NYSE: RBC

The
Bearing, Gearing and Engineered Component Industry

The
bearing, gearing and engineered component industry is a fragmented multi-billion-dollar market. Purchasers of bearings, gearing and engineered
components include producers of commercial and military aircraft, submarines, military vehicles, energy equipment, warehousing and logistics
systems, industrial equipment, automation systems, construction machinery, rail and transportation equipment, packaging and canning machinery,
agriculture and mining equipment, and other forms of specialized equipment, as well as distributors who service the aftermarket for these
products.

Demand
for bearings, gearing and precision components in the diversified industrial market is influenced by growth factors in industrial machinery
and equipment shipments, and construction, mining, energy, food and beverage, packaging and canning, semiconductor, and general industrial
activity. In addition, usage of existing machinery will impact aftermarket demand for replacement products. In the commercial aerospace
market, new aircraft build rates along with carrier traffic volumes worldwide determine demand for our solutions. Activity in the defense
market is influenced by modernization programs necessitating spending on new equipment, as well as continued utilization of deployed
equipment supporting aftermarket demand for replacement bearings, gearing and engineered components.

Customers
and Markets

We
serve a broad range of end markets where we can add value with our specialty precision bearings, essential systems and engineered components.
We classify our customers into two principal categories: Industrial and Aerospace & Defense. These segments utilize
a large number of both commercial and specialized bearings, gearings and engineered components. Although we provide a relatively small
percentage of total bearings, gearings and engineered components supplied to each of our principal markets, we believe we have leading
market positions in many of the specialized product markets in which we primarily compete. Financial information regarding geographic
areas is set forth in Part II, Item 8, Note 19 of this Annual Report on Form 10-K.

Industrial
Market (58% of net sales for the fiscal year ended March 28, 2026)

We
manufacture bearings, gearing and engineered components for a wide range of diversified industrial markets, including multi-industry
manufacturing, construction, metals and mining, aggregate and cement, food and beverage, oil and natural resource extraction, forest
products, warehousing and logistics, grain, transportation, packaging and canning, semiconductor equipment, power generation, waste and
water management, and other general industrial markets. Our products target market applications in which our engineering and manufacturing
capabilities provide us with a competitive advantage in the marketplace.

1

Our
largest industrial customers include Caterpillar, Komatsu and Halliburton and various aftermarket distributors including Motion Industries,
Applied Industrial, Baldwin Supply, BDI and Purvis Industries. We believe that the diversification of our sales among the various segments
of the industrial markets and channels reduces our exposure to downturns in any individual segment. We believe opportunities exist for
growth and margin improvement in this market as a result of the introduction of new products, the expansion of aftermarket sales, and
continued manufacturing process improvements.

Aerospace
& Defense Market (42% of net sales for the fiscal year ended March 28, 2026)

We
supply bearings and engineered components for use in commercial, private, and military aircraft and aircraft engines, guided weaponry,
space and satellites, vision and optical systems, and military marine and ground applications.

We
supply precision products for many of the commercial aircraft currently operating worldwide and are the primary bearing supplier for
many of the aircraft OEMs’ product lines. Commercial aerospace customers generally require precision products, often constructed
of special materials and made to unique designs and specifications. Many of our aerospace bearings and engineered component products
are designed and certified during the original development of the aircraft being served, which often makes us the primary bearing supplier
for the life of that aircraft.

We
manufacture bearings and engineered components used by the U.S. Department of Defense (the “DOD”) and certain foreign governments
for use in fighter jets, helicopters, naval vessels, gas turbine engines, armored vehicles, transport vehicles, guided weaponry, and
space and satellite applications. We manufacture an extensive line of standard products that conform to many domestic military application
requirements, as well as customized products designed for unique applications. Our bearings and engineered components are manufactured
to conform to U.S. military specifications and are typically custom designed during the original product design phase, which often makes
us the sole or primary supplier for the life of that product. Product approval for use on military equipment is often a lengthy process
ranging from six months to six years.

