Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 29, 2014 |
Accounting Policies [Abstract] | ' |
General | ' |
General |
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The consolidated financial statements include the accounts of RBC Bearings Incorporated, Roller Bearing Company of America, Inc. (“RBCA”) and its wholly-owned subsidiaries, Industrial Tectonics Bearings Corporation (“ITB”), RBC Linear Precision Products, Inc. (“LPP”), RBC Nice Bearings, Inc. (“Nice”), RBC Precision Products - Bremen, Inc. (“Bremen (MBC)”), RBC Precision Products - Plymouth, Inc. (“Plymouth”), RBC Lubron Bearing Systems, Inc. (“Lubron”), Schaublin Holdings S.A. and its wholly-owned subsidiaries (“Schaublin”), RBC de Mexico S DE RL DE CV (“Mexico”), RBC Oklahoma, Inc. (“RBC Oklahoma”), RBC Aircraft Products, Inc. (“API”), Shanghai Representative office of Roller Bearing Company of America, Inc. (“RBC Shanghai”), RBC Southwest Products, Inc. (“SWP”), All Power Manufacturing Co. (“All Power”), RBC Bearings U.K. Limited and its wholly-owned subsidiary Phoenix Bearings Limited (“Phoenix”), RBC CBS Coastal Bearing Services LLC (“CBS”), RBC Aerostructures (“RAS”), Western Precision Aero LLC (“WPA”), Climax Metal Products Company (“CMP”) and RBC Turbine Components LLC (“TCI”), as well as its Transport Dynamics (“TDC”), Heim (“Heim”), Engineered Components (“ECD”), RBC Aerocomponents (“RAC”) and PIC Design (“PIC Design”) divisions of RBCA. U.S. Bearings (“USB”) is a division of SWP and Schaublin USA is a division of Nice. All intercompany balances and transactions have been eliminated in consolidation. |
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The Company has a fiscal year consisting of 52 or 53 weeks, ending on the Saturday closest to March 31. Based on this policy, fiscal years 2014, 2013, and 2012 contained 52 weeks. The amounts are shown in thousands, unless otherwise indicated. |
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Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. The Company has concluded that it was appropriate to classify certain accounts receivables as other current assets. Accordingly, the Company had revised the classification to report these receivables under the prepaid expenses and other current assets caption on the Consolidated Balance Sheet. Corresponding reclassifications have also been made to the Consolidated Statement of Cash Flows to reflect the reclassification and this change in classification does not affect previously reported cash flows from operations, and had no effect on the previously reported Consolidated Statement of Operations for any period. |
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Use of Estimates | ' |
Use of Estimates |
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The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts, valuation of inventories, accrued expenses, depreciation and amortization, income taxes and tax reserves, pension and postretirement obligations and the valuation of options. |
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Cash and Cash Equivalents | ' |
Cash and Cash Equivalents |
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The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains its cash accounts primarily with Bank of America, N.A. The balances are insured by the Federal Deposit Insurance Company up to $250. The Company has not experienced any losses in such accounts. |
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Inventory | ' |
Inventory |
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Inventories are stated at the lower of cost or market value. Cost is principally determined by the first-in, first-out method. The Company accounts for inventory under a full absorption method, and records adjustments to the value of inventory based upon past sales history and forecasted plans to sell our inventories. The physical condition, including age and quality, of the inventories is also considered in establishing its valuation. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions, customer inventory levels or competitive conditions differ from our expectations. |
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Shipping and Handling | ' |
Shipping and Handling |
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The sales price billed to customers includes shipping and handling, which is included in net sales. The costs to the Company for shipping and handling are included in cost of sales. |
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Property, Plant and Equipment | ' |
Property, Plant and Equipment |
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Property, plant and equipment are recorded at cost. Depreciation and amortization of property, plant and equipment, including equipment under capital leases, is provided for by the straight-line method over the estimated useful lives of the respective assets or the lease term, if shorter. Depreciation of assets under capital leases is reported within depreciation and amortization. The cost of equipment under capital leases is equal to the lower of the net present value of the minimum lease payments or the fair market value of the leased equipment at the inception of the lease. Expenditures for normal maintenance and repairs are charged to expense as incurred. |
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The estimated useful lives of the Company's property, plant and equipment follows: |
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Buildings and improvements | 20-30 years | | | | | | | | | | | | |
Machinery and equipment | 3-15 years | | | | | | | | | | | | |
