Good morning, and thank you for joining us for RBC Bearings Fiscal First Quarter 2026 Earnings Call. I'm Josh Carroll with the Investor Relations team. And with me on today's call are Dr. Hartnett, Chairman, President and Chief Executive Officer; Daniel Bergeron, Director, Vice President and Chief Operating Officer; and Rob Sullivan, Vice President and Chief Financial Officer. As a reminder, some of the statements made today may be forward-looking and are under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected or implied due to a variety of factors. We refer you to RBC Bearings' recent filings with the SEC for a more detailed discussion of the risks that could impact the company's future operating results and financial condition. These factors are also listed in the press release, along with the reconciliation between GAAP and non-GAAP financial information. With that, I'll now turn the call over to Dr. Hartnett.

Thank you, Josh, and good morning, and we had a great quarter, and we have some really good news to go through with you today. So thank you all for joining us. I'm going to start today's call, as usual, with a short review of our financial results, and I'll finish with our outlook on the industry and fiscal 26. Rob Sullivan will follow me with more details on the numbers. Our first quarter sales were $436 million, a 7.3% increase over last year, driven by continued strong performance in our Aerospace and Defense segment and solid performance from our industrial businesses. Consolidated gross margin for the quarter was 44.8% versus 45.3% for the same period last year, and adjusted diluted EPS was $2.84 versus $2.54 per share. We are very pleased to see these strong margins and kick off our first quarter in fiscal 26. Free cash flow was another highlight of the period of $104.3 million, setting a new record for RBC, and adjusted EPS was $2.84 per share. Total Aerospace & Defense sales were up 10.4% year-over-year with 9.6% growth on the commercial aerospace side and 11.9% in defense. On the industrial side, the segment grew 5.5% year-over-year with distribution and aftermarket up 10%. In Aerospace & Defense, we continue to see broad strength across the portfolio. The aircraft aftermarket expanded 22.6% and the defense aftermarket contributed well, yielding a total of 10.4% for the segment in the quarter. We celebrate the progress Boeing is making on aircraft production and continue to pray for their continued success. Moving to Industrial. We achieved a 5.5% growth this quarter. Most of our industrial markets contributed to this performance: aggregate, metals and mining, food and beverage, forest products, warehousing, and grain among others. Oil and gas, as well as semiconductor, remain weak. For RBC, the industrial economy felt strong, and the recent 3% U.S. GDP expansion confirmed our impression during the period. Certainly, the tax treatment for capacity investment in the recently signed bill portends well for these sectors in the future quarters, and we expect this to be a very positive influence on demand for our products for the balance of this year and into next. Overall, our backlog for the first time exceeded $1 billion during the period, with $100 million of that being industrial products. Our relentless drive for organic growth through product innovation and market development creates new opportunities that are identified and sorted monthly at our ops meetings. This is often where high potential productive short- and long-term options are identified and prioritized. These can be for markets as diverse as aero engine, space, guided weapons, marine, warehousing, and airframe, to name a few examples. This has become an increasingly important feature of our business plan, adding meaningful revenues year in and year out. A little on defense: Demand for our products remains at unprecedented levels. We expect to see this sector of our business expand in the high single to low double digits for many quarters into the future. We are adding to our capacities where needed to satisfy the expanding requirements of our customers. Our marine business is a primary driver in this regard, but there are many other subordinate drivers in this expansion, such as airframe, aero engine, and aero aftermarket. Clearly, the recent acquisition of VACCO adds fuel to this fire. A little on VACCO: VACCO's marine business, which has historically represented half of their revenues, has similar high demand for their products, driven by the build-out of the U.S. submarine fleet. Their business, like ours, must expand to meet the needs of the Navy. The synergy between RBC and VACCO is strong, adding critical mass in the areas of engineering, manufacturing, contract management, and supply chain. We are only weeks into our ownership of this new business, and I will wait until our next conference call to further elaborate on our plans and potential. I am highly optimistic about our future together with this unusually synergistic business. As we begin Q2 and fiscal 26, the year is shaping up to be a very strong one for RBC. We are well positioned in our markets. We see unprecedented demand in several important areas of the market for our products. We hold a strong balance sheet and have created a well-defined business plan in most of our core businesses with a strong, detailed 5-year outlook that's executable. I will now turn the call over to Rob Sullivan.

