. Noncurrent contract assets are included within other assets on the consolidated balance sheets.
Contract Liabilities (Deferred Revenue) - The Company ~~has substantially completed their assessment~~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 ~~impact~~transfer of the ~~new standard on its business which has identified potential differences that would result from applying~~related goods or services is at the ~~requirements~~discretion of the ~~new standard to its revenue contracts. Upon adoption,~~customer. Current contract liabilities are included within accrued expenses and other current liabilities on the ~~Company expects certain revenue streams currently accounted for using a point-in-time model will utilize an over-time model due to~~consolidated balance sheets. Noncurrent contract liabilities are included within other non-current liabilities on the continuous transfer of control to customers. The Company is in the process of drafting updated accounting policies and disclosures under the new guidance. The Company has not finalized the impact of reported revenues and earnings of adopting the new standard but expects to do so by the end of the fourth quarter of fiscal 2018.consolidated balance sheets.

As of December 26, 2020 and March 28, 2020, accounts receivable with customers, net, were $106,506 and $128,995, respectively. Contract assets and contract liabilities were as follows:

December 26,
2020 March 28,
2020
Contract Assets – Current $ 2,094 $ 2,604
Contract Assets – Noncurrent 2,128 —
Contract Liabilities – Current 8,813 11,116
Contract Liabilities – Noncurrent 3,527 2,427
1.
During the three- and nine-month periods ended December 26, 2020, we recognized $2,291 and $10,056 of our current contract liabilities that existed at March 28, 2020 as revenue. During the three- and nine- month periods ended December 26, 2020, we recognized $769 of our noncurrent contract liabilities that existed at March 28, 2020 as revenue.

4. Accumulated Other Comprehensive Income (Loss)

The components of comprehensive income (loss) that relate to the Company are net income, foreign currency translation adjustments, and pension plan and postretirement benefits.

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

Currency
Translation

Pension and
Postretirement
Liability
Total
Balance at March 28, 2020 $ (582 ) $ (6,316 ) $ (6,898 )
Other comprehensive income before reclassifications 5,609 — 5,609
Amounts reclassified from accumulated other comprehensive income — 779 779
Net current period other comprehensive income 5,609 779 6,388
Balance at December 26, 2020 $ 5,027 $ (5,537 ) $ (510 )

Currency
Translation

Pension and
Postretirement
Liability
Total
Balance at April 1, 2017 $ (3,942 ) $ (5,881 ) $ (9,823 )
Other comprehensive income before reclassifications 4,890 — 4,890
Amounts reclassified from accumulated other comprehensive income — 588 588
Net current period other comprehensive income 4,890 588 5,478
Balance at December 30, 2017 $ 948 $ (5,293 ) $ (4,345 )
2.5. Net Income Per Common Share

Basic net income per common share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding.

Diluted net income per common share is computed by dividing net income 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 vesting or exercise of stock ~~options.~~awards.

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 per common share:

Three Months Ended Nine Months Ended

December 30,
2017

December 31,
2016

December 30,
2017

December 31,
2016

Net income $ 23,832 $ 12,770 $ 60,464 $ 49,038

Denominator for basic net income per common share—weighted-average shares outstanding 23,985,925 23,581,921 23,912,474 23,457,717
Effect of dilution due to employee stock awards 460,190 231,859 409,691 261,404
Denominator for diluted net income per common share—weighted-average shares outstanding 24,446,115 23,813,780 24,322,165 23,719,121

Basic net income per common share $ 0.99 $ 0.54 $ 2.53 $ 2.09

Diluted net income per common share $ 0.97 $ 0.54 $ 2.49 $ 2.07

Three Months Ended Nine Months Ended

December 26,
2020

December 28,
2019

December 26,
2020

December 28,
2019

Net income $ 21,569 $ 30,515 $ 64,679 $ 92,284

Denominator for basic net income  per common share — weighted-average shares outstanding 24,861,792 24,699,461 24,816,451 24,595,179
Effect of dilution due to employee stock awards 199,020 282,019 169,397 303,456
Denominator for diluted net income per common share — weighted-average shares outstanding 25,060,812 24,981,480 24,985,848 24,898,635

Basic net income per common share $ 0.87 $ 1.24 $ 2.61 $ 3.75

Diluted net income per common share $ 0.86 $ 1.22 $ 2.59 $ 3.71
At December ~~30, 2017, no~~26, 2020, 443,294 employee stock options and 1,000 restricted shares have been excluded from the calculation of diluted earnings per share. At December ~~31, 2016, 449,500~~28, 2019, 217,470 employee stock options and no restricted shares have been excluded from the calculation of diluted earnings per share. The inclusion of these employee stock options and restricted shares would be anti-dilutive.

3.6. Cash and Cash Equivalents and Marketable Securities

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

~~Short-term investments, if any, are~~At December 26, 2020, the Company held $75,539 of short-term marketable securities comprised of ~~equity securities and~~mutual funds as part of the Company’s investment strategy. These investments are measured at fair value by using quoted prices in active markets and are classified as Level 1 of the valuation hierarchy. These mutual funds can be liquidated at the Company’s discretion. They are held for investment and are not considered debt securities. Preservation of principal is the primary goal of our cash and investment policy. Pursuant to our established investment guidelines, we strive to achieve high levels of credit quality, liquidity and diversification. Our investment guidelines do not permit us to invest in puts, calls, strips, short sales, straddles, options, commodities, precious metals, futures or investments on margin.
4.7. Inventory

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

December 30,
2017

April 1,
2017

Raw materials $ 38,324 $ 35,364
Work in process 79,921 79,048
Finished goods 184,768 175,182
$ 303,013 $ 289,594
December 26,
2020
March 28,
2020

Raw materials $ 56,289 $ 51,362
Work in process 89,121 97,286
Finished goods 226,694 218,846
$ 372,104 $ 367,494

~~5.   Goodwill and Intangible Assets~~
8. Debt

~~Goodwill~~
Roller Plain Ball Engineered Products Total
April 1, 2017 $ 16,007 $ 79,597 $ 5,623 $ 166,815 $ 268,042
Translation adjustments — — — 81 81
December 30, 2017 $ 16,007 $ 79,597 $ 5,623 $ 166,896 $ 268,123
~~Intangible Assets~~
December 30, 2017 April 1, 2017
Weighted Average Useful Lives Gross Carrying Amount
Accumulated Amortization
Gross Carrying Amount
Accumulated Amortization

Product approvals 24 $ 50,878 $ 7,823 $ 53,869 $ 6,465
Customer relationships and lists 24 106,583 15,426 107,864 12,308
Trade names 10 18,734 6,300 19,923 5,137
Distributor agreements 5 722 722 722 722
Patents and trademarks 16 9,610 4,661 8,803 4,130
Domain names 10 437 419 437 386
Other 6 1,365 1,255 1,174 1,043
188,329 36,606 192,792 30,191
Non-amortizable repair station certifications n/a 34,200 — 34,200 —
Total $ 222,529 $ 36,606 $ 226,992 $ 30,191

Amortization expense for definite-lived intangible assets for the nine month periods ended December 30, 2017 and December 31, 2016 was $7,041 and $6,921, respectively. Estimated amortization expense for the remaining three months of fiscal 2018, the five succeeding fiscal years and thereafter is as follows:
2018 $ 2,435
2019 8,855
2020 8,747
2021 8,696
2022 8,579
2023 8,496
2024 and thereafter 105,915
~~6.   Debt~~
The balances payable under all borrowing facilities are as follows:

December 30,
2017

April 1,
2017

Revolver and term loan facilities $ 194,250 $ 267,000
Debt issuance costs (3,324 ) (4,392 )
Other 7,027 7,192
Total debt 197,953 269,800
Less: current portion 17,976 14,214
Long-term debt $ 179,977 $ 255,586
December 26,
2020
March 28,
2020

Revolver and term loan facilities $ 15,695 $ 18,593
Debt issuance costs (1,328 ) (1,687 )
Other 6,126 6,106
Total debt 20,493 23,012
Less: current portion 6,127 6,429
Long-term debt $ 14,366 $ 16,583

The current portion of long-term debt as of ~~both~~ December ~~30, 2017 and April 1, 2017~~26, 2020 includes the current portion of the foreign term loan, foreign revolving facility and the Schaublin mortgage, ~~and the current portion~~all of ~~the Term Loan Facilities.~~which are discussed below in further detail.
Domestic Credit Facility

~~In connection with the Sargent Aerospace & Defense (“Sargent”) acquisition on April 24, 2015, the Company entered into a new~~The Company’s credit agreement ~~(the “Credit Agreement”) and related Guarantee, Pledge Agreement and Security Agreement~~ with Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, Swingline Lender and Letter of Credit Issuer, and the other lenders party thereto ~~and terminated~~(the “Credit Agreement”) provides the ~~JP Morgan Credit Agreement. The~~Company with a $250,000 revolving credit facility (the “Revolver”), which expires on January 31, 2024. Debt issuance costs associated with the Credit Agreement ~~provides RBCA, as Borrower, with (a) a $200,000 Term Loan~~totaled $852 and ~~(b) a $350,000 Revolver and together~~will be amortized through January 31, 2024 along with the ~~Term Loan (the “Facilities”). The Facilities expire on April 24, 2020.~~unamortized debt issuance costs remaining from the Company’s prior credit agreement. As of December 26, 2020, $1,220 in unamortized debt issuance costs remain.

Amounts outstanding under the ~~Facilities~~Revolver generally bear interest at (a) a base rate determined by reference to the higher of (1) Wells Fargo’s prime lending rate, (2) the federal funds effective rate plus 1/2 of 1% and (3) the one-month LIBOR rate plus 1%, or (b) LIBOR ~~rate~~ plus a specified margin, depending on the type of borrowing being made. The applicable margin is based on the ~~Company’s~~Company's consolidated ratio of total net debt to consolidated EBITDA ~~from time to time.~~at each measurement date. Currently, the ~~Company’s~~Company's margin is 0.00% for base rate loans and ~~1.00%~~0.75% for LIBOR ~~rate~~ loans. ~~As of December 30, 2017, there was $21,750 outstanding under the Revolver and $172,500 outstanding under the Term Loan, offset by $3,324 in debt issuance costs (original amount was $7,122).~~

The Credit Agreement requires the Company to comply with various covenants including, among other things, a financial ~~covenants~~covenant to maintain ~~the following: (1)~~ a ratio of consolidated net debt to adjusted EBITDA not ~~to exceed~~greater than 3.50 ~~to 1; and (2) a consolidated interest coverage ratio not to be less than 2.75~~ to 1. The Credit Agreement allows the Company to, among other things, make distributions to shareholders, 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 ~~agreement.~~Credit Agreement. As of December ~~30, 2017,~~26, 2020, the Company was in compliance with all such covenants.

The Company’s domestic subsidiaries have guaranteed the Company’s obligations under the Credit Agreement, and the Company’s obligations and the domestic subsidiaries’ guarantee are secured ~~as well as providing for~~by a pledge of substantially all of the ~~Company’s and RBCA’s assets. The~~domestic assets of the Company and ~~certain of~~ its ~~subsidiaries have also entered into a Guarantee to guarantee RBCA’s obligations under the Credit Agreement.~~domestic subsidiaries.

Approximately ~~$3,990~~$3,700 of the Revolver is being utilized to provide letters of credit to secure ~~RBCA’s~~the Company’s obligations relating to certain insurance programs. ~~As of December 30, 2017, RBCA~~The Company has the ability to borrow up to an additional ~~$324,260~~$246,300 under the ~~Revolver.~~Revolver as of December 26, 2020.

Foreign Term Loan and Revolving Credit Facility
On August 15, 2019, one of our foreign subsidiaries, Schaublin SA (“Schaublin”), entered into two separate credit agreements (the “Foreign Credit Agreements”) with Credit Suisse (Switzerland) Ltd. to finance the acquisition of Swiss Tool and 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 and a CHF 15,000 (approximately $15,383) revolving credit facility (the “Foreign Revolver”), which continues in effect until terminated by either Schaublin or Credit Suisse. Debt issuance costs associated with the Foreign Credit Agreements totaled CHF 270 (approximately $277) and will be amortized throughout the life of the Foreign Credit Agreements. As of December 26, 2020, approximately $108 in unamortized debt issuance costs remain.

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%.
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 3.00 to 1 as of March 31, 2020 and 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 March 31, 2020, 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 three operating companies in the Swiss Tool group of companies.
As of December 26, 2020, there was approximately $2,243 outstanding under the Foreign Revolver and approximately $13,452 outstanding under the Foreign Term Loan. These borrowings have been classified as Level 2 of the valuation hierarchy. Schaublin has the ability to borrow up to an additional $14,575 under the Foreign Revolver as of December 26, 2020.
Schaublin’s required future annual principal payments are approximately $5,606 for the next 12 months and approximately $3,363 for each of the following three years.
Other Notes Payable

~~On October 1,~~In 2012 Schaublin purchased the land and building ~~which~~that it ~~occupied and had been leasing,~~occupies for ~~14,067 CHF (approximately $14,910).~~approximately $14,910. Schaublin obtained a ~~20 year fixed rate~~20-year fixed-rate mortgage of ~~9,300 CHF (approximately $9,857)~~approximately $9,857 at an interest rate of 2.9%. The balance of the purchase price of ~~4,767 CHF (approximately $5,053)~~approximately $5,053 was paid from cash on hand. The balance on this mortgage as of December ~~30, 2017~~26, 2020 was ~~6,859 CHF, or $7,027.~~approximately $6,126 and has been classified as Level 2 of the valuation hierarchy.

