RBC 10-K & 10-Q changes, risk factors and insider trading

Although we believe that the expectations and assumptions reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition, results of operations, and cash flows, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this Annual Report on Form 10-K. Factors that could cause our actual results, performance and achievements or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following:

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. “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.

The mining and construction equipment and other diversified industrial industriesmarkets to which we sell our products are, to varying degrees, cyclical and tend to decline in response to overall declines in industrial production. Margins in those industries are highly sensitive to demand cycles, and our customers (or our customers’ customers) in those industries historically have tended to delay large capital purchases and projects, including expensive maintenance and upgrades, during economic downturns. As a result, our business is also cyclical, and the demand for our products by these customers depends, in part, on overall levels of industrial production, general economic conditions, and business confidence levels. Many of our customers have historically experienced periodic downturns, which often have had a negative effect on demand for our products. Future downward economic cycles or customer downturns could reduce sales of our products resulting in reductions in our revenues, cash flows and profitability.

Changes to and uncertainty in U.S. and international trade policy, including import tariffs imposed by the U.S. and other countries,trade and the resulting consequences,policies could adversely affect our revenue and profit margin.

Specifically,In U.S.-imposed tariffs increase our costaddition to importdriving rawup our materialsoperating costs, these tariffs and componentother partschanges fromin U.S. trade policy have caused foreign sources (including our foreign operations) which will decrease our profitabilitycountries to theimplement extentretaliatory tariffs and other responsive trade policies that we are unableapply to pass the increased cost on to our customers. Any import tariffs imposed on our U.S.-manufactured products by other countriessold in responsethose tocountries, U.S.thereby trade policies will causecausing those products to be more expensive in those countries,expensive, which may reduce our sales in those countries, thereby adversely affecting our revenue, cash flow and profitability. In addition, any foreign tariff-driven reduction in sales of our customers’ products into which our products are integrated will correspondingly correspondingly reduce the demand for our products, thereby adversely affecting our revenue, profitability and cash flow.

While we have not experienced experienced a material impact on our business to date, no assurance can be given that will continue to be the case. We are continuing to evaluate the trade situation as it evolves and we are assessing mitigation strategies, including supply chain adjustments and pricing actions. We believe the majority of our imports from Mexico are compliant with the United States-Mexico-Canada Agreement (“USMCA”) and are currently exempt from tariffs upon importing into the United States. The ultimate impact of tariffs on our operations and financial results is currently uncertain and will depend on the scope, duration, and potential expansion of the measures implemented.

Essential to servicing the aerospace Aerospace & Defense 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. These Production Approval Holders provide quality control oversight and generally limit the number of suppliers directly servicing the commercial aerospaceAerospace market. Regulations enacted by the FAA provide for an independent process (the PMA process) that enables suppliers who currently sell their products to the Production Approval Holders to also sell products to the aftermarket. 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 aerospaceAerospace 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.

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, Cost Accounting Standards (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.

Any potential cost-saving opportunities may take several quarters or years following an acquisition to implement, and any results of these actions may not be realized for several quarters thereafter, if at all.

The majority of our foreign operations utilize the local currency as their functional currency. Foreign currency transaction gains and losses are included in earnings. Foreign currency transaction exposure arises primarily from the transfer of foreign currency from one subsidiary to another within the group and to foreign currency-denominated trade receivables.receivables and payables. Unrealized currency translation gains and losses are recorded on the balance sheet upon translation of the foreign operations’ functional currency to the reporting currency. Because our financial statements are denominated in U.S. dollars, changes in currency exchange rates between the U.S. dollar and the currencies used by our international operations have had, and will continue to have, an impact on our earnings. We periodically enter into derivative financial instruments such as cross currency swaps to reduce the effect of fluctuations in exchange rates on transactions and account balances denominated in non-functional currencies. Currency fluctuations may affect our financial performance in the future and we cannot predict the impact of future exchange rate fluctuations on our results of operations. See Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Exchange Rates” of this Annual Report on Form 10-K.

As of March 29,28, 2025,2026, we had an order backlog of $940.7.$2.3 billion. 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.

We incurred substantial debt in order to complete the Dodge acquisition,and VACCO acquisitions, which could constrain our business and exposes us to the risk of defaults under our debt instruments.

In fiscal 2022, we incurred $1,800.0 of total debt to finance the acquisition of Dodge acquisition.Industrial and in July 2025 we incurred $200.0 of debt to finance the acquisition of VACCO Industries. As of March 29,28, 2025,2026, our total debt was $920.1.$875.5. This debt could or will have important important consequences, including, but not limited to:

Increases in interest rates would increase the cost of servicing our termbank loandebt and could reduce our profitability.

As of March 29, 2025, $100.0Future of our term loan was subject to a fixed-rate interest swap but the remaining $313.0 balance of the term loan bears interest at a variable rate. Future increases in interest rates would increase the cost of servicing theour portionbank ofdebt the(i.e., term loan notand subjectrevolving tocredit afacility), which swap, which could materially reduce our profitability and cash flows.

We are a well-known international manufacturer of highly engineered precision bearings, components and essential systems for the Aerospace aerospace,& defenseDefense and industrialIndustrial industries.markets. Our precision solutions are integral to the manufacture and operation of most machines and mechanical systems, reduce wear to moving parts, facilitate proper power transmission, and reduce damage and energy loss caused by friction. While we manufacture products in all major bearing categories, we focus primarily on the higher end of the bearing market where we believe our value-added manufacturing and engineering capabilities enable us to differentiate ourselves from our competitors and enhance profitability. We believe our unique expertise has enabled us to garner leading positions in many of the product markets in which we primarily compete. With 5465 facilities in 11 countries, of which 38 44 are manufacturing facilities, we have been able to significantly broaden our end markets, products, customer base and geographic reach. We have a fiscal year consisting of 52 or 53 weeks, ending on the Saturday closest to March 31. Based on this policy, fiscal 2025 2026 had 52 weeks and fiscal 2024 2025 had 52 weeks.

We currently operate under two reportable business segments – Aerospace/ & Defense and Industrial:

We use gross margin as the primary measurement to assess the financial performance of each reportable segment. End market and channel sales within our segments are based on internal definitions and metrics considered by management and are periodically reviewed and updated prospectively. For fiscal year 2024, we estimate approximately $6.9 of sales classified as industrial distribution for fiscal year 2024 would now be classified as industrial OEM. Fiscal year 2024 was not recast to reflect this change.

