NN, Inc. Reports 2001 First Quarter Results

Apr 26, 2001, 01:00 ET from NN, Inc.

    JOHNSON CITY, Tenn., April 26 /PRNewswire/ -- NN, Inc. (Nasdaq:   NNBR)
 today reported its financial results for the first quarter ended March 31,
 2001.  These results are in line with the Company's earnings revision
 announced on April 3, 2001.  Results for the 2001 first quarter reflects the
 operations of NN Euroball ApS (Euroball), a stand-alone joint venture company
 formed on July 31, 2000, Delta Rubber Company acquired on February 16, 2001,
 as well as the operations of Industrial Molding Corporation (IMC) acquired on
 July 6, 1999.  Both IMC and Delta Rubber were acquired in a transaction using
 the purchase method of accounting.  The Company also noted that its results
 for the same period reflect NN's joint venture interests in Jiangsu General
 Ball & Roller (formed in March 2000) and NN-Arte (a joint venture formed in
 August 2000).
     Net sales for the first quarter of 2001 were $50,227,000 up 79% compared
 to $28,002,000 for the same period of 2000.  Net income totaled $1,561,000, or
 $0.10 per share, down 26% from  $2,110,000, or $0.14 per share, for the first
 quarter of 2000.
     Roderick R. Baty, President and Chief Executive Officer, stated, "Our top
 line growth in the first quarter of 2001 is the result of the revenue
 contribution from Euroball and Delta Rubber, totaling $25.3 million and
 $2.2 million, respectively.  This was offset somewhat by the adverse economic
 conditions in our North American markets.  While our European operations
 experienced top-line growth year over year of 2%, our domestic businesses were
 down an average of 11%.  The 11% decline in demand has resulted in very
 difficult operating conditions.  Unfortunately, these conditions have
 necessitated a combination of employee layoffs and reduced work schedules for
 our domestic ball and roller business, IMC and Delta Rubber operations.
     "As a percentage of net sales, the gross profit margin was 24% in the 2001
 first quarter versus 27% in the 2000 first quarter.  This reflects inventory
 reductions at our domestic ball & roller facilities as well as volume related
 margin decline due to soft economic conditions.  Selling, general and
 administrative expense as a percentage of sales was the same as the prior
 year's quarter of 8.0%.  This was achieved despite the increased costs
 associated with expanding global operations," added Mr. Baty.
     "Given the challenging economic outlook, we have revised our business plan
 for 2001.  At this time, we expect for full year 2001, revenues should reach
 approximately $200 million, reflecting a full year contribution from Euroball,
 the addition of Delta Rubber, modest sales from NN-Arte and share gains/new
 product programs in our core domestic operations partially offsetting our weak
 domestic markets.  At these sales levels, the Company is projecting second
 quarter earnings to be between $0.12 and $0.13 per share while reducing 2001
 full year earnings to $0.58 per share to $0.60 per share.  Finally, we
 anticipate focusing on reducing the Company's long-term debt by at least
 $10 million during 2001," added Mr. Baty.
     "Our latest acquisition, Delta Rubber Company, which we acquired in
 February of 2001, is a premier designer and manufacturer of rubber bearing
 seals.  We are very excited about the synergies between Delta Rubber and our
 core bearing component products.  We believe that NN is now uniquely
 positioned to capitalize on our component bearing strategy.  Toward this end
 we are working closely with our customers to ensure we maximize the value to
 them of NN's broader product offering.
     "Our operating initiatives for 2001 include limiting business development
 and acquisition activity and focusing on further integration of all our
 business units.  At the same time, we are very aware of the current economic
 softness in the United States.  Going forward, we are focusing on cost
 reduction programs, minimizing noncritical capital expenditures and debt
 reduction. Our strong cash flows from existing businesses, and our new
 acquisitions will enable us to pay down debt in 2001.
     "In summary, we are enthusiastic about the Company's long-term prospects
 and position in our industry.  It is important to note that the Company's
 product breadth, quality and service reputation, low cost position and global
 operations uniquely position the Company as a key strategic supplier,"
 concluded Mr. Baty.
     NN, Inc. is an independent manufacturer and supplier of high quality,
 precision bearing components to both domestic and international anti-friction
 bearing manufacturers and had sales of $132 million in 2000.
     For More Information on NN, Inc. at no cost, via facsimile,
 please call 1-800-PRO-INFO and enter stock ticker symbol - NNBR.
     With the exception of the historical information contained in the release,
 the matters described herein contain forward-looking statements that are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Forward-looking statements involve a number of risks and
 uncertainties that may cause actual results to be materially different from
 such forward-looking statements.  Such factors include, among others, general
 economic conditions and economic conditions in the industrial sector,
 competitive influences, risks that current customers will commence or increase
 captive production, risks of capacity underutilization, quality issues,
 availability 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, 2000.
 
