JOHNSON CITY, Tenn.,
Aug. 5, 2015 /PRNewswire/ --
- Net sales of $164.9 million,
an increase of $58.2 million
- Adjusted income from operations grew to $14.3 million
- Adjusted net income of $7.2
million, or $0.37 per diluted
share
NN, Inc., (NASDAQ: NNBR) a diversified industrial company, today
reported its financial results for the second quarter ended
June 30, 2015.
Second Quarter 2015 Results
Net sales for the second quarter of 2015 increased $58.2 million, or 55%, to $164.9 million, compared to $106.7 million for the second quarter of
2014. Acquisitions made subsequent to March 31, 2014 added $64.3
million in revenue. Negative currency impacts reduced
reported net sales by $9.3 million
versus the second quarter of last year.
Adjusted income from operations for the second quarter of 2015
was $14.3 million, an increase of
51%, compared to $9.5 million for the
same period in 2014. Adjusted net income, which excludes the
after-tax impact of foreign exchange on inter-company loans and
after-tax acquisition and integration expenses, increased to
$7.2 million, or $0.37 per diluted share, compared to $6.0 million, or $0.33 per diluted share for the same period in
2014.
On a GAAP basis, income from operations for the second quarter
of 2015 was $13.6 million, compared
to $8.2 million for the same period
in 2014. Net income on a GAAP basis for the second quarter of 2015
was $7.0 million, or $0.36 per diluted share. This compared to
$5.2 million, or $0.29 per diluted share, in the second quarter of
2014.
Richard Holder, President and
Chief Executive Officer, commented, "Excluding the macro-economic
challenges in Brazil our
businesses along with our financial results continue to meet our
expectations for the year. Our adjusted income from operations
continued to improve during the quarter as the remainder of our
portfolio continues to grow and hit our operating targets. The
acquisitions we've made since 2014 remain on or ahead of our stated
integration and synergy targets for 2015."
Business Group Results
Metal Bearing Components
Net sales for the group decreased $3.7
million to $69.3 million
during the second quarter of 2015, compared to $73.0 million for second quarter 2014. Negative
currency impacts of $9.3 million were
partially offset by volume increases of $3.0
million and the contribution of acquisition sales of
$2.6 million. Income from operations
for the second quarter was $9.4
million, compared to $8.7
million in the second quarter of 2014.
"The Metal Bearing Components Group continued its solid
performance in 2015," said Holder. "Excluding the negative currency
impacts the business continues to grow and expand its end
markets."
Autocam Precision Components
Net sales for the second quarter of 2015 were $86.5 million, compared to $25.3 million in the second quarter of 2014, an
increase of $61.2 million.
Acquisitions accounted for $60.9
million of the increase. Income from operations for
the quarter increased $6.8 million to
$9.1 million, compared to
$2.3 million in the second quarter of
2014.
Holder commented, "The Autocam Precision Components Group
performed well despite the conditions in Brazil. As expected, new customer programs
continued to ramp in the quarter and began to hit their expected
operating targets as the quarter came to a close, while the
integration of the Autocam acquisition remains ahead of
schedule."
Plastic and Rubber Components
Net sales for the second quarter increased $0.7 million to $9.1
million, compared to $8.4
million for the same period in 2014. Income from operations
for the quarter was $0.5 million,
compared to $0.4 million in 2014.
Holder commented, "We continue to transform our plastics
business as we focus on growing a diversified business that meets
our operating expectations. During the quarter we continued
that process with the completion of the Caprock acquisition."
Holder concluded, "The second quarter was an important quarter
in the history of our company. We made our first acquisition in our
plastics portfolio and raised $182
million in equity to prepare for future acquisitions and
continued growth as we remain focused on executing our strategic
plan."
NN will discuss its results during its quarterly investor
conference call tomorrow morning starting at 9:00 a.m. ET. The call and an accompanying
slide presentation may be accessed via NN's website. The conference
call can also be accessed by dialing 888-427-9376; conference id –
5901109. For those who are unavailable to listen to the live
broadcast, a replay will be available shortly after the call for 90
days.