The markets for our products are cyclical, and we have endeavored to mitigate this cyclicality by entering into single and sole-source relationships and long-term purchase agreements, through diversification across multiple market segments within the Aerospace/ & Defense and Industrial segments, by increasing sales to the aftermarket, and by focusing on developing highly customized solutions.

We have demonstrated expertise in acquiring and integrating bearing and precision engineered component manufacturers that have complementary products or distribution channels and have provided significant margin enhancement. We have consistently increased the profitability of acquired businesses through a process of methods and systems improvement coupled with the introduction of complementary and proprietary new products. Since 1992 we have completed 29 30 acquisitions, including VACCO, which we acquired on July 18, 2025. These acquisitions have broadened our end markets, products, customer base and geographic reach.

For the fiscal year ended March 29,28, 2025,2026, 63.8%57.9% of our net sales were attributable to the Industrial segment while the Aerospace/ & Defense segment contributed 36.2%42.1% of our net sales. Our net sales increased 4.9%14.3% year over year due to ansales increaseincreases in both the Aerospace & Defense and Industrial segments. VACCO, which was acquired on July 18, 2025, accounted for $83.9 of 14.1%net sales in fiscal 2026. VACCO is part of our Aerospace and& Defense segment sales and a 0.2% increase in Industrial segment sales.segment.

Aerospace and & Defense segment sales increased 14.1%32.9% year over year. Commercial aerospace increased 13.3%,17.8%, demonstratingdue to the continuedincreased recoverybuild andrates earlyfrom large stagesOEMs. of a growth cycle. Defensedefense sales, which representrepresented approximately 32.4%40.0% of segment sales during the year, were up 15.9%64.5% for the year. Excluding net sales from VACCO, defense sales were up 22.9% year over year. Our backlog in this marketsegment is significant and deliveries are expected to continue to grow in the coming years.

Industrial segment sales increase 0.2%increased 3.8% year over year, led by a 1.4%4.8% increase in distribution and aftermarket sales. Sales to OEMs were downup 2.1% 1.5% year over year, primarily driven by softnessaggregate in& thecement, energywarehousing, grain and semiconfood markets.& beverage.

ForOf our net sales for the fourth quarter of fiscal 2025,2026, 64.1% of our net sales57.1% was attributable to the Industrial segment compared to approximately 35.9%42.9% for the Aerospace/ & Defense segment. Approximately $191.5$200.0 of Industrial segment sales in the fourth quarter of fiscal 20252026 were to distribution and aftermarket compared to approximately $186.8$191.5 in the prior year while approximately $88.9$95.9 were made directly to OEMs in the fourth quarter of fiscal 20252026 compared to approximately $84.5$88.9 in the prior year. Net sales in the Aerospace/ & Defense segment segment increased $14.9,$64.8, or 10.6%,41.2%, for the fourth quarter of fiscal 20252026 compared to the same period last fiscal year. Excluding net sales from VACCO, net sales increased in this segment by 22.8%. Commercial aerospace net sales, which consisted of $85.9$106.6 of OEM and $23.3 $22.9 of distribution and aftermarket, increased by 11.6%18.5% compared to the fourth quarter of fiscal 20242025 when OEM net sales were $78.2 $85.9 and distribution and aftermarket net sales were $19.7.$23.3. This was driven by a continuing recovery asincreased build rates and orders grew in the OEM market and aftermarket demand remained strong. Our fiscal 2026 fourth quarter defense marketsmarkets’ net sales, which consisted of $38.1$74.0 of OEM and $10.0$18.6 of distribution and aftermarket, increased 8.2%92.5% compared to the fourth quarter of fiscal 20242025 when OEM net sales were $34.2 $38.1 and distribution and aftermarket net sales were $10.3.$10.0. Excluding net sales from VACCO, defense net sales were up 35.0% compared to the same period in the prior year.

Our backlog as of March 29,We 2025 was $940.7 compared to $821.5 as of March 30, 2024. This increase reflects continued growth, most notably in our commercial aerospace and marine defense end markets We experienced solid operating cash flow generation during fiscal 20252026 (as discussed in the “Liquidity and Capital Resources” section below). We believe that operating cash flows and available credit under our revolving bank credit facilities will provide adequate resources to fund internal growth initiatives for the foreseeable future, including at least the next 12 months. As of March 29,28, 2025, 2026, we had cash of $36.8,$57.3, of which, $23.7$33.1 was cash held by our foreign operations.

Approximately 98% 95% of the Company’s revenue was generated from the sale of products to customers in the IndustrialAerospace & Defense and Aerospace/Defense Industrial markets for each of the years ended March 29,28, 20252026 and March 30,29, 2024.2025. The remaining 2%5% of the Company’s revenue for each of the last two fiscal years was derived from services performed for customers, which included repair and refurbishment work performed on customer-controlled assets as well as design and test work.

Less than half of our factory costs, depending on product mix, are attributable to raw materials, purchased components and outside processing. When we experience raw material inflation, we attempt to offset these cost increases by changing our buying patterns, expanding our vendor network and passing through price increases when possible. Although we experienced cost inflation on raw material, labor and overhead for this fiscal year, we were able to mitigate it through pricingpricing, insourcing and strategic sourcing efforts.

Net sales for the fiscal year ended March 29,28, 20252026 increased $76.0,$234.6, or 4.9%,14.3%, compared to fiscal 2024.2025. Excluding $83.9 of net sales from VACCO, net sales increased by 9.2% compared to the prior year. This increase was the result of a 0.2% 3.8% increase in our Industrial segment, while net sales in our Aerospace/ & Defense segment increased 14.1%32.9% year over year. Industrial segment sales experienced the strongest contribution to growth in the metalsaggregate and& mining,cement, warehousing and logistics, food & beverage and food and beveragegrain markets. Within Aerospace/ & Defense, total commercial aerospace net sales increased 13.3%17.8% and defense net sales increased 15.9% 64.5% year over year. Commercial aerospace net sales, which consisted of $387.4 of OEM and $85.0 of distribution and aftermarket, increased by 17.8% compared to fiscal 2025 when OEM net sales were $317.8 and distribution and aftermarket net sales were $83.1. The commercialOEM aerospacemarkets increasehave reflects the continued recoveryto inimprove theas marketbuild rates have steadily increased over the last year.several months. Our defense market net sales, which consisted of $237.1 of OEM and $78.5 of distribution and aftermarket, increased by 64.5% compared to fiscal 2025 when OEM net sales were $146.3 and distribution and aftermarket net sales were $45.6. The increase in defense sales was led by marine, missiles and guided munitions and reflects continued growth in demand which is evident by our growing backlog. The acquisition of VACCO also contributed to the sales growth. Excluding VACCO, net sales increased by 19.1% for the Aerospace & Defense segment.

