All dollar amounts in this MD&A presentation are stated in millions except for per share amounts. Cautionary Statement as to Forward-Looking Information The objective of the discussion and analysis is to provide material information relevant to an assessment of the financial condition and results of operations of the Company including an evaluation of the amounts and certainty of cash flows from operations and from outside sources. The information in this discussion contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts, included in this quarterly report on Form 10-Q regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management are “forward-looking statements” as the term is defined in the Private Securities Litigation Reform Act of 1995. 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 our 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 or investments we may make. We do not intend, and undertake no obligation, to update or alter any forward-looking statement. The following section is qualified in its entirety by the more detailed information, including our financial statements and the notes thereto, that appears elsewhere in this Quarterly Report. 20 Overview We are a leading international manufacturer of highly engineered precision bearings, components and essential systems for the aerospace, 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, 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 66 facilities in 11 countries, of which 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 2027 will have 53 weeks and fiscal 2026 had 52 weeks. Both the first quarter of fiscal 2027 and the first quarter of fiscal 2026 had 13 weeks. We currently operate under two reportable business segments – Aerospace & Defense and Industrial: ● Aerospace & Defense. This segment represents the end markets for the Company’s highly engineered bearings and precision components used in commercial aerospace, defense aerospace, defense marine, defense ground vehicles, missiles and guided munitions, and space and satellite applications. ● Industrial. This segment represents the end markets for the Company’s highly engineered bearings, gearing and precision components used in various industrial applications including: construction, mining, forestry, energy, agricultural and other machinery; aggregate and cement handling; food and beverage manufacturing; grain, and agricultural product handling; metals and mining material handling; chemicals, oil and gas production; warehousing and logistics; manufacturing automation and semiconductor equipment; power generation; waste and water management; rail and transportation. 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. 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. Currently, our strategy is built around maintaining our role as a leading manufacturer of highly engineered bearings and precision components through the following efforts: ● Developing innovative solutions. By leveraging our design and manufacturing expertise and our extensive customer relationships, we continue to develop new products for markets in which there are substantial growth opportunities. ● Expanding customer base and penetrating end markets. We continually seek opportunities to access new customers, geographic locations and bearing platforms with existing products or profitable new product opportunities. ● Increasing aftermarket sales. We believe that increasing our aftermarket sales of replacement parts will further enhance the continuity and predictability of our revenues and enhance our profitability. Such sales include sales to third party distributors, and sales to OEMs for replacement products and aftermarket services. We can further increase the percentage of our revenues derived from the replacement market by continuing to implement several initiatives. ● Pursuing selective acquisitions. The acquisition of businesses that complement or expand our operations has been and continues to be an important element of our business strategy. We believe that there will continue to be consolidation within the industry that may present us with acquisition opportunities. 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 and geographic reach. 21 Outlook Our net sales for the three-month period ended June 27, 2026 increased 19.2% compared to the same period last fiscal year. The increase in net sales was a result of a 36.9% increase in our Aerospace & Defense segment and a 8.4% increase in our Industrial segment. Backlog as of June 27, 2026, was $2.3 billion compared to $2.3 billion as of March 28, 2026 and $1.0 billion as of June 28, 2025. We are continuing to see the expansion of the commercial aerospace business, which experienced a 21.8% increase in net sales for the three-month period ended June 27, 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 since this time last year. Defense sales, which represented approximately 42.4% of segment sales during the quarter, were up 64.6% quarter over quarter, which included $31.7 sales from VACCO. We expect this growth to continue throughout the current fiscal year and beyond as we are gearing up to fulfill the substantial number of defense orders in our backlog. Our industrial business continued to demonstrate strength in distribution across several major end markets, notably including semicon, grain, and food and beverage. The Company expects net sales to be approximately $505.0 to $515.0 in the second quarter of fiscal 2027, an increase of 10.9% to 13.1% compared to the second quarter of fiscal 2026. 