JOHNSON CITY, Tenn.,
March 10, 2015 /PRNewswire/ --
- Record full year net sales including
acquisitions of $488.6 million, an
increase of $115.4 million or 31%
compared to 2013
- Record annual adjusted income from
operations of $39.9 million before
acquisition and integration charges, an increase of 40% compared to
the prior year
- Record adjusted net income for 2014 of
$23.5 million or $1.29 per diluted share
- 2015 foreign currency adjusted revenue forecast of
$670 to $690 million
NN, Inc., (NASDAQ: NNBR) a diversified industrial company, today
reported its financial results for the fourth quarter and twelve
months ended December 31, 2014.
Fourth Quarter 2014 Results
Net sales for the fourth quarter increased $63.7 million, or 71% to $153.8 million, as compared to $90.1 million for the fourth quarter of
2013. This included approximately $65.9 million in net sales from the four
acquisitions. The impact of foreign exchange translation during the
quarter was $2.0 million in sales
resulting in an after tax impact of $0.2
million or $0.01 per diluted
share for the quarter.
Adjusted income from operations which excludes acquisition and
other related expenses for the fourth quarter was $10.9 million, an increase of 68%, compared to
$6.5 million for the same period in
2013. Adjusted net income which excludes acquisition and other
related expenses increased to $5.7
million or $0.30 per diluted
share, compared to $4.5 million or
$0.25 per diluted share for the same
period in 2013. These increases can be attributed to the four
acquisitions, as well as improved operating performance within our
legacy business.
Reported income from operations for the fourth quarter was
$8.6 million which included
$2.3 million in acquisition,
integration and impairment charges, compared to $6.5 million for the same period in 2013.
Reported net income for the fourth quarter was $1.6 million or $0.08 per diluted share including acquisition,
impairment and other non-recurring charges, compared to
$4.5 million or $0.25 per diluted share for the fourth quarter
2013.
Full Year 2014 Results
Net sales for full year 2014 increased $115.4 million, or 31% to $488.6 million, compared to net sales of
$373.2 million for full year
2013. This included approximately $101.0 million in net sales from the four
acquisitions made during 2014. Adjusted income from
operations for the twelve months ended December 31, 2014 increased $11.5 million or 40% to $39.9 million, compared to $28.4 million for the same period in 2013.
Adjusted net income for the year 2014 was $23.5 million, or $1.29 per diluted share, compared to adjusted net
income of $17.7 million, or
$1.03 per diluted share for the year
2013.
The primary drivers behind these results were the four
acquisitions, organic and adjacent market growth coupled with
improved operating performance.
Reported income from operations for the year 2014 was
$27.7 million including $12.2 million in charges related to the four
acquisitions made during the year, compared to $27.8 million for the year 2013. Reported
net income for full year 2014 was $8.2
million or $0.45 per diluted
share which included $15.3 million in
acquisition, integration, impairment expenses and foreign exchange
losses on intercompany loans. This compares to $17.2 million or $1.00 per diluted share for the year 2013.
Richard Holder, President and
Chief Executive Officer, commented, "2014 was a transformative year
for NN. We emerged a new and revitalized company with a larger,
more diverse portfolio which opens up new end markets and
opportunities for growth into the future. During the fourth
quarter, we witnessed the first full quarter of sales and operating
results from the four businesses we acquired during 2014.
"The global economy in 2015 will again present a mixed
bag. While we are optimistic the global economy will see
improvement as the year progresses, our businesses are built to
expand margins in the current environment. As some of the weaker
markets begin to show improvement in 2015 and beyond, we are in
position to bring strong incremental profits to the bottom
line. We will continue to closely monitor the impact of
foreign exchange on all our businesses. We expect foreign
exchange to have a negative impact on 2015 sales of 3% to 5%. With
this backdrop we expect 2015 to be another solid year of growth for
us. Our businesses will be growing at 8% while our margins
continue to expand as we continue to make progress on the strategic
initiatives we have in place. We are forecasting our 2015 foreign
currency adjusted revenue to be $670 million
to $690 million."