Net income attributable to common stockholders increased by $46.9$53.8 to $233.8$287.6 for fiscal 20252026 compared to fiscal 2024.2025. The net income attributable to common stockholders of $287.6 in fiscal 2026 was impacted by $14.8 of acquisition and related costs, $6.2 of restructuring and consolidation charges, $49.8 of interest expense, and $81.7 of income tax expense. The net income attributable to common stockholders of $233.8 in fiscal 2025 was impacted by $1.5 of restructuring and consolidation charges, $59.8 of interest expense, $12.4 of preferred stock dividends, and $65.7 of income tax expense. The net income attributable to common stockholders of $186.9 in fiscal 2024 was impacted by $3.0 of restructuring and consolidation charges, $78.7 of interest expense, $23.0 of preferred stock dividends, and $51.9 of income tax expense.

Gross margin was 44.4% of sales for fiscal 20252026 compared to 43.0%44.4% for the same period last year. The increase in gross margin was primarily driven by volume. Gross margin of $670.5 in fiscal 20242026 includedwas $0.3impacted of by $2.1 in restructuring costs related to inventory rationalization costs associated with consolidation efforts at one of our facilitiesmanufacturing locatedplants inand California.$13.2 Theof expansion inunfavorable marginpurchase duringaccounting fiscaladjustments 2025associated reflectswith the combinationVACCO of product mix, pricing and continued cost efficiencies and synergies achieved through integration.acquisition.

SG&A as a % of net sales was 16.9% compared to 17.1% in the prior fiscal year. SG&A expenses increased by $25.8$36.8 to $279.3$316.1 for fiscal 2025 2026 compared to fiscal 2024. The increase in SG&A was2025, primarily driven by increased personnel costs,costs IT costs and other$11.2 professionalfrom fees.the inclusion of VACCO.

Interest expense, net, consists of interest charged on the Company’s debt agreements and amortization of deferred financing fees, offset by interest income. Interest expense, net was $49.8 for fiscal 2026 compared to $59.8 for fiscal 2025 compared to $78.7 for fiscal 2024.2025. The decrease in interest expense between isthe primarilyperiods relatedwas due to our debtthe reduction efforts, as well asof the Interestprincipal Ratebalance Swapon our Term Loan (as defined in “Liquidity and Capital Resources—Liquidity—Domestic Credit Facility”), partially offset by the impact of a $200.0 draw on the Revolving Credit Facility (as defined in “Liquidity and Capital Resources—Liquidity—Domestic Credit Facility”) during the second quarter of fiscal 2026 to fund part of the VACCO acquisition. In addition, the Cross Currency Swap,Swap which havehas enabled us to better manage interest costs.

Other Non-Operating Expense/(Income)/Expense

Other non-operating expense for fiscal 2026 totaled $1.9, consisting primarily of post-retirement benefit costs and foreign exchange gains and losses. Non-operating income for during fiscal 2025 totaledwas $1.8, consisting primarily of a $4.0 legal settlement partially offset by post-retirement benefit costs and foreign exchange gains and losses. Non-operating costs incurred during fiscal 2024 were $1.7, consisting primarily of post-retirement benefit costs.

Income tax expense for fiscal 2025 2026 was $65.7$81.7 compared to $51.9$65.7 for fiscal 2024.2025. Our effective income tax rate for fiscal 20252026 was 21.1%22.1% compared to 19.8%21.1% for fiscal 2024. 2025. The effective income tax rates are different from the U.S. statutory rate due to the U.S. credits for increasing research activities and foreign-derived intangible income provision, which decrease the rate, and differences in foreign and state income taxes, which increase the rate. The effective income tax rate for fiscal 2026 of 22.1% included discrete items totaling a benefit of $6.2 which is substantially related to a benefit associated with stock-based compensation, changes in valuation allowances, and one-time adjustments to record deferred tax liabilities for foreign subsidiaries. The effective income tax rate for fiscal 2026 without these discrete items would have been 23.8%. The effective income tax rate for fiscal 2025 of 21.1% included discrete items totaling a benefit of $7.6 which is substantially related to a benefit associated with stock-based compensation, a reduction in unrecognized tax benefits due to the expiration of the statute of limitations, and benefits related to the release of a valuation allowance and an adjustment related to state remeasurements. The effective income tax rate for fiscal 2025 without these discrete items would have been 23.5%. The effective income tax rate for fiscal 2024 of 19.8% included discrete items totaling a benefit of $8.2 which is substantially related to a benefit associated with stock-based compensation, a reduction in unrecognized tax benefits due to the expiration of the statute of limitations, and the accrual of deferred tax assets related to state tax modifications. The effective income tax rate for fiscal 2024 without these discrete items would have been 22.9%.

We report our financial results under two operating segments: Aerospace/ & Defense and Industrial. We use gross margin as the primary measurement to assess the financial performance of each reportable segment.

Aerospace/ & Defense Segment:

Net sales increased $73.4, $195.2, or 14.1%,32.9%, for fiscal 20252026 compared to fiscal 2024.2025. Commercial aerospace net sales, which consisted of $317.8 $387.4 of OEM and $83.1$85.0 of distribution and aftermarket, increased by 13.3%17.8% compared to fiscal 20242025 when OEM net sales were $278.5$317.8 and distribution and and aftermarket net sales were $75.3.$83.1. This was driven by a continuing recovery as build rates and orders grew in theThe OEM markets and aftermarkethave demandcontinued remainedto strong.improve in line with build rates. Our defense marketsmarket net sales, which consisted of $146.3$237.1 of OEM and $45.6$78.5 of distribution and aftermarket, increased by 15.9%64.5% compared to fiscal 20242025 when OEM net sales were $135.3$146.3 and distribution and aftermarket net sales were $30.3.$45.6. The increase in defense sales was led by marine, missiles and guided munitions and reflects continued growth in demand which is evident by our growing backlog. The acquisition of VACCO also contributed to the sales growth. Excluding VACCO, net sales increased by 19.1% for the Aerospace & Defense segment. Excluding VACCO, commercial net sales increased 17.3% and defense market net sales increased 22.9% compared to the same period in the prior year.