7.The Company’s required future annual principal payments are approximately $521 each year for the next five years and $3,521 thereafter.
9. Income Taxes

The Company files income tax returns in ~~the~~numerous U.S. ~~federal jurisdiction, and various states~~ and foreign ~~jurisdictions. With few exceptions, the Company is no longer~~jurisdictions, with returns subject to ~~state or foreign income tax examinations by tax authorities~~examination for ~~years~~varying periods, but generally back to and including the year ending ~~before~~ April 2, 2005. The Company is no longer subject to U.S. federal tax examination by the Internal Revenue Service for years ending before ~~March 29, 2014. A U.S. federal tax examination by the Internal Revenue Service for the year ended March 30, 2013 was effectively settled in fiscal 2016.~~April 1, 2017.

The effective income tax rates for the ~~three month~~three-month periods ended December ~~30, 2017~~26, 2020 and December ~~31, 2016~~28, 2019 were ~~23.9%~~17.9% and ~~31.5%~~17.0%, respectively. During the third quarter, Congress passed and the President signed the Tax Cuts and Jobs Act (“TCJA”) of 2017 into law. The new law includes a number of changes in existing tax law impacting businesses including a permanent reduction in the corporate income tax rate from 35.0% to 21.0%. As a result, the blended statutory rate applied for the current fiscal year is 31.5%. As of December 30, 2017, we have not completed our accounting for the tax effects associated with the TCJA. The impacts recorded, as detailed below, represent our estimate of the impact during the current fiscal year. In addition to discrete items, the effective income tax rates for these periods ~~are~~were different from the U.S. statutory rates due to ~~a special U.S. manufacturing deduction,~~ the foreign-derived intangible income provision and U.S. credit for increasing research activities, ~~and foreign income taxed at lower rates~~ which ~~decrease~~decreased the rate, and state income taxes, which ~~increase~~increased the rate.

The effective income tax rate for the ~~three month~~three-month period ended December ~~30, 2017~~26, 2020 of ~~23.9% was impacted by one-time adjustments~~17.9% included $1,003 of tax benefits associated with the enactment of the TCJA. Included in these adjustments was an estimated charge of $9,491 associated with the repatriation transition tax and an estimated benefit of $8,708 associated with the revaluation of our deferred tax liabilities. The TCJA also impacted the third quarter provision with a benefit from the lower blended statutory tax rate of 31.5%. The third quarter provision was also impacted by approximately $1,238 of benefit associated with the adoption of ASU 2016-09~~Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accountingand $45 of other discrete expense related to federal and state tax filing positions.~~share-based compensation. The effective income tax rate without discrete items for the ~~three month~~three-month period ended December ~~30, 2017~~26, 2020 would have been ~~25.3%~~21.4%. The effective income tax rate for the ~~three month~~three-month period ended December ~~31, 2016~~28, 2019 of ~~31.5% includes immaterial discrete items~~17.0% included $857 of ~~$56.~~tax benefits associated with share-based compensation. The third quarter provision for fiscal 2020 was also impacted by $567 of tax benefit associated with the decrease in the Company’s unrecognized tax positions related to the statute of limitations expiration. The effective income tax rate without discrete items for the ~~three month~~three-month period ended December ~~31, 2016~~28, 2019 would have been ~~31.8%~~20.9%. The Company believes it is reasonably possible that some of its unrecognized tax positions may be effectively settled within the next ~~twelve~~12 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, pertaining primarily to federal and state credits and state tax, is estimated to be approximately ~~$531.~~$1,524.

8.Income tax expense for the nine-month period ended December 26, 2020 was $15,741 compared to $18,914 for the nine-month period ended December 28, 2019. Our effective income tax rate for the nine-month period ended December 26, 2020 was 19.6% compared to 17.0% for the nine-month period ended December 28, 2019. The effective income tax rate for the nine-month period ended December 26, 2020 of 19.6% included $1,682 of tax benefits associated with share-based compensation. The effective income tax rate without these benefits and other items for the nine-month period ended December 26, 2020 would have been 21.5%. The effective income tax rate for the nine-month period ended December 28, 2019 of 17.0% included $3,896 of tax benefits associated with share-based compensation and $477 of tax benefits associated with the decrease in the Company’s unrecognized tax positions related to statute of limitations expiration and $241 of tax benefit associated with other permanent adjustments from filing the Company’s fiscal 2018 foreign tax returns. The effective income tax rate without these benefits and other items for the nine-month period ended December 28, 2019 would have been 21.2%.
10. Reportable Segments

The Company operates through operating segments for which separate financial information is available, and for which operating results are evaluated regularly by the ~~Company’s~~Company's chief operating decision maker in determining resource allocation and assessing performance. Those operating segments ~~with~~are aggregated as reportable segments as they have similar economic characteristics, ~~and that meet all other required criteria,~~ including nature of the products and production processes, distribution patterns and classes of ~~customers, are aggregated as reportable segments.~~customers.

The Company has ~~four~~4 reportable business ~~segments;~~segments, Plain Bearings, Roller Bearings, Ball Bearings and Engineered Products, which are described below.

Plain Bearings.Plain bearings are produced with either self-lubricating or metal-to-metal designs and ~~consist~~consists of several sub-classes, including rod end bearings, spherical plain bearings and journal bearings. Unlike ball bearings, which are used in high-speed rotational applications, plain bearings are primarily used to rectify inevitable misalignments in various mechanical components.

Roller Bearings.Roller bearings are anti-friction bearings that use rollers instead of balls. The Company manufactures four basic types of roller bearings: ~~heavy duty~~heavy-duty needle roller bearings with inner rings, tapered roller bearings, track rollers and aircraft roller bearings.

Ball Bearings.The Company manufactures four basic types of ball bearings: high precision aerospace, airframe control, thin section and commercial ball bearings, which are used in high-speed rotational applications.

Engineered Products.Engineered Products consists of highly engineered hydraulics, fasteners, collets and precision components used in aerospace, marine and industrial applications.

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.

Three Months Ended Nine Months Ended

December 30,
2017

December 31,
2016

December 30,
2017

December 31,
2016

Net External Sales
Plain $ 69,764 $ 65,822 $ 214,809 $ 205,107
Roller 32,485 26,157 96,215 80,786
Ball 16,496 13,700 48,756 41,979
Engineered Products 48,113 40,977 135,292 127,306
$ 166,858 $ 146,656 $ 495,072 $ 455,178
Gross Margin
Plain $ 26,615 $ 26,814 $ 82,719 $ 79,971
Roller 14,425 6,397 40,077 30,182
Ball 7,021 5,336 19,936 15,823
Engineered Products 16,604 13,838 45,653 40,391
$ 64,665 �� $ 52,385 $ 188,385 $ 166,367
Selling, General & Administrative Expenses
Plain $ 6,371 $ 6,192 $ 19,143 $ 18,007
Roller 1,553 1,517 4,765 4,484
Ball 1,707 1,384 5,002 4,163
Engineered Products 5,338 4,534 15,737 13,840
Corporate 13,193 12,085 38,888 36,202
$ 28,162 $ 25,712 $ 83,535 $ 76,696
Operating Income
Plain $ 19,134 $ 18,065 $ 60,957 $ 57,695
Roller 12,872 2,761 35,291 23,955
Ball 5,237 3,814 14,752 11,252
Engineered Products 8,817 7,831 17,839 22,564
Corporate (12,937 ) (11,942 ) (38,638 ) (36,162 )
$ 33,123 $ 20,529 $ 90,201 $ 79,304
Geographic External Sales
Domestic $ 145,565 $ 129,212 $ 433,588 $ 399,629
Foreign 21,293 17,444 61,484 55,549
$ 166,858 $ 146,656 $ 495,072 $ 455,178
Intersegment Sales
Plain $ 1,240 $ 1,146 $ 3,793 $ 3,248
Roller 3,438 3,264 9,731 11,512
Ball 606 370 1,758 1,211
Engineered Products 7,785 6,767 23,806 21,183
$ 13,069 $ 11,547 $ 39,088 $ 37,154

Three Months Ended Nine Months Ended
December 26,
2020
December 28,
2019
December 26,
2020
December 28,
2019

Net External Sales
Plain $ 69,321 $ 86,876 $ 219,249 $ 264,372
Roller 22,408 31,829 66,887 101,273
Ball 20,675 18,475 60,614 53,609
Engineered Products 33,457 39,839 101,939 122,364
$ 145,861 $ 177,019 $ 448,689 $ 541,618
Gross Margin
Plain $ 27,841 $ 35,016 $ 89,668 $ 104,830
Roller 7,626 14,048 22,269 41,968
Ball 9,183 8,184 26,239 23,486
Engineered Products 10,938 13,463 33,461 42,235
$ 55,588 $ 70,711 $ 171,637 $ 212,519
Selling, General & Administrative Expenses
Plain $ 5,443 $ 6,726 $ 15,990 $ 19,774
Roller 1,125 1,632 3,526 4,893
Ball 1,293 1,598 3,928 4,805
Engineered Products 3,771 4,410 11,421 13,147
Corporate 14,107 16,353 43,726 48,961
$ 25,739 $ 30,719 $ 78,591 $ 91,580
Operating Income
Plain $ 20,830 $ 27,503 $ 69,703 $ 82,583
Roller 6,339 12,427 17,919 36,731
Ball 7,835 6,579 22,189 18,623
Engineered Products 6,341 8,274 18,434 25,699
Corporate (14,804 ) (17,317 ) (46,527 ) (50,371 )
$ 26,541 $ 37,466 $ 81,718 $ 113,265
Intersegment Sales
Plain $ 1,500 $ 1,638 $ 4,274 $ 4,994
Roller 1,633 3,498 7,182 10,722
Ball 777 585 1,908 2,170
Engineered Products 7,182 11,449 24,663 33,022
$ 11,092 $ 17,170 $ 38,027 $ 50,908
All intersegment sales are eliminated in consolidation.

~~9. Integration and Restructuring of Operations~~11. Acquisition

~~In the second quarter of fiscal 2018,~~On August 15, 2019, the Company, ~~reached a decision to restructure~~through its manufacturing operation in Montreal, Canada. After completing its obligations, the Company expects to close its RBC Canada location and consolidate certain residual assets into other locations by the end of this fiscal year. As a result, the Company recorded an after-tax charge of $5,577 associated with the restructuring in the second quarter of fiscal 2018 attributable to the Engineered Products segment. The $5,577 charge includes a $1,337 impairment of fixed assets and a $5,157 impairment of intangible assets offset by a $917 tax benefit. The impairment charges were recognized within the “Other, net” line item within the consolidated statement of operations. The Company determined that the market approach was the most appropriate method to estimate the fair valueSchaublin SA subsidiary, acquired all of the ~~fixed assets using comparable sales data~~outstanding shares of Swiss Tool for a purchase price of approximately $33,597 (CHF 32,768). We have finalized the purchase price allocation with no material adjustments subsequent to March 28, 2020.
12. Restructuring and actual quotes from potential buyers in the market place. The fixed assets are comprised of land, a building, machinery and equipment. The Company assessed the fair value of the intangible assets in accordance with ASC 360-10, which are comprised of customer relationships, product approvals, tradenames and trademarks. InConsolidation
During the third quarter of fiscal ~~2018,~~2021, the Company ~~incurred~~continued its efforts to consolidate certain manufacturing facilities to increase efficiencies of our operations. This resulted in $1,692 of restructuring charges incurred during the third quarter, including $835 of ~~$1,091 comprised primarily~~inventory rationalization costs included within cost of ~~employee termination costs. These costs~~sales, all of which were ~~recorded within the “Other, net” line item within the consolidated statement of operations and are all~~ attributable to the ~~Engineered Products~~Plain segment. The ~~cumulative~~restrucuturing charges also included $355 of fixed asset disposals included within other operating costs, a $138 lease impairment charge, and $364 of other items. $255 of these restructuring charges ~~as of the end of the third quarter of fiscal 2018, net of taxes,~~within other operating expenses were ~~$6,668. The total impact of this restructuring is expected to be between $7,000 and $7,500 in after-tax charges, all attributable to~~included within the Engineered Products segment and ~~is expected~~the rest were included within the Plain segment. The Company secured right of use assets obtained in exchange for new operating lease liabilities of $7,662 as part of this restructuring. The Company anticipates additional costs associated with these consolidation efforts of $500 to ~~conclude~~$1,000 to be incurred in the ~~third~~fourth quarter of fiscal ~~2019.~~
In2021 and the ~~third~~first quarter of fiscal 2017, the Company reached a decision to integrate and restructure its industrial manufacturing operation in South Carolina. The Company exited a few smaller product offerings and consolidated two manufacturing facilities into one. These restructuring efforts will better align our manufacturing capacity and market focus. As a result, the Company recorded a charge of $7,060 associated with the restructuring in the third quarter of fiscal 2017 attributable to the Roller Bearings segment. The $7,060 charge includes $3,215 of inventory rationalization costs, $261 in impairment of intangibles, $2,402 loss on fixed assets disposals, and $1,182 exit obligation associated with a building operating lease. The inventory rationalization costs were recorded in Cost of Sales in the income statement. All other costs were recorded under operating expenses in the “Other, net” category of the income statement. The pre-tax charge of $7,060 was offset with a tax benefit of approximately $2,222. The Company determined that the market approach was the most appropriate method to estimate the fair value for the inventory, intangible assets, equipment and building operating lease using comparable sales data and actual quotes from potential buyers in the market place.2022.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement ~~As To~~as to Forward-Looking Information

