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): May 3, 2006
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)
|
(IRS
Employer
Identification
No.)
|
|
2000
Waters Edge Drive
Johnson
City, Tennessee
|
37604 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant's
telephone number, including area code:
(423)743-9151
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
oWritten
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
oPre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02. Results of Operations and Financial
Condition.
Furnished
as Exhibit 99.1 is a copy of the earnings
release of NN, Inc. reporting results for the quarter ended March 31, 2006,
which was issued on May 3, 2006.
Item
9.01. Financial Statements and
Exhibits.
(c)
Exhibits.
The
following exhibit
is furnished pursuant to Item 2.02, is not considered "filed" under the
Securities Exchange Act of 1934, as amended, and shall not be incorporated
by
reference into any of the previous or future filings of NN, Inc. under the
Securities Act of 1933, as amended, or the Exchange Act:
Exhibit
Number
Description of Exhibit
99.1 Press
Release of NN,
Inc. dated May 3, 2006.
2
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.
| NN, INC. | ||
| |
|
|
| Date: May 3, 2006 | By: | /s/ William C. Kelly, Jr. |
|
|
||
|
Title: Vice
President and
Chief Administrative
Officer
|
||
EXHIBIT 99.1
NEWS
FINANCIAL
RELATIONS
BOARD
RE:
NN, Inc.
2000
Waters Edge Drive
Johnson
City, TN 37604
FOR
FURTHER INFORMATION:
| AT THE COMPANY | AT FINANCIAL RELATIONS BOARD | |
| Will Kelly | Marilynn Meek | Susan Garland |
| Vice President and Chief Administrative Officer | (General info) | (Analyst info) |
| (423) 743-9151 | 212-827-3773 | 212-827-3775 |
FOR
IMMEDIATE RELEASE
May
3,
2006
NN,
INC. REPORTS FIRST QUARTER 2006 RESULTS
Earnings
Per Diluted Share Up 30%, Includes Net Gain On Disposal
Of
Assets of $0.04 Per Diluted Share
Johnson
City, Tenn, May 3, 2006 -
NN,
Inc. (Nasdaq: NNBR) today reported its financial results for the first quarter
ended March 31, 2006. Net sales for the first quarter of 2006 were $86.0
million, a decrease of 1.0% from $86.7 million for the same period of 2005.
Net
income for the first quarter of 2006 totaled $5.3 million or $0.30 per diluted
share and includes an after-tax gain from the sale of excess land of $1.5
million or $0.08 per diluted share and an after-tax write-off of certain unused
equipment of $667,000 or $0.04 per diluted share. This compares to net income
of
$4.0 million, or $0.23 per diluted share for the first quarter of
2005.
James
H.
Dorton, Vice President and Chief Financial Officer commented, “Revenues of $86.0
million in the first quarter of 2006 were down slightly from $86.7 million
recorded in the first quarter of the prior year. Increases in volume and mix
of
approximately $1.6 million as well as selling price increases related to
material cost pass through of approximately $2.8 million were offset by the
negative result of currency translation of $5.1 million.
“As
a
percentage of net sales, 2006 first quarter cost of goods sold was 76.7% of
net
sales as compared to the 2005 first quarter cost of goods sold of 78.0%. Our
Level 3 initiatives made a major contribution to this margin improvement. As
a
percentage of net sales, selling, general and administrative expenses for the
first quarter of 2006 was 8.9% as compared to 8.6% for the same period in 2005.
This increase was mainly due to stock compensation related
expenses.”
Mr.
Dorton continued, “Our reported net income of $5.3 million or $0.30 per diluted
share includes a net gain of approximately $784,000 or $0.04 per diluted share
comprised of an after-tax gain from the sale of excess land located at our
Pinerolo, Italy facility of $1.5 million or $0.08 per diluted share and
offsetting this gain, the write-off of certain unused and obsolete equipment
of
$667,000 or $0.04 per diluted share, after-tax.
1
“Due
to
the proceeds realized from the sale of this land, we were able to pay down
debt
during the quarter by $3.2 million. We anticipate reducing debt by approximately
$10 million for the full year. This assumes fully funding the previously
announced stock repurchase plan up to $10 million and excludes the impact of
any
potential new acquisitions that may occur during 2006.”
Mr.
