PROSPECTUS SUPPLEMENT
Prospectus Supplement to Prospectus Dated February 11, 2003
NN, INC.
2000 Waters Edge Drive
Johnson City, Tennessee 37604
(423) 743-9151
700,000 shares of Common Stock
____________________
We are offering and selling 700,000 shares of our common stock, par
value $.01 per share, having an aggregate offering price of $6,188,000, or $8.84
per share, all of which will be issued directly to AB SKF, an entity organized
under the laws of Sweden. The purchase price was determined by negotiation of
the parties and was established based on the average closing price of our common
stock on the Nasdaq Stock Market over an agreed period of time. No discounts,
commissions, concessions or other compensation has been paid to any underwriter,
agent, broker or dealer in connection with this offering.
You should read this prospectus supplement, the accompanying prospectus
and the documents that are incorporated by reference in this prospectus
supplement and the accompanying prospectus carefully before investing.
Our common stock is quoted on the Nasdaq National Market under the
symbol "NNBR." On May 1, 2003, the last sale price of the common stock as
reported on the Nasdaq Stock Market was $10.989.
Investing in our common stock involves risks. See "Risk Factors"
beginning on page S-5 of this prospectus supplement to read about the risks you
should consider before buying our common stock.
____________________________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
____________________________
The date of this Prospectus Supplement is May 2, 2003
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PROSPECTUS SUPPLEMENT SUMMARY.........................................S-1
RISK FACTORS..........................................................S-5
USE OF PROCEEDS.......................................................S-9
PLAN OF DISTRIBUTION..................................................S-9
LEGAL MATTERS.........................................................S-9
WHERE YOU CAN FIND MORE INFORMATION...................................S-9
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................S-10
PROSPECTUS
ABOUT THIS PROSPECTUS...................................................1
RECENT DEVELOPMENTS.....................................................1
RISK FACTORS............................................................3
NN, INC.................................................................8
USE OF PROCEEDS........................................................10
SELLING STOCKHOLDERS...................................................11
PLAN OF DISTRIBUTION...................................................12
LEGAL MATTERS..........................................................16
EXPERTS................................................................16
WHERE YOU CAN FIND MORE INFORMATION....................................16
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................16
i
PROSPECTUS SUPPLEMENT SUMMARY
This prospectus supplement summary highlights certain information
contained elsewhere or incorporated by reference in this prospectus supplement
and accompanying prospectus. This summary does not contain all of the
information that you should consider before deciding to invest in our common
stock. If there is any inconsistency between the information in this prospectus
supplement and the accompanying prospectus, you should rely on the information
in this prospectus supplement. You should read both this prospectus supplement
and the accompanying prospectus together with additional information described
below under the heading "Where You Can Find More Information."
When acquiring any securities discussed in this prospectus supplement,
you should rely upon the information contained in this prospectus supplement and
the accompanying prospectus, including the information incorporated by
reference. We have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information,
you should not rely on it. We are not making an offer to sell these securities
in any jurisdiction where the offer or sale is not permitted.
As used in this prospectus supplement and the accompanying prospectus,
the terms "we," "us," "our," "NN" or the "Company," refer collectively to NN,
Inc. and its subsidiaries.
S-1
NN, Inc.
NN manufactures and supplies high precision bearing components,
consisting of balls, rollers, seals and retainers, for leading bearing
manufacturers on a global basis. We are the leading independent manufacturer of
precision steel bearing balls for the North American and European markets. In
1998, we began implementing a strategic plan designed to position us as a
worldwide supplier of a broad line of bearing components. Through a series of
acquisitions executed as part of that plan, we have built on our strong core
ball business and greatly expanded our bearing component product offering.
Today, we offer the industry's most complete line of bearing components. We
emphasize engineered products that take advantage of our competencies in product
design and high tolerance manufacturing processes. Our bearing customers use our
components in fully assembled ball and roller bearings, which serve a wide
variety of industrial applications in the transportation, electrical,
agricultural, construction, machinery, mining and aerospace markets.