                                    NN, Inc.
                       Condensed Statement of Operations
                  (in thousands, except for per share amounts)
                                  (unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                       2001            2000
 
     Net sales                                        $50,227        $28,002
     Cost of goods sold                                38,184         20,346
       Gross profit                                    12,043          7,656
 
     Selling, General and Administrative                4,014          2,318
     Depreciation & Amortization                        3,311          1,845
       Income from operations                           4,718          3,493
 
     Interest expense                                   1,182            291
     Equity in earnings of unconsolidated affiliate       (49)           (13)
     Net loss on involuntary conversion                     -             25
     Other income                                        (180)             -
     Income before provision for taxes                  3,765          3,190
     Provision for income taxes                         1,653          1,080
     Minority interest in income of
       consolidated subsidiary                            551              -
        Net income                                     $1,561         $2,110
 
     Diluted Income per Common Share                    $0.10          $0.14
 
 
                                    NN, Inc.
                            Condensed Balance Sheet
                                 (In thousands)
 
                                                    March  31,    December 31,
                                                       2001            2000
                                                            (unaudited)
 
     Assets
     Current assets:
     Cash                                              $7,487         $8,273
     Accounts receivable, net                          38,429         29,549
     Inventories, net                                  24,086         23,742
     Other current assets                               2,971          2,474
       Total current assets                            72,973         64,038
 
     Property, plant and equipment, net                89,834         91,693
     Goodwill                                          39,466         27,865
     Other assets                                       6,924          4,212
       Total assets                                  $209,197       $187,808
 
     Liabilities and Stockholders' Equity
     Current liabilities:
     Acquisition bridge financing                     $24,642             $-
     Accounts payable                                  19,429         17,337
     Other current liabilities                         22,299         18,522
       Total current liabilities                       66,370         35,859
 
     Long-Term loans                                   45,784         50,515
     Deferred income taxes                              5,524          5,353
     Minority interest and other
      long-term liabilities                            29,317         30,835
       Total liabilities                              146,995        122,562
 
