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What changed in RBC Bearings INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of RBC Bearings INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+170 added−134 removedSource: 10-K (2022-05-26) vs 10-K (2021-05-21)

Top changes in RBC Bearings INC's 2023 10-K

170 paragraphs added · 134 removed · 118 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

55 edited+15 added−5 removed32 unchanged
Biggest changeThe following table provides a summary of our four reportable product segments: Plain Bearings; Roller Bearings; Ball Bearings; and Engineered Products: Net Sales and Percent of Sales for the Fiscal Year Ended Segment April 3, 2021 March 28, 2020 March 30, 2019 Representative Applications Plain Bearings $ 293,990 $ 358,291 $ 323,251 ● Aircraft engine controls and landing gear 48.3 % 49.3 % 46.0 % ● Missile launchers ● Mining, energy, construction and wind equipment Roller Bearings $ 91,657 $ 132,642 $ 143,832 ● Aircraft hydraulics 15.1 % 18.2 % 20.5 % ● Military and commercial truck chassis ● Packaging machinery and canning Ball Bearings $ 83,704 $ 74,231 $ 72,307 ● Radar and night vision systems 13.7 % 10.2 % 10.3 % ● Airframe control and actuation ● Semiconductor equipment Engineered Products $ 139,633 $ 162,297 $ 163,126 ● Hydraulics, valves, fasteners and engines 22.9 % 22.3 % 23.2 % ● Industrial gears, components and collets Plain Bearings.
Biggest changeThe following table provides a summary of our two reportable business segments: Net Sales and Percent of Sales for the Fiscal Year Ended (Dollars in millions) Segment April 2, 2022 April 3, 2021 March 28, 2020 Representative Applications Industrial $ 561.4 60 % $ 212.8 35 % $ 220.1 30 % ● Mining, energy, construction, wind equipment and material handling ● Packaging and canning machinery ● Semiconductor equipment ● Hydraulics, valves and fasteners ● Industrial gears, components and collets Aerospace/Defense $ 381.5 40 % $ 396.2 65 % $ 507.4 70 % ● Airframe control and actuation ● Aircraft engine controls and landing gear ● Missile launchers ● Aircraft hydraulics ● Radar and night vision systems ● Space applications Products Bearings, gearing and engineered components are employed to perform several functions including reduction of friction, transfer of motion, carriage of loads, and control of pressure and flows.
We believe that current capacity levels and future annual estimated capital expenditures on equipment up to approximately 3.0% to 3.5% of net sales should permit us to effectively meet demand levels for the foreseeable future. Inventory Management. We operate an inventory management program designed to balance customer delivery requirements with economically optimal inventory levels.
We believe that current capacity levels and future annual estimated capital expenditures on equipment up to approximately 2.5% to 3.0% of net sales should permit us to effectively meet demand levels for the foreseeable future. Inventory Management. We operate an inventory management program designed to balance customer delivery requirements with economically optimal inventory levels.
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. 2 Roller Bearings. Roller bearings are anti-friction products that utilize cylindrical rolling elements. We produce three main designs: tapered roller bearings, needle roller bearings and needle bearing track rollers and cam followers.
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. Roller Bearings. Roller bearings are anti-friction products that utilize cylindrical rolling elements. We produce three main designs: tapered roller bearings, needle roller bearings and needle bearing track rollers and cam followers.
Competition Our principal competitors include SKF, New Hampshire Ball Bearings, Rexnord, Precision Castparts and Timken, although we compete with different companies for each of our product lines. We believe that for the majority of our products, the principal competitive factors affecting our business are product qualifications, product line breadth, service, quality and price.
Competition Our principal competitors include SKF, New Hampshire Ball Bearings, Regal Rexnord, Precision Castparts and Timken, although we compete with different companies for each of our product lines. We believe that for the majority of our products, the principal competitive factors affecting our business are product qualifications, product line breadth, service, quality and price.
Needle bearing track rollers and cam followers have wide and diversified use in the industrial market and are often prescribed as a primary component in articulated aircraft wings. Ball Bearings. Ball bearings are devices that utilize high precision ball elements to reduce friction in high speed applications.
Needle bearing track rollers and cam followers have wide and diversified use in the industrial market and are often prescribed as a primary component in articulated aircraft wings. 3 Ball Bearings. Ball bearings are devices that utilize high precision ball elements to reduce friction in high-speed applications.
Custom and standard products are produced according to manufacturing schedules that ensure maximum availability of popular items for immediate sale while carefully considering the economies of lot production and special products. Capital programs and manufacturing methods development are focused on quality improvement, production costs and service.
Custom and standard products are produced according to manufacturing schedules that ensure maximum availability of popular items for immediate sale while carefully considering the economies of lot production and special products. Capital programs and manufacturing methods development are focused on quality improvement, production costs, safety and service.
A monthly review of product line production performance assures an environment of continuous attainment of profitability and quality goals. 3 Capacity. Our plants currently run on a full first shift with second and third shifts at select locations to meet the demands of our customers.
A monthly review of product line production performance assures an environment of continuous attainment of profitability and quality goals. Capacity. Our plants currently run on a full first shift with second and third shifts at select locations to meet the demands of our customers.
A bearing or engineered product design must perform reliably for the period of time required by the customer’s product objectives. Once a bearing or engineered product is designed, a mathematical simulation is created to replicate the expected application environment and thereby allow optimization with respect to these design variables.
A bearing or engineered component design must perform reliably for the period of time required by the customer’s product objectives. Once a bearing or engineered component is designed, a mathematical simulation is created to replicate the expected application environment and thereby allow optimization with respect to these design variables.
This position provides many of our industrial and aerospace customers with a single manufacturer to provide the engineering service and product breadth needed to achieve a series of OEM design objectives and/or aftermarket requirements. This enhances our value to the OEM considerably while strengthening our overall market position. 4 Service.
This position provides many of our industrial and aerospace customers with a single manufacturer to provide the engineering service and product breadth needed to achieve a series of OEM design objectives and/or aftermarket requirements. This enhances our value to the OEM considerably while strengthening our overall market position. Service.
Many of the products we produce are qualified for the application by the OEM, the DOD, the FAA or a combination of these. These credentials have been achieved for thousands of distinct items after years of design, testing and improvement.
Many of the products we produce are qualified for the application by the OEM, the DOD, the FAA, the user or a combination of these. These credentials have been achieved for thousands of distinct items after years of design, testing and improvement.
These programs provide our employees with a uniform foundation regarding how we do business, expand their subject matter expertise, and develop the various leadership positions across our organization, including plant management and general management. We also offer a tuition reimbursement program for many employees wishing to further their classroom education in their chosen field. 5 Ethics.
These programs provide our employees with a uniform foundation regarding how we do business, expand their subject matter expertise, and develop the various leadership positions across our organization, including plant management and general management. We also offer a tuition reimbursement program for many employees wishing to further their classroom education in their chosen field. 7 Ethics.
Our bearings and engineered products are manufactured to conform to U.S. military specifications and are typically custom-designed during the original product design phase, which often makes us the sole or primary supplier for the life of that product. Product approval for use on military equipment is often a lengthy process ranging from six months to six years.
Our bearings and engineered components are manufactured to conform to U.S. military specifications and are typically custom-designed during the original product design phase, which often makes us the sole or primary supplier for the life of that product. Product approval for use on military equipment is often a lengthy process ranging from six months to six years.
Product design, performance, reliability, availability, quality, and technical and administrative support are elements that define the service standard for this business. Our customers are sophisticated and demanding, as our products are fundamental and enabling components to the construction or operation of their machinery. We maintain inventory levels of our most popular items for immediate sale and service.
Product design, performance, reliability, availability, quality, and technical and administrative support are elements that define the service standard for this business. Our customers are sophisticated and demanding, as our products are fundamental and enabling components to the manufacturing or operation of their machinery. We maintain inventory levels of our most popular items for immediate sale and service.
We believe that the diversification of our sales among the various segments of the industrial market reduces our exposure to downturns in any individual segment. We believe opportunities exist for growth and margin improvement in this market as a result of the introduction of new products, the expansion of aftermarket sales, and continued manufacturing process improvements.
We believe that the diversification of our sales among the various segments of the industrial markets and channels reduces our exposure to downturns in any individual segment. We believe opportunities exist for growth and margin improvement in this market as a result of the introduction of new products, the expansion of aftermarket sales, and continued manufacturing process improvements.
We currently have a significant number of such approvals, which often gives us a competitive advantage, and in many of these instances we are the only approved supplier of a given bearing or engineered product . Manufacturing and Operations Our manufacturing strategies are focused on product reliability, quality and service.
We currently have a significant number of such approvals, which often gives us a competitive advantage, and in many of these instances we are the only approved supplier of a given bearing or engineered component . Manufacturing and Operations Our manufacturing strategies are focused on product reliability, quality, safety and service.
Many of our aerospace bearings and engineered component products are designed and certified during the original development of the aircraft being served, which often makes us the primary bearing supplier for the life of that aircraft. 1 We manufacture bearings and engineered products used by the U.S.
Many of our aerospace bearings and engineered component products are designed and certified during the original development of the aircraft being served, which often makes us the primary bearing supplier for the life of that aircraft. We manufacture bearings and engineered components used by the U.S.
Workplace Safety. Safety is of paramount importance to RBC and so we go to great lengths in striving for a zero-incident workplace that is consistent with our mandate to produce the highest quality, highly engineered products for our customers.