Gross margin was $243.1, $320.7, or 41.0%40.7% of net sales, in fiscal 20252026 compared to $208.8,$243.1, or 40.2%41.0% of sales, for the same period in fiscal 2024.2025. We anticipate anticipate additional margin expansion in the upcoming year as the growing orders for commercial products are expected to increase volumes flowing through our manufacturing facilities driving cost efficiencies. Expected synergies from the VACCO acquisition should also contribute to margin expansion. Gross margin in fiscal 2026 was affected by $13.2 of purchase accounting adjustments related to the VACCO acquisition.

Net sales increased $2.6, $39.4, or 0.2%,3.8%, during fiscal 20252026 compared to the same period last year. The continued strong performance was driven by the aggregate and cement, warehousing, food & beverage and grain markets, partially offset by softness in the mining & metals, power generation and general industrialoil & gas end markets. Sales to distribution and the aftermarket were $717.4$751.9 in fiscal 20252026 compared to $707.6 $717.4 in the prior year, a 1.4% year4.8% over yearyear-over-year increase. OEM sales wereincreased $326.11.5% to $331.0 for fiscal 20252026 compared to $333.3$326.1 in the prior year. The 2.1% decrease in OEM sales compared to the prior year was primarily due to softness in the machinery, oil and gas, and semiconductor equipment end markets.

In fiscal 2022, RBC Bearings Incorporated, our top holding company, and our Roller Bearing Company of America, Inc. subsidiary (“RBCA”) entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent, Collateral Agent, Swingline Lender and Letter of Credit Issuer and the other lenders party thereto. The Credit Agreement provides the Company with (a) a $1,300.0 term loan (the “Term Loan”), which was used to fund a portion of the cash purchase price for the acquisition of Dodge Industrial and to pay related fees and expenses, and (b) a $500.0 revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan, the “Facilities”). Debt issuance costs associated with the Credit Agreement totaled $14.9 and are being amortized over the life of the Credit Agreement.

Amounts outstanding under the Facilities generally bear interest at either, at the Company’s option, (a) a base rate determined by reference to the higher of (i) Wells Fargo’s prime lending rate, (ii) the federal funds effective rate plus 0.50% and (iii) Term SOFR (as defined in the Credit Agreement based on SOFR, the secured overnight financing rate administered by the Federal Reserve Bank of New York) plus 1.00% or (b) Term SOFR plus a credit spread adjustment of 0.10% plus a margin ranging from 0.75% to a cap of 1.75% in the case of loans under the Revolving Credit Facility and 2.00% in the case of the Term Loan depending on the Company’s consolidated ratio ratio of total net debt to consolidated EBITDA (as defined withinin the Credit Agreement) from time to time. The Facilities are subject to a SOFR floor of 0.00%. As of March 29,28, 2025,2026, the Company’s margin was 1.00% for SOFR loans, the commitment fee rate was 0.175%, and the letter of credit fee rate was 1.00%. A portion of the Term Loan is subject to a fixed-rate interest swap as discussed in Note 12.0.75%.

The Term Loan matures in November 2026 and amortizes in quarterly installments with the balance payable on the maturity date. The Company can elect to prepay some or all of the outstanding balance from time to time without penalty, which will offset future quarterly amortization installments. Due to prepayments previously made, the required future principal payments on the Term Loan are $0 for fiscal 2026 and $413.0$173.0 for fiscal 2027. The Revolving Credit Facility expires in November 2026, at which time all amounts outstanding under the Revolving Credit Facility will be payable.

The Credit Agreement requires the Company to comply with various covenants, including the following financial covenants: (a) a maximum Total Net Leverage Ratio (as defined within the Credit Agreement) of 5.004.50:1.00, which maximum Total Net Leverage Ratio shall decrease during certain subsequent test periods as set forth in the Credit Agreement1.00 (provided that, no more than once during the term of the Facilities,that such maximum ratio applicable at such time may be increased by the Company byto 0.50:1.00 for a period of twelve (12) months after the consummation of a material acquisition); and (bprovided that there may be only one such increase in effect at any one time) a minimum Interest Coverage Ratio of 2.00:1.00. ). As of March 29,28, 20252026 the Company was in compliance with all debt covenants.

As of March 29,28, 2025,2026, $413.0$173.0 was outstanding under the Term Loan, $5.0$200.0 was outstanding under the Revolving Credit Facility (used to fund a portion of the purchase price for VACCO), and $3.7 of the Revolving Credit Facility was being utilized to provide letters of credit to secure the Company’s obligations relating to certain insurance programs. The Company had the ability to borrow up to an additional $491.3 $296.3 under the Revolving Credit Facility as of March 29,28, 2025.2026.

The Senior Notes will mature on October 15, 2029. The Company may redeem some or all of the Senior Notes at any time on or after October 15, 2024 at the redemption prices prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company may also redeem up to 40% of the Senior Notes using the proceeds of certain equity offerings completed before October 15, 2024, at a redemption price equal to 104.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If the Company sells certain of its assets or experiences specific kinds of changes in control, the Company must offer to purchase the Senior Notes.

One of our foreign subsidiaries, Schaublin SA, has a CHF 5.0 (approximately $5.5$6.1 USD) credit line (the “Foreign Credit Line”) with Credit Suisse (Switzerland) Ltd. to provide future working capital, if necessary. As of March 29,28, 2025,2026, $0.1 was being utilized to provide a bank guarantee. Fees associated associated with thethis Foreigncredit Credit Lineline are nominal.

In July 2024, Swiss Tool Systems, one of our foreign subsidiaries, purchased the building where it operates for CHF 7.1 (approximately $8.4 USD) and took out a 10-year 10-year, 2.9% fixed-rate mortgage on the building for CHF 4.0 (approximately $4.5 USD).