Our bearing component products presently account for approximately 90%
of our consolidated revenue and sales of high precision plastic products account
for the balance. We estimate that the size of the global market for balls,
rollers, seals and retainers is $3.2 billion. Captive component
production of bearing manufacturers accounts for approximately 53% of this
market, while independent manufacturers currently serve approximately 47% of the
market. We believe that we are a leader in the independent manufacturers segment
of the market with a 17% market share. We also believe that the percentage of
the market served by independent manufacturers is growing due to the ongoing
component outsourcing trend among our major customers. Outsourcing components
enables our global bearing customers to focus on their core competencies in the
design and engineering of finished bearing technologies. In addition, it
provides them with significant financial advantages, including lower long-term
component costs and improved returns on invested capital.
We intend to continue to capitalize on this growing trend of
outsourcing within our global bearing customer base. Recent successes include
joining with our two largest bearing customers, SKF and INA/FAG, to create our
majority-owned subsidiary, Euroball. In forming Euroball, we contributed our
Ireland ball manufacturing facility, while SKF and INA/FAG contributed their
captive ball manufacturing facilities in Italy and Germany. On December 20,
2002, we purchased all of INA/FAG's interest in Euroball and on May 2, 2003, we
purchased all of SKF's interest in Euroball to become the sole owner of
Euroball. Also, on May 2, 2003, we purchased certain component manufacturing
operations of SKF in Veenendaal, The Netherlands. These transactions are
described in the Section entitled "Recent Developments" beginning on page S-3.
Both SKF and INA/FAG independently entered into long-term supply agreements
designating Euroball as their primary supplier of ball products in Europe.
Through Euroball, we are Europe's leading provider of precision balls.
We operate eight North American and European manufacturing facilities.
Our two U. S. ball and roller production facilities are located in Tennessee and
our Euroball subsidiary operates three manufacturing facilities located in
Ireland, Germany and Italy. Our seal, retainer and other plastic products are
manufactured in three facilities located in Connecticut, Texas and Mexico.
S-2
Recent Developments
On December 20, 2002, we acquired the 23 percent interest in Euroball
held by INA/FAG. We paid approximately 13.4 million Euros ($13.8 million) for
INA/FAG's interest in Euroball. On May 2, 2003, we acquired the 23 percent
interest in Euroball held by SKF. We paid approximately 13.8 million Euros ($15.5
million) for SKF's interest in Euroball. Following the closings of these
transactions, we are the sole owner of Euroball.
On January 24, 2003, we exercised our call right to purchase the
remaining 49 percent interest in NN Mexico, LLC. The transaction was consummated
on April 1, 2003. The transaction is not expected to materially impact our
financial condition or results of operations.
On May 2, 2003, we acquired the tapered roller and metal cage
manufacturing operations of SKF in Veenendaal, The Netherlands for approximately
22.2 million Euros ($25.0 million). This acquisition expands our current bearing
component product offering, enabling us to further serve and bring additional
value to our global bearing customers.
In connection with the purchase of SKF's Veenendaal component
manufacturing operations and SKF's 23 percent interest in Euroball, on May 1,
2003, we entered into a new credit facility with AmSouth Bank, under which we
borrowed $60.4 million and 26.3 million Euros ($29.6 million) to fund the SKF
transactions described above. This new financing arrangement replaces our prior
credit facility with AmSouth and Euroball's credit facility with HypoVereinsbank
Luxembourg, S.A.
Corporate Information
Our principal executive offices are located at 2000 Waters Edge Drive,
Johnson City, Tennessee 37604 and our telephone number is (423) 743-9151. Our
Internet website address is www.nnbr.com. Information contained on our website
is not part of this prospectus supplement.
Cautionary Statement Concerning Forward-Looking Statements
This prospectus supplement includes and incorporates by reference
"forward-looking statements" as that term is defined in the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are based on our
current expectations, estimates and projections about the industry and markets
in which we operate. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" and variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve risks,
uncertainties and assumptions, which are difficult to predict and many of which
are beyond our control, including those described in "Risk Factors" on pages S-5
through S-9 of this prospectus supplement. Therefore, actual outcomes and
results may differ materially from what is expressed, forecasted or implied in
such forward-looking statements. We undertake no obligation to publicly update
any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by applicable law.
