Good morning, and thank you for joining us for RBC Bearings' fiscal second quarter 2026 earnings call. I'm Josh Carroll with the Investor Relations team. With me on today's call are Dr. Michael Hartnett, Chairman, President, and Chief Executive Officer; Daniel Bergeron, Director, Vice President, and Chief Operating Officer; and Rob Sullivan, Vice President and Chief Financial Officer. As a reminder, some of the statements made today may be forward-looking and under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected or implied due to a variety of factors. We refer you to RBC Bearings' recent filings with the SEC for a more detailed discussion of the risks that could impact the company's future operating results and financial condition. These factors are also listed in the press release, along with the reconciliation between GAAP and non-GAAP financial information. With that, I'll now turn the call over to Dr. Hartnett. Good morning, and thank you. Good morning, everyone, and thank you for joining us. As usual, I'm going to start today's call with a short review of our financial results, with some comments, and I'll finish our outlook on the industry and fiscal 2026. Rob Sullivan will follow me with some more details on the results. Second quarter net sales were $455.3 million, a 14.4% increase over last year, driven by continued strong performance in our Aerospace and Defense segment and steady performance from our Industrial businesses. Consolidated gross margin for the quarter was 44.1%, versus 43.7% for the same period last year, and adjusted EPS was $2.88 versus $2.29 last year. Clearly, our performance exceeded our expectations for the second quarter of fiscal 2026, and the company is showing good momentum moving into the second half of RBC's year. Free cash flow for the period was a strong $71.7 million. 56% of our revenues were Industrial sector and 44% Aerospace and Defense, with the Aerospace and Defense sector now racing to parity, we think, next year. Total A&D sales were up 38.8% year- on- year. Commercial Aerospace expanded 21.6%. Defense expansion was 73.3%. Organically, the performance looks like this: Commercial Aerospace increased by 21.2%, Defense increased by 22.4%. Demand across the A&D sector is impressive, and momentum is strong. Backlog is up to $1.6 billion today from $940 million in March and $860 million last year at this time. We fully expect to approach $2 billion in backlog by year's end, which will be an amazing milestone, especially when you consider that more than half of our revenues preclude backlog production. Although revenues are currently capped by production capacity, we are working hard to expand manufacturing capacities in our marine and aircraft RBC plants, adding more capacity each quarter. Clearly, this will be impactful to margins. Primary drivers here are submarine, aircraft, and engine customers. Proprietary components are quiet valves and actuators for submarines, that is, the Virginia and Columbia boats, as well as MRO supplies for existing fleets. Both Sargent and VACCO are the RBC contributors here. On airframe and engines, as Boeing, Airbus, and Embraer continue increasing build rates to unprecedented levels, production of our products, of course, must follow. As most of you know, we have substantial c ontent in these airframes and engines, where we supply precision and line bearings as well as integrated structural components across aircraft and engine spectrum. With Boeing's recent FAA approval to expand production rates, business is good and about to get better. It's important to understand that building rates of submarines and commercial aircraft are levels not seen in over a generation, since the early 1980s for submarines, for reasons both good and bad. We are currently booking some orders for deliveries into the 2030s. RBC is dead center in the middle of this effort today, with a considerable number of proprietary, sole, and single-source products governed by multi-year contracts in the majority of cases. Let's turn over to our Industrial business now. Overall, our Industrial business was up 0.7%. Industrial distribution was up 3.3%, while the OEM sector was off 4.7%. Continued weakness in the markets of oil, semiconductor machinery, and European machine tools continue. Our industrial OEM business is a 70/30 split, with 30% being the OEM component. We are encouraged to see the continued demand in the industrial aftermarket across many of the markets that we monitor. These include aggregates, metals, grains, food and beverage, forest products, warehousing, to name a few. I'll now turn the call over to Rob Sullivan, who will give some colored commentary on the financial treatments and the Q3 outlook. Thank you, Mike. As Dr. Hartnett mentioned, this was another strong quarter for RBC. Net sales grew 14.4%, driving a 15.4% increase in gross margin. Gross margins were 44.1% for the quarter, or 44.9% on an adjusted basis, compared to 43.7% in the same period last year. During the quarter, we delivered strong performance across our business segments, specifically within A&D, which has been seeing strong growth, as Dr. Hartnett previously noted. A&D gross margins during the quarter were 38.7%, or 42.3% on an organic basis, and industrial margins were 48.2%. Included in the aerospace results were $24.7 million of net sales from VACCO during the period, which was acquired on July 18th this quarter. On the SG&A line, we had total costs of $77.4 million, or 17% of sales for the quarter. This ultimately resulted in an adjusted EBITDA of $145.3 million, or 31.9% for the quarter. That represents an approximate 17.7% increase in EBITDA dollars compared to last year. Interest expense for the quarter was $13.4 million. This was down 14.1% year- over- year, reflecting the impact of debt payments made over