Our
largest Aerospace & Defense customers include the DOD, Boeing, Airbus, Newport News Shipbuilding, Lockheed Martin, Northrop Grumman,
Raytheon, Blue Origin and SpaceX and various aftermarket distributors including National Precision Bearing. We believe our strong relationships
with OEMs help drive our aftermarket sales since a portion of OEM sales are ultimately intended for use as replacement parts. We believe
that growth and margin expansion in this market will be driven primarily by expanding our international presence, new commercial aircraft
introductions, new products, share gains, and the refurbishment and maintenance of existing commercial and military aircraft.

In
fiscal 2026, approximately 1% of our net sales were made directly, and we estimate that approximately an additional 7% of our net sales
were made indirectly, to the U.S. government. The contracts or subcontracts for these sales may be subject to renegotiation of profit
or termination at the election of the U.S. government. Based on experience, we believe that no material renegotiations or refunds will
be required. See Part I, Item 1A. “Risk Factors – Future reductions or changes in U.S. government spending could negatively
affect our business” of this Annual Report on Form 10-K.

2

Our
two reportable business segments are aligned with the end markets for our products. Operating results for the segments are evaluated
regularly by our chief operating decision maker in determining resource allocation and assessing performance. The following table provides
a summary of our two reportable business segments:

Net
Sales and Percent of Sales for the Fiscal Year Ended

Segment
March
28,

2026
March
29,

2025
March
30,

2024
Representative
Applications

Industrial

$
1,082.9

$1,043.5

$1,040.9

●
Heavy machinery and other capital goods manufacturing

58%
64%
67%

●
Mining, energy, aggregates, construction, and material handling

●
Food and beverage, grain and agricultural product handling

●
Chemicals, oil and gas

●
Warehousing and logistics

● Manufacturing
automation and semiconductor equipment

●
Power generation, waste and water management

●
Rail and transportation

Aerospace
& Defense

$
788.0

42

%

$
592.8

36

%

$
519.4

33

%

●
Airframe flight control and actuation

●
Aircraft engines

●
Helicopter rotary systems

●
Landing gear

●
Missiles and guided munitions

●
Optical and targeting systems

● Hydraulics
and valves

●
Space and satellite applications

Products

Bearings,
gearing and engineered components are employed to perform several functions including reduction of friction, transfer of motion, carriage
of loads, and control of pressure and flows. We design, manufacture and market a broad portfolio of bearings, gearing and engineered
components.

Plain
Bearings. Plain bearings are primarily used to rectify inevitable misalignments in various mechanical components, such as aircraft
controls, helicopter rotors, or heavy mining and construction equipment. Such misalignments are either due to machining inaccuracies
or result when components change position relative to each other. Plain bearings are produced with either self-lubricating or metal-to-metal
designs and consist of several sub-classes, including rod end bearings, spherical plain bearings and journal bearings.

Roller
Bearings. Roller bearings are anti-friction products that utilize cylindrical rolling elements. We produce three main designs: tapered
roller bearings, needle roller bearings and needle bearing track rollers, and cam followers. We offer several needle roller bearing designs
that are used in both industrial applications and certain U.S. military aircraft platforms where there are high loads and the design
is constrained by space considerations. A significant portion of our sales of needle roller bearings is to the aftermarket rather than
to OEMs. Needle bearing track rollers and cam followers have wide and diversified use in the industrial market and are often prescribed
as a primary component in articulated aircraft wings.

Ball
Bearings. Ball bearings are devices that utilize high precision ball elements to reduce friction in high-speed applications. We specialize
in four main types of ball bearings: high precision aerospace, airframe control, thin section, and industrial ball bearings. High precision
aerospace bearings are primarily sold to customers in the defense industry that require more technically sophisticated bearing products
providing a high degree of fault tolerance given the criticality of the applications in which they are used. Airframe control ball bearings
are precision ball bearings that are plated to resist corrosion and are qualified under a military specification. Thin section ball bearings
are specialized bearings that use extremely thin cross sections and give specialized machinery manufacturers many advantages. We produce
a general line of industrial ball bearings sold primarily to the aftermarket.

