UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 November 7, 2000
reported) ----------------------------------------
NN, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-23485 62-1096725
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2000 Waters Edge Drive, Johnson City, Tennessee 37604
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including (423) 743-9151
area code ------------------------------------
Not applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On November 7, 2000, the Company issued a press release announcing its
third quarter results. A copy of the press release is attached as Exhibit 99.1
hereto and incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) EXHIBITS. The following exhibits are filed herewith:
99.1 Press Release dated November 7, 2000.
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SIGNATURE
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: November 7, 2000
NN, INC.
By: /s/ William C. Kelly, Jr.
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William C. Kelly, Jr.,
Chief Accounting Officer
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Exhibit 99.1
NN, INC. REPORTS EPS UP 23%
FOR THE 2000 THIRD QUARTER
Outlook for Year 2000 In Line With Expectations
Johnson City, Tenn. -- November 7, 2000 -- NN, Inc. (Nasdaq: NNBR) today
reported its financial results for the third quarter and first nine months ended
September 30, 2000. Results for both the 2000 third quarter and first nine
months reflect the operations of NN Euroball ApS, a stand-alone joint venture
company which was formed on August 1, 2000, as well as the operations of
Industrial Molding Corporation (IMC), which was acquired on July 6, 1999 in a
transaction using the purchase method of accounting. The Company also noted that
its earnings for the same period reflect NN's 30% minority interest in Jiangsu
General Ball & Roller, a Chinese joint venture company formed in March 2000.
Net sales for the third quarter of 2000 were $37,075,000 up 45% compared to
$25,601,000 for the same period of 1999. Net income increased 26% to $2,443,000,
from $1,944,000, for the third quarter of 1999. Earnings per share increased 23%
to $0.16 per share versus $0.13 per share for the 1999 third quarter. Of note,
NN Euroball Aps contributed earnings per share of $0.03 for the 2000 third
quarter.
For the first nine months of 2000 net sales were $90,720,000, an increase of 49%
compared to $60,988,000 for the same period of last year. Net income increased
21% to $6,795,000, or $0.44 per share, from $5,621,000, or $0.37 per share, for
the first nine months of 1999.
Roderick R. Baty, President and Chief Executive Officer, stated, "Over the past
eighteen months we have been highly focused on acquiring and integrating
profitable businesses that meet the specific criteria we developed in NN's
strategic growth plan. Specifically, the criteria requires that a new initiative
fit our core competencies, is synergistic to existing business and is accretive
to NN. Accordingly, our third quarter earnings reflect not only the improved
profitability of our core business but also the accretive contribution of our
IMC subsidiary, Jiangsu General Ball & Roller and NN Euroball ApS.
Mr. Baty, continued, "The increase in our top line is attributable to continued
growth in our core domestic ball and roller operations, up 9.2% to $15.4 million
versus the third quarter of 1999, and two months of revenue from Euroball ApS
totaling $13.0 million. Euroball's results reflect partial downtime for its
three European factories due to the traditional European holiday month of
August.
"During the quarter we were able to achieve profit levels near our historical
levels. As a percentage of net sales, the gross profit margin was 30%, versus
29% as achieved in the 1999 third quarter. At the same time, selling, general
and administrative expense as a percentage of sales was 8.7%, the same as
experienced in the prior year quarter. This was achieved despite increased costs
due to our expanded global operations and increased business activity associated
with the implementation of our strategic growth plans," added Mr. Baty.
"Our joint venture in China, Jiangsu General Ball & Roller Company, Ltd.,
continues to progress as we focus on sales and marketing on a global basis and
improving product quality. With respect to NN Euroball ApS, we are focused on
initiatives to improve manufacturing and
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operating efficiencies. Specifically we are working to optimize production mix
between facilities, while leveraging our existing capital base.
"We recently announced the establishment of a joint venture company in
Guadalajara, Mexico to manufacture plastic gears and components for office
automation equipment and industrial applications. The new venture, NN-Arte, will
principally supply Mexican operations of U.S. and international customers and we
expect to ship the first product in the first quarter of 2001. The venture, in
which NN owns a 51% interest, is the first step in implementing our recently
developed strategic growth plan for our plastic business. This plan identified
opportunities to expand the plastic platform organically as well as through
targeted acquisitions.
"Going forward, we expect NN to continue to generate improving results. For full
year 2000, revenues should reach $133 million and earnings per share should be
in the range of $0.64 to $0.65 per share, in line with our previous guidance.