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’~~customers' businesses generally, could materially reduce our revenues, cash flows and profitability; ~~(d)~~(e) future reductions or changes in U.S. government spending could negatively affect our business; ~~(e)~~(f) fluctuating ~~or interruption to~~ supply and ~~availability~~costs of subcomponents, raw materials ~~components~~ and energy resources, or the imposition of import tariffs, could materially ~~increase our costs or~~ reduce our revenues, cash ~~flow from operations~~flows and profitability; ~~(f)~~(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) 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; ~~(g) restrictions in~~(i) the retirement of commercial aircraft could reduce our ~~indebtedness agreements could limit our growth~~revenues, cash flows and ~~our ability to respond to changing conditions; (h)~~profitability; (j) work stoppages and other labor problems could materially reduce our ability to operate our business; ~~(i) our business is capital intensive and may consume cash in excess of cash flow from our operations; (j)~~(k) unexpected equipment failures, catastrophic events or capacity constraints ~~may~~could increase our costs and reduce our sales due to production curtailments or shutdowns; ~~(k)~~(l) we may not be able to continue to make the acquisitions necessary for us to realize our growth strategy; ~~(l)~~(m) businesses that we have acquired or that we may acquire in the ~~costs~~future may have liabilities that are not known to us; (n) goodwill and ~~difficulties~~indefinite-lived intangibles comprise a significant portion of ~~integrating acquired businesses could impede~~ our total assets, and if we determine that goodwill and indefinite-lived intangibles have become impaired in the future, ~~growth; (m)~~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; ~~(n)~~(p) our international operations are subject to risks inherent in such activities; ~~(o)~~(q) currency translation risks may have a material impact on our results of operations; ~~(p)~~(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; ~~(q)~~(t) we may incur material losses for product liability and ~~recall related~~recall-related claims; ~~(r)~~(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; ~~(s)~~(v) our intellectual property and ~~other~~ proprietary ~~rights~~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; ~~(t)~~(w) cancellation of orders in our backlog ~~of orders~~ could negatively impact our ~~revenues; (u)~~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; ~~(v) provisions in our charter documents may prevent or hinder efforts to acquire a controlling interest in us; (w) health care reform~~(y) litigation could adversely affect our ~~operating results; (x) we may not pay cash dividends~~financial condition; (z) changes in accounting standards or changes in the ~~foreseeable future; (y) retirement~~interpretations of ~~commercial aircraft~~existing standards could ~~reduce~~affect our ~~revenues,~~financial results; and ~~(z) we may not achieve satisfactory operating results in the integration of acquired companies.~~(aa) risks associated with utilizing information technology systems could adversely affect our operations. 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 Annual Report on Form 10-K for the year ended ~~April 1, 2017.~~March 28, 2020. 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 appears elsewhere in this Quarterly Report.

~~Overview~~

Overview
We are a well-known international manufacturer and maker of highly engineered precision bearings and 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~~value-added manufacturing and engineering capabilities enable us to differentiate ourselves from our competitors and enhance profitability. We believe our unique expertise has enabled us to garner leading positions in many of the product markets in which we primarily compete. With 4543 facilities in seven countries, of which 3631 are manufacturing facilities, ~~in six countries,~~ we have been able to significantly broaden our end markets, products, customer base and geographic reach. We currently operate under four reportable business segments: Plain ~~Bearings;~~Bearings, Roller ~~Bearings;~~Bearings, Ball ~~Bearings;~~Bearings, and Engineered Products. The following further describes these reportable segments:

Plain Bearings.Plain bearings are produced with either self-lubricating or metal-to-metal designs and ~~consist~~consists of several sub-classes, including rod end bearings, spherical plain bearings and journal bearings. Unlike ball bearings, which are used in high-speed rotational applications, plain bearings are primarily used to rectify inevitable misalignments in various mechanical components.

17
Roller Bearings.Roller bearings are anti-friction bearings that use rollers instead of balls. We manufacture four basic types of roller bearings: ~~heavy duty~~heavy-duty needle roller bearings with inner rings, tapered roller bearings, track rollers and aircraft roller bearings.

Ball Bearings. We manufacture four basic types of ball bearings: high precision aerospace, airframe control, thin section and commercial ball bearings, which are used in high-speed rotational applications.

Engineered Products.Engineered Products consists of highly engineered hydraulics, fasteners, collets and precision components used in aerospace, marine and industrial applications.

Purchasers of bearings and engineered products include industrial equipment and machinery manufacturers, producers of commercial and military aerospace equipment such as missiles and radar systems, agricultural machinery manufacturers, construction, energy, mining, marine and specialized equipment manufacturers, marine products, automotive and commercial truck manufacturers. The markets for our products are cyclical, and we have endeavored to mitigate this cyclicality by entering into sole-source relationships and long-term purchase agreements, through diversification across multiple market segments within the aerospace and defense and diversified 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 ~~precision engineered~~precision-engineered bearings and 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. We will 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~~three-month period ended December ~~30, 2017 increased 13.8%~~26, 2020 decreased 17.6% compared to the same period last fiscal year. ~~Our industrial markets increased 23.1% while the~~The decrease in net sales was a result of a 29.7% decrease in our aerospace markets ~~increased 8.9%.~~offset by a 5.5% increase in our industrial markets. The decrease in aerospace sales was primarily due to the commercial markets, both OEM and aftermarket. The increase in industrial sales was driven by increases in the marine, wind, semiconductor and general industrial markets. Our backlog, as of December ~~30, 2017,~~26, 2020, was ~~$392.5~~$393.9 million compared to ~~$349.1~~$477.7 million as of December ~~31, 2016.~~28, 2019.

The COVID-19 health crisis, which was declared a pandemic in March 2020, has led to governments around the world implementing measures to reduce the spread. These measures include quarantines, “shelter in place” orders, travel restrictions, and other measures and have resulted in a slowdown of worldwide economic activity.
Our business is operating as an essential business, and as such, our facilities have remained open, with the exception of a few temporary closures at some of our locations. The COVID-19 pandemic is impacting our commercial aerospace and industrial sales in fiscal 2021. Our commercial aerospace sales continue to face headwinds associated with build rate changes within the industry, while the general decline in global economic activity has had an impact on the industrial markets.

Our production and sales in the third quarter of fiscal 2021 have been negatively affected by the economic implications of the pandemic. We expect that commercial aerospace OEM and aftermarket will continue to be impacted by the year-over-year decline in air travel and changes in aircraft production rates. Although our sales to aerospace defense markets have grown 9.1% through the first nine months of the year, they were down 6.2% during the third quarter of fiscal 2021 as compared to the same period last year. Sales to industrial markets benefited from strong sales in our marine, wind and other general industrial business during the quarter, while we faced headwinds in mining and energy markets. We expect this trend to continue through the remainder of the fiscal year. Management is continuously evaluating the status of our orders and operations, and restructuring efforts are being implemented where necessary to align our cost structure to the new demand levels we experience in the marketplace.
We experienced solid cash flow generation during the third quarter of fiscal 2021 (as discussed in the section “Liquidity and Capital Resources” below). Management believes that these operating cash flows and available credit under ~~the~~all credit ~~facilities~~agreements will provide adequate resources to fund internal and external growth initiatives for at least the ~~foreseeable future.~~next 12 months. As of December ~~30, 2017,~~26, 2020, we had cash, ~~and~~ cash equivalents and highly liquid marketable securities of ~~$43.8~~$201.7 million, of which, approximately ~~$40.5~~$16.0 million 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 entities.~~

The Company expects net sales to be approximately $155.0 million to $160.0 million in the fourth quarter of fiscal 2021.
Results of Operations
(dollars in millions)
Three Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Total net sales $ 166.9 $ 146.7 $ 20.2 13.8 %

Net income $ 23.8 $ 12.8 $ 11.0 86.6 %

Net income per common share: diluted $ 0.97 $ 0.54
Weighted average common shares: diluted 24,446,115 23,813,780

Three Months Ended
December 26,
2020
December 28,
2019
$
Change %
Change
Total net sales $ 145.9 $ 177.0 $ (31.1 ) (17.6 )%

Net income $ 21.6 $ 30.5 $ (8.9 ) (29.3 )%

Net income per common share: diluted $ 0.86 $ 1.22
Weighted average common shares: diluted 25,060,812 24,981,480
Our net sales for the ~~three month~~three-month period ended December ~~30, 2017 increased 13.8%~~26, 2020 decreased 17.6% compared to the same period last fiscal year. The ~~overall increase~~decrease in net sales was a result of a ~~23.1%~~29.7% decrease in our aerospace markets partially offset by a 5.5% increase in our industrial markets. The decrease in aerospace sales was primarily due to the commercial markets, both OEM and ~~an 8.9%~~aftermarket, which were down 37.2% and 31.2%, respectively. Aerospace defense was also down 6.2% this quarter compared to the same period in the prior year with OEM sales down by 8.2% partially offset by a 15.9% increase in ~~our aerospace markets.~~aftermarket sales. The increase in industrial sales was ~~a result of strong performance~~driven primarily by increases in the marine ~~mining, semicon, energy,~~ and certain general industrial ~~activity.~~markets. Compared to the second quarter of fiscal 2021, overall net sales have been consistent. Industrial sales have increased by 8.5% while aerospace sales have decreased by 13.3%. The increase in industrial sales was driven mostly by the marine and certain general industrial markets. The decrease in aerospace sales was ~~driven mainly~~attributable to the commercial and defense OEM markets offset by ~~commercial OEM.~~increases to the defense distribution markets.

Net income for the third quarter of fiscal ~~2018~~2021 was ~~$23.8~~$21.6 million compared to ~~$12.8~~$30.5 million for the same period last year. Net income ~~of $23.8 million in~~for the third quarter of fiscal ~~2018~~2021 was affected by $1.1 million of after-tax restructuring costs and related items primarily associated with the consolidation of ~~$1.1~~certain manufacturing facilities, as well as $0.2 million of losses on foreign exchange, partially offset by ~~a $1.2~~$1.0 million of tax ~~benefit related to the adoption of ASU 2016-09 and the impact of the new tax legislation signed during the third quarter.~~benefits associated with share-based compensation. Net income for the third quarter of fiscal ~~2017~~2020 was affected by ~~restructuring costs~~$0.9 million of ~~$4.9~~tax benefit associated with share-based compensation and $0.6 million of tax benefit associated with the decrease in the Company’s unrecognized tax positions due to the statute of limitations expiration, partially offset by ~~$0.3~~$0.2 million of ~~discrete tax benefit~~inventory purchase accounting costs associated with the acquisition of Swiss Tool, $0.2 million of losses on foreign exchange, and ~~foreign currency gains.~~$0.1 million of other items.

Nine Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Total net sales $ 495.1 $ 455.2 $ 39.9 8.8 %

Net income $ 60.5 $ 49.0 $ 11.5 23.3 %

Net income per common share: diluted $ 2.49 $ 2.07
Weighted average common shares: diluted 24,322,165 23,719,121

Nine Months Ended
December 26,
2020
December 28,
2019
$
Change %
Change
Total net sales $ 448.7 $ 541.6 $ (92.9 ) (17.2 )%

Net income $ 64.7 $ 92.3 $ (27.6 ) (29.9 )%

Net income per common share: diluted $ 2.59 $ 3.71
Weighted average common shares: diluted 24,985,848 24,898,635
Net sales ~~increased $39.9~~decreased $92.9 million, or ~~8.8%~~17.2%, for the ~~nine month~~nine-month period ended December ~~30, 2017~~26, 2020 over the same period last year. The ~~increase~~decrease in net sales was mainly the result of a ~~19.2% increase~~23.5% decrease in aerospace sales and a 5.7% decrease in industrial ~~sales and an increase of 3.4%~~sales. The decrease in aerospace ~~sales.~~sales was primarily due to the commercial markets, both OEM and aftermarket, which were down 32.2% and 28.1%, respectively, and was partially offset by defense OEM and aftermarket, which increased year over year by 8.4% and 17.1%, respectively. The ~~increase~~decrease in industrial sales was ~~mostly attributable~~primarily due to ~~an increase~~mining and energy, partially offset by increases in ~~marine, mining, semicon, energy,~~the semiconductor, military vehicles, wind, nuclear, and ~~general~~a few other industrial ~~activity. The increase in aerospace was primarily driven by aerospace OEM, both defense and commercial.~~markets. Excluding $2.6 million of sales associated with Swiss Tool, overall net sales decreased 17.6% year over year.

Net income for the nine months ended December ~~30, 2017~~26, 2020 was ~~$60.5~~$64.7 million compared to ~~$49.0~~$92.3 million for the same period last year. Net income for the nine month period in fiscal 2021 was affected by $4.8 million of after-tax restructuring costs and related items, and $0.4 million of losses on foreign exchange, partially offset by $1.7 million of tax benefits associated with share-based compensation. The net income of ~~$60.5~~$92.3 million infor fiscal ~~2018~~2020 was ~~affected~~impacted by ~~restructuring and integration costs of $6.7 million, a~~ $3.9 million of tax ~~benefit related to~~benefits associated with share-based compensation, and $0.7 million of discrete tax benefits, partially offset by $1.0 million of after-tax cost associated with the ~~adoption~~acquisition of ~~ASU 2016-09, the impact~~Swiss Tool, $0.5 million of ~~the new tax legislation signed during the third quarter~~loss on foreign exchange, and $0.2 million of ~~discrete tax benefits. Net income~~other items.
Gross Margin
Three Months Ended
December 26,
2020
December 28,
2019
$
Change
%
Change

Gross Margin $ 55.6 $ 70.7 $ (15.1 ) (21.4 )%
Gross Margin % 38.1 % 39.9 %
Gross margin was 38.1% of net sales for the third quarter of fiscal 2021 compared to 39.9% for the third quarter of fiscal 2020. Gross margin for the third quarter of fiscal 2021 was impacted by $0.8 million in inventory rationalization costs associated with the consolidation of certain manufacturing facilities. The year-over-year decrease in gross margin as a percentage of sales was driven by these additional rationalization costs and reduced sales volumes during the period.
Nine Months Ended
December 26,
2020
December 28,
2019
$
Change
%
Change

Gross Margin $ 171.6 $ 212.5 $ (40.9 ) (19.2 )%
Gross Margin % 38.3 % 39.2 %
Gross margin was 38.3% of net sales for the first nine months of fiscal 2017 was affected by $0.3 million in costs associated with the Sargent acquisition and $4.9 million in costs related to restructuring offset by $0.2 million of discrete tax benefit and $0.2 million of foreign exchange gain.
19
~~Gross Margin~~
Three Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Gross Margin $ 64.7 $ 52.4 $ 12.3 23.4 %
Gross Margin % 38.8 % 35.7 %
~~Gross margin increased $12.3 million, or 23.4%, in the third quarter of fiscal 2018~~2021 compared to the third quarter of fiscal 2017. The three months ended December 31, 2016 was affected by a restructuring charge of $3.2 million. The increase in gross margin was mainly driven by higher sales and cost efficiencies achieved during the current period.
Nine Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Gross Margin $ 188.4 $ 166.4 $ 22.0 13.2 %
Gross Margin % 38.1 % 36.5 %
~~Gross margin increased $22.0 million or 13.2%~~39.2% for ~~the first nine months of fiscal 2018 compared to~~ the same period last year. Gross margin for the first nine months of fiscal ~~2017~~2021 was ~~affected~~impacted by $0.8 million of capacity inefficiencies driven by the ~~unfavorable impact of $3.2~~decrease in volume and $2.8 million ~~of restructuring charges and $0.4 million of~~in inventory ~~purchase accounting~~rationalization costs associated with the ~~Sargent acquisition. The increase in gross margin year over year is primarily a result~~consolidation of ~~higher sales and cost efficiencies achieved.~~certain manufacturing facilities.

