<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 26, 1998
------------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission file number: 333-33085
ROLLER BEARING COMPANY OF AMERICA, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3426227
- ------------------------------- -------------------------------------
(State or other jurisdiction of (IRS Employer Indentification Number)
incorporation or organization)
60 ROUND HILL ROAD, FAIRFIELD, CT
----------------------------------------
(Address of principal executive offices)
203-255-1511
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
preceding twelve (12) months (or for shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 9, 1998
---------------------------- -------------------------------
Common stock, $.01 par value 100
<PAGE>
ROLLER BEARING COMPANY OF AMERICA, INC.
INDEX
PAGE
Part I Financial Information
Item 1. Consolidated Balance Sheets -
At September 26, 1998 (unaudited) and March 28, 1998 3
Consolidated Statements of Operations - Three and Six
Months ended September 26, 1998 (unaudited) and
September 27, 1997 (unaudited) 4
Consolidated Statements of Cash
Flows - Three and Six Months ended September 26, 1998
(unaudited) and September 27, 1997 (unaudited) 5
Notes to Consolidated Financial Statements 6 - 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 12
Part II Other Information 13
Signatures 14
Exhibit 27 15
2
<PAGE>
PART I
ITEM 1. FINANCIAL INFORMATION
ROLLER BEARING COMPANY OF AMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 26, MARCH 28,
1998 1998
---------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 2,701 $ 10,625
Accounts receivable, net 23,987 26,859
Inventories 43,822 38,563
Prepaid expenses and other current assets 2,331 1,996
---------- ----------
Total current assets 72,841 78,043
========== ==========
Property, plant and equipment, net 49,813 45,237
Restricted marketable securities 6,012 4,005
Goodwill, net of accumulated amortization of $3,821 at
September 1998, and $3,420 at March 1998 27,953 19,334
Deferred financing costs, net of accumulated amortization
of $1,255 at September 1998, and $766 at March 1998 6,806 7,147
Other assets 3,009 2,639
---------- ----------
Total assets $ 166,434 $ 156,405
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 12,322 $ 12,925
Accrued expenses and other current liabilities 16,078 14,827
Current portion of long-term debt 1,500 1,490
Obligations under capital leases, current portion 1,505 1,585
---------- ----------
Total current liabilities 31,405 30,827
Long term debt 142,700 134,710
Capital lease obligations, less current portion 1,749 2,115
Other noncurrent liabilities 3,675 3,675
---------- ----------
Total liabilities 179,529 171,327
Stockholder's (deficit) equity:
Common stock - $.01 par value; 1,000 shares
authorized; issued and outstanding shares:
100 shares at September 1998, and at March 1998 - -
Additional paid-in capital (759) (759)
Stock Warrants 6,600 6,600
Retained earnings (deficit) (18,936) (20,763)
---------- ----------
Total stockholder's (deficit) (13,095) (14,922)
Total liabilities and stockholder's (deficit) $ 166,434 $ 156,405
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- -----------------------------
September 26, September 27, September 26, September 27,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 36,001 $ 32,309 $ 73,481 $ 60,971
Cost of sales 25,261 22,855 51,940 43,141
---------- ---------- ---------- ----------
Gross Margin 10,740 9,454 21,541 17,830
Operating expenses:
Selling, general and administrative 5,663 4,531 10,913 8,661
Other expense, net of other income 165 234 337 1,022
---------- ---------- ---------- ----------
5,828 4,765 11,250 9,683
Operating income 4,912 4,689 10,291 8,147
Interest expense, net 3,748 3,311 7,191 4,894
---------- ---------- ---------- ----------
Income before taxes and
extraordinary charge 1,164 1,378 3,100 3,253
Income tax expense 478 565 1,271 1,334
---------- ---------- ---------- ----------
Income before extraordinary charge 686 813 1,829 1,919
Extraordinary charge, net - - - 625
---------- ---------- ---------- ----------
Net income $ 686 $ 813 $ 1,829 $ 1,294
========== ========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 26, SEPTEMBER 27,
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,829 $ 1,294
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 4,100 3,453
