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SEC Filings

10-Q
NN INC filed this Form 10-Q on 08/14/2017
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We have elected to present the derivative contracts on a gross basis in the Condensed Consolidated Balance Sheet included within other current assets, other non-current assets, other current liabilities and other non-current liabilities. To the extent we presented the derivative contract on a net basis, we would have a derivative in a net liability position of $1.7 million as of June 30, 2017. We do not have any cash collateral due under such agreements.

As of June 30, 2017, we reported no gains or losses in accumulated other comprehensive income related to the interest rate swaps. Additionally, during the three and six months ended June 30, 2016, when the interest rate swap was accounted for in accordance with hedge accounting, the periodic settlements and related reclassification of other comprehensive income was $0.5 million and $0.9 million, respectively, of net hedging losses on the interest rate swap in the interest expense line on the Condensed Consolidated Statements of Operations. We recognized $0.5 and $1.0 million of interest rate swap settlements during the three and six months ended June 30, 2017, in the “Derivative losses on change in interest rate swap fair value” line on the Condensed Consolidated Statements of Operations. If there are no changes in the interest rates for the next twelve months, we expect to make $1.3 million in cash payments related to the interest rate swap.

Note 13. Restructuring and Integration

Restructuring and integration costs totaling $0.3 million and $4.0 million were recognized in the three months ended June 30, 2017 and 2016. Restructuring and integration costs totaling $0.4 million and $6.6 million were recognized in the six months ended June 30, 2017 and 2016.

Within the Precision Bearing Components Group, restructuring initiatives to optimize operations in the U.S., Italy, the Netherlands, Mexico and at segment headquarters resulted in a charge of $0.3 and $1.7 million for the three months ended June 30, 2017 and 2016, respectively, and $0.4 and $2.4 million for the six months ended June 30, 2017 and 2016. These charges consisted primarily of severance and other employee costs relating to personnel reductions.

Within the Autocam Precision Components Group, certain restructuring programs, including the closure of one facility, the Wheeling Plant, resulted in a charge of $6 thousand and $2.1 million for the three months ended June 30, 2017 and 2016, respectively, and $16 thousand and $3.6 million for the six months ended June 30, 2017 and 2016.

Within the Precision Engineered Products Group, initiatives resulted in integration, site closure and employee costs of $0.2 million and $0.6 million for the three and six months ended June 30, 2016. There were no charges in the three and six months ended June 30, 2017.

The following table summarizes restructuring and integration activity related to actions incurred for the three and six months ended June 30, 2017 and 2016:

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2017      2016      2017      2016  

Severance and other employee costs

   $ 306      $ 1,814      $ 446      $ 3,390  

Site closure and other associated costs

     —          2,011        —          2,938  

Integration and other associated costs

     —          222        —          257  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 306      $ 4,047      $ 446      $ 6,585  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Reserve
Balance at
December 31, 2016
     Charges      Paid in
2017
     Reserve
Balance at
June 30, 2017
 

Severance and other employee costs

   $ 3,019      $ 446      $ (1,673    $ 1,792  

Site closure and other associated costs

     1,626        —          (614      1,012  

Integration and other associated costs

     —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 4,645      $ 446      $ (2,287    $ 2,804  
  

 

 

    

 

 

    

 

 

    

 

 

 

The total restructuring and impairment costs are still being identified at the various segments; therefore, we are not able to estimate the ultimate costs at this time. We will include in future filings updates to these activities along with a reconciliation of beginning and ending liabilities recorded. The amounts recorded for the three and six months ended June 30, 2017, for restructuring charges that have been incurred are primarily expected to be paid out during 2017. Some amounts related to foreign locations extend through 2021.

 

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