UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): November 1, 2005
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NN, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-23486 62-1096725
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(State or other jurisdiction of (Commission (I. R. S. Employer
incorporation or organization) File Number) Identification No.)
2000 Waters Edge Drive, Johnson City, Tennessee 37604
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (423) 743-9151
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Not Applicable
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(Former name or former address, if changed since last report.)
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 (see General Instruction A.2. below):
|_| 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 Condition
Furnished as Exhibit 99.1 is a copy of a Press Release issued by NN, Inc. on
November 1, 2005.
Item 9.01. Financial Statements and Exhibits
(c) 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 the previous or future filings of NN, Inc.
under the Securities Act of 1933, as amended, or the Exchange Act:
Exhibits:
Exhibit
Number Description
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99.1 Press Release of NN, Inc. dated November 1, 2005
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.
Dated: November 1, 2005 By: /s/ William C. Kelly, Jr.
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William C. Kelly, Jr.
Secretary, Treasurer and
Chief Administrative Officer
Exhibit 99.1
NEWS
FINANCIAL
RELATIONS BOARD RE: NN, Inc.
2000 Waters Edge Drive
Johnson City, TN 37604
FOR FURTHER INFORMATION:
AT THE COMPANY AT FINANCIAL RELATIONS BOARD
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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
November 1, 2005
NN, INC. REPORTS THIRD QUARTER 2005 RESULTS
Third Quarter Revenues Up 3%, Earnings Per Share Up 15%
Nine Months Year-To-Date Revenues Up 9%, Earnings Per Share Up 33%
Johnson City, Tenn., November 1, 2005 - NN, Inc. (Nasdaq: NNBR) today reported
its financial results for the third quarter and nine months ended September 30,
2005. Net sales for the third quarter of 2005 were $75.0 million, up 2.9% from
$72.9 million for the same period of 2004. Net income for the third quarter of
2005 totaled $2.6 million as compared to $2.2 million for the same period of
2004. Earnings per diluted share for the third quarter of 2005 were $0.15, up
15% from $0.13 per diluted share in third quarter 2004.
Net sales for the first nine months of 2005 were $245.5 million, up 8.7%,
compared to $225.8 million for the same period of 2004. Net income for the first
nine months of 2005 totaled $9.9 million as compared to $7.4 million for the
same period of 2004. Earnings per diluted share for the first nine months of
2005 were $0.57, an increase of 33% from $0.43 per diluted share for the same
period of 2004.
James H. Dorton, Vice President and Chief Financial Officer, commented, "Of the
total revenue increase of $19.7 million for the first nine months of 2005, price
increases accounted for approximately 34%, the positive effects of currency
translation accounted for 27% and volume increases accounted for approximately
39% of the total increase.
"As a percentage of net sales, cost of products sold was 77.6% in the third
quarter of 2005 versus 78.5% in the third quarter of 2004. Cost improvements
associated with our Level 3 initiatives were the primary factor for the improved
margins. As a percentage of net sales, cost of products sold for the first nine
months of 2005 of 78.1% was comparable to 78.2% for the same period in the prior
year. We estimate that Level 3 initiatives in the first nine months of 2005
accounted for approximately 2.0% margin improvement. These improvements were
offset by the margin reduction associated with raw material pass through.
"Selling, general and administrative expenses of $7.2 million, or 9.6% as a
percentage of net sales for the third quarter of 2005 were negatively impacted
by the recording of a reserve for Delphi Corp. accounts receivable and for
start-up costs in China. However SG&A remained relatively flat as compared to
the same period in 2004 of $7.1 million, or 9.8% as a percentage of net sales.
Selling, general and administrative expenses for the first nine months of 2005
were $22.0 million, or 8.9 % as a percentage of net sales as compared to $22.3
million, or 9.9% as a percentage of net sales for the same period of 2004."
Mr. Dorton concluded, "Total debt on September 30, 2005 was $67.8 million, down
$4.7 million year-to-date after adjusting for currency. For the year, we believe
that we will reduce total debt by approximately $10.0 million."