Deferred income taxes (428) (105)
Amortization of goodwill 401 289
Amortization of deferred financing costs 489 333
Extraordinary charge - 625
Changes in working capital, net of acquisition:
(Increase) decrease in accounts receivable 3,813 (1,765)
(Increase) decrease in inventories (3,995) (3,042)
(Increase) decrease in prepaid expenses & other current assets (332) (542)
(Increase) decrease in other non current assets (170) 434
Increase (decrease) in accounts payable (1,229) 1,207
Increase (decrease) in accrued expenses & other current liabilities (417) 4,995
Increase (decrease) in other non-current liabilities (159) -
--------- ---------
Net cash provided (used) by operating activities 3,902 7,176
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of subsidiaries (11,088) (3,721)
Purchase of property, plant & equipment, net (6,080) (2,761)
Sale of restricted marketable securities (3,000) -
Purchase of restricted marketable securities 993 (93)
--------- ---------
Net cash used in investing activities (19,175) (6,575)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in revolving credit facility 5,500 (24,627)
Issuance of Industrial Revenue Bonds 3,000 -
Payments of bank term loan (500) (250)
Principal payments on capital lease obligations (651) (692)
Proceeds from long-term debt - 126,000
Payments of long-term debt - (27,488)
Dividend paid to parent company - (56,219)
Financing fees paid in connection with the Recapitalization - (8,164)
--------- ---------
Net cash provided by financing activities 7,349 8,560
Net increase (decrease) in cash (7,924) 9,161
Cash, at beginning of year 10,625 859
--------- ---------
Cash, at end of period $ 2,701 $ 10,020
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 6,543 $ 1,830
========= =========
Income taxes $ 1,098 $ 1,011
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
ROLLER BEARING COMPANY OF AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
The consolidated financial statements included herein have been prepared by
Roller Bearing Company of America, Inc. (the "Company"), without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission. The
fiscal year end balance sheet data was derived from the Company's audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles. The interim financial statements furnished with
this report have been prepared on a consistent basis with the Company's audited
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the fiscal year ended March 28, 1998 (the "Form 10-K"). These
statements reflect all adjustments, consisting only of items of a normal
recurring nature, which are, in the opinion of management, necessary for the
fair statement of the consolidated financial condition and consolidated results
of operations for the interim periods presented. These financial statements
should be read in conjunction with the Company's audited financial statements
and notes thereto included in the Form 10-K.
The results of operations for the three and six month periods ended September
26, 1998 are not necessarily indicative of the operating results for the full
year.
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries, Industrial Tectonics Bearings Corporation
("ITB"), RBC Linear Precision Products ("LPP"), RBC Nice Bearings, Inc.
("Nice"), Bremen Bearings, Inc. ("Bremen"), Miller Bearings, Inc. ("Miller")
and Roller Bearing Company FSC, Inc. ("FSC"). All material intercompany
balances and transactions have been eliminated.
All references to "Holdings" refer to Roller Bearing Holding Company, Inc., a
Delaware corporation, and the parent and sole stockholder of the Company.
1. ACQUISITION OF WHOLLY OWNED SUBSIDIARIES
On August 8, 1997, Bremen completed the acquisition of the Bremen Bearings
Division of SKF USA, Inc., a manufacturer of needle bearings with facilities in
Bremen, Indiana. The aggregate purchase price for the acquisition, which was
effective as of July 1, 1997, was approximately $3,640 and was accounted for
under the purchase method of accounting. A deferred payment of $546, which was
paid in December 1997 for the installation of certain equipment, has been
classified as the purchase of property, plant and equipment. Additionally, a
deferred payment of $749 was made in August 1998 for inventory acquired at
closing. The purchase price has been allocated to the assets required and
liabilities assumed based upon their respective estimated fair values.