Prior to October 15, 2024, the Company had outstanding 4,600,000 shares of 5.00% Series A Mandatory Convertible Preferred Stock (“MCPS”) to which we paid a quarterly dividend aggregating $5.75, but on that date each then-outstanding share of the MCPS converted into 0.4413 shares of common stock, resulting in the retirement of the MCPS and the issuance of 2,029,955 shares of common stock.stock, Becauseand the MCPS is no longercessation outstanding,of the Company willpaying notrelated pay MCPS dividends in the future, resulting in a cash savings of $23.0 per year.dividends.

During fiscal 2025,2026, we generated cash of $293.6$415.7 from operating activities compared to $274.7$293.6 for fiscal 2024.2025. The increase of $18.9$122.1 was mainly the result of a $36.3$41.4 increase in net income partially offset byincome, a $6.2$56.8 unfavorablefavorable change in non-cash activity and net unfavorablefavorable change in operating assets and liabilities of $11.2.$23.9. The unfavorablefavorable change in operating assets and liabilities is detailed in the table below. The change in non-cash activity was primarily driven by $0.7$8.8 more depreciation and amortizationamortization, and $11.0$6.1 more stock-based compensation partially offset bycompensation, $0.6 lessmore amortization of of deferred financing costs, a$37.7 $14.5 unfavorable change inmore deferred taxes, $0.5$0.9 lessmore non-cash operating lease expense, $0.2 lessof additional losses on the disposition of assets,assets and $2.1$2.5 less inmore restructuring and other non-cash charges.

During fiscal 2025,2026, we used $49.8 $349.7 for investing activities as compared to $52.2$49.8 for fiscal 2024.2025. ThisThe decreaseincrease in cash used was primarily attributable to $19.3 less cash$276.7 used for acquisitionsthe VACCO acquisition and a $23.3 increase in fiscal 2025. This was partially offset by $16.6 more capital expenditures and $0.3 less proceeds from the sale of assets in fiscal 2025 compared to fiscal 2024.expenditures.

Revenue Recognition. Recognition. The performance obligations for the majority of RBC’s product sales are satisfied at the point in time in which the products are shipped. The Company has determined that the customer obtains control upon shipment of the product based on the shipping terms (i.e. when it ships from RBC’s dock or when the product arrives at the customer’s dock) and recognizes revenue when control has transferred to the customer. Once a customer has obtained control, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. Approximately 95% and 98% of the Company’s revenue was recognized in this manner based on sales for the fiscal years ended March 29,28, 20252026 and March 30,29, 2024.2025, respectively.

Goodwill and Indefinite-Lived Intangible Assets. Goodwill (representing the excess of the amount paid to acquire a company over the estimated fair value of the net assets acquired) and indefinite-lived intangible assets are not amortized but instead are tested for impairment annually, or when events or circumstances indicate that the carrying value of such asset may not be recoverable. Separate tests are performed for goodwill and indefinite lived intangible assets. The Company performs the annual impairment testing during the fourth quarter of each fiscal year. We completed a quantitative test of impairment on the indefinite lived intangible assets with no impairment noted in fiscal year 2025. 2026. The determination of any goodwill impairment is made at the reporting unit level. The Company determines the fair value of a reporting unit and compares it to its carrying amount. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company applies the income approach (discounted cash flow method) in testing goodwill for impairment. The key assumptionassumptions used in the discounted cash flow method used to estimate fair value isinclude gross margin, discount rate, and long-term growth rate, which is affected by expectations about future market or economic conditions. The fair value of the reporting units exceeds the carrying value by a minimum of 13.8%38.8% at each of the two reporting units. Assuming no growth in gross margin within the model would not result in impairment of goodwill for any of our reporting units. Although no changes are expected, if the actual results of the Company are less favorable than the assumptions the Company makes regarding estimated cash flows, the Company may be required to record an impairment charge in the future.

All dollar amounts in this MD&A presentation are stated in millions except for per share amounts and backlog.amounts.

The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation: (a) the bearing and engineered products industries are highly competitive, and this competition could reduce our profitability or limit our ability to grow; (b) 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; (c) weakness in any of the industries in which our customers operate, as well as the cyclical nature of our customers’ businesses generally, could materially reduce our revenues, cash flows and profitability; (d) future reductions or changes in U.S. government spending could negatively affect our business; (e) fluctuating supply and costs of subcomponents, raw materials and energy resources, could materially reduce our revenues, cash flows and profitability; (f) our results could be impacted by U.S. governmental trade policies and tariffs relating to the components and supplies we import from foreign vendors and foreign governmental trade policies and tariffs relating to our finished goods exported to other countries; (g) some of 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; (h) the retirement of commercial aircraft could reduce our revenues, cash flows and profitability; (i) work stoppages and other labor problems could materially reduce our ability to operate our business; (j) unexpected equipment failures, catastrophic events or capacity constraints could increase our costs and reduce our sales due to production curtailments or shutdowns; (k) we may not be able to continue to make the acquisitions necessary for us to realize our growth strategy; (l) businesses that we have acquired (such as Dodge or VACCO) or that we may acquire in the future may have liabilities that are not known to us; (m) goodwill and indefinite-lived intangibles comprise a significant portion of our total assets, and if we determine that goodwill and indefinite-lived intangibles have become impaired in the future, our results of operations and financial condition in such years may be materially and adversely affected; (n) we depend heavily on our senior management and other key personnel, the loss of whom could materially affect our financial performance and prospects; (o) our international operations are subject to risks inherent in such activities; (p) currency translation risks may have a material impact on our results of operations; (q) we may incur material losses for product liability and recall-related claims; (r) 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; (s) cancellation of orders in our backlog could negatively impact our revenues, cash flows and profitability; (t) our failure to maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on the Company’s financial condition and the trading price of our common stock; (u) risks associated with utilizing information technology systems could adversely affect our operations; (v) our quarterly performance can be affected by the timing of government product inspections and approvals; (w) we incurred substantial debt in order to complete the Dodge and VACCO acquisitions, which could constrain our business and exposes us to the risk of defaults under our debt instruments; (x) increases in interest rates would increase the cost of servicing the Term Loan and Revolving Credit Facility and could reduce our profitability; and (y) fluctuations in interest rates and foreign exchange rates could impact future earnings and cash flows related to theour Cross Currency Swap. Additional information regarding these and other risks and uncertainties is contained in our periodic filings with the SEC, including, without limitation, the risks identified under the heading “Risk Factors” set forth in our Annual Report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures,ventures or investments we may make. We do not intend, and undertake no obligation, to update or alter any forward-looking statement.