Workplace Safety. Safety is of paramount importance to RBC and so we go to great lengths in striving for a zero-incident workplace that is consistent with our mandate to produce the highest quality, highly engineered components for our customers.
Several of our products are protected by patents, and we believe that in many cases we have strong brand identity or we are the sole source for products for a particular application. Product Line Breadth. Our products encompass a broad range of designs which often create a critical mass of complementary bearings and engineered products for our markets.
Several of our products are protected by patents, and we believe that in many cases we have strong brand identity or we are the sole source for products for a particular application. Product Line Breadth. Our products encompass a broad range of designs which often create a critical mass of complementary bearings, essential systems and engineered components for our markets.
Airframe control ball bearings are precision ball bearings that are plated to resist corrosion and are qualified under a military specification. Thin section ball bearings are specialized bearings that use extremely thin cross sections and give specialized machinery manufacturers many advantages. We produce a general line of industrial ball bearings sold primarily to the aftermarket. Engineered Products.
Airframe control ball bearings are precision ball bearings that are plated to resist corrosion and are qualified under a military specification. Thin section ball bearings are specialized bearings that use extremely thin cross sections and give specialized machinery manufacturers many advantages. We produce a general line of industrial ball bearings sold primarily to the aftermarket. Mounted Bearings .
We do not anticipate material capital expenditures for environmental compliance in fiscal year 2022. 6 Available Information We file our annual, quarterly and current reports, proxy statements, and other documents with the Securities Exchange Commission (“SEC”) under the Securities Exchange Act of 1934.
We do not anticipate material capital expenditures for environmental compliance in fiscal year 2023. 8 Available Information We file our annual, quarterly and current reports, proxy statements, and other documents with the Securities Exchange Commission (“SEC”) under the Securities Exchange Act of 1934.
For the majority of our products, the culmination of this lengthy process is the receipt of a product approval or certification, generally obtained from either the OEM, the DOD or the Federal Aviation Administration (“FAA”), which allows us to supply the product to the OEM customer and to the aftermarket.
For many of our Aerospace/Defense products, the culmination of this lengthy process is the receipt of a product approval or certification, generally obtained from either the OEM, the DOD or the Federal Aviation Administration (“FAA”), which allows us to supply the product to the OEM customer and to the aftermarket.
In the aerospace market, new aircraft build rates along with carrier traffic volume worldwide determines demand for our solutions. Lastly, activity in the defense market is being influenced by modernization programs necessitating spending on new equipment, as well as continued utilization of deployed equipment supporting aftermarket demand for replacement bearings and engineered products.
In the aerospace market, new aircraft build rates along with carrier traffic volume worldwide determines demand for our solutions. Activity in the defense market is influenced by modernization programs necessitating spending on new equipment, as well as continued utilization of deployed equipment supporting aftermarket demand for replacement bearings, gearing and engineered components.
Customers and Markets We serve a broad range of end markets where we can add value with our specialty precision bearings and engineered products, components, and applications. We classify our customers into two principal categories: industrial and aerospace. These principal end markets utilize a large number of both commercial and specialized bearings and engineered products.
Customers and Markets We serve a broad range of end markets where we can add value with our specialty precision bearings, essential systems and engineered components. We classify our customers into two principal categories: industrial and aerospace/defense. These principal end markets utilize a large number of both commercial and specialized bearings, gearings and engineered components.
Demand for bearings and precision components in the diversified industrial market is influenced by growth factors in industrial machinery and equipment shipments, and construction, mining, energy, marine and general industrial activity. In addition, usage of existing machinery will impact aftermarket demand for replacement products.
Demand for bearings, gearing and precision components in the diversified industrial market is influenced by growth factors in industrial machinery and equipment shipments, and construction, mining, energy, marine, food and beverage, packaging and canning, semiconductor, and general industrial activity. In addition, usage of existing machinery will impact aftermarket demand for replacement products.
In fiscal 2021, approximately 5.8% of our net sales were made directly, and we estimate that approximately an additional 25.5% of our net sales were made indirectly, to the U.S. government. The contracts or subcontracts for these sales may be subject to renegotiation of profit or termination at the election of the U.S. government.
In fiscal 2022, approximately 2% of our net sales were made directly, and we estimate that approximately an additional 16% of our net sales were made indirectly, to the U.S. government. The contracts or subcontracts for these sales may be subject to renegotiation of profit or termination at the election of the U.S. government.
We store product inventory in warehouses located in the Midwest, Southwest and on the East and West coasts of the U.S. as well as in France and Switzerland. The inventory is located in these locations based on analysis of customer demand to provide superior service and product availability.
We store product inventory in warehouses located in the Midwest, Southwest and on the East and West coasts of the U.S. as well as in Australia, Canada, France, India, Mexico, the People’s Republic of China and Switzerland. The inventory is located in these locations based on analysis of customer demand to provide superior service and product availability.
Our products target market applications in which our engineering and manufacturing capabilities provide us with a competitive advantage in the marketplace. Our largest industrial customers include Caterpillar, LM Wind, Newport News Shipbuilding, Komatsu and various aftermarket distributors including Applied Industrial, BDI, Kaman, McMaster Carr, and Motion Industries.
Our products target market applications in which our engineering and manufacturing capabilities provide us with a competitive advantage in the marketplace. Our largest industrial customers include Caterpillar, Komatsu and Kurt Manufacturing and various aftermarket distributors including Motion Industries, Applied Industrial, BDI, Kaman and Purvis Industries.
Plain bearings are primarily used to rectify inevitable misalignments in various mechanical components, such as aircraft controls, helicopter rotors, or heavy mining and construction equipment. Such misalignments are either due to machining inaccuracies or result when components change position relative to each other.
We design, manufacture and market a broad portfolio of bearings, gearing and engineered components. Plain Bearings. Plain bearings are primarily used to rectify inevitable misalignments in various mechanical components, such as aircraft controls, helicopter rotors, or heavy mining and construction equipment. Such misalignments are either due to machining inaccuracies or result when components change position relative to each other.
Based on experience, we believe that no material renegotiations or refunds will be required. See Part I, Item 1A. “Risk Factors – Future reductions or changes in U.S. government spending could negatively affect our business” of this Annual Report on Form 10-K.
Based on experience, we believe that no material renegotiations or refunds will be required. See Part I, Item 1A. “Risk Factors – Future reductions or changes in U.S. government spending could negatively affect our business” of this Annual Report on Form 10-K. 2 Our two reportable business segments are aligned with the end-markets for our products.
Aerospace Market (58% of net sales for the fiscal year ended April 3, 2021) We supply bearings and engineered products for use in commercial, private and military aircraft and aircraft engines, guided weaponry, space and satellites and vision and optical systems.
Aerospace/Defense Market (40% of net sales for the fiscal year ended April 2, 2022) We supply bearings and engineered components for use in commercial, private and military aircraft and aircraft engines, guided weaponry, space and satellites and vision and optical systems, and military marine and ground applications.
We purchase steel at market prices, which fluctuate as a result of supply and demand driven by economic conditions in the marketplace. For further discussion of the possible effects of changes in the cost of raw materials on our business, see Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K.
Our suppliers and sources of raw materials are based in the U.S., Europe and Asia. We purchase steel at market prices, which fluctuate as a result of supply and demand driven by economic conditions in the marketplace. For further discussion of the possible effects of changes in the cost of raw materials on our business, see Part I, Item 1A.
We also sell our products through a well-established, global network of industrial and aerospace distributors. This channel primarily provides our products to smaller OEM customers and the end users of bearings and engineered products that require local inventory and service. We intend to continue to focus on building distributor sales volume.
This channel primarily provides our products to smaller OEM customers, aftermarket customers and the end users of bearings and engineered components that require local inventory and service. We intend to continue to focus on building distributor sales volume.
We believe our products are priced competitively in the markets we serve and we continually evaluate our manufacturing and other operations to maximize efficiencies in order to maintain competitive prices while maximizing our profit margins. We invest considerable effort to develop our price to value algorithms and we price to market levels where required by competitive pressures.
We believe our products are priced competitively in the markets we serve and we continually evaluate our manufacturing and other operations to maximize efficiencies in order to maintain competitive prices while maximizing our profit margins.
Often, at the early stage, a bearing or engineered product design is produced that addresses the expected demands of the application including load, stress, heat, thermal gradients, vibration, lubricant supply, pressure and flows, and corrosion resistance, with one or two of these environmental constraints being predominant in the design consideration.
A typical process for a major OEM project begins when our design engineers meet with the customer at the machine design conceptualization stage and work with them through the conclusion of the product development. 4 Often, at the early stage, a bearing or engineered component design is produced that addresses the expected demands of the application including load, stress, heat, thermal gradients, vibration, lubricant supply, pressure and flows, and corrosion resistance, with one or two of these environmental constraints being predominant in the design consideration.
We operate through operating segments for which separate financial information is available, and for which operating results are evaluated regularly by our chief operating decision maker in determining resource allocation and assessing performance.
Operating results for the segments are evaluated regularly by our chief operating decision maker in determining resource allocation and assessing performance.
In addition, participation in our long-term equity incentive plan goes very deep in our organization, providing employees with equity compensation/awards that they might not receive if they worked for one of our competitors. Training. An important part of achieving our human capital objective is our in-house training programs – RBC University, Materials University, and Mechanical Engineering Training.
In addition, participation in our long-term equity incentive plan goes very deep in our organization, providing employees with equity compensation/awards that they might not receive if they worked for one of our competitors. Training.