     Stockholders' equity                              62,202         65,246
 
     Total liabilities and stockholders' equity      $209,197       $187,808
 
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SOURCE NN, Inc.
    JOHNSON CITY, Tenn., April 26 /PRNewswire/ -- NN, Inc. (Nasdaq:   NNBR)
 today reported its financial results for the first quarter ended March 31,
 2001.  These results are in line with the Company's earnings revision
 announced on April 3, 2001.  Results for the 2001 first quarter reflects the
 operations of NN Euroball ApS (Euroball), a stand-alone joint venture company
 formed on July 31, 2000, Delta Rubber Company acquired on February 16, 2001,
 as well as the operations of Industrial Molding Corporation (IMC) acquired on
 July 6, 1999.  Both IMC and Delta Rubber were acquired in a transaction using
 the purchase method of accounting.  The Company also noted that its results
 for the same period reflect NN's joint venture interests in Jiangsu General
 Ball & Roller (formed in March 2000) and NN-Arte (a joint venture formed in
 August 2000).
     Net sales for the first quarter of 2001 were $50,227,000 up 79% compared
 to $28,002,000 for the same period of 2000.  Net income totaled $1,561,000, or
 $0.10 per share, down 26% from  $2,110,000, or $0.14 per share, for the first
 quarter of 2000.
     Roderick R. Baty, President and Chief Executive Officer, stated, "Our top
 line growth in the first quarter of 2001 is the result of the revenue
 contribution from Euroball and Delta Rubber, totaling $25.3 million and
 $2.2 million, respectively.  This was offset somewhat by the adverse economic
 conditions in our North American markets.  While our European operations
 experienced top-line growth year over year of 2%, our domestic businesses were
 down an average of 11%.  The 11% decline in demand has resulted in very
 difficult operating conditions.  Unfortunately, these conditions have
 necessitated a combination of employee layoffs and reduced work schedules for
 our domestic ball and roller business, IMC and Delta Rubber operations.
     "As a percentage of net sales, the gross profit margin was 24% in the 2001
 first quarter versus 27% in the 2000 first quarter.  This reflects inventory
 reductions at our domestic ball & roller facilities as well as volume related
 margin decline due to soft economic conditions.  Selling, general and
 administrative expense as a percentage of sales was the same as the prior
 year's quarter of 8.0%.  This was achieved despite the increased costs
 associated with expanding global operations," added Mr. Baty.
     "Given the challenging economic outlook, we have revised our business plan
 for 2001.  At this time, we expect for full year 2001, revenues should reach
 approximately $200 million, reflecting a full year contribution from Euroball,
 the addition of Delta Rubber, modest sales from NN-Arte and share gains/new
 product programs in our core domestic operations partially offsetting our weak
 domestic markets.  At these sales levels, the Company is projecting second
 quarter earnings to be between $0.12 and $0.13 per share while reducing 2001
 full year earnings to $0.58 per share to $0.60 per share.  Finally, we
 anticipate focusing on reducing the Company's long-term debt by at least
 $10 million during 2001," added Mr. Baty.
     "Our latest acquisition, Delta Rubber Company, which we acquired in
 February of 2001, is a premier designer and manufacturer of rubber bearing
 seals.  We are very excited about the synergies between Delta Rubber and our
 core bearing component products.  We believe that NN is now uniquely
 positioned to capitalize on our component bearing strategy.  Toward this end
 we are working closely with our customers to ensure we maximize the value to
 them of NN's broader product offering.
     "Our operating initiatives for 2001 include limiting business development
 and acquisition activity and focusing on further integration of all our
 business units.  At the same time, we are very aware of the current economic
 softness in the United States.  Going forward, we are focusing on cost
 reduction programs, minimizing noncritical capital expenditures and debt
 reduction. Our strong cash flows from existing businesses, and our new
 acquisitions will enable us to pay down debt in 2001.
     "In summary, we are enthusiastic about the Company's long-term prospects
 and position in our industry.  It is important to note that the Company's
 product breadth, quality and service reputation, low cost position and global
 operations uniquely position the Company as a key strategic supplier,"
 concluded Mr. Baty.
     NN, Inc. is an independent manufacturer and supplier of high quality,
 precision bearing components to both domestic and international anti-friction
 bearing manufacturers and had sales of $132 million in 2000.
     For More Information on NN, Inc. at no cost, via facsimile,
 please call 1-800-PRO-INFO and enter stock ticker symbol - NNBR.
     With the exception of the historical information contained in the release,
 the matters described herein contain forward-looking statements that are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Forward-looking statements involve a number of risks and
 uncertainties that may cause actual results to be materially different from
 such forward-looking statements.  Such factors include, among others, general
 economic conditions and economic conditions in the industrial sector,
 competitive influences, risks that current customers will commence or increase
 captive production, risks of capacity underutilization, quality issues,
 availability 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, 2000.
 
                                    NN, Inc.
                       Condensed Statement of Operations
                  (in thousands, except for per share amounts)
                                  (unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                       2001            2000
 
     Net sales                                        $50,227        $28,002
     Cost of goods sold                                38,184         20,346
       Gross profit                                    12,043          7,656
 
     Selling, General and Administrative                4,014          2,318
     Depreciation & Amortization                        3,311          1,845
       Income from operations                           4,718          3,493
 
     Interest expense                                   1,182            291
     Equity in earnings of unconsolidated affiliate       (49)           (13)
     Net loss on involuntary conversion                     -             25
     Other income                                        (180)             -
     Income before provision for taxes                  3,765          3,190
     Provision for income taxes                         1,653          1,080
     Minority interest in income of
       consolidated subsidiary                            551              -
        Net income                                     $1,561         $2,110
 
     Diluted Income per Common Share                    $0.10          $0.14
 
 
                                    NN, Inc.
                            Condensed Balance Sheet
                                 (In thousands)
 
                                                    March  31,    December 31,
                                                       2001            2000
                                                            (unaudited)
 
     Assets
     Current assets:
     Cash                                              $7,487         $8,273
     Accounts receivable, net                          38,429         29,549
     Inventories, net                                  24,086         23,742
     Other current assets                               2,971          2,474
       Total current assets                            72,973         64,038
 
     Property, plant and equipment, net                89,834         91,693
     Goodwill                                          39,466         27,865
     Other assets                                       6,924          4,212
       Total assets                                  $209,197       $187,808
 
     Liabilities and Stockholders' Equity
     Current liabilities:
     Acquisition bridge financing                     $24,642             $-
     Accounts payable                                  19,429         17,337
     Other current liabilities                         22,299         18,522
       Total current liabilities                       66,370         35,859
 
     Long-Term loans                                   45,784         50,515
     Deferred income taxes                              5,524          5,353
     Minority interest and other
      long-term liabilities                            29,317         30,835
       Total liabilities                              146,995        122,562
 
     Stockholders' equity                              62,202         65,246
 
     Total liabilities and stockholders' equity      $209,197       $187,808
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X17234054
 
 SOURCE  NN, Inc.