Selling, General and Administrative

Three Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

SG&A $ 28.2 $ 25.7 $ 2.5 9.5 %
% of net sales 16.9 % 17.5 %
Three Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

SG&A $ 25.7 $ 30.7 $ (5.0 ) (16.2 )%
% of net sales 17.6 % 17.4 %
SG&A expenses ~~increased by $2.5 million to $28.2 million~~ for the third quarter of fiscal ~~2018~~2021 was $25.7 million, or 17.6% of net sales, as compared to ~~$25.7~~$30.7 million, ~~for the third quarter~~or 17.4% of fiscal 2017. This increase was mainly driven by $1.7 million of personnel related expenses, $0.3 million of additional stock compensation expense, $0.2 million of professional fees and $0.3 million of other costs. As a percentage ofnet sales, ~~SG&A was 16.9% for the third quarter of fiscal 2018 compared to 17.5%~~ for the same period ~~last year.~~of fiscal 2020. This reduction was due to decreases in personnel costs of $4.4 million, professional fees of $0.1 million, and $0.5 million of other items.

Nine Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

SG&A $ 83.5 $ 76.7 $ 6.8 8.9 %
% of net sales 16.9 % 16.8 %
Nine Months Ended
December 26,
2020
December 28,
2019
$
Change
%
Change

SG&A $ 78.6 $ 91.6 $ (13.0 ) (14.2 )%
% of net sales 17.5 % 16.9 %

SG&A expenses ~~increased~~decreased by ~~$6.8~~$13.0 million to ~~$83.5~~$78.6 million for the first nine months of fiscal ~~2018~~2021 compared to ~~$76.7~~$91.6 million for the same period last year. This ~~increase is~~decrease was primarily due to ~~$5.0~~reductions of $13.1 million ofin personnel ~~related expenses, $1.0 million of additional stock compensation and $0.8~~costs, partially offset by $0.1 million of other ~~costs.~~items.

20
Other, Net

Three Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Other, net $ 3.4 $ 6.1 $ (2.7 ) (45.0 )%
% of net sales 2.0 % 4.2 %
Three Months Ended

December 26,
2020

December 28,
2019

$
Change

%
Change

Other, net $ 3.3 $ 2.5 $ 0.8 31.0 %
% of net sales 2.3 % 1.4 %

Other operating expenses for the third quarter of fiscal ~~2018~~2021 totaled ~~$3.4~~$3.3 million compared to ~~$6.1~~$2.5 million for the same period last year. For the third quarter of fiscal ~~2018,~~2021, other operating expenses ~~were comprised mainly~~included $2.6 million of ~~$1.1~~amortization of intangible assets, $0.5 million of restructuring costs and ~~$2.3~~related items, and $0.2 million of other costs. Other operating expenses last year were comprised mainly of $2.5 million of amortization of intangible ~~assets. For the third quarter of fiscal 2017, other operating expenses were comprised of $3.8~~assets and $0.1 million of restructuring costs, ~~and $2.3~~partially offset by $0.1 million of ~~amortization of intangible assets.~~other income.

Nine Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Other, net $ 14.7 $ 10.4 $ 4.3 41.3 %
% of net sales 3.0 % 2.3 %
Nine Months Ended
December 26,
2020
December 28,
2019
$
Change
%
Change

Other, net $ 11.3 $ 7.7 $ 3.6 47.6 %
% of net sales 2.5 % 1.4 %

Other operating expenses for the first nine months of fiscal ~~2018~~2021 totaled ~~$14.7~~$11.3 million compared to ~~$10.4~~$7.7 million for the same period last year. For the first nine months of fiscal ~~2018,~~2021, other operating expenses were comprised mainly of ~~$7.6~~$7.7 million in amortization of intangibles, $3.1 million of restructuring ~~costs, $7.0~~and related items, $0.4 million of ~~amortization of intangible assets~~additions to the allowance for doubtful accounts, and $0.1 million of other ~~costs.~~items. For the first nine months of fiscal ~~2017,~~2020, other operating expenses were comprised ~~mostly~~mainly of ~~$4.0~~$7.1 million of amortization of intangibles, $0.9 million of costs associated with the acquisition of Swiss Tool, and $0.2 million of restructuring costs, ~~and $6.9 million of amortization of intangible assets~~partially offset by $0.5 million of other ~~revenue.~~income.

Interest Expense, Net

Three Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Interest expense, net $ 1.8 $ 2.1 $ (0.3 ) (16.6 )%
% of net sales 1.1 % 1.4 %
Three Months Ended

December 26,
2020

December 28,
2019

$
Change

%
Change

Interest expense, net $ 0.3 $ 0.5 $ (0.2 ) (29.8 )%
% of net sales 0.2 % 0.3 %
Interest expense, net, generally consists of interest charged on ~~our credit facilities~~the Company’s debt agreements and amortization of deferred financing fees, offset by interest income (see “Liquidity and Capital ~~Resources – Liquidity”,~~Resources” below). Interest expense, net, was ~~$1.8~~$0.3 million for the third quarter of fiscal ~~2018~~2021 compared to ~~$2.1~~$0.5 million for the same period last year. ~~The Company had total debt of $198.0 million at December 30, 2017 compared to $294.9 million at December 31, 2016.~~

Nine Months Ended Nine Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

December 26,
2020

December 28,
2019
$
Change
%
Change

Interest expense, net $ 5.7 $ 6.7 $ (1.0 ) (14.3 )% $ 1.1 $ 1.5 $ (0.4 ) (26.3 )%
% of net sales 1.2 % 1.5 % 0.2 % 0.3 %

Interest expense, net, generally consists of interest charged on our credit facilities and amortization of deferred financing fees, offset by interest income (see “Liquidity and Capital Resources – Liquidity”, below). Interest expense, net, was ~~$5.7~~$1.1 million for the first nine months of fiscal ~~2018~~2021 compared to ~~$6.7~~$1.5 million for the first nine months of fiscal ~~2017.~~2020.
Other Non-Operating Expense (Income)

Three Months Ended

December 26,
2020

December 28,
2019
$
Change
%
Change

Other non-operating expense (income) $ (0.1 ) $ 0.2 $ (0.3 ) (123.0 )%
% of net sales 0.0 % 0.1 %
Other non-operating income was $0.1 million for the third quarter of fiscal 2021 compared to $0.2 million of expense for the same period in the prior year. 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 million of foreign exchange loss and $0.2 million of other items. For the third quarter of fiscal 2020, other non-operating expenses were comprised of $0.2 million of foreign exchange loss.
Nine Months Ended

December 26,
2020

December 28,
2019
$
Change
%
Change

Other non-operating expense (income) $ 0.2 $ 0.6 $ (0.4 ) (65.1 )%
% of net sales 0.0 % 0.1 %

Other non-operating expenses were $0.2 million for the first nine months of fiscal 2021 compared to $0.6 million for the same period in the prior year. 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. For the first nine months of fiscal 2020, other non-operating expenses were comprised of $0.6 million of foreign exchange loss.
Income Taxes

Three Months Ended

December 30,
2017

December 31,
2016

Income tax expense $ 7.5 $ 5.9
Effective tax rate 23.9 % 31.5 %
Three Months Ended
December 26,
2020
December 28,
2019

Income tax expense $ 4.7 $ 6.3
Effective tax rate 17.9 % 17.0 %

Income tax expense for the ~~three month~~three-month period ended December ~~30, 2017~~26, 2020 was ~~$7.5~~$4.7 million compared to ~~$5.9~~$6.3 million for the ~~three month~~three-month period ended December ~~31, 2016.~~28, 2019. Our effective income tax ~~rate~~rates for the ~~three month~~three-month period ended December ~~30, 2017~~26, 2020 was ~~23.9%~~17.9% compared to ~~31.5%~~17.0% for the ~~three month~~three-month period ended December ~~31, 2016.~~28, 2019. The effective income tax rate for the ~~three month~~three-month period ended December ~~30, 2017~~26, 2020 of ~~23.9% was impacted by adjustments made in relation to the recently enacted Tax Cuts and Jobs Act (TCJA). These were mainly comprised~~17.9% includes $1.0 million of ~~a charge of $9.5 million for the repatriation transition~~ tax and a benefit of $8.7 million associated with the revaluation of our deferred tax liabilities. The third quarter provision also benefited from a lower blended statutory tax rate of 31.5% as a result of the enactment of TCJA and a $1.2 million benefit associated with ~~ASU 2016-09~~~~Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting~~.share-based compensation. The effective income tax rate without ~~discrete~~these benefits and other items for the ~~three month~~three-month period ended December ~~30, 2017~~26, 2020 would have been ~~25.3%~~21.4%. The effective income tax rate for the ~~three month~~three-month period ended December ~~31, 2016 was 31.5%, which included approximately $0.1~~28, 2019 of 17.0% includes $0.9 million of ~~immaterial discrete expense items.~~tax benefit associated with share-based compensation and $0.6 million of tax benefit associated with the decrease in the Company’s unrecognized tax positions related to statute of limitations expiration. The effective income tax rate without ~~discrete~~this benefit and other items for the ~~three month~~three-month period ended December ~~31, 2016~~28, 2019 would have been ~~31.8%~~20.9%.
Nine Months Ended

December 30,
2017

December 31,
2016

Income tax expense $ 23.6 $ 23.6
Effective tax rate 28.0 % 32.5 %

Nine Months Ended
December 26,
2020
December 28,
2019

Income tax expense $ 15.7 $ 18.9
Effective tax rate 19.6 % 17.0 %
Income tax expense for the ~~nine month~~nine-month period ended December ~~30, 2017~~26, 2020 was ~~$23.6~~$15.7 million compared to ~~$23.6~~$18.9 million for the ~~nine month~~nine-month period ended December ~~31, 2016.~~28, 2019. Our effective income tax ~~rate~~rates for the ~~nine month~~nine-month period ended December ~~30, 2017~~26, 2020 was ~~28.0%~~19.6% compared to ~~32.5%~~17.0% for the ~~nine month~~nine-month period ended December ~~31, 2016.~~28, 2019. The effective income tax rate for the ~~nine month~~nine-month period ended December ~~30, 2017~~26, 2020 of ~~28.0% was impacted by adjustments made in relation to the recently enacted Tax Cuts and Jobs Act (TCJA). These were mainly comprised~~19.6% includes $1.7 million of ~~a charge of $9.5 million for the repatriation transition~~ tax and a benefit of $8.7 million associated with the revaluation of our deferred tax liabilities. The effective tax rate also benefited from a lower blended statutory rate of 31.5% as a result of the enactment of TCJA, $3.9 million of benefit associated with ~~ASU 2016-09~~~~Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting~~~~, $0.9 million of benefit associated with restructuring and integration activities, and $0.2 million of other discrete benefits.~~share-based compensation. The effective income tax rate without ~~discrete~~these benefits and other items for the ~~nine month~~nine-month period ended December ~~30, 2017~~26, 2020 would have been ~~33.0%~~21.5%. The effective income tax rate for the ~~nine month~~nine-month period ended December ~~31, 2016 was 32.5%, which included immaterial discrete~~28, 2019 of 17.0% includes $3.9 million of tax benefit associated with share-based compensation and $0.5 million of tax benefit associated with the decrease in the Company’s unrecognized tax positions related to statute of limitations expiration and $0.2 ~~million.~~million of tax benefit associated with other permanent adjustments from filing the Company’s fiscal 2018 foreign tax returns. The effective income tax rate without ~~discrete~~this benefit and other items for the ~~nine month~~nine-month period ended December ~~31, 2016~~28, 2019 would have been ~~32.8%~~21.2%. Based on our initial reviews and subject to further regulatory guidance issued in connection with TCJA, we estimate the fourth quarter of fiscal 2018 effective tax rate will be approximately 25.0% to 27.0% and we estimate the full year fiscal 2019 effective tax rate will be approximately 20.0% to 22.0%.