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 26
manufacturing plants in the North
America, 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, 2014. 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
|
|
Six Months
Ended
|
|
|
JUNE
30,
|
|
JUNE
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net sales
|
|
$164,856
|
|
$106,680
|
|
$328,601
|
|
$209,208
|
Cost of products sold
(exclusive of depreciation and amortization shown separately
below)
|
|
128,708
|
|
84,285
|
|
258,025
|
|
164,569
|
Selling, general and
administrative
|
|
13,962
|
|
10,074
|
|
25,961
|
|
20,104
|
Depreciation and
amortization
|
|
8,597
|
|
4,084
|
|
17,091
|
|
7,961
|
Income from
operations
|
|
13,589
|
|
8,237
|
|
27,524
|
|
16,574
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
6,021
|
|
551
|
|
11,959
|
|
1,115
|
Other expense,
net
|
|
19
|
|
129
|
|
1,419
|
|
212
|
Income before
provision for income taxes and share of net income from joint
venture
|
|
7,549
|
|
7,557
|
|
14,146
|
|
15,247
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
1,617
|
|
2,357
|
|
3,073
|
|
4,809
|
Share of net income
from joint venture
|
|
1,021
|
|
-
|
|
1,882
|
|
-
|
Net income
|
|
$6,953
|
|
$5,200
|
|
$12,955
|
|
$10,438
|
|
|
|
|
|
|
|
|
|
Basic income per
common share:
|
|
$0.36
|
|
$0.29
|
|
$0.68
|
|
$0.59
|
Weighted average
shares outstanding
|
|
19,215
|
|
17,779
|
|
19,064
|
|
17,700
|
Diluted income per
common share:
|
|
$0.36
|
|
$0.29
|
|
$0.67
|
|
$0.58
|
Weighted average
shares outstanding
|
|
19,582
|
|
18,172
|
|
19,416
|
|
18,054
|
Cash dividends per
common share
|
|
$0.07
|
|
$0.07
|
|
$0.14
|
|
$0.14
|
NN,
Inc.
|
Condensed Balance
Sheets
|
(In
thousands)
|
(Unaudited)
|
|
|
June
30,
|
|
December
31,
|
|
2015
|
|
2014
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash
|
$21,409
|
|
$37,317
|
Accounts
receivable, net
|
114,819
|
|
97,510
|
Inventories
|
87,928
|
|
91,469
|
Other current
assets
|
16,590
|
|
16,503
|
Total current
assets
|
$240,746
|
|
242,799
|
|
|
|
|
Property, plant and
equipment, net
|
$272,047
|
|
278,442
|
Goodwill,
net
|
85,436
|
|
83,941
|
Intangible asset,
net
|
52,929
|
|
52,827
|
Investment in joint
venture
|
38,240
|
|
34,703
|
Other non-current
assets
|
19,542
|
|
20,001
|
Total assets
|
$708,940
|
|
$712,713
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$63,616
|
|
$71,094
|
Accrued
salaries, wages and benefits
|
19,760
|
|
21,148
|
Current
maturities of long-term debt
|
23,345
|
|
22,160
|
Income taxes
payable
|
5,057
|
|
3,274
|
Current
portion of obligations under capital lease
|
5,482
|
|
5,418
|
Other current
liabilities
|
11,481
|
|
14,504
|
Total current
liabilities
|
128,741
|
|
137,598
|
|
|
|
|
Non-current deferred
tax liabilities
|
48,238
|
|
49,461
|
Long-term debt, net
of current portion
|
335,938
|
|
328,026
|
Obligations under
capital lease, net of current portion
|
11,829
|
|
14,539
|
Other non-current
liabilities
|
10,692
|
|
9,390
|
Total liabilities
|
$535,438
|
|
539,014
|
|
|
|
|
Total stockholders'
equity
|
$173,502
|
|
173,699
|
Total liabilities and
stockholders' equity
|
$708,940
|
|
$712,713
|
NN,
Inc.