3

Mounted
Bearings. Mounted bearings are fully assembled bearings with a wide range of shaft attachment methods, rolling elements, housing
materials and configurations offering a variety of sealing solutions. Mounted bearing products include mounted ball bearings, mounted
roller bearings and mounted plain bearings, and are used in light to heavy loads, and in clean, corrosive or harsh environments. Mounted
roller bearings are pre-machined to allow field installation of the Dodge bearing sensor, adding remote monitoring capability in difficult
to access applications and unsafe environments. Applications include unit and bulk material handling, industrial air handling, large
rotor fans, food processing, roll-out tables, and forest pulp and paper processing equipment.

Enclosed
Gearing. We provide a broad range of enclosed gearing product lines including Quantis Gearmotor (helical style gearing with modular
configurations and a variety of mounting methods), Torque Arm (shaft-mount gearing with helical style gearing and v-belt input for first
stage reduction), Tigear (single reduction, right angle gear reducers with worm style gearing), MagnaGear & Maxum (parallel reducers
with helical and planetary style gearing) and Controlled Start Transmission (planetary style gearing with hydraulic clutch package used
for soft starting large conveyors). Applications include unit and bulk handling, food processing, roll-out tables, and forest pulp and
paper processing equipment.

Motion
Control Components. Power transmission components are of three types: mechanical drive components (offering V belt sheaves, synchronous
sprockets, bushings and belts) used to change rotational speed between two pieces of equipment; couplings used to transmit torque between
two rotating pieces of equipment, such as a motor and a gearbox; and conveyor components, which transfer torque from the mechanical drive
equipment to the conveyor belt in bulk material handling applications. Applications include unit and bulk material handling, industrial
air handling, large rotor fans, food processing, roll-out tables, and forest pulp and paper processing equipment. We also provide actuation
components to customers within our commercial aerospace and space markets.

Engineered
Components. Engineered components include highly engineered hydraulics and valves, fasteners, precision mechanical components and
machine tool collets. Engineered hydraulics and valves are used in aircraft and submarine applications and Aerospace & Defense aftermarket
services. Precision mechanical components are used in all general industrial applications where some form of movement is required. Machine
tool collets are cone-shaped metal sleeves used for holding circular or rod-like pieces in a lathe or other machine that provide effective
part holding and accurate part location during machining operations.

Product
Design and Development

We
produce specialized bearings and engineered components that are often tailored to the specifications of a customer or application. Our
sales professionals are highly experienced engineers who collaborate with our customers to develop bearing and engineered component solutions.
The product development cycle can follow many paths, which are dependent on the end market or sales channel. The process normally takes
between three and six years from concept to sale depending upon the application and the market. A typical process for a major OEM project
begins when our design engineers meet with the customer at the machine design conceptualization stage and work with them through the
conclusion of the product development.

Often,
at the early stage, a bearing or engineered component design is produced that addresses the expected demands of the application including
load, stress, heat, thermal gradients, vibration, lubricant supply, pressure and flows, and corrosion resistance, with one or two of
these environmental constraints being predominant in the design consideration. A bearing or engineered component design must perform
reliably for the period of time required by the customer’s product objectives.

Once
a bearing or engineered component is designed, a mathematical simulation is created to replicate the expected application environment
and thereby allow optimization with respect to these design variables. Upon conclusion of the design and simulation phase, samples are
produced and laboratory testing commences at one of our test laboratories. The purpose of this testing phase is not only to verify the
design and the simulation model but also to allow further design improvement where needed. The last phase is field testing by the customer,
after which the product is ready for sale.

For
many of our Aerospace & Defense products, the culmination of this lengthy process is the receipt of a product approval or certification,
generally obtained from either the OEM, the DOD or the Federal Aviation Administration (“FAA”), which allows us to supply
the product to the OEM customer and to the aftermarket. We currently have a significant number of such approvals, which often gives us
a competitive advantage, and in many of these instances we are the only approved supplier of a given bearing or engineered component.