Roderick R. Baty, Chairman and Chief Executive Officer, commented, "In
mid-October we revised our previously released 2005 full year guidance primarily
due to three factors: lower second half sales volumes in Europe, currency
translation, and an unfavorable tax rate mix. Although these negative factors
will cause us to fall short of our original guidance, our revised guidance of
approximately $325 million in revenues and earnings per diluted share of $0.77
to $0.81 show significant improvement over the prior year."
Mr. Baty concluded, "Our outlook for the remainder of 2005 is mixed. Lower
revenues in comparison to original plan for the second half in Europe are
partially offset by continuing strong demand in North America. The longer-term
global outlook for customers' demand in both our automotive and industrial
served markets, however, remains strong. Strategically, we will continue to
focus on opportunities to profitably grow our core bearing components business.
In early October of this year, we announced the purchase of SNR Roulements'
internal precision ball producing equipment from its manufacturing facility in
Annecy, France. This outsourcing transaction is consistent with our strategy and
further provides us with the opportunity to add additional value to our existing
customer relationships through our component manufacturing and service
competencies. Further, our investments in Slovakia and China not only position
us well for the geographic expansion of our ball manufacturing capabilities in
Eastern Europe and Asia, but provide us with the capabilities for other bearing
component manufacturing as well. In China, we will begin limited production of
high volume automotive application precision balls during the fourth quarter of
this year. Finally, our Level 3 program is delivering solid results and we
expect even stronger results in 2006 and beyond."
NN, Inc. manufacturers and supplies high precision bearing components consisting
of balls, rollers, seals, and retainers for leading bearing manufacturers on a
global basis. In addition, the company manufactures a variety of other plastic
components. NN, Inc. had sales of US $304 million in 2004.
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, success of cost
improvement initiatives, adequate reserves for accounts receivable, successful
and timely 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 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, 2004.
(Financial Tables Follow)
NN, Inc.
Condensed Statements of Income
(In Thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
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Net sales $ 74,998 $ 72,917 $ 245,500 $ 225,815
Cost of products sold (exclusive of
depreciation shown separately below) 58,177 57,263 191,848 176,590
Selling, general and administrative 7,180 7,126 21,961 22,309
Depreciation and amortization 3,998 3,999 12,302 11,918
Loss on disposal of assets -- -- 6 --
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Income from operations 5,643 4,529 19,383 14,998
Interest expense, net 967 1,101 2,976 2,925
Other (income) expense 53 (177) (286) (208)
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Income before provision for income taxes 4,623 3,605 16,693 12,281
Provision for income taxes 2,066 1,453 6,801 4,926
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Net income $ 2,557 $2,152 $ 9,892 $ 7,355
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Diluted income per common share $ 0.15 $ 0.13 $ 0.57 $ 0.43
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Weighted average diluted shares 17,522 17,135 17,286 17,142
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NN, Inc.
Condensed Balance Sheets
(In Thousands)
(Unaudited)
September 30, December 31,
2005 2004
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Assets
Current Assets:
Cash $ 7,707 $ 10,772
Accounts receivable, net 52,981 51,597
Inventories, net 35,051 35,629
Other current assets 11,009 10,340
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Total current assets 106,748 108,338
Property, plant and equipment, net 115,930 131,169
Goodwill, net 41,932 44,457
Other assets 6,197 5,905
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Total assets $270,807 $289,869
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 36,092 $ 45,217
Accrued salaries and wages 13,835 16,332
Current portion of long-term debt 6,319 7,160
Other liabilities 9,301 5,722
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Total current liabilities 65,547 74,431
Deferred income taxes 16,715 17,857
Long-term notes payable 61,481 67,510
Other 13,089 14,931
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Total liabilities 156,832 174,729
Total stockholders' equity 113,975 115,140
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Total liabilities and stockholders' equity $270,807 $289,869
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