S-3
The Offering
Common stock being offered............................ 700,000 shares
Common stock to be outstanding after this offering.... 16,081,441 shares
Use of Proceeds....................................... We will use the net proceeds of
$6,188,000 to finance a portion of our
acquisition of SKF's Veenendaal operations.
See "Use of Proceeds."
Nasdaq National Market symbol......................... NNBR
S-4
RISK FACTORS
You should carefully consider the following risks and uncertainties,
and all other information contained in this prospectus supplement and
accompanying prospectus or incorporated by reference in this prospectus
supplement and accompanying prospectus, before making an investment in our
common stock. Any of the following risks could have a material adverse effect on
our business, financial condition or operating results. In such case, the
trading price of our common stock could decline and you may lose all or part of
your investment.
The demand for our products is cyclical, which could adversely impact
our revenues.
The end markets for fully assembled bearings are cyclical and tend to
decline in response to overall declines in industrial production. As a result,
the market for bearing components is also cyclical and impacted by overall
levels of industrial production. Our sales in the past have been negatively
affected, and in the future will be negatively affected, by adverse conditions
in the industrial production sector of the economy or by adverse global or
national economic conditions generally.
We depend on a very limited number of foreign sources for our primary
raw material and are subject to risks of shortages and price
fluctuation.
The steel that we use to manufacture precision balls and rollers is of
an extremely high quality and is available from a limited number of producers on
a global basis. Due to quality constraints in the U.S. steel industry, we obtain
substantially all of the steel used in our U.S. ball and roller production from
overseas suppliers. In addition, we obtain substantially all of the steel used
in our European ball production from a single European source. If we had to
obtain steel from sources other than our current suppliers, particularly in the
case of our European operations, we could face higher prices and transportation
costs, increased duties or taxes, and shortages of steel. Problems in obtaining
steel, and particularly 52100 chrome steel, in the quantities that we require
and on commercially reasonable terms, could increase our costs, negatively
impact our ability to operate our business efficiently and have a material
adverse effect on the operating and financial results of our Company.
We operate in and sell products to customers outside the U.S. and are
subject to several related risks.
Because we obtain a majority of our raw materials from overseas
suppliers, actively participate in overseas manufacturing operations and sell to
a large number of international customers, we face risks associated with the
following:
o adverse foreign currency fluctuations;
o changes in trade, monetary and fiscal policies, laws and
regulations, and other activities of governments, agencies and
similar organizations;
o the imposition of trade restrictions or prohibitions;
S-5
o high tax rates that discourage the repatriation of funds to the
U.S.;
o the imposition of import or other duties or taxes; and
o unstable governments or legal systems in countries in which our
suppliers, manufacturing operations, and customers are located.
We do not have a hedging program in place associated with consolidating the
operating results of our foreign businesses into U.S. dollars. An increase in
the value of the U.S. dollar and/or the Euro relative to other currencies may
adversely affect our ability to compete with our foreign-based competitors for
international, as well as domestic, sales. Also, a decline in the value of the
Euro relative to the U.S. dollar will negatively impact our consolidated
financial results, which are denominated in U.S. dollars.
In addition, due to the typical slower summer manufacturing season in
Europe, we expect that revenues in the third fiscal quarter will reflect lower
sales, as our sales to European customers have increased as a percentage of net
sales.
We depend heavily on a relatively limited number of customers, and the
loss of any major customer would have a material adverse effect on our
business.
Sales to various U.S. and foreign divisions of SKF, which is one of
the largest bearing manufacturers in the world, accounted for approximately 33%
of consolidated net sales in 2002, and sales to INA/FAG accounted for
approximately 19% of consolidated net sales in 2002. Our recent acquisition of
SKF's tapered roller and metal cage production facility, along with the related
long-term supply agreement
with SKF, will increase the percentage of net sales
to SKF in the future. During 2002, our ten largest customers accounted for
approximately 73% of our consolidated net sales. None of our other customers
individually accounted for more than 5% of our consolidated net sales for 2002.
Recent consolidation of certain of our bearing customers, including the
acquisition of the Torrington Company by Timken, will increase our dependence on
a smaller number of customers. The loss of all or a substantial portion of sales
to these customers would cause us to lose a substantial portion of our revenue
and would lower our profit margin and cash flows from operations.
The costs and difficulties of integrating acquired business could
impede our future growth.