the last 12 months and lower interest rates, partially offset by the impact of borrowing $200 million on the revolver in July to assist in paying for the acquisition of VACCO. During the second quarter, we paid off $45 million on our term loan balance. We made an additional $40 million payment on September 30th, which will be reflected in next quarter's results. Diluted earnings per share were $1.90 compared to $1.65 for the same period last year. Adjusted diluted earnings per share were $2.88, representing a 25.8% increase over $2.29 for the same period last year. The tax rate in our adjusted EPS calculation was 22% compared to last year's 22.1%. Free cash flow in the quarter came in at $71.7 million, with conversion of 119.5%, and compares to $26.8 million and 49.4% last year. The higher conversion rate was due to the increased earnings and working capital management during the quarter. As we have previously noted, our capital allocation strategy going forward will remain focused on deleveraging by using the cash that we are generating to pay off the term loan and then the revolver balance. This week, we finalized an amendment to our credit facility, extending the revolver until 2030. We intend to pay the term loan off by November of 2026. Looking into the third quarter, we are guiding revenues of $454 million- $462 million, representing year-over-year growth of 15.1%- 17.1%. This guidance embeds an operating environment that's been fairly similar to what we have been seeing over the past few quarters, with the additional benefit of owning VACCO for a full quarter. On an organic basis, net sales are expected to increase 7.4%- 9.5%. On the margin side, we are projecting adjusted gross margins of 44%- 44.25% for the quarter, and SG&A as a percentage of sales to be between 17% and 17.25% for the period. We continue to remain well-positioned to achieve our objectives and drive sustainable growth, leveraging our core strengths in engineering excellence, operational efficiency, and innovative product development. Looking ahead, our focus will remain squarely on executing on our organic growth strategy, further integrating VACCO, driving operational efficiencies, and delivering strong free cash flow conversion that will create long-term value for all our stakeholders. With that, Operator, please open the call for Q&A. Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question at this time, you may press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question is coming from the line of Kristine Liwag with Morgan Stanley. Please proceed with your questions. Good morning, Dr. Hartnett. Good morning, Rob. Morning, Christine. Maybe following up on the backlog, you had a very strong backlog growth of 60% in the quarter. Can you provide any color regarding how much of that was just from the VACCO acquisition and also what were the key drivers of that increase? You actually said a $2 billion backlog by the end of your fiscal year. That's a significant step up from where we are today. Any sort of color on what you're seeing there would be helpful. Approximately $500 million of that increase is due to the VACCO acquisition. The remainder of the business is up more than 20% from this time last year. We're seeing extraordinarily strong growth in the A&D side of the business. Approximately 90%+ of our backlog is really all A&D. The industrial side has a much smaller component when you look at our backlog, and we expect that to continue through the rest of the year. Yeah. Kristine, we're currently negotiating contracts, and we're very far along. They're very mature in the negotiations, and we expect to conclude those within the month, which should kind of round the whole thing off to that $2 billion level, at least that neighborhood. Maybe it's $100 million less, maybe it's $100 million more, something like that. To some extent, we've had rollover of aircraft contracts, which all begin sort of next year. There's still several marine contracts that we're working our way through, and really, for the most part, have worked our way through, and we're waiting for the conclusion of the signatures. Great. Super helpful. I think you know, Dr. Hartnett, last time when we talked, it seems like Boeing production rates are starting to move up to the right. From Boeing's earnings this quarter, it seems like that's really, truly materializing. Can you just remind us regarding your production rates? What's the utilization of your aerospace plants? When we think about this volume finally coming through, how should we think about incremental operating margins, especially with the changes in contract that you've had and, of course, the inflation that's gone through the business in the past few years? Right now, in terms of capacity utilization for the airframe business, we're pretty much at 100% everywhere. We're adding capacity, we're adding shifts, we're adding manpower, and we're adding some capital to continue. We're going to be stepping up capacity every quarter going forward in several of the plants. Demand is strong. You're going to see, obviously, when you add plant, when you add shifts, you get better absorption of the overheads, and you get some margin expansion there. The outlook for margin expansion overall is, it just couldn't be more positive. That's very exciting to hear. I'll keep it to two questions today. Thank you. Okay. Thanks. The next question is from the line of Michael Ciarmoli with Truist Securities. Please proceed with your question. Hey. Morning, guys. Nice results. Thanks for taking the questions. Maybe just housekeeping. I think I may have missed it, Rob. What was the Aero OEM growth in the quarter and the Aero distribution growth in the quarter? You doing commercial in the Aero OEM, or are you talking about the whole segment? Just Commercial, sorry. Commercial