~~Integration and Restructuring of Operations~~Segment Information

In the second quarter of fiscal 2018, the Company reached a decision to restructure its manufacturing operation in Montreal, Canada. After completing its obligations, the Company expects to close its RBC Canada location and consolidate certain residual assets into other locations by the end of this fiscal year. As a result, the Company recorded an after-tax charge of $5.6 million associated with the restructuring in the second quarter of fiscal 2018 attributable to the Engineered Products segment. The $5.6 million charge includes a $1.3 million impairment of fixed assets and a $5.2 million impairment of intangible assets offset by a $0.9 million tax benefit. The impairment charges were recognized within the “Other, net” line item within the consolidated statement of operations. The Company determined that the market approach was the most appropriate method to estimate the fair value of the fixed assets using comparable sales data and actual quotes from potential buyers in the market place. The fixed assets are comprised of land, a building, machinery and equipment. The Company assessed the fair value of the intangible assets in accordance with ASC 360-10, which are comprised of customer relationships, product approvals, tradenames and trademarks. In the third quarter of fiscal 2018, the Company incurred restructuring charges of $1.1 million comprised primarily of employee termination costs. These costs were recorded within the “Other, net” line item within the consolidated statement of operations and are all attributable to the Engineered Products segment. The cumulative restructuring charges as of the end of the third quarter of fiscal 2018, net of taxes, were $6.7 million. The total impact of this restructuring is expected to be between $7.0 million and $7.5 million in after-tax charges, all attributable to the Engineered Products segment, and is expected to conclude in the third quarter of fiscal 2019. The Company anticipates a positive cash flow result of approximately $5.2 million from this transaction.
~~Segment Information~~
We have four reportable product segments: Plain Bearings, Roller Bearings, Ball Bearings and Engineered Products. We use gross margin as the primary measurement to assess the financial performance of each reportable segment.

Plain ~~Bearing Segment:~~Bearings Segment

Three Months Ended

December 30,
2017

December 31,
2016

$
Change

%
Change

Total net sales $ 69.8 $ 65.8 $ 4.0 6.0 %

Gross margin $ 26.6 $ 26.8 $ (0.2 ) (0.7 )%
Gross margin % 38.2 % 40.7 %

SG&A $ 6.4 $ 6.2 $ 0.2 2.9 %
% of segment net sales 9.1 % 9.4 %
Three Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

Total net sales $ 69.3 $ 86.9 $ (17.6 ) (20.2 )%

Gross margin $ 27.8 $ 35.0 $ (7.2 ) (20.5 )%
Gross margin % 40.2 % 40.3 %

SG&A $ 5.4 $ 6.7 $ (1.3 ) (19.1 )%
% of segment net sales 7.9 % 7.7 %

Net sales ~~increased $4.0~~decreased $17.6 million, or ~~6.0%~~20.2%, for the three months ended December ~~30, 2017~~26, 2020 compared to the same period last year. The ~~6.0% increase~~20.2% decrease was primarily driven by ~~an increase~~a decrease of ~~23.4% in our industrial markets and a 0.9% increase~~28.2% in our aerospace markets, partially offset by an 8.0% increase in the industrial markets. The decrease in aerospace net sales was due to commercial aerospace OEM and aftermarket, partially offset by defense OEM. The increase in industrial net sales was mostly driven by the wind and general industrial markets.
Gross margin as a percentage of net sales was 40.2% for the third quarter of fiscal 2021 compared to 40.3% for the same period last year. Gross margin for the third quarter of fiscal 2021 was affected by $0.8 million of inventory rationalization costs associated with the restructuring of certain manufacturing facilities.
Nine Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

Total net sales $ 219.2 $ 264.4 $ (45.2 ) (17.1 )%

Gross margin $ 89.7 $ 104.8 $ (15.1 ) (14.5 )%
Gross margin % 40.9 % 39.7 %

SG&A $ 16.0 $ 19.8 $ (3.8 ) (19.1 )%
% of segment net sales 7.3 % 7.5 %
Net sales decreased $45.2 million, or 17.1%, for the nine months ended December 26, 2020 compared to the same period last year. The 17.1% decrease was primarily driven by a decrease of 22.5% in our aerospace markets offset by a 2.0% increase in the industrial markets. The decrease in aerospace was primarily due to commercial OEM and aftermarket, partially offset by defense OEM aftermarket. The increase in industrial sales was mostly driven by the wind and general industrial ~~OEM while the increase in aerospace sales was due to the commercial aerospace OEM.~~markets.

Gross margin as a percentage of net sales increased to 40.9% for the first nine months of fiscal 2021 compared to 39.7% for the same period last year. The increase was a result of product mix during the period. Gross margin in the first nine months of fiscal 2021 was affected by $0.8 million of inventory rationalization costs associated with the restructuring of certain manufacturing facilities during the period.

Roller Bearings Segment
Three Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

Total net sales $ 22.4 $ 31.8 $ (9.4 ) (29.6 )%

Gross margin $ 7.6 $ 14.0 $ (6.4 ) (45.7 )%
Gross margin % 34.0 % 44.1 %

SG&A $ 1.1 $ 1.6 $ (0.5 ) (31.1 )%
% of segment net sales 5.0 % 5.1 %
Net sales decreased $9.4 million, or 29.6%, for the three months ended December 26, 2020 compared to ~~38.2%~~the same period last year. Our aerospace markets decreased 41.6% while our industrial markets decreased by 15.3%. The decrease in aerospace was driven by the commercial and defense OEM and aftermarket. The decrease in industrial net sales was primarily due to mining and energy market activity.
Gross margin for the three months ended December 26, 2020 was 34.0% of net sales compared to 44.1% for the comparable period in fiscal 2020. This decrease in gross margin as a percentage of net sales was primarily due to decreased sales volumes and product mix.
Nine Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

Total net sales $ 66.9 $ 101.3 $ (34.4 ) (34.0 )%

Gross margin $ 22.3 $ 42.0 $ (19.7 ) (46.9 )%
Gross margin % 33.3 % 41.4 %

SG&A $ 3.5 $ 4.9 $ (1.4 ) (27.9 )%
% of segment net sales 5.3 % 4.8 %
Net sales decreased $34.4 million, or 34.0%, for the nine months ended December 26, 2020 compared to the same period last year. Our industrial markets decreased 30.1% while our aerospace markets decreased by 37.3%. The decrease in industrial sales was primarily due to mining, energy and general industrial market activity while the decrease in aerospace was driven by the commercial and defense OEM markets and commercial aftermarket.
Gross margin for the nine months ended December 26, 2020 was 33.3% of net sales compared to 41.4% for the comparable period in fiscal 2020. This decrease in gross margin as a percentage of net sales was driven by a reduction in sales volume and product mix. Further, the first nine months of fiscal 2021 were impacted by $2.0 million in inventory rationalization costs associated with the consolidation of certain manufacturing facilities, as well as approximately $0.3 million of capacity inefficiencies driven by the impact of the COVID-19 pandemic.

Ball Bearings Segment
Three Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

Total net sales $ 20.7 �� $ 18.5 $ 2.2 11.9 %

Gross margin $ 9.2 $ 8.2 $ 1.0 12.2 %
Gross margin % 44.4 % 44.3 %

SG&A $ 1.3 $ 1.6 $ (0.3 ) (19.1 )%
% of segment net sales 6.3 % 8.6 %
Net sales increased by $2.2 million for the third quarter of fiscal ~~2018~~2021 compared to ~~40.7%~~the same period last year. Our aerospace markets increased 14.1% while our industrial sales increased 10.8%. The increase in aerospace net sales was primarily driven by the defense and space OEM market. The increase in industrial was primarily due to the semiconductor and general industrial markets.
Gross margin as a percentage of net sales was 44.4% for the third quarter of fiscal 2021 compared to 44.3% for the same period last year.
Nine Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

Total net sales $ 60.6 $ 53.6 $ 7.0 13.1 %

Gross margin $ 26.2 $ 23.5 $ 2.7 11.7 %
Gross margin % 43.3 % 43.8 %

SG&A $ 3.9 $ 4.8 $ (0.9 ) (18.3 )%
% of segment net sales 6.5 % 9.0 %
Net sales increased $7.0 million, or 13.1% for the nine months ended December 26, 2020 compared to the same period last year. Our aerospace market sales increased 28.2% while sales to our industrial markets increased 6.3%. The increase in industrial was primarily due to the semiconductor market. The increase in aerospace net sales was primarily driven by the defense and space markets.
Gross margin as a percentage of net sales decreased to 43.3% for the nine months ended December 26, 2020 compared to 43.8% for the same period last year. The decrease was primarily due to product ~~mix.~~mix during the period.

Nine Months Ended

December 30,
2017

December 31,
2016

$
Change

%
Change

Total net sales $ 214.8 $ 205.1 $ 9.7 4.7 %

Gross margin $ 82.7 $ 80.0 $ 2.7 3.4 %
Gross margin % 38.5 % 39.0 %

SG&A $ 19.1 $ 18.0 $ 1.1 6.3 %
% of segment net sales 8.9 % 8.8 %

Engineered Products Segment
Three Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

Total net sales $ 33.5 $ 39.8 $ (6.3 ) (16.0 )%

Gross margin $ 10.9 $ 13.5 $ (2.6 ) (18.8 )%
Gross margin % 32.7 % 33.8 %

SG&A $ 3.8 $ 4.4 $ (0.6 ) (14.5 )%
% of segment net sales 11.3 % 11.1 %
Net sales increased $9.7 million, or 4.7%, for the nine months ended December 30, 2017 compared to the same period last year. The 4.7% increase was primarily driven by an increase of 10.0% in the industrial markets and 3.1% in the aerospace markets. The increase in industrial sales was mostly driven by general industrial OEM. The increase in aerospace sales was mainly due to the commercial aerospace OEM and aftermarket.
~~Gross margin as a percentage of sales~~ decreased ~~to 38.5% for the first nine months of fiscal 2018 compared to 39.0% for the same period last year. The decrease was primarily due to product mix.~~
~~Roller Bearing Segment:~~
Three Months Ended

December 30,
2017

December 31,
2016

$
Change

%
Change

Total net sales $ 32.5 $ 26.2 $ 6.3 24.2 %

Gross margin $ 14.4 $ 6.4 $ 8.0 125.5 %
Gross margin % 44.4 % 24.5 %

SG&A $ 1.5 $ 1.5 $ 0.0 2.4 %
% of segment net sales 4.8 % 5.8 %
~~Net sales increased~~ $6.3 million, or 24.2%, for the three months ended December 30, 2017 compared to the same period last year. Our industrial markets increased 37.8% while our aerospace markets increased 13.8%. The increase in industrial sales was primarily due to energy, mining and general industrial markets while the increases in aerospace were due to increases in defense and commercial OEM.
Gross margin for the three months ended December 30, 2017 was $14.4 million, or 44.4% of sales, compared to $6.4 million, or 24.5% of sales, in the comparable period in fiscal 2017. The gross margin for the three months ended December 31, 2016 was affected by $3.2 million of restructuring costs. The increase in gross margin was primarily due to higher sales and cost efficiencies achieved during the period.

Nine Months Ended

December 30,
2017

December 31,
2016

$
Change

%
Change

Total net sales $ 96.2 $ 80.8 $ 15.4 19.1 %

Gross margin $ 40.1 $ 30.2 $ 9.9 32.8 %
Gross margin % 41.7 % 37.4 %

SG&A $ 4.8 $ 4.5 $ 0.3 6.3 %
% of segment net sales 5.0 % 5.6 %
Net sales increased $15.4 million, or 19.1%, for the nine months ended December 30, 2017 compared to the same period last year. Our industrial markets increased 36.4% while our aerospace markets increased by 5.6%. The increase in industrial sales was primarily due to energy, mining and general industrial activity while the increase in aerospace was driven by defense OEM sales partially offset by the commercial OEM market.
Gross margin for the nine months ended December 30, 2017 was $40.1 million, or 41.7% of sales, compared to $30.2 million, or 37.4%, in the comparable period in fiscal 2017. The gross margin for the nine months ended December 31, 2016 was affected by $3.2 million of restructuring costs.
~~Ball Bearing Segment:~~

Three Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Total net sales $ 16.5 $ 13.7 $ 2.8 20.4 %

Gross margin $ 7.0 $ 5.3 $ 1.7 31.6 %
Gross margin % 42.6 % 38.9 %

SG&A $ 1.7 $ 1.4 $ 0.3 23.3 %
% of segment net sales 10.3 % 10.1 %
~~Net sales increased $2.8 million, or 20.4%~~16.0%, for the third quarter of fiscal 2018 compared to the same period last year. Our industrial markets increased 13.8% while our aerospace markets increased 38.8% during the period. The increase in industrial sales was a result of semiconductor, energy, and general industrial markets. The increase in aerospace sales was driven by aerospace OEM market activity.
Gross margin as a percentage of sales increased to 42.6% for the third quarter of fiscal 2018 compared to 38.9% for the same period last year. The increase was primarily due to higher sales and product mix.

Nine Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Total net sales $ 48.8 $ 42.0 $ 6.8 16.1 %

Gross margin $ 19.9 $ 15.8 $ 4.1 26.0 %
Gross margin % 40.9 % 37.7 %

SG&A $ 5.0 $ 4.2 $ 0.8 20.2 %
% of segment net sales 10.3 % 9.9 %
Net sales increased $6.8 million, or 16.1%, for the nine months ended December 30, 2017 compared to the same period last year. Our industrial markets increased 24.0% while our aerospace markets decreased 1.9% during the period. The increase in industrial sales was a result of semiconductor, energy, and general industrial markets. The decrease in aerospace sales was driven by the aerospace OEM market.
Gross margin as a percentage of sales increased to 40.9% for the nine months ended December 30, 2017 compared to 37.7% for the same period last year. The increase was primarily due to higher sales and cost efficiencies achieved during the period.
~~Engineered Products Segment:~~
Three Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Total net sales $ 48.1 $ 41.0 $ 7.1 17.4 %

Gross margin $ 16.6 $ 13.8 $ 2.8 20.0 %
Gross margin % 34.5 % 33.8 %

SG&A $ 5.3 $ 4.5 $ 0.8 17.7 %
% of segment net sales 11.1 % 11.1 %
~~Net sales increased $7.1 million, or 17.4% for the third quarter of fiscal 2018~~2021 compared to the same period last year. Our aerospace markets ~~increased 17.3%~~decreased 36.3% while our industrial markets increased ~~17.6%~~18.0%. The ~~increase~~decrease in aerospace ~~sales was mainly due to our commercial and defense aerospace OEM markets. The increase in industrial~~net sales was driven by the commercial and defense OEM and aftermarket. The increase in our industrial net sales was driven by the marine and ~~our European~~general industrial markets.

