# Rexnord Corporation (RBC) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/RBC/thesis · /stocks/RBC/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: RBC
step: "04"
title: Financial Snapshot — Three-Year P&L
created: 2026-05-29
---

### Step 04 — Financial Snapshot

#### Income Statement Summary (GAAP)

| Metric | FY2023 (Apr'22–Apr'23) | FY2024 (Apr'23–Mar'24) | FY2025E (Apr'24–Mar'25) |
|--------|----------------------|----------------------|------------------------|
| Revenue | $1,533.2M | $1,589.3M | ~$1,620-1,660M |
| Gross Profit | $587.4M | $626.8M | ~$650-670M |
| Gross Margin | 38.3% | 39.4% | ~40-41% |
| Operating Income (GAAP) | $181.2M | $224.6M | ~$240-265M |
| Operating Margin (GAAP) | 11.8% | 14.1% | ~15-16% |
| Net Income (GAAP) | $79.5M | $117.5M | ~$130-150M |
| EPS (Diluted, GAAP) | $1.64 | $2.41 | ~$2.65-3.05 |
| D&A (total) | ~$190M | ~$185M | ~$178M |
| — of which: PPA Amortization | ~$105M | ~$100M | ~$95M |

Note: GAAP earnings are significantly depressed by purchase price accounting (PPA) amortization from the Dodge acquisition. The ~$95-105M annual intangible amortization charge is non-cash and inflates COGS and D&A while providing no operating benefit — it will step down over time as intangibles are fully amortized.

#### Adjusted (Non-GAAP) Income Statement

| Metric | FY2023 | FY2024 | FY2025E |
|--------|--------|--------|---------|
| Adjusted Gross Profit | ~$650M | ~$690M | ~$720-740M |
| Adjusted Gross Margin | ~42.4% | ~43.4% | ~43.5-45% |
| Adjusted EBITDA | ~$430M | ~$465M | ~$490-510M |
| Adjusted EBITDA Margin | ~28.1% | ~29.3% | ~30-31% |
| Adjusted Operating Income | ~$370M | ~$400M | ~$420-440M |
| Adjusted EPS | ~$7.00 | ~$8.00 | ~$8.50-9.25 |

Note: Adjusted figures exclude PPA amortization, restructuring charges, transaction costs, and stock compensation. Management's preferred metric for operating performance is Adjusted EBITDA and Adjusted EPS.

#### Margin Analysis

##### Gross Margin Trend

GAAP gross margin has expanded from ~35% (FY2022, first year post-Dodge close) toward 39-40% in FY2024-FY2025. This reflects:
1. Mix shift toward higher-margin aerospace products as aerospace demand recovers
2. Pricing realization (3-5% annually in FY2022-FY2024)
3. Dodge manufacturing integration benefits and plant consolidation
4. Operating leverage on fixed manufacturing overhead

Adjusted gross margins are meaningfully higher (~42-44%) because PPA amortization is booked into cost of goods sold.

##### Operating Margin Trajectory

- GAAP operating margins are expanding as revenue grows faster than SG&A and PPA amortization burns down
- Adjusted operating margins are in the 25-27% range — among the highest in the precision industrial manufacturing peer group
- Long-term management target: Adjusted EBITDA margins of 32-35% as Dodge synergies are fully realized and aerospace mix increases

##### EBITDA Quality

Adjusted EBITDA of ~$465-510M is high quality:
- Cash conversion is excellent (capex is light at ~$60-75M annually, ~4-5% of revenue)
- Free cash flow generation is strong despite interest expense burden from Dodge leverage
- Working capital is modestly intensive but manageable

#### Interest Expense & Leverage

The Dodge acquisition was financed with ~$2.5B of debt (term loans + senior notes). Interest expense is a significant P&L headwind:

| Year | Gross Debt | Net Debt | Interest Expense | Net Debt/EBITDA |
|------|-----------|---------|-----------------|----------------|
| FY2022 | ~$2.7B | ~$2.5B | ~$110M | ~6.5x |
| FY2023 | ~$2.4B | ~$2.2B | ~$110M | ~5.1x |
| FY2024 | ~$2.1B | ~$1.9B | ~$105M | ~4.1x |
| FY2025E | ~$1.8B | ~$1.6B | ~$95M | ~3.2x |

The rapid deleveraging trajectory (from >6x to ~3x in 3 years) is a critical fundamental driver for the next 2-3 years. Each turn of leverage reduction meaningfully increases equity value per share.

#### Key Financial Ratios

| Ratio | FY2024 | Peer Median | Comment |
|-------|--------|------------|---------|
| Gross Margin | 39.4% | 32-36% | Premium — precision mix |
| Adjusted EBITDA Margin | 29.3% | 18-22% | Top quartile precision industrial |
| GAAP Net Margin | 7.4% | 8-12% | Suppressed by PPA + interest |
| Adj. Net Margin | ~15-17% | 10-14% | Well above peers |
| Revenue/Employee | ~$250K | $200-250K | Reasonable productivity |

#### Preferred Stock

As part of the Dodge financing, RBC issued ~$500M in Series A Convertible Preferred Stock to Dodge's sellers (ABB). The preferred pays cumulative dividends at approximately 5.5% ($27.5M annually). This preferred is a senior claim on equity and dilutes common shareholders until converted or redeemed. Management has been actively working to reduce/eliminate this preferred overhang.

#### Capex & Free Cash Flow

| Year | Capex | FCF (adj.) | FCF Margin |
|------|-------|-----------|-----------|
| FY2023 | $55M | ~$270M | ~17.6% |
| FY2024 | $65M | ~$295M | ~18.6% |
| FY2025E | $70M | ~$320M | ~19.5% |

FCF conversion from EBITDA is approximately 65-70% (reflecting interest expense and taxes but minimal capex drag). This is favorable for an industrial company and supports rapid debt paydown.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/RBC/fundamental

## Navigation

- Overview: /stocks/RBC
- Financials (this page): /stocks/RBC/financials
- Thesis: /stocks/RBC/thesis
- Investment Memo: /stocks/RBC/memo
- Coverage universe: /stocks