JOHNSON CITY, Tenn.,
May 6, 2014 /PRNewswire/ -- NN,
Inc. (NASDAQ: NNBR) today reported its financial results for the
first quarter ended March 31,
2014. Net sales for the first quarter of 2014 were
$102.5 million, an increase of
$8.7 million or 9.3% as compared to
$93.8 million for the same period of
2013. This included approximately $1.8
million in net sales from the acquisition of the assets of
V-S Industries that was announced on February 4, 2014.
Pre-tax income for the first quarter of 2014 was $7.7 million, compared to 2013 first quarter
pre-tax income of $4.3 million. This
increase was due to improved sales and improved operating
performance. Reported net income for first quarter 2014 was
$5.2 million or $0.29 per diluted share, compared to prior year's
net income for the first quarter of $2.9
million, or $0.17 per diluted
share.
As a percentage of net sales, cost of goods sold for the quarter
decreased to 78.3% from 79.4% for the first quarter in 2013.
The decrease in the cost of products sold as a percentage of sales
reflects the continuing operational performance improvement in our
divisions.
Debt, net of cash, was $45.2
million at March 31, 2014, an
increase of $11.8 million over the
December 31, 2013 amount of
$33.4 million. This situation
is historically typical of the first quarter and was mainly due to
the purchase of the assets of V-S Industries and the seasonality of
funding additional working capital during the first quarter.
The Company expects to meet its beginning of the year goals for
debt retirement (net of acquisitions) and capital spending of
approximately $15.0 million and
$23.0 million, respectively.
Richard Holder, President and
Chief Executive Officer, commented, "The sales momentum we
experienced in 2013 continued to positively affect our 2014 first
quarter performance. Quarterly sales and operating income
were at the highest level since our 2012 first quarter. The
improving economic recovery in Europe, sustained strong growth in
China and improving share position
and adjacent product expansion were the main drivers behind this
positive growth. Sales growth in North America was more modest due to a
sluggish automotive market that was negatively affected by the
harsh weather experienced in January and February."
Mr. Holder continued, "As a Company, we remain persistently
focused on maximizing incremental profits for each additional sales
dollar. This discipline allowed us to continue to improve
margins and bring additional dollars to the bottom line. As
expected, the V-S acquisition had a short-term negative impact on
margins, however; we expect V-S to become accretive to earnings in
the second half of the year."
Mr. Holder concluded, "Results for the first quarter were in
large part as planned. Revenues and profits were in line with
our expectations given the current economic environment. We remain
positive regarding the remainder of 2014. Our sales levels from
European customers have not yet reached pre-recession levels.
However, as the industrial and automotive markets of this
region return to a more normalized level, we are in an excellent
position to further leverage our operational performance
improvements and return more profit to the bottom line.
Additionally, every person at NN is fully committed and highly
focused on the execution of the strategic initiatives of increasing
profitable growth that we communicated to you in our enhanced
business strategy."
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 12 manufacturing plants in the United States, Western Europe, Eastern Europe, Mexico and China. NN, Inc. had sales of
US $373 million in 2013.
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, 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 Form 10-K for the fiscal
year ended December 31, 2013.
Financial Tables Follow
NN,
Inc.
Consolidated
Statements of Income
(In thousands,
except per share amounts)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2014
|
|
2013
|
|
|
|
|
Net sales
|
$
102,528
|
|
$
93,797
|
Cost of goods sold
(exclusive of depreciation
shown
separately below)
|
80,283
|
|
74,517
|
Selling, general and
administrative
|
10,030
|
|
9,106
|
Depreciation and
amortization
|
3,877
|
|
4,531
|
Loss on disposal of
assets
|
--
|
|
4
|
Income from
operations
|
8,338
|
|
5,639
|
|
|
|
|
Interest
expense
|
564
|
|
785
|
Other expense,
net
|
83
|
|
579
|
Income before
provision for income taxes
|
7,691
|
|
4,275
|
Provision for income
taxes
|
2,453
|
|
1,404
|
|
|
|
|
Net income
|
5,238
|
|
2,871
|
|
|
|
|
Diluted income per
common share
|
$
0.29
|
|
$
0.17
|
|
|
|
|
Weighted average
diluted shares
|
17,962
|
|
17,162
|
NN,
Inc.
Condensed Balance
Sheets
(In
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
March
31,
2014
|
|
December
31,
2013
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash
|
|
$
4,542
|
|
$
3,039
|
Accounts receivable,
net
|
|
74,165
|
|
58,929
|
Inventories
|
|
57,449
|
|
54,530
|
Other current
assets
|
|
10,221
|
|
9,176
|
Total
current assets
|
|
146,377
|
|
125,674
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
125,742
|
|
121,089
|
Goodwill,
net
|
|
8,959
|
|
8,624
|
Intangible
assets
|
|
975
|
|
900
|
Other non-current
assets
|
|
4,936
|
|
6,115
|
Total
assets
|
|
$
286,989
|
|
$
262,402
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
45,816
|
|
$
40,687
|
Accrued salaries,
wages and benefits
|
|
11,215
|
|
11,761
|
Current maturities of
long-term debt
|
|
13,752
|
|
10,477
|
Income taxes
payable
|
|
2,496
|
|
1,340
|
Other current
liabilities
|
|
6,453
|
|
5,119
|
Total
current liabilities
|
|
79,732
|
|
69,384
|
|
|
|
|
|
Non-current deferred
tax liabilities
|
|
3,936
|
|
3,844
|
Long-term debt, net
of current portion
|
|
36,000
|
|
26,000
|
Other non-current
liabilities
|
|
10,299
|
|
10,414
|
Total
liabilities
|
|
129,967
|
|
109,642
|
|
|
|
|
|
Total stockholders'
equity
|
|
157,022
|
|
152,760
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
286,989
|
|
$
262,402
|
NN,
Inc.
Reconciliation of
Non-GAAP to GAAP Financial Measures
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
2014
|
|
|
|
In
Thousands
|
|
Diluted
Earnings
Per share
|
Net income
|
$
5,238
|
|
$
0.29
|
After-tax acquisition
related expenses
|
314
|
|
0.02
|
Net income from
normal operations
|
$
5,552
|
|
$
0.31
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
2013
|
|
|
|
In
Thousands
|
|
Diluted
Earnings
Per share
|
Net income
|
$
2,871
|
|
$
0.17
|
After-tax foreign
currency loss on intercompany loans
|
350
|
|
0.02
|
After-tax
restructuring and other non-recurring items
|
399
|
|
0.02
|
Net from normal
operations
|
$
3,620
|
|
$
0.21
|
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.
SOURCE NN, Inc.