Gross margin as a percentage of net sales ~~increased to 34.5%~~was 32.7% for the third quarter of fiscal ~~2018~~2021 compared to 33.8% for the same period last year. This ~~increase is~~decrease was primarily ~~due~~attributable to product mix and ~~cost efficiencies achieved during~~decreased sales volume compared to the ~~period.~~same period in the prior year.

Nine Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Total net sales $ 135.3 $ 127.3 $ 8.0 6.3 %

Gross margin $ 45.7 $ 40.4 $ 5.3 13.0 %
Gross margin % 33.7 % 31.7 %

SG&A $ 15.7 $ 13.8 $ 1.9 13.7 %
% of segment net sales 11.6 % 10.9 %

Nine Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

Total net sales $ 101.9 $ 122.4 $ (20.5 ) (16.7 )%

Gross margin $ 33.5 $ 42.2 $ (8.7 ) (20.8 )%
Gross margin % 32.8 % 34.5 %

SG&A $ 11.4 $ 13.1 $ (1.7 ) (13.1 )%
% of segment net sales 11.2 % 10.7 %
Net sales ~~increased $8.0~~decreased $20.5 million, or ~~6.3%~~16.7%, for the nine months ended December ~~30, 2017~~26, 2020 compared to the same period last year. Our aerospace sales decreased 27.5% while industrial ~~markets increased 12.1% while our aerospace markets increased 3.5%~~sales decreased 0.4%. Excluding $2.6 million of sales associated with the acquisition of Swiss Tool in fiscal 2020, overall sales decreased 18.8%. The ~~increase~~decrease in aerospace sales was primarily driven by the commercial OEM market and commercial aftermarket. The decrease in industrial sales was driven by the general industrial markets offset by increased sales in the marine ~~and European collets activity. The increase in aerospace sales was mainly due to the commercial and defense OEM~~ markets.

Gross margin as a percentage of net sales ~~increased~~decreased to ~~33.7%~~32.8% for the nine months ended December ~~30, 2017~~26, 2020 compared to ~~31.7%~~34.5% for the same period last year. ~~Gross margin for~~This decrease was primarily due to lower sales volume and product mix. During the first nine months of fiscal ~~2017~~2021, gross margin was ~~affected~~also impacted by ~~$0.3~~approximately $0.5 million of ~~acquisition related costs. This year over year increase was primarily attributable to volume, product mix and cost efficiencies achieved during~~capacity inefficiencies driven by the ~~period.~~impact of the COVID-19 pandemic.

~~Corporate:~~
Corporate
Three Months Ended
December 26,
2020
December 28,
2019

$
Change

%
Change

SG&A $ 14.1 $ 16.4 $ (2.3 ) (13.7 )%
% of total net sales 9.7 % 9.2 %

Three Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

SG&A $ 13.2 $ 12.1 $ 1.1 9.2 %
% of total net sales 7.9 % 8.2 %
Nine Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

SG&A $ 38.9 $ 36.2 $ 2.7 7.4 %
% of total net sales 7.9 % 8.0 %
Corporate SG&A ~~increased~~decreased $2.3 million, or 13.7%, for ~~both~~ the third quarter ~~and first nine months~~ of fiscal ~~2018~~2021 compared to the same ~~periods~~period last year. This was primarily due to ~~an increase~~a decrease of $2.0 million in ~~stock~~personnel costs, $0.1 million in professional fees and $0.2 million of other items.
Nine Months Ended
December 26,
2020
December 28,
2019
$
Change
%
Change

SG&A $ 43.7 $ 49.0 $ (5.3 ) (10.7 )%
% of total net sales 9.7 % 9.0 %
Corporate SG&A decreased $5.3 million for the nine months ended December 26, 2020 compared to the same period last year due to a decrease of $6.7 million in personnel costs and $0.3 million of other items, partially offset by $0.8 million of additional share-based compensation expenses and ~~personnel related~~$0.9 million of additional professional costs.

Liquidity and Capital Resources

Our business is ~~capital intensive.~~capital-intensive. Our capital requirements include manufacturing equipment and materials. In addition, we have historically fueled our growth, in part, through acquisitions. 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 of equity to investors. We believe that operating cash flows and available credit under the ~~Facilities~~Revolver and Foreign Revolver (see below) will provide adequate resources to fund internal and external growth initiatives for the foreseeable future.

Our ability to meet future working capital, capital expenditures 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 the COVID-19 pandemic, 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, partially or completely, relocate production lines, consolidate or otherwise dispose of those 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 December ~~30, 2017,~~26, 2020, we had cash, ~~and~~ cash equivalents and highly liquid marketable securities of ~~$43.8~~$201.7 million, of which, approximately ~~$40.5~~$16.0 million 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 ~~entities.~~subsidiaries.

Domestic Credit Facility

~~In connection with the Sargent Aerospace & Defense (“Sargent”) acquisition on April 24, 2015, the Company entered into a new~~The Company’s credit agreement ~~(the “Credit Agreement”) and related Guarantee, Pledge Agreement and Security Agreement~~ with Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, Swingline Lender and Letter of Credit Issuer, and the other lenders party thereto ~~and terminated~~(the “Credit Agreement”) provides the ~~JP Morgan Credit Agreement. The~~Company with a $250.0 million revolving credit facility (the “Revolver”), which expires on January 31, 2024. Debt issuance costs associated with the Credit Agreement ~~provides RBCA, as Borrower, with (a) a $200.0~~totaled $0.9 million ~~Term Loan~~ and ~~(b) a $350.0 million Revolver and together~~will be amortized through January 31, 2024 along with the ~~Term Loan (the “Facilities”). The Facilities expire on April 24, 2020.~~unamortized debt issuance costs remaining from the Company’s prior credit agreement. As of December 26, 2020, $1.2 million in unamortized debt issuance costs remain.

Amounts outstanding under the ~~Facilities~~Revolver generally bear interest at (a) a base rate determined by reference to the higher of (1) Wells Fargo’s prime lending rate, (2) the federal funds effective rate plus 1/2 of 1% and (3) the one-month LIBOR rate plus 1%, or (b) LIBOR ~~rate~~ plus a specified margin, depending on the type of borrowing being made. The applicable margin is based on the ~~Company’s~~Company's consolidated ratio of total net debt to consolidated EBITDA ~~from time to time.~~at each measurement date. Currently, the ~~Company’s~~Company's margin is 0.00% for base rate loans and ~~1.00%~~0.75% for LIBOR ~~rate~~ loans. As of December 30, 2017, there was $21.8 million outstanding under the Revolver and $172.5 million outstanding under the Term Loan, offset by $3.3 million in debt issuance costs (original amount was $7.1 million).

The Credit Agreement requires the Company to comply with various covenants including, among other things, a financial ~~covenants~~covenant to maintain ~~the following: (1)~~ a ratio of consolidated net debt to adjusted EBITDA not ~~to exceed~~greater than 3.50 ~~to 1; and (2) a consolidated interest coverage ratio not to be less than 2.75~~ to 1. The Credit Agreement allows the Company to, among other things, make distributions to shareholders, 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 ~~agreement.~~Credit Agreement. As of December ~~30, 2017,~~26, 2020, the Company was in compliance with all such covenants.

The Company’s domestic subsidiaries have guaranteed the Company’s obligations under the Credit Agreement, and the Company’s obligations and the domestic subsidiaries’ guarantee are secured ~~as well as providing for~~by a pledge of substantially all of the ~~Company’s and RBCA’s assets. The~~domestic assets of the Company and ~~certain of~~ its ~~subsidiaries have also entered into a Guarantee to guarantee RBCA’s obligations under the Credit Agreement.~~domestic subsidiaries.

Approximately ~~$3.9~~$3.7 million of the Revolver is being utilized to provide letters of credit to secure ~~RBCA’s~~the Company’s obligations relating to certain insurance programs. ~~As of December 30, 2017, RBCA~~The Company has the ability to borrow up to an additional ~~$324.3~~$246.3 million under the ~~Revolver.~~Revolver as of December 26, 2020.
Foreign Term Loan and Revolving Credit Facility
On August 15, 2019, one of our foreign subsidiaries, Schaublin SA (“Schaublin”), entered into two separate credit agreements (the “Foreign Credit Agreements”) with Credit Suisse (Switzerland) Ltd. to finance the acquisition of Swiss Tool and provide future working capital. The Foreign Credit Agreements provided Schaublin with a CHF 15.0 million (approximately $15.4 million) term loan (the “Foreign Term Loan”), which expires on July 31, 2024 and a CHF 15.0 million (approximately $15.4 million) revolving credit facility (the “Foreign Revolver”), which continues in effect until terminated by either Schaublin or Credit Suisse. Debt issuance costs associated with the Foreign Credit Agreements totaled CHF 0.3 million (approximately $0.3 million) and will be amortized throughout the life of the Foreign Credit Agreements. As of December 26, 2020, approximately $0.1 million in unamortized debt issuance costs remain.
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%.
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 3.00 to 1 as of March 31, 2020 and 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 March 31, 2020, 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 three operating companies in the Swiss Tool group of companies.
As of December 26, 2020, there was approximately $2.2 million outstanding under the Foreign Revolver and approximately $13.5 million outstanding under the Foreign Term Loan. These borrowings have been classified as Level 2 of the valuation hierarchy. Schaublin has the ability to borrow up to an additional $14.6 million under the Foreign Revolver as of December 26, 2020.
Schaublin’s required future annual principal payments are approximately $5.6 million for the next 12 months and approximately $3.4 million for each of the following three years.
Other Notes Payable

~~On October 1,~~In 2012 Schaublin purchased the land and building ~~which~~that it ~~occupied and had been leasing,~~occupies for ~~14.1 million CHF (approximately~~approximately $14.9 ~~million).~~million. Schaublin obtained a ~~20 year fixed rate~~20-year fixed-rate mortgage of ~~9.3~~approximately $9.9 million ~~CHF (approximately $9.9 million)~~ at an interest rate of 2.9%. The balance of the purchase price of ~~4.8~~approximately $5.1 million ~~CHF (approximately $5.1 million)~~ was paid from cash on hand. The balance on this mortgage as of December ~~30, 2017~~26, 2020 was ~~6.9~~approximately $6.1 million ~~CHF, or $7.0 million.~~and has been classified as Level 2 of the valuation hierarchy.

The Company’s required future annual principal payments are approximately $0.5 million each year for the next five years and $3.5 million thereafter.
Cash Flows

~~Nine month period~~Nine-month Period Ended December ~~30, 2017~~26, 2020 Compared to the ~~Nine month period~~Nine-month Period Ended December ~~31, 2016~~28, 2019

The following table summarizes our cash flow activities:

FY18 FY17 $ Change
Net cash provided by (used in):
Operating activities $ 92.5 $ 74.6 $ 17.9
Investing activities (20.5 ) (14.9 ) (5.6 )
Financing activities (68.6 ) (57.7 ) (10.9 )
Effect of exchange rate changes on cash 1.5 (1.7 ) 3.2
Increase (decrease) in cash and cash equivalents $ 4.9 $ 0.3 $ 4.6
FY21 FY20
$ Change

Net cash provided by (used in):
Operating activities $ 110.6 $ 111.2 $ (0.6 )
Investing activities (83.6 ) (61.1 ) (22.5 )
Financing activities (4.6 ) (20.7 ) 16.1
Effect of exchange rate changes on cash 0.5 1.0 (0.5 )
Increase in cash and cash equivalents $ 22.9 $ 30.4 $ (7.5 )

During the first nine months of fiscal ~~2018,~~2021, we generated cash of ~~$92.5~~$110.6 million from operating activities compared to ~~generating~~$111.2 million of cash generated during the same period of ~~$74.6~~fiscal 2020. The decrease of $0.6 million for fiscal ~~2017. The increase of $17.9 million for fiscal 2018~~2021 was mainly a result of a decrease in net income of $27.6 million offset by the favorable impact of ~~an increase in net income of $11.5 million, non-cash charges of $4.4 million, and the~~a net change in operating assets and liabilities of ~~$2.0~~$19.1 million and a favorable change in non-cash charges of $7.9 million. The favorable change in operating assets and liabilities ~~was primarily the result of a decrease in the amount of cash being used for working capital items as~~is detailed in the table ~~below, while the~~below. The increase in non-cash charges ~~were primarily driven by $4.1~~resulted from $0.6 million of increased impairment charges, $4.9 million from the adoption of ASU 2016-09, which no longer requires the reclassification of the excess tax impact from stock-based compensation from operating to financing activities, an increase in stock compensation of $0.9 million, increased depreciation of $0.6 million, increased amortization of ~~intangibles of $0.1~~intangible assets, $2.3 million ~~and $0.3 million of acquisition expenses present in fiscal 2017 offset by a $4.0 million decrease~~ in deferred taxes, ~~driven by~~$0.9 million of depreciation, $0.9 million of share-based compensation charges, and $3.2 million of other non-cash charges related to restructuring efforts. Excluded from the consolidated statements of cash flows are right of use assets obtained in exchange for new ~~tax legislation signed~~operating lease liabilities of $7.7 million during the ~~quarter and a $2.5 million loss on the disposal of fixed assets included in~~ fiscal ~~2017.~~year.