We are a leading international manufacturer of highly engineered precision bearings, components and essential systems for the aerospace, defense,defense and industrial industries. Our precision solutions are integral to the manufacture and operation of most machines and mechanical systems, reduce wear to moving parts, parts, facilitate proper power transmission, and reduce damage and energy loss caused by friction. While we manufacture products in all major major bearing categories, we focus primarily on the higher end of the bearing market where we believe our value-added manufacturing and engineering engineering capabilities enable us to differentiate ourselves from our competitors and enhance profitability. We believe our unique expertise has has enabled us to garner leading positions in many of the product markets in which we primarily compete. With 6266 facilities in 11 countries, of which 4244 are manufacturing facilities, we have been able to significantly broaden our end markets, products, customer base,base and geographic reach. We have a fiscal year consisting of 52 or 53 weeks, ending on the Saturday closest to March 31. Based on this policy, fiscal 20262027 will have 5253 weeks and fiscal 20252026 had 52 weeks. Both the thirdfirst quarter of fiscal 2027 and the first quarter of fiscal 2026 andhad 13 the third quarter of fiscal 2025 had 13 weeks.

We currently operate under two reportable business segments – Aerospace/ & Defense and Industrial:

The markets for our products are cyclical, and we have endeavored to mitigate this cyclicality by entering into single and sole-source relationships and long-term purchase agreements, through diversification across multiple market segments within the Aerospace/ & Defense and Industrial segments, by by increasing sales to the aftermarket, and by focusing on developing highly customized solutions.

We have demonstrated expertise in acquiring and integrating bearing and precision engineered component manufacturers that have complementary products or distribution channels and have provided significant margin enhancement. We have consistently increased the profitability of acquired businesses through a process of methods and systems improvement coupled with the introduction of complementary and proprietary new products. Since 1992 we have completed 30 acquisitions, including VACCO, which we acquired on July 18, 2025. These acquisitions have broadened our end markets, products, customer base,base and geographic reach.

Our net sales for the three-month three-month period ended DecemberJune 27, 20252026 increased 17.0%19.2% compared to the same period last fiscal year. The increase in net sales was a result of a 41.5%36.9% increase in our Aerospace/ & Defense segment and a 3.1%8.4% increase in our Industrial segment. $29.2 of sales included within this quarter came from VACCO. Our backlogBacklog as of December June 27, 20252026, was $2.1 billion, which included $0.5$2.3 billion of VACCO backlog, compared to $0.9 $2.3 billion of total backlog as of March 29,28, 2025.2026 Ourand backlog$1.0 includes orders with specific conditions (suchbillion as the timing of deliveryJune or the28, requirement to obtain funding approvals prior to commencing work) and/or that are cancellable at the customer’s discretion. As of December 27, 2025, approximately $1.1 billion of our backlog is related to the marine business.2025.

We continueare continuing to see the expansion of ourthe commercial aerospace business, which experienced a 21.5%21.8% increase in net sales for the three-month period ended December June 27, 2025,2026, which included $1.6 of sales from VACCO, versus the same period last fiscal year. We anticipate this growth to continue through the rest of the current fiscal year and beyond. Orders have continued to grow as evidenced by the increase in our backlog.backlog since this time last year. Defense sales, which represented approximately 40.6%42.4% of segment sales during the quarter, were up 86.2% year64.6% quarter over year.quarter, which included $31.7 sales from VACCO. We expect this growth to continue throughout the current fiscal year and beyond as we are adding capacitygearing up to fulfill the substantial number of defense orders in our backlog. Our industrial business continued to demonstrate strength in distribution across across several major end markets, notably including semicon, grain, and food & beverage, warehousing, and aggregate & cement.beverage.

We believe that operating cash flows and available credit under the Revolving Credit Facility will provide adequate resources to fund internal growth initiatives for the foreseeable future, including at least the next 12 months. As of DecemberJune 27, 2025,2026, we had cash of $107.6,$124.5, of which approximately $32.6 $47.4 was cash held by our foreign operations. Since June 27, 2026, we used $50.0 of our domestic cash to pay down the Term Loan.

Our netNet sales for the three-month nine-month period ended DecemberJune 27, 20252026 increased 12.9%$83.5, or 19.2%, compared to the same period last fiscal year. Net sales in our Industrial segment increased 3.1% compared8.4% toquarter over quarter against a strong quarter in the prior fiscal year. NetGrowth saleswas todriven thefrom semicon, aggregategrain, & cement,and food & beverage, forest products, and warehousing markets increased during the period while power generation and semicon showed weaknessbeverage compared to the prior year. Net sales in our Aerospace/ & Defense segment increased 30.0% year36.9% quarter over year. The increase in sales wasquarter, led by Defensedefense sales, which were up 55.1%64.6% compared to the same period in the prior fiscal year, driven by marine missiles and the acquisition of VACCO.VACCO, which contributed $31.7 of net sales to these end markets. Commercial OEM and aftermarket sales increased 17.6%21.8% compared to the same period in the prior fiscal year. The increase in commercial aerospace sales reflected growth in orders from large OEMs as build rates escalated, as well as expansion in the aftermarket.aftermarket and the acquisition of VACCO, which contributed $1.6 of net sales to these end markets. Space sales increased to $25.1 in the first quarter of fiscal 2027 compared to $7.5 for the same period in the prior year.

Net income attributable to common stockholders for the ninefirst quarter monthsof endedfiscal December 27, 20252027 was $195.9$101.5 compared to $161.1$68.5 for the same period last fiscal year.

SG&A for the ninefirst monthsquarter endedof Decemberfiscal 27, 20252027 was $229.2,$85.8, or 16.9%16.5% of net sales, as compared to $207.2,$73.9, or 17.3%16.9% of net sales, for the same period of fiscal 2025. 2026. The increase in SG&A was primarily driven by increased personnel costs and $7.0 from the inclusion of VACCO.VACCO and increased personnel costs.