On June 3, 1998, Miller completed the acquisition of the assets of Miller
Bearing Company, Inc. ("MBC"), a manufacturer of pins, rollers and screw machine
products with facilities in Bremen, Indiana. The aggregate purchase price for
the acquisition, which was effective as of March 1, 1998, was approximately
$11,088. The acquisition was accounted for as a purchase, resulting in
approximately $2,138 allocable to tangible assets and $8,949 of excess of
purchase price over net assets acquired allocable to goodwill.
The results of operations of Bremen and Miller subsequent to the effective dates
of acquisition are included in the results of operations of the Company.
Therefore, the results of the Company for the six
6
<PAGE>
months ended September 26, 1998 include Bremen and Miller results. Pro forma
consolidated results of operations of the Company, based upon pre-acquisition
unaudited historical information provided by the seller of Miller, for the
six months ended September 26, 1998, as if the acquisition took place at the
beginning of fiscal 1998, are as follows:
SIX MONTHS ENDED SEPTEMBER 27, 1997
---------------------------------------
AS REPORTED BREMEN & MILLER PRO FORMA
---------------------------------------
Net Sales $ 60,971 $ 8,396 $ 69,367
Income before Extraordinary Charge $ 1,919 $ 823 $ 2,742
Net Income $ 1,294 $ 823 $ 2,117
2. DEBT
On June 23, 1997, pursuant to a Redemption and Warrant Purchase Agreement dated
May 20, 1997, Holdings effected a recapitalization of its outstanding capital
stock (including the financing and other transactions consummated by Holdings,
the Company and its subsidiaries in connection therewith, the
"Recapitalization"). In connection with the financing of the Recapitalization,
the Company issued $110,000 aggregate principal amount of 9 5/8% Senior
Subordinated Notes due 2007 (the "Notes"). The Notes pay interest semiannually
and mature on June 15, 2007, but may be redeemed at the Company's option
beginning on June 15, 2002, or earlier under certain conditions specified in the
indenture pursuant to which the Notes were issued (the "Indenture"). The Notes
are unsecured and subordinated to all existing and future Senior Indebtedness
(as defined in the Indenture) of the Company. The Notes are fully and
unconditionally and irrevocably guaranteed, jointly and severally, on a senior
subordinated basis by each of the wholly owned subsidiaries of the Company.
The separate financial statements of the subsidiary guarantors have not been
presented because management has determined that they would not be material to
investors. However the summarized combined financial information of the
subsidiary guarantors are as follows:
SEPTEMBER 26, MARCH 28,
Balance Sheet Data: 1998 1998
------------- -------------
Current assets $ 24,505 $ 22,985
Noncurrent assets 32,849 21,061
Total assets $ 57,354 $ 44,046
-------- --------
Current liabilities $ 46,021 $ 36,647
Noncurrent liabilities 1,291 694
Total liabilities $ 47,312 $ 37,341
-------- --------
Stockholder's equity $ 10,042 $ 6,705
SIX MONTHS ENDED
------------------------------------
SEPTEMBER 26, SEPTEMBER 27,
Operating Results 1998 1997
------------- -------------
Net sales $ 32,921 $ 23,889
Gross margin $ 7,602 $ 5,991
Net income $ 2,738 $ 2,161
7
<PAGE>
Total current liabilities include intercompany liabilities of $34,422 and $25,
936 as of September 26, 1998 and March 28, 1998, respectively. Net income
includes a charge for corporate overhead allocated from the Company of $520 in
both fiscal years 1998 and 1997, and a provision for income taxes of $1,902 and
$1,502 in fiscal years 1998 and 1997, respectively.
In addition, in connection with the Recapitalization, the Company entered into
bank credit facilities (the "Senior Credit Facilities") with a group of lenders
providing for $16,000 of term loans (the "Term Loans") and up to $54,000 of
revolving credit loans and letters of credit (the "Revolving Credit Facility").
Approximately $10,900 of the Revolving Credit Facility is being utilized to
provide letters of credit to secure the Company's obligations relating to
certain Industrial Development Revenue Bonds. As of September 26, 1998 the
Company had the ability to borrow up to an additional $37,600 under the
Revolving Credit Facility.