Thank you, Mike. As Dr. Hartnett indicated, this was another strong quarter for RBC. Net sales growth of 7.3% drove gross profit growth of 6.1%, with gross margins of 44.8% for the quarter and 45.4% on an adjusted basis versus 45.3% for the same period last year. Our performance during the quarter was driven by a strong performance across our business segments, with industrial gross margins leading the way. Industrial gross margins during the quarter were 46%, and Aerospace & Defense margins were 42.3%. On an adjusted basis, industrial gross margins were 47.1% for the quarter. On the SG&A line, we had total costs of $73.9 million or 16.9% of sales for the quarter. Included in that number were additional personnel and fringe costs as well as continued investment in IT-related costs during the quarter. This ultimately resulted in adjusted EBITDA of $141.5 million or 32.5% for the quarter. That reflects a 5.6% increase in EBITDA dollars year-over-year. Interest expense in the quarter was $12.2 million. This was down 29.1% year-over-year, reflecting the impact of the debt payments made in fiscal 2025, further enhanced by reduced interest rates this quarter compared to this time last year. During the quarter, we only paid off approximately $6 million of debt as we held cash in anticipation of the VACCO deal closing. The tax rate in our adjusted EPS calculation was 22.5%, consistent with last year's 22.4%. Altogether, this led to adjusted diluted EPS of $2.84, representing growth of 11.8% year-over-year, an impressive result given the choppiness in commercial aerospace production schedules and the macroeconomic softness in the industrial economy. Free cash flow in the quarter came in at $104.3 million, with conversion of 152%, which compares to $88.4 million and 144% last year. The higher conversion rate was due to increased earnings and working capital management during the quarter. In July, we drew down $200 million of our revolver to help finance the VACCO acquisition, with the remaining $75 million payment coming from cash on hand. Looking ahead, our capital allocation strategy will remain focused on deleveraging by using the cash that we are generating to pay off that $200 million we drew by the end of the fiscal year. Looking into the second quarter, we're guiding revenues of $445 million to $455 million, representing year-over-year growth of 11.8% to 14.4%. That guidance embeds an operating environment that has been fairly similar to what we have been seeing over the last few quarters, with an additional benefit of owning VACCO for a little more than two months. On the margin side, we are projecting gross margins of 44% to 44.25% for the quarter and SG&A as a percentage of sales to be between 17% and 17.25% for the quarter. Embedded in all of this is an assumption that VACCO will add approximately $15 million to $20 million of revenue to our quarterly results in Q2, with gross margins between 25% and 30%, very similar to Sargent when we closed on that acquisition. Keep in mind, this deal closed in the second half of July, and therefore, this does not reflect a full quarter's worth of sales activity. To wrap it up, this was another strong quarter for RBC, which underscores the momentum we have built and the strength of our strategic execution. As Dr. Hartnett notes, we're well positioned to achieve our objectives and drive growth, driven by our core capabilities in engineering and operational excellence and innovative product development. Our focus will continue to remain on executing our organic growth, integrating VACCO, enhancing operational efficiencies, and delivering robust free cash flow conversion to create long-term value for all of our stakeholders. With that, operator, please open the call for Q&A.

Our first question today is from Kristine Liwag at Morgan Stanley.

So Mike, in your prepared remarks, you kind of talked about a 5-year outlook there. So I was wondering what parts of that could you share with us? How are you thinking about the next 5 years? And what are the key components that you're measuring?

Well, we're going from major business to major business, and we're lining up our historical sales by account and what the outlook for those accounts is. As you know, if it's Boeing or Airbus, or Embraer, or Pratt, or GE, or one of the other big drivers of the aerospace industry, they are all customers of ours, and their business outlook is pretty well defined and within limits, so we use that along with our content and what the expansion of our content would be over that term based on some of the things that we're working on now and expect to convert. We compile that into revenues by account and margins by account and expand it over a course of 5 years, and we do that for basically all of our businesses. Obviously, the big ones get the most attention, and so that leads us to the point of planning on whether we have the right capacity to satisfy the business demands for these customers. So we look at our capitalization in each one of those business units, and where it needs expansion, improvement and where the mix is likely to be the strongest and where our production ability to support that mix may be weak. So it gives us sort of a timeline to build out our thoughts on how to expand those businesses, and we have several businesses that have very positive outlooks over the next 5 years, given where they are positioned in their markets.