OEM grew 27.9% this quarter. Got it. Commercial distribution was basically flat. It was actually down 2%, but more or less flat. Okay. Got it. Just looking at Industrial Distribution, it looked like it was, I think you had it up 3.3%, but down 8% sequentially. Anything happening there? Was that any sort of seasonality, lumpy orders? I know it's usually down a little bit sequentially on a seasonal basis, but anything jump out with that Industrial Distribution side? We had some really relatively strong performance in the Industrial Distribution business in the first quarter, some really strong orders on that end. The fact is it's still growing. It's just probably quarter over quarter. That's what you're seeing there. Okay. Got it. I think you guys called out the dilution from VACCO, roughly 360 basis points or so. Can you give us any sense as to how we should think about the VACCO margins expanding? I know you kind of just answered Kristine's question with, couldn't be more positive on the outlook for margin expansion. How do we think about that, maybe VACCO drag dissipating and getting those margins up to and in line with historic RBC margins? Yeah. Look, they're running in the mid-20% at this point. On an adjusted basis, that's their normal run rate. It's going to take some time, but we think there's tremendous capacity for some operational synergy there over time to get those margins looking like the rest of the RBC Bearings business. That's what we picked up on when we were doing diligence, and that's kind of the internal objectives. These projects do take time. Okay. Does it get time? Yeah, I would. Oh, go ahead. Yeah, Michael, I would say on that too. As far as VACCO is concerned, we're still in the getting-to-know-you phase. Very encouraged by what we see, and lots of manufacturing synergy with Southern California plants, which is needed because VACCO needs to substantially kick up production rates. Those rates will be done in the West Coast plants that have the floor space, and they'll need some added capacity. We're working on that right now. That's going to be very positive to margin absorption on the West Coast. I think right now, we're looking at some of the existing space contracts and renegotiating terms and conditions that are more aligned with RBC policies. We're just working through that one at a time, and that's part of the process. We expect next year for VACCO to be a star player in our lineup. Got it. Helpful. I'll jump back in the queue. Thanks, guys. The next question is from the line of Steve Barger with KeyBanc Capital Markets. Please proceed with your questions. Thanks. Good morning. Good morning, Steve. Mike, you talked about adding capacity to support all these Aerospace and Defense programs. I'm sure planning for that growth is a moving target, but what revenue level did you direct the team to plan for? For that group? Yeah. Let's start with A&D and then maybe talk about the whole company. Why don't we just email you our five-year business plan, Steve? You're talking about needing to substantially ramp production across multiple programs. I'm just wondering, do you think that you need to be able to support $1.2 billion, $1.5 billion? I'm just talking A&D now. Is this going to be a $3 billion capacity plan? Is this going to be a situation where you're just continually kind of tacking it on and chasing that capacity as those programs evolve? I think that's a good question. We're doing it sort of business by business, and I haven't rolled it all up into what the final number is going to be. A lot of that depends upon how quickly we can add the capacity and get the throughput. If you look at one of our businesses on the marine side of Sargent, I think two years ago we were in the mid-30s in terms of annual revenue out of that marine program, and we need to be well over $100 million as quickly as we can get there. It's a matter of how quickly can we get there. That's kind of what's going on in Tucson. When we look at VACCO, we're still trying to figure out what the mature steady-state production rate needs to be in order to keep the MRO business and the shipbuilders happy with the hardware output. We have differences of opinion on what that number is right now, so I can't really be more specific about it, but it's much bigger than where they are. We're going to see substantial improvement in both airframe, air engine, and marine over the next couple of years. There's almost no way to avoid it if they keep building airplanes and they keep building submarines. There's no way to avoid it. Right. No, I guess that's the key takeaway here is that RBC has the potential to have a pretty significantly bigger top plan based on the slate of opportunities you see in front of you. Correct. That's how we see it. When you look at those programs and opportunities out there, do you have enough engineering staff to support underwater, ground-based aircraft, space? Is that a capacity constraint as well on the engineering side? You never have enough engineers, and you certainly never have enough good engineers. I don't think it's a capacity constraint. I think the design engineering work and the testing engineering work, for the most part, is done, and so there's probably incremental staff increases needed. Although when we acquired VACCO, we got quite a few very capable engineering team, so that's going to be helpful. I think on the production side, we have our MET program where we hire college engineering graduates every year and put them into our plants into a two-year training program. We've been doing this for years, and I think the last time I looked at the numbers, the number of people that were in the two-year training program was probably 100 folks. I mean, we've been salting engineering talent into the company for years, so we