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SEC Filings

8-K
NN INC filed this Form 8-K on 11/03/2017
Entire Document
 


Reconciliation of GAAP Income from Operations to Non-GAAP Adjusted Income from Operations

 

S000s    Three Months Ended
September 30,
 
NN, Inc. Consolidated    2017     2016  

GAAP income from operations

   $ 6,296     $ 12,985  

Restructuring and integration expense

     345       286  

Acquisition and transition expense

     2,922       757  

Amortization of intangibles

     5,840       5,865  
  

 

 

   

 

 

 

Non-GAAP adjusted income from operations (a)

   $ 15,403     $ 19,893  
  

 

 

   

 

 

 

Non-GAAP adjusted operating margin (1)

     10.4     13.6

GAAP net sales

     148,156       146,714  
S000s    Three Months Ended
September 30,
 
Autocam Precision Components    2017     2016  

GAAP income from operations

   $ 6,799     $ 8,464  

Restructuring and integration expense

     345       286  

Acquisition and transition expense

     500       —    

Amortization of intangibles

     874       885  

Share of net income from joint venture

     1,202       1,427  
  

 

 

   

 

 

 

Non-GAAP adjusted income from operations (a)

   $ 9,720     $ 11,062  
  

 

 

   

 

 

 

Non-GAAP adjusted operating margin (1)

     11.9     13.7

GAAP net sales

     81,664       80,492  
S000s    Three Months Ended
September 30,
 
Precision Engineered Products    2017     2016  

GAAP income from operations

   $ 7,922     $ 9,913  

Restructuring and integration expense

     —         —    

Acquisition and transition expense

     400       320  

Amortization of intangibles

     4,966       4,980  
  

 

 

   

 

 

 

Non-GAAP adjusted income from operations (a)

   $ 13,288     $ 15,213  
  

 

 

   

 

 

 

Non-GAAP adjusted operating margin (1)

     20.0     23.0

GAAP net sales

     66,492       66,222  

 

(1) Non-GAAP adjusted operating margin = Non-GAAP adjusted income from operations / GAAP net sales
 

 

The Company discloses in this presentation the non-GAAP financial measures of adjusted income from operations and Non-GAAP adjusted operating margin. Each of these non-GAAP financial measures provide supplementary information about the impacts of acquisition, divestiture and integration related expenses, foreign-exchange impacts on inter-company loans reorganizational and impairment charges. Over the past four years, we have completed seven acquisitions, two of which were transformative for the Company, and sold two of our businesses. The costs we incurred in completing such acquisitions, including the amortization of intangibles and deferred financing costs, and these divestitures have been excluded from these measures because their size and inconsistent frequency are unrelated to our commercial performance during the period, and which we believe are not indicative of our ongoing operating costs. We exclude the impact of currency translation from these measures because foreign exchange rates are not under management’s control and are subject to volatility. Other non-operating charges such as, the write-off of our interest rate swap, are excluded as the charges on not indicative of our ongoing operating cost. We believe the presentation of adjusted income from operations and adjusted operating margin provide useful information in assessing our underlying business trends and facilitates comparison of our long-term performance over given periods.

The non-GAAP financial measures provided herein may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies may calculate such financial results differently. The Company’s non-GAAP financial measures are not measurements of financial performance under GAAP, and should not be considered as alternatives to actual income growth derived from income amounts presented in accordance with GAAP. The Company does not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial results.

(a) Non-GAAP Adjusted income from operations, represents GAAP income from operations, adjusted to exclude the effects of restructuring and integration expense, non-operational charges related to acquisition, divestiture and restructuring and integration costs, intangible amortization costs for fair value step-up in values related to acquisitions, and when applicable, our share of income from joint venture operations. We believe this presentation is commonly used by investors and professional research analysts in the valuation, comparison, rating and investment recommendations of companies in the industrial industry. We use this information for comparative purposes within the industry. Non-GAAP adjusted income from operations, is not a measure of financial performance under GAAP and should not be considered as a measure of liquidity or as an alternative to GAAP income from operations.