JOHNSON CITY, Tenn.,
May 4, 2016 /PRNewswire/ --
- Net sales of $212.2 million,
an increase of $48.5 million
- Adjusted income from operations increased $9.1 million to $24
million
- Adjusted net income of $7.1
million or $0.27 per diluted
share
NN, Inc., (NASDAQ: NNBR), a diversified industrial company,
today reported its financial results for the first quarter ended
March 31, 2016.
First Quarter 2016 Results
Net sales for the first quarter of 2016 increased $48.5 million, or 30% to $212.2 million, compared to $163.7 million for the first quarter of
2015. Acquisitions added $55.6
million in revenue. Negative currency and price/mix
impacts reduced reported net sales by $7.1
million versus the first quarter of last year.
Adjusted income from operations for the first quarter of 2016
was $24.0 million, an increase of
61%, compared to $14.9 million for
the same period in 2015. Adjusted net income was $7.1 million, or $0.27 per diluted share, compared to $8.0 million, or $0.41 per diluted share for the same period in
2015.
Richard Holder, President and
Chief Executive Officer, commented, "Our performance for the
quarter was in line with our expectations as we continue to see the
positive effects of the NN Operating System. The first quarter also
marked our first full period post the acquisition of PEP. We are
very pleased with where we are in our integration efforts as we
continue to find more opportunities to deliver engineered solutions
to our customers."
Business Group Results
Autocam Precision Components
Net sales for the first quarter of 2016 were $84.0 million, compared to $82.6 million in the first quarter of 2015, an
increase of $1.4 million.
Adjusted income from operations for the quarter increased
$1.1 million to $9.7 million, compared to $8.6 million in the first quarter of
2015.
Holder commented, "The Autocam Group continues to perform well
with the continued adoption of CAFE technologies driving our
performance, and we are pleased with the margin expansion the team
has achieved."
Precision Bearing Components
Net sales for the first quarter of 2016 were $64.7 million, compared to $73.2 million in the first quarter of 2015, a
decrease of $8.5 million.
Negative currency impacts of $1.4
million and a soft industrial market accounted for the
decline. Adjusted income from operations for the first
quarter was $7.1 million, compared to
$9.2 million in the first quarter of
2015.
Holder commented, "The Group rebounded in the first quarter from
the challenges during the fourth quarter of 2015. Operating
performance returned to our expectations, and we continue to drive
margin expansion throughout 2016."
Precision Engineered Products
Net sales for the first quarter of 2016 were $63.5 million, compared to $7.9 million in the first quarter of 2015, an
increase of $55.6 million. The
acquisition of PEP accounted for $56.0
million of the increase. Adjusted income from
operations for the quarter was $13.2
million, compared to $0.2
million in 2015.
Holder commented, "The integration of PEP is off to a good
start. The strong operating performance in the quarter met
our expectations. We expect to see improvements throughout
the year as we implement the NN Operating System."
Guidance
Holder continued, "Our businesses have performed to our
expectations thus far in 2016. We are encouraged by the
positive trends in the macro back drop and reaffirm our guidance
for the year."
The full set of financial guidance for the second quarter and
full year 2016 can be found in our supplemental presentation posted
in the Investor Relations section of our website at
www.nninc.com.
Holder concluded, "We are pleased with our performance to start
the year. The team continues to focus on the disciplined
execution of the NN Operating System."
GAAP Results
On a GAAP basis, income from operations for the first quarter of
2016 was $11.9 million, compared to
$13.9 million for the same period in
2015. Net loss on a GAAP basis for first quarter of 2016 was
$1.3 million, or ($0.05) per diluted share. This compares to net
income of $6.0 million, or
$0.31 per diluted share in the first
quarter of 2015.
On a GAAP basis, income from operations for first quarter 2016
in the Autocam Precision Components Group was $6.5 million compared to $7.7 million for the same period in 2015.
On a GAAP basis, income from operations for first quarter 2016
in the Precision Bearing Components Group was $6.3 million compared to $9.1 million for the same period in 2015.
On a GAAP basis, income from operations for first quarter 2016
in the Precision Engineered Products Group was $5.4 million compared to $0.2 million for the same period in 2015.
NN will discuss its results during its quarterly investor
conference call tomorrow morning starting at 9:00 a.m. ET. The call and supplemental
presentation may be accessed via NN's website, www.nninc.com. The
conference call can also be accessed by dialing 888-505-4368 or
719-325-2281 Conference ID: 9964576. For those who are
unavailable to listen to the live broadcast, a replay will be
available shortly after the call for 90 days.
The Company discloses in this press release the non-GAAP
financial measures of adjusted income from operations and adjusted
net income. Each of adjusted income from operations and
adjusted net income provide supplementary information about the
impacts of acquisition related expenses, foreign-exchange and other
non-operating impacts on our business.
