News Feed Item

NN Reports Fourth Quarter and Twelve Months Results

Quarterly net sales increase of $9.9 million represents real growth of $8.0 million or 10.0%

JOHNSON CITY, Tenn., March 11, 2014 /PRNewswire/ -- NN, Inc. (NASDAQ: NNBR) today reported its financial results for the fourth quarter and twelve months ended December 31, 2013.  Net sales for the fourth quarter of 2014 were $90.1 million, an increase of $9.9 million or 12.4% (currency adjusted), compared to net sales of $80.2 million for the fourth quarter of 2012.  This increase was due primarily to improved demand from European automotive markets and continued strong demand in North American and Asian automotive markets.   Continued strong demand in European heavy truck markets also contributed to the increased sales.

Pre-tax income for the fourth quarter of 2013 was $6.1 million, compared to 2012 fourth quarter of $0.5 million. This increase was due to improved sales and improved operating performance at our divisions. Reported net income for the fourth quarter 2013 was $4.5 million or $0.25 per diluted share, compared to prior year's net income for the fourth quarter of $8.2 million, or $0.48 per diluted share.  Fourth quarter 2012 net income included a onetime $7.3 million benefit related to deferred tax accounting.

Net sales for full year 2013 were $373.2 million, an increase of $3.1 million, or 1.0% compared to net sales of $370.1 million for full year 2012.  Lower demand due mainly to weak European automotive end markets and slowing Asian economic growth in the first half of the year gave way to improved economic conditions and greater demand in European, North American and Asian automotive markets in the second half of the year.

Pre-tax income for the full year of 2013 was $25.2 million, compared to the full year of 2012 of $20.3 million. This increase was due to improved operating performance at our divisions. Reported net income for the full year of 2013 was $17.2 million, or $1.00 per diluted share compared to $24.3 million, or $1.42 per diluted share for the comparable period last year.  Full year 2012 taxes included a onetime $7.3 million benefit related to deferred tax accounting.

As a percentage of net sales, cost of products sold for the fourth quarter of 2013 decreased to 79.8% from 81.9% for the prior year's fourth quarter.  Cost of products sold for full year 2013 was 79.1% as compared to 79.7% for the same period last year.  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 $33.4 million at December 31, 2013, a decrease of $17.1 million over the December 31, 2012 amount of $50.5 million.  Capital spending totaled $15.3 million for the year versus a budget of $17 million.  The Company reinstated its quarterly cash dividend during the second quarter of 2013.  Dividends paid during the year were $3.1 million.

Richard Holder, President and Chief Executive Officer, commented, "We finished 2013 strong despite the negative impact of the persistent weak economic conditions in Europe.  Sales were also negatively impacted in the short-term by our strategic decision to shed non-core, non-strategic products and customer platforms.  However, as a result of this action we are now positioned for future growth at higher levels of profitability.  Even considering these factors, our fourth quarter revenues were up 10.0% in currency adjusted numbers as compared to last year's fourth quarter.  Along with the positive revenue trend, we have been able to leverage strong incremental profits for each additional dollar of revenue generated.

"During 2013, we continued to strengthen our balance sheet having reduced net debt by $17.1 million.   We accomplished this while at the same time reinstating our quarterly dividend.  We entered 2014 well positioned to fund our organic and acquisitive growth plans as well as shareholder value initiatives, all of which are key components of our strategic plan.

"While we are sensitive to the prolonged general economic uncertainty hanging over the markets as well as the weakness in European automotive markets and in particular European industrial markets, we are positive regarding NN's opportunities in 2014.  We are forecasting 2014 sales to be in the range of $400 million to $415 million.  This guidance does not include any additional potential acquisitions we may close in 2014, but does include approximately $15 million of incremental revenues from our recently announced acquisition of the assets of V-S Industries.  The portfolio of V-S products is complementary to the Whirlaway Products and will roll up the operations under its NN Precision Metals Components Group."  

Mr. Holder concluded, "On January 30, 2014 we presented our revised and enhanced business strategy during our investor day meeting in New York City.  If you have not had an opportunity to view it, I encourage you to do so.  It is available on our website at www.nninc.com.  Our strategy includes numerous components and initiatives including plans to aggressively pursue acquisitive and organic growth opportunities in our core and adjacent markets to grow our Company from annual sales of $373 million in 2013 to $800 million in 2018.   We currently expect approximately 60% of this growth will come from acquisitions, approximately 20% will come from growth in adjacent markets and approximately 14% from organic growth, leaving approximately 6% from European economic recovery.  Our strategic plan calls for specific growth, including compound annual growth rates of: earnings per share of 31%, sales of 21% and EBIT of 31%.   Specific return targets of 13% return on invested capital and 5% free cash to sales.  These are bold, aggressive goals, but ones that our Board of Directors and management team strongly believe are obtainable and are strongly committed to achieving."

