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~~July 2, 2022

☐ 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~~001-40840

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
(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

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

Common Stock, par value $0.01 per share

ROLL

Nasdaq NMS

5.00% Series A Mandatory Convertible Preferred Stock, par value $0.01 per share

ROLLP

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,~~July 29, 2022, RBC Bearings Incorporated had ~~24,289,481~~28,930,840 shares of Common Stock and 4,600,000 shares of Preferred 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

	July 2, 2022			April 2, 2022 (As Restated) ⁽¹⁾
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	119,587		$	182,862
Accounts receivable, net of allowance for doubtful accounts of $2,860 as of July 2, 2022 and $2,737 as of April 2, 2022		234,987			247,487
Inventory		542,050			516,140
Prepaid expenses and other current assets		19,456			15,748
Total current assets		916,080			962,237
Property, plant and equipment, net		384,497			386,732
Operating lease assets, net		44,104			44,535
Goodwill		1,876,642			1,902,104
Intangible assets, net		1,500,714			1,511,515
Other noncurrent assets		35,980			38,294
Total assets	$	4,758,017		$	4,845,417


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	161,834		$	158,606
Accrued expenses and other current liabilities		158,713			145,252
Current operating lease liabilities		8,333			8,059
Current portion of long-term debt		1,525			1,543
Total current liabilities		330,405			313,460
Long-term debt, less current portion		1,563,805			1,686,798
Long-term operating lease liabilities		35,928			36,680
Deferred income taxes		311,599			315,463
Other noncurrent liabilities		118,639			120,408
Total liabilities		2,360,376			2,472,809

Stockholders’ equity:
Preferred stock, $.01 par value; authorized shares: 10,000,000 as of July 2, 2022 and April 2, 2022, respectively; issued shares: 4,600,000 as of July 2, 2022 and April 2, 2022, respectively		46			46
Common stock, $.01 par value; authorized shares: 60,000,000 as of July 2, 2022 and April 2, 2022, respectively; issued shares: 29,877,876 and 29,807,208 as of July 2, 2022 and April 2, 2022, respectively		299			298
Additional paid-in capital		1,569,539			1,564,261
Accumulated other comprehensive loss		(11,750	)		(5,800	)
Retained earnings		917,843			886,155
Treasury stock, at cost, 958,791 shares and 928,322 shares as of July 2, 2022 and April 2, 2022, respectively		(78,336	)		(72,352	)

Total stockholders’ equity		2,397,641			2,372,608
Total liabilities and stockholders’ equity	$	4,758,017		$	4,845,417

⁽¹⁾

See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

See accompanying notes.

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
	July 2, 2022		July 3, 2021 (As Restated) ⁽¹⁾
Net sales	$	354,080	$	156,205
Cost of sales		212,928		92,432
Gross margin		141,152		63,773
Operating expenses:
Selling, general and administrative		55,828		31,212
Other, net		20,854		3,248
Total operating expenses		76,682		34,460
Operating income		64,470		29,313
Interest expense, net		15,799		319
Other non-operating (income)/expense		767		(465	)
Income before income taxes		47,904		29,459
Provision for income taxes		10,466		5,421
Net income		37,438		24,038
Preferred stock dividends		5,750		—
Net income available to common stockholders	$	31,688	$	24,038

Net income per common share available to common stockholders:
Basic	$	1.11	$	0.96
Diluted	$	1.09	$	0.95
Weighted average common shares:
Basic		28,670,488		25,021,063
Diluted		28,944,955		25,392,047

(1)

See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

See accompanying notes.

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
	July 2, 2022			July 3, 2021 (As Restated)⁽²⁾
Net income	$	37,438		$	24,038
Pension and postretirement liability adjustments, net of taxes ⁽¹⁾		535			318
Foreign currency translation adjustments		(6,485	)		1,919
Total comprehensive income	$	31,488		$	26,275

⁽¹⁾

These adjustments were net of tax expense of $148 and $83 for the three-month periods ended July 2, 2022 and July 3, 2021, respectively.

⁽²⁾

See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Stockholders’ Equity

(dollars in thousands)

(Unaudited)

	Common Stock				Preferred Stock				Additional Paid-in Capital		Accumulated Other Comprehensive			Retained Earnings			Treasury Stock						Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		(As Restated) ⁽¹⁾		Income/(Loss)			(As Restated) ⁽¹⁾			Shares			Amount			(As Restated) ⁽¹⁾
Balance at April 2, 2022		29,807,208	$	298		4,600,000	$	46	$	1,564,261	$	(5,800	)	$	886,155			(928,322	)	$	(72,352	)	$	2,372,608
Net income		—		—		—		—		—		—			37,438			—			—			37,438
Share-based compensation		—		—		—		—		3,819		—			—			—			—			3,819
Preferred stock dividends		—		—		—		—		—		—			(5,750	)		—			—			(5,750	)
Repurchase of common stock		—		—		—		—		—		—			—			(30,469	)		(5,984	)		(5,984	)
Exercise of equity awards		13,713		1		—		—		1,459		—			—			—			—			1,460
Change in net prior service cost and actuarial losses, net of tax expense of $148		—		—		—		—		—		535			—			—			—			535
Issuance of restricted stock, net of forfeitures		56,955		—		—		—		—		—			—			—			—			—
Currency translation adjustments		—		—		—		—		—		(6,485	)		—			—			—			(6,485	)
Balance at July 2, 2022		29,877,876	$	299		4,600,000	$	46	$	1,569,539	$	(11,750	)	$	917,843			(958,791	)	$	(78,336	)	$	2,397,641

⁽¹⁾

See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

See accompanying notes.

RBC Bearings Incorporated

Consolidated Statements of Stockholders’ Equity (continued)

(dollars in thousands)

(Unaudited)

	Common Stock				Additional Paid-in Capital		Accumulated Other Comprehensive			Retained Earnings		Treasury Stock						Total Stockholders’ Equity
	Shares		Amount		(As Restated) ⁽¹⁾		Income/(Loss)			(As Restated) ⁽¹⁾		Shares			Amount			(As Restated) ⁽¹⁾
Balance at April 3, 2021		26,110,320	$	261	$	462,616	$	(10,409	)	$	843,456		(884,701	)	$	(63,826	)	$	1,232,098
Net income		—		—		—		—			24,038		—			—			24,038
Share-based compensation		—		—		7,182		—			—		—			—			7,182
Repurchase of common stock		—		—		—		—			—		(31,572	)		(6,264	)		(6,264	)
Exercise of equity awards		135,518		2		16,679		—			—		—			—			16,681
Change in net prior service cost and actuarial losses, net of tax expense of $83		—		—		—		318			—		—			—			318
Issuance of restricted stock		91,056		—		—		—			—		—			—			—
Currency translation adjustments		—		—		—		1,919			—		—			—			1,919
Balance at July 3, 2021		26,336,894	$	263	$	486,477	$	(8,172	)	$	867,494		(916,273	)	$	(70,090	)	$	1,275,972

⁽¹⁾

See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

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

	Three Months Ended
	July 2, 2022			July 3, 2021 (As Restated) ⁽¹⁾
Cash flows from operating activities:
Net income	$	37,438		$	24,038
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		28,642			8,212
Deferred income taxes		(4,102	)		1,276
Amortization of deferred financing costs		2,298			106
Share-based compensation		3,819			7,182
Loss/(gain) on disposition of assets		(15	)		13
Consolidation, restructuring, and other noncash charges		-			467
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		11,402			4,890
Inventory		(28,187	)		(4,879	)
Prepaid expenses and other current assets		(2,758	)		(2,201	)
Other noncurrent assets		(2,608	)		(2,003	)
Accounts payable		3,661			6,285
Accrued expenses and other current liabilities		13,250			2,899
Other noncurrent liabilities		(3,805	)		7,008
Net cash provided by operating activities		59,035			53,293

Cash flows from investing activities:
Purchase of property, plant and equipment		(7,857	)		(3,367	)
Proceeds from sale of assets		47			5
Purchase of marketable securities		-			(29,949	)
Purchase price adjustments for acquisition of business		22,966			-
Net cash provided by/(used in) investing activities		15,156			(33,311	)

Cash flows from financing activities:
Repayments of term loans		(125,000	)		(5,753	)
Repayments of notes payable		(120	)		(128	)
Principal payments on finance lease obligations		(968	)		-
Preferred stock dividends paid		(5,750	)		-
Exercise of stock options		1,460			16,681
Repurchase of common stock		(5,984	)		(6,264	)
Net cash provided by/(used in) financing activities		(136,362	)		4,536

Effect of exchange rate changes on cash		(1,104	)		167

Cash and cash equivalents:
Increase/(Decrease) during the period		(63,275	)		24,685
Cash and cash equivalents, at beginning of period		182,862			151,086
Cash and cash equivalents, at end of period	$	119,587		$	175,771

Supplemental disclosures of cash flow information:
Cash paid for:
Income taxes	$	892		$	606
Interest		19,322			216

⁽¹⁾

See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

See accompanying notes.

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.~~Commission (“SEC”). The interim financial statements included with this report have been prepared on a consistent basis with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form ~~10-K~~10-K/A for the fiscal year ended April ~~1, 2017.~~2, 2022. 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.~~10-K/A.

The results of operations for the ~~three month~~three-month period ended ~~December 30, 2017~~July 2, 2022 are not necessarily indicative of the operating results for the entire fiscal year ending ~~March 31, 2018.~~April 1, 2023. The ~~three month~~three-month periods ended ~~December 30, 2017~~July 2, 2022 and ~~December 31, 2016~~July 3, 2021 each ~~include~~included 13 weeks. The amounts shown are in thousands, unless otherwise indicated.

~~Critical~~2. Significant Accounting Policies

~~Revenue Recognition.~~In accordance with SEC Staff Accounting Bulletin 101 “Revenue Recognition in Financial Statements as amended by Staff Accounting Bulletin 104,” we recognize revenues principally from the sale 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.