We believe our unique expertise has enabled us to garner leading positions in many of the product markets in which we primarily compete. Over the past several years, we have broadened our end markets, products, customer base and geographic reach. We currently have 43 facilities in seven countries, of which 31 are manufacturing facilities.
We believe our expertise has enabled us to garner leading positions in many of the product markets in which we primarily compete. With 56 facilities in 10 countries, of which 37 are manufacturing facilities, we have been able to significantly broaden our end markets, products, customer base and geographic reach.
Although we provide a relatively small percentage of total bearing and engineered products supplied to each of our principal markets, we believe we have leading market positions in many of the specialized product markets in which we primarily compete. Financial information regarding geographic areas is set forth in Part II, Item 8.
Although we provide a relatively small percentage of total bearings, gearings and engineered components supplied to each of our principal markets, we believe we have leading market positions in many of the specialized product markets in which we primarily compete.
Backlog As of April 3, 2021, we had order backlog of $394.8 million compared to a backlog of $478.6 million in the prior fiscal year. Orders included in our backlog are subject to cancellation, delay or modifications by our customers prior to fulfillment.
“Risk Factors” of this Annual Report on Form 10-K. Backlog As of April 2, 2022, we had order backlog of $603.1 million compared to a backlog of $394.8 million in the prior fiscal year. Orders included in our backlog are subject to cancellation, delay or modifications by our customers prior to fulfillment.
Although we are not presently aware of any pending legal or regulatory changes that may have a material impact on us, new laws, regulations or standards or changes to existing laws, regulations or standards could subject us to significant additional costs of compliance or liabilities, and could result in material reductions to our results of operations, cash flow or revenues.
New laws, regulations or standards or changes to existing laws, regulations or standards could subject us to significant additional costs of compliance or liabilities, and could result in material reductions to our results of operations, cash flow or revenues.
As part of the nation’s critical infrastructure sectors (defense industrial base sector and critical manufacturing sector) RBC has been required to operate our manufacturing facilities during the COVID-19 pandemic using a mostly in-person workforce.
As part of the nation’s critical infrastructure sectors (defense industrial base sector and critical manufacturing sector) RBC was required to operate our manufacturing facilities during the COVID-19 pandemic using a mostly in-person workforce. We implemented strict cleaning, social distancing, quarantining and other safety measures to minimize the risk to our employees of contracting COVID-19 at work.
BUSINESS RBC Bearings Incorporated RBC Bearings Incorporated, together with its subsidiaries, is an international manufacturer and marketer of highly engineered precision bearings and products, which are integral to the manufacture and operation of most machines, aircraft and mechanical systems, to reduce wear to moving parts, facilitate proper power transmission, reduce damage and energy loss caused by friction, and control pressure and flow.
Our precision solutions are integral to the manufacture and operation of most machines and mechanical systems, to reduce wear to moving parts, facilitate proper power transmission, reduce damage and energy loss caused by friction, and control pressure and flow.
Our human capital objective is to attract and retain high-performing people who can work in a culture that fosters innovation and continuous improvement. To achieve that objective, we maintain an aggressive talent recruitment program, a fair and competitive compensation program, an on-going training and development program, and an ethical and safe work environment. Talent Recruitment.
To achieve that objective, we maintain an aggressive talent recruitment program, a fair and competitive compensation program, an on-going training and development program, and an ethical and safe work environment. Talent Recruitment.
To affect this strategy, we seek to expand into geographic areas not previously served by us and we continue to capitalize on new markets and industries for existing and new products. We employ a technically proficient sales force and utilize marketing managers, product managers, customer service representatives and product application engineers in our selling efforts.
To affect this strategy, we seek to expand into geographic areas not previously served by us and we continue to capitalize on new markets and industries for existing and new products.
Our sales professionals are highly experienced engineers who collaborate with our customers to develop bearing and engineered product solutions. The product development cycle can follow many paths, which are dependent on the end market or sales channel. The process normally takes between three and six years from concept to sale depending upon the application and the market.
Product Design and Development We produce specialized bearings and engineered components that are often tailored to the specifications of a customer or application. Our sales professionals are highly experienced engineers who collaborate with our customers to develop bearing and engineered component solutions. The product development cycle can follow many paths, which are dependent on the end market or sales channel.
Industrial Market (42% of net sales for the fiscal year ended April 3, 2021) We manufacture bearings and engineered products for a wide range of diversified industrial markets, including construction and mining, oil and natural resource extraction, heavy truck, marine, rail and train, packaging, semiconductor machinery, wind, canning and the general industrial markets.
Financial information regarding geographic areas is set forth in Part II, Item 8, Note 18 of this Annual Report on Form 10-K. 1 Industrial Market (60% of net sales for the fiscal year ended April 2, 2022) We manufacture bearings, gearing and engineered components for a wide range of diversified industrial markets, including construction and mining, oil and natural resource extraction, heavy truck, marine, rail and train, food and beverage, packaging and canning, semiconductor machinery, wind, and the general industrial markets.
The Bearing and Engineered Products Industry The bearing and engineered products industry is a fragmented multi-billion dollar market. Purchasers of bearings and engineered products include producers of commercial and military aircraft, submarine and vehicle equipment, energy equipment, machinery manufacturers, industrial equipment and machinery manufacturers, construction machinery manufacturers, rail and train equipment manufacturers, and mining and specialized equipment manufacturers.
Purchasers of bearings, gearings and engineered components include producers of commercial and military aircraft, submarine and vehicle equipment, energy equipment, machinery manufacturers, industrial equipment and machinery manufacturers, construction machinery manufacturers, rail and train equipment manufacturers, packaging and canning machinery manufacturers, agriculture and mining equipment manufacturers, and specialized equipment manufacturers, as well as distributors who service the aftermarket for these products.
Machine tool collets are cone-shaped metal sleeves used for holding circular or rod-like pieces in a lathe or other machine that provide effective part holding and accurate part location during machining operations. Product Design and Development We produce specialized bearings and engineered products that are often tailored to the specifications of a customer or application.
Precision mechanical components are used in all general industrial applications where some form of movement is required. Machine tool collets are cone-shaped metal sleeves used for holding circular or rod-like pieces in a lathe or other machine that provide effective part holding and accurate part location during machining operations.
Our largest aerospace customers include the U.S. Department of Defense, Airbus, Boeing, Precision Castparts, Lockheed Martin, Safran, Raytheon Technologies Corp and various aftermarket distributors including National Precision Bearing, Jamaica Bearings, Wencor, and Wesco Aircraft. We believe our strong relationships with OEMs help drive our aftermarket sales since a portion of OEM sales are ultimately intended for use as replacement parts.
Our largest aerospace and defense customers include the U.S. Department of Defense, Boeing, Airbus, Newport News Shipbuilding, Lockheed Martin, Northrop Grumman, Raytheon and various aftermarket distributors including National Precision Bearing, Jamaica Bearings, Wencor, and Wesco Aircraft.
Human Capital RBC employs 2,990 people at our 31 U.S. facilities, approximately 5% of which are exempt and 95% are non-exempt. In addition, we employ 895 people at our 12 facilities located in Mexico, France, Switzerland, Germany, Poland and China. Nearly all of our personnel are RBC employees rather than independent contractors, temporaries or third-party labor provider personnel.
Human Capital RBC employs 3,549 people at our 37 U.S. facilities, approximately 4% of which are exempt and 96% are non-exempt. In addition, we employ 1,343 people at our 19 facilities located in Canada, Mexico, France, Switzerland, Germany, Poland, India, Australia and China.
Suppliers and Raw Materials We obtain raw materials, component parts and supplies from a variety of sources and generally from more than one supplier. Our principal raw material is steel. Our suppliers and sources of raw materials are based in the U.S., Europe and Asia.
We invest considerable effort to develop our price-to-value algorithms and we price to market levels where required by competitive pressures. 6 Suppliers and Raw Materials We obtain raw materials, component parts and supplies from a variety of sources and generally from more than one supplier. Our principal raw materials are steel and cast iron.
Today, our direct sales force is located to service North America, Europe, Asia and Latin America and is responsible for selling all of our products. This selling model leverages our relationship with key customers and provides opportunities to market multiple product lines to both established and potential customers.
This selling model leverages our relationship with key customers and provides opportunities to market multiple product lines to both established and potential customers. We also sell our products through a well-established, global network of industrial and aerospace distributors.
We have developed our sales force through the hiring of sales personnel with prior industry experience, complemented by an in-house training program. We intend to continue to hire and develop expert sales professionals and strategically locate them to implement our expansion strategy.
We employ a technically proficient sales force and utilize marketing managers, product managers, customer service representatives and product application engineers in our selling efforts. 5 We have developed our sales force through the hiring of sales personnel with prior industry experience, complemented by an in-house training program.
Engineered products consist primarily of highly engineered hydraulics and valves, fasteners, precision mechanical components and machine tool collets. Engineered hydraulics and valves are used in aircraft and submarine applications and aerospace and defense aftermarket services. Precision mechanical components are used in all general industrial applications where some form of movement is required.
Applications include unit and bulk material handling, industrial air handling, large rotor fans, food processing, roll-out tables, and forest pulp and paper processing equipment. Engineered Components. Engineered components include highly engineered hydraulics and valves, fasteners, precision mechanical components and machine tool collets. Engineered hydraulics and valves are used in aircraft and submarine applications and aerospace and defense aftermarket services.
