RBC (RBC) Q4 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool Fri, May 15, 2026 at 11:14 PM GMT+7 25 min read Image source: The Motley Fool. Chairman, President, and Chief Executive Officer — Michael J. Hartnett Vice President and Chief Financial Officer — Robert Sullivan Need a quote from a Motley Fool analyst? Email pr@fool.com Michael J. Hartnett: Thank you, Joshua. Good morning, and thank you all for joining us this morning. As usual, I will begin today s call with a brief review of our financial results and highlight several key trends we see across the sectors. Then I will turn the call over to Robert Sullivan, who will provide additional details on our financial performance for the fourth quarter. Fourth quarter net sales increased 18.3% year over year to $518 million driven by continued momentum in our A and D segment and steady growth in our industrial businesses. Consolidated gross margin was 44.4% for the quarter or 45.3% on an adjusted basis. Adjusted diluted EPS increased year over year to $33.62 compared to $2.83 in the prior year period. Adjusted EBITDA rose 21% to $168.9 million up from $139.8 million last year. Free cash flow remained a strong 67.5 million and we paid down an additional $116 million of debt during the quarter. Now turning to our 2 business segments, approximately 57% of our revenue during the quarter came from and 43% came from our Industrial segment. Our A and D business has continued to deliver exceptional performance with segment revenue increasing 41.2% compared to the prior year period. This strong momentum in aerospace and defense is further reflected in our backlog, which has continued to expand and currently stands at approximately $2.3 billion This growth continues to be driven by robust demand across the defense and space markets. Along with unprecedented commercial aircraft build rates at the major builders. For the full year, sales were up 32%, of which 19.1% was organic. With regard to our business segments, Commercial Aircraft was up 17.8%, 17.3% of which was organic. Defense was up 65.4%, of which 22.1% was organic. Our key revenue drivers first, as many of you know, marine has been a significant contributor to our backlog growth driven by accelerating build out of the submarine fleet Given the strategic importance of submarines within today s defense strategies, we expect this to remain a meaningful tailwind as production rates continue to ramp across all subcontracts. For both the Virginia and Columbia class programs as well as fleet spares. We are adding machinery and floor space to accommodate increased production rates as we speak. Next is missiles. Missile related revenue was up significantly this year with revenue for this sector exceeding $45 million in the fiscal year. Some of this gain did come from our recent VACCO acquisition. This growth really reflects increased content we have across several top missile programs and the expanding demand we are seeing given the current global conditions. We are planning for sustained growth in requirements for this sector in the current and future years. We also see an impressive ramp in our space business as investments in this sector continue to hit record levels. During the year, we saw space revenues come in just above $70 million including $30 million from 8 months contribution by back up. This impressive growth especially considering that space related revenue was only $4 million for RBC back in 2021. As this trend accelerates and private investment grows, space infrastructure is being viewed not only as a major strategic national priority, but as a substantial and essential commercial reality. On top of this strong momentum, we are also supporting the unprecedented production rates for commercial aircraft and engines As you know, we are deeply embedded across these markets on 3 continents. And as a result, expect to see continued growth at both the OEM and aftermarket levels. Turning now to our Industrial business. Performance remained steady and up during the period, with OEM revenue increasing 7.8% and distribution revenue growing at 4.5%. During the quarter, we saw strength in aggregates, warehousing, food and beverage, grain, and semiconductor end markets. As we look to the fiscal year 2027, we are encouraged by the continued strength of our operating environment and the building momentum across many businesses. We firmly believe our strong service levels coupled with our brands, our renowned brands, market positions and technical expertise provide for continued strong financial results long into the future. This was a record year for RBC and as always it is a true team effort. I want to thank our employees across the organization for their hard work, dedication and unwavering commitment to executing our strategy and serving our clients with excellence. Robert Sullivan: With that, I will turn the call over to Robert, who will walk us through the financials. Thank you, Mike. We closed fiscal year 2026 with anot

RBC (RBC) Q4 2026 Earnings Call Transcript

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RBC (RBC) Q4 2026 Earnings Call Transcript

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