have a very deep bench of expertise. We were actually looking at that yesterday at who's in the 10 to 15-year group with us, because that's the emerging management of the company, and it's quite salty. That's good to hear. I don't remember ever hearing an AI-related question on one of your earnings calls, so I'm happy to be first. Are you leaning into AI from the engineering side or anywhere else in the organization to try and help optimize manufacturing or engineering or anything else? I think AI is something you almost can't avoid using, right? You get too many good answers quickly. When you go to Chat or you go to Grok or one of the suppliers. I personally, I mean, I ask my five questions every day. I never subscribed to ChatGPT, but they do give me five questions every day, and I use them up every day. I think there's many, many of us that subscribe and use it productively. Yeah, it's having an impact. How to measure exactly what that impact is right now, we don't have that. We don't have a good grip on that. The other day, we were talking about designing a component that was failing in our tests. I personally asked AI what kind of tribological coupling did beryllium copper make on steel, and how would I improve that coupling through design? In 30 seconds, I got a report that would have taken me a week to get from one of my engineering teams that was excellent. We actually debated using some of those recommendations within the hour. That's the impact it's having here. That's interesting detail. Thanks. I'll get back in line. Okay. Our next question is from the line of Scott Deuschle with Deutsche Bank. Please proceed with your questions. Hey, good morning. Rob, when you restrike the Boeing and Airbus contracts, do we see the full benefit of that hit in the calendar first quarter, or do you have to honor some pre-existing backlog ordered at lower prices such that it takes a few quarters for that benefit to show up in gross margins? We should see most, if not all of that, right away on the shipments that start after January 1. In terms of what you all have been targeting to get out of those renegotiations, are you generally tracking to what you hoped for in terms of your ask, or is there any general update as it relates to the status of those negotiations you can offer? You never get what you're asked. The airframe people are very tough negotiators. Let's just put it this way. We negotiated with them for two solid years. That negotiation was scheduled every week for two solid years. Got it. Okay. And we're. And I. And we're. Go ahead. We were reasonably satisfied. I think neither side was completely happy with the results, but we weren't disappointed. Okay. Just following up on the prior question on AI, Caterpillar reported results earlier this week. They have an investor day next week. A big topic of conversation is the demand on these smaller and mid-sized power generators. I don't think on large combined cycle generators you have much content, correct me if I'm wrong. On these smaller and mid-sized reciprocating engines, is that an all-in area that RBC plays in? No, we're not in that area at all. Okay. Last question for you, Dr. Hartnett. There's now a publicly- traded company out there that's generating 30% EBITDA margins in their fasteners business. The industry appears to have some supply constraints. I believe you have some capabilities here. You got through Sargent and Shearpins. Just curious, is that an area of strategic interest for you as you think about organic investment in the business, given the margin potential others in the industry are demonstrating? We've looked at fasteners many times. Yes, we have a business that sort of overlaps that market. We don't see it as a productive market in terms of proprietary protection and what our current capitalization is tooled to produce. Let's put it this way: there are more interesting markets that we pursued. Okay, thank you. I'll pass it along. The next questions are from the line of Pete Skibitski with Alembic Global. Please proceed with your questions. Hey, good morning, guys. Nice quarter. Thanks, Pete. In Defense, just with this government shutdown, we're about a month into your third quarter. Just wondering if you guys are seeing any headwinds on order flow from the shutdown. None. None. None. Subs are pretty protected. Okay. Just on the 777X delay, shift to the right, Mike. I know you guys have a lot of content there. Is there any meaningful impact to your prior plan over the next few quarters from that delay? No, it hasn't been part of our plan at all, just because of the uncertainty of when that ship is going to be produced. If it's produced sooner, we'd call that plan insurance. Yeah. Okay. Last one for me, just on your bonus comments earlier about gross margin expansion. Are you still within the framework of kind of your typical 50- 100 basis point annual goal, or are you moving kind of beyond that organically and/or with the VACCO opportunity there? What's the right way to think about that? We ended last year at about 44.4 basis points for the full year. Our first two quarters this year, 45.4 basis points, 44.9 basis points. Obviously, VACCO is a little bit lower than the rest, so that will impact the second half of the year to a certain degree. Organically, we're right in line with that level of expansion. Even with VACCO, I think we're still going to be able to expand our margins year- over- year. I think we're very pleased with where we are. Okay. Thanks, guys. Thanks, Rob. Our next questions come from the line of Ron Epstein with Bank of America. Please proceed with your questions. Hey, good morning, guys. Has there been any impact from critical minerals, rare earths, on what you guys do? If there is, how are you mitigating it? No, we see no impact at all. I think our products