The terms “we,” “us,” “our,” “RBC” and the “Company” mean RBC Bearings Incorporated and its subsidiaries, unless the context indicates another meaning. While we manufacture products in all major categories, we focus primarily on highly technical or regulated bearing products and engineered products for specialized markets that require sophisticated design, testing and manufacturing capabilities.
The terms “we,” “us,” “our,” “RBC” and the “Company” mean RBC Bearings Incorporated and its subsidiaries, unless the context indicates another meaning.
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“Financial Statements and Supplementary Data,” Note 19 – “Reportable Segments” of this Annual Report on Form 10-K.
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ITEM 1. BUSINESS RBC Bearings Incorporated RBC Bearings Incorporated, together with its subsidiaries, is an international manufacturer and marketer of highly engineered precision bearings, components and essential systems for the industrial, defense and aerospace industries.
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Products Bearings and engineered products are employed to perform several functions including reduction of friction, transfer of motion, carriage of loads, and control of pressure and flows. We design, manufacture and market a broad portfolio of bearings and engineered products.
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While we manufacture products in all major categories, we focus primarily on the higher end of the bearing, gearing and engineered component markets where we believe our value-added engineering and manufacturing capabilities, and application expertise enable us to differentiate ourselves from our competitors and enhance profitability.
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Those operating segments that have similar economic characteristics and meet all other required criteria, including nature of the products and production processes, distribution patterns and classes of customers, are aggregated as reportable segments.
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The Bearing, Gearing and Engineered Component Industry The bearing, gearing and engineered component industry is a fragmented multi-billion-dollar market.
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A typical process for a major OEM project begins when our design engineers meet with the customer at the machine design conceptualization stage and work with them through the conclusion of the product development.
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Our acquisition of Dodge Industrial on November 1, 2021, contributed $291.9 million of revenue from the industrial market in the second half of fiscal 2022.
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We implemented strict cleaning, social distancing, quarantining and other safety measures to minimize the risk to our employees of contracting COVID-19 at work and these measures have proved thus far to be very successful as the infection rate among our workforce has been very low.
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We believe our strong relationships with OEMs help drive our aftermarket sales since a portion of OEM sales are ultimately intended for use as replacement parts.
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Mounted bearings are fully assembled bearings with a wide range of shaft attachment methods, rolling elements, housing materials and configurations offering a variety of sealing solutions. Mounted bearing products include mounted ball bearings, mounted roller bearings and mounted plain bearings, and are used in light to heavy loads, and in clean, corrosive or harsh environments.
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Mounted roller bearings are pre-machined to allow field installation of the Dodge bearing sensor, adding remote monitoring capability in difficult to access applications and unsafe environments. Applications include unit and bulk material handling, industrial air handling, large rotor fans, food processing, roll-out tables, and forest pulp and paper processing equipment. Enclosed Gearing.
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We provide a broad range of enclosed gearing product lines including Quantis Gearmotor (helical style gearing with modular configurations and a variety of mounting methods), Torque Arm (shaft-mount gearing with helical style gearing and v-belt input for first stage reduction), Tigear (single reduction, right angle gear reducers with worm style gearing), MagnaGear & Maxum (parallel reducers with helical and planetary style gearing) and Controlled Start Transmission (planetary style gearing with hydraulic clutch package used for soft starting large conveyors).
Added
Applications include unit and bulk handling, food processing, roll-out tables, and forest pulp and paper processing equipment. Motion Control Components .
Added
Power transmission components are of three types: mechanical drive components (offering V belt sheaves, synchronous sprockets, bushings and belts) used to change rotational speed between two pieces of equipment; couplings used to transmit torque between two rotating pieces of equipment, such as a motor and a gearbox; and conveyor components, which transfer torque from the mechanical drive equipment to the conveyor belt in bulk material handling applications.
Added
The process normally takes between three and six years from concept to sale depending upon the application and the market.
Added
We intend to continue to hire and develop expert sales professionals and strategically locate them to implement our expansion strategy. Today, our direct sales force is located to service North America, Europe, Asia and Latin America and is responsible for selling all of our products.
Added
Applicable Dodge products are compliant as required with related communications, safety, and Ex certifications for use in North America, Mexico, the EU, as well as other select international locations. This includes, but is not limited to, ATEX, IECEx, NYCE NOM, and C/US declarations of conformity.
Added
Nearly all of our personnel are RBC employees rather than independent contractors, temporaries or third-party labor provider personnel. Our human capital objective is to attract and retain high-performing people who can work in a culture that fosters innovation and continuous improvement.
Added
An important part of achieving our human capital objective is our in-house training programs – RBC University, Materials University, Mechanical Engineering Training and the Dodge Customer, Application, Product Training (CAPT) Program.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

50 edited+34 added−11 removed58 unchanged
Biggest changeFactors that could cause our actual results, performance and achievements or industry results to differ materially from estimates or projections contained in forward-looking statements include, among others, the following: ● Effects of the COVID-19 pandemic; ● Weaknesses or cyclicality in any of the industries in which our customers operate; ● Changes in marketing, product pricing and sales strategies, or development of new products by us or our competitors; ● Future reductions in U.S. governmental spending or changes in governmental programs, particularly military equipment procurement programs; ● Conditions that adversely affect the business of any of our significant customers; ● Our ability to obtain and retain product approvals; ● Supply and costs of raw materials (particularly steel) and energy resources, the imposition of import tariffs, and our ability to pass through these costs on a timely basis; ● Our ability to acquire and integrate complementary businesses; ● Unanticipated liabilities of acquired businesses; ● Unexpected equipment failures or catastrophic events; ● Our ability to attract and retain our management team and other highly skilled personnel; ● Work stoppages and other labor problems affecting us or our customers or suppliers; ● Changes in trade agreements or treaties and the imposition of tariffs on our goods exported to other countries; ● Regulatory changes or developments in the U.S. or in foreign countries where we produce or sell products; ● Developments or disputes concerning patents or other proprietary rights; ● Risks associated with utilizing information technology systems; ● Risks associated with operating internationally, including currency translation risks; ● Investors’ perceptions of us and our industry; and ● Other risks and uncertainties including but not limited to those described from time to time in our current and quarterly reports filed with the SEC. 7 These and additional factors that could cause actual results to differ materially from our forward-looking statements are set forth in this Annual Report on Form 10-K under Part I, Item 1.
Biggest changeFactors that could cause our actual results, performance and achievements or industry results to differ materially from estimates or projections contained in forward-looking statements include, among others, the following: ● Effects of the COVID-19 pandemic; ● Weaknesses or cyclicality in any of the industries in which our customers operate; ● Changes in marketing, product pricing and sales strategies, or development of new products by us or our competitors; ● Future reductions in U.S. governmental spending or changes in governmental programs, particularly military equipment procurement programs; ● Conditions that adversely affect the business of any of our significant customers; ● Our ability to obtain and retain product approvals; ● Supply and costs of raw materials (particularly steel) and energy resources, the imposition of import tariffs, and our ability to pass through these costs on a timely basis; ● Our ability to acquire and integrate complementary businesses; ● Unanticipated liabilities of acquired businesses; ● Unexpected equipment failures or catastrophic events; ● Our ability to attract and retain our management team and other highly skilled personnel; ● Work stoppages and other labor problems affecting us or our customers or suppliers; ● Changes in trade agreements or treaties and the imposition of tariffs on our goods exported to other countries; 9 ● Regulatory changes or developments in the U.S. or in foreign countries where we produce or sell products; ● Developments or disputes concerning patents or other proprietary rights; ● Risks associated with utilizing information technology systems; ● Risks associated with operating internationally, including currency translation risks; ● Investors’ perceptions of us and our industry; ● Risks associated with the Dodge acquisition including the possible failure to realize the anticipated benefits from the acquisition and problems with the integration of Dodge with our legacy business; ● Risks associated with the substantial amount of debt we incurred to finance the Dodge acquisition; and ● Other risks and uncertainties including but not limited to those described from time to time in our current and quarterly reports filed with the SEC.
If we are required to record a charge to earnings because of an impairment of goodwill or indefinite-lived intangibles, our results of operations and financial condition could be materially and adversely affected. We depend heavily on our senior management and other key personnel, the loss of whom could materially affect our financial performance and prospects.
If we are required to record a charge to earnings because of an impairment of goodwill or indefinite-lived intangibles, our results of operations and financial condition could be materially and adversely affected. 15 We depend heavily on our senior management and other key personnel, the loss of whom could materially affect our financial performance and prospects.
Our foreign sales may be subject to similar approvals or U.S. export control restrictions. We cannot assure you that we will not lose approvals for our products in the future. The loss or suspension of product approvals could result in lost sales and materially reduce our revenues, cash flows and profitability.
Our foreign sales may be subject to similar approvals or U.S. export control restrictions. We cannot assure you that we will not lose approvals for our aerospace products in the future. The loss or suspension of product approvals could result in lost sales and materially reduce our revenues, cash flows and profitability.
In that event, we could incur substantial defense costs and, if such litigation is successful, we could be required to pay the claimant damages and royalties for our past and future use of such intellectual property or proprietary information, or we could be prohibited from using it in the future.
In that event, we could incur substantial defense costs and, if such litigation is successful, we could be required to pay the claimant damages for our past use of such intellectual property or proprietary information, and we could either be required to pay royalties for our use of it in the future or be prohibited from using it in the future.
This reduction in new aircraft purchases has had an adverse effect on our sales of bearings and component parts. Future reductions or changes in U.S. government spending could negatively affect our business.
