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 8, 2007
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:
[
] 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))
ITEM 2.02
Results of Operations and Financial Conditions.
Furnished
as Exhibit 99.1 is a copy of the earnings release of NN, Inc. reporting
results
for the quarter ended March 31, 2007, which was issued on May 8,
2007.
ITEM
9.01 FINANCIAL STATEMENTS AND
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 hte previous of future filings of NN,
Inc.
under the Securities Act of 1933, as amended, or the Exchange Act.
Exhibits:
Exhibit
Number
Description of Exhibit
99.1
Press Release of NN, Inc. dated May 8, 2007.
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 8, 2007 | By: | /s/ William C. Kelly, Jr. |
|
|
||
|
Title: Vice
President and Chief Administrative
Officer
|
||
3
FINANCIAL
RELATIONS
BOARD
RE:
NN, Inc.
2000
Waters Edge Drive
&#
160; 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
8,
2007
NN,
INC. REPORTS FIRST QUARTER 2007 RESULTS
Revenues
of $107.9 Million and Corresponding Earnings per Share of $0.22 per Diluted
Share on Target for 2007
Johnson
City, Tenn, May 8, 2006 -
NN,
Inc. (Nasdaq: NNBR) today reported its financial results for the first quarter
ended March 31, 2007. Net sales for the first quarter of 2007 were $107.9
million, an increase of $21.9 million or 25.5% from $86.0 million for the same
period of 2006. The acquisition of Whirlaway, which occurred on December 1,
2006, contributed $18.0 million of this increase. Net income for the first
quarter of 2007 totaled $3.8 million or $0.22 per diluted share as compared
to
$5.3 million or $0.30 per diluted share for the same period in 2006. First
quarter net income for 2006 included 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 $0.7 million or $0.04 per diluted share.
James
H.
Dorton, Vice President and Chief Financial Officer commented, “Revenues of
$107.9 million for the first quarter of 2007 were up $21.9 million, an increase
of 25.5% million over the $86.0 million recorded in the first quarter of 2006.
Included in this increase was $18.0 million of revenue from the Whirlaway
acquisition. Additionally, the positive effect of currency translation of
approximately $5.4 million more than offset product mix/price reductions of
$1.5
million.
“As
a
percentage of net sales, 2007 first quarter cost of goods sold was 78.8% as
compared to the 2006 first quarter cost of goods sold of 76.7%. Approximately
50% of the increase of cost of goods sold as a percentage of net sales was
associated with the addition of our Whirlaway operation. The remaining factors
for the increased costs were efficiency issues related to volume reductions
in
domestic operations and price/mix issues in European operations. As a percentage
of net sales, selling, general and administrative expenses for the first quarter
of 2007 was 8.7% as compared to 8.9% for the same period in 2006.”
1
Mr.
Dorton continued, “Our reported net income of $3.8 million or $0.22 per diluted
share compares to 2006 first quarter net income of $5.3 million or $0.30 per
diluted share. Of note, the 2006 first quarter income includes a net gain of
approximately
$0.8
million 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 $0.7 million or $0.04 per diluted share, after-tax.”
Mr.
Dorton added, “During the first quarter our net debt, which is total debt minus
cash increased by $1.9 million. This increase was due to our traditionally
higher working capital needs during the first quarter of the year and the timing
of inter-company cash flows to pay down debt balances during the quarter. We
continue to anticipate meeting our business plan goal of $12.0 million in total
debt reduction for the year.”
Roderick
R. Baty, Chairman and Chief Executive Officer commented, “During the first
quarter we continued to make excellent progress regarding the integration of
Whirlaway and the development of our new precision metal component platform.
We
also are continuing to experience improvements from our Level 3 program. These
improvements should more than offset the volume reductions associated with
planned market share loss in Europe and general cost inflation in our business.
Although our Slovakian and Chinese facilities continued to negatively impact
earnings for the quarter, we are expecting improved operating results in both
of
these facilities for the remainder of the year.”