Other operating expenses for the thirdfirst quarter of fiscal 20262027 totaled $23.5$21.2 compared to $19.2$20.2 for the same period last fiscal year. For the thirdfirst quarter of fiscal 2026,2027, other operating expenses includedconsisted of $21.0 million of amortization of intangible assets,assets and $0.4 million of acquisition costs, $0.2 of restructuring costs andoffset $1.9by million $0.2 of other items. $3.7 of the amortization expense was related to acquired intangible assets from the VACCO deal. For the thirdfirst quarter of fiscal 2025,2026, other operating expenses included $17.9 of amortization of intangible assets, $1.2 of restructuring costs, $0.1 of restructuring acquisition costs and $1.2$1.0 of other expense items.

Interest expense, net, consists of interest charged on the Company’s debt agreements and amortization of deferred financing fees, offset by interest income (see “Liquidity and Capital Resources” below). Interest expense, net, was $13.0 $10.1 for the thirdfirst quarter of fiscal 20262027 compared to $14.2 $12.2 for the same period last fiscal year. The decrease in interest expense between the periods was due to the reduction of the principal balance on the Term Loan,Loan and lower interest rates, partially offset by the impact of a $200.0 draw on the Revolving Credit Facility during during the second quarter of fiscal 2026 to fundpay parta portion of the VACCO acquisition.acquisition purchase price. In addition, the Cross Currency Swap has enabled us to better manage interest costs. See “Liquidity and Capital Resources – Liquidity” for more information about the Term Loan, the Revolving Credit Facility, and the Cross Currency Swap.

Other Non-Operating (Income)/Expense

Other non-operating expenses were $0.7$0.5 for the thirdfirst quarter of fiscal 20262027 compared to $3.3 of other non-operating income$1.2 for the same period in the prior fiscal year and consisted primarily of post-retirement benefit costs and foreign exchange gains and losses.

Income tax expense for the three-month period ended DecemberJune 27, 20252026 was $21.9$28.7 compared to $16.8$19.2 for the three-month period ended DecemberJune 28, 2024.2025. Our effective income tax rate for the three-month period ended June 27, 2026 was 22.1% compared to 21.9% for the three-month period ended June 28, 2025. The effective income tax rate for the three-month period ended DecemberJune 27, 20252026 wasof 24.6%22.1% comparedincluded to$1.4 22.5%of tax benefits associated with stock-based compensation and $0.1 of other items. The effective income tax rate without discrete items for the three-month period ended DecemberJune 27, 28,2026 2024.would have been 23.2%. The effective income tax rate for the three-month period ended DecemberJune 27,28, 2025 of 24.6%21.9% included $0.5$2.3 of discrete tax benefits associated with stock-based compensation partially offset by $2.0$1.3 of other items, including a $0.7 change to deferred taxes associated with new state tax filings and $1.1 from estimated liabilities and interest in those states for prior years.items. The effective income tax rate without discrete items for the three-month period ended DecemberJune 27,28, 2025 would have been 22.9%. The effective income tax rate for the three-month period ended December 28, 2024 of 22.5% included $0.8 of discrete tax benefits associated with stock-based compensation. The effective income tax rate without discrete items for the three-month period ended December 28, 2024 would have been 23.5%.23.1%.

We report our financial results under two operating segments: Aerospace/ & Defense and Industrial. The CODM uses gross margin as the primary measurement ofto profitabilityassess the financial performance of each reportable segment. End market and channel sales within our segments are based on internal definitions and metrics considered by management and are periodically reviewed and updated prospectively.

Aerospace/ & Defense Segment

Net sales increased $59.3,$60.8, or 41.5%,36.9% for the three months ended DecemberJune 27, 20252026 compared to the same period last fiscal year. Our commercial aerospace markets, which which consisted of $100.7$108.7 of OEM net sales and $19.4$21.2 of distribution and aftermarket net sales, increased by 21.5%21.8% compared to fiscal 2025 2026 when OEM net sales were $78.0$83.6 and distribution and aftermarket net sales were $20.9.$23.0. The OEM markets have continued to improve as build rates have steadily increased over the last several months. Our defense markets, which consisted of $60.0$70.3 of OEM net sales and $22.4 $25.2 of distribution and aftermarket net sales, aftermarket, increased by 86.2%64.6% compared to fiscal 20252026 when OEM net sales were $32.5$40.6 and distribution and aftermarket net sales were $11.8.$17.4. The increase in defense sales was driven by marinemilitary and missilesaircraft and reflects continued growth in demand which is evident by our growing backlog. The acquisition of VACCO also contributed to the sales growth.

Gross margin as a percentage of segment net sales was 40.1%44.5% for the third first quarter of fiscal 2026 compared to 40.5%42.6% for the same period last fiscal year. Gross margin for the third quarter of fiscal 2026 was unfavorably impacted by a $4.2 purchase accounting adjustment related to the VACCO acquisition. The decrease increase in gross margin as a percentage of net sales was primarily driven by this, partially offset by efficiencies achieved at the plants in part due to increased sales sales volumes and favorable product mix. The effectsbetter ofvolumes theallowed purchase accounting are expectedus to ceasebetter duringabsorb theour firstoverhead quarter of fiscal 2027. Including the impact of purchasing accounting, VACCO contributed $5.9 of gross margin in the third quarter of fiscal 2026.costs.

Net sales increased $7.9, $22.7, or 3.1%,8.4%, for the three months ended DecemberJune 27, 20252026 compared to the same period last fiscal year. We saw improvements in manynearly all of our end markets, including semicon, aggregategrain, & cement,and food &and beverage,beverage and warehousing,warehousing. partially offset by softness in mining and grain. Industrial OEM sales were $77.9$95.3 and $72.7$78.5 for the three month periods ended December June 27, 20252026 and DecemberJune 28, 2024,2025, respectively. Industrial sales to distribution and the aftermarket were $181.2$198.8 and $178.5$192.9 for the three month periods ended DecemberJune 27, 20252026 and DecemberJune 28, 2024, 2025, respectively.