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 June 27, 2026, we had cash of $124.5, of which approximately $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. Results of Operations Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change Total net sales $ 519.5 $ 436.0 $ 83.5 19.2 % Net income $ 101.5 $ 68.5 $ 33.0 48.2 % Net income per-share: diluted $ 3.20 $ 2.17 Weighted average common shares: diluted 31,714.686 31,553,214 Net sales for the three-month period ended June 27, 2026 increased $83.5, or 19.2%, compared to the same period last fiscal year. Net sales in our Industrial segment increased 8.4% quarter over quarter against a strong quarter in the prior fiscal year. Growth was driven from semicon, grain, and food and beverage compared to the prior year. Net sales in our Aerospace & Defense segment increased 36.9% quarter over quarter, led by defense sales, which were up 64.6% compared to the same period in the prior fiscal year, driven by missiles and the acquisition of VACCO, which contributed $31.7 of net sales to these end markets. Commercial OEM and aftermarket sales increased 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 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 for the first quarter of fiscal 2027 was $101.5 compared to $68.5 for the same period last fiscal year. 22 Gross Margin Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change Gross Margin $ 247.8 $ 195.2 $ 52.6 26.9 % % of net sales 47.7 % 44.8 % Gross margin remained strong at 47.7% of net sales for the first quarter of fiscal 2027 compared to 44.8% for the first quarter of fiscal 2026. This margin improvement was driven by continued operational excellence across all of our business segments as they were able to push high volumes through the plants. The volumes allowed us to better absorb our overhead costs. We also had improved product mix compared to the prior year. Further, the timing of tariff refunds, which temporarily alleviated the impact of ongoing global tariff costs, provided nearly 100 basis points of margin benefit during the quarter. Selling, General and Administrative Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change SG&A $ 85.8 $ 73.9 $ 11.9 16.1 % % of net sales 16.5 % 16.9 % SG&A for the first quarter of fiscal 2027 was $85.8, or 16.5% of net sales, as compared to $73.9, or 16.9% of net sales, for the same period of fiscal 2026. The increase in SG&A was primarily driven by the inclusion of VACCO and increased personnel costs. Other, Net Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change Other, net $ 21.2 $ 20.2 $ 1.0 5.0 % % of net sales 4.1 % 4.6 % Other operating expenses for the first quarter of fiscal 2027 totaled $21.2 compared to $20.2 for the same period last fiscal year. For the first quarter of fiscal 2027, other operating expenses consisted of $21.0 of amortization of intangible assets and $0.4 of restructuring costs offset by $0.2 of other items. For the first quarter of fiscal 2026, other operating expenses included $17.9 of amortization of intangible assets, $1.2 of restructuring costs, $0.1 of acquisition costs and $1.0 of other expense items. Interest Expense, Net Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change Interest expense, net $ 10.1 $ 12.2 $ (2.1 ) (17.2 )% % of net sales 1.9 % 2.8 % 23 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 $10.1 for the first quarter of fiscal 2027 compared to $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 and lower interest rates, partially offset by the impact of a $200.0 draw on the Revolving Credit Facility during the second quarter of fiscal 2026 to pay a portion of the VACCO 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 Expense Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change Other non-operating expense $ 0.5 $ 1.2 $ (0.7 ) (58.3 )% % of net sales 0.1 % 0.3 % Other non-operating expenses were $0.5 for the first quarter of fiscal 2027 compared to $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 Taxes Three Months Ended June 27, 2026 June 28, 2025 Income tax expense $ 28.7 $ 19.2 Effective tax rate 22.1 % 21.9 % Income tax expense for the three-month period ended June 27, 2026 was $28.7 compared to $19.2 for the three-month period ended June 28, 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 June 27, 2026 of 22.1% included $1.4 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 June 27, 2026 would have been 23.2%. The effective income tax rate for the three-month period ended June 28, 2025 of 21.9% included $2.3 of discrete tax benefits associated with stock-based compensation partially offset by $1.3 of other items. The effective income tax rate without discrete items for the three-month period ended June 28, 2025 would have been 23.1%. Segment Information We report our financial results under two operating segments: Aerospace & Defense and Industrial. The CODM uses 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. 