We cannot assure you that any future acquisition will enhance our
financial performance. Our ability to effectively integrate any future
acquisitions will depend on, among other things, the adequacy of our
implementation plans, the ability of our management to oversee and operate
effectively the combined operations and our ability to achieve desired operating
efficiencies and sales goals. The integration of any acquired businesses might
cause us to incur unforeseen costs, which would lower our profit margin and
future earnings and would prevent us from realizing the expected benefits of
these acquisitions.
S-6
We may not be able to continue to make the acquisitions necessary for
us to realize our growth strategy.
Acquiring businesses that complement or expand our operations has been
and continues to be an important element of our business strategy. This strategy
calls for growth through acquisitions constituting approximately two-thirds of
our future growth, with the remainder resulting from internal growth and market
penetration. We bought our plastic bearing component business in 1999, formed
Euroball with our two largest bearing customers, SKF and INA/FAG, in 2000 and
acquired our bearing seal operations in 2001. During 2002, we purchased
INA/FAG's minority interest in Euroball and on May 2, 2003, we acquired all of
SKF's minority interest in Euroball. We cannot assure you that we will be
successful in identifying attractive acquisition candidates or completing
acquisitions on favorable terms in the future. In addition, we may borrow funds
to acquire other businesses, increasing our interest expense and debt levels.
Our inability to acquire businesses, or to operate them profitably once
acquired, could have a material adverse effect on our business, financial
position, results of operations and cash flows.
Our growth strategy depends on outsourcing, and if the industry trend
toward outsourcing does not continue, our business could be adversely
affected.
Our growth strategy depends in significant part on major bearing
manufacturers continuing to outsource components, and expanding the number of
components being outsourced. This requires manufacturers to depart significantly
from their traditional methods of operations. If major bearing manufacturers do
not continue to expand outsourcing efforts or determine to reduce their use of
outsourcing, our ability to grow our business could be materially adversely
affected.
Our market is highly competitive and many of our competitors have
significant advantages that could adversely affect our business.
The global market for bearing components is highly competitive, with a
majority of production represented by the captive production operations of
certain large bearing manufacturers and the balance represented by independent
manufacturers. Captive manufacturers make components for internal use and for
sale to third parties. All of the captive manufacturers, and many independent
manufacturers, are significantly larger and have greater resources than do we.
Our competitors are continuously exploring and implementing improvements in
technology and manufacturing processes in order to improve product quality, and
our ability to remain competitive will depend, among other things, on whether we
are able to keep pace with such quality improvements in a cost effective manner.
The production capacity we have added over the last several years has
at times resulted in our having more capacity than we need, causing our
operating costs to be higher than expected.
We have expanded our ball and roller production facilities and capacity
over the last several years. During 1997, we built an additional manufacturing
plant in Kilkenny, Ireland, and we continued this expansion in 2000 through the
formation of Euroball with SKF and INA/FAG. Our ball and roller facilities have
not always operated at full capacity and from time to time our results of
operations have been adversely affected by the under-utilization of our
production facilities, and we face risks of further under-utilization or
inefficient utilization of our production facilities in future years.
S-7
The price of our common stock may be volatile.
The market price of our common stock could be subject to significant
fluctuations and may decline. Among the factors that could affect our stock
price are:
o our operating and financial performance and prospects;
o quarterly variations in the rate of growth of our financial
indicators, such as earnings per share, net income and revenues;
o changes in revenue or earnings estimates or publication of
research reports by analysts;
o loss of any member of our senior management team;
o speculation in the press or investment community;
o strategic actions by us or our competitors, such as acquisitions
or restructurings;
o sales of our common stock by stockholders;
o general market conditions; and
o domestic and international economic, legal and regulatory factors
unrelated to our performance.
The stock markets in general have experienced extreme volatility that
has often been unrelated to the operating performance of particular companies.
These broad market fluctuations may adversely affect the trading price of our
common stock.
Provisions in our charter documents and Delaware law may inhibit a
takeover, which could adversely affect the value of our common stock.