Restatement

~~We also recognize revenue~~On August 2, 2022, the Audit Committee of the Board of Directors of the Company, in consultation with the Company’s management, concluded that the previously issued consolidated financial statements as of and for the years ended April 2, 2022, April 3, 2021, and March 28, 2020 and the consolidated financial statements for the quarters therein (the “Affected Periods”) included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 26, 2022 contained an error related to the accounting of non-cash stock-based compensation granted to the Company’s CEO and COO. As a ~~Ship-In-Place basis~~result of this error, the Audit Committee determined that the Company’s consolidated financial statements for ~~three customers who have required~~the Affected Periods included in the 2022 Annual Report on Form 10-K should not be relied upon and should be restated by adjusting selling, general and administrative expenses to reflect non-cash stock-based compensation 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 inspectionsshould have been ~~completed~~recognized in each of the Affected Periods. Any previously issued or filed reports, press releases, earnings releases and ~~customer acceptance has been obtained. In~~investor presentations or other communications describing the ~~three months ended December 30, 2017, 1.8%~~Company’s previously issued consolidated financial statements and other related financial information covering the Affected Periods should no longer be relied upon.

The need for the restatement arose out of the Company’s ~~total net sales were~~reexamination of the timing of the Company’s recognition of stock-based compensation, a non-cash item, for awards granted to the CEO and COO in light of their employment agreements as then in effect, which historically included provisions that (i) would accelerate the vesting of all the CEO’s then-unvested shares of restricted stock and stock options in the event that he voluntarily resigns from employment or provides the Company with notice that his employment agreement will not renew, and (ii) would accelerate the vesting of all the COO’s then-unvested shares of restricted stock and stock options in the event that he provides the Company with notice that his employment agreement will not renew. Historically, the Company recognized ~~under Ship-In-Place transactions.~~stock-based compensation for restricted stock awards granted to the CEO and COO over the three-year vesting period and option awards over the five-year vesting period stated in the agreements underlying these awards, but U.S. GAAP requires stock-based compensation for awards to be recognized over the shorter service period effectively provided by the above-referenced provisions in the CEO and COO’s respective employment agreements.

The CEO and COO’s employment agreements have been amended to remove the provisions referred to above (which the Company, the CEO and COO consider to be a technical mistake causing the employment agreements to not reflect the parties’ mutual agreement) so the Company will recognize stock-based compensation for restricted stock and option awards granted in the future to the CEO and COO over the full three- and five-year vesting periods, respectively, rather than over the shorter service period applicable to the prior awards.

The following unaudited tables present the impact of the restatement on the Company’s previously reported consolidated statements of operations and balance sheets for the quarterly period ended July 3, 2021. The values as previously reported were derived from the Company’s Original Form 10-Q previously filed with the Securities and Exchange Commission:

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

	Three Months Ended July 3, 2021
	As Previously Reported		Restatement Impacts			As Restated
Selling, general and administrative	$	29,802	$	1,410		$	31,212
Total operating expenses	$	33,050	$	1,410		$	34,460
Operating income	$	30,723	$	(1,410	)	$	29,313
Income before income taxes	$	30,869	$	(1,410	)	$	29,459
Provision for income taxes	$	4,870	$	551		$	5,421
Net income	$	25,999	$	(1,961	)	$	24,038
Preferred stock dividends		—		—			—
Net income available to common stockholders	$	25,999	$	(1,961	)	$	24,038

Net income per common share available to common stockholders:
Basic	$	1.04	$	(0.08	)	$	0.96
Diluted	$	1.03	$	(0.08	)	$	0.95
Weighted average common shares:
Basic		25,021,063		—			25,021,063
Diluted		25,308,723		83,324			25,392,047

	As of July 3, 2021
	As Previously Reported		Restatement Impacts			As Restated
Deferred income taxes	$	17,956	$	(1,596	)	$	16,360
Total liabilities	$	216,223	$	(1,596	)	$	214,627
Additional paid-in capital	$	467,524	$	18,953		$	486,477
Retained earnings	$	884,851	$	(17,357	)	$	867,494
Total stockholders’ equity	$	1,274,376	$	1,596		$	1,275,972

The following tables present the impact of the restatement on the Company’s previously reported consolidated balance sheet as of April 2, 2022. The values as previously reported were derived from the Company’s Original Form 10-K.

	As of April 2, 2022
	As Previously Reported		Restatement Impacts			As Restated
Deferred income taxes	$	316,224	$	(761	)	$	315,463
Total liabilities	$	2,473,570	$	(761	)	$	2,472,809
Additional paid-in capital	$	1,537,749	$	26,512		$	1,564,261
Retained earnings	$	911,906	$	(25,751	)	$	886,155
Total stockholders’ equity	$	2,371,847	$	761		$	2,372,608

The Company’s significant accounting policies are detailed in “Note 2 - Summary of Significant Accounting Policies” of our Annual Report on Form 10-K/A for the year ended April 2, 2022.

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

Recent Accounting ~~Pronouncements~~Standards Adopted

Not applicable.

Recent Accounting Standards Yet to Be Adopted

In ~~May 2017,~~March 2020, the Financial Accounting Standards Board ~~(“FASB”)~~(FASB) issued Accounting Standards Update ~~(“ASU”) No. 2017-09, “Compensation – Stock Compensation~~(ASU) 2020-04, Reference Rate Reform (Topic ~~718): Scope~~848) - Facilitation of ~~Modification Accounting”,~~the Effects of Reference Rate Reform on Financial Reporting. The objective of the standard is to address operational challenges likely to arise in ~~an effort to reduce diversity in practice as it relates to applying modification~~ accounting for ~~changes~~contract modifications and hedge accounting due to ~~the terms~~reference rate reform. The amendments in this ASU provide optional expedients and ~~conditions~~exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of ~~share-based payment awards. This ASU~~reference rate reform. The standard update is effective for ~~public companies~~all entities as of March 12, 2020 through December 31, 2022. This guidance is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company is currently assessing which of its various contracts will require an update for a new reference rate and will determine the ~~financial statements issued~~timing for ~~annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The adoption~~implementation of this ~~ASU is~~guidance after completing that analysis.

Other new pronouncements issued but not effective until after April 1, 2023 are not expected to have a material impact on ~~the Company’s consolidated~~our financial ~~statements.~~position, results of operations or liquidity.

3. Revenue from Contracts with Customers

~~In March 2017,~~Disaggregation of Revenue

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

	Three Months Ended
	July 2, 2022		July 3, 2021

Aerospace/Defense	$	99,399	$	90,365
Industrial		254,681		65,840
	$	354,080	$	156,205

The following table disaggregates total revenue by geographic origin:

	Three Months Ended
	July 2, 2022		July 3, 2021

United States	$	310,630	$	139,790
International		43,450		16,415
	$	354,080	$	156,205

The following table illustrates the ~~FASB issued ASU No. 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving~~approximate percentage of revenue recognized for performance obligations satisfied over time versus the ~~Presentation~~amount of ~~Net Periodic Pension Cost~~revenue recognized for performance obligations satisfied at a point in time:

	Three Months Ended
	July 2, 2022			July 3, 2021

Point-in-time		98	%		96	%
Over time		2	%		4	%
		100	%		100	%

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of orders meeting the definition of a contract for which work has not been performed or has been partially performed and ~~Net Periodic Postretirement Benefit Cost”,~~excludes unexercised contract options. The duration of the majority of our contracts, as defined by ASC Topic 606, is less than one year. The Company has elected to apply the practical expedient, which allows companies to exclude remaining performance obligations with an original expected duration of one year or less. The aggregate amount of the transaction price allocated to remaining performance obligations for such contracts with a duration of more than one year was approximately $274,610 at July 2, 2022. The Company expects to recognize revenue on approximately 64% and 89% of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter.

Contract Balances

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

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

As of July 2, 2022 and April 2, 2022, current contract assets were $4,875 and $3,882, respectively, and included within prepaid expenses and other current assets on the consolidated balance sheets. The increase in contract assets was primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations prior to billing partially offset by amounts billed to customers during the period. As of July 2, 2022 and April 2, 2022, the Company did not have any contract assets classified as noncurrent on the consolidated balance sheets.

Contract Liabilities (Deferred Revenue) - The Company may receive a customer advance or deposit, or have an ~~effort~~unconditional right to ~~improve~~receive a customer advance, prior to revenue being recognized. Since the ~~presentation~~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 ~~these costs~~the transfer of the related goods or services is at the discretion of the customer.

As of July 2, 2022 and April 2, 2022, current contract liabilities were $21,009 and $19,556, respectively, and included within accrued expenses and other current liabilities on the ~~income statement. Under~~consolidated balance sheets. The increase in current ~~GAAP, all components~~contract liabilities was primarily due to advance payments received and the reclassification of ~~both net periodic pension cost~~a portion of advance payments received from the noncurrent portion of contract liabilities partially offset by revenue recognized on customer contracts. For the three months ended July 2, 2022, the Company recognized revenues of $3,868 that were included in the contract liability balance as of April 2, 2022. For the three months ended July 3, 2021, the Company recognized revenues of $4,650 that were included in the contract liability balance at April 3, 2021.

As of July 2, 2022 and ~~net periodic postretirement cost~~April 2, 2022, noncurrent contract liabilities were $10,732 and $10,401, respectively, and included within other noncurrent liabilities on the consolidated balance sheets. The increase in noncurrent contract liabilities was primarily due to advance payments received partially offset by the reclassification of a portion of advance payments received to the current portion of contract liabilities.

Variable Consideration

The amount of consideration to which the Company expects to be entitled in exchange for the goods and services is not generally subject to significant variations. However, the Company does offer certain customers rebates, prompt payment discounts, end-user discounts, the right to return eligible products, and/or other forms of variable consideration. The Company estimates this variable consideration using the expected value amount, which is based on historical experience. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company adjusts the estimate of revenue at the earlier of when the amount of consideration the Company expects to receive changes or when the consideration becomes fixed. Accrued customer rebates were $38,779 and $35,234 at July 2, 2022 and April 2, 2022, respectively, and are included within ~~selling, general~~accrued expenses and ~~administrative costs~~other current liabilities 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.consolidated balance sheets.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill 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 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.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The objective of this standard update is to remove inconsistent practices with regards to revenue recognition between U.S. GAAP and IFRS. The standard intends to improve comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The provisions of ASU No. 2014-09 will be effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted for annual periods beginning after December 15, 2016.