Leasehold improvements | Shorter of the term of lease or estimated useful life | | | | | | | | | | | | |
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Recognition of Revenue and Accounts Receivable and Concentration of Credit Risk | ' |
Recognition of Revenue and Accounts Receivable and Concentration of Credit Risk |
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The Company recognizes revenue only after the following four basic criteria are met: |
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| ⋅ | Persuasive evidence of an arrangement exists; | | | | | | | | | | | |
| ⋅ | Delivery has occurred or services have been rendered; | | | | | | | | | | | |
| ⋅ | The seller's price to the buyer is fixed or determinable; and | | | | | | | | | | | |
| ⋅ | Collectability is reasonably assured. | | | | | | | | | | | |
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Revenue is recognized upon the passage of title, which generally is at the time of shipment, except for certain customers for which it occurs when the products reach their destination. Accounts receivable, net of applicable allowances, is recorded when revenue is recorded. |
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The Company sells to a large number of OEMs and distributors who service the aftermarket. The Company's credit risk associated with accounts receivable is minimized due to its customer base and wide geographic dispersion. The Company performs ongoing credit evaluations of its customers' financial condition and generally does not require collateral or charge interest on outstanding amounts. The Company had no concentrations of credit risk with any one customer greater than 5% and 4% of accounts receivables at March 29, 2014 and March 30, 2013, respectively. |
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Short-Term Investments | ' |
Short-Term Investments |
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Short-term investments include equity and fixed-income securities and are measured at fair value by using quoted prices in active markets and are classified as Level 1 of the valuation hierarchy. |
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Allowance for Doubtful Accounts | ' |
Allowance for Doubtful Accounts |
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The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews the collectability of its receivables on an ongoing basis taking into account a combination of factors. The Company reviews potential problems, such as past due accounts, a bankruptcy filing or deterioration in the customer's financial condition, to ensure the Company is adequately accrued for potential loss. Accounts are considered past due based on when payment was originally due. If a customer's situation changes, such as a bankruptcy or creditworthiness, or there is a change in the current economic climate, the Company may modify its estimate of the allowance for doubtful accounts. The Company will write-off accounts receivable after reasonable collection efforts have been made and the accounts are deemed uncollectible. |
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Goodwill | ' |
Goodwill |
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Goodwill (representing the excess of the amount paid to acquire a company over the estimated fair value of the net assets acquired) is not amortized but instead is tested for impairment annually, or when events or circumstances indicate that its value may have declined. This determination of any goodwill impairment is made at the reporting unit level and consists of two steps. First, the Company determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the goodwill's implied fair value. The fair value of the Company’s reporting units is calculated by comparing the combination of the net present value of future cash flows method (Level 3 inputs) and a market approach method to the reporting units' carrying value. The Company utilizes discount rates determined by management to be similar with the level of risk in its current business model. The Company performs the annual impairment testing during the fourth quarter of each fiscal year and has determined that, to date, no impairment of goodwill exists and fair value of the reporting units exceeded the carrying value substantially. Although no changes are expected, if the actual results of the Company are less favorable than the assumptions the Company makes regarding estimated cash flows, the Company may be required to record an impairment charge in the future. |
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Deferred Financing Costs | ' |
Deferred Financing Costs |
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Deferred financing costs are amortized by the effective interest method over the lives of the related credit agreements. |
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Derivative Financial Instruments | ' |
Derivative Financial Instruments |
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The Company utilizes forward contracts and average rate options to mitigate the impact of currency fluctuations on monetary assets and liabilities denominated in currencies other than the applicable functional currency as well as on forecasted transactions denominated in currencies other than the applicable functional currency. The Company does not engage in other uses of these financial instruments. For a financial instrument to qualify as a hedge, the Company must be exposed to interest rate or price risk, and the financial instrument must reduce the exposure and be designated as a hedge. Financial instruments qualifying for hedge accounting must maintain a high correlation between the hedging instrument and the item being hedged, both at inception and throughout the hedged period. The Company measures the effectiveness of the hedging relationship at the inception of the hedge and quarterly at a minimum. |
