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SEC Filings

10-Q
NN INC filed this Form 10-Q on 08/14/2017
Entire Document
 


Table of Contents

Three Months Ended June 30, 2017 Compared to the Three Months Ended June 30, 2016

OVERALL RESULTS

 

     Consolidated NN, Inc.
Three Months Ended June 30,
 
     2017     2016     Change        

Net sales

   $ 225,875     $ 214,272     $ 11,603    

Volume

           12,837  

Foreign exchange effects

           (2,033

Price/material inflation pass-through/mix

           799  

Cost of products sold (exclusive of depreciation and amortization shown separately below)

     166,040       156,794       9,246    

Volume

           9,389  

Foreign exchange effects

           (1,450

Mix

           2,448  

Inflation

           1,655  

Cost reduction projects/other

           (2,796

Selling, general and administrative expense

     23,036       20,993       2,043    

Foreign exchange effects

           (56

Infrastructure and staffing costs

           2,099  

Depreciation and amortization

     15,900       15,136       764    

Restructuring and integration expense

     306       4,047       (3,741  
  

 

 

   

 

 

   

 

 

   

Income from operations

     20,593       17,302       3,291    

Interest expense

     12,409       16,631       (4,222  

Loss on extinguishment of debt and write-off of unamortized debt issuance costs

     39,639       —         39,639    

Derivative losses on change in interest rate swap fair value

     101       —         101    

Other (income) expense, net

     645       (824     1,469    
  

 

 

   

 

 

   

 

 

   

Income (loss) before provision (benefit) for income taxes and share of net income from joint venture

     (32,201     1,495       (33,696  

Provision (benefit) for income taxes

     (9,428     719       (10,147  

Share of net income from joint venture

     1,244       1,343       (99  
  

 

 

   

 

 

   

 

 

   

Net income (loss)

   $ (21,529   $ 2,119     $ (23,648  
  

 

 

   

 

 

   

 

 

   

Net Sales. Net sales increased during the second quarter of 2017 from the second quarter of 2016 by $11.6 million, principally due to higher volumes. The higher volumes were primarily due to demand improvements within the automotive, industrial and medical markets. Overall, sales were ahead of prior year by $2.8 million, $3.7 million and $5.1 million for PBC, the Autocam Precision Components Group (“APC”), and the Precision Engineered Products Group (“PEP”), respectively. These increases were partially offset by the impact of devaluation of the euro and other foreign currency denominated sales.

Cost of Products Sold. The increase in cost of products sold was primarily due to the increase in demand and production volumes. These increases were partially offset by the impact of the devaluation of the euro and other foreign currency denominated costs. Additionally, increases were partially offset by cost savings from production process improvement projects.

Selling, General and Administrative Expense. The majority of the increase during the second quarter of 2017 from the second quarter of 2016 was due to the infrastructure and staffing costs incurred related to our strategic initiatives.

Restructuring and Integration Expense. The decrease in restructuring and integration expense was primarily due to limited spending on restructuring in the second quarter of 2017 compared to the second quarter of 2016. The second quarter of 2016 included $2.1 million of cost incurred to close the Wheeling Plant and $1.7 million of cost for headcount reduction in PBC.

Interest Expense. Interest expense decreased by $4.2 million due to the redemption of the Senior Notes at the beginning of the second quarter of 2017 with the proceeds of the Incremental Term Loan, which bears a lower interest rate based on LIBOR.

 

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