This reduction in new aircraft purchases has had an adverse effect on our sales of bearings and component parts. 11 Future reductions or changes in U.S. government spending could negatively affect our business.
The availability and prices of subcomponents, raw materials and energy resources may be subject to change due to, among other things, new laws or regulations, suppliers’ allocations to other purchasers, interruptions in production or deliveries by suppliers (including interruption caused by the COVID-19 pandemic), and changes in exchange rates and supplier costs and profit expectations.
The availability and prices of subcomponents, raw materials and energy resources may be subject to change due to, among other things, new laws or regulations, economic inflation, suppliers’ allocations to other purchasers, interruptions in production or deliveries by suppliers (including interruption caused by the COVID-19 pandemic), and changes in exchange rates and supplier costs and profit expectations.
The significance of the impact that such consolidation could have on our business is difficult to predict because we do not know when or if one or more of our customers will engage in merger or acquisition activity. However, if such activity involved our material customers it could materially impact our revenues, cash flows and profitability.
The significance of the impact that such consolidations could have on our business is difficult to predict because we do not know when or if one or more of our customers will engage in merger or acquisition activity. However, if such activity involved our material customers it could materially impact our revenues, cash flows and profitability.
The secure maintenance and transmission of this information is critical to our business operations. 10 We may face cyber events and other IT security threats, including malware, ransomware, phishing and other intrusions, to our IT infrastructure, attempts to gain unauthorized access to proprietary, classified or confidential information, and threats to the physical security of our IT systems.
The secure maintenance and transmission of this information is critical to our business operations. 13 We may face cyber events and other IT security threats, including malware, ransomware, phishing and other intrusions, to our IT infrastructure, attempts to gain unauthorized access to proprietary, classified or confidential information, and threats to the physical security of our IT systems.
In particular, our products are installed in a number of types of vehicle fleets, including airplanes, trains, automobiles, heavy trucks and farm equipment, many of which are subject to government–ordered recalls as well as voluntary recalls by the manufacturer.
In particular, our products are installed in a number of types of vehicle fleets, including airplanes, trains, automobiles, heavy trucks and farm equipment, many of which may be subject to government-ordered recalls as well as voluntary recalls by the manufacturer.
For example, Boeing’s temporary shut-down of its two primary production facilities in April 2020 led to the cancellation or deferral of various orders for our products that support Boeing production. In addition, demand for our commercial aerospace products has been adversely affected by the significant reduction in commercial air travel during the pandemic.
For example, Boeing’s temporary shut-down of its two primary production facilities in April 2020 led to the cancellation or deferral of various orders for our products that support Boeing production. In addition, demand for our commercial aerospace products was adversely affected by the significant reduction in commercial air travel during the pandemic.
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. Our top ten customers generated approximately 36%, 34% and 35% of our net sales during fiscal 2021, 2020 and 2019, respectively.
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. Our top ten customers generated approximately 36%, 36% and 34% of our net sales during fiscal 2022, 2021 and 2020, respectively.
We cannot assure you that product liability claims, if made, would be covered by our insurance or would not exceed our insurance coverage limits. Claims that are not covered by insurance, or that exceed insurance coverage limits, could result in material losses. Claims that are covered by insurance could result in increased future insurance costs.
We cannot assure you that product liability claims, if made, would be covered by our insurance or would not exceed our insurance coverage limits. Claims that are not covered by insurance, or that exceed insurance coverage limits, could result in material losses.
See Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Exchange Rates” of this Annual Report on Form 10-K. We may incur material losses for product liability and recall-related claims.
See Part II, Item 7A. "Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Exchange Rates" of this Annual Report on Form 10-K. We may incur material losses for product liability and recall-related claims.
The U.S. government has imposed tariffs on the importation of various products that we use to produce our finished goods, and various foreign countries, including the People’s Republic of China, could impose retaliatory tariffs on our products exported to those countries.
From time to time the U.S. government has imposed tariffs on the importation of various products that we use to produce our finished goods, and various foreign countries, including the People’s Republic of China, have or could impose retaliatory tariffs on our products exported to those countries.
Due to the competitiveness in the bearing and engineered products industries we may not be able to increase prices for our products to cover increases in our costs, and we may face pressure to reduce prices, which could materially reduce our revenues, cash flows and profitability.
Due to the competitiveness in the bearings, engineered components and essential systems industries we may not be able to increase prices for our products to cover increases in our costs, and we may face pressure to reduce prices, which could materially reduce our revenues, cash flows and profitability.
We have a substantial number of product approvals, which enable us to provide products used in virtually all domestic aircraft platforms presently in production or operation. Product approvals are typically issued by the FAA to designated OEMs who are Production Approval Holders of FAA-approved aircraft.
Essential to servicing the aerospace market is the ability to obtain product approvals. We have a substantial number of product approvals, which enable us to provide products used in virtually all domestic aircraft platforms presently in production or operation. Product approvals are typically issued by the FAA to designated OEMs who are Production Approval Holders of FAA-approved aircraft.
We currently have three collective bargaining agreements covering employees at our Plymouth, Indiana, Fairfield, Connecticut and West Trenton, New Jersey facilities, representing approximately 8.2% of our hourly employees as of April 3, 2021.
We currently have three collective bargaining agreements covering employees at our Plymouth, Indiana, Fairfield, Connecticut and West Trenton, New Jersey facilities, representing approximately 8% of our U.S.-based hourly employees as of April 2, 2022.
Any potential cost-saving opportunities may take several quarters following an acquisition to implement, and any results of these actions may not be realized for several quarters thereafter, if at all. Businesses that we have acquired or that we may acquire in the future may have liabilities which are not known to us.
Any potential cost-saving opportunities may take several quarters following an acquisition to implement, and any results of these actions may not be realized for several quarters thereafter, if at all. Businesses that we acquire may have liabilities for which we are liable.
Our intellectual property and proprietary information are valuable, and any inability to protect them could adversely affect our business and results of operations; in addition, we may be subject to infringement claims by third parties.
Claims that are covered by insurance could result in increased future insurance costs. 16 Our intellectual property and proprietary information are valuable, and any inability to protect them could adversely affect our business and results of operations; in addition, we may be subject to infringement claims by third parties.
In fiscal 2021, approximately 5.8% of our net sales were made directly, and we estimate that approximately an additional 25.5% of our net sales were made indirectly, to the U.S. government to support military or other government projects.
In fiscal 2022, approximately 2% of our net sales were made directly, and we estimate that approximately an additional 16% of our net sales were made indirectly, to the U.S. government to support military or other government projects.
Our inability to acquire businesses, or to operate them profitably once acquired, could have a material adverse effect on our business, financial position, cash flow and growth. 11 Our ability to realize anticipated benefits and synergies from our acquisitions could be affected by a number of factors, including: the need for greater than expected cash or other financial resources or management time in order to implement or integrate acquisitions; increases in other expenses related to an acquisition, including restructuring and other exit costs; the timing and impact of purchase accounting adjustments; difficulties in employee or management integration, including labor disruptions or disputes; and unanticipated liabilities associated with acquired businesses.
Our ability to realize anticipated benefits and synergies from our acquisitions could be affected by a number of factors, including: the need for greater than expected cash or other financial resources or management time in order to implement or integrate acquisitions; increases in other expenses related to an acquisition, including restructuring and other exit costs; the timing and impact of purchase accounting adjustments; difficulties in employee or management integration, including labor disruptions or disputes; and unanticipated liabilities associated with acquired businesses.
Although we have no present intention to issue any preferred stock, we may do so in the future. Holders of our common stock do not have preemptive rights to subscribe for a pro rata portion of preferred stock or any other capital stock that we may issue in the future. We may not pay cash dividends in the foreseeable future.
Although we have no present intention to issue any additional preferred stock, no assurance can be given that we will not do so in the future. Holders of our common stock do not have preemptive rights to subscribe for a pro rata portion of preferred stock or any other capital stock that we may issue in the future.
Our failure to comply with these regulations, or our compliance with new and more stringent government regulations, if enacted, could have an adverse effect on our business, financial condition and results of operations. Our U.S. government business is subject to specific procurement regulations and other requirements that increase our performance and compliance costs.
Our failure to comply with these regulations, or our compliance with new and more stringent government regulations, if enacted, could have an adverse effect on our business, financial condition and results of operations.
We have operations in Mexico, France, Switzerland, Poland, China and Germany. Of our 43 facilities in seven countries, 12 are located outside the U.S., including ten manufacturing facilities in three countries . In fiscal 2021, 10.3% of our net sales were generated by our international operations.
We have operations in Australia, Canada, France, Germany India, Mexico, the Peoples Republic of China, Poland and Switzerland. Of our 56 facilities in ten countries, 19 are located outside the U.S., including 10 manufacturing facilities in four countries . In fiscal 2022, approximately 12% of our net sales were generated by our international operations.
Disruptions in the supply of subcomponents, raw materials or energy resources could temporarily impair our ability to manufacture our products for our customers or require us to pay higher prices in order to obtain these items from other sources, which could thereby affect our net sales and profitability. 9 Where our customer contracts permit us to do so, we seek to pass through a significant portion of our additional costs to our customers through steel surcharges or price increases.
Disruptions in the supply of subcomponents, raw materials or energy resources could temporarily impair our ability to manufacture our products for our customers or require us to pay higher prices in order to obtain these items from other sources, which could thereby affect our net sales and profitability.
Interruptions in production capabilities will inevitably increase our production costs and reduce revenues, cash flows and profitability for the affected period. We may not be able to continue to make the acquisitions necessary for us to realize our growth strategy.