I mean it sounds like a pretty positive one. So with the capacity that you have in place and you built out a lot of capacity going into COVID in preparation for these new programs. Does this mean that you have to spend more money on CapEx? And how should we think about the margin if the build rates play out as the OEMs have described or are planning for, what does that ultimately mean for potential margin expansion and revenue growth for your aerospace business?

The Aerospace business is performing positively, and we are currently transporting manufacturing equipment from Europe to some of our plants to rapidly increase capacity, as demand is stronger in certain areas than we expected. Looking at our capital expenditures over this period, our depreciation stands at about 3% to 4% of our revenues, and we plan to maintain that range. We also have some real estate that we will likely sell off and consolidate a few businesses over time, which should help us stay within that 3% to 4% range.

Great. I would like to follow up on the Big Beautiful Bill comment you made. You are essential to U.S. infrastructure development. Considering the opportunities presented in that bill, can you remind us of your position in the cycle with your current portfolio? Will you be at the beginning or in the middle of those builds? How quickly do you expect to see orders come in for your business, and did that contribute to the $100 million backlog for industrial that you mentioned earlier?

Yes. Well, I think a lot of our industrial customers are small. Not all of them are small, but a lot of them are small, and I think the tax treatment in that bill, allowing them to expense their industrial equipment and minimize their tax bill in any given year is very appealing, so we would expect to see significant expansion in demand from those smaller customers, and that's likely how it's going to affect our industrial business the most. I'm not sure on the aircraft and aerospace and defense side. Everybody is a pretty large customer, and they probably don't pay taxes now anyway. So I'm not sure how impactful that bill will be, but we're expecting it to be more favorable on the industrial side than on the aerospace side.

Our next question today is coming from Michael Ciarmoli from Truist Securities.

Nice results as always. Rob, can you provide more details on the modeling for VACCO? Should we expect a similar growth trajectory as other companies in the naval sector, estimating a monthly revenue contribution of around $10 million to $11 million for our models? Does all this revenue fall under the A&D segment, particularly in defense? Regarding margins, based on your midpoint estimate, it appears there could be about 150 basis points of dilution this year. Can you share any additional insights?

It's early days, right? We've really had them under our tent for about 2 weeks now. So I think we'll have a lot more to share on where it's all going to go for the broader year by next quarter. I kind of laid out what I thought the impact is going to be for this coming quarter. But I think, generally speaking, where our margins are running, if you look at our gross margins for Q2 in the range that we provided, it's still exhibiting year-over-year expansion from where we were at this time last year. So it's not overall as meaningfully impactful as a result, and just about any acquisition we were going to put under our tent would have some measure of impact in the short term, but that's our playbook, right? And that's what we've done with Sargent, that's what we've done with Dodge. So that's kind of how we're looking at this thing. I think they're running at a $30 million a quarter run rate on sales over the last 12 months, and that's kind of the barometer that we were using, and so more to come certainly in the future.

Okay. Okay. That's helpful. Yes, I was saying 150 basis points dilution. I was actually looking at my '26 exit rate. Yes, you should still get year-over-year expansion. Are we putting all these revenues in the A&D sector? Or is anything going into industrial, just so we can have models calibrated?

Yes, it's A&D.

Okay. Okay. Helpful. And then maybe separately, Mike, what are you seeing in commercial aerospace? We've seen some different trends, maybe some destocking on the airframe side. Engine continues to be strong. I think your year-over-year growth, I think if I've got it right, in the OE side maybe showed some deceleration with a big pickup in aftermarket, but anything else you can talk to build rates, color, order trends?

Well, I mean, I think the build rates are pretty public news, right? And so our content per build rate is pretty well defined. We do expect to, in a measured way, expand our content on some of these ships over the next 6 to 12 months, and I think that's probably the biggest positive we're seeing right now, and currently, we're negotiating contracts with all of these OEMs on expanding our statement of work and the term of the statement of work over the next 5 years, so the discussions are very positive, so I think it's looking good for us.

