UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 5, 2015

 

 

 

NN, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		0-23486		62-1096725
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

207 Mockingbird Lane		37604
(Address of principal executive offices)		(Zip Code)

(423) 743-9151

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

 

 

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c))

 

 

 

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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On August 5, 2015, NN, Inc. (the “Company”) issued a press release announcing the Company’s results of operations and financial condition for the three months ended June 30, 2015. The full text of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

 

Exhibit No.		Description
99.1		Press Release of NN, Inc. dated August 5, 2015.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 5, 2015

 

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EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press Release of NN, Inc. dated August 5, 2015.

Exhibit 99.1

 

 

 

		RE: NN, Inc. 207 Mockingbird Lane 3rd Floor Johnson City, TN 37604
FOR FURTHER INFORMATION:
AT THE COMPANY Robbie Atkinson Corporate Treasurer & Investor Relations (423) 434-8398		AT FINANCIAL RELATIONS BOARD Marilynn Meek (General info) 212-827-3773

FOR IMMEDIATE RELEASE

August 5, 2015

NN, INC. REPORTS SECOND QUARTER 2015 RESULTS

 

•

Net sales of $164.9 million, an increase of $58.2 million

 

•

Adjusted income from operations grew to $14.3 million

 

•

Adjusted net income of $7.2 million, or $0.37 per diluted share

Johnson City, Tenn, August 5, 2015 –NN, Inc., (NASDAQ: NNBR) a diversified industrial company, today reported its financial results for the second quarter ended June 30, 2015.

Second Quarter 2015 Results

Net sales for the second quarter of 2015 increased $58.2 million, or 55%, to $164.9 million, compared to $106.7 million for the second quarter of 2014. Acquisitions made subsequent to March 31, 2014 added $64.3 million in revenue. Negative currency impacts reduced reported net sales by $9.3 million versus the second quarter of last year.

Adjusted income from operations for the second quarter of 2015 was $14.3 million, an increase of 51%, compared to $9.5 million for the same period in 2014. Adjusted net income, which excludes the after-tax impact of foreign exchange on inter-company loans and after-tax acquisition and integration expenses, increased to $7.2 million, or $0.37 per diluted share, compared to $6.0 million, or $0.33 per diluted share for the same period in 2014.

On a GAAP basis, income from operations for the second quarter of 2015 was $13.6 million, compared to $8.2 million for the same period in 2014. Net income on a GAAP basis for the second quarter of 2015 was $7.0 million, or $0.36 per diluted share. This compared to $5.2 million, or $0.29 per diluted share, in the second quarter of 2014.

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Richard Holder, President and Chief Executive Officer, commented, “Excluding the macro-economic challenges in Brazil our businesses along with our financial results continue to meet our expectations for the year. Our adjusted income from operations continued to improve during the quarter as the remainder of our portfolio continues to grow and hit our operating targets. The acquisitions we’ve made since 2014 remain on or ahead of our stated integration and synergy targets for 2015.”

Business Group Results

Metal Bearing Components

Net sales for the group decreased $3.7 million to $69.3 million during the second quarter of 2015, compared to $73.0 million for second quarter 2014. Negative currency impacts of $9.3 million were partially offset by volume increases of $3.0 million and the contribution of acquisition sales of $2.6 million. Income from operations for the second quarter was $9.4 million, compared to $8.7 million in the second quarter of 2014.

“The Metal Bearing Components Group continued its solid performance in 2015,” said Holder. “Excluding the negative currency impacts the business continues to grow and expand its end markets.”

Autocam Precision Components

Net sales for the second quarter of 2015 were $86.5 million, compared to $25.3 million in the second quarter of 2014, an increase of $61.2 million. Acquisitions accounted for $60.9 million of the increase. Income from operations for the quarter increased $6.8 million to $9.1 million, compared to $2.3 million in the second quarter of 2014.

Holder commented, “The Autocam Precision Components Group performed well despite the conditions in Brazil. As expected, new customer programs continued to ramp in the quarter and began to hit their expected operating targets as the quarter came to a close, while the integration of the Autocam acquisition remains ahead of schedule.”

Plastic and Rubber Components

Net sales for the second quarter increased $0.7 million to $9.1 million, compared to $8.4 million for the same period in 2014. Income from operations for the quarter was $0.5 million, compared to $0.4 million in 2014.

Holder commented, “We continue to transform our plastics business as we focus on growing a diversified business that meets our operating expectations. During the quarter we continued that process with the completion of the Caprock acquisition.”

