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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 reported) April 24, 2003
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NN, Inc.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-23486 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 area code (423) 743-9151
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Not applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
On April 24, 2003, the Company issued a press release announcing its earnings
for the first quarter of 2003. 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 April 24, 2003.
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: April 24, 2003
NN, INC.
By: /s/ William C. Kelly, Jr.
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William C. Kelly, Jr.,
Treasurer, Secretary and Chief
Accounting Officer
RE: NN, Inc.
2000 Waters Edge Drive
Johnson City, TN 37604
FOR FURTHER INFORMATION:
AT THE COMPANY AT FRB|WEBER SHANDWICK
Will Kelly Kerry Thalheim Susan Garland
Treasurer & Manager of Investor Relations (General info) (Analyst info)
(423) 743-9151 212-445-8437 212-445-8458
FOR IMMEDIATE RELEASE
April 24, 2003
NN, INC. GENERATES EARNINGS PER SHARE IMPROVEMENT OF 91.7% ON REVENUE GROWTH
OF 22.1% IN THE FIRST QUARTER OF 2003
Johnson City, Tenn., April 24, 2003 - NN, Inc. (Nasdaq: NNBR) today reported its
financial results for the first quarter ended March 31, 2003. Net sales for the
first quarter of 2003 reached $57.6 million, up 22.1% from $47.2 million for the
same period of 2002. Net income for the first quarter of 2003 totaled $3.6
million or $0.23 per share as compared to $1.8 million or $0.12 per share for
the first quarter of 2002.
David L. Dyckman, Chief Financial Officer, commented, "This is the fourth
consecutive quarter that we have experienced year-over-year improvement in
revenues and earnings. However, it is important to note that approximately 50%
of the $10.4 million increase in revenues was attributable to favorable currency
fluctuations. The remainder of the increase consists of overall improvements in
demand and new program developments.
"As a percentage of net sales, the gross profit margin was 25.8% in the first
quarter of 2003 versus 24.7% in the first quarter of 2002 and 24.8% in the
fourth quarter of 2002. This improvement over the prior year reflects the
continuing benefit of the initiatives to lower our cost structure and the
associated benefits of higher volumes and inventory builds. Similarly, selling,
general and administrative expenses for the first quarter of 2003 declined to
8.0% as a percentage of net sales compared to 9.5% for the same period in the
prior year.
"Our earnings per share of $0.23 exceeded our previous first quarter guidance of
$0.16 to $0.18 per share. Driving these better than expected results were three
principle factors: volume increases, favorable currency exchange rates, and
increases in inventory levels.
"Our revenue growth in the first quarter resulted in incremental working capital
needs. This was evidenced by significant increases in accounts receivable,
inventories and
accounts payable balances during the quarter. Correspondingly, our debt
increased $0.1 million from $53.1 million at year end to $53.2 million at the
end of the first quarter. Net of cash, our debt increased by $2.0 million. We
anticipate our operating cash flow results will improve in subsequent quarters
and remain committed to a reduction of debt (excluding the impact of any pending
acquisitions) of $11.0 million for 2003", added Mr. Dyckman.
Roderick R. Baty, Chairman and Chief Executive Officer, stated, "We are pleased
with our results for the first quarter. We experienced solid growth in a
sluggish global economic environment. Looking forward, we remain cautious
regarding the balance of 2003. However, we continue to believe our businesses
are well positioned to achieve good results in the current economic environment.
Consequently, we anticipate second quarter earnings to be in the range of $0.18
to $0.19 per share on revenues of approximately $55.0 million. Adjusting for our
favorable first quarter actual results, we expect the 2003 full year earnings
per share to be in the range of $0.73 to $0.76 on revenues of approximately
$215.0 million. These estimates exclude accretion from any pending acquisitions.
"Finally, we are in the final stages of negotiations regarding the acquisitions
of SKF's 23% ownership stake in NN Euroball as well as SKF's tapered roller and
metal cage business in Veenendaal, The Netherlands."
NN, Inc. manufactures and supplies high precision bearing components consisting
of balls, rollers, seals, and retainers for leading bearing manufacturers on a
global basis. In addition, the Company manufactures a variety of other plastic
components. NN, Inc. had sales of US $193 million in 2002.
The anticipated second quarter and full year 2003 earnings and the pending
acquisitions with SKF are 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 10-K for the fiscal year ended December 31,
2002.
(Financial Tables Follow)
NN, Inc.
Condensed Statements of Income
(In Thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31
2003 2002
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Net sales $ 57,609 $ 47,200
Cost of goods sold 42,743 35,532
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Gross profit 4,866 1,668
Selling, general and administrative 4,632 4,498
Depreciation and amortization 3,079 2,825
Restructuring and impairment costs - 78
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Income from operations 7,155 4,267
Interest expense 513 601
Other income (7) (355)
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Income before provision for taxes 6,649 4,021
Provision for taxes 2,472 1,505
Minority interest in consolidated subsidiary 534 668
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Net income $ 3,643 $ 1,848
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Diluted income per common share $ 0.23 $ 0.12
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NN, Inc.
Condensed Balance Sheet
(In Thousands, except per share amounts)
(Unaudited)
March 31, December 31,
2003 2002
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Assets
Current assets:
Cash and cash equivalents $ 3,228 5,144
Accounts receivable, net 39,092 28,965
Inventories, net 25,594 23,402
Other current assets 5,375 3,901
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Total current assets 73,289 61,412
Property, plant and equipment, net 89,536 88,199
Assets held for sale 1,939 2,214
Goodwill, net 42,675 42,166
Other assets 4,657 4,016
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Total assets $212,096 $198,007
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 27,377 $ 23,020
Accrued salaries and wages 6,579 6,354
Income taxes payable 3,014 620
Short-term portion of long-term notes payable 7,000 7,000
Other liabilities 3,195 3,240
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Total current liabilities 47,165 40,234
Minority interest in consolidated subsidiaries 20,987 19,706
Deferred income taxes 9,479 9,334
Long-term notes payable 46,236 46,135
Other 9,840 9,319
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Total liabilities 133,707 124,728
Total stockholders' equity 78,389 73,279
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Total liabilities and stockholders' equity $212,096 $198,007
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