4

Manufacturing
and Operations

Our
manufacturing strategies are focused on product reliability, quality, safety and service. Custom and standard products are produced according
to manufacturing schedules that ensure maximum availability of popular items for immediate sale while carefully considering the economies
of lot production and special products. Capital programs and manufacturing methods development are focused on quality improvement, production
costs, safety and service. Ongoing review of product line production performance assurance an environment of continue attainment of profitability
and quality goals.

Capacity.
Our plants currently run on a full first shift with second and third shifts at select locations to meet the demands of our customers.
We believe that current capacity levels and future annual estimated capital expenditures on equipment up to approximately 3.5% to 4.0%
of net sales should permit us to effectively meet demand levels for the foreseeable future.

Inventory
Management. We operate an inventory management program designed to balance customer delivery requirements with economically optimal
inventory levels. In this program, each product is categorized based on characteristics including order frequency, number of customers
and sales volume. Using this classification system, our primary goal is to maintain a sufficient supply of standard items while minimizing
costs. In addition, production cost savings are achieved by optimizing plant scheduling around inventory levels and customer delivery
requirements. This leads to more efficient utilization of manufacturing facilities and minimizes plant production changes while maintaining
sufficient inventories to service customer needs.

Sales,
Marketing and Distribution

Our
marketing strategy is aimed at increasing sales within our two primary markets, targeting specific applications in which we can exploit
our competitive strengths. To affect this strategy, we seek to expand into geographic areas not previously served by us and we continue
to capitalize on new markets and industries for existing and new products. We employ a technically proficient sales force and utilize
marketing managers, product managers, customer service representatives and product application engineers in our selling efforts.

We
have developed our sales force through the hiring of sales personnel with prior industry experience, complemented by an in-house training
program. We intend to continue to hire and develop expert sales professionals and strategically locate them to implement our expansion
strategy. Today, our direct sales force is located to service North America, Europe, Asia, Australia and Latin America and is responsible
for selling all of our products. This selling model leverages our relationship with key customers and provides opportunities to market
multiple product lines to both established and potential customers. We also sell our products through a well-established, global network
of Industrial and Aerospace distributors. This channel primarily provides our products to smaller OEM customers, aftermarket customers
and the end users of bearings and engineered components that require local inventory and service. We intend to continue to focus on building
distributor sales volume.

The
Company has a joint venture in North America focused on joint warehouse and transportation logistics and e-business services. The e-business
service focuses on information and business services for authorized distributors in the Industrial segment.

The
sale of our products is supported by a well-trained and experienced customer service organization, which provides customers with instant
access to key information regarding their purchases. We also provide customers with updated information through our website, and we have
developed on-line integration with specific customers, enabling more efficient ordering and timely order fulfillment for those customers.

We
store product inventory in warehouses located in the Midwest, Southwest and on the East and West coasts of the U.S. as well as in Australia,
Canada, England, France, India, Mexico, the People’s Republic of China, Switzerland and Germany. The inventory is located in these
locations based on analysis of customer demand to provide superior service and product availability.

Competition

Our
principal competitors include SKF, New Hampshire Ball Bearings, Regal Rexnord, NORD and Timken, although we compete with different companies
for each of our product lines. We believe that for the majority of our products, the principal competitive factors affecting our business
are product qualifications, product line breadth, service, quality and price. Although some of our current and potential competitors
may have greater financial, marketing, personnel and other resources than us, we believe that we are well-positioned to compete with
regard to each of these factors in each of the markets in which we operate.

Product
Qualifications. Many of the products we produce are qualified for the application by the OEM, the DOD, the FAA, the user or a combination
of these. These credentials have been achieved for thousands of distinct items after years of design, testing and improvement. Applicable
Dodge products are compliant as required with related communications, safety, and Ex certifications for use in North America, Mexico,
the EU, as well as other select international locations. Several of our products are protected by patents, and we believe that in many
cases we have strong brand identity or we are the sole source for products for a particular application.