Holder concluded, “The second quarter was an important quarter in the history of our company. We made our first acquisition in our plastics portfolio and raised $182 million in equity to prepare for future acquisitions and continued growth as we remain focused on executing our strategic plan.”

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NN will discuss its results during its quarterly investor conference call tomorrow morning starting at 9:00 a.m. ET. The call and an accompanying slide presentation may be accessed via NN’s website. The conference call can also be accessed by dialing 888-427-9376; conference id – 5901109. For those who are unavailable to listen to the live broadcast, a replay will be available shortly after the call for 90 days.

The attached financial tables include a reconciliation of adjusted income from operations and adjusted net income to the U.S. GAAP financial measures of income from operations and net income.

NN, Inc., a diversified industrial company manufactures and supplies high precision metal bearing components, industrial plastic and rubber products and precision metal components to a variety of markets on a global basis. Headquartered in Johnson City, Tennessee, NN has 26 manufacturing plants in the North America, Western Europe, Eastern Europe, South America and China.

Except for specific historical information, many of the matters discussed in this press release may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations or statements of future economic performance. These, and similar statements, are forward-looking statements concerning matters that involve risks, uncertainties and other factors which may cause the actual performance of NN, Inc. and its subsidiaries to differ materially from those expressed or implied by this discussion. All forward-looking information is provided by the Company pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “assumptions”, “target”, “guidance”, “outlook”, “plans”, “projection”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “potential” or “continue” (or the negative or other derivatives of each of these terms) or similar terminology. Factors which could materially affect actual results include, but are not limited to: general economic conditions and economic conditions in the industrial sector, inventory levels, regulatory compliance costs and the Company’s ability to manage these costs, start-up costs for new operations, debt reduction, competitive influences, risks that current customers will commence or increase captive production, risks of capacity underutilization, quality issues, availability and price of raw materials, currency and other risks associated with international trade, the Company’s dependence on certain major customers, and the successful implementation of the global growth plan including development of new products. Similarly, statements made herein and elsewhere regarding pending or completed acquisitions are also forward-looking statements, including statements relating to the anticipated closing date of an acquisition, the Company’s ability to obtain required regulatory approvals or satisfy closing conditions, the costs of an acquisition and the Company’s source(s) of financing, the future performance and prospects of an acquired business, the expected benefits of an acquisition on the Company’s future business and operations and the ability of the Company to successfully integrate recently acquired businesses.

For additional information concerning such risk factors and cautionary statements, please see the section titled “Risk Factors” in the Company’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Except as required by law, we undertake no obligation to update or revise any forward-looking statements we make in our press releases, whether as a result of new information, future events or otherwise.

Financial Tables Follow

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NN, Inc.

Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

 

		Three Months Ended JUNE 30,								Six Months Ended JUNE 30,
		2015				2014				2015				2014
Net sales		$	164,856			$	106,680			$	328,601			$	209,208
Cost of products sold (exclusive of depreciation and amortization shown separately below)			128,708				84,285				258,025				164,569
Selling, general and administrative			13,962				10,074				25,961				20,104
Depreciation and amortization			8,597				4,084				17,091				7,961
Income from operations			13,589				8,237				27,524				16,574
Interest expense			6,021				551				11,959				1,115
Other expense, net			19				129				1,419				212
Income before provision for income taxes and share of net income from joint venture			7,549				7,557				14,146				15,247
Provision for income taxes			1,617				2,357				3,073				4,809
Share of net income from joint venture			1,021				—				1,882				—
Net income		$	6,953			$	5,200			$	12,955			$	10,438
Basic income per common share:		$	0.36			$	0.29			$	0.68			$	0.59
Weighted average shares outstanding			19,215				17,779				19,064				17,700
Diluted income per common share:		$	0.36			$	0.29			$	0.67			$	0.58
Weighted average shares outstanding			19,582				18,172				19,416				18,054
Cash dividends per common share		$	0.07			$	0.07			$	0.14			$	0.14

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NN, Inc.