The guidance permits use of either a retrospective or cumulative effect transition method. Based upon the FASB’s decision to approve a one-year delay in implementation, the new standard is now effective for the Company in fiscal 2019, with early adoption permitted, but not earlier than fiscal 2018. The Company has concluded it will utilize the modified retrospective method upon adopting this standard.

The Company has substantially completed their assessment of the impact of the new standard on its business which has identified potential differences that would result from applying the requirements of the new standard to its revenue contracts. Upon adoption, the Company expects certain revenue streams currently accounted for using a point-in-time model will utilize an over-time model due to 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.

1.4. 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 April 2, 2022	$	860		$	(6,660	)	$	(5,800	)
Other comprehensive income (loss) before reclassifications		(6,485	)		—			(6,485	)
Amounts recorded in/reclassified from accumulated other comprehensive income (loss)		—			535			535
Net current period other comprehensive income (loss)		(6,485	)		535			(5,950	)
Balance at July 2, 2022	$	(5,625	)	$	(6,125	)	$	(11,750	)

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 Share Available to Common ~~Share~~Stockholders

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

Diluted net income per share available to common ~~share~~stockholders is computed by dividing net income available to common stockholders by the sum of the weighted-average number of common shares and dilutive common share equivalents then outstanding using the treasury stock method. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock ~~options.~~options and the conversion of 5.00% Series A Mandatory Convertible Preferred Stock (“MCPS”) to common shares. The MCPS were issued on September 24, 2021.

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

For the three-month period ended July 2, 2022, the effect of assuming the conversion of the 4,600,000 shares of MCPS into shares of common stock was anti-dilutive, and therefore excluded from the calculation of diluted earnings per share available to common stockholders. Accordingly, net income was reduced by cumulative MCPS dividends, as presented in our consolidated statement of operations, for purposes of calculating net income available to common stockholders.

For the three months ended July 2, 2022, 202,894 employee stock options and 29,054 restricted shares were excluded from the calculation of diluted earnings per share available to common stockholders. The inclusion of these employee stock options and restricted shares would have been anti-dilutive. For the three months ended July 3, 2021, 160,600 employee stock options and no restricted shares were excluded from the calculation of diluted earnings per share available to common stockholders. The inclusion of these employee stock options would have been anti-dilutive.

The table below reflects the calculation of weighted-average shares outstanding for each period presented as well as the computation of basic and diluted net income per share available to 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

At December 30, 2017, no employee stock options have been excluded from the calculation of diluted earnings per share. At December 31, 2016, 449,500 employee stock options have been excluded from the calculation of diluted earnings per share. The inclusion of these employee stock options would be anti-dilutive.stockholders.

	Three Months Ended
	July 2, 2022		July 3, 2021 (As Restated) ⁽¹⁾

Net income	$	37,438	$	24,038
Preferred stock dividends		5,750		—
Net income available to common stockholders	$	31,688	$	24,038

Denominator for basic net income per share available to common stockholders — weighted-average shares outstanding		28,670,488		25,021,063
Effect of dilution due to employee stock awards		274,467		370,984
Denominator for diluted net income per share available to common stockholders — weighted-average shares outstanding		28,944,955		25,392,047

Basic net income per share available to common stockholders	$	1.11	$	0.96

Diluted net income per share available to common stockholders	$	1.09	$	0.95

⁽¹⁾

See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

~~3. Cash and Cash Equivalents~~

6. Fair Value

~~The Company considers all highly liquid investments purchased with an original maturity of three months or less~~Fair value is defined as the price that would be expected to be ~~cash equivalents.~~received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The FASB provides accounting rules that classify the inputs used to measure fair value into the following hierarchy:

~~Short-term investments, if any, are comprised of equity securities and are measured at fair value by using~~Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.

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

Level 3 – Unobservable inputs for the asset or liability.

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

The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable, prepaids and other current assets, accounts payable and accruals and other current liabilities approximate their fair value due to their short-term nature.

The Company also measures certain assets at fair value, using Level 3 inputs, as ~~Level 1~~a result of the ~~valuation hierarchy.~~

~~4. Inventory~~occurrence of triggering events such as purchase accounting for acquisitions.

No other material assets were measured at fair value on a nonrecurring basis during the three months ended July 2, 2022 and July 3, 2021, respectively.

Financial Instruments:

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, trade accounts payable, short-term borrowings and long-term debt. Due to their short-term nature, the carrying value of cash and cash equivalents, accounts receivable, trade accounts payable, accrued expenses and short-term borrowings are a reasonable estimate of their fair value. Due to the nature of fair value calculations for variable-rate debt, the carrying value of the Company’s long-term variable-rate debt is a reasonable estimate of its fair value. The fair value of the Company’s long-term fixed-rate debt, based on quoted market prices, was $431,875 and $463,750 at July 2, 2022 and April 2, 2022, respectively. The carrying value of this debt was $492,608 at July 2, 2022 and $492,396 at April 2, 2022. The fair value of long-term fixed-rate debt was measured using Level 2 inputs. The Company does not believe it has significant concentrations of risk associated with the counterparties to its financial instruments.

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

	July 2, 2022		April 2, 2022
Raw materials	$	119,036	$	112,651
Work in process		125,383		122,983
Finished goods		297,631		280,506
	$	542,050	$	516,140

5.8. Goodwill and Intangible Assets

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

Goodwill balances, by segment, consist of the following:

	Aerospace/ Defense		Industrial			Total
April 2, 2022	$	194,124	$	1,707,980		$	1,902,104
Acquisition ⁽¹⁾		—		(22,912	)		(22,912	)
Translation adjustments		—		(2,550	)		(2,550	)
July 2, 2022	$	194,124	$	1,682,518		$	1,876,642

⁽¹⁾

Purchase accounting adjustments to goodwill associated with the acquisition of Dodge discussed further in Note 13.

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

		July 2, 2022				April 2, 2022
	Weighted Average Useful Lives(Years)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Product approvals	24	$	50,878	$	17,162	$	50,878	$	16,680
Customer relationships and lists	24		1,294,095		66,795		1,294,577		53,376
Trade names	25		216,327		17,357		216,340		15,073
Distributor agreements	5		722		722		722		722
Patents and trademarks	16		12,456		6,739		12,342		6,607
Domain names	10		437		437		437		437
Other	3		16,779		6,049		9,720		4,887
			1,591,694		115,261		1,585,016		97,782
Non-amortizable repair station certifications	n/a		24,281		—		24,281		—
Total	24	$	1,615,975	$	115,261	$	1,609,297	$	97,782

Amortization expense for definite-lived intangible assets ~~for~~during the ~~nine month~~three-month periods ended ~~December 30, 2017~~July 2, 2022 and ~~December 31, 2016 was $7,041~~July 3, 2021 were $17,304 and ~~$6,921,~~$2,584, respectively. This is included in other, net on the Company’s consolidated statements of operations. Estimated amortization expense for the ~~remaining three months~~remainder of fiscal ~~2018,~~2023 and 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

Remainder of Fiscal 2023	$	52,609
Fiscal 2024		69,734
Fiscal 2025		69,685
Fiscal 2026		66,757
Fiscal 2027		63,509
Fiscal 2028		63,506
Fiscal 2029 and thereafter		1,090,633

~~6. Debt~~9. Accrued Expenses and Other Current Liabilities

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

December 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

	July 2, 2022		April 2, 2022
Employee compensation and related benefits	$	34,510	$	34,697
Taxes		26,532		11,706
Contract liabilities		21,009		19,556
Accrued rebates		38,779		35,234
Workers compensation and insurance		1,633		1,144
Acquisition costs		2,864		4,568
Current finance lease liabilities		4,537		3,863
Accrued preferred stock dividends		4,919		4,919
Interest		5,166		10,987
Audit fees		254		599
Legal		850		450
Other		17,660		17,529
	$	158,713	$	145,252

~~The current portion of long-term debt as of both December 30, 2017 and April 1, 2017 includes the current portion of the Schaublin mortgage and the current portion of the Term Loan Facilities.~~10. Debt

Domestic Credit Facility

~~In connection with the Sargent Aerospace & Defense~~On November 1, 2021 RBC Bearings Incorporated, our top holding company, and our Roller Bearing Company of America, Inc. subsidiary (“~~Sargent”~~RBCA”) ~~acquisition on April 24, 2015, the Company~~ entered into a ~~new credit agreement~~Credit Agreement (the ~~“Credit~~“New Credit Agreement”) ~~and related Guarantee, Pledge Agreement and Security Agreement~~ with Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent, Collateral Agent, Swingline Lender and Letter of Credit Issuer and the other lenders party thereto, and terminated the ~~JP Morgan~~Company’s prior Credit ~~Agreement.~~Agreement, which was entered into with Wells Fargo in 2015 (the “2015 Credit Agreement”). The New Credit Agreement provides ~~RBCA, as Borrower,~~the Company with (a) a ~~$200,000 Term~~$1,300,000 term loan facility (the “Term Loan Facility”), which was used to fund a portion of the cash purchase price for the acquisition of Dodge and to pay related fees and expenses, and (b) a ~~$350,000 Revolver~~$500,000 revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan ~~(the~~Facility, the “Facilities”). ~~The Facilities expire on April 24, 2020.~~Debt issuance costs associated with the New Credit Agreement totaled $14,947 and will be amortized over the life of the New Credit Agreement.

Amounts outstanding under the Facilities generally bear interest at either, at the Company’s option, (a) a base rate determined by reference to the higher of ~~(1)~~(i) Wells Fargo’s prime lending rate, ~~(2)~~(ii) the federal funds effective rate plus 1/2 of 1%1.00% and ~~(3)~~(iii) the one-month LIBOR rate plus 1%1.00% or (b) the LIBOR rate plus a specified margin, depending on the type of borrowing being made. The applicable margin is based on the Company’s consolidated ratio of total net debt to consolidated EBITDA from time to time. Currently, the Company’s margin is ~~0.00%~~0.50% for base rate loans and ~~1.00%~~1.50% for LIBOR rate loans. The Facilities are subject to a “LIBOR” floor of 0.00% and contain “hard-wired” LIBOR replacement provisions as set forth in the New Credit Agreement. As of ~~December 30, 2017, there was $21,750~~July 2, 2022, the Company’s commitment fee rate is 0.20% and the letter of credit fee rate is 1.50%.