Our certificate of incorporation and bylaws, as well as Delaware
corporate law, contain provisions that could delay or prevent a change of
control or changes in our management that a stockholder might consider favorable
and may prevent you from receiving a takeover premium for your shares. These
provisions include, for example, a classified board of directors and the
authorization of our board of directors to issue up to 5,000,000 preferred
shares without a stockholder vote. In addition, our restated certificate of
incorporation provides that stockholders may not call a special meeting.
We are a Delaware corporation subject to the provisions of Section 203
of the Delaware General Corporation Law, an anti-takeover law. Generally, this
statute prohibits a publicly-held Delaware corporation from engaging in a
business combination with an interested stockholder for a period of three years
after the date of the transaction in which such person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
A business combination includes a merger, asset sale or other transaction
resulting in a financial benefit to the stockholder. We anticipate that the
provisions of Section 203 may encourage
S-8
parties interested in acquiring us to negotiate in advance with our board of
directors, because the stockholder approval requirement would be avoided if a
7majority of the directors then in office approve either the business combination
or the transaction that results in the stockholder becoming an interested
stockholder.
These provisions apply even if the offer may be considered beneficial
by some of our stockholders. If a change of control or change in management is
delayed or prevented, the market price of our common stock could decline.
USE OF PROCEEDS
We intend to use the net cash proceeds of $ 6,188,000 from this
offering to pay for a portion of the acquisition of SKF's tapered roller and
metal cage manufacturing operations in Veenendaal, The Netherlands. This
acquisition is discussed in "Recent Developments" on page S-3 of this prospectus
supplement.
PLAN OF DISTRIBUTION
The shares of common stock offered under this prospectus supplement
are being offered and sold directly to a single investor, SKF, on the date of
this prospectus supplement. No underwriters, agents, brokers or dealers were
involved in the distribution of the shares of common stock offered under this
prospectus supplement to SKF. No discounts, commissions, concessions or other
compensation was paid to any underwriter, agent, broker or dealer in connection
with the offering. Our employees involved in the process will not receive any
compensation based upon their participation in this offering and, pursuant to
Rule 3a4-1 of the Securities Exchange Act of 1934, will not be deemed to be
brokers as defined in the Securities Exchange Act of 1934.
In connection with the sale to SKF, we will deliver certificates
representing the shares purchased or effect the sale through the book entry
facilities of The Depository Trust Company, in either case against payment of
the aggregate purchase price for the shares purchased and through a broker
designated by SKF.
We determined the per share price for the direct placement through
negotiations with SKF based on the average closing price of our common stock on
the Nasdaq Stock Market over an agreed period of time.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon
for us by Blackwell Sanders Peper Martin LLP, Two Pershing Square, 2300 Main
Street, Suite 1000, Kansas City, Missouri 64108.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any of these materials at
the SEC's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. Our SEC filings,
S-9
including the registration statement, will also be available to you on
the SEC's website. The address of this website is http://www.sec.gov.
We have filed a registration statement on Form S-3 with the SEC to
register shares of our common stock. This prospectus supplement and the
accompanying prospectus are part of that registration statement and, as
permitted by the SEC's rules, does not contain all of the information included
in the registration statement. For further information about us and this
offering, you may refer to the registration statement and its exhibits. You can
review and copy the registration statement and its exhibits at the public
reference rooms maintained by the SEC or on the SEC's website described above.
This prospectus supplement and accompanying prospectus may contain
summaries of contracts or other documents. Because they are summaries, they will
not contain all of the information that may be important to you. If you would
like complete information about a contract or other document, you should read
the copy filed as an exhibit to the registration statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference is
considered to be a part of this prospectus, and information that we file with
the SEC at a later date will automatically update or supersede this information.
We incorporate by reference the following documents as well as any future filing
we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
o Our Annual Report on Form 10-K for the year ended December 31,
2002;
o Our Current Reports on Form 8-K filed with the SEC on February
25, 2003, March 11, 2003 and April 24, 2003 (as amended on
Form 8-K/A on May 1, 2003); and
o The description of our common stock contained in the amended
registration statement on Form 8-A/A filed with the SEC on
November 22, 2002.
You may request a copy of these filings, at no cost, by written or
telephone request to:
NN, Inc.