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If derivative financial instruments qualify as fair value hedges, the gain or loss on the instrument and the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings during the period of the change in fair values. For derivative financial instruments that qualify as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of a cash flow hedge, if any, is determined based on the dollar-offset method (i.e., the gain or loss on the derivative financial instrument in excess of the cumulative change in the present value of future cash flows of the hedged item) and is recognized in current earnings during the period of change. As long as hedge effectiveness is maintained, interest rate swap arrangements and foreign currency exchange agreements qualify for hedge accounting as cash flow hedges. |
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All derivatives are recorded in the consolidated balance sheets at their fair values. Changes in fair values of derivatives are recorded in each period in comprehensive income, since the derivative is designated and qualifies as a cash flow hedge. As of March 29, 2014, the Company held no derivatives. |
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Income Taxes | ' |
Income Taxes |
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The Company accounts for income taxes using the liability method, which requires it to recognize a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences between the financial statement and tax reporting bases of assets and liabilities to the extent that they are realizable. Deferred tax expense (benefit) results from the net change in deferred tax assets and liabilities during the year. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized. |
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Temporary differences relate primarily to the timing of deductions for depreciation, goodwill amortization relating to the acquisition of operating divisions, basis differences arising from acquisition accounting, pension and retirement benefits, and various accrued and prepaid expenses. Deferred tax assets and liabilities are recorded at the rates expected to be in effect when the temporary differences are expected to reverse. |
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Net Income Per Common Share | ' |
Net Income Per Common Share |
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Basic net income per common share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. |
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Diluted net income per common share is computed by dividing net income by the sum of the weighted-average number of common shares and dilutive common share equivalents then outstanding using the treasury stock method. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options. |
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The table below reflects the calculation of weighted-average shares outstanding for each year presented as well as the computation of basic and diluted net income per common share: |
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| | Fiscal Year Ended | | | | |
| | March 29, | | March 30, | | March 31, | | | | |
2014 | 2013 | 2012 | | | |
Net income | | $ | 60,208 | | $ | 56,342 | | $ | 49,997 | | | | |
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Denominator: | | | | | | | | | | | | | |
Denominator for basic net income per common share—weighted-average shares | | | 22,874,842 | | | 22,401,068 | | | 21,880,554 | | | | |
Effect of dilution due to employee stock options | | | 369,399 | | | 409,725 | | | 510,360 | | | | |
Denominator for diluted net income per common share—adjusted weighted-average shares | | | 23,244,241 | | | 22,810,793 | | | 22,390,914 | | | | |
Basic net income per common share | | $ | 2.63 | | $ | 2.52 | | $ | 2.28 | | | | |
Diluted net income per common share | | $ | 2.59 | | $ | 2.47 | | $ | 2.23 | | | | |
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At March 29, 2014, 193,500 employee stock options and no restricted shares have been excluded from the calculation of diluted earnings per share. At March 30, 2013, 207,700 employee stock options and 300 restricted shares have been excluded from the calculation of diluted earnings per share. At March 31, 2012, 200,900 employee stock options and 700 restricted shares have been excluded from the calculation of diluted earnings per share. The inclusion of these employee stock options and restricted shares would be anti-dilutive. |
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Impairment of Long-Lived Assets | ' |
Impairment of Long-Lived Assets |
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The Company assesses the net realizable value of its long-lived assets and evaluates such assets for impairment whenever indicators of impairment are present. For amortizable long-lived assets to be held and used, if indicators of impairment are present, management determines whether the sum of the estimated undiscounted future cash flows is less than the carrying amount. The amount of asset impairment, if any, is based on the excess of the carrying amount over its fair value, which is estimated based on projected discounted future operating cash flows using a discount rate reflecting the Company's average cost of funds. To date, no indicators of impairment exist other than those resulting in the restructuring charges already recorded. |
