RBC Bearings Incorporated (NYSE: RBC) Q3 2025 Earnings Call dated Jan. 31, 2025
Corporate Participants:
Robert Moffatt — Director of Investor Relations
Michael J. Hartnett — Chairman, President and Chief Executive Officer
Robert M. Sullivan — Vice President, Chief Financial Officer
Analysts:
Peter Skibitski — Analyst
Steve Barger — Analyst
Michael Ciarmoli — Analyst
Ross Sparenblek — Analyst
Jordan Lyonnais — Analyst
Presentation:
Robert Moffatt — Director of Investor Relations
Good morning, and thank you for joining us for RBC Bearings’ Fiscal Third Quarter 2025 Earnings Call. I’m Rob Moffatt, Director of Corporate Development and Investor Relations. And with me on today’s call are Dr. Michael Hartnett, Chairman, President and Chief Executive Officer; Dan 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 are made 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 a reconciliation between GAAP and non-GAAP financial information.
With that, I’ll now turn the call over to Dr. Hartnett.
Michael J. Hartnett — Chairman, President and Chief Executive Officer
Thank you, Rob, and good morning. I’m going to start today’s call with a quick review of our financial results and I’ll finish with some high-level thoughts on the industry and the outlook for the remainder of fiscal ’25. And I’ll hand it over to Rob Sullivan for some more detail on the on the numbers. Third quarter net sales came in at $394 million, a 5.5% increase over last year, driven by continued strong performance in our Aerospace and Defense segment. Total Aerospace and Defense sales were up 10.7% year-over-year with a 14.6% growth on the commercial aerospace side and a 3% growth in defense. On the industrial side, this segment grew 2.7% year-over-year with distribution and aftermarket up 8% and OEM down 8.2%. Altogether, it was a solid quarter.
So, I’m going to talk about some underlying trends. In Aerospace and Defense, we did a good job mitigating the impact from the strikes of Boeing and Textron during the quarter. Quarter-by-quarter cadence across commercial aerospace has been lumpy through our fiscal 2025 and I’m sure that’s no surprise to anyone on this call. I would encourage you to focus on the total segment trend, which is 10.7% growth for the quarter and a 15.5% growth year-to-date and these are solid performance numbers. Growth in the case of defense was limited by capacity and not demand. In fact, demand is extraordinary. We are adding capacity as we speak and adding capacity means hiring and training staff, expanding supply chain and we are currently building plants.
I want to take a second to commend the teams managing our customers, plants, people and production schedules. There’s a lot of work put into rebalancing our production cadence in order to smooth some of the customer volatility over the past two quarters. Maintaining level operating loans in our plant that is balancing load against cost is a critical part of RBC’s performance and continues to be a key contributor to our long-term gross margin expansion. On the industrial side, we were excited to see the segment return to growth. While our OEM business was down for the period, the bulk of the contraction came from the oil and gas category.
Additionally, headwinds we’re also seen, but to a lesser extent in the construction and semiconductor machinery manufacturing. We saw encouraging signs in the aftermarket of aggregate and cement, mining and metals, food and beverage and grain. Seller markets were up well into the double-digits, yielding a net gain of 8% over the period. Evidence of how even a modest USA GDP expansion can be very impactful to this sector. Excluding the oil and gas influence, our industrial sector expanded at a 4.4% rate. Overall, the continued tailwinds of industry-leading service levels, organic growth, synergies and favorable end-market mix came together to put us well into the green on revenues, margins, cash flow for the quarter, which was a quarter that’s the most challenging of the four to navigate.
Gross margin for the quarter came in at $175 million or 44.3% of sales, a 205 basis point increase year-over-year. The biggest drivers of our margin expansion continued to be increased absorption of our Aerospace and Defense capacity, ongoing synergies with Dodge and a wide range of smaller continuous improvement projects on a plant-by-plant basis, we continue to identify through our RBC ops management process. Adjusted net income of $73 million was up 34.7% year-over-year and that translated to an adjusted EPS of $2.34 per share compared to last year’s $1.85 for a growth of 26.5%. Cash from operations came in at $84 million and compares to $80 million last year and free cash flow of $74 million was up nicely versus the $71 million last year. We use our cash to continue to deleverage the balance sheet with an impressive $100 million of debt reduction in the quarter, making our trailing net leverage to 1.8 turns.