Mr.
Baty
concluded, “We look forward to the challenges and the opportunities for the
remainder of 2007. As previously stated, we are continuing to forecast
relatively flat economic conditions for our businesses. We are forecasting
continued weakness in certain North American markets, notably, automotive and
housing, offset by continuing strength in European automotive markets and
industrial markets. We therefore remain committed to our previously stated
guidance for estimated total year revenues of approximately $400 million and
full year earnings to be in the range of $0.98 to $1.04 per diluted
share.”
NN,
Inc.
manufacturers 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
14
manufacturing plants in the United States, Western Europe, Eastern Europe and
China. NN, Inc. had sales of US $330 million in 2006.
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
2
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,
the successful implementation of the global growth plan including development
of
new products and consummation of potential acquisitions 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, 2006.
Financial
Tables Follow
3
NN,
Inc.
Consolidated
Statements of Income
(In
thousands, except per share amounts)
(Unaudited)
&
#160;
Three
Months Ended
&
#160;
March 31,
|
2007
|
2006
|
||||||
|
Net
sales
|
$
|
107,944
|
$
|
86,017
|
|||
|
Cost
of goods sold (exclusive of depreciation
shown separately below)
|
85,082
|
65,999
|
|||||
|
Selling,
general and administrative
|
9,424
|
7,681
|
|||||
|
Depreciation
and amortization
|
5,523
|
4,162
|
|||||
|
(Gain)
loss on disposal of assets
|
(5
|
)
|
(730
|
)
|
|||
|
Income
from operations
|
7,920
|
8,905
|
|||||
|
Interest
expense, net
|
1,694
|
986
|
|||||
|
Other
income
|
26
|
(209
|
)
|
||||
|
Income
before provision for income taxes
|
6,200
|
8,128
|
|||||
|
Provision
for income taxes
|
2,445
|
2,866
|
|||||
|
Net
income
|
$
|
3,755
|
$
|
5,262
|
|||
|
Diluted
income per common share
|
$
|
0.22
|
$
|
0.30
|
|||
|
Weighted
average diluted shares
|
17,033
|
17,376
|
|||||
4
NN,
Inc.
Condensed
Balance Sheets
(In
thousands)
(Unaudited)
|
March
31,
2007
|
December
31,
2006
|
||||||
|
Assets
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
|
$
|
17,566
|
$
|
11,681
|
|||
|
Accounts
receivable, net
|
72,971
|
63,442
|
|||||
|
Inventories,
net
|
44,600
|
43,538
|
|||||
|
Other
current assets
|
7,326
|
7,203
|
|||||
|
Total
current assets
|
142,463
|
125,864
|
|||||
|
Property,
plant and equipment, net
|
156,309
|
156,447
|
|||||
|
Goodwill,
net
|
46,419
|
46,147
|
|||||
|
Other
assets
|
14,343
|
14,243
|
|||||
|
Total
assets
|
$
|
359,534
|
$
|
342,701
|
|||
|
Liabilities
and Stockholders’ Equity
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
51,012
|
$
|
52,576
|
|||
|
Dividends
payable
|
1,348
|
--
|
|||||
|
Accrued
salaries and wages
|
14,784
|
13,519
|
|||||
|
Current
portion of long-term debt
|
10,125
|
851
|
|||||
|
Other
liabilities
|
10,800
|
7,923
|
|||||
|
Total
current liabilities
|
88,069
|
74,869
|
|||||
|
Deferred
income taxes
|
16,741
|
16,334
|
|||||
|
Long-term
notes payable and related party debt
|
100,490
|
102,016
|
|||||
|
Other
liabilities
|
16,333
|
16,313
|
|||||
|
Total
liabilities
|
221,633
|
209,532
|
|||||
|
Total
stockholders’ equity
|
137,901
|
133,169
|
|||||
|
Total
liabilities and stockholders’ equity
|
$
|
359,534
|
$
|
342,701
|
###
5