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Long-lived assets to be disposed of by sale or other means are reported at the lower of carrying amount or fair value, less costs to sell. |
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Foreign Currency Translation and Transactions | ' |
Foreign Currency Translation and Transactions |
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Assets and liabilities of the Company's foreign operations are translated into U.S. dollars using the exchange rate in effect at the balance sheet date. Results of operations are translated using the average exchange rate prevailing throughout the period. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are included in accumulated other comprehensive income (loss), while gains and losses resulting from foreign currency transactions, which were not material for any of the fiscal years presented, are included in other non-operating expense (income). Net income of the Company's foreign operations for fiscal 2014, 2013 and 2012 amounted to $10,045, $6,099, and $7,778, respectively. Net assets of the Company's foreign operations were $106,553 and $87,624 at March 29, 2014 and March 30, 2013, respectively. |
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Fair Value of Measurements | ' |
Fair Value of Measurements |
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Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are within a hierarchy consisting of three levels. Level 1 inputs represent unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs represent 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 inputs represent 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. |
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The financial assets and liabilities that are measured on a recurring basis in fiscal 2013 and 2012 consist of the Company’s forward contracts and average rate options. The Company has measured the fair value of these forward contracts and average rate options using observable market inputs such as spot and forward rates (as provided by the financial institution with which these instruments has been executed). Based on these inputs, these instruments are classified as Level 2 of the valuation hierarchy. As of March 29, 2014, the Company held no forward contracts or average rate options. |
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The carrying amounts reported in the balance sheet for cash and cash equivalents, short-term investments, accounts receivable, prepaids and other current assets, and accounts payable and accruals, and other current liabilities approximate their fair value due to their short-term nature. |
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The carrying amounts of the Company's borrowings under its JP Morgan Credit Agreement and Swiss Credit Facility approximate fair value, as these obligations have interest rates which vary in conjunction with current market conditions. The carrying value of the mortgage on our Schaublin building approximates fair value as the rates since entering into the mortgage in fiscal 2013 have not changed. |
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Accumulated Other Comprehensive Income (Loss) | ' |
Accumulated Other Comprehensive Income (Loss) |
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The components of comprehensive income (loss) that relate to the Company are net income, foreign currency translation adjustments and pension plan and postretirement benefits, all of which are presented in the consolidated statements of stockholders' equity and comprehensive income (loss). |
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The following summarizes the activity within each component of accumulated other comprehensive income (loss), net of taxes: |
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| | Currency | | Pension and | | Investments | | Total | |
Translation | Postretirement |
| Liability |
Balance at March 30, 2013 | | $ | 4,116 | | $ | -7,714 | | $ | 129 | | $ | -3,469 | |
Other comprehensive income before reclassifications | | | 4,721 | | | 552 | | | 131 | | | 5,404 | |
Amounts reclassified from accumulated other comprehensive income (loss) | | | — | | | 430 | | | — | | | 430 | |
Net current period other comprehensive income | | | 4,721 | | | 982 | | | 131 | | | 5,834 | |
Balance at March 29, 2014 | | $ | 8,837 | | $ | -6,732 | | $ | 260 | | $ | 2,365 | |
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Stock-Based Compensation | ' |
Stock-Based Compensation |
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The Company recognizes compensation cost relating to all share-based payment transactions in the financial statements based upon the grant-date fair value of the instruments issued over the requisite service period. The fair value of each option grant was estimated on the date of grant using the Black-Scholes pricing model. |
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Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements |
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In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, "Income Taxes (Topic 740) - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This ASU requires that companies net their unrecognized tax benefits against all same-jurisdiction net operating losses or tax credits carryforwards that would be used to settle the position with a tax authority. This standard is effective for all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists for fiscal years, and interim periods beginning after December 15, 2013. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. |
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