As many of you know, RBC is a cash flow rich business. Since we acquired Dodge, we committed nearly all of our cash generation to deleveraging the balance sheet. The 2.0 mark debt divided by EBITDA was an important milestone and I’m excited we were able to achieve it in just three years. Also, with our preferred dividend now gone, we are excited to recapture $23 million in annual expense back into our cash flow and further accelerate additional debt repayment going-forward. In terms of our outlook, our A&D business remains on a path towards mid-teens growth for the full year. The industrial business should finish the year roughly flat with a healthy second half exit to the year. With the new calendar year, the election behind us, many of you asked for my thoughts on the new administration and what it might mean for RBC.
I’ve done a little bit of thinking on the topic and this is where I come out. In terms of our end-markets, I don’t think it changes much for commercial aerospace. The drivers here have been supply chain challenges and the broader issues at Boeing. But from what I can see, there appears to be a nice progress in addressing some of these issues and I’m optimistic that it continue. If that happens, we should stand to benefit from some wonderful comps in the commercial aerospace business as we progress through calendar 2025, our fiscal 2026. We continue to expect strong secular growth beyond ’25, fueled by record bookings, backlogs at Boeing and Airbus, who together have 12 years of demand sitting on their order books and build rates that need to move higher.
On the defense side, with the current geopolitical backdrop and with the Republicans in-charge of the House, Senate and Executive branch, it seems it likely that the U.S. defense spending will accelerate over the next four years. And in terms of international defense spending, EU members are increasingly investing 2% of GDP level and are now debating if it needs to be 3% with Trump arguing there should be 5%. I can’t tell you exactly where things are going to shake out, but I suspect there’s good odds that it will eventually be higher than it’s been at any time in post Cold War history. In the industrial business, we continue to hear from customers and distributor partners the following. Since the election, there has been a risk step-up in quoting for new projects. Clearly, there’s no mistake, we are moving into a drill baby drill period where renewable energy sources are out of favor worldwide.
Array [Phonetic] or common sense where has it been? Confidence seems to have returned and a future lowering of interest rates appears to be inevitable. Our third quarter is a good indicator of the impact of GDP growth on our industrial aftermarket. Tarrifs certainly add both spice and fuel to our business outlook, all of which are strongly a net good for RBC. The last area worth touching on is M&A. With our net leverage down to 1.8 times, we are well-prepared for the next opportunity and remain busy assessing candidates. With just one more quarter left in our fiscal 2025, our attention is beginning to focus on next year. If the current trend holds, it’s likely that fiscal 2026 could offer an environment where all three of our end-markets are growing in unison. It’s too early to provide a concrete outlook, but that is the backdrop by which we are putting budgets together for fiscal 2026.
With that, I’ll now turn the call over to Rob Sullivan for more details on the financial performance.
Robert M. Sullivan — Vice President, Chief Financial Officer
Thank you, Mike. As Dr. Hartnett indicated, this was another strong quarter for RBC. Net sales growth of 5.5% drove gross margin growth of 10.6% with more than 200 basis points of percentage expansion. The quarter benefited from some favorable product mix and strong manufacturing performance on the industrial side. Those factors were in addition to the more structural drivers of our gross margin performance, including ongoing synergies and increased utilization of our aerospace and defense manufacturing assets.
On the SG&A line, we continued our investments in future growth. This includes a combination of investing in personnel costs and back-office support, including IT licenses and infrastructure. This resulted in adjusted EBITDA of $122.6 million, up 12% year-over-year and an adjusted EBITDA margin of 31.1%, which was up 180 basis points year-over-year. Interest expense in the quarter was $14.2 million. This was down 26.4% year-over-year, reflecting the ongoing repayment of our term loan as well as a lower rate on the loan as the SOFR base rate has moved lower.
The tax rate in our adjusted EPS calculation was 22.2% and reasonably consistent versus last year’s 21.3%. Altogether, this led to an adjusted diluted EPS of $2.34, representing growth of 26.5% year-over-year, an impressive result given some of the choppiness in commercial aerospace customer production schedules and the macroeconomic softness in the industrial economy. Free cash flow in the quarter came in at $73.6 million with conversion of 127% and compares to $70.9 million and 152% last year. As usual, we used a meaningful portion of the cash generated to continue to deleverage the balance sheet. We repaid $100 million of debt during the quarter, taking our total year-to-date debt reduction on the facilities to $195.4 million.