Attn: Corporate Secretary
2000 Waters Edge Drive
Johnson City, Tennessee 37604
(423) 743-9151
This prospectus supplement may contain information that updates,
modifies or is contrary to information in one or more of the documents
incorporated by reference in this prospectus supplement. Reports we file with
the SEC after the date of this prospectus supplement may also contain
information that updates, modifies or is contrary to information in this
prospectus supplement or in documents incorporated by reference in this
prospectus supplement. Investors
S-10
should review these reports as they may disclose a change in our business,
prospects, financial condition or other affairs after the date of this
prospectus supplement.
S-11
PROSPECTUS
NN, INC.
COMMON STOCK
____________________
$36,000,000 of Company Shares
3,733,664 of Selling Stockholders Shares
By this prospectus from time to time, we may offer and sell shares of
our common stock, par value $.01 per share, having an aggregate offering price
of up to $36,000,000.
Up to 3,733,664 shares of common stock may be sold from time to time in
one or more offerings by the selling stockholders identified on page 11. We will
not receive any proceeds from sales of shares of our common stock by the selling
stockholders.
We will provide you with a prospectus supplement before we or any of
the selling stockholders sell any common stock under this prospectus. Any
prospectus supplement will inform you about the specific terms of an offering by
us or any selling stockholder, will list the names of any underwriters or
agents, and may also add, update or change information contained in this
prospectus. You should read this prospectus, the documents that are incorporated
by reference in this prospectus and any prospectus supplement carefully before
investing. This prospectus may not be used to sell any common stock unless it is
accompanied by a prospectus supplement.
We may offer these securities directly to investors, or through agents,
underwriters or dealers. See "Plan of Distribution" on page 12. Each prospectus
supplement will provide the terms of the plan of distribution relating to each
offering of common stock.
Our common stock is quoted on the Nasdaq National Market under the
symbol "NNBR."
Investing in our common stock involves risks. See "Risk Factors"
beginning on page 4 to read about the risks you should consider before buying
our common stock.
____________________________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
____________________________
The date of this Prospectus is February 11, 2003
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS.......................................................1
RECENT DEVELOPMENTS.........................................................1
RISK FACTORS................................................................3
NN, INC.....................................................................8
USE OF PROCEEDS............................................................10
SELLING STOCKHOLDERS.......................................................11
PLAN OF DISTRIBUTION.......................................................12
LEGAL MATTERS..............................................................16
EXPERTS....................................................................16
WHERE YOU CAN FIND MORE INFORMATION........................................16
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................16
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission using a "shelf" registration
process. Under the shelf registration process, we may, from time to time, offer
and sell shares of our common stock described in this prospectus in one or more
offerings up to a total dollar amount of $36,000,000. In addition, up to
3,733,664 shares of our common stock may be sold from time to time in one or
more offerings by several of our stockholders. We will not receive any proceeds
from any sale of the shares by the selling stockholders.
This prospectus provides you with a general description of the
securities we may offer. Each time we or the selling stockholders sell common
stock, we will provide a prospectus supplement that will contain specific
information about the method and terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. If there is any inconsistency between the information in this
prospectus and a prospectus supplement, you should rely on the information in
that prospectus supplement. You should read both this prospectus and any
applicable prospectus supplement together with additional information described
below under the heading "Where You Can Find More Information."
When acquiring any securities discussed in this prospectus, you should
rely upon the information contained in this prospectus and the prospectus
supplement, including the information incorporated by reference. We have not
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted.
We and the selling stockholders may sell the common stock to or through
underwriters, dealers or agents or directly to purchasers. The applicable
prospectus supplement will provide the names of any underwriters, dealers or
agents involved in the sale of the common stock, and any applicable fee,
commission or discount arrangements with them. For a more detailed description
of the various means by which we may distribute the common stock, you should
read the information under the heading "Plan of Distribution."
As used in this prospectus and any prospectus supplement, the terms
"we," "us," "our," "NN" or the "Company," refer collectively to NN, Inc. and its
subsidiaries.