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 combines advanced
engineering and production capabilities with in-depth materials
science expertise to design and manufacture high-precision
components and assemblies for a variety of markets on a global
basis. Headquartered in Johnson
City, Tennessee, NN has 42 manufacturing plants in
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 completed acquisitions are also
forward-looking statements, including statements relating to 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, 2015. 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.
|
Condensed
Consolidated Statements Income (Loss)
|
(Unaudited)
|
|
Three Months
ended
|
|
March
31,
|
(in thousands, except
per share data)
|
2016
|
2015
|
|
|
|
Net sales
|
$ 212,226
|
$ 163,746
|
Cost of products sold
(exclusive of depreciation and amortization shown separately
below)
|
159,754
|
129,317
|
Selling, general and
administrative
|
20,712
|
12,001
|
Depreciation and
amortization
|
17,348
|
8,494
|
Restructuring and
impairment charges
|
2,538
|
-
|
Income from
operations
|
11,874
|
13,934
|
|
|
|
Interest
expense
|
16,422
|
5,938
|
Other (income)
expense, net
|
(1,129)
|
1,400
|
Income (loss) before
provision (benefit) for income taxes and share of net income from
joint venture
|
(3,419)
|
6,596
|
Provision (benefit)
expense for income taxes
|
(720)
|
1,456
|
Share of net income
from joint venture
|
1,400
|
861
|
Net (loss)
income
|
$
(1,299)
|
$
6,001
|
|
|
|
Basic income (loss)
per share:
|
|
|
Net income
(loss)
|
$
(0.05)
|
$
0.32
|
Weighted average
shares outstanding
|
26,869
|
18,996
|
|
|
|
Diluted income (loss)
per share:
|
|
|
Net income
(loss)
|
$
(0.05)
|
$
0.31
|
Weighted average
shares outstanding
|
26,869
|
19,380
|
|
|
|
Cash dividends
per common share
|
$
0.07
|
$
0.07
|
|
|
|
NN,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
(in thousands, except
per share data)
|
March
31,
|
December
31,
|
Assets
|
2016
|
2015
|
Current
assets:
|
|
|
Cash
|
$
15,079
|
$
15,087
|
Accounts receivable,
net
|
143,323
|
123,005
|
Inventories
|
120,119
|
119,836
|
Income tax
receivable
|
3,989
|
3,989
|
Current deferred tax
assets
|
-
|
6,696
|
Other current
assets
|
13,125
|
11,568
|
Total current
assets
|
295,635
|
280,181
|
|
|
|
Property, plant and
equipment, net
|
325,222
|
318,968
|
Goodwill,
net
|
450,190
|
449,898
|
Intangible assets,
net
|
273,807
|
282,169
|
Non-current deferred
tax assets
|
-
|
742
|
Investment in joint
venture
|
39,862
|
38,462
|
Other non-current
assets
|
10,901
|
10,147
|
Total
assets
|
$
1,395,617
|
$
1,380,567
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$
70,292
|
$
69,101
|
Accrued salaries,
wages and benefits
|
24,341
|
21,125
|
Income taxes
payable
|
3,525
|
5,350
|
Current maturities of
long-term debt
|
11,947
|
11,714
|
Current portion of
obligation under capital lease
|
4,440
|
4,786
|
Other current
liabilities
|
26,938
|
21,275
|
Total current
liabilities
|
141,483
|
133,351
|
|
|
|
Non-current deferred
tax liabilities
|
111,050
|
117,459
|
Long-term debt, net
of current portion
|
804,672
|
795,400
|
Accrued
post-employment benefits
|
6,177
|
6,157
|
Obligation under
capital lease, net of current portion
|
8,646
|
9,573
|
Other
|
6,257
|
4,746
|
Total
liabilities
|
1,078,285
|
1,066,686
|
Total stockholders'
equity
|
317,332
|
313,881
|
Total liabilities and
stockholders' equity
|
$
1,395,617
|
$
1,380,567
|
Reconciliation of
income from operations to adjusted income from
operations:
|
NN, Inc - Total
Company
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
|
$'000
|
% of
Sales
|
|
$'000
|
% of
Sales
|
Income from
operations
|
$11,874
|
5.6%
|
|
$13,934
|
8.5%
|
Restructuring &
impairment charges
|
2,963
|
1.4%
|
|
-
|
0.0%
|
Acquisition &
integration expenses
|
3,263
|
1.5%
|
|
-
|
0.0%
|
Amortization of
intangibles
|
5,926
|
2.8%
|
|
983
|
0.6%
|
Adjusted income
from operations
|
$24,026
|
11.3%
|
|
$14,917
|
9.1%
|
|
|
|
|
|
|
Total
Sales
|
$212,226
|
|
$163,746
|
Reconciliation of
income from operations to adjusted income from
operations:
|
NN, Inc - Autocam
Precision Components Group
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
|
$'000
|
% of
Sales
|
|
$'000
|
% of
Sales
|
Income from
operations
|
$6,527