The balances payable under all borrowing facilities are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 26, MARCH 28,
1998 1998
--------- ---------
<S> <C> <C>
SENIOR SUBORDINATED NOTES PAYABLE $ 110,000 $ 110,000
CREDIT FACILITY
Term Loan, payable in quarterly installments of $250,
Commencing September 30, 1997, increasing annually thereafter to
$1,375 from September 20, 2001 with final payment due June 30, 2002;
bears interest at variable rates,
Payable monthly and quarterly for prime and LIBOR-based elections,
respectively 15,000 15,500
Revolving Credit Facility borrowings outstanding 5,500
INDUSTRIAL DEVELOPMENT REVENUE BONDS
Series 1994 A due in annual installments of $180 beginning September 1, 2006,
graduating to $815 on September 1, 2014 with final payment due on September 1,
2017; bears interest at a variable rate, payable monthly through September 2017 7,700 7,700
Series 1994 B bears interest at a variable rate, payable monthly
through September 2017 3,000 3,000
Series 1998 tax-exempt industrial development bonds; bears interest at variable
rates, payable monthly through September 2021 3,000 -
-------- --------
Total debt 144,200 136,200
Less: current portion 1,500 1,490
Long term debt $142,700 $134,710
======== ========
</TABLE>
The debt agreements require that the Company meet certain financial covenants,
principally limiting the incurrence of additional indebtedness, the payment of
dividends, and certain other transactions.
8
<PAGE>
3. EXTRAORDINARY CHARGE
The extraordinary charge for the six months ended September 26, 1997 resulted
from the write off of unamortized deferred financing costs due to the Company's
early extinguishment of debt in connection with the Recapitalization described
above. The extraordinary charge was $1,059 and is reflected net of the related
tax benefit of $434.
4. RECENTLY ISSUED PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, which is required
to be adopted in years beginning after June 15, 1999. Because of the Company's
minimal exposure to derivatives, management does not anticipate that the
adoption of the new statement will have a significant effect on earnings or the
financial position of the Company.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
Except for the historical information and current statements contained in this
Quarterly Report on Form 10-Q, certain matters discussed herein, including,
without limitation, "Management's Discussion and Analysis of Financial Condition
and Results of Operations" are forward looking statements that involve risks and
uncertainties, including, without limitation, the effect of economic and market
conditions and competition, the cyclical nature of the Company's target markets,
particularly, the aerospace industry, the cost of raw materials and the
Company's ability to pass cost increases to its customers, the ability of the
Company to expand into new markets, the ability of the Company to integrate
recent acquisitions and other factors discussed from time to time in the reports
filed by the Company with the Securities and Exchange Commission, which would
cause actual results to differ materially.
The following discussion addresses the financial condition of the Company as of
September 26, 1998 and the results of its operations for the three and six month
periods ended September 26, 1998, compared to the same period last year. The
discussion should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations for the fiscal year
ended March 28, 1998 included in the Form 10-K.
THREE MONTHS ENDED SEPTEMBER 26, 1998 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 27, 1997
Net sales for the three months ended September 26, 1998 were $36,001, an
increase of $3,692 or 11.4% over the three months ended September 27, 1997. The
increase included sales totaling $2,129 from Miller, acquired effective March
1998. Net sales increased $1,563 or 4.8% without Miller sales. This increase was
primarily due to strong sales to customers in the aerospace and construction
industries.
Gross margin increased by $1,286 or 13.6% for the three months ended September
26, 1998, as compared to the comparable period last year, as a result of higher
sales volume. Gross margin as a percentage of net sales increased 0.5% from
29.3% for the second quarter of fiscal 1998, to 29.8% in the second quarter of
fiscal 1999, primarily as a result of strategic pricing, better operational
performance through Kaizen management techniques, profitable new products, and
machine tool capital enhancements.