The Term Loan Facility and the Revolving Credit Facility will mature on November 2, 2026. The Company can elect to prepay some or all of the outstanding ~~under~~balance from time to time without penalty. Commencing one full fiscal quarter after the ~~Revolver and $172,500 outstanding under~~execution of the New Credit Agreement, the Term Loan ~~offset by $3,324~~Facility will amortize in ~~debt issuance costs (original amount was $7,122).~~quarterly installments with the balance payable on the Maturity Date unless otherwise extended in accordance with the terms of the Term Loan Facility. The required future principal payments are approximately $0 for the remainder of fiscal 2023, $0 for fiscal 2024, $2,500 for fiscal 2025, $130,000 for fiscal 2026, and $942,500 for fiscal 2027.

The New Credit Agreement requires the Company to comply with various covenants, including ~~among other things,~~the following financial covenants ~~to maintain~~beginning with the ~~following: (1)~~test period ending December 31, 2021: (a) a maximum Total Net Leverage Ratio of 5.50:1.00, which maximum Total Net Leverage Ratio shall decrease during certain subsequent test periods as set forth in the New Credit Agreement (provided that, no more than once during the term of the Facilities, such maximum ratio applicable at such time may be increased by the Borrower by 0.50:1.00 for a period of ~~consolidated net debt to adjusted EBITDA, not to exceed 3.50 to 1;~~twelve (12) months after the consummation of a material acquisition), and ~~(2)~~(b) a ~~consolidated interest coverage ratio not to be less than 2.75 to 1.~~ minimum Interest Coverage Ratio of 2.00:1.00.

The New 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.~~ New Credit Agreement.

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

As of ~~December 30, 2017,~~July 2, 2022, $1,075,000 was outstanding under the Term Loan Facility and approximately $3,675 of the Revolving Credit Facility was being utilized to provide letters of credit to secure the Company’s obligations relating to certain insurance programs, and the Company had the ability to borrow up to an additional $496,325 under the Revolving Credit Facility.

Senior Notes

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

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

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

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

The Senior Notes will mature on October 15, 2029. The Company may redeem some or all of the Senior Notes at any time on or after October 15, 2024 at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company may also redeem up to 40% of the Senior Notes using the proceeds of certain equity offerings completed before October 15, 2024, at a redemption price equal to 104.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, at any time prior to October 15, 2024, the Company may redeem some or all of the Senior Notes at a price equal to 100% of the principal amount, plus a “make–whole” premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If the Company sells certain of its assets or experiences specific kinds of changes in control, the Company must offer to purchase the Senior Notes.

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 (i) finance the acquisition of Swiss Tool, and (ii) provide future working capital. The Foreign Credit Agreements provided Schaublin with a CHF 15,000 (approximately $15,383) term loan (the “Foreign Term Loan”), which was extinguished in February 2022 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).

Amounts outstanding under 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 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 July 2, 2022, Schaublin was in compliance with all such covenants.

~~The Company’s~~Schaublin’s parent company, Schaublin Holding, has guaranteed Schaublin’s obligations under the Foreign Credit ~~Agreement~~Agreements. Schaublin Holding’s guaranty and the Foreign Credit Agreements are secured ~~as well as providing for~~by a pledge of ~~substantially all~~the capital stock of Schaublin. In addition, the Foreign Term Loan is secured with pledges of the ~~Company’s~~capital stock of the top company and ~~RBCA’s assets. The Company and certain~~the three operating companies in the Swiss Tool System group of ~~its subsidiaries have also entered into a Guarantee to guarantee RBCA’s obligations~~companies.

As of July 2, 2022, the Foreign Term Loan has been paid, with no balance outstanding. There were no amounts outstanding under the ~~Credit Agreement.~~

~~Approximately $3,990 of the Revolver is being utilized to provide letters of credit to secure RBCA’s obligations relating to certain insurance programs. As of December 30, 2017, RBCA~~Foreign Revolver. Schaublin has the ability to borrow up to an additional ~~$324,260~~$15,626 under the ~~Revolver.~~Foreign Revolver as of July 2, 2022.

	July 2, 2022			April 2, 2022
Revolver and term loan facilities	$	1,075,000		$	1,200,000
Senior notes		500,000			500,000
Debt issuance costs		(18,597	)		(20,895	)
Other		8,927			9,236
Total debt		1,565,330			1,688,341
Less: current portion		1,525			1,543
Long-term debt	$	1,563,805		$	1,686,798

~~Other Notes Payable~~

11. Income Taxes

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

~~7. 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.~~31, 2018.

The effective income tax rates for the ~~three month~~three-month periods ended ~~December 30, 2017~~July 2, 2022 and ~~December 31, 2016~~July 3, 2021, were ~~23.9%~~21.8% and ~~31.5%~~18.4%⁽¹⁾, 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 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 the rate, and state income taxes, ~~which~~foreign income taxes, and nondeductible stock-based compensation, that increase the rate.

The effective income tax rate for the ~~three month~~three-month period ended ~~December 30, 2017~~July 2, 2022 of ~~23.9% was impacted by one-time adjustments associated with the enactment~~21.8% includes $600 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 share-based compensation, along with $32 of tax benefit for the ~~adoption~~release of ~~ASU 2016-09~~~~Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting~~~~and $45~~unrecognized tax positions associated with a statute of ~~other discrete expense related to federal and state tax filing positions.~~limitations expiration. The effective income tax rate without discrete items for the ~~three month~~three-month period ended ~~December 30, 2017~~July 2, 2022 would have been ~~25.3%~~23.1%. The effective income tax rate for the ~~three month~~three-month period ended ~~December 31, 2016~~July 3, 2021 of ~~31.5%~~ 18.4%⁽¹⁾includes ~~immaterial discrete items~~$2,139 of ~~$56.~~tax benefit associated with share-based compensation, along with $160 of tax benefit for the release of unrecognized tax positions associated with a statute of limitations expiration. The effective income tax rate without discrete items for the ~~three month~~three-month period ended ~~December 31, 2016~~July 3, 2021 would have been ~~31.8%~~26.2%⁽¹⁾. The Company believes it is reasonably possible that some of its unrecognized tax positions may be effectively settled within the next twelve months due to the closing of audits and the statute of limitations expiring in varying jurisdictions. The decrease in the Company’s unrecognized tax positions reserve, pertaining primarily to federal and state credits and state tax, is estimated to be approximately ~~$531.~~$1,607 over the next twelve months.

⁽¹⁾

See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

12. Reportable Segments

The Company operates through operating segments ~~for which separate~~and reports its financial ~~information is available, and for which operating~~ results ~~are evaluated regularly by the Company’s~~based on how its chief operating decision maker ~~in determining resource allocation~~makes operating decisions, assesses the performance of the business, and ~~assessing performance. Those~~allocates resources. These reportable operating segments ~~with similar economic characteristics~~are Aerospace/Defense and ~~that meet all other required criteria, including nature of the products~~Industrial and ~~production processes, distribution patterns and classes of customers, are aggregated as reportable segments.~~

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

~~Plain Bearings.~~Aerospace/Defense. ~~Plain bearings are produced with either self-lubricating or metal-to-metal designs and consist of several sub-classes, including rod~~This segment represents the 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 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~~markets for the Company’s highly engineered ~~hydraulics, fasteners, collets~~bearings and precision components used in commercial aerospace, ~~marine~~defense aerospace, and ~~industrial~~sea and ground defense applications.

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

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

Segment performance is evaluated based on segment net sales and gross margin. Items not allocated to segment operating income include corporate administrative expenses and certain other amounts.

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

~~All intersegment sales are eliminated in consolidation.~~ Identifiable assets by reportable segment consist of those directly identified with the segment’s operations.

~~9. Integration and Restructuring of Operations~~

	Three Months Ended
	July 2, 2022			July 3, 2021 (As Restated) ⁽¹⁾
Net External Sales
Aerospace/Defense	$	99,399		$	90,365
Industrial		254,681			65,840
	$	354,080		$	156,205
Gross Margin
Aerospace/Defense	$	38,600		$	38,632
Industrial		102,552			25,141
	$	141,152		$	63,773
Selling, General & Administrative Expenses
Aerospace/Defense	$	7,468		$	7,248
Industrial		29,972			5,747
Corporate		18,388			18,217
	$	55,828		$	31,212
Operating Income
Aerospace/Defense	$	29,504		$	29,590
Industrial		53,295			19,386
Corporate		(18,329	)		(19,663	)
	$	64,470		$	29,313

	July 2, 2022		April 2, 2022
Total Assets
Aerospace/Defense	$	805,312	$	776,505
Industrial		3,932,291		3,920,957
Corporate		20,414		147,955
	$	4,758,017	$	4,845,417

⁽¹⁾

See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

13. Dodge Acquisition

On November 1, 2021, the Company completed the acquisition of Dodge for approximately $2,908,241, net of cash acquired and subject to certain adjustments. The purchase price was paid with (i) $1,285,761 of borrowing under the Term Loan Facility, net of issuance costs, (ii) $1,050,811 of net proceeds from common stock and MCPS offerings, (iii) $494,200 of net proceeds from the Senior Notes offering, and (iv) approximately $77,469 of cash on hand. Since the close of the transaction, purchase price adjustments totaling $22,966 have been recorded.

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

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

Acquisition costs incurred for the fiscal year ended April 2, 2022 totaled $22,598 and were recorded as period expenses and included within other, net within the consolidated statements of operations. For the three months ended July 2, 2022, $82 of acquisition costs have been incurred. This acquisition was accounted for as a purchase transaction. The preliminary purchase price allocation is subject to change pending a final valuation of the assets and liabilities acquired. The assets acquired and liabilities assumed were recorded based on their fair values at the date of acquisition as follows:

	November 1, 2021
Cash and cash equivalents	$	81,868
Accounts receivable		83,533
Inventory		136,376
Prepaid expenses and other current assets		1,261
Property, plant and equipment		165,109
Operating lease assets		9,768
Goodwill		1,601,881
Other intangible assets		1,385,082
Other noncurrent assets		3,672
Accounts payable		(69,757	)
Accrued rebates		(30,184	)
Accrued expenses and other current liabilities		(44,766	)
Deferred tax liabilities		(299,711	)
Other noncurrent liabilities		(56,989	)
Net assets acquired		2,967,143
Less cash received		81,868
Net consideration	$	2,885,275

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

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

The results of operations for Dodge have been included in the Company’s financial statements for the period subsequent to the completion of the acquisition on November 1, 2021. Dodge contributed $177,473 of revenue and $30,494 of operating income for the three months ended July 2, 2022.