Interruptions in production capabilities would inevitably increase our production costs and reduce revenues, cash flows and profitability for the affected period. 14 We may not be able to continue to make the acquisitions necessary for us to realize our growth strategy. The acquisition of businesses that complement or expand our operations is an important element of our business strategy.
Except for a $2.00 per common share special dividend paid in 2014, we have not paid any cash dividends on our common stock and may not pay cash dividends in the future. Instead, we plan to apply earnings and excess cash, if any, to the expansion and development of our business.
Except for a $2.00 per common share special dividend paid in 2014, we have not paid any cash dividends on our common stock and we do not expect to pay cash dividends on the common stock in the foreseeable future.
Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. Indefinite-lived intangibles represent repair station certifications obtained in business combinations and assumed to have indefinite lives.
Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. Indefinite-lived intangibles represent repair station certifications obtained in business combinations and assumed to have indefinite lives. As of April 2, 2022, we had $1,902.1 million of goodwill and $24.3 million of indefinite-lived intangibles, representing approximately 40% of our total assets.
We expect that this proportion is likely to increase as we seek to increase our penetration of foreign markets, including through acquisitions.
We expect that this proportion is likely to increase as we seek to increase our penetration of foreign markets, including through acquisitions such as Dodge, which included operations in Australia, Canada, India, Mexico and China.
Certain competitors may be better able to manage costs than us or may have greater financial resources than we have.
We compete primarily based on product qualifications, product line breadth, service and price. Certain competitors may be better able to manage costs than us or may have greater financial resources than we have.
To date we have not experienced significant difficulties with the foregoing risks associated with our international operations. 12 Currency translation risks may have a material impact on our results of operations.
To date we have not experienced significant difficulties with the foregoing risks associated with our international operations. Currency translation risks may have a material impact on our results of operations. Primarily, each of our foreign operations utilizes the local currency as their functional currency. Foreign currency transaction gains and losses are included in earnings.
Based upon the forensic review, there is no evidence of data access or exfiltration and no material impact to the operations of the Company. The Company has implemented a variety of measures to enhance and modernize its systems to guard against similar incidents in the future, and is also enhancing the Company’s recovery capabilities in the event of future incidents.
Since the cyber event the Company has implemented a variety of measures to enhance and modernize our systems to guard against similar incidents in the future, and is also enhancing the Company’s recovery capabilities in the event of future incidents.
In addition, our certificate of incorporation authorizes the issuance of preferred stock, with such designations, rights and preferences as may be determined from time to time by the Board, without stockholder approval.
Our certificate of incorporation authorizes the issuance of 10,000,000 shares of preferred stock, with such designations, rights and preferences as may be determined from time to time by the Board, without stockholder approval. We utilized this authorization to issue 4,600,000 shares of 5.00% Series A Mandatory Convertible Preferred Stock (“MCPS”) in fiscal 2022.
It is expected that the pandemic will continue to adversely affect our business during fiscal 2022, although the severity and duration depend on future developments that are highly uncertain and unpredictable. 8 While we have been able to keep our operations open for the most part during the pandemic and COVID-19 vaccines are now being administered throughout the world, it remains possible that there could be a future increase in the COVID-19 infection rate that results in governmental orders or COVID-19 outbreaks among the local workforce that necessitate the closure of any of our operations or those of any of our critical suppliers, which would adversely affect our production.
While we have been able to keep our operations open for the most part during the pandemic and COVID-19 vaccines have become widely available, it remains possible that there could be future increases in the COVID-19 infection rate as new variants of the virus develop, which could result in governmental orders or COVID-19 outbreaks among the local workforce that necessitate the closure of any of our operations or those of any of our critical suppliers, which would adversely affect our production.
While this situation has not had a material adverse effect on our business, a further escalation of tariffs on our foreign-sourced supplies and/or the imposition of tariffs on our finished goods exported to other countries could adversely impact our operating costs or demand for our products.
While this situation has not had a material adverse effect on our business in the past, future tariffs on our foreign-sourced supplies and/or our finished goods exported to other countries could adversely impact our operating costs or demand for our products. 12 Some of our products and operations 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.
However, many of our contracts are fixed-price contracts under which we are not able to pass these additional costs on to our customers.
Where our customer contracts permit us to do so, we seek to pass through a significant portion of our additional costs to our customers through steel surcharges or price increases. However, many of our contracts are fixed-price contracts under which we are not able to pass these additional costs on to our customers.
We cannot assure you that we will be successful in identifying attractive acquisition candidates or completing acquisitions on favorable terms in the future.
We frequently engage in evaluations of potential acquisitions and negotiations for possible acquisitions, some of which, if consummated, could be significant to us. We cannot assure you that we will be successful in identifying attractive acquisition candidates or completing acquisitions on favorable terms in the future.
The global bearing and engineered products industries are highly competitive, and we compete with many U.S. and non-U.S. companies, some of which benefit from lower labor costs and fewer regulatory burdens than us. We compete primarily based on product qualifications, product line breadth, service and price.
The bearings, engineered components and essential systems industries are highly competitive, and competition could reduce our profitability or limit our ability to grow. The global bearings, engineered components and essential systems industries are highly competitive, and we compete with many U.S. and non-U.S. companies, some of which benefit from lower labor costs and fewer regulatory burdens than us.
The consolidation and combination of defense or other manufacturers could eliminate customers from the industry and/or put downward pricing pressures on sales of component parts. For example, the consolidation that has occurred in the defense industry in recent years has significantly reduced the overall number of defense contractors in the industry.
For example, the consolidation that has occurred in the defense industry in recent years has significantly reduced the overall number of defense contractors.
For example, due to Boeing’s 737 MAX production shutdown that began in 2019 we experienced the suspension or cancellation of orders for product used in the 737 MAX airframe and engines. In addition, in fiscal 2021 we experienced reduced purchasing from customers whose businesses were constrained by the COVID-19 pandemic.
For example, due to Boeing’s 737 MAX production temporary shutdown, we experienced the suspension or cancellation of orders for product used in the 737 MAX airframe and engines over the last 24 months.
Future downward economic cycles or customer downturns could reduce sales of our products resulting in reductions in our revenues, cash flows and profitability.
Future downward economic cycles or customer downturns could reduce sales of our products resulting in reductions in our revenues, cash flows and profitability. The COVID-19 pandemic caused a significant reduction in air travel, which lead various airlines to delay or cancel previously-scheduled aircraft purchases.
If we were to issue preferred stock in the future, it could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of us, or could impede our stockholders’ ability to approve a transaction they consider in their best interests.
In the future the Board could authorize the issuance of additional preferred stock with rights, preferences and privileges that rank equally with the MCPS, or that could have the effect of discouraging, delaying or preventing a change in control of us, or that could impede our stockholders’ ability to approve a transaction they consider in their best interests.
Risk Factors Relating to Our Company Our business, operating results, cash flows or financial condition could be materially adversely affected by any of the following risks. The trading price of our common stock could decline due to any of these risks, and you could lose all or part of your investment.
You are advised, however, to review any disclosures we make on related subjects in our future periodic filings with the SEC. Risk Factors Relating to Our Company Our business, operating results, cash flows or financial condition could be materially adversely affected by any of the following risks.
As we begin to operate acquired businesses, we may learn additional information about them that adversely affects us, such as unknown or contingent liabilities, issues relating to compliance with applicable laws, or issues related to ongoing supply chain or customer relationships or order demand.
In addition, after we complete an acquisition we may learn of other matters that adversely affect us, such as issues relating to the acquired business’s compliance with applicable laws, or issues relating to its supply chain, customer relationships or order demand.
Thus, the return on your investment, if any, could depend solely on an increase, if any, in the market value of our common stock.
Instead, we plan to apply earnings and excess cash, if any, to the service of our debt, the payment of quarterly dividends on the MCPS, and the expansion and development of our business. Thus, any return on an investment in our common stock would depend solely on an increase, if any, in the market value of the common stock.
“Business,” Part I, Item 1A. “Risk Factors,” Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Part II, Item 8. “Financial Statements and Supplementary Data.” All forward-looking statements contained in this report and any subsequently filed reports are expressly qualified in their entirety by these cautionary statements.
“Financial Statements and Supplementary Data.” All forward-looking statements contained in this report and any subsequently filed reports are expressly qualified in their entirety by these cautionary statements. We have no duty to update any forward-looking statements after the date of this report to conform such statements to actual results or to changes in our expectations.
You should carefully consider these risks before investing in shares of our common stock. The bearing and engineered products industries are highly competitive, and competition could reduce our profitability or limit our ability to grow.
The trading price of our common stock or preferred stock could decline due to any of these risks, and you could lose all or part of your investment. You should carefully consider these risks before investing in shares of our common stock or preferred stock.
However, orders included in our backlog are subject to cancellation, delay or other modifications by our customers and we cannot assure you that these orders will ultimately be fulfilled. 13 Risk Factors Related to our Common Stock Provisions in our charter documents may prevent or hinder efforts to acquire a controlling interest in us.
As of April 2, 2022, we had an order backlog of $603.1 million. However, orders included in our backlog may be subject to cancellation, delay or other modifications by our customers and we cannot assure you that these orders will ultimately be fulfilled. Quarterly performance can be affected by the timing of government product inspections and approvals.
Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition or results of operations.
Liabilities of acquired businesses that ultimately are borne by us (either because we assume them or our indemnification right proves to be insufficient or unenforceable) could have a material adverse effect on our business, financial condition or results of operations.
