RBC Bearings Incorporated (NYSE:RBC) Q1 2024 Earnings Call Transcript

But now the Dodge is integrated for a year. Now we go back to our normal kind of routine that we have with seasonality, mainly driven by production days.

Vivek Srivastava: And maybe if I can squeeze one last one, just a more longer term question on the industrial business. You have talked about two times GDP growth and always trying to like attack some of the smaller green shoots across the businesses. Maybe highlight some of the green shoots that are helping your industrial business right now in this current environment and for the upcoming like two, three quarters? Thanks.

Robert Sullivan: I think we talked about where we saw quarter to quarter growth in some of our markets and that was food and beverage forest products, oil and gas, mining and aggregates. Those are all very strong markets for us. And so in part, what we have to do is make sure that our resources are selling and field resources are aligned, are properly aligned with those markets so that we can benefit in their growth. And this is probably some organizational tweaking that has to be done to achieve that. On the oil and gas side, we are pretty much capped out on capacity, manufacturing capacity to service that oil and gas market right now. And so we are working to add capacity which in our industry that that takes a little while because it is machinery and the machinery has to be built.

And so we would expect to see additional capacity online for that business by late fourth quarter. So to some extent, that is one sector that is a material sector for us in terms of scale that is, it has some capacity constraints.

Michael Hartnett: I will add one more to it. Just to give you an idea of some of the green shoots that we work on. One is the space industry. So in 2021, we shipped around $4 million of product into space. Last year we shipped in 10 million, and just the first quarter of this year, we shipped four million. So that is over about 15 different RBC facilities participating in that market, such as one of many, green shoots that these guys are working on kind of driving volume.

Operator: Our next questions come from the line of [indiscernible] with Bank of America.

Unidentified Analyst: So I just had a quick question. With the step up coming for the aerospace OEM production rates, would you guys be able to give more details on ship set value or any increased content you guys are expecting?

Michael Hartnett: We don’t publish our ship set content, but we are picking up market share on different platforms on both the commercial side and the defense side. Our bigger ships for us would be like the 737, the 787, the 777X, the F-35 and of course, we have a significant content on our marine programs under Virginia and the Columbia, subs for the Newport News and Electric Boat.

Operator: Our next questions come from the line of Kristine Liwag with Morgan Stanley. Please proceed with your questions.

Kristine Liwag: Hey, guys. Thanks for letting me back into the queue. So maybe now that, we have had a few – you guys have had a few quarters of Dodge already almost two years and the leverage is approaching manageable levels and Dodge is integrated. What is your appetite to restart the M&A pipeline? And historically, you guys have wanted to be 50% aerospace defense, 50% industrials. What is your appetite today, and what does that pipeline look like?