The following chart summarizes the favorable change in operating assets and liabilities of ~~$2.0~~$19.1 million for fiscal ~~2018~~2021 versus fiscal ~~2017~~2020 and the favorable ~~$2.7~~change of $26.3 million for fiscal ~~2017~~2020 versus fiscal ~~2016.~~2019.

FY18 FY17 FY21 FY20
Cash provided by (used in):
Accounts receivable $ (3.3 ) $ (6.9 ) $ 13.0 $ 13.4
Inventory (4.7 ) 14.0 16.0 11.2
Prepaid expenses and other current assets 0.7 (2.2 ) 1.8 1.1
Other non-current assets (1.0 ) (1.0 ) (5.3 ) (4.1 )
Accounts payable 7.6 5.0 (11.4 ) 0.4
Accrued expenses and other current liabilities (5.5 ) 1.6 (0.5 ) (1.0 )
Other non-current liabilities 8.2 (7.8 ) 5.5 5.3
Total change in operating assets and liabilities: $ 2.0 $ 2.7 $ 19.1 $ 26.3
During the first nine months of fiscal ~~2018,~~2021, we used ~~$20.5~~$83.6 million for investing activities as compared to ~~$14.9~~$61.1 million ~~for~~used during the first nine months of fiscal ~~2017. The~~2020. This increase in cash used was attributable to the purchase of $75.1 million of highly liquid marketable securities during the current period, offset by an ~~increase of $6.1~~$18.8 million decrease in capital expenditures and ~~$0.1~~the use of $33.8 million in ~~proceeds from~~ the ~~sale~~prior year for the acquisition of ~~assets offset by $0.6 million cash used for an acquisition in fiscal 2017.~~Swiss Tool.

During the first nine months of fiscal ~~2018,~~2021, we used ~~$68.6~~$4.5 million for financing activities compared to ~~using $57.7~~$20.7 million for the first nine months of fiscal ~~2017.~~2020. This ~~increase~~decrease in cash used was primarily attributable to $41.3 million less payments made on outstanding debt, $0.3 million less financing fees paid in connection with credit facilities, and $5.3 million less treasury stock purchases, partially offset by proceeds received from borrowings of $24.8 million for the ~~payment~~acquisition of ~~$62.8~~Swiss Tool in the prior year and $6.0 million ~~on the revolving credit facility and $10.0 million on the term loan during the first nine months~~less exercises of ~~fiscal 2018 as compared to $61.5 million and $7.5 million respectively during the same period of fiscal 2017.~~share-based awards.
Capital Expenditures
Our capital expenditures were ~~$20.5~~$2.8 million and $8.8 million for the ~~nine month period~~three- and nine-month periods ended December ~~30, 2017. In addition, we~~26, 2020, respectively. We expect to make additional capital expenditures of ~~$5.0~~$3.0 to ~~$10.0~~$4.0 million during the remainder of fiscal ~~2018~~2021 in connection with our existing business. We expect to fund ~~fiscal 2018~~these capital expenditures principally through existing cash and internally generated ~~funds and debt.~~funds. We may also make substantial additional capital expenditures in connection with acquisitions.

~~Obligations and Commitments~~
The contractual obligations presented in the table below represent our estimates of future payments under fixed contractual obligations and commitments. Changes in our business needs, cancellation provisions and interest rates, as well as actions by third parties and other factors, may cause these estimates to change. Because these estimates are necessarily subjective, our actual payments in future periods are likely to vary from those presented in the table. The following table summarizes certain of our contractual obligations and principal and interest payments under our debt instruments and leases as of December 30, 2017:
Payments Due By Period
Contractual Obligations⁽¹⁾
Total Less than
1 Year 1 to
3 Years 3 to
5 Years More than
5 Years
(in thousands)
Total debt $ 201,277 $ 17,976 $ 177,703 $ 953 $ 4,645
Operating leases 22,982 6,251 7,928 4,788 4,015
Interest on debt⁽²⁾ 12,644 5,037 6,635 300 672
Pension and postretirement benefits 18,944 1,829 3,818 3,869 9,428
Transition tax on unremitted foreign E&P⁽³⁾ 9,491 759 2,278 2,183 4,271
Total contractual cash obligations $ 265,338 $ 31,852 $ 198,362 $ 12,093 $ 23,031

~~(1)~~ We cannot make a reasonably reliable estimate of when the unrecognized tax liability of $12.2 million, which includes interest and penalties, and is offset by deferred tax assets, will be paid to the respective taxing authorities. These obligations are therefore excluded from the above table.
~~(2)~~ ~~These amounts represent expected cash payments of interest on our variable rate long-term debt under our Facilities at the prevailing interest rates at December 30, 2017.~~
~~(3)~~ As discussed further in Note 7 to the consolidated financial statements, the Tax Cuts and Jobs Acts (“TCJA”), which was enacted in December 2017, includes a transition tax on unremitted foreign earnings and profits (“E&P”). We will elect to pay the estimated amount above over an eight year period.

Other Matters

Critical Accounting Policies and Estimates

~~Revenue Recognition.~~~~See page 7 in Notes to Unaudited Interim Consolidated Financial Statements.~~
Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We believe the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Notes to the Consolidated Financial Statements in our fiscal ~~2017~~2020 Annual Report ~~incorporated by reference in our fiscal 2017~~on Form 10-K describe the significant accounting estimates and policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management’s estimates. There have been no significant changes in our critical accounting estimates during the first nine months of fiscal ~~2018.~~2021 other than those described in Note 2 to the unaudited interim consolidated financial statements contained in this quarterly report.

Off-Balance Sheet Arrangements

~~We have~~As of December 26, 2020, we had no significant off-balance sheet ~~arrangements.~~arrangements other than $3.7 million of outstanding standby letters of credit, all of which were under the Revolver.

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 ~~the~~our credit ~~agreement.~~agreements. 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.

Foreign Currency Exchange Rates.Our Swiss operations utilize the Swiss franc as the functional currency, our French and German operations utilize the euro as the functional currency and our Polish operations utilize the Polish zloty as the functional currency. As a result, ~~of our operations in Europe,~~ we are exposed to risk associated with fluctuating currency exchange rates between the U.S. dollar ~~the Euro, the Swiss Franc, the Polish Zloty~~ and the Canadian Dollar. Our Swiss operations utilize the Swiss Franc as the functional currency, our French and German operations utilize the Euro as the functional currency, our Polish operations utilize the Polish Zloty as the functional currency and our Canadian operations utilize the Canadian Dollar as the functional currency.these currencies. Foreign currency transaction gains and losses are included in earnings. Approximately ~~11%~~10% of our net sales were impacted by foreign currency fluctuations infor the ~~first nine months of both fiscal 2018~~three-month period ended December 26, 2020 compared to ~~approximately~~ 10% for the three-month period ended December 28, 2019. Approximately 9% of our net sales were impacted by foreign currency fluctuations for the nine-month period ended December 26, 2020 compared to 9% for the same period in ~~fiscal 2017.~~the prior year. We expect that this proportion is likely to increase as we seek to increase our penetration of foreign markets, particularly within the aerospace and defense markets. 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 ~~subsidiaries’~~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, ~~(“AOCI”),~~ and is reclassified into earnings when the hedged transaction affects earnings. As of December ~~30, 2017,~~26, 2020, we had no derivatives.

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”)) as of December ~~30, 2017.~~26, 2020. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December ~~30, 2017,~~26, 2020, our disclosure controls and procedures were (1) designed 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 for external purposes in accordance with generally accepted accounting principles.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the ~~nine month~~three-month period ended December ~~30, 2017~~26, 2020 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 Exchange Act).

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, ~~including those discussed below,~~ 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 ~~during~~since the ~~three month period ended December 30, 2017.~~most recent filing of our Form 10-K. For a discussion of the ~~Risk Factors,~~risk factors, refer to Part I, Item 2, “Cautionary Statement ~~As To~~as to Forward-Looking ~~Information,”~~Information” contained in this quarterly report and Part I, Item 1A, “Risk Factors,” contained in the Company’s Annual Report on Form 10-K for the ~~period~~fiscal year ended ~~April 1, 2017.~~March 28, 2020.
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

~~On February 7, 2013,~~In 2019, our ~~board~~Board of ~~directors~~Directors authorized us to repurchase up to ~~$50.0~~$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 ~~Securities and Exchange Commission~~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 December ~~30, 2017~~26, 2020 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)

10/1/2017 – 10/28/2017 3,385 $ 125.69 3,385 $ 22,053
10/29/2017 – 11/25/2017 — — — 22,053
11/26/2017 – 12/30/2017 8,748 131.60 8,748 $ 20,901
Total 12,133 $ 129.95 12,133
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)

09/27/2020 – 10/24/2020 24 $ 124.55 24 $ 90,023
10/25/2020 – 11/21/2020 104 118.71 104 90,011
11/22/2020 – 12/26/2020 10,745 166.82 10,745 $ 88,218
Total 10,873 $ 166.26 10,873

~~ITEM 3.~~ ~~Defaults Upon Senior Securities~~
ITEM 3. Defaults Upon Senior Securities

Not applicable.

~~ITEM 4.~~ ~~Mine Safety Disclosures~~
ITEM 4. Mine Safety Disclosures

Not applicable.

~~ITEM 5.~~ ~~Other Information~~
ITEM 5. Other Information

Not applicable.

ITEM 6. Exhibits
~~ITEM 6.~~Exhibit
Number
~~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 XBRL Instance Document.
101.SCH XBRL Taxonomy Extension Schema Document.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
* 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.

*               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: ~~(Registrant)~~
/s/ Michael J. Hartnett
Name: Michael J. Hartnett
Title: Chief Executive Officer
Date: January 29, 2021

By:
/s/ ~~Michael J. Hartnett~~Robert M. Sullivan
Name: ~~Michael J. Hartnett~~ Robert M. Sullivan
Title: Chief ~~Executive~~Financial Officer
Date: ~~February 6, 2018~~
~~By:~~
~~/s/ Daniel A. Bergeron~~
~~Name:~~ ~~Daniel A. Bergeron~~
~~Title:~~ ~~Chief Financial Officer and Chief Operations Officer~~
~~Date:~~ ~~February 6, 2018~~ January 29, 2021

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 XBRL Instance Document.
101.SCH XBRL Taxonomy Extension Schema Document.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
*          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.

* 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.
36
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Part I -	FINANCIAL INFORMATION	31

ITEM 1.	Consolidated Financial Statements	31
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3132
ITEM 4.	Controls and Procedures	32
	Changes in Internal Control over Financial Reporting	32

Part II -	OTHER INFORMATION	3233

ITEM 1.	Legal Proceedings	3233
ITEM 1A.	Risk Factors	3233
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3233
ITEM 3.	Defaults Upon Senior Securities	3334
ITEM 4.	Mine Safety Disclosures	3334
ITEM 5.	Other Information	3334
ITEM 6.	Exhibits	34

	December 30, 2017		April 1, 2017

ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	43,822	$	38,923
Accounts receivable, net of allowance for doubtful accounts of $1,476 at December 30, 2017 and $1,213 at April 1, 2017		109,923		109,700
Inventory		303,013		289,594
Prepaid expenses and other current assets		13,304		9,743
Total current assets		470,062		447,960
Property, plant and equipment, net		190,313		183,625
Goodwill		268,123		268,042
Intangible assets, net of accumulated amortization of $36,606 at December 30, 2017 and $30,191 at April 1, 2017		185,923		196,801
Other assets		14,729		12,419
Total assets	$	1,129,150	$	1,108,847


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	43,643		$	34,392
Accrued expenses and other current liabilities		39,521			44,532
Current portion of long-term debt		17,976			14,214
Total current liabilities		101,140			93,138
Deferred income taxes		10,827			12,036
Long-term debt, less current portion		179,977			255,586
Other non-current liabilities		38,662			31,043
Total liabilities		330,606			391,803

Stockholders’ equity:
Preferred stock, $.01 par value; authorized shares: 10,000,000 at December 30, 2017 and April 1, 2017; none issued and outstanding		—			—
Common stock, $.01 par value; authorized shares: 60,000,000 at December 30, 2017 and April 1, 2017; issued and outstanding shares: 25,000,672 at December 30, 2017 and 24,757,803 at April 1, 2017		250			248
Additional paid-in capital		331,819			312,474
Accumulated other comprehensive loss		(4,345	)		(9,823	)
Retained earnings		510,301			448,693
Treasury stock, at cost, 713,201 shares at December 30, 2017 and 667,931 shares at April 1, 2017		(39,481	)		(34,548	)
Total stockholders’ equity		798,544			717,044
Total liabilities and stockholders’ equity	$	1,129,150		$	1,108,847

	December 26, 2020			March 28, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	126,192		$	103,255
Marketable securities		75,539			—
Accounts receivable, net of allowance for doubtful accounts of $1,874 at December 26, 2020 and $1,627 at March 28, 2020		106,506			128,995
Inventory		372,104			367,494
Prepaid expenses and other current assets		12,001			12,262
Total current assets		692,342			612,006
Property, plant and equipment, net		212,702			219,846
Operating lease assets, net		36,880			28,953
Goodwill		278,472			277,776
Intangible assets, net of accumulated amortization of $61,054 at December 26, 2020 and $55,732 at March 28, 2020		157,320			162,747
Other assets		31,266			20,584
Total assets	$	1,408,982		$	1,321,912

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	39,936		$	51,038
Accrued expenses and other current liabilities		36,386			40,580
Current operating lease liabilities		5,963			5,708
Current portion of long-term debt		6,127			6,429
Total current liabilities		88,412			103,755
Deferred income taxes		19,391			16,560
Long-term debt, less current portion		14,366			16,583
Long-term operating lease liabilities		31,347			23,396
Other non-current liabilities		50,659			43,619
Total liabilities		204,175			203,913