Condensed Balance Sheets

(In thousands)

(Unaudited)

 

		June 30, 2015				December 31, 2014
Assets
Current assets:
Cash		$	21,409			$	37,317
Accounts receivable, net			114,819				97,510
Inventories			87,928				91,469
Other current assets			16,590				16,503
Total current assets		$	240,746				242,799
Property, plant and equipment, net		$	272,047				278,442
Goodwill, net			85,436				83,941
Intangible asset, net			52,929				52,827
Investment in joint venture			38,240				34,703
Other non-current assets			19,542				20,001
Total assets		$	708,940			$	712,713
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	63,616			$	71,094
Accrued salaries, wages and benefits			19,760				21,148
Current maturities of long-term debt			23,345				22,160
Income taxes payable			5,057				3,274
Current portion of obligations under capital lease			5,482				5,418
Other current liabilities			11,481				14,504
Total current liabilities			128,741				137,598
Non-current deferred tax liabilities			48,238				49,461
Long-term debt, net of current portion			335,938				328,026
Obligations under capital lease, net of current portion			11,829				14,539
Other non-current liabilities			10,692				9,390
Total liabilities		$	535,438				539,014
Total stockholders’ equity		$	173,502				173,699
Total liabilities and stockholders’ equity		$	708,940			$	712,713

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NN, Inc.

Reconciliation of Non-GAAP to GAAP Financial Measures

(Unaudited)

 

Reconciliation of net income to adjusted net income:
		Three Months Ended June 30, 2015								Three Months Ended June 30, 2014
		(In Thousands)				Diluted Earnings Per Share				(In Thousands)				Diluted Earnings Per Share
Net Income		$	6,953			$	0.36			$	5,200			$	0.29
After tax acquisition and integration expenses			436				0.02				818				0.04
After-tax foreign exchange gain on inter-company loans			(232	)			-0.01				—				0.00
Adjusted Net Income		$	7,157			$	0.37			$	6,018			$	0.33
Reconciliation of net income to adjusted net income:
		Six Months Ended June 30, 2015								Six Months Ended June 30, 2014
		(In Thousands)				Diluted Earnings Per Share				(In Thousands)				Diluted Earnings Per Share
Net Income		$	12,955			$	0.67			$	10,438			$	0.58
After tax acquisition and integration expenses			436				0.02				1,132				0.06
After-tax foreign exchange loss on inter-company loans			655				0.03				—				0.00
Adjusted Net Income		$	14,046			$	0.72			$	11,570			$	0.64
Reconciliation of income from operations to adjusted income from operations:
		Three Months Ended June 30, 2015 (In Thousands)				Three Months Ended June 30, 2014 (In Thousands)				Six Months Ended June 30, 2015 (In Thousands)				Six Months Ended June 30, 2014 (In Thousands)
Income from operations		$	13,589			$	8,237			$	27,524			$	16,574
Acquisition and integration expenses			681				1,279				681				1,770
Adjusted Income from operations		$	14,270			$	9,516			$	28,205			$	18,344

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Reconciliation of income from operations to adjusted income from operations
		Three Months Ended June 30, 2015
		MBC				APC				PRC				NN Inc
Income from operations		$	9,403			$	9,095			$	501			$	13,589
Acquisition and integration expenses			—				—				—				681
China JV Income			—				1,021				—				1,021
Adjusted Income from operations Including China JV		$	9,403			$	10,116			$	501			$	15,291
		Three Months Ended June 30, 2014
		MBC				APC				PRC				NN Inc
Income from operations		$	8,748			$	2,306			$	414			$	8,237
Acquisition and integration expenses			—				—				—				1,279
Adjusted Income from operations Including China JV		$	8,748			$	2,306			$	414			$	9,516
Reconciliation of income from operations to adjusted income from operations
		Six Months Ended June 30, 2015
		MBC				APC				PRC				NN Inc
Income from operations		$	18,491			$	16,813			$	714			$	27,524
Acquisition and integration expenses			—				—				—				681
China JV Income			—				1,882				—				1,882
Adjusted Income from operations Including China JV		$	18,491			$	18,695			$	714			$	30,087
		Six Months Ended June 30, 2014
		MBC				APC				PRC				NN Inc
Income from operations		$	17,520			$	4,868			$	649			$	16,574
Acquisition and integration expenses			—				—				—				1,770
Adjusted Income from operations Including China JV		$	17,520			$	4,868			$	649			$	18,344

The Company’s management evaluates operating performance excluding unusual and/or nonrecurring items. The Company believes excluding such items provides a more effective and comparable measure of performance and a clearer view of underlying trends. Since net income excluding these items is not a measure calculated in accordance with GAAP, this should not be considered as a substitute for other GAAP measures, including net income, as an indicator of performance. Accordingly, net income/loss excluding the above items is reconciled to net income/loss on a GAAP basis.