5

Product
Line Breadth. Our products encompass a broad range of designs which often create a critical mass of complementary bearings, essential
systems and engineered components for our markets. This position provides many of our Industrial and Aerospace customers with a single
manufacturer to provide the engineering service and product breadth needed to achieve a series of OEM design objectives and/or aftermarket
requirements. This enhances our value to the OEM considerably while strengthening our overall market position.

Service.
Product design, performance, reliability, availability, quality, and technical and administrative support are elements that define the
service standard for this business. Our customers are sophisticated and demanding, as our products are fundamental and enabling components
to the manufacturing or operation of their machinery. We maintain inventory levels of our most popular items for immediate sale and service.
Our customers have high expectations regarding product availability and quality, and the primary emphasis of our service efforts is to
provide the widest possible range of available products delivered on a timely basis.

Price.
We believe our products are priced competitively in the markets we serve and we continually evaluate our manufacturing and other operations
to maximize efficiencies in order to maintain competitive prices. We invest considerable effort to develop our price-to-value algorithms
and we price to market levels where required by competitive pressures.

Suppliers
and Raw Materials

We
obtain raw materials, component parts and supplies from a variety of sources and generally from more than one supplier. Our principal
raw materials are steel and cast iron. Our suppliers and sources of raw materials are based in the U.S., Europe and Asia. We purchase
steel at market prices, which fluctuate as a result of supply and demand driven by economic conditions in the marketplace, and we currently
pay import tariffs on our raw materials sourced outside the U.S. For further discussion of the possible effects of import tariffs and
changes in the cost of raw materials on our business, see Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K.

Backlog

Our
backlog as of March 28, 2026 was $2.3 billion compared to $0.9 billion as of March 29, 2025. Our backlog as of March 28, 2026 included
$0.6 billion of VACCO backlog and $1.1 billion of marine related backlog. Many of our orders are fulfilled immediately after the order
has been placed by the customer and would not be seen in our backlog at the end of a reporting period. Orders included in our backlog
are subject to cancellation, delay or modifications by our customers prior to fulfillment as governed by our terms of sale. We sell many
of our products pursuant to contractual agreements, single-source relationships or long-term purchase orders, each of which may permit
early termination by the customer. However, we believe that the unique nature of many of our products prevents other suppliers from being
able to satisfy customer orders on a timely or cost-effective basis, thereby making it impracticable for our customers to shift their
purchase of these products to other suppliers.

Human
Capital

RBC
employs 5,816 people worldwide. Of these, 4,187 are employed at our 44 U.S. facilities and 1,629 are employed at our 21 international
facilities located in Australia, Canada, England, France, Germany, India, Mexico, the People’s Republic of China, Poland and Switzerland.
The majority of our personnel are RBC employees rather than independent contractors, temporaries or third-party-labor-provider personnel.

Our
human capital objective is to attract and retain high-performing people who can work in a culture that fosters innovation and continuous
improvement. To achieve that objective, we maintain an aggressive talent recruitment program, a fair and competitive compensation program,
an on-going training and development program, and an ethical and safe work environment.

Talent
Recruitment. Critical to our success is that we have a deep and talented pool of engineers who oversee the production of our current
products to the highest standards, work directly with customers on applications, and direct the research and development for new products.
To maintain that talent pool, we actively recruit engineers from over 40 colleges and universities around the U.S. In addition, we have
developed deep collaborative relationships with a select group of schools, including internship and trainee programs with several of
these schools.

Compensation.
We offer fair and competitive compensation to our employees. Our employee benefits package includes medical, dental and vision coverage,
life insurance, supplemental disability coverage, and 401(k) and supplemental employee retirement plans. In addition, participation in
our long-term equity incentive plan goes very deep in our organization, providing employees with equity compensation/awards that they
might not receive if they worked for one of our competitors.

6

Training.
An important part of achieving our human capital objective is our in-house training programs – RBC University, Materials University,
Mechanical Engineering Training and the Customer, Application, Product Training (CAPT) Program. These programs provide our employees
with a uniform foundation regarding how we do business, expand their subject matter expertise, and develop the various leadership positions
across our organization, including plant management and general management. We also offer a tuition reimbursement program for many employees
wishing to further their classroom education in their chosen field.