Gross margin for the three months ended DecemberJune 27, 2025 2026 was 47.5%50.2% of net sales, compared to 46.5%46.1% in the comparable period in fiscal 2025.2026. The improvedincrease in gross margin as a percentage of isnet sales was primarily driven by productsales mix.volumes which have allowed us to better absorb our manufacturing overhead costs.

Corporate SG&A was $26.5,$32.8, or 3.9%6.3% of net sales, for the thirdfirst quarter of fiscal 20262027 compared to $25.5,$27.3, or 6.5%6.3% of net sales, for the same period last fiscal year. The quarter over quarter increase was primarily due to an increase in stockpersonnel compensation costs, partially offset by a reduction in personnel costs.

As of DecemberJune 27, 2025, 2026, we had cash of $107.6,$124.5, of which approximately $32.6$47.4 was cash held by our foreign operations. We expect that our undistributed foreign earnings earnings will be re-invested indefinitely for working capital, internal growth, and acquisitions for and by our foreign subsidiaries, subsidiaries with the exception of our Canadian operationsoperations. as there are no current plans to expand the sales operations within that jurisdiction. As discussed in further detail below, we also have the ability to borrow money from our existing credit facilities.

Amounts outstanding under the Facilities generally bear interest at either,interest, at the Company’s option, at either (a) a base rate determined by reference to the higher of (i) Wells Fargo’s prime lending rate, (ii) the federal funds effective rate plus 0.50% and (iii) Term SOFR plus 1.00% or (b) Term SOFR plus a credit spread adjustment adjustment of 0.10% plus a margin ranging from 0.75% to a cap of 1.75% in the case of loans under the Revolving Credit Facility and 2.00% in the case of the Term Loan, depending on the Company’s consolidated ratio of total net debt to consolidated EBITDA. The Facilities are are subject to a SOFR floor of 0.00%. As of DecemberJune 27, 2025,2026, the Company’s margin was 1.00%0.75% for SOFR loans, the commitment fee rate was 0.175%, and the letter of credit fee rate was 1.00%.0.75%.

The Term Loan matures in November 2026 and amortizes in quarterly installments with the balance payable on the maturity date. The Company can elect to prepay some or all of the outstanding balance from time to time without penalty, which will offset future quarterly amortization installments. Due to prepayments previously made, the required future principal payments on the Term Loan are $0$96.0 for fiscal 2027. Since June 27, 2026, andthe $288.0Company for fiscalhas 2027.paid Thedown Revolving$50.0 Crediton Facilitythe expiresTerm inLoan, Octoberreducing 2030, at which time all amountsthe outstanding underbalance theto Revolving Credit Facility will be payable.$46.0.

The Credit Agreement requires requires the Company to comply with various covenants, including a maximum Total Net Leverage Ratio (as defined inwithin the Credit Agreement) of 4.50:1.00 (provided that,that such maximum ratio may be increased by the Company to 0.50:1.00 for a period of 12 months after the consummation of a material acquisition (provided that there may be only one such increase in effect at any one time)). As of June 27, 2026 the Company was in compliance with all debt covenants.

As of DecemberJune 27, 2025,2026, $288.0$96.0 was outstanding under the Term Loan, $200.0 was outstanding under the Revolving Credit Facility (used to fund a portion of the purchase price for VACCO), and $3.7 of the Revolving Credit Facility was being utilized to provide letters of credit to secure the Company’s Company’s obligations relating to certain insurance programs, and $200.0 of the Revolving Credit Facility had been used to fund the purchase of VACCO.programs. The Company had the ability to borrow an additional $296.3 under the Revolving Credit Facility as of DecemberJune 27, 2025. 2026.

In fiscal 2022, RBCA issued $500.0 aggregate principal amount of the Senior Notes. The net proceeds from the issuance of the Senior Notes were approximately $492.0, after deducting initial purchasers’ discounts and commissions and offering expensesexpenses, and were used to fund a portion of the cash purchase price for the acquisition of Dodge.

The Senior Notes were issued pursuant to an indenture with Wilmington Trust, National Association, as trustee. This indenture contains covenants limiting the ability of the Company to (i) incur additional indebtedness or guarantee indebtedness, (ii) declare or pay dividends, redeem stock or make other distributions to stockholders, (iii) make investments, (iv) create liens or use assets as security in other transactions, (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of its assets, (vi) enter into transactions with affiliates, and (vii) sell or transfer certain assets. These covenants contain various exceptions, limitations and qualifications. At any time thatIf the Senior Notes are ever rated investment grade, certain of these covenants will be suspended.

The Senior Notes will mature on October 15, 2029. The Company may redeem some or all of the Senior Notes at any time at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If the Company sells certain of its assets or experiences specific kinds of changes in control, the Company must offer to repurchasepurchase the Senior Notes.

TheOne Foreignof Creditour Lineforeign provides subsidiaries, Schaublin SASA, withhas a CHF 5.0 (approximately $6.2 $6.0 USD) credit line with Credit Suisse (Switzerland) Ltd. to provide future working capital, if necessary. As of DecemberJune 27, 2025,2026, $0.1 was being utilized to provide a bank guarantee. Fees associated with thethis Foreigncredit Credit Lineline are nominal.

Nine-monthThree-month Period Ended DecemberJune 27, 20252026 Compared to the Nine-monthThree-month Period Ended DecemberJune 28, 20242025

During the first ninethree months of fiscal 2026,2027, we generated cash of $330.5 $171.8 from operating activities compared to $224.4$120.0 during the same period of fiscal 2025.2026. The increase of $106.1$51.8 was the result of an increase in net income of $22.4,$33.0, a favorable change in operating assets and liabilities of $43.1$14.8 and a favorable impact of non-cash activity of $40.6. $4.0. The favorable change in operating assets and liabilities is detailed in the table below. The change in non-cash activity was driven by $3.0$0.1 more of stock-based compensation, $0.7$3.7 more of amortization of deferred financing costs, $4.0 more of restructuring costs, $5.5 more of depreciation and amortization, $0.7$0.2 more ofnoncash amortizationoperating lease expense, $3.2 increase of operatingdeferred leases,taxes, $0.5and of$0.6 additional lossesgain on theasset dispositiondispositions, ofoffset by $3.8 less restructuring assets and a $26.2 increase in deferred taxes.costs.