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 and China.  NN, Inc. had sales of US $370 million in 2012.

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, 2012.


Financial Tables Follow


NN, Inc.

Condensed Statements of Income

(In Thousands, except per share amounts)


Three Months Ended

Year Ended

December 31,

December 31,





Net sales

$   90,081

$   80,155

$ 373,206

$  370,084

Cost of products sold (exclusive of

  depreciation and amortization shown 

  separately below)













Selling, general and administrative





Depreciation and amortization





(Gain) loss on disposal of assets





Restructuring and impairment charges





Income from operations





Interest expense





Other expense (income), net





Income before provision (benefit) for income taxes





Provision(benefit) for income taxes





Net income

$    4,485


$    8,206

$  17,178

$  24,268

Diluted income per share

$       0.25

$       0.48

$       1.00

$       1.42

Weighted average diluted shares outstanding






NN, Inc.

Condensed Balance Sheets

(In thousands)


December 31,


December 31,



Current Assets:


$       3,039

$    18,990

Accounts receivable, net






Other current assets



   Total current assets



Property, plant and equipment, net



Goodwill, net



Intangible assets, net



Other non-current assets



   Total assets

$   262,402

$   265,343

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$     40,687

$     37,000

Accrued salaries, wages and benefits



Current maturities of long-term debt



Income taxes payable



Other current liabilities



   Total current liabilities



Non-current deferred tax liabilities



Long-term debt, net of current portion



Other non-current liabilities



Total liabilities



Total stockholders' equity



Total liabilities and stockholders' equity

$   262,402

$  265,343


Three Months Ended

December 31, 2013

Year Ended

December 31, 2013


In Thousands

Diluted Earnings Per Share


In Thousands

Diluted Earnings Per Share

Net Income

$     4,485

$    0.25

$   17,178

$     1.00

After tax restructuring and other non-recurring items





Foreign exchange loss on intercompany





Net Income from normal operations

$     4,485

$    0.25

$   17,745

$     1.03


Three Months Ended

December 31, 2012

Year Ended

December 31, 2012


In Thousands

Diluted Earnings Per Share


In Thousands

Diluted Earnings Per Share

Net Income

$   8,206

$    0.48

$   24,268

$     1.42

Benefits from reversing deferred tax asset valuation allowances, net of offsetting tax charges





Impairment of non-operating assets





Foreign exchange loss on intercompany





Net income from normal operations

$      2,784

$    0.16

$   19,129

$     1.12


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.



More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Cloud based infrastructure deployment is becoming more and more appealing to customers, from Fortune 500 companies to SMEs due to its pay-as-you-go model. Enterprise storage vendors are able to reach out to these customers by integrating in cloud based deployments; this needs adaptability and interoperability of the products confirming to cloud standards such as OpenStack, CloudStack, or Azure. As compared to off the shelf commodity storage, enterprise storages by its reliability, high-availabil...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
Governments around the world are adopting Safe Harbor privacy provisions to protect customer data from leaving sovereign territories. Increasingly, global companies are required to create new instances of their server clusters in multiple countries to keep abreast of these new Safe Harbor laws. Is it worth it? In his session at 19th Cloud Expo, Adam Rogers, Managing Director of Anexia, Inc., will discuss how to keep your data legal and still stay in business.
Successful transition from traditional IT to cloud computing requires three key ingredients: an IT architecture that allows companies to extend their internal best practices to the cloud, a cost point that allows economies of scale, and automated processes that manage risk exposure and maintain regulatory compliance with industry regulations (FFIEC, PCI-DSS, HIPAA, FISMA). The unique combination of VMware, the IBM Cloud, and Cloud Raxak, a 2016 Gartner Cool Vendor in IT Automation, provides a co...
Today every business relies on software to drive the innovation necessary for a competitive edge in the Application Economy. This is why collaboration between development and operations, or DevOps, has become IT’s number one priority. Whether you are in Dev or Ops, understanding how to implement a DevOps strategy can deliver faster development cycles, improved software quality, reduced deployment times and overall better experiences for your customers.
Donna Yasay, President of HomeGrid Forum, today discussed with a panel of technology peers how certification programs are at the forefront of interoperability, and the answer for vendors looking to keep up with today's growing industry for smart home innovation. "To ensure multi-vendor interoperability, accredited industry certification programs should be used for every product to provide credibility and quality assurance for retail and carrier based customers looking to add ever increasing num...
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
Apache Hadoop is a key technology for gaining business insights from your Big Data, but the penetration into enterprises is shockingly low. In fact, Apache Hadoop and Big Data proponents recognize that this technology has not yet achieved its game-changing business potential. In his session at 19th Cloud Expo, John Mertic, director of program management for ODPi at The Linux Foundation, will explain why this is, how we can work together as an open data community to increase adoption, and the i...
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to impr...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of So...