Upon closing, the Company entered into a transition services agreement (“TSA”) with ABB, pursuant to which ABB agreed to support the information technology, human resources and benefits, finance, tax and treasury functions of the Dodge business for six to twelve months. The Company has the option to extend the support period for up to a maximum of an additional year for certain IT services. RBC has the right to terminate individual services at any point over the renewal term. All services are expected to be terminated by the end of the second quarter of fiscal 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 $5,5772023. Costs associated with the ~~restructuring~~TSA were $3,705 for the three months ended July 2, 2022 and are included in other, net on 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 theCompany’s consolidated statement of operations. ~~The Company determined that~~Since the ~~market approach was the most appropriate method to estimate the fair value~~purchase 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 $1,091 comprised primarily of employee termination costs. TheseDodge business on November 1, 2021, 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 $6,668. The total impact of this restructuring is expected to be between $7,000 and $7,500 in after-tax charges, all attributable to the Engineered Products segment, and is expected to conclude in the third quarter of fiscal 2019.

In the third 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 costsTSA 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.$11,708 through July 2, 2022.

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

Cautionary Statement ~~As To~~as to Forward-Looking Information

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

The information in this discussion contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts, included in this quarterly report on Form 10-Q regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management are “forward-looking statements” as the term is defined in the Private Securities Litigation Reform Act of 1995.

The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation: (a) the bearing and engineered products industries are highly competitive, and this competition could reduce our profitability or limit our ability to grow; (b) the loss of a major customer, or a material adverse change in a major customer’s business, could result in a material reduction in our revenues, cash flows and profitability; (c) our results have been and are likely to continue to be impacted by the COVID-19 pandemic; (d) weakness in any of the industries in which our customers operate, as well as the cyclical nature of our customers’ businesses generally, could materially reduce our revenues, cash flows and profitability; ~~(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 (such as Dodge) 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~~financial condition; (z) changes in accounting standards or changes in the interpretations of existing standards could affect our financial results; ~~(x)~~(aa) risks associated with utilizing information technology systems could adversely affect our operations; (bb) our quarterly performance can be affected by the timing of government product inspections and approvals; (cc) we may not ~~pay cash dividends~~be able to efficiently integrate Dodge into our operations; (dd) we may fail to realize some or all of the anticipated benefits of the Dodge acquisition or those benefits may take longer to realize than expected; (ee) we incurred substantial debt in order to complete the ~~foreseeable future; (y) retirement~~Dodge acquisition, which could constrain our business and exposes us to the risk of ~~commercial aircraft~~defaults under our debt instruments; and (ff) increases in interest rates would increase the cost of servicing the Term Loan Facility and could reduce our ~~revenues, and (z) we may not achieve satisfactory operating results in the integration of acquired companies.~~profitability. Additional information regarding these and other risks and uncertainties is contained in our periodic filings with the SEC, including, without limitation, the risks identified under the heading “Risk Factors” set forth in the Annual Report on Form ~~10-K~~10-K/A for the year ended April ~~1, 2017.~~2, 2022. 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~~highly-engineered bearings and precision components. Our precision solutions are integral to the manufacture and operation of most machines and mechanical systems, reduce wear to moving parts, facilitate proper power transmission, and reduce damage and energy loss caused by friction. While we manufacture products in all major bearings categories, we focus primarily on the higher end of the bearing and engineered component markets where we believe our ~~value added~~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 4556 facilities in 10 countries, of which 3637 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~~

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

●

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

~~Plain Bearings.~~Plain bearings are produced with either self-lubricating or metal-to-metal designs and consist 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.

●

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

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

~~Roller Bearings.~~Roller bearings are anti-friction bearings that use rollers instead of balls. We manufacture four basic types of roller bearings: 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 single and sole-source relationships and long-term purchase agreements, through diversification across multiple market segments within the ~~aerospace~~Aerospace/Defense and ~~defense and diversified industrial~~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~~highly-engineered bearings and precision components through the following efforts:

●

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

●

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

●

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

●

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

~~Outlook~~

Outlook

Our net sales for the ~~three month~~three-month period ended ~~December 30, 2017~~July 2, 2022 increased ~~13.8%~~126.7% compared to the same period last fiscal ~~year. Our industrial markets~~year; excluding Dodge sales in the first quarter of fiscal 2023, net sales were up 13.1% period over period. The increase in net sales was a result of a 286.8% increase in our Industrial segment and 10.0% increase in our Aerospace/Defense segment. Excluding sales from Dodge, our Industrial segment increased ~~23.1% while the aerospace markets increased 8.9%.~~17.3% year over year. Our backlog, as of ~~December 30, 2017,~~July 2, 2022, was ~~$392.5~~$635.7 million compared to ~~$349.1~~$603.1 million as of ~~December 31, 2016.~~April 2, 2022.

~~Management believes~~We are continuing to see the recovery of the commercial aerospace business, which has increased by 18.9% versus the same period last year. We anticipate this recovery to accelerate throughout the rest of the fiscal year and beyond. Orders have continued to grow as evidenced by our backlog. Defense sales, which represented approximately 35.0% of segment sales this period, were down 3.4% year over year. This is in part due to the timing of delivery on parts that require government approval and/or completion of certain milestone achievements prior to invoicing.

The increase in our industrial sales reflects a pattern of sustained growth over the last year, with strong results in several areas. Mining increased by more than 25.0% year over year. Our oil and gas business this quarter showed the start of a strong recovery which is expected to continue into future periods. Other notable strengths in industrial were in semiconductor and general industrial markets. The increase in our global industrial sales was negatively impacted by the Covid related shut downs in China, where Dodge has a plant in Shanghai.

The Company expects net sales to be approximately $355 million to $365 million in the second quarter of fiscal 2023.

We experienced strong cash flow generation during the first quarter of fiscal 2023 (as discussed in the section “Liquidity and Capital Resources” below). We expect this trend to continue throughout the fiscal year as customer demand continues to be significant. We believe that operating cash flows and available credit under the ~~credit facilities~~Revolving Credit Facility and Foreign Revolver will provide adequate resources to fund internal ~~and external~~ growth initiatives for the foreseeable ~~future.~~future, including at least the next 12 months. As of ~~December 30, 2017,~~July 2, 2022, we had cash and cash equivalents of ~~$43.8~~$119.6 million of which approximately ~~$40.5~~$24.8 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.~~

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
	July 2, 2022		July 3, 2021 (As Restated) ⁽¹⁾		$ Change		% Change
Total net sales	$	354.1	$	156.2	$	197.9		126.7	%

Net income available to common stockholders	$	31.7	$	24.0	$	7.7		31.8	%

Net income per share available to common stockholders: diluted	$	1.09	$	0.95
Weighted average common shares: diluted		28,944,955		25,392,047

Our net sales for the ~~three month~~three-month period ended ~~December 30, 2017~~July 2, 2022 increased ~~13.8%~~126.7% compared to the same period last fiscal ~~year.~~year; excluding Dodge sales in the first quarter of fiscal 2023, net sales were up 13.1% period over period. The ~~overall~~ increase in net sales was a result of a ~~23.1%~~286.8% increase in our Industrial segment. Sales to our Aerospace/Defense segment were led by aircraft OEM, which was up 23.2% compared to the same period in the prior year. Sales to the defense sector were down 3.4%. Excluding Dodge sales, sales to our industrial ~~markets and an 8.9% increase~~segment increased 17.3% year over year. This reflects a pattern of sustained growth in our ~~aerospace markets. The increase~~industrial sales, with strong results in ~~industrial was a result of strong performance in marine,~~areas including the semiconductor, mining, ~~semicon,~~ energy, and general industrial ~~activity.~~markets. Within aerospace, we experienced an increase in our commercial aerospace business while the defense end markets were down as compared to the same period last year. The increase in commercial aerospace reflects the recovery in build rates from large OEMs and stability in the aftermarket. Defense sales ~~was driven mainly~~were negatively impacted by ~~commercial OEM.~~the timing of shipments associated with our marine business.

Net income available to common stockholders for the ~~third~~first quarter of fiscal ~~2018~~2023 was ~~$23.8~~$31.7 million compared to ~~$12.8~~$24.0 million⁽¹⁾ for the same period last year. Net income ~~of $23.8 million in~~for the ~~third~~first quarter of fiscal ~~2018~~2023 was affected by restructuring costs of $1.1 million offset by a $1.2 million tax benefit related to the adoption of ASU 2016-09 and the impact of the new tax legislation signed during the third quarter. Net income for the third quarter of fiscal 2017 was affected by restructuring costs of $4.9 million offset by $0.3approximately $3.7 million of ~~discrete tax benefit and foreign currency gains.~~

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

~~Net sales increased $39.9 million or 8.8% for~~pre-tax transition services costs associated with the nine month period ended December 30, 2017 over the same period last year. The increase in net sales was mainly the result of a 19.2% increase in industrial sales and an increase of 3.4% in aerospace sales. The increase in industrial sales was mostly attributable to an increase in marine, mining, semicon, energy, and general industrial activity. The increase in aerospace was primarily driven by aerospace OEM, both defense and commercial.

Net income for the nine months ended December 30, 2017 was $60.5 million compared to $49.0 million for the same period last year. The net income of $60.5 million in fiscal 2018 was affected by restructuring and integration costs of $6.7 million, a $3.9 million tax benefit related to the adoption of ASU 2016-09, the impact of the new tax legislation signed during the third quarter and $0.2 million of discrete tax benefits.Dodge acquisition. Net income for the first ~~nine months~~quarter of fiscal ~~2017~~2022 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.~~benefit.

⁽¹⁾	See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

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 %

	Three Months Ended
	July 2, 2022			July 3, 2021			$ Change		% Change

Gross Margin	$	141.2		$	63.8		$	77.4		121.3	%
% of net sales		39.9	%		40.8	%

Gross margin ~~increased $12.3 million, or 23.4%, in~~was 39.9% of net sales for the ~~third~~first quarter of fiscal ~~2018~~2023 compared to 40.8% for the ~~third~~first quarter of fiscal ~~2017.~~2022. The ~~three months ended December 31, 2016 was affected by a restructuring charge of $3.2 million. The increase~~decrease in gross margin as a percentage of net sales was ~~mainly~~ driven by ~~higher sales and cost efficiencies achieved during the current period.~~product mix.