Stockholders' equity:
Preferred stock, $.01 par value; authorized shares: 10,000,000 at December 26, 2020 and March 28, 2020, respectively; none issued or outstanding		—			—
Common stock, $.01 par value; authorized shares: 60,000,000 at December 26, 2020 and March 28, 2020, respectively; issued shares: 26,011,098 and 25,881,415 at December 26, 2020 and March 28, 2020, respectively		260			259
Additional paid-in capital		434,346			412,400
Accumulated other comprehensive loss		(510	)		(6,898	)
Retained earnings		833,898			769,219
Treasury stock, at cost, 881,096 shares and 838,982 shares at December 26, 2020 and March 28, 2020, respectively		(63,187	)		(56,981	)
Total stockholders' equity		1,204,807			1,117,999
Total liabilities and stockholders' equity	$	1,408,982		$	1,321,912

	Three Months Ended					Nine Months Ended
	December 30, 2017		December 31, 2016			December 30, 2017		December 31, 2016
Net sales	$	166,858	$	146,656		$	495,072	$	455,178
Cost of sales		102,193		94,271			306,687		288,811
Gross margin		64,665		52,385			188,385		166,367
Operating expenses:
Selling, general and administrative		28,162		25,712			83,535		76,696
Other, net		3,380		6,144			14,649		10,367
Total operating expenses		31,542		31,856			98,184		87,063
Operating income		33,123		20,529			90,201		79,304
Interest expense, net		1,761		2,111			5,704		6,659
Other non-operating expense		26		(216	)		462		51
Income before income taxes		31,336		18,634			84,035		72,594
Provision for income taxes		7,504		5,864			23,571		23,556
Net income	$	23,832	$	12,770		$	60,464	$	49,038
Net income per common share:
Basic	$	0.99	$	0.54		$	2.53	$	2.09
Diluted	$	0.97	$	0.54		$	2.49	$	2.07
Weighted average common shares:
Basic		23,985,925		23,581,921			23,912,474		23,457,717
Diluted		24,446,115		23,813,780			24,322,165		23,719,121

	Three Months Ended					Nine Months Ended
	December 30, 2017		December 31, 2016			December 30, 2017		December 31, 2016
Net income	$	23,832	$	12,770		$	60,464	$	49,038
Pension and postretirement liability adjustments, net of taxes		196		234			588		701
Foreign currency translation adjustments		470		(3,954	)		4,890		(5,759	)
Total comprehensive income	$	24,498	$	9,050		$	65,942	$	43,980

	Common Stock					Additional Paid-in		Accumulated Other Comprehensive			Retained		Treasury Stock						Total Stockholders'
	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
Net income		—			—		—		—			22,689		—			—			22,689
Share-based compensation		—			—		5,438		—			—		—			—			5,438
Repurchase of common stock		—			—		—		—			—		(31,179	)		(4,391	)		(4,391	)
Exercise of equity awards		4,200			—		231		—			—		—			—			231
Change in net prior service cost and actuarial losses, net of taxes of $79		—			—		—		260			—		—			—			260
Issuance of restricted stock, net of forfeitures		56,157			—		—		—			—		—			—			—
Currency translation adjustments		—			—		—		409			—		—			—			409
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
Repurchase of common stock		—			—		—		—			—		(62	)		(8	)		(8	)
Exercise of equity awards		31,200			1		2,188		—			—		—			—			2,189
Change in net prior service cost and actuarial losses, net of taxes of $79		—			—		—		259			—		—			—			259
Issuance of restricted stock, net of forfeitures		(2,299	)		—		—		—			—		—			—			—
Currency translation adjustments		—			—		—		1,377			—		—			—			1,377
Balance at September 26, 2020		25,970,673		$	260	$	425,488	$	(4,593	)	$	812,329		(870,223	)	$	(61,380	)	$	1,172,104
Net income		—			—		—		—			21,569		—			—			21,569
Share-based compensation		—			—		5,173		—			—		—			—			5,173
Repurchase of common stock		—			—		—		—			—		(10,873	)		(1,807	)		(1,807	)
Exercise of equity awards		40,199			—		3,685		—			—		—			—			3,685
Change in net prior service cost and actuarial losses, net of taxes of $79		—			—		—		260			—		—			—			260
Issuance of restricted stock, net of forfeitures		226			—		—		—			—		—			—			—
Currency translation adjustments		—			—		—		3,823			—		—			—			3,823
Balance at December 26, 2020		26,011,098		$	260	$	434,346	$	(510	)	$	833,898		(881,096	)	$	(63,187	)	$	1,204,807

	Nine Months Ended
	December 30, 2017			December 31, 2016
Cash flows from operating activities:
Net income	$	60,464		$	49,038
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		14,155			13,557
Excess tax benefits from stock-based compensation		—			(4,870	)
Deferred income taxes		(321	)		3,717
Amortization of intangible assets		7,041			6,921
Amortization of deferred financing costs		1,068			1,068
Stock-based compensation		9,897			8,914
(Gain) loss on disposal of fixed assets		(1	)		2,457
Gain on acquisition		—			(293	)
Impairment charges		5,577			1,443
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		701			3,954
Inventory		(12,035	)		(7,293	)
Prepaid expenses and other current assets		(4,555	)		(5,238	)
Other non-current assets		(3,308	)		(2,282	)
Accounts payable		9,040			1,466
Accrued expenses and other current liabilities		(3,340	)		2,123
Other non-current liabilities		8,113			(107	)
Net cash provided by operating activities		92,496			74,575

Cash flows from investing activities:
Purchase of property, plant and equipment		(20,542	)		(14,415	)
Proceeds from sale of assets		33			107
Business acquisition		—			(651	)
Net cash used in investing activities		(20,509	)		(14,959	)

Cash flows from financing activities:
Repayments of revolving credit facility		(62,750	)		(61,500	)
Repayments of term loans		(10,000	)		(7,500	)
Payments of notes payable		(359	)		(353	)
Exercise of stock options		9,450			11,567
Excess tax benefits from stock-based compensation		—			4,870
Repurchase of common stock		(4,933	)		(4,750	)
Net cash used in financing activities		(68,592	)		(57,666	)

Effect of exchange rate changes on cash		1,504			(1,686	)

Cash and cash equivalents:
Increase during the period		4,899			264
Cash, at beginning of period		38,923			39,208
Cash, at end of period	$	43,822		$	39,472

	Nine Months Ended
	December 26, 2020			December 28, 2019
Cash flows from operating activities:
Net income	$	64,679		$	92,284
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		17,129			16,209
Deferred income taxes		2,580			249
Amortization of intangible assets		7,683			7,066
Amortization of deferred financing costs		365			365
Share-based compensation		15,842			14,996
Other non-cash charges		3,278			90
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		23,285			10,283
Inventory		(4,717	)		(20,739	)
Prepaid expenses and other current assets		(251	)		(2,049	)
Other non-current assets		(11,724	)		(6,426	)
Accounts payable		(11,400	)		22
Accrued expenses and other current liabilities		(4,575	)		(4,092	)
Other non-current liabilities		8,412			2,937
Net cash provided by operating activities		110,586			111,195

Cash flows from investing activities:
Purchase of property, plant and equipment		(8,809	)		(27,562	)
Proceeds from sale of assets		18			300
Purchase of marketable securities		(75,075	)		-
Acquisition of business		245			(33,842	)
Net cash used in investing activities		(83,621	)		(61,104	)

Cash flows from financing activities:
Proceeds received from revolving credit facilities		-			9,435
Proceeds received from term loans		-			15,383
Repayments of revolving credit facilities		(773	)		(45,411	)
Repayments of term loans		(3,287	)		-
Repayments of notes payable		(379	)		(352	)
Finance fees paid in connection with credit facilities and term loans		-			(276	)
Exercise of stock options		6,105			12,077
Repurchase of common stock		(6,206	)		(11,548	)
Net cash used in financing activities		(4,540	)		(20,692	)

Effect of exchange rate changes on cash		512			1,045

Cash and cash equivalents:
Increase during the period		22,937			30,444
Cash and cash equivalents, at beginning of period		103,255			29,884
Cash and cash equivalents, at end of period	$	126,192		$	60,328

Supplemental disclosures of cash flow information:
Cash paid for:
Income taxes	$	12,880		$	21,569
Interest		737			1,029

	Three Months Ended
	December 26, 2020						December 28, 2019
	Aerospace		Industrial		Total		Aerospace		Industrial		Total
Plain	$	48,676	$	20,645	$	69,321	$	67,753	$	19,123	$	86,876
Roller		10,122		12,286		22,408		17,332		14,497		31,829
Ball		6,964		13,711		20,675		6,103		12,372		18,475
Engineered Products		15,895		17,562		33,457		24,958		14,881		39,839
	$	81,657	$	64,204	$	145,861	$	116,146	$	60,873	$	177,019

	December 26, 2020		March 28, 2020
Contract Assets – Current	$	2,094	$	2,604
Contract Assets – Noncurrent		2,128		—
Contract Liabilities – Current		8,813		11,116
Contract Liabilities – Noncurrent		3,527		2,427

	Currency Translation			Pension and Postretirement Liability			Total
Balance at March 28, 2020	$	(582	)	$	(6,316	)	$	(6,898	)
Other comprehensive income before reclassifications		5,609			—			5,609
Amounts reclassified from accumulated other comprehensive income		—			779			779
Net current period other comprehensive income		5,609			779			6,388
Balance at December 26, 2020	$	5,027		$	(5,537	)	$	(510	)

	December 30, 2017		April 1, 2017
Raw materials	$	38,324	$	35,364
Work in process		79,921		79,048
Finished goods		184,768		175,182
	$	303,013	$	289,594

			December 30, 2017				April 1, 2017
	Weighted Average Useful Lives		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Product approvals		24	$	50,878	$	7,823	$	53,869	$	6,465
Customer relationships and lists		24		106,583		15,426		107,864		12,308
Trade names		10		18,734		6,300		19,923		5,137
Distributor agreements		5		722		722		722		722
Patents and trademarks		16		9,610		4,661		8,803		4,130
Domain names		10		437		419		437		386
Other		6		1,365		1,255		1,174		1,043
				188,329		36,606		192,792		30,191
Non-amortizable repair station certifications		n/a		34,200		—		34,200		—
Total			$	222,529	$	36,606	$	226,992	$	30,191

2018	$	2,435
2019		8,855
2020		8,747
2021		8,696
2022		8,579
2023		8,496
2024 and thereafter		105,915

	December 30, 2017			April 1, 2017
Revolver and term loan facilities	$	194,250		$	267,000
Debt issuance costs		(3,324	)		(4,392	)
Other		7,027			7,192
Total debt		197,953			269,800
Less: current portion		17,976			14,214
Long-term debt	$	179,977		$	255,586

	Three Months Ended
	December 26, 2020		December 28, 2019		$ Change			% Change
Total net sales	$	145.9	$	177.0	$	(31.1	)		(17.6	)%

Net income	$	21.6	$	30.5	$	(8.9	)		(29.3	)%

Net income per common share: diluted	$	0.86	$	1.22
Weighted average common shares: diluted		25,060,812		24,981,480

	Nine Months Ended
	December 26, 2020			December 28, 2019			$ Change			% Change

Gross Margin	$	171.6		$	212.5		$	(40.9	)		(19.2	)%
Gross Margin %		38.3	%		39.2	%

	FY18			FY17			$ Change
Net cash provided by (used in):
Operating activities	$	92.5		$	74.6		$	17.9
Investing activities		(20.5	)		(14.9	)		(5.6	)
Financing activities		(68.6	)		(57.7	)		(10.9	)
Effect of exchange rate changes on cash		1.5			(1.7	)		3.2
Increase (decrease) in cash and cash equivalents	$	4.9		$	0.3		$	4.6

	FY21			FY20			$ Change
Net cash provided by (used in):
Operating activities	$	110.6		$	111.2		$	(0.6	)
Investing activities		(83.6	)		(61.1	)		(22.5	)
Financing activities		(4.6	)		(20.7	)		16.1
Effect of exchange rate changes on cash		0.5			1.0			(0.5	)
Increase in cash and cash equivalents	$	22.9		$	30.4		$	(7.5	)

	Payments Due By Period
Contractual Obligations⁽¹⁾	Total		Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years
	(in thousands)
Total debt	$	201,277	$	17,976	$	177,703	$	953	$	4,645
Operating leases		22,982		6,251		7,928		4,788		4,015
Interest on debt⁽²⁾		12,644		5,037		6,635		300		672
Pension and postretirement benefits		18,944		1,829		3,818		3,869		9,428
Transition tax on unremitted foreign E&P⁽³⁾		9,491		759		2,278		2,183		4,271
Total contractual cash obligations	$	265,338	$	31,852	$	198,362	$	12,093	$	23,031

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)
10/1/2017 – 10/28/2017		3,385	$	125.69		3,385	$	22,053
10/29/2017 – 11/25/2017		—		—		—		22,053
11/26/2017 – 12/30/2017		8,748		131.60		8,748	$	20,901
Total		12,133	$	129.95		12,133

~~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		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

RBC Bearings Incorporated
	(Registrant)

By:	~~(Registrant)~~ /s/ Michael J. Hartnett
	Name:	Michael J. Hartnett
	Title:	Chief Executive Officer
	Date:	January 29, 2021

By:	/s/ ~~Michael J. Hartnett~~Robert M. Sullivan
	Name:	~~Michael J. Hartnett~~	Robert M. Sullivan
	Title:	Chief ~~Executive~~Financial Officer
	Date:	~~February 6, 2018~~

~~By:~~	~~/s/ Daniel A. Bergeron~~
	~~Name:~~	~~Daniel A. Bergeron~~
	~~Title:~~	~~Chief Financial Officer and Chief Operations Officer~~
	~~Date:~~	~~February 6, 2018~~	January 29, 2021

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		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.