We cannot assure you that our rights to indemnification contained in definitive acquisition agreements that we have entered or may enter into will be sufficient in amount, scope or duration to fully offset the risk of liabilities relating to acquired businesses.
In the case of an acquisition in which we do not assume all the liabilities of the acquired business, we obtain indemnification from the seller against the unassumed liabilities, although no assurance can be given that such indemnification will be sufficient in amount, scope or duration to fully offset the risk of the unassumed liabilities.
Removed
We have no duty to update any forward-looking statements after the date of this report to conform such statements to actual results or to changes in our expectations. You are advised, however, to review any disclosures we make on related subjects in our future periodic filings with the SEC.
Added
These and additional factors that could cause actual results to differ materially from our forward-looking statements are set forth in this Annual Report on Form 10-K under Part I, Item 1. “Business,” Part I, Item 1A. “Risk Factors,” Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Part II, Item 8.
Removed
The COVID-19 pandemic has caused a significant reduction in air travel, which has lead to various airlines delaying or cancelling previously-scheduled aircraft purchases as they reassess their fleet needs and/or take advantage of opportunities to purchase aircraft that have become available in the used aircraft market.
Added
In addition, in fiscal 2021 and fiscal 2022 we experienced reduced purchasing from customers whose businesses were constrained by the COVID-19 pandemic. 10 The consolidation and combination of manufacturers could eliminate customers and/or put downward pricing pressures on sales of component parts.
Removed
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. Essential to servicing the aerospace market is the ability to obtain product approvals.
Added
We continued to see the pandemic’s adverse effect on our business during fiscal 2022, and expect it to continue during fiscal 2023 although the severity and duration depend on future developments that are highly uncertain and unpredictable.
Removed
These costs might increase in the future, reducing our profitability.
Added
As a U.S. government contractor, we are subject to various procurement and other laws, regulations and contract terms applicable to our industry, including the FAR, the DFARS, the Truth in Negotiations Act, the False Claims Act, the Procurement Integrity Act, the International Traffic in Arms Regulations promulgated under the Arms Export Control Act, the Close the Contractor Fraud Loophole Act, the Foreign Corrupt Practices Act, and CAS, and we could be adversely affected by any negative finding by the U.S. government as to our compliance with them, including suspension or debarment from future government contracting.
Removed
Although we have procedures designed to assure compliance with these regulations and requirements, failure to do so under certain circumstances could lead to suspension or debarment from future government contracting or subcontracting for a period of time, which would result in lost sales and reduce our revenues, cash flows and profitability and could adversely impact our reputation.
Added
Based upon the forensic review, there was no evidence of data access or exfiltration and no material impact to the operations of the Company.
Removed
The acquisition of businesses that complement or expand our operations has been and continues to be an important element of our business strategy. We frequently engage in evaluations of potential acquisitions and negotiations for possible acquisitions, some of which, if consummated, could be significant to us.
Added
Our inability to acquire businesses, or to operate them profitably once acquired, could have a material adverse effect on our business, financial position, cash flow and growth.
Removed
In certain cases, we have assumed liabilities of acquired businesses and may assume liabilities of businesses that we acquire in the future.
Added
In order to complete an acquisition, it may be necessary for us to assume the liabilities of the acquired business, which was the case in the Dodge acquisition. These liabilities may be known at the time of the acquisition, but could be underestimated by us, or they may not be known to us until after the acquisition.
Removed
There may be liabilities or risks that we are required to assume in order to complete an acquisition, or that we do not discover, or that we underestimate, in the course of performing our due diligence investigations of the acquired business.
Added
A portion of our quarterly revenue is associated with contracts with the U.S. government that require onsite inspection and approval of the products by government personnel before we may ship the products, and we have no control over the timing of those inspections and approvals.
Removed
Additionally, businesses that we have acquired or may acquire in the future may have made previous acquisitions, and we could be subject to certain liabilities and risks relating to these prior acquisitions as well.
Added
If products scheduled for delivery in one quarter are not inspected or approved until the following quarter, the delay would adversely affect our sales and profitability for the quarter in which the shipments were scheduled. 17 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.
Removed
Our Swiss operation utilizes the Swiss franc as the functional currency, our French and German operations utilize the euro as the functional currency and our Polish operation utilizes the Polish zloty as the functional currency. Foreign currency transaction gains and losses are included in earnings.
Added
We believe that there are significant benefits and synergies to be realized through leveraging the products, scale and combined enterprise customer bases of our legacy business and our new Dodge business. However, the efforts to realize these benefits and synergies will be a complex process and may disrupt operations if not implemented in a timely and efficient manner.
Removed
As of April 3, 2021, we had an order backlog of $394.8 million.
Added
The full benefits of the Dodge acquisition, including any anticipated sales or growth opportunities, may not be realized as expected or may not be achieved within the time frames we anticipate, or at all.
Added
Any data on the expected synergies from the Dodge acquisition included in the unaudited pro forma condensed combined financial information that was included in our Current Report on Form 8-K filed with the SEC on September 20, 2021 or in our purchase price allocation disclosed within Part II, Item 8, Note 8 of this report was based on various adjustments, assumptions and preliminary estimates made at that time.
Added
Failure to achieve the anticipated benefits of the acquisition could adversely affect our results of operations or cash flows. We may not be able to efficiently integrate Dodge into our operations.
Added
The success of the Dodge acquisition, including its anticipated benefits and cost savings, depends, in part, on our ability to optimize our operations and integrate Dodge, its systems, operations and personnel into our legacy business. These activities will require time and involve dedication of various resources of the Company that would otherwise be dedicated to our other operations.
Added
These integration efforts may accordingly adversely affect our other operations to the extent such efforts take resources or attention away from those operations.
Added
If we experience difficulties in the integration process, the anticipated benefits of the Dodge acquisition may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on us for an undetermined period.
Added
There can be no assurance that we will realize the operational or financial gains from the Dodge acquisition that we anticipated when we originally decided to acquire Dodge.
Added
Additional challenges, risks and uncertainties we may encounter as part of the integration process include the following: ● we may face significant costs of integration and compliance with any laws or regulations applicable to Dodge or our combined company; ● we may experience delays in the integration of management teams, strategies, operations, products and services; ● differences in business backgrounds, corporate cultures and management philosophies may delay the successful integration of Dodge’s management personnel into our operations; ● we may be unable to retain key Dodge employees; ● we may not be able to create and enforce uniform standards, controls, procedures, policies and information systems across our combined company; ● we may face challenges in integrating complex systems, technology, networks and other assets of Dodge into our operations in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies; ● there may be potential unknown liabilities and unforeseen increased expenses associated with the Dodge acquisition, including costs to integrate Dodge beyond current estimates; and ● we may experience disruptions of, or the loss of momentum in, our legacy business or the Dodge businesses or inconsistencies in standards, controls, procedures and policies. 18 Any of these factors could adversely affect our ability to maintain relationships with customers, suppliers, employees and other constituencies or our ability to achieve the anticipated benefits of the Dodge acquisition, which could reduce earnings or otherwise adversely affect our business and financial results.
Added
We incurred substantial debt in order to complete the Dodge acquisition, which could constrain our business and exposes us to the risk of defaults under our debt instruments. As of November 1, 2021, we had approximately $1,800.0 million of total debt as a result of the completion of the Dodge acquisition.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also own or lease manufacturing facilities in the United States, Mexico, Switzerland and Poland as follows: Manufacturing Facility Location Owned/Leased Square Footage Arizona: Tucson owned 155,000 California: Baldwin Park leased 30,000 Fountain Valley leased 22,000 Garden Grove leased 18,000 Rancho Dominguez owned 70,000 San Diego leased 38,000 Santa Ana owned 70,000 Santa Fe Springs leased 40,000 Torrance leased 72,000 Connecticut: Fairfield owned 80,000 Middlebury owned 60,000 Oxford owned 89,000 Torrington owned 137,000 Georgia: Ball Ground owned 40,000 Indiana: Bremen owned 50,000 Franklin owned 30,000 Plymouth owned 40,000 New Jersey: West Trenton leased 86,000 Ohio: Mentor leased 57,000 Oklahoma: Oklahoma City leased 75,000 South Carolina: Hartsville owned 148,000 Westminster owned 78,000 Mexico: Guaymas, Sonora leased 70,000 Reynosa, Tamaulipas leased 202,000 Tecate, Baja leased 38,000 Poland: Mielec owned 44,000 Switzerland: Bürglen leased 20,000 Delémont owned 132,000 15 We also own or lease the following distribution centers: Distribution Center Location Owned/Leased Square Footage California: Rancho Dominguez owned 4,000 Illinois: Hoffman Estates leased 2,200 South Carolina: Bishopville owned 77,000 Texas: Grand Prairie leased 5,000 In addition, we lease several sales offices in various locations throughout the United States and in Les Ulis, France; Shanghai, China; and Langenselbold, Germany to support our sales activities.