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% 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 was affected by the unfavorable impact of $3.2 million of restructuring charges and $0.4 million of inventory purchase accounting associated with the Sargent acquisition. The increase in gross margin year over year is primarily a result of higher sales and cost efficiencies achieved.

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
	July 2, 2022			July 3, 2021 (As Restated) ⁽¹⁾			$ Change		% Change

SG&A	$	55.8		$	31.2		$	24.6		78.9	%
% of net sales		15.8	%		20.0	%

SG&A ~~expenses increased by $2.5 million to $28.2 million~~ for the ~~third~~first quarter of fiscal ~~2018~~2023 was $55.8 million, or 15.8% of net sales, as compared to ~~$25.7~~$31.2 million ~~for the third quarter~~ ⁽¹⁾, or 20.0%⁽¹⁾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.~~

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 %

of fiscal 2022. SG&A ~~expenses increased by $6.8 million to $83.5 million~~ for the first ~~nine months~~quarter of fiscal ~~2018 compared to $76.7~~2023 includes approximately $23.9 million ~~for~~of costs from the ~~same period last year. This~~Dodge business. The remainder of the increase is primarily ~~due to $5.0 million of~~associated with an increase in personnel ~~related expenses, $1.0 million of additional stock compensation and $0.8 million of other costs.~~

costs year over year.

⁽¹⁾	See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

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 %

Other operating expenses for the third quarter of fiscal 2018 totaled $3.4 million compared to $6.1 million for the same period last year. For the third quarter of fiscal 2018, other operating expenses were comprised mainly of $1.1 million of restructuring costs and $2.3 million of amortization of intangible assets. For the third quarter of fiscal 2017, other operating expenses were comprised of $3.8 million of restructuring costs and $2.3 million of amortization of intangible assets.

	Three Months Ended
	July 2, 2022			July 3, 2021			$ Change		% Change

Other, net	$	20.9		$	3.2		$	17.7		542.1	%
% of net sales		5.9	%		2.1	%

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 %

Other operating expenses for the first ~~nine months~~quarter of fiscal ~~2018~~2023 totaled ~~$14.7~~$20.9 million compared to ~~$10.4~~$3.2 million for the same period last year. For the first ~~nine months~~quarter of fiscal ~~2018,~~2023, other operating expenses included $3.8 million of TSA costs and other costs associated with the Dodge acquisition and $17.3 million of amortization of intangible assets partially offset by $0.2 million of other income. For the first quarter of fiscal 2022, other operating expenses were comprised mainly of ~~$7.6 million of restructuring costs, $7.0~~$2.6 million of amortization of intangible assets and ~~$0.1 million of other costs. For the first nine months of fiscal 2017, other operating expenses were comprised mostly of $4.0~~$0.6 million of restructuring costs and ~~$6.9 million of amortization of intangible assets offset by $0.5 million of~~ other ~~revenue.~~items.

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
	July 2, 2022			July 3, 2021			$ Change		% Change

Interest expense, net	$	15.8		$	0.3		$	15.5		4,852.7	%
% of net sales		4.5	%		0.2	%

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~~$15.8 million for the ~~third~~first quarter of fiscal ~~2018~~2023 compared to ~~$2.1~~$0.3 million for the same period last year. The ~~Company had total debt~~increase in interest cost during the period is a result of ~~$198.0 million at December 30, 2017 compared to $294.9 million at December 31, 2016.~~the addition of the Term Loan Facility and Senior Notes in the third quarter of fiscal 2022.

Nine Months Ended

December 30,
2017

December 31,
2016
$
Change
%
Change

Interest expense, net $ 5.7 $ 6.7 $ (1.0 ) (14.3 )%
% of net sales 1.2 % 1.5 %

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 $5.7Other Non-Operating Expense

	Three Months Ended
	July 2, 2022			July 3, 2021			$ Change		% Change

Other non-operating expense	$	0.8		$	(0.5	)	$	1.3		(264.9	)%
% of net sales		0.2	%		(0.3	)%

Other non-operating expenses were $0.8 million for the first ~~nine months~~quarter of fiscal ~~2018~~2023 compared to ~~$6.7~~$0.5 million of income for the same period in the prior year. For the first ~~nine months~~quarter of fiscal ~~2017.~~2023, other non-operating expenses were comprised of $0.6 million of post-retirement benefit costs, and $0.2 million of other items. For the first quarter of fiscal 2022, other non-operating income of $0.5 million was primarily comprised of dividend income received from short-term marketable securities.

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
	July 2, 2022			July 3, 2021 (As Restated) ⁽¹⁾

Income tax expense	$	10.5		$	5.4
Effective tax rate		21.8	%		18.4	%

Income tax expense for the ~~three month~~three-month period ended ~~December 30, 2017~~July 2, 2022 was ~~$7.5~~$10.5 million compared to ~~$5.9~~$5.4 million⁽¹⁾for the ~~three month~~three-month period ended ~~December 31, 2016.~~July 3, 2021. Our effective income tax rate for the ~~three month~~three-month period ended ~~December 30, 2017~~July 2, 2022 was ~~23.9%~~21.8% compared to ~~31.5%~~18.4%⁽¹⁾ for the ~~three month~~three-month period ended ~~December 31, 2016.~~July 3, 2021. The effective income tax rate for the ~~three month~~three-month period ended ~~December 30, 2017~~July 2, 2022 of ~~23.9% was impacted by adjustments made in relation to the recently enacted Tax Cuts and Jobs Act (TCJA). These were mainly comprised~~21.8% included $0.6 million of ~~a charge of $9.5 million for the repatriation transition~~ tax ~~and a benefit of $8.7 million~~benefits associated with share-based compensation; 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. The~~ effective income tax rate without ~~discrete~~these items ~~for the three month period ended December 30, 2017~~ would have been ~~25.3%~~23.1%. The effective income tax rate for the ~~three month~~three-month period ended ~~December 31, 2016 was 31.5%, which~~July 3, 2021 of 18.4%⁽¹⁾ included ~~approximately $0.1~~$2.1 million of ~~immaterial discrete expense items.~~tax benefit associated with share-based compensation along with $0.2 million of tax benefit associated with the release of unrecognized tax positions associated with the statute of limitations expiration. The effective income tax rate without ~~discrete~~these benefits and other items for the ~~three month~~three-month period ended ~~December 31, 2016~~July 3, 2021 would have been ~~31.8%~~26.2%⁽¹⁾.

Nine Months Ended

December 30,
2017

December 31,
2016

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

(1)	See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

~~Income tax expense~~

Segment Information

We previously reported our financial results under four operating segments (Plain Bearings; Roller Bearings; Ball Bearings; and Engineered Products), but the Dodge acquisition has resulted in a change in the internal organization of the Company and how our chief operating decision maker makes operating decisions, assesses the performance of the business, and allocates resources. Accordingly, we will now report our financial results under two operating segments: Aerospace/Defense; and Industrial. Financial information for ~~the nine month period ended December 30, 2017 was $23.6 million compared~~fiscal 2022 has been recast to $23.6 million for the nine month period ended December 31, 2016. Our effective income tax rate for the nine month period ended December 30, 2017 was 28.0% compared to 32.5% for the nine month period ended December 31, 2016. The effective income tax rate for the nine month period ended December 30, 2017 of 28.0% was impacted by adjustments made in relationconform to the recently enacted Tax Cuts and Jobs Act (TCJA). These were mainly comprised 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. The effective income tax rate without discrete items for the nine month period ended December 30, 2017 would have been 33.0%. The effective income tax rate for the nine month period ended December 31, 2016 was 32.5%, which included immaterial discrete benefit of $0.2 million. The effective income tax rate without discrete items for the nine month period ended December 31, 2016 would have been 32.8%. 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~~

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 Productsnew 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.~~presentation. We use gross margin as the primary measurement to assess the financial performance of each reportable segment.

~~Plain Bearing Segment:~~Aerospace/Defense 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
	July 2, 2022			July 3, 2021			$ Change			% Change

Total net sales	$	99.4		$	90.4		$	9.0			10.0	%

Gross margin	$	38.6		$	38.6		$	(0.0	)		(0.1	)%
% of segment net sales		38.8	%		42.8	%

SG&A	$	7.5		$	7.3		$	0.2			3.0	%
% of segment net sales		7.5	%		8.0	%

Net sales increased ~~$4.0~~$9.0 million, or ~~6.0%~~10.0%, for the three months ended ~~December 30, 2017~~July 2, 2022 compared to the same period last year. Commercial aerospace increased during the period 18.9% year over year. The ~~6.0% increase~~aerospace OEM component was ~~primarily driven~~up 23.2%, demonstrating early signs of a recovery in the OEM markets. This was further evidenced by ~~an increase~~continuing expansion of ~~23.4% in~~ our ~~industrial~~backlog during the period. Our defense markets, which represent about 35.0% of segment sales, decreased by approximately 3.4% during the period. These markets were impacted by the timing of deliveries to certain government customers which require sign off or achievement of certain milestones prior to shipment. Overall distribution and ~~a 0.9% increase in our aerospace markets. The increase in industrial~~aftermarket sales, ~~was mostly driven by general industrial OEM while the increase in aerospace~~which represent 18.3% of segment sales, ~~was due to the commercial aerospace OEM.~~increased 2.7% year over year.

Gross margin as a percentage of segment net sales ~~decreased to 38.2%~~was 38.8% for the ~~third~~first quarter of fiscal ~~2018~~2023 compared to ~~40.7%~~42.8% for the same period last year. The decrease ~~was primarily due to product mix.~~

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 %

~~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~~gross margin as a percentage of net sales ~~decreased to 38.5% for~~was driven by product mix during 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.~~period.

