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SEC Filings

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

Table of Contents
     Three Months Ended
June 30,


   2017      2016  

Interest on debt

   $ 11,451      $ 15,241  

Interest rate swaps settlements

     —          466  

Amortization of debt issuance costs

     914        1,047  

Capital lease interest

     327        278  

Capitalized interest (1)

     (283      (401







Total interest expense

   $ 12,409      $ 16,631  








(1) Capitalized interest primarily relates to the equipment construction efforts at the various plants.

Loss on Extinguishment of Debt and Write-off of Unamortized Debt Issuance Cost. The $39.6 million write-off resulted from the extinguishment of the Senior Notes and modification of the credit facility on April 3, 2017.

Other (Income) Expense, Net. The change in other income and expenses was primarily due to foreign currency exchange effects related to the Brazilian real and the euro.

Net Income (Loss). The $39.6 million loss on extinguishment of debt and write-off of unamortized debt issuance cost was the primary reason for the net loss in the second quarter of 2017. This loss was partially offset by a $3.3 million increase in income from operations, a $4.2 million reduction in interest expense, and a $10.1 million decrease in income tax expense. Significant components of the changes in income from operations and interest expense were presented in the preceding paragraphs. The decrease in tax expense includes the tax effect of the loss on extinguishment of debt and write-off of unamortized debt issuance cost.




     Three Months Ended June 30,  
     2017      2016      Change         

Net sales

   $ 67,928      $ 65,157      $ 2,771     



Foreign exchange effects


Price/material inflation pass-through/mix


Income from operations

   $ 8,351      $ 6,474      $ 1,877     










Net sales increased by $2.8 million during the second quarter of 2017 from the second quarter of 2016 due to higher demand volumes. The higher volumes were primarily due to demand improvements within the industrial and automotive markets.

The primary driver of the improvement in income from operations was a $1.4 million reduction in restructuring costs compared to the second quarter of 2016, primarily related to headcount reductions in the prior year. The remaining increase in income from operations was consistent with the increase in net sales.