|
7.8%
|
|
$7,718
|
9.3%
|
Restructuring &
impairment Charges
|
2,274
|
2.7%
|
|
-
|
0.0%
|
Acquisition &
integration expenses
|
-
|
0.0%
|
|
-
|
0.0%
|
Amortization of
intangibles
|
885
|
1.1%
|
|
910
|
1.1%
|
Adjusted income
from operations
|
$9,686
|
11.5%
|
|
$8,628
|
10.4%
|
|
|
|
|
|
|
China JV
Contribution
|
1,400
|
|
|
861
|
|
Adjusted income
from operations
|
$11,086
|
13.2%
|
|
$9,489
|
11.5%
|
|
|
|
|
|
|
Total
Sales
|
$83,990
|
|
$82,622
|
Reconciliation of
income from operations to adjusted income from
operations:
|
NN, Inc -
Precision Bearing Components Group
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
|
$'000
|
% of
Sales
|
|
$'000
|
% of
Sales
|
Income from
operations
|
$6,326
|
9.8%
|
|
$9,089
|
12.4%
|
Restructuring &
impairment Charges
|
689
|
1.1%
|
|
-
|
0.0%
|
|
|
|
|
|
|
Amortization of
intangibles
|
58
|
0.1%
|
|
73
|
0.1%
|
Adjusted income
from operations
|
$7,073
|
10.9%
|
|
$9,162
|
12.5%
|
|
|
|
|
|
|
Total
Sales
|
$64,745
|
|
$73,236
|
Reconciliation of
income from operations to adjusted income from
operations:
|
NN, Inc -
Precision Engineered Products Group
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
|
$'000
|
% of
Sales
|
|
$'000
|
% of
Sales
|
Income from
operations
|
$5,421
|
8.5%
|
|
$213
|
2.7%
|
Restructuring &
impairment Charges
|
-
|
0.0%
|
|
-
|
0.0%
|
Acquisition &
integration expenses
|
2,777
|
4.4%
|
|
-
|
0.0%
|
Amortization of
intangibles
|
4,983
|
7.8%
|
|
-
|
0.0%
|
Adjusted income
from operations
|
$13,181
|
20.8%
|
|
$213
|
2.7%
|
|
|
|
|
|
|
Total
Sales
|
$63,491
|
|
$7,888
|
Reconciliation of
net income to adjusted net income:
|
|
|
|
|
|
|
NN, Inc - Total
Company
|
Three Months Ended
March 31, 2016
|
|
Three Months Ended
March 31, 2015
|
|
In
Thousands
|
|
Diluted
Earnings
Per
Share
|
|
In
Thousands
|
|
Diluted
Earnings
Per
Share
|
Net income
|
($1,299)
|
|
(0.05)
|
|
6,001
|
|
$ 0.31
|
After-tax acquisition
and integration costs
|
2,422
|
|
0.09
|
|
-
|
|
-
|
After-tax foreign
exchange loss on inter-company loans
|
(654)
|
|
(0.02)
|
|
886
|
|
0.04
|
Restructuring &
impairment charges
|
2,198
|
|
0.08
|
|
-
|
|
-
|
Amortization of
intangibles & deferred financing costs
|
4,459
|
|
0.17
|
|
1,140
|
|
0.06
|
Adjusted net
income
|
$ 7,126
|
|
$ 0.27
|
|
$ 8,027
|
|
$ 0.41
|
The Company discloses in this press release the non-GAAP
financial measures of adjusted income from operations and adjusted
net income. Each of adjusted income from operations and
adjusted net income provide supplementary information about the
impacts of acquisition related expenses and foreign-exchange
impacts on inter-company loans. Over the past three years, we
have completed six acquisitions, two of which were transformative
for the Company. The costs we incurred in completing such
acquisitions, including the amortization of intangibles and
deferred financing costs, have been excluded from these measures
because their size and inconsistent frequency are unrelated to our
commercial performance during the period, and which we believe are
not indicative of our ongoing operating costs. We exclude the
impact of currency translation from these measures because foreign
exchange rates are not under management's control and are subject
to volatility. We believe the presentation of adjusted income from
operations and adjusted net income provides useful information in
assessing our underlying business trends and facilitates comparison
of our long-term performance over given periods
The non-GAAP financial measures provided herein may not provide
information that is directly comparable to that provided by other
companies in the Company's industry, as other companies may
calculate such financial results differently. The Company's
non-GAAP financial measures are not measurements of financial
performance under GAAP, and should not be considered as
alternatives to actual net income growth derived from income
amounts presented in accordance with GAAP. The Company does not
consider these non-GAAP financial measures to be a substitute for,
or superior to, the information provided by GAAP financial
results.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nn-inc-reports-first-quarter-2016-results-in-line-with-company-guidance-300262973.html
SOURCE NN, Inc.