~~Roller Bearing Segment:~~

Industrial Segment

	Three Months Ended
	July 2, 2022			July 3, 2021			$ Change		% Change

Total net sales	$	254.7		$	65.8		$	188.9		286.8	%

Gross margin	$	102.6		$	25.2		$	77.4		307.9	%
% of segment net sales		40.3	%		38.2	%

SG&A	$	30.0		$	5.7		$	24.3		421.5	%
% of segment net sales		11.8	%		8.7	%

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~~$188.9 million, or ~~24.2%~~286.8%, for the three months ended ~~December 30, 2017~~July 2, 2022 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%, 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~~three months of Dodge sales in fiscal 2023 and continued strong performance across the majority of our industrial markets. Excluding Dodge sales of $177.5 million, net sales increased $11.4 million, or 17.3%, period over period. This increase was driven by performance in semiconductor, energy, mining, and the general industrial markets. Sales to distribution and the aftermarket reflected 63.4% of our quarterly industrial sales. These distribution and aftermarket sales increased 565.0% compared to the same quarter in the prior year, and 11.6% excluding associated sales from Dodge.

Gross margin for the three months ended July 2, 2022 was 40.3% of net sales, compared to 38.2% in the comparable period in fiscal 2022. The improved gross margin is primarily due to price increases put into place 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 %

Corporate

	Three Months Ended
	July 2, 2022			July 3, 2021 (As Restated) ⁽¹⁾			$ Change		% Change

SG&A	$	18.3		$	18.2		$	0.1		0.9	%
% of total net sales		5.2	%		11.7	%

~~Net sales increased $6.8~~Corporate SG&A was $18.3 million, or ~~16.1%,~~5.2% of sales for the ~~nine months ended December 30, 2017~~first quarter of fiscal 2023 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~~$18.2⁽¹⁾ million, or 11.7%⁽¹⁾ 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 compared to the same period last year. Our aerospace markets increased 17.3% while our industrial markets increased 17.6%. The increase in aerospace sales was mainly due to our commercial and defense aerospace OEM markets. The increase in industrial sales was driven by marine and our European markets.

Gross margin as a percentage of sales increased to 34.5% for the third quarter of fiscal 2018 compared to 33.8% for the same period last year. This increase is primarily due to product mix and cost efficiencies achieved during the period.

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 %

Net sales increased $8.0 million, or 6.3%, for the nine months ended December 30, 2017 compared to the same period last year. Our industrial markets increased 12.1% while our aerospace markets increased 3.5%. The increase in industrial sales was driven by 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 sales increased to 33.7% for the nine months ended December 30, 2017 compared to 31.7% for the same period last year. Gross margin for the first nine months of fiscal 2017 was affected by $0.3 million of acquisition related costs. This year over year increase ~~was primarily attributable to volume, product mix and cost efficiencies achieved during the period.~~

~~Corporate:~~

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 for both the third quarter and first nine months of fiscal 2018 compared to the same periods last year. This~~ was primarily due to an increase in ~~stock compensation expenses~~personnel costs and ~~personnel related costs.~~professional fees during the period.

(1)	See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

Liquidity and Capital Resources

(dollars in millions in tables)

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.~~acquisitions, including the Dodge acquisition completed on November 1, 2021. We have historically met our working capital, capital expenditure requirements and acquisition funding needs through our net cash flows provided by operations, various debt arrangements and sale of equity to investors. We believe that operating cash flows and available credit under the ~~Facilities~~Revolving Credit Facility and Foreign Revolver will provide adequate resources to fund internal ~~and external~~ growth initiatives for the foreseeable future. For further discussion regarding the funding of the Dodge acquisition, refer to Part I, Item 1 – Note 13.

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 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,~~July 2, 2022, we had cash and cash equivalents of ~~$43.8~~$119.6 million, of which, approximately ~~$40.5~~$24.8 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~~The Company entered into ~~a new credit agreement (the “Credit Agreement”) and related Guarantee, Pledge Agreement and Security~~the New Credit 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 on November 1, 2021 and terminated the ~~JP Morgan~~2015 Credit Agreement. The New Credit Agreement provides ~~RBCA, as Borrower,~~the Company with (a) ~~a $200.0~~the $1,300.0 million Term Loan Facility, which was used to fund a portion of the cash purchase price for the acquisition of Dodge and to pay related fees and expenses, and (b) ~~a $350.0~~the $500.0 million ~~Revolver and together~~Revolving Credit Facility. Debt issuance costs associated with the ~~Term Loan (the “Facilities”). The Facilities expire on April 24, 2020.~~New Credit Agreement totaled $14.9 million and will be amortized over the life of the New Credit Agreement.

Amounts outstanding under the Facilities generally bear interest at either, at the Company’s option, (a) a base rate determined by reference to the higher of ~~(1)~~(i) Wells Fargo’s prime lending rate, ~~(2)~~(ii) the federal funds effective rate plus 1/2 of 1%1.00% and ~~(3)~~(iii) the one-month LIBOR rate plus 1%1.00% or (b) the LIBOR rate plus a specified margin, depending on the type of borrowing being made. The applicable margin is based on the Company’s consolidated ratio of total net debt to consolidated EBITDA from time to time. Currently, the Company’s margin is ~~0.00%~~0.50% for base rate loans and ~~1.00%~~1.50% for LIBOR rate loans. The Facilities are subject to a “LIBOR” floor of 0.00% and contain “hard-wired” LIBOR replacement provisions as set forth in the New Credit Agreement. As of ~~December 30, 2017, there was $21.8 million~~July 2, 2022, the Company’s commitment fee rate is 0.20% and the letter of credit fee rate is 1.50%.

The Term Loan Facility and the Revolving Credit Facility will mature on November 2, 2026. The Company can elect to prepay some or all of the outstanding ~~under~~balance from time to time without penalty. Commencing one full fiscal quarter after the ~~Revolver and $172.5 million outstanding under~~execution of the New Credit Agreement, the Term Loan ~~offset by $3.3 million~~Facility will amortize in ~~debt issuance costs (original amount was $7.1 million).~~quarterly installments as set forth in Part I, Item 1 – Note 10, with the balance payable on the Maturity Date unless otherwise extended in accordance with the terms of the Term Loan Facility.

The Company’s domestic subsidiaries have guaranteed the Company’s obligations under the New Credit Agreement, and the Company’s obligations and the domestic subsidiaries’ guaranty are secured ~~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~~its domestic subsidiaries.

As of ~~its subsidiaries have also entered into a Guarantee to guarantee RBCA’s obligations~~July 2, 2022, $1,075.0 million was outstanding under the ~~Credit Agreement.~~

~~Approximately $3.9 million~~Term Loan Facility and approximately $3.7 of the ~~Revolver is~~Revolving Credit Facility was being utilized to provide letters of credit to secure ~~RBCA’s~~the Company’s obligations relating to certain insurance ~~programs.~~programs, and the Company had the ability to borrow up to an additional $496.3 million under the Revolving Credit Facility.

Senior Notes

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

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

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

Foreign Term Loan and Revolving Credit Facility

Our Foreign Credit Agreements with Credit Suisse (Switzerland) Ltd. provided us with financing to acquire Swiss Tool in 2019 and provide future working capital for Schaublin, our foreign subsidiary. The Foreign Credit Agreements provide (a) the Foreign Term Loan, a CHF 15.0 million (approximately $15.4 million) term loan, which was extinguished in February 2022, and (b) the Foreign Revolver, a CHF 15.0 million (approximately $15.4 million) revolving credit facility, which continues in effect until terminated by either Schaublin or Credit Suisse. Debt issuance costs associated with the Foreign Credit Agreements totaled CHF 0.3 million (approximately $0.3 million).

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 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 ~~December 30, 2017, RBCA~~July 2, 2022, Schaublin was in compliance with all such covenants.

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

As of July 2, 2022, the Foreign Term Loan has been paid, with no balance outstanding. There were no amounts outstanding under the Foreign Revolver. Schaublin has the ability to borrow up to an additional ~~$324.3~~$15.6 million under the ~~Revolver.~~

~~Other Notes Payable~~

On October 1, 2012, Schaublin purchased the land and building, which it occupied and had been leasing, for 14.1 million CHF (approximately $14.9 million). Schaublin obtained a 20 year fixed rate mortgage of 9.3 million CHF (approximately $9.9 million) at an interest rate of 2.9%. The balance of the purchase price of 4.8 million CHF (approximately $5.1 million) was paid from cash on hand. The balance on this mortgageForeign Revolver as of ~~December 30, 2017 was 6.9 million CHF, or $7.0 million.~~July 2, 2022.

Cash Flows

~~Nine month period~~Three-month Period Ended ~~December 30, 2017~~July 2, 2022 Compared to the ~~Nine month period~~Three-month Period Ended ~~December 31, 2016~~July 3, 2021

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

	FY23			FY22			$ Change
Net cash provided by (used in):
Operating activities	$	59.0		$	53.3		$	5.7
Investing activities		15.2			(33.3	)		48.5
Financing activities		(136.4	)		4.5			(140.9	)
Effect of exchange rate changes on cash		(1.1	)		0.2			(1.3	)
Increase/(Decrease) in cash and cash equivalents	$	(63.3	)	$	24.7		$	(88.0	)

During the first three months of fiscal ~~2018,~~2023, we generated cash of ~~$92.5~~$59.0 million from operating activities compared to ~~generating~~$53.3 million of cash generated during the same period of ~~$74.6~~fiscal 2022. The increase of $5.7 million for fiscal ~~2017. The increase of $17.9 million for fiscal 2018~~2023 was mainly a result of ~~the~~a favorable ~~impact~~change in non-cash activity of $13.3 million and an increase in net income of ~~$11.5~~$13.4 million, ~~non-cash charges~~partially offset by the unfavorable impact of ~~$4.4 million, and the~~a net change in operating assets and liabilities of ~~$2.0~~$21.0 million. The ~~favorable~~unfavorable 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 increase in non-cash charges ~~were primarily driven by $4.1~~resulted from $20.4 million of ~~increased impairment charges, $4.9~~depreciation and amortization and $2.2 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 million and $0.3 million of acquisition expenses present in fiscal 2017~~deferred financing costs, partially offset by ~~a $4.0~~unfavorable changes of $5.4 million ~~decrease~~ in deferred taxes, ~~driven by the new tax legislation signed during the quarter~~$3.4 million of share-based compensation charges and ~~a $2.5~~$0.5 million ~~loss on the disposal~~ of ~~fixed assets included in fiscal 2017.~~restructuring and consolidation charges.