Biggest changeWe also own or lease manufacturing facilities in the United States, China, Mexico, Switzerland and Poland as follows: Manufacturing Facility Location Owned/Leased Square Footage Arizona: Tucson owned 155,000 California: Baldwin Park leased 30,000 Garden Grove leased 18,000 Rancho Dominguez owned 70,000 San Diego leased 38,000 Santa Ana owned 70,000 Santa Fe Springs leased 40,000 Torrance leased 72,000 Connecticut: Fairfield owned 80,000 Middlebury owned 60,000 Oxford owned 89,000 Torrington owned 137,000 Georgia: Ball Ground owned 40,000 Indiana: Bremen owned 50,000 Franklin owned 30,000 Plymouth owned 40,000 New Jersey: West Trenton leased 86,000 North Carolina: Marion owned 271,000 Weaverville leased 167,000 Ohio: Mentor leased 57,000 Oklahoma: Oklahoma City leased 75,000 South Carolina: Belton owned 187,000 Greenville leased 264,000 Greer leased 34,000 Hartsville owned 148,000 Westminster owned 78,000 Tennessee: Rogersville leased 221,000 China: Shanghai leased 62,000 Mexico: Guaymas, Sonora leased 70,000 Reynosa, Tamaulipas leased 202,000 Tecate, Baja leased 38,000 Poland: Mielec owned 44,000 Switzerland: Bürglen leased 20,000 Delémont owned 132,000 21 We also own or lease the following distribution centers: Distribution Center Location Owned/Leased Square Footage California: Rancho Dominguez owned 4,000 Illinois: Hoffman Estates leased 2,200 South Carolina: Bishopville owned 77,000 Texas: Grand Prairie leased 5,000 Tennessee; Crossville leased 158,000 Australia; Sydney leased 9,000 Canada: Burlington leased 7,000 Edmonton leased 13,000 Mississauga leased 40,000 St.
ITEM 2. PROPERTIES Our principal executive office consists of 42,000 square feet located at One Tribology Center, Oxford, Connecticut.
ITEM 2. PROPERTIES Our principal executive office consists of 42,000 square feet located at One Tribology Center, Oxford, Connecticut, which we own, and our Dodge Industrial subsidiary has 74,970 square feet of office space in Greenville, South Carolina, which we lease.
Added
Hubert leased 7,000 India: Pune leased 5,000 In addition, we lease several sales offices in various locations throughout the United States and in Les Ulis, France; Shanghai, China; and Langenselbold, Germany to support our sales activities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities In 2019, our Board of Directors authorized us to repurchase up to $100.0 million of our common stock from time to time on the open market, in block trade transactions, and through privately negotiated transactions, in compliance with SEC Rule 10b-18 depending on market conditions, alternative uses of capital, and other relevant factors.
Biggest changeThe following table shows the high and low sales prices of our preferred stock as reported by the Nasdaq National Market during the periods indicated: Fiscal 2022 Fiscal 2021 High Low High Low First Quarter $ — $ — $ — $ — Second Quarter 126.88 101.00 — — Third Quarter 122.74 101.17 — — Fourth Quarter 109.76 91.35 — — The last reported sale price of our preferred stock on the Nasdaq National Market on May 20, 2022 was $84.55 per share. 23 Issuer Purchases of Equity Securities In 2019, our Board of Directors authorized us to repurchase up to $100.0 million of our common stock from time to time on the open market, in block trade transactions, and through privately negotiated transactions, in compliance with SEC Rule 10b-18 depending on market conditions, alternative uses of capital, and other relevant factors.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Price range of our Common Stock Our common stock is quoted on the Nasdaq National Market under the symbol “ROLL.” As of May 14, 2021, there was one holder of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Price range of our Common Stock and Preferred Stock Our common stock is quoted on the Nasdaq National Market under the symbol “ROLL.” As of May 20, 2022, there was one holder of record of our common stock.
Total share repurchases under the 2019 plan for the three months ended April 3, 2021 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) 12/27/2020 – 01/30/2021 - $ - - $ 88,218 01/31/2021 – 02/27/2021 3,575 177.01 3,575 87,585 02/28/2021 – 04/3/2021 30 193.93 30 $ 87,579 Total 3,605 $ 177.15 3,605 During the fourth quarter of fiscal 2021, we did not issue any common stock that was not registered under the Securities Act of 1933.
Total share repurchases under the 2019 plan for the three months ended April 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) 01/02/2022 – 01/29/2022 - $ - - $ 79,923 01/30/2022 – 02/26/2022 4,982 174.65 4,982 79,053 02/27/2022 – 04/02/2022 - - - $ 79,053 Total 4,982 $ 174.65 4,982 During the fourth quarter of fiscal 2022, we did not issue any common stock that was not registered under the Securities Act of 1933.
Equity Compensation Plans Information regarding equity compensation plans required to be disclosed pursuant to this Item is included in Part II, Item 8.
Equity Compensation Plans Information regarding equity compensation plans required to be disclosed pursuant to this Item is included in Part II, Item 8, Note 15 of this Annual Report on Form 10-K.
The following table shows the high and low sales prices of our common stock as reported by the Nasdaq National Market during the periods indicated: Fiscal 2021 Fiscal 2020 High Low High Low First Quarter $ 159.04 $ 103.09 $ 167.47 $ 125.30 Second Quarter 145.55 113.40 171.54 149.98 Third Quarter 184.83 114.49 174.94 152.55 Fourth Quarter 206.64 160.51 185.06 77.63 The last reported sale price of our common stock on the Nasdaq National Market on May 14, 2021 was $196.87 per share.
The following table shows the high and low sales prices of our common stock as reported by the Nasdaq National Market during the periods indicated: Fiscal 2022 Fiscal 2021 High Low High Low First Quarter $ 208.11 $ 185.00 $ 159.04 $ 103.09 Second Quarter 250.52 179.60 145.55 113.40 Third Quarter 242.74 188.51 184.83 114.49 Fourth Quarter 214.80 165.99 206.64 160.51 The last reported sale price of our common stock on the Nasdaq National Market on May 20, 2022 was $157.36 per share.
Each line on the graph assumes that $100 was invested in our common stock or in the respective indices on April 2, 2016 based on the closing price on that date. The graph then presents the value of these investments, assuming reinvestment of dividends, through the close of trading on April 3, 2021.
Each line on the graph assumes that $100 was invested in our common stock or in the respective indices on April 1, 2017 based on the closing price on that date.
“Financial Statements and Supplementary Data,” Note 16 “Stockholders’ Equity-Stock Option Plans” of this Annual Report on Form 10-K. 18 Performance Graph The following graph shows the total return to our stockholders compared to the Russell 3000 Index and the Nasdaq Composite Index over the period from April 2, 2016 to April 3, 2021.
Performance Graph The following graph shows the total return to our stockholders compared to the Russell 3000 Index and the Nasdaq Composite Index over the period from April 1, 2017 to April 2, 2022.
April 2, 2016 April 1, 2017 March 31, 2018 March 30, 2019 March 28, 2020 April 3, 2021 RBC Bearings Incorporated $ 100.00 $ 131.83 $ 168.64 $ 172.67 $ 149.36 $ 269.03 Nasdaq Composite Index 100.00 121.76 147.04 162.67 159.56 289.02 Russell 3000 Index 100.00 117.38 133.59 145.30 129.94 217.35 The cumulative total return shown on the stock performance graph indicates historical results only and may not be indicative of future results. 19
The graph then presents the value of these investments, assuming reinvestment of dividends, through the close of trading on April 2, 2022. 24 April 1, 2017 March 31, 2018 March 30, 2019 March 28, 2020 April 3, 2021 April 2, 2022 RBC Bearings Incorporated $ 100.00 $ 127.92 $ 130.98 $ 113.30 $ 204.08 $ 201.41 Nasdaq Composite Index 100.00 120.76 133.60 131.04 237.37 252.78 Russell 3000 Index 100.00 113.81 123.79 110.70 185.17 205.53 The cumulative total return shown on the stock performance graph indicates historical results only and may not be indicative of future results.
Added
Our preferred stock is quoted on the Nasdaq National Market under the symbol “ROLLP.” As of May 20, 2022, there was one holder of record of our preferred stock.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSee “Liquidity and Capital Resources” in Item 7 of this Annual Report on Form 10-K. Foreign Currency Exchange Rates. Our Swiss operations utilize the Swiss franc as the functional currency, our French and German operations utilize the euro as the functional currency, and our Polish operations utilize the Polish zloty as the functional currency.
Biggest changeSee “Liquidity and Capital Resources” in Item 7 of this Annual Report on Form 10-K. Foreign Currency Exchange Rates.
For derivative financial instruments designated and qualifying as cash flow hedges, the effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income, and is reclassified into earnings when the hedged transaction affects earnings. As of April 3, 2021, we had no derivatives. 34
For derivative financial instruments designated and qualifying as cash flow hedges, the effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income, and is reclassified into earnings when the hedged transaction affects earnings. As of April 2, 2022, we had no derivatives. 38
As a result, we are exposed to risk associated with fluctuating currency exchange rates between the U.S. dollar and these currencies. Foreign currency transaction gains and losses are included in earnings. Approximately 9% of our net sales were impacted by foreign currency fluctuations in fiscal 2021 compared to approximately 9% of our net sales in fiscal 2020.
Foreign currency transaction gains and losses are included in earnings. Approximately 11% of our net sales were impacted by foreign currency fluctuations in fiscal 2022 compared to approximately 9% of our net sales in fiscal 2021.
Added
Our operations in the following countries utilize the following currencies as their functional currency: ● Australia – Australian dollar ● India – rupee ● Canada – Canadian dollar ● Mexico – peso ● China – Chinese yuan ● Poland – zloty ● France – euro ● Switzerland – Swiss franc ● Germany – euro As a result, we are exposed to risk associated with fluctuating currency exchange rates between the U.S. dollar and these currencies.

Other RBC 10-K year-over-year comparisons