Dorton concluded, “During the quarter we purchased 20,474 shares under our
recently announced stock repurchase program. This program allows for the
purchase of up to $10.0 million of the Company’s outstanding stock which
commenced in mid March of 2006 and will continue for 18 months
thereafter.”
Roderick
R. Baty, Chairman and Chief Executive Officer commented, “We are very pleased
with the financial results for the first quarter of 2006. Each of our business
units contributed positively to the excellent operating results. Our Level
3
program continues to play a major role in achieving significant improvements
in
cost reductions and operating efficiencies. The cost savings realized by this
program have allowed us to offset substantially higher energy costs in our
global operations as well as start-up expenses associated with our new facility
in China.”
Mr.
Baty
concluded, “We look forward to both the challenges and the opportunities for the
remainder of 2006. As I previously stated in our 2005 fourth quarter earnings
release, we are forecasting relatively flat economic conditions in the U.S.
and
Europe for 2006, therefore our guidance for the total year remains unchanged
with estimated total year revenues at approximately $325 million and full year
earnings to be in the range of $0.86 to $0.92 per diluted share.”
NN,
Inc.
manufacturers 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 $321 million in 2005.
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 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, 2005.
Financial
Tables Follow
2
NN,
Inc.
Consolidated
Statements of Income
(In
thousands, except per share amounts)
(Unaudited)
&
#160;
Three
Months Ended
&
#160;
March
31,
|
2006
|
2005
|
|||||||
|
Net
sales
|
$
86,017
|
$
86,715
|
||||||
|
Cost
of goods sold (exclusive of depreciation
shown
separately below)
|
65,999
|
67,666
|
||||||
|
Selling,
general and administrative
|
7,681
|
7,484
|
||||||
|
Depreciation
and amortization
|
4,162
|
4,174
|
||||||
|
(Gain)
loss on disposal of assets
|
(730)
|
4
|
||||||
|
Income
from operations
|
8,905
|
7,387
|
||||||
|
Interest
expense, net
|
986
|
984
|
||||||
|
Other
income
|
(209)
|
(171)
|
||||||
|
Income
before provision for income taxes
|
8,128
|
6,574
|
||||||
|
Provision
for income taxes
|
2,866
|
2,551
|
||||||
|
Net
income
|
$
5,262
|
$
4,023
|
||||||
|
Diluted
income per common share
|
$
0.30
|
$
0.23
|
||||||
|
Weighted
average diluted shares
|
17,376
|
17,261
|
||||||
3
NN,
Inc.
Condensed
Balance Sheets
(In
thousands)
(Unaudited)
|
March
31,
2006
|
December
31,
2005
|
||
|
Assets
|
|||
|
Current
Assets:
|
|||
|
Cash
|
$
7,537
|
$
10,856
|
|
|
Accounts
receivable, net
|
59,881
|
47,297
|
|
|
Inventories,
net
|
36,770
|
38,096
|
|
|
Other
current assets
|
10,596
|
9,701
|
|
|
Total
current assets
|
114,784
|
105,950
|
|
|
Property,
plant and equipment, net
|
117,605
|
118,829
|
|
|
Assets
held for sale
|
--
|
1,072
|
|
|
Goodwill,
net
|
42,090
|
41,648
|
|
|
Other
assets
|
2,084
|
2,156
|
|
|
Total
assets
|
$
276,563
|
$
269,655
|
|
|
Liabilities
and Stockholders’ Equity
|
|||
|
Current
liabilities:
|
|||
|
Accounts
payable
|
$
41,270
|
$
41,660
|
|
|
Dividends
payable
|
1,377
|
--
|
|
|
Accrued
salaries and wages
|
12,062
|
12,407
|
|
|
Income
taxes payable
|
3,960
|
2,093
|
|
|
Short-term
portion of long-term notes payable
|
1,509
|
4,668
|
|
|
Other
liabilities
|
4,833
|
4,011
|
|
|
Total
current liabilities
|
65,011
|
64,839
|
|
|
Deferred
income taxes
|
15,337
|
15,128
|
|
|
Long-term
notes payable
|
57,900
|
57,900
|
|
|
Accrued
Pension and Other
|
12,212
|
11,783
|
|
|
Other
liabilities
|
3,963
|
3,931
|
|
|
Total
liabilities
|
154,423
|
153,581
|
|
|
Total
stockholders’ equity
|
122,140
|
116,074
|
|
|
Total
liabilities and stockholders’ equity
|
$
276,563
|
$
269,655
|
###
4