(1)	See Note 2, Summary of Significant Accounting Policies – Restatement, for discussion regarding the impacts of the Restatement.

The following chart summarizes the ~~favorable~~unfavorable change in operating assets and liabilities of ~~$2.0~~$21.0 million for fiscal ~~2018~~2023 versus fiscal ~~2017~~2022 and the favorable ~~$2.7~~change of $3.2 million for fiscal ~~2017~~2022 versus fiscal ~~2016.~~2021.

	FY18			FY17			FY23			FY22
Cash provided by (used in):
Accounts receivable	$	(3.3	)	$	(6.9	)	$	6.5		$	(11.0	)
Inventory		(4.7	)		14.0			(23.3	)		(1.6	)
Prepaid expenses and other current assets		0.7			(2.2	)		(0.6	)		(3.4	)
Other non-current assets		(1.0	)		(1.0	)
Other noncurrent assets								(0.6	)		2.7
Accounts payable		7.6			5.0			(2.6	)		5.5
Accrued expenses and other current liabilities		(5.5	)		1.6			10.4			7.1
Other non-current liabilities		8.2			(7.8	)
Other noncurrent liabilities								(10.8	)		3.9
Total change in operating assets and liabilities:	$	2.0		$	2.7		$	(21.0	)	$	3.2

During the first ~~nine~~three months of fiscal ~~2018,~~2023, we ~~used $20.5~~generated $15.2 million ~~for~~in investing activities as compared to ~~$14.9~~$33.3 million ~~for~~used during the first three months of fiscal ~~2017. The~~2022. This increase from cash used to cash generated was attributable to Dodge acquisition purchase price adjustments of $23.0 million and $29.9 million less in purchase of marketable securities partially offset by an increase ~~of $6.1 million~~ in capital expenditures ~~and $0.1 million in proceeds from the sale~~ of ~~assets offset by $0.6 million cash used for an acquisition in fiscal 2017.~~$4.4 million.

During the first ~~nine~~three months of fiscal ~~2018,~~2023, we used ~~$68.6~~$136.4 million ~~for~~in financing activities compared to ~~using $57.7~~$4.5 million ~~for~~generated during the first three months of fiscal ~~2017.~~2022. This ~~increase in~~decrease from cash generated to cash used was primarily attributable to ~~the payment~~$119.2 million more payments made on outstanding debt, $15.2 million fewer exercises of ~~$62.8~~share-based awards, $5.8 million more cash dividends paid on ~~the revolving credit facility~~preferred stock, and ~~$10.0~~$1.0 million in principal payments made on ~~the term loan~~finance lease obligations during the ~~first nine months of~~current fiscal ~~2018 as compared to $61.5~~year partially offset by $0.3 million ~~and $7.5 million respectively during the same period of fiscal 2017.~~less in treasury stock purchases.

Capital Expenditures

Our capital expenditures were ~~$20.5~~$7.9 million for the ~~nine month~~three-month period ended ~~December 30, 2017. In addition, we~~July 2, 2022. We expect to make additional capital expenditures of ~~$5.0~~$30.0 million to ~~$10.0~~$25.0 million during the remainder of fiscal ~~2018~~2023 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~~Company’s 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 estimatescommitments are ~~necessarily subjective, our actual payments in future periods are likely to vary from those presented in the table. The following table summarizes certain~~primarily comprised of our ~~contractual~~debt obligations ~~and principal and interest payments under~~disclosed within Part I, Item 1- Note 10 of this report. We also have lease obligations which are materially consistent with what we have disclosed within our ~~debt instruments and leases as of December 30, 2017:~~Form 10-K/A for the fiscal year ended April 2, 2022.

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~~2022 Annual Report ~~incorporated by reference in our fiscal 2017~~on Form ~~10-K,~~10-K/A 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~~three months of fiscal ~~2018.~~2023.

Off-Balance Sheet Arrangements

~~We have~~As of July 2, 2022, 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 Revolving Credit Facility.

~~ITEM~~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 operations in the following countries utilize the following currencies as their functional currency:

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

As a result, ~~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 12% and 11% of our net sales were impacted by foreign currency fluctuations ~~in the first nine months of both fiscal 2018 compared to approximately 10%~~ for the ~~same period in fiscal 2017. We expect that this proportion is likely to increase as we seek to increase our penetration of foreign markets, particularly within the aerospace~~three- month periods ended July 2, 2022 and ~~defense markets.~~July 3, 2021, respectively. Foreign currency transaction exposure arises primarily from the transfer of foreign currency from one subsidiary to another within the group, and to foreign currency denominated trade receivables. Unrealized currency translation gains and losses are recognized upon translation of the foreign ~~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,~~July 2, 2022, we had no derivatives.

~~ITEM~~Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of ~~1934 (the “Exchange Act”))~~1934) as of ~~December 30, 2017.~~ July 2, 2022. This evaluation excluded the Dodge business acquired on November 1, 2021 as we are currently in the process of integrating the internal controls and procedures of Dodge into our internal controls over financial reporting. As provided under the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations of the SEC, we will include the internal controls and procedures of Dodge in our annual assessment of the effectiveness of internal control over financial reporting for our 2023 fiscal year.

Based on ~~this~~the evaluation performed to evaluate the effectiveness of our disclosure controls and procedures, excluding Dodge, the Company determined that errors were made in its original accounting conclusions related to the timing of when stock-based compensation was recognized for equity awards granted to its Chief Executive Officer and Chief ~~Financial~~Operating Officer ~~have concluded that, as~~based on the terms of ~~December 30, 2017, our disclosure controls~~their employment agreements. The Company determined the errors were the result of a material weakness related to deficiency in internal control over financial reporting regarding the design of its control to consider all relevant terms within executive employment agreements 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~~related application of relevant authoritative accounting guidance for stock-based compensation awards, a non-cash item. Company-wide, there are two employment agreements for executive officers; one for its Chief Executive Officer and one for its Chief ~~Financial Officer within the time periods specified in the rules~~Operating Officer.

The Company acknowledges that its management is responsible for establishing and ~~forms of the U.S. Securities and Exchange Commission, and (2) effective, in that they provide reasonable assurance regarding the reliability of~~maintaining internal control over financial reporting and assessing the ~~preparation~~effectiveness of ~~financial statements~~its internal controls. The Company is committed to maintaining a strong internal control environment and implementing measures to ensure that the control deficiencies identified above are remediated as soon as possible. Management is in the process of implementing its remediation plan, which includes steps to design and implement new controls regarding management’s review of new or modified employment agreements for ~~external purposes in accordance with generally accepted accounting principles.~~key executives. The Company will consider the material weakness remediated after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.

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~~July 2, 2022, other than the material weakness noted above, 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).

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

PART II - OTHER INFORMATION

~~ITEM~~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~~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/A, other than what has been described below, which is also disclosed within the most recent filing of our Form 10-K/A. 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~~10-K/A for the ~~period~~fiscal year ended April ~~1, 2017.~~2, 2022.

New Risk Factor

The Company has identified a material weakness in its internal control over financial reporting. If not remediated, the Company’s failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in its financial statements and a failure to meet its reporting and financial obligations, each of which could have a material adverse effect on the Company’s financial condition and the trading price of its common stock.

Subsequent to the filing of the Original Form 10-K, management identified a material weakness in its internal control over financial reporting related to the design of its control to consider all relevant terms within executive employment agreements and the related application of relevant authoritative accounting guidance for stock-based compensation awards, a non-cash item. Company-wide, there are two employment agreements for executive officers; one for its Chief Executive Officer and one for its Chief Operating Officer . A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As discussed in Item 9A. Controls and Procedures of this Annual Report on Form 10-K/A, the Company’s management has re-evaluated its assessment of the effectiveness of internal control over financial reporting and its disclosure controls and procedures and concluded that they were not effective as of April 2, 2022.

The Company is committed to remediating its material weakness as promptly as possible. Management is in the process of implementing its remediation plan. However, there can be no assurance as to when the material weakness will be remediated or that additional material weaknesses will not arise in the future. If the Company is unable to maintain effective internal control over financial reporting, its ability to record, process and report financial information timely and accurately could be adversely affected, which could subject the Company to litigation or investigations, require management resources, increase costs, negatively affect investor confidence and adversely impact its stock price.

~~ITEM~~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~~July 2, 2022 are as follows:

Period
Total number
of shares
purchased

Average
price paid
per share

Number of
shares
purchased
as part of the
publicly
announced
program

Approximate
dollar value
of shares still
available to be
purchased
under the
program
(000’s)

10/1/2017 – 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)
04/03/2022 – 04/30/2022		54	$	185.24		54	$	79,043
05/01/2022 – 05/28/2022		38		178.23		38		79,036
05/29/2022 – 07/02/2022		30,377		196.42		30,377	$	73,069
Total		30,469	$	196.38		30,469

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

~~ITEM 3.~~

~~Defaults Upon Senior Securities~~

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		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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

SIGNATURES

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

RBC Bearings Incorporated
	(Registrant)

By:	~~(Registrant)~~ /s/ Michael J. Hartnett
	Name:	Michael J. Hartnett
	Title:	Chief Executive Officer
	Date:	August 5, 2022

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~~	August 5, 2022

EXHIBIT INDEX

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

* 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.

iso4217:USD xbrli:shares

Part I -		FINANCIAL INFORMATION	3	1

~~ITEM~~Item 1.	Consolidated Financial Statements	3	1
~~ITEM~~Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16	21
~~ITEM~~Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31	30
~~ITEM~~Item 4.	Controls and Procedures	32	31
	Changes in Internal Control over Financial Reporting	32	31

Part II -		OTHER INFORMATION		32

~~ITEM 1.~~	~~Legal Proceedings~~	32
~~ITEM 1A.~~Item 1.	~~Risk Factors~~Legal Proceedings		32
~~ITEM 2.~~Item 1A.	Risk Factors		32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		32
~~ITEM~~Item 3.	Defaults Upon Senior Securities		33
~~ITEM~~Item 4.	Mine Safety Disclosures		33
~~ITEM~~Item 5.	Other Information		33
~~ITEM~~Item 6.	Exhibits	34	33

	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

	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

	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

	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

			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

	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