24 Aerospace & Defense Segment Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change Total net sales $ 225.4 $ 164.6 $ 60.8 36.9 % Gross margin $ 100.2 $ 70.2 $ 30.0 42.7 % % of segment net sales 44.5 % 42.6 % SG&A $ 16.3 $ 12.0 $ 4.3 35.8 % % of segment net sales 7.2 % 7.3 % Net sales increased $60.8, or 36.9% for the three months ended June 27, 2026 compared to the same period last fiscal year. Our commercial aerospace markets, which consisted of $108.7 of OEM sales and $21.2 of distribution and aftermarket sales, increased by 21.8% compared to fiscal 2026 when OEM net sales were $83.6 and distribution and aftermarket net sales were $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 $70.3 of OEM and $25.2 of distribution and aftermarket, increased by 64.6% compared to fiscal 2026 when OEM net sales were $40.6 and distribution and aftermarket net sales were $17.4. The increase in defense sales was driven by military aircraft 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 44.5% for the first quarter of fiscal 2026 compared to 42.6% for the same period last fiscal year. The increase in gross margin as a percentage of net sales was primarily driven by efficiencies achieved at the plants in part due to increased sales volumes and favorable product mix. The better volumes allowed us to better absorb our overhead costs. Industrial Segment Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change Total net sales $ 294.1 $ 271.4 $ 22.7 8.4 % Gross margin $ 147.6 $ 125.0 $ 22.6 18.1 % % of segment net sales 50.2 % 46.1 % SG&A $ 36.7 $ 34.6 $ 2.1 6.1 % % of segment net sales 12.5 % 12.7 % Net sales increased $22.7, or 8.4%, for the three months ended June 27, 2026 compared to the same period last fiscal year. We saw improvements in nearly all of our end markets, including semicon, grain, and food and beverage and warehousing. Industrial OEM sales were $95.3 and $78.5 for the three month periods ended June 27, 2026 and June 28, 2025, respectively. Industrial sales to distribution and the aftermarket were $198.8 and $192.9 for the three month periods ended June 27, 2026 and June 28, 2025, respectively. 25 Gross margin for the three months ended June 27, 2026 was 50.2% of net sales, compared to 46.1% in the comparable period in fiscal 2026. The increase in gross margin as a percentage of net sales was primarily driven by sales volumes which have allowed us to better absorb our manufacturing overhead costs. Corporate Three Months Ended June 27, 2026 June 28, 2025 $ Change % Change SG&A $ 32.8 $ 27.3 $ 5.5 20.1 % % of total net sales 6.3 % 6.3 % Corporate SG&A was $32.8, or 6.3% of net sales, for the first quarter of fiscal 2027 compared to $27.3, or 6.3% of net sales, for the same period last fiscal year. The quarter over quarter increase was primarily due to an increase in personnel costs. Liquidity and Capital Resources Our capital requirements include manufacturing equipment and materials. We have historically fueled our growth, in part, through acquisitions. We have historically met our working capital, capital expenditure and acquisition funding needs through our net cash flows provided by operations, various debt arrangements and public sales of equity. We believe that operating cash flows and available credit under the Revolving Credit Facility (which expires in October 2030) will provide adequate resources to fund internal growth initiatives for at least the next 12 months. Our ability to meet future working capital, capital expenditure and debt service requirements will depend on our future financial performance, which could be affected by a range of economic, competitive and business factors, many of which are outside of our control. These include interest rates, cyclical changes in our end markets, the imposition of trade tariffs, increased prices for steel and other supplies, and our ability to pass through tariffs and price increases on a timely basis. In addition, future acquisitions could have a significant impact on our liquidity position and our need for additional funds. From time to time, we evaluate our existing facilities and operations and their strategic importance to us. If we determine that a given facility or operation does not have future strategic importance, we may sell, relocate, consolidate or otherwise dispose of that facility or operations. Although we believe our operations would not be materially impaired by such dispositions, relocations or consolidations, we could incur significant cash or non-cash charges in connection with them. Liquidity As of June 27, 2026, we had cash of $124.5, of which approximately $47.4 was cash held by our foreign operations. We expect that our undistributed foreign earnings will be re-invested indefinitely for working capital, internal growth, and acquisitions for and by our foreign subsidiaries with the exception of our Canadian operations. As discussed in further detail below, we also have the ability to borrow money from our existing credit facilities. Domestic Credit Facility The Credit Agreement, which was entered into in fiscal 2022 and amended in fiscal 2023 and again on October 28, 2025, provides the Company with (a) the $1,300.0 Term Loan, which was used to fund a portion of the purchase price for the acquisition of Dodge and to pay related fees and expenses, and (b) the $500.0 Revolving Credit Facility. 