Mr. Holder concluded, "I am very proud of our accomplishments
during the fourth quarter and over the past year. My sincere thanks
to our entire team. The results of the fourth quarter and full year
2014 continue to provide evidence that we are committed to do what
we said we would do. We are extremely excited about 2015 and
remain well positioned to deliver increased shareholder value,
while continuing to execute our strategic plan to build a
diversified industrial company that is a consistent earner through
the cycle."
The attached financial tables include a reconciliation of
adjusted income from operations and adjusted net income to the U.S.
GAAP financial measures of income from operations and net
income.
NN, Inc., a diversified industrial company manufactures 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 25
manufacturing plants in the United
States, Western Europe,
Eastern Europe, South America and China.
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 the successful implementation of the global growth
plan including development of new products. Similarly, statements
made herein and elsewhere regarding pending or completed
acquisitions are also forward-looking statements, including
statements relating to the anticipated closing date of an
acquisition, the Company's ability to obtain required regulatory
approvals or satisfy closing conditions, the costs of an
acquisition and the Company's source(s) of financing, the future
performance and prospects of an acquired business, the expected
benefits of an acquisition on the Company's future business and
operations and the ability of the Company to successfully integrate
recently acquired businesses.
For additional information concerning such risk factors and
cautionary statements, please see the section titled "Risk Factors"
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. Except as required by law, we
undertake no obligation to update or revise any forward-looking
statements we make in our press releases, whether as a result of
new information, future events or otherwise.
Financial Tables Follow
NN,
Inc.
|
Consolidated
Statements of Income
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended December
31,
|
|
Twelve Months
Ended December
31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net Sales
|
$ 153,761
|
|
$ 90,081
|
|
$ 488,601
|
|
$ 373,206
|
Cost of products sold
(exclusive of
depreciation shown separately below)
|
119,879
|
|
71,848
|
|
384,889
|
|
295,136
|
Selling, general and
administrative
|
13,957
|
|
7,737
|
|
43,756
|
|
33,281
|
Acquisition related
costs excluded from
selling, general and administrative
|
2,168
|
|
--
|
|
9,248
|
|
--
|
Depreciation and
amortization
|
8,322
|
|
4,022
|
|
22,146
|
|
16,957
|
Impairment
Charges
|
875
|
--
|
875
|
--
|
Loss on disposal of
assets
|
--
|
|
--
|
|
--
|
|
5
|
Income from
Operations
|
8,560
|
|
6,474
|
|
27,687
|
|
27,827
|
|
|
|
|
|
|
|
|
Interest
expense
|
5,556
|
|
225
|
|
12,293
|
|
2,374
|
Other expense,
net
|
453
|
|
191
|
|
2,222
|
|
275
|
Income before
provision for income taxes
|
2,551
|
|
6,058
|
|
13,172
|
|
25,178
|
Provision for income
taxes
|
1,539
|
|
1,573
|
|
5,786
|
|
8,000
|
Share of net income
(loss) from joint
venture
|
606
|
|
--
|
|
831
|
|
--
|
Net
income
|
$ 1,618
|
|
$ 4,485
|
|
$ 8,217
|
|
$ 17,178
|
|
|
|
|
|
|
|
|
Diluted income per
common share
|
$ 0.08
|
|
$ 0.25
|
|
$ 0.45
|
|
$ 1.00
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares
|
19,317
|
|
17,817
|
|
18,253
|
|
17,260
|
|
|
|
|
|
|
|
|
|
NN,
Inc.