And in terms of our free cash flow generation going forward, the October 15 automatic conversion of our mandatory convertible preferred stock removed the cash dividend payment, reducing our future total cash outlays by approximately $23 million on an annualized basis. This was roughly 9.5% of fiscal ’24’s total free cash flow. With our trailing net leverage now at 1.8 turns and heading even lower going forward, our balance sheet is in an increasingly attractive position to pursue additional accretive M&A and our team remains busy growing our funnel of potential deal flow.
Looking into the fourth quarter, we are guiding to revenues of $434 million to $444 million, representing year-over-year growth of 4.9% to 7.3%. That guidance embeds an operating environment that’s fairly similar to the fiscal third quarter. On the gross margin side, we are projecting gross margins of 44% to 44.5%, which would be an increase of roughly 115 basis points year-over-year at the midpoint. And for SG&A, we expect SG&A as a percentage of sales to be between 16% and 16.5% range during the fourth quarter.
In closing, this was another strong quarter for RBC. We remain focused on leveraging our core strengths in engineering, manufacturing and product development to drive both organic and inorganic growth, continued margin excellence and high levels of free cash flow conversion.
With that, operator, please open the call for Q&A.
Questions and Answers:
Operator
Thank you. We’ll now be conducting a question-and-answer session. [Operator Instructions] Thank you.
Our first question is from Pete Skibitski with Alembic Global. Please proceed with your question.
Peter Skibitski
Hey, good morning, guys. Nice performance. Mike, I’ll echo you that it was good to see industrial return to growth. Can you talk more about oil and gas, kind of what you saw in the quarter that was — was it lack of spending because of the election? And then when you talk about increased code activity at industrial, does that include oil and gas?
Michael J. Hartnett
Yeah. Well, on the oil and gas side of things, [Technical Issues] that’s boom or bust industry and when it’s booming they want materials faster than you can make materials and they ultimately over order their materials because the trees never stop growing. And so the trees stopped growing and they had too many materials. So, it’s really an inventory correction. And we’re studying it. And it will blend down over the next nine months and sort of get back to a more normal level. But I think basically, we had a few customers who over-ordered.
Peter Skibitski
Got it. Okay. Thanks for that.
Robert Moffatt
Just to give you a little more color on that, this is Rob Moffatt. Ex the oil and gas headwind that OEM business will have been down about 2%, 2.5%. So, a big chunk of that delta in the industrial oil gas.
Peter Skibitski
Got you. That’s helpful, guys. I appreciate it. And then just everybody is going to be worried going to the weekend about this tariff issue. Mike, you don’t sound too worried. Can you give us more color in terms of what allows you to retain confidence that won’t be a major roadblock for you?
Michael J. Hartnett
Yeah, sure. Well, I mean there’s — it’s Mexico and China really, right, I mean that’s the two — those are the two issues. First of all, our Mexico plants we have three plants in Mexico. The materials are shipped in from the U.S., the value-added is minimal and then they’re shipped back out. So, any tariff that’s applied to Mexico will be easily absorbed in our — it’s just not it’s not that big a number and it will easily be absorbed in our cost structure and passed along in our prices. Just it’s a non-issue. So, the other part of Mexico is our commercial contracts where we sought where we actually sell product out of Mexico directly to customers. Our contracts have triggers in them which anticipate or anticipate some government action that’s unforeseen and it allows us to renegotiate our contract.
And how did we learn that? Well, we learned that during the pandemic when they showed up at the plant with guns drawn and shut-down our plants. So we decided, it would be nice to have a clause in these contracts going forward that say there’s anything crazy like that happens between the governments that there’s a way to mitigate our business model. So yeah, that’s kind of baked into our contracts. And also for the most part, our contracts for commercial items, our FOB plant and I’m sure we have belts and suspenders on this thing as far as that’s concerned. Now, China is another issue and if Trump does his 10% tariff on China, I will be incredibly disappointed. I mean all the huffing and puffing he did and he’s going to do 10%. First of all 10% we won’t even feel it in our numbers. It’s just it will be insignificant. If he does 50% and he puts the same program in place he’s putting in place for the steel industry, for the bearing industry, what do you think is going to happen to bearings?
Peter Skibitski
Probably a shortfall, right?
Michael J. Hartnett
Shortfall. What happens supply-and-demand. How about that equation? How does that balance up? So, it’s going to follow the same path as the steel industry if there’s a very strong tariff. I’m praying for a strong tariff.
Peter Skibitski
Got it. Got it. Okay. Okay, that’s very helpful. I appreciate the whole context.