don't use it. We saw more of an impact from the availability of the more exotic stainless steels, which, that problem seems to have corrected itself. That was a problem 12 months ago, that was a bigger problem. Gotcha. All right. Good to know. If I could follow up on that AI question, I found your answer fascinating. Being an engineer myself, you get that answer from Grok or whatever. What do you have to do to review it to actually trust it? You know what I mean? When you get to a point where you can trust it, does this have an implication on the number of engineers that you're going to need? You know what I mean? It's just how do you get confident that the AI is giving you something that's useful? I think when we use the answer that I got for that tribological coupling, it came out with suggestions that if we were thinking about it, we would come up with those answers. It really gave us a reminder that said, "Hey, you could do it this way. You could do it that way. There's three or four different ways to improve it. Did you think of these?" Those were all known and comfortable solutions for us. It centered us a little bit and stimulated our thinking on the subject. I think it's a place you start. It's sort of like when you're researching a company, you pull out a value line, and that's always the place you start. From that, you say, "That's an interesting company. Maybe I should dig a little further." That's how we're using AI right now. Interesting. Interesting. Can you imagine a world where it's doing more than that for you, or is it just kind of how it goes? Yeah, it's funny because when we have our operations meetings, we'll have 30 people in the room, and we'll be asked sometimes, they get into, "How do we solve this problem? How do we solve that problem?" Everybody's going to AI and coming up with suggestions, and it sort of feeds on itself. You have three or four engineers that are using their phone to figure out how to solve a problem. All of a sudden, you've got suggestions on the table that you wouldn't have had. You wouldn't have thought about it that quickly. The old days of driving up to the university to go through the library, I mean, that's over. Yeah. Interesting. Cool. Thank you very much. Okay, Ron. Thanks. Thank you. The next question is a follow-up from the line of Kristine Liwag with Morgan Stanley. Please proceed with your questions. I mean, I guess with that comment, Dr. Hartnett, it sounds like you should pay for ChatGPT and just stop doing the free stuff for now. I tipped you off on how we manage expenses at RBC. I think there's some pretty interesting themes going around in this with AI. Then you've got this whole theme of embodied AI. I wanted to ask you a more, I don't know, a different question we haven't really discussed before. How do you think about humanoids? You're starting to see some pretty interesting machines out there, but right bearings are to machines as elbows and joints are to humans. How do you think of that world? Do you think that's a commoditized bearing, or do you think that you have a role in something like that? I think you've been through some of our plants, and there's a healthy amount of robotics that are sort of co-robots working beside a person who's doing work, right? As that technology proves itself, we will adopt it. There's no question about it. I think ultimately there'll be humanoids in the RBC plants doing what, I'm not sure. It'll show up as a capital requisition at one of our ops meetings in the not-too-distant future, and that's how it'll begin. Right now, we're making use of robotic and non-contact measurement technologies. I see. Super helpful. You see yourself more as a user. I guess my question is more as a supplier to that industry, similar to as you're a supplier for a lot of those robotic systems. Is this a potential business opportunity for you as a supplier if that industry matures? I can imagine if you are using it for those kinds of industrial use cases, then quality and making sure the humanoid doesn't break down is going to be similar to the value that you add for other industrial applications where you're a small dollar amount, but a critical portion for functionality. I think today we supply bearings for robotics that are in some pretty sophisticated applications where there's either high temperature or vacuum or a little bit of both, producing computer chips. The way this always starts is somebody that's designing a robot doesn't have any production volume and will go to one of our distributors and buy one of our bearings and use it in their prototype. Once it proves out and they start getting into production, they'll continue to use that distributor until production gets to a certain rate. They'll trace back to the manufacturer, or we'll find out about it from our distributor that this is an OEM that's using a considerable amount of volume. That's how every one of these markets is developed. Do you see this as an exciting market? I really haven't thought that much about it. I think Elon Musk thinks it's an exciting market because he thinks cars are less of an exciting market, right? He's going to turn Tesla into a humanoid robot machine. I guess that works. Great. Thank you. Maybe we'll spend another time talking more about that. Thank you for your thoughts today. Okay. Thanks, Kristine. Thank you. At this time, we've reached the end of our question-and-answer session. I'll turn the floor back to management for closing remarks. I think that ends our conference call for today. I'd like to thank everybody for their participation. I guess our job now is to go back to work and make the third quarter happen. Thanks again. Thank you. This will conclude today's conference. We may disconnect your lines at this time. We thank you for your participation and have a wonderful day.