|
Condensed Balance
Sheets
|
(In
thousands)
|
(Unaudited)
|
|
|
December
31,
2014
|
|
December
31,
2013
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
Cash
|
$ 37,317
|
|
$ 3,039
|
Accounts receivable,
net
|
97,510
|
|
58,929
|
Inventories
|
91,469
|
|
54,530
|
Other current
assets
|
15,210
|
|
9,176
|
Total
current assets
|
241,506
|
|
125,674
|
|
|
|
|
Property, plant and
equipment, net
|
278,442
|
|
121,089
|
Goodwill and
intangible assets, net
|
136,768
|
|
9,524
|
Other non-current
assets
|
58,126
|
|
6,115
|
Total
assets
|
$ 714,842
|
|
$ 262,402
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$ 71,094
|
|
$ 40,687
|
Accrued salaries,
wages and benefits
|
20,873
|
|
11,761
|
Current maturities of
long-term debt
|
22,160
|
|
10,477
|
Income taxes
payable
|
3,274
|
|
1,340
|
Other current
liabilities
|
20,197
|
|
5,119
|
Total
current liabilities
|
137,598
|
|
69,384
|
|
|
|
|
Non-current deferred
tax liabilities
|
48,039
|
|
3,844
|
Long-term debt, net
of current portion
|
328,026
|
|
26,000
|
Other non-current
liabilities
|
27,931
|
|
10,414
|
Total
liabilities
|
541,594
|
|
109,642
|
|
|
|
|
Total stockholders'
equity
|
173,248
|
|
152,760
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$ 714,842
|
|
$ 262,402
|
NN, Inc.
Reconciliation of Non-GAAP to GAAP
Financial Measures
(Unaudited)
|
Three Months
Ended
December 31,
2014
|
|
Three Months
Ended
December 31,
2013
|
|
In Thousands
|
|
In
Thousands
|
Income from
operations
|
$ 8,560
|
|
$ 6,474
|
Acquisition and
integration costs
|
1,452
|
|
--
|
Impairment
charges
|
875
|
--
|
Adjusted income from
operations
|
$ 10,887
|
|
$ 6,474
|
|
Three Months
Ended
December 31,
2014
|
|
Three Months
Ended
December 31,
2013
|
|
In
Thousands
|
|
Diluted
Earnings Per
Share
|
|
In
Thousands
|
|
Diluted
Earnings Per
Share
|
Net income
|
$ 1,618
|
|
$ 0.08
|
|
$ 4,485
|
|
$ 0.25
|
After-tax acquisition
and integration costs
|
3,199
|
|
0.17
|
|
--
|
|
--
|
After-tax foreign
exchange loss on inter-company
loans
|
317
|
|
0.02
|
|
|
|
|
After-tax impairment
charges
|
577
|
0.03
|
--
|
--
|
Adjusted net
income
|
$ 5,711
|
|
$ 0.30
|
|
$ 4,485
|
|
$ 0.25
|
|
Twelve
Months Ended
December 31,
2014
|
|
Twelve
Months Ended
December 31,
2013
|
|
In
Thousands
|
|
In
Thousands
|
Income from
operations
|
$ 27,687
|
|
$ 27,827
|
Acquisition and
integration costs
|
11,311
|
|
--
|
Restructuring and
Impairment charges
|
875
|
568
|
Adjusted income from
operations
|
$ 39,873
|
|
$ 28,395
|
|
Twelve Months
Ended
December 31,
2014
|
|
Twelve Months
Ended
December 31,
2013
|
|
In
Thousands
|
|
Diluted
Earnings Per
Share
|
|
In
Thousands
|
|
Diluted
Earnings Per
Share
|
Net income
|
$ 8,217
|
|
$ 0.45
|
|
$ 17,178
|
|
$ 1.00
|
After-tax acquisition
and integration costs
|
13,553
|
|
0.74
|
|
--
|
|
--
|
After-tax foreign
exchange loss on inter-company
loans
|
1,197
|
|
0.07
|
|
84
|
|
0.01
|
After-tax impairment
charges
|
577
|
|
0.03
|
|
483
|
|
0.02
|
Adjusted net
income
|
$ 23,544
|
|
$ 1.29
|
|
$ 17,745
|
|
$ 1.03
|
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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nn-inc-reports-fourth-quarter-and-full-year-2014-results-300048112.html
SOURCE NN, Inc.