Next question is coming from Steve Barger from KeyBanc Capital Markets.

Mike, you talked about some of the impacts from the One Big Beautiful Bill on smaller customers, but we've been hearing a few industrial companies talk a little more positively about the back half and even 2026 before seeing that benefit. So to the extent you can pull stimulus apart from general demand, does it feel like we've turned the corner into a sustainable industrial expansion?

It certainly felt that way in the first quarter. I mean our industrial distribution business in the first quarter was up 10%. That's pretty good for an industrial distribution business to be up 10% in the quarter. So our metrics are telling us that, yes, things are getting stronger. My own metric is the number of tractor trailers on the highways that are between me and my exit seem to be exponentially larger this year than they were last year, and everybody who comes to work complains about the traffic now. To me, that's a very good sign that the economy is really being stimulated.

Yes. Makes sense. Great to see you hit the $1 billion backlog milestone. You said most of that is aerospace and defense. What's the duration of that backlog? Is that multiple years?

It is multiple years, and we think we have a good chance of doubling that over the next 12 months.

Just from all the defense programs primarily? Or does that include commercial? What would drive that?

Mainly defense.

Got it. Okay, and when you talk about doubling that over the next 12 months, would that push the backlog to end of decade? Or how would we think about the monetization schedule of that?

Well, a lot of the center of mass on that is our build-outs of equipment between now and 2030 and 2031. So that's sort of how these contracts are coming together.

Got it. And last one for me. We know you and your team make detailed plans just like how you talked about the 5-year process. I know it's really early in owning VACCO, but can you talk about the first steps of integration? Can you take a shot at margin progression in the coming quarters and years and how you see that playing out just based on your experience from other deals?

Yes. Well, on Sargent: VACCO is kind of Sargent's little brother. For half of their revenues, particularly the marine half, and it's RBC's aerospace little brother for the other half for the space half. So we have it well covered. When we did Sargent, we expanded over time their margins by about 1,000 basis points, right? I'm not sure exactly what the historical time frame was that we did that, but it was probably between when we acquired Sargent in 2015, and the pandemic early 2020. So we think VACCO is going to see a similar ramp, and we're thinking 18 to 24 months just would be a good benchmark. Nothing is hard. Nothing is unknown. As Rumsfeld says, it's all known knowns to us. It's a matter of execution, and we have teams of people on the West Coast sorting through and creating a roadmap. VACCO is in an area where we have over 1,000 people in 7 or 8 plants that are very synergistic to what they do, how they do it, the skill sets they have, and what they have for supply chain. They're very similar businesses. So I think it's going to be much easier to accelerate the improvement of that business than it was for Sargent, and maybe not as easy as Dodge.

Next question is coming from Scott Deuschle from Deutsche Bank.

Dr. Hartnett, does the upgrade of the GTF engine to the GTF Advantage create an opportunity for RBC to potentially increase its share position on the program? Meaning just the changes in the engineering of the engine and the upgrades for certain parts create some openings for you all to come in and increase your content?

Yes, yes, yes and yes, we are going to increase...

Any more specifics or...

I hesitate to talk more about it, but we're going to increase our content substantially on that engine.

Okay. And do you have a sense for when that begins to ramp up for you all? Do you see it a little bit in the second half of this year and more 2026 in terms of when we see those gains?

I think it's going to start slowly in calendar 26 and ramp through 2030.

Okay. And then Dr. Hartnett, it sounds like we'll hear more on VACCO in the future, but can you maybe just spend a few moments with respect to the revenue synergy strategy with VACCO, particularly as it relates to space?

Yes. I think the space business is probably the hardest part for us to sort through. RBC has a pretty good business in space with a completely different customer base than VACCO has with completely different products. VACCO has a nice core space business and some business in space that needs to be rethought, and so we're working our way through that. Net-net, some of the VACCO customers have always been target customers for RBC on the space side, so we're going to have good introductions there. We'll be able to ride VACCO's coattails into those customers. Conversely, VACCO can ride RBC's coattails into customers in the space business that they don't have. I think that's the benefit right now, and I think VACCO's engineering strength in what they do is unique and has limited design engineering test skills available at that level in the country, and they have unique talents and tools that we hope to employ for RBC's space business benefit.