RECENT DEVELOPMENTS
On December 20, 2002, we acquired the 23 percent interest in NN
Euroball, ApS ("Euroball") held by INA/FAG. Euroball was formed in 2000 by the
Company, FAG Kugelfischer Georg Schaefler AG, which was subsequently acquired by
INA - Schaeffler KG (collectively, "INA/FAG") and AB SKF ("SKF"). INA/FAG is a
global bearing manufacturer and one of our largest customers. We paid
approximately 13.4 million Euros for INA/FAG's interest in Euroball. Following
the closing of the transaction, we own 77 percent of the outstanding shares of
Euroball and SKF owns the remaining 23 percent. SKF consented to our purchase of
INA/FAG's interest pursuant to the terms of the Euroball Shareholder Agreement.
1
SKF has the right, beginning January 1, 2003 to require us to purchase its
interest in Euroball, based on a formula price detailed in the Euroball
Shareholder Agreement.
On December 9, 2002, we announced that we had signed a letter of intent
to acquire certain component manufacturing operations of SKF in Veenendaal, The
Netherlands. SKF, a Swedish corporation, is a global bearing manufacturer and
one of our major customers. The transaction, which is expected to close in the
first quarter of 2003, is subject to a number of conditions, including the
execution of a definitive asset acquisition agreement, completion of due
diligence, approval of NN and SKF's boards of directors and any necessary
approval of relevant government agencies. The on-going negotations between the
parties have included the possibility of offering shares of our common stock
under this prospectus as all or part of the purchase price for the assets.
2
RISK FACTORS
You should carefully consider the following risks and uncertainties
and any risks and uncertainties contained in the accompanying prospectus
supplement, and all other information contained in or incorporated by reference
in this prospectus and the prospectus supplement, before making an investment in
our common stock. Any of the following risks could have a material adverse
effect on our business, financial condition or operating results. In such case,
the trading price of our common stock could decline and you may lose all or part
of your investment.
The demand for our products is cyclical, which could adversely impact
our revenues.
The end markets for fully assembled bearings are cyclical and tend to
decline in response to overall declines in industrial production. As a result,
the market for bearing components is also cyclical and impacted by overall
levels of industrial production. Our sales in the past have been negatively
affected, and in the future will be negatively affected, by adverse conditions
in the industrial production sector of the economy or by adverse global or
national economic conditions generally.
We depend on a very limited number of foreign sources for our primary
raw material and are subject to risks of shortages and price
fluctuation.
The steel that we use to manufacture precision balls and rollers is of
an extremely high quality and is available from a limited number of producers on
a global basis. Due to quality constraints in the U.S. steel industry, we obtain
substantially all of the steel used in our U.S. ball and roller production from
overseas suppliers. In addition, we obtain substantially all of the steel used
in our European ball production from a single European source. If we had to
obtain steel from sources other than our current suppliers, particularly in the
case of our European operations, we could face higher prices and transportation
costs, increased duties or taxes, and shortages of steel. Problems in obtaining
steel, and particularly 52100 chrome steel, in the quantities that we require
and on commercially reasonable terms, could increase our costs, negatively
impact our ability to operate our business efficiently and have a material
adverse effect on the operating and financial results of our Company.
We operate in and sell products to customers outside the U.S. and are
subject to several related risks.
Because we obtain a majority of our raw materials from overseas
suppliers, actively participate in overseas manufacturing operations and sell to
a large number of international customers, we face risks associated with the
following:
o adverse foreign currency fluctuations;
o changes in trade, monetary and fiscal policies, laws and
regulations, and other activities of governments, agencies and
similar organizations;
o the imposition of trade restrictions or prohibitions;
3
o high tax rates that discourage the repatriation of funds to the
U.S.;
o the imposition of import or other duties or taxes; and
o unstable governments or legal systems in countries in which our
suppliers, manufacturing operations, and customers are located.
We do not have a hedging program in place to help limit the risk associated with
consolidating the operating results of our foreign businesses into U.S. dollars.
An increase in the value of the U.S. dollar and/or the Euro relative to other
currencies may adversely affect our ability to compete with our foreign-based
competitors for international, as well as domestic, sales. Also, a decline in
the value of the Euro relative to the U.S. dollar will negatively impact our
consolidated financial results, which are denominated in U.S. dollars.
In addition, due to the typical slower summer manufacturing season in
Europe, we expect that revenues in the third fiscal quarter will reflect lower
sales, as our sales to foreign customers have increased as a percentage of net
sales.
We depend heavily on a relatively limited number of