Michael J. Hartnett
And I think one other thing, there is a RBC is a Made in the USA company for the most part. We make our products here. I mean there’s some augmentation by other foreign sources, but not a lot and nothing that we can’t recover with our own plants. So, we make it here and for the most part, more or less, we sell 90% of our sales are here. That’s a big distinction between us and what other people consider as our peers.
Peter Skibitski
Very helpful. I’ll end on a defense note and maybe a less controversial one. You’ve talked about the need to increase submarine capacity. I think you’ve hinted that you need to increase munitions capacity as well. I’m just wondering if you can update us on the capex impact and the schedules for your capacity expansion in defense.
Michael J. Hartnett
Yeah. Well, you won’t — the capex will be — won’t be extraordinary. As far as the submarine business is concerned, we’re — yeah, we’re building out a 100,000 plus plant in Tucson. It’s a leased building so there’s no brick-and-mortar there. And we’ll move machinery from one of the Tucson plants into this third plant over the course of the year and allow more manufacturing capacity inside the base Tucson plant for the submarine business. So that’s ongoing. The capital impact is well within our normal capital budgets.
Peter Skibitski
Okay. And that sounds like a — not something that would take a long time. I guess is the first point. The second point is, I guess the free cash flow drop-down should be pretty strong, I would think.
Michael J. Hartnett
Yeah, it’s going to be same as same as it’s been.
Peter Skibitski
Correct. Thanks for the color. Appreciate it guys.
Michael J. Hartnett
Yeah.
Operator
Thank you. Our next question is from Steve Barger with KeyBanc Capital Markets. Please proceed with your question.
Steve Barger
Thanks. Good morning.
Michael J. Hartnett
Good morning, Steve.
Steve Barger
Mike, I know it’s early to talk about fiscal ’26, but you did mention how comps and conditions should allow for strong growth in aerospace. Just based on what you know now about demand and your capacity, are you thinking mid-teen growth against the mid-teens comp or does the growth rate actually accelerate? I guess just trying to figure out how good you think this could be?
Michael J. Hartnett
Now, we’re talking about commercial aerospace, right?
Steve Barger
I guess the segment of Aerospace.
Michael J. Hartnett
Yeah. Okay. It’s going to be very good. Let’s put it this way, we’re at 15%, Boeing really hasn’t been building airplanes.
Steve Barger
Right. So, you have a layer that — if nothing else changes, it just accelerates the growth rate.
Michael J. Hartnett
Yeah, if nothing else changes, it just accelerates. We have a lot of content on those plans. So, yeah, it’s 15% for commercial aerospace. Should be a — I don’t want to say it’s a floor because I think the floor should be higher. I mean it’s going to be [Technical Issues].
Steve Barger
And presumably, and I’m not trying to nail you down to anything, but just based on the conditions, the 12-year backlog that you talked about, like this shouldn’t end anytime soon. You should have — not to put words in your mouth, but like you must have as good a visibility right now into aerospace as you’ve had in a long-time.
Michael J. Hartnett
Yeah, I mean, our visibility in the aerospace is the same as everybody else as we look at Boeing, Skyline and we say a little, to hope that they make it and that all happens for us. That’s where the risk is. I mean our we have contracts in place with Boeing through 2030 for all of our stuff. So, all they have to do is make a plane and we’ll send them the components they need. So, it’s really in their hand.
Steve Barger
Understood. And similar question for industrial. If I heard you right, you said 4% growth ex-oil and gas this quarter. If we assume oil and gas gets back to growth, does this feel like we’re heading back to a mid-single-digit kind of growth environment for industrial, just as you think about the sentiment, the quoting activity that you’ve talked about, the — how you think the administration is going to proceed?
Michael J. Hartnett
Yes. I would say that’s right. I think oil and gas from what we know about inventories and absorption rates is going to take a little bit longer, but it will phase-in at the end-of-the year.
Steve Barger
Understood. Thanks very much.
Michael J. Hartnett
Yeah.
Operator
Thank you. Our next question is from Michael Carmoli with Truist Securities. Please proceed with your question. Michael, is your line on mute?
Michael Ciarmoli
Oh, sorry, can you guys hear me now? Apologies. Yes. Thanks for taking the question. Nice results. Hey, Mike, just to maybe stay on stay on that line. I guess first with oil and gas, I mean you mentioned the drill baby drill. Are you kind of seeing any tangible evidence of more planned spending? I mean, if we do see a pretty steep reduction in oil prices, I mean or energy prices, these companies usually aren’t incentivized to spend, they want to continue to deploy capital to shareholders. So, do you really think you see large-scale projects pick up in that kind of environment?