26 Amounts outstanding under the Facilities generally bear 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 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 subject to a SOFR floor of 0.00%. As of June 27, 2026, the Company’s margin was 0.75% for SOFR loans, the commitment fee rate was 0.175%, and the letter of credit fee rate was 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 $96.0 for fiscal 2027. Since June 27, 2026, the Company has paid down $50.0 on the Term Loan, reducing the outstanding balance to $46.0. Originally the Revolving Credit Facility was to expire in November 2026 but on October 28, 2025, the Credit Agreement was amended to, among other things, (i) extend the expiration date of the Revolving Credit Facility to October 2030, (ii) eliminate the minimum interest coverage ratio covenant from the Credit Agreement, and (iii) reduce the margin cap within the pricing grid on Term SOFR-based loans under the Revolving Credit Facility from 2.00% to 1.75%. All amounts outstanding under the Revolving Credit Facility will be payable on its expiration date. In connection with the amendment, new debt issuance costs totaled $1.8. Additionally, $0.6 of previously unamortized debt issuance costs associated with the Revolving Credit Facility will now be associated with the new arrangement. The total of $2.4 of debt issuance costs will be amortized through the new term of October 2030. The remaining portion of original debt issuance costs associated with the Term Loan of $1.6 will continue to be amortized through the end of the Term Loan in November 2026. As of June 27, 2026, there were $0.6 and $2.1 of unamortized debt issuance costs associated with the Term Loan and Revolving Credit Facility, respectively. The Credit Agreement requires the Company to comply with various covenants, including a maximum Total Net Leverage Ratio (as defined within the Credit Agreement) of 4.50:1.00 (provided 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. The Credit Agreement allows the Company to, among other things, make distributions to stockholders, repurchase its stock, incur other debt or liens, or acquire or dispose of assets provided that the Company complies with certain requirements and limitations of the Credit Agreement. The Company’s domestic subsidiaries have guaranteed the Company’s obligations under the Credit Agreement, and the Company’s obligations and the domestic subsidiaries’ guaranty are secured by a pledge of substantially all of the assets of the Company and its domestic subsidiaries. As of June 27, 2026, $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 obligations relating to certain insurance programs. The Company had the ability to borrow an additional $296.3 under the Revolving Credit Facility as of June 27, 2026. Senior Notes 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 expenses, and were used to fund a portion of the cash purchase price for the acquisition of Dodge. 27 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. If the Senior Notes are ever rated investment grade, certain of these covenants will be suspended. The Senior Notes are guaranteed jointly and severally on a senior unsecured basis by RBC Bearings and certain of RBCA’s existing and future wholly-owned domestic subsidiaries that also guarantee the Credit Agreement. Interest on the Senior Notes accrues at a rate of 4.375% and is payable semi–annually in cash in arrears on April 15 and October 15 of each year. 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 purchase the Senior Notes. Foreign Borrowing Arrangements One of our foreign subsidiaries, Schaublin SA, has a CHF 5.0 (approximately $6.0 USD) credit line with Credit Suisse (Switzerland) Ltd. to provide future working capital, if necessary. As of June 27, 2026, $0.1 was being utilized to provide a bank guarantee. Fees associated with this credit line are nominal. In April 2026, Schaublin, entered into a CHF 9.8 (approximately $12.1 USD) secured credit line agreement with UBS Switzerland AG, and on April 27, 2026, Schaublin borrowed CHF 6.7 (approximately $8.3 USD) to finance the expansion of a facility in Poland. The line has an annual fixed interest rate of 2.00% and expires in April 2036, at which time all outstanding amounts will be due. 