|
Reconciliation of
Non-GAAP to GAAP Financial Measures
|
(Unaudited)
|
|
Reconciliation of
net income to adjusted net income:
|
|
|
|
|
|
|
|
Three Months
Ended
June 30, 2015
|
|
Three Months
Ended
June 30, 2014
|
|
(In
Thousands)
|
|
Diluted Earnings
Per Share
|
|
(In
Thousands)
|
|
Diluted Earnings
Per Share
|
Net Income
|
$6,953
|
|
$0.36
|
|
$5,200
|
|
$0.29
|
After tax acquisition
and integration expenses
|
436
|
|
0.02
|
|
818
|
|
0.04
|
After-tax foreign
exchange gain on inter-company loans
|
(232)
|
|
-0.01
|
|
-
|
|
0.00
|
Adjusted Net
Income
|
$7,157
|
|
$0.37
|
|
$6,018
|
|
$0.33
|
|
|
|
|
|
|
|
|
Reconciliation of
net income to adjusted net income:
|
|
|
|
|
|
|
|
Six Months
Ended
June 30, 2015
|
|
Six Months
Ended
June 30, 2014
|
|
(In
Thousands)
|
|
Diluted Earnings
Per Share
|
|
(In
Thousands)
|
|
Diluted Earnings
Per Share
|
Net Income
|
$12,955
|
|
$0.67
|
|
$10,438
|
|
$0.58
|
After tax acquisition
and integration expenses
|
436
|
|
0.02
|
|
1,132
|
|
0.06
|
After-tax foreign
exchange loss on inter-company loans
|
655
|
|
0.03
|
|
-
|
|
0.00
|
Adjusted Net
Income
|
$14,046
|
|
$0.72
|
|
$11,570
|
|
$0.64
|
|
|
|
|
|
|
|
|
Reconciliation of
income from operations to adjusted income from
operations:
|
|
|
|
|
|
Three Months
Ended
June 30, 2015
|
|
Three Months
Ended
June 30, 2014
|
|
Six Months
Ended
June 30, 2015
|
|
Six Months
Ended
June 30, 2014
|
|
(In
Thousands)
|
|
(In
Thousands)
|
|
(In
Thousands)
|
|
(In
Thousands)
|
Income from
operations
|
$13,589
|
|
$8,237
|
|
$27,524
|
|
$16,574
|
Acquisition and
integration expenses
|
681
|
|
1,279
|
|
681
|
|
1,770
|
Adjusted Income from
operations
|
$14,270
|
|
$9,516
|
|
$28,205
|
|
$18,344
|
|
Reconciliation of
income from operations to adjusted income from
operations
|
|
|
|
|
|
Three Months
Ended
June 30, 2015
|
|
MBC
|
|
APC
|
|
PRC
|
|
NN
Inc
|
Income from
operations
|
$9,403
|
|
$9,095
|
|
$501
|
|
$13,589
|
Acquisition and
integration expenses
|
-
|
|
-
|
|
-
|
|
681
|
China JV
Income
|
-
|
|
1,021
|
|
-
|
|
1,021
|
Adjusted Income from
operations Including China JV
|
$9,403
|
|
$10,116
|
|
$501
|
|
$15,291
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30, 2014
|
|
MBC
|
|
APC
|
|
PRC
|
|
NN
Inc
|
Income from
operations
|
$8,748
|
|
$2,306
|
|
$414
|
|
$8,237
|
Acquisition and
integration expenses
|
-
|
|
-
|
|
-
|
|
1,279
|
Adjusted Income from
operations Including China JV
|
$8,748
|
|
$2,306
|
|
$414
|
|
$9,516
|
|
Reconciliation of
income from operations to adjusted income from
operations
|
|
|
|
|
|
Six Months
Ended
June 30, 2015
|
|
MBC
|
|
APC
|
|
PRC
|
|
NN
Inc
|
Income from
operations
|
$18,491
|
|
$16,813
|
|
$714
|
|
$27,524
|
Acquisition and
integration expenses
|
-
|
|
-
|
|
-
|
|
681
|
China JV
Income
|
-
|
|
1,882
|
|
-
|
|
1,882
|
Adjusted Income from
operations Including China JV
|
$18,491
|
|
$18,695
|
|
$714
|
|
$30,087
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30, 2014
|
|
MBC
|
|
APC
|
|
PRC
|
|
NN
Inc
|
Income from
operations
|
$17,520
|
|
$4,868
|
|
$649
|
|
$16,574
|
Acquisition and
integration expenses
|
-
|
|
-
|
|
-
|
|
1,770
|
Adjusted Income from
operations Including China JV
|
$17,520
|
|
$4,868
|
|
$649
|
|
$18,344
|
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-second-quarter-2015-results-300124401.html
SOURCE NN, Inc.