Michael J. Hartnett
Well, hard to say. I mean, you’ve got two forces in balance there, right? Consumption and supply and there always seems to be a problem with supply. Whether it’s a war or it’s an embargo or it’s something else, there’s always — there always seems to be an interruption that’s unpredictable, it changes the game for a year or two. So, I think it needs something like that to accelerate it, but I wouldn’t rule something like that out.
Michael Ciarmoli
Okay. Fair. And then just a follow-up on where Steve was going with aero, if I’ll put words in your mouth. If 15% is a floor next year, how do we think about your contract renewals that have been coming due? Do you kind of maybe juice that — juice any growth rate a bit with some pricing on top of the volume assuming Boeing, Airbus and the supply chains kind of start to normalize here.
Michael J. Hartnett
Our current contracts term out at the end of ’26 with Boeing, I think Airbus. I’m sure Airbus. So, the new contracts and the new pricing and the new mix takes effect January of ’26. So yeah, and it’s better. I mean, okay. Since the old — let’s put it this way, since the old contracts were signed, the producer price index has probably gone up somewhere between 30% and 35%.
Michael Ciarmoli
Okay. That’s helpful. Got it. And then just further back on tariffs, maybe with the China topic. I think when you guys — we saw this years ago in 2018, you commented, I guess you don’t really have a lot of direct competition in China, a lot of commoditized markets. Does that really then move the needle for you guys if the tariffs into China are pretty significant? Just given that you play a lot of the commoditized market? Yeah. I mean you don’t have a lot of China’s competition, right? I mean, the customers you’re dealing with are looking for more ruggedized, high-quality differentiated bearings like you provide versus the commoditized market. So, I mean does it really move the needle?
Michael J. Hartnett
Well, you’re talking about exports into China?
Michael Ciarmoli
I guess in both cases, right? I mean, do you sell directly that much into China right now? And presumably, would there be a lot of substitute if those tariffs on products coming out of China are material, do you think you’ll get a lot of business from the customers looking out for?
Michael J. Hartnett
We sell into China now, but it’s not material.
Michael Ciarmoli
Okay.
Michael J. Hartnett
It isn’t worth talking about.
Michael Ciarmoli
Okay. Okay. Got it. And then I guess last one for me. Anything else you can say on kind of M&A? I know you talked about the leverage being down. You’ve got more cash here with the preferreds rolling-off. I mean just anything close to the finish line? Any specific adds, whether it’s market you’re looking to expand? Any kind of color you can maybe tell us?
Michael J. Hartnett
Sure. Well, certainly, we have the balance sheet that would support expansion. On the other hand, we have an unprecedented [Indecipherable] of projects, internal projects underway that we’re developing for organic growth that are either in production or close to production. So, our first order of business is to look internally and make sure that these projects and products are well-managed and we don’t disappoint our customers. So that’s our first order of priority. On acquisitions, we continue to review candidates. I don’t know how many half a dozen come over the TransSouth [Phonetic] every month that kind of a rate. And we look at it bit with our markets, bit with our ability to sell, our ability to understand those markets. We look for scale. Scale is important and we’ve gotten to the point where we’ll accept no less than a top-tier management. So, Dodge completely spoiled us. Right? We look at every one of them and we say is it as good as Dodge? And is it a yay or nay or an a in terms of management team? And so we’re looking for another guest.
Michael Ciarmoli
So that rules out, should we think about ruling out kind of fix or uppers or a company with maybe inferior margins, it just — I’ve always looked at those as saying you can deploy your toolkit and there would be a tremendous opportunity for accretion. But if you’re accepting no less than top-tier management, presumably the financials would be pretty good.
Michael J. Hartnett
Well, we were able to help Dodge out with their margins and that all worked out well for everybody. So, I think we want a management team basically that knows the game has a lot of experience in the industry and the business and is willing to work with us and that’s what we found with that. And so that’s all kind of gray stuff when you’re doing your diligence you have to make a call out exactly that. And that’s where we are. I mean, we’ve made bids on some of the candidates we’ve seen over the last quarter and I can only say that there’s way too much private equity flowing around and so whatever we do will be expensive.
Michael Ciarmoli
Got it. That’s helpful. Thanks, guys.
