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SEC Filings

10-Q
NN INC filed this Form 10-Q on 08/14/2017
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Table of Contents

AUTOCAM PRECISION COMPONENTS GROUP

 

     Six Months Ended June 30,  
     2017      2016      Change         

Net sales

   $ 173,104      $ 166,981      $ 6,123     

Volume

              6,678  

Foreign exchange effects

              414  

Price/material inflation pass-through/mix

              (969

Income from operations

   $ 21,289      $ 14,297      $ 6,992     
  

 

 

    

 

 

    

 

 

    

Net sales increased by $6.1 million during the first half of 2017 from the first half of 2016 due to industrial market demand improvements in the US and Asia and new automotive program launches in the US Asia and Brazil.

The primary driver of the improvement in income from operations was a $3.6 million reduction in restructuring costs compared to the first half of 2016, primarily related to the closure of the Wheeling Plant in the prior year. The remaining increase in income from operations was consistent with the increase in net sales.

PRECISION ENGINEERED PRODUCTS GROUP

 

     Six Months Ended June 30,  
     2017      2016      Change         

Net sales

   $ 142,398      $ 129,615      $ 12,783     

Volume

              13,528  

Foreign exchange effects

              (734

Price/material inflation pass-through/mix

              (11

Income from operations

   $ 21,514      $ 16,203      $ 5,311     
  

 

 

    

 

 

    

 

 

    

Net sales increased by $12.8 million during the first half of 2017 from the first half of 2016 primarily due to the overall improvement in demand across the medical end market and sales to new customers within the aerospace market.

The increase in income from operations was driven by the increase in net sales. Additionally, depreciation and amortization decreased by $2.4 million due to the amortization of backlog and unfavorable leasehold intangibles during the first quarter of 2016.

Changes in Financial Condition from December 31, 2016 to June 30, 2017.

From December 31, 2016 to June 30, 2017, total assets increased by $50.1 million, of which $47.1 million related to current assets. The increase in current assets was primarily due to increases in accounts receivable and inventories as well as an increase in income tax receivable. The increase in accounts receivable is consistent with increased sales. Despite the increase in net sales, we held inventory levels relatively flat with days inventory outstanding decreasing by approximately two days. The income tax receivable resulted from a net taxable loss for the six months ended June 30, 2017.

From December 31, 2016 to June 30, 2017, total liabilities increased by $48.8 million due to a $53.7 million increase in total debt. The increase in debt resulted from the redemption of our Senior Notes with the proceeds of a new $300.0 million Incremental Term Loan in April 2017.

Working capital, which consists principally of accounts receivable and inventories offset by accounts payable, accrued payroll costs, and current maturities of long-term debt, was $180.6 million at June 30, 2017, compared to $141.9 million at December 31, 2016. The increase in working capital was due primarily to the increase in accounts receivable and inventories, as discussed above.

Cash used by operations was $15.6 million for the six months ended June 30, 2017, compared with cash provided by operations of $11.8 million for the six months ended June 30, 2016. The difference was primarily due to $31.6 million paid for the call premium on the redemption of the Senior Notes, partially offset by increased operating income.

 

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