That's great. And last question, if I can. Just on the aerospace and defense ramp, do you foresee any supply chain constraints on your end over the next few years, particularly as it relates to your ability to obtain sufficient volumes of specialty alloys? Or do you already have firm delivery commitment growth lined up with suppliers of those alloys?

Well, I think on the supply chain side, non-alloy, I think we're fine. Where VACCO is on the supply chain side is something that we're trying to sort through, but we have so much production capacity ourselves in L.A. that I don't think it's going to be a big issue. We are very vertically integrated from the time we receive the material. Now receiving the material is another issue. There are some materials that are not a problem, and some are semi-exotic, and we use them in good quantities. They are a little bit on the commodity side regarding the ability to procure them, so that's all fine. On some of the more exotics, we've been tested for years on how to secure and procure some of these exotic materials and have actually bought extensive inventories of the exotics to protect our production base. Those materials were at one point impossible to get, but that seems to have improved, and it's more normalized now. However, you still cannot get some of this stuff for 60 weeks, so your planning cycle needs to be way out there in order to make sure that your customer deliveries aren't affected by someone who can't get your material. So that's a little bit of a challenge, but on an 80-20 basis, it's definitely in the 20 category, not the 80 category.

Next question is coming from Peter Skibitski from Alembic Global.

Nice quarter. Mike, I want to circle back to industrial one more time. Just PMIs have stayed below 50, but revenues really kind of accelerated here in the last couple of quarters. You mentioned GDP and the tax changes. We are a month here into the second quarter. Do you have some degree of confidence that industrial is now kind of a mid-single-digit grower versus maybe more tepid growth, the way we're thinking about it 6 months ago?

I think it's sector dependent. You look at certain sectors, and it's off, but our major sectors have performed very well year-to-year, so I guess if I'm in Texas, I'm not feeling great about life in the oil patch. On the other hand, if I'm doing grain or aggregate in various parts of the country, I'm doing fine. Forest products seem to be doing great. Food and beverage seems to be doing great. The consumable side of the world is okay. The larger OEM side of the world is definitely slow. We haven't seen the turn at the larger OEMs, but on the consumable side, it's definitely turned.

Okay. So maybe we shouldn't get too carried away with our assumptions there yet?

Well, I think the impact of this bill is yet to be seen. It's only a few weeks old, right? I think that's going to have a real positive effect. Will farmers buy more combines because they can expense them in a given year? Some might. It might help people like Deere.

In the first quarter and maybe quarter-to-date in the second quarter, have you seen any impacts at all, positive or negative from tariffs?

We are very focused on the U.S. market, and our production and sales are largely determined by domestic factors. However, we do feel the effects of tariffs. To mitigate the impact on our profit and loss, we have adjusted our prices or made changes to our contracts and supply agreements as necessary. Some customers acknowledge the tariff and accept that it's their responsibility as importers, so they pass it on without issue. Others are more resistant, and we aim to cooperate with them as best as we can. The outcome of these discussions is uncertain, and for some customers, we have simply adjusted the pricing.

Next question is coming from Jordan Lyonnais from Bank of America.

On Aero, just given that it looks like production is stabilizing, how should we think about contract renewals that you guys have coming up and pricing power going forward?

I think we've developed a strong reputation with our customers, and it was really done through execution, which starts with quality and our on-time delivery. We're thrilled with what the news has demonstrated in terms of the production rates and stabilization in some of the large OEMs. I think it's more just the reputation we've earned through our performance over the years that gives us the ability to successfully develop the long-term agreements we've been able to create in the past and the ones we're looking forward to in the future in '26.

We reached the end of our question-and-answer session. I'd like to turn the floor back over to Dr. Hartnett for any further or closing comments.

Okay. Well, I think that concludes our conference call for the day. I appreciate everybody's questions and participation and look forward to talking to you again, I guess it's mid-fall. Good day.

Thank you. That does conclude today's teleconference. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.