Selling, general and administrative (SG&A) expenses increased by $1,132 or 25.0%
for the three month period ended September 26, 1998 compared to the comparable
period last year. The increase was primarily due to infrastructure costs
necessary to support the expanded business as well as the additional expenses
related to Miller. SG&A as a percentage of net sales increased from 14.0% for
the second quarter of fiscal 1998 to 15.7% for the second quarter of fiscal
1999. The increase of 1.7% is primarily due to the infrastructure needed to
support the expanded business. Other operating expenses decreased slightly by
$69.
Operating income increased by $223 or 4.8% to $4,912 for the three months ended
September 26, 1998 as compared to $4,689 for the corresponding period in the
prior year. The increase primarily resulted from higher gross margin from higher
sales volume, partially offset by higher SG&A.
Income before taxes and extraordinary charges decreased for the three month
period ended September 26, 1998 to $1,164 from $1,378 for the same period last
year, as a result of higher operating income, less higher interest expense
resulting from the debt incurred in connection with acquisition financing and
the Recapitalization.
10
<PAGE>
Net income for the current quarter reflects a tax provision of $478 compared to
$565 for the second quarter of fiscal 1998, an effective combined Federal and
state tax rate of 41% in both years. Net income decreased by $127 to $686 from
$813 for the corresponding period last year.
SIX MONTHS ENDED SEPTEMBER 26, 1998 COMPARED TO SIX MONTHS ENDED
SEPTEMBER 27, 1997
Net sales for the six months ended September 26, 1998 were $73,481, an increase
of $12,510 or 20.5% over the six months ended September 27, 1997. The increase
includes sales totaling $11,156 in fiscal 1998 from Bremen and Miller, acquired
effective July 1997 and March 1998 respectively. Net sales increased $5,141 or
9.0% without Bremen and Miller sales. Fiscal 1997 sales includes $3,787 in
Bremen sales. The primary reason for this increase was due to profitable new
products and continued strong performance, particularly in the aerospace,
airframe and construction industries.
Gross margin increased by $3,711 or 20.8% for the six months ended September 26,
1998 as compared to the comparable period last year, as a result of strategic
pricing, better operational performance through Kaizen management techniques,
and machine tool capital enhancements. Gross margin as a percentage of net sales
increased from 29.2% for the first six months of fiscal 1998 to 29.3% for the
first six months of fiscal 1999.
Selling, general and administrative (SG&A) expenses increased by $2,252 or 26.0%
for the six month period ended September 26, 1998 compared to the comparable
period last year. The increase is primarily due to infrastructure costs
necessary to support the expanded business as well as the additional expenses
related to the two acquired companies. SG&A as a percentage of net sales
increased from 14.2% for the first six months of fiscal 1998, to 14.8% for the
first six months of fiscal 1999. The 0.6% is primarily due to the infrastructure
needed to support the expanded business. Other operating expenses decreased by
$685 primarily due to charges relating to Recapitalization ($563) and other
charges net of other income ($122) in fiscal 1998.
Operating income increased by $2,144 or 26.3% to $10,291 for the six months
ended September 26, 1998 as compared to $8,147 for the corresponding period in
the prior year. The increase primarily resulted from higher gross margin from
higher sales volume, partially offset by higher SG&A and other operating
expenses.
Income before taxes and extraordinary charges decreased for the six month period
ended September 26, 1998 to $3,100 from $3,253, for the same period last year,
as a result of higher operating income less higher interest expense resulting
from the debt incurred in connection with acquisition financing and the
Recapitalization.
Net income for the first six months ended September 26, 1998 reflects a tax
provision of $1,271 compared to $1,334 for the first six months of fiscal 1997,
an effective combined Federal and state effective tax rate of 41% in both years.
Income before extraordinary charges decreased by $90 to $1,829 from $1,919 for
the corresponding period last year. However, net income increased to $1,829 from
$1,294 in fiscal 1998, due to an extraordinary charge relating to the early
extinguishment of debt of $1,059 less related tax benefit of $434 ($625 net).
The early extinguishment of debt related to the Recapitalization.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at September 26, 1998 was $41,436 compared to $47,216 at March
28, 1998, a decrease of $5,780. For the six months ended September 26, 1998, the
Company provided $3,902 from operating activities.