Ethics.
We expect our personnel to conduct the business of RBC in a legal and ethical manner. To ensure that they do that, our people are required
to comply at all times with our corporate Code of Conduct, which among other things requires them to:

●deal
fairly with their coworkers and RBC’s customers, suppliers and competitors,

●comply
with all applicable laws,

●protect
RBC’s proprietary information and other assets, and

●avoid
conflicts of interest with RBC.

Workplace
Safety. Safety is of paramount importance to RBC and so we go to great lengths in striving for a zero-incident workplace that is
consistent with our mandate to produce the highest quality, highly engineered components for our customers. Our general managers and
operations managers are charged with creating and maintaining the highest standards of safety for employees, visitors and the local community
through the use of industry best practices at their facilities. Monthly, each of our facilities reports to senior leadership on key safety
metrics and we maintain a proactive approach in assessing and mitigating risk through root cause analysis, communication, training and
teamwork.

Intellectual
Property

We
own U.S. and foreign patents and trademark registrations and U.S. copyright registrations and have U.S. trademark and patent applications
pending. We file patent applications and maintain patents to protect certain technology, inventions and improvements that are important
to the development of our business, and we file trademark applications and maintain trademark registrations to protect product names
that have achieved brand-name recognition among our customers. We also rely upon trade secrets, know-how and continuing technological
innovation to develop and maintain our competitive position. Many of our brands are well recognized by our customers and are considered
valuable assets of our business. We do not believe, however, that any individual item of intellectual property is material to our business.

Regulation

Product
Approvals. Essential to servicing the Aerospace & Defense markets is the ability to obtain product approvals. We have a substantial
number of product approvals in the form of OEM approvals or Parts Manufacturer Approvals, or “PMAs,” from the FAA. We also
have a number of active PMA applications in process. These approvals enable us to provide products used in virtually all domestic aircraft
platforms presently in production or operation.

We
are subject to various other federal laws, regulations and standards. New laws, regulations or standards or changes to existing laws,
regulations or standards could subject us to significant additional costs of compliance or liabilities and could result in material reductions
to our results of operations, cash flow or revenues.

Environmental
Matters

We
are subject to federal, state and local environmental laws and regulations, including those governing discharges of pollutants into the
air and water, the storage, handling and disposal of wastes and the health and safety of employees. We also may be liable under the Comprehensive
Environmental Response, Compensation, and Liability Act or similar state laws for the costs of investigation and clean-up of contamination
at facilities currently or formerly owned or operated by us, or at other facilities at which we have disposed of hazardous substances.
In connection with such contamination, we may also be liable for natural resource damages, U.S. government penalties and claims by third
parties for personal injury and property damage. Agencies responsible for enforcing these laws have authority to impose significant civil
or criminal penalties for non-compliance. We believe we are currently in material compliance with all applicable requirements of environmental
laws. We do not anticipate material capital expenditures for environmental compliance in fiscal 2027.

7

Available
Information

We
file our annual, quarterly and current reports, proxy statements, and other documents with the Securities Exchange Commission (“SEC”)
under the Securities Exchange Act of 1934. The public may read and copy any materials filed with the SEC at the SEC’s Office of
Investor Education and Advocacy at 100F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the
Office of Investor Education and Advocacy by calling the SEC at 1–800–732–0330. Also, the SEC maintains an Internet
website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with
the SEC. The public can obtain any documents that are filed by us at http://www.sec.gov.

In
addition, this Annual Report on Form 10-K and our other periodic filings with the SEC (including our quarterly reports on Form 10-Q and
current reports on Form 8-K), any amendments to any of the foregoing, and our governance documents are made available free of charge
on our website (https://investor.rbcbearings.com) as soon as reasonably practicable after
they are electronically filed with or furnished to the SEC. Copies of the above reports and documents will also be provided free of charge
upon written request to us.