For 2001, revenues should reach $190 million reflecting a full year contribution
from Euroball and organic growth of 5%. This revenue level assumes no further
significant devaluation of the Euro relative to the dollar and also takes into
account slight volume reductions from the previous year's level due to an
anticipated economic slowdown in Europe and the U.S. However, this should be
more than offset by increased market penetration by both our ball and roller and
plastics businesses. In terms of business mix, Euroball products should account
for 45% of total sales, plastic products 20% and our core domestic ball and
roller business 35%. At this sales level, the Company estimates 2001 earnings to
be between $0.78 and $0.80 per share, reflecting a full year contribution from
Euroball and the improved profitability of the plastics business. Additionally,
barring other acquisition activity, we anticipate reducing the company's
long-term debt roughly $10 million during 2001," concluded Mr. Baty.
NN, Inc. is an independent manufacturer and supplier of high quality, precision
steel balls and rollers to both domestic and international anti-friction bearing
manufacturers and had sales of US $85.3 million in 1999.
For More Information on NN, Inc. at no cost, via facsimile,
please call 1-800-PRO-INFO and enter stock ticker symbol - NNBR
With the exception of the historical information contained in the release, the
matters described herein contain forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements involve a number of risks and
uncertainties that may cause actual results to be materially different from such
forward-looking statements. Such factors include, among others, general economic
conditions and economic conditions in the industrial sector, competitive
influences, risks that current customers will commence or increase captive
production, risks of capacity underutilization, quality issues, availability of
raw materials, currency and other risks associated with international trade, the
Company's dependence on certain major customers, and other risk factors and
cautionary statements listed from time to time 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-Q for the period ended June 30,2000
and the company's Annual Report on 10-K for the fiscal year ended December 31,
1999.
(Financial Tables Follow)
NN, Inc.
Condensed Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2000 1999 2000 1999
------- ------- ------- --------
Net sales $37,075 $25,601 $90,720 $60,988
Cost of goods 26,103 18,289 64,414 43,403
sold ------- ------- ------- --------
Gross profit 10,972 7,312 26,306 17,585
Selling, general and administration 3,236 2,223 8,017 4,468
Depreciation and amortization 2,535 1,821 6,103 4,296
Loss on involuntary conversion 1,695 -- 10,179 --
Gain on involuntary conversion (1,695) -- (10,154) --
Equity in earnings of unconsolidated (39) -- (105) --
affiliate -------- ------- -------- ------
Income from operations 5,240 3,268 12,266 8,821
Interest expense 651 247 1,210 256
Income before provision for 4,589 3,021 11,056 8,565
income taxes
Provision for income taxes 1,722 1,077 3,837 2,944
Minority interest in income of 424 -- 424 --
consolidated subsidiary ------- ------- ------- ------
Net income $2,443 $ 1,944 $ 6,795 5,621
======= ======= ======= ======
Other comprehensive income:
Foreign currency translation (2,100) 391 (2,522) (896)
------- ------- ------- -------
Other comprehensive income (2,100) 391 (2,522) (896)
------- ------- ------- -------
Comprehensive income $ 343 $2,335 $4,273 $ 4,725
======= ======= ======= =======
Basic income per common share $ 0.16 $ 0.13 $ 0.45 $ 0.37
======= ====== ======= =======
Weighted average shares outstanding 15,247 15,244 15,247 15,244
======= ====== ======= =======
Diluted income per common share $ 0.16 $ 0.13 $ 0.44 $ 0.37
======= ====== ======= =======
Weighted average share outstanding 15,424 15,317 15,434 15,264
======= ====== ======= =======
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NN, Inc.
Condensed Balance Sheet
(In thousands)
September 30, December 31,
2000 1999
(unaudited)
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ASSETS
Current assets:
Cash $ 8,194 $ 1,409
Accounts receivable, net 34,012 18,183
Inventories, net 20,186 13,122
Other current assets 3,368 688
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Total current assets 65,760 33,402
Property, plant & equipment 82,028 43,452
Goodwill, net 23,933 12,779
Equity in unconsolidated affiliate 1,563 --
Other non-current assets 5,759 735
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Total assets $ 179,043 $90,368
======== =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $18,637 $ 5,343
Accrued pension obligation 5,856 --
Accrued other wages 4,333 676
Deferred income 624 875
Income taxes payable 1,641 1,283
Other current liabilities 3,696 2,301
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Total current liabilities 34,787 10,478
Deferred income taxes 3,047 2,611
Minority interest in consolidated 30,024 --
subsidiary
Long-term debt 50,427 17,151
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Total liabilities 118,285 30,240
Total stockholders' equity 60,758 60,128
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Total liabilities and stockholders' $179,043 $90,368
equity ======== ========
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