11
<PAGE>
Cash used for investing activities for the six months ended September 26, 1998
was $19,175 which included $11,088 for the acquisition of Miller, with the
remainder relating to capital expenditures of $6,080 less the sale of restricted
securities of $993.
The Company had net cash inflows from financing activities of $7,349
partially resulting from a draw down on its revolving credit facility of
$5,500. Additionally, in September 1998, the Company issued $3,000 in secured
industrial revenue bonds which are due in 2021, which are to be used for
construction or purchase of building improvements, fixtures, machinery and
equipment in connection with a manufacturing facility of the Company. During
the six month period ended September 26, 1998, the Company used $651 of funds
for capital lease obligations and made payments of $500 on its bank term loan.
Principal and interest payments under the Senior Credit Facilities, interest
payments on the Notes, and the funding of acquisitions represent significant
liquidity requirements for the Company. With respect to the Term Loans, the
Company is required to make scheduled principal payments which commenced in
September 1997. The Term Loans bear interest at a floating rate based upon the
interest rate option elected by the Company. As a result of the indebtedness
incurred in connection with the Recapitalization, the Company's
post-Recapitalization interest expense will be higher and will have a greater
proportionate impact on net income in comparison to pre-Recapitalization
periods.
The Company believes that cash flows from operations and amounts available under
the Revolving Credit Facility will provide adequate funds for ongoing
operations, planned capital expenditures (including acquisitions) and debt
service payments for at least the next twelve months. The Company's ability to
borrow is limited by the terms of the Senior Credit Facilities and the Indenture
under which the Notes were issued.
YEAR 2000
The Company has made a comprehensive assessment of its computer operations to
identify systems that could be affected by the change in the millennium. The
Company has developed a detailed Year 2000 compliance plan and is utilizing both
internal and external resources to ensure Year 2000 compliance. The Company
expects its Year 2000 conversion to be completed by March, 1999, but has also
formulated contingency plans, which, in the event the Company's plans are
delayed, may be implemented to minimize the risks of interruptions of the
Company's business.
Costs related to this conversion to date are approximately $100, and are not
expected to exceed $250. However, there can be no assurance that the systems of
other companies on which the Company's system relies will also be converted on a
timely basis. A failure to convert by another company could have an adverse
effect on the Company's systems.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are various claims and legal proceedings against the Company relating to
its operations in the normal course of business, none of which the Company
believes is material. The Company currently maintains insurance coverage for
product liability claims. There can be no assurance that indemnification from
its customers and coverage under insurance policies will be adequate to cover
any future product liability claims against the Company.
ITEMS 2, 3, 4, AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT 27
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the undersigned
thereunto duly authorized.
ROLLER BEARING COMPANY OF AMERICA, INC.
November 6, 1998 /s/ Michael J. Hartnett
----------------------------------------
By: Michael J. Hartnett
President & Chief Executive Officer
Principal Executive Officer
November 6, 1998 /s/ Anthony S. Cavalieri
----------------------------------------
By: Anthony S. Cavalieri
Vice President & Chief Financial Officer
Principal Accounting Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-27-1999
<PERIOD-START> MAR-29-1998
<PERIOD-END> SEP-26-1998
<CASH> 2,701
<SECURITIES> 0
<RECEIVABLES> 24,158
<ALLOWANCES> 171
<INVENTORY> 43,822
<CURRENT-ASSETS> 72,841
<PP&E> 79,721
<DEPRECIATION> 29,908
<TOTAL-ASSETS> 166,434
<CURRENT-LIABILITIES> 31,405
<BONDS> 144,200
0
0
<COMMON> 0
<OTHER-SE> (13,095)
<TOTAL-LIABILITY-AND-EQUITY> 166,434
<SALES> 73,481
<TOTAL-REVENUES> 73,481
<CGS> 51,940
<TOTAL-COSTS> 10,913
<OTHER-EXPENSES> 337
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,191
<INCOME-PRETAX> 3,100
<INCOME-TAX> 1,271
<INCOME-CONTINUING> 1,829
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,829
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