Robert Moffatt
Just to add on to that, this is Rob Moffat. I mean, to Dr. Hartnett’s earlier point, when we look to fiscal 2026 and the amount of organic growth that’s out there. We don’t need to take risks on M&A. Number one focus is just heads-down in capturing the organic growth that’s there and we can wait for the right pitch to come across the plate, whether it’s product fit management team, et cetera. But there’s a lot of opportunity that we’re focused on organically where we don’t feel pressure to take a risk.
Michael Ciarmoli
Yeah, makes sense. Got it. Helpful. Good stuff. Thanks, guys.
Operator
Our next question is from Ross Sparenblek with William Blair. Please proceed with your question.
Ross Sparenblek
Hey, good morning, gentlemen.
Michael J. Hartnett
Hey, Ross.
Ross Sparenblek
Hey, guys. Apologies if I missed it, but did you provide the gross margins by segment between Aero and Industrial?
Robert M. Sullivan
That’ll be in the Q.
Ross Sparenblek
Okay. All right. I guess the slide here though is that Aero was the heavy-lift this quarter?
Robert M. Sullivan
Can you just give me a sec, Ross, I’ll pull it out for you. Industrial margins were exceptional, again, but as you would expect. Aerospace margins this quarter were over 40% to 40.5% and industrial margins were 46.5%.
Ross Sparenblek
Wow. So, I mean that implies that you guys really aren’t seeing much from the widebody ramp and/or contract renewals as I guess you previously noted. So, there’s still a pretty significant leg-up here. On the industrial side, do you get the sense that you’re towards the end of the Dodge synergies then?
Michael J. Hartnett
I think we’ll have Dodge synergies for the next 10 years. It just doesn’t seem to end. It doesn’t seem to end.
Ross Sparenblek
Okay. Maybe on the warehouse business, could you provide us what the growth was in the quarter between aftermarket and aero? I know that’s an OEM. I know that’s stepping up here as those warranties lap.
Robert Moffatt
Ross, you’re asking for aftermarket versus OEM aero?
Ross Sparenblek
The Dodge, the Dodge warehouse?
Robert M. Sullivan
I got it right here. Solid performance across OEM and aftermarket, it was up about 7% on a year-over-year basis.
Ross Sparenblek
Okay.
Robert M. Sullivan
With OEM and aftermarket.
Ross Sparenblek
Yeah. So maybe just to kind of frame the industrial runway at the end of the year and then 2026, roughly 70% of industrial is stable and modest growth. The warehouse is coming back and then semiconductor and oil and gas are still around trough levels. Any sense on kind of where that stands on peak-to-trough or maybe just trough to normalized levels for OEM and semiconductor as those begin to come back?
Michael J. Hartnett
We’re starting to see semiconductor work its way back. We’re seeing orders from customers that were non-existent a year-ago. These are old customers for us, so we know who they are and what they use and so on. So yeah, we’re starting to see that trickle back. It’s — it hasn’t reached a gallop yet. Let’s just put it.
Ross Sparenblek
Okay. I’m just trying to assess expectations on maybe if there is a lift above 4% growth in the near-term if those did meaningfully accelerate, but it sounds like you guys have a lot still ahead of you. So, congrats on the quarter. And I’ll leave it there.
Michael J. Hartnett
Thanks, Ross.
Ross Sparenblek
Thank you.
Operator
Thank you. Our next question is from Jordan Lyonnais with Bank of America. Please proceed with your question.
Jordan Lyonnais
Hey, good morning.
Michael J. Hartnett
Good morning.
Jordan Lyonnais
On Aero, could you guys give a little more detail on what the growth was for space in which end-markets in defense you guys saw the most growth for and expectations for going forward.
Michael J. Hartnett
Pulling up aerospace for you, hold on a second. Yes, aerospace was solid again. It was another quarter with ballpark, call it 40% year-over-year growth as the rest of defense was pretty balanced.
Jordan Lyonnais
Okay. Also a couple of categories. The missiles and guided munitions are strong, fixed-wing military, strong on the defense side, but they’re pretty balanced across the board. Great. Thank you guys so much.
Michael J. Hartnett
Got it.
Operator
Thank you. There are no further questions at this time. I’d like to turn the floor back over to Dr. Hartnett for any closing comments.
Michael J. Hartnett
Okay. Well, this concludes our conference call for the third quarter and I appreciate everybody’s participation and all the good questions. We look forward to talking to you again. I think that’s in May, end of May. Good day.
Operator
[Operator Closing Remarks]