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, 2.9% fixed-rate mortgage on the building for CHF 4.0 (approximately $4.5 USD). 28 Cross Currency Swap The Company is exposed to foreign exchange rate fluctuations as some of our subsidiaries operate in various countries. On August 12, 2024, the Company entered into the Cross Currency Swap with a third-party financial counterparty. The objective of the Cross Currency Swap is to economically hedge the Company’s net investment in its lower-tier European subsidiary, Schaublin, against adverse changes in the Swiss franc/U.S. dollar exchange rate. The Cross Currency Swap is based upon a net investment of CHF 69.4 ($80.0 USD) notional amount with a three-year maturity date. RBC receives a fixed U.S. dollar amount on a month-to-month basis based upon a fixed annual rate of 2.77% of the notional amount. At maturity, RBC will net-settle the principal of the Cross Currency Swap in cash with the counterparty. The Cross Currency Swap has been designated as a net investment hedge on an after-tax basis. Cash Flows Three-month Period Ended June 27, 2026 Compared to the Three-month Period Ended June 28, 2025 The following table summarizes our cash flow activities: Three Months Ended June 27, 2026 June 28, 2025 $ Change Net cash provided by/(used in): Operating activities $ 171.8 $ 120.0 $ 51.8 Investing activities (24.9 ) (15.7 ) (9.2 ) Financing activities (79.4 ) (7.9 ) (71.5 ) Effect of exchange rate changes on cash (0.3 ) (0.3 ) - Increase/(decrease) in cash $ 67.2 $ 96.1 $ (28.9 ) During the first three months of fiscal 2027, we generated cash of $171.8 from operating activities compared to $120.0 during the same period of fiscal 2026. The increase of $51.8 was the result of an increase in net income of $33.0, a favorable change in operating assets and liabilities of $14.8 and a favorable impact of non-cash activity of $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 $0.1 more stock-based compensation, $3.7 more depreciation and amortization, $0.2 more noncash operating lease expense, $3.2 increase of deferred taxes, and $0.6 gain on asset dispositions, offset by $3.8 less restructuring costs. 29 The following table summarizes the impact on cash flow from operating assets and liabilities for the first quarter of fiscal 2027 versus the first quarter of fiscal 2026. Three Months Ended June 27, 2026 June 28, 2025 $ Change Cash provided by/(used in): Accounts receivable $ 14.2 $ 17.7 $ (3.5 ) Inventory (14.2 ) (22.8 ) 8.6 Prepaid expenses and other current assets (10.7 ) (1.7 ) (9.0 ) Other noncurrent assets (9.4 ) (2.2 ) (7.2 ) Accounts payable 2.9 1.9 1.0 Accrued expenses and other current liabilities 34.0 25.5 8.5 Other noncurrent liabilities 12.2 (4.2 ) 16.4 Total change in operating assets and liabilities: $ 29.0 $ 14.2 $ 14.8 During the first three months of fiscal 2027, we used cash of $24.9 for investing activities as compared to $15.7 used in the first three months of fiscal 2026. This increase in cash used was attributable to a $9.2 increase in capital expenditures. During the first three months of fiscal 2027, we used cash of $79.4 for financing activities compared to $7.9 in the first three months of fiscal 2026. This increase in cash used was primarily attributable to $77.0 more in payments made on the Term Loan, $0.1 more in repayments of notes payable, and $9.1 less in exercises of stock-based awards partially offset by $5.0 less of repayments of revolving credit facilities, $1.4 less repurchases of common stock and $8.3 more in proceeds received from revolving credit facilities. Capital Expenditures Our capital expenditures were $24.9 for the three-month period ended June 27, 2026 compared to $15.7 for the three-month period ended June 28, 2025. We expect that capital expenditures for fiscal 2027 will be between 4.0% to 4.5% of our net sales for the fiscal year. We expect to fund these capital expenditures principally through existing cash and internally generated funds. We may also make substantial additional capital expenditures in connection with acquisitions. Obligations and Commitments The Company’s fixed contractual obligations and commitments are primarily comprised of the Credit Agreement and the Senior Notes. We also have lease obligations which are materially consistent with what we disclosed in our Annual Report. Other Matters Critical Accounting Policies and Estimates Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We believe the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Notes to the Consolidated Financial Statements in our Annual Report describe the significant accounting estimates and policies used in preparation of our consolidated financial statements. Actual results in these areas could differ from management’s estimates. There were no significant changes in our critical accounting estimates during the first quarter of fiscal 2027. 30 Off-Balance Sheet Arrangements The Company has a $3.7 outstanding standby letter of credit under the Revolving Credit Facility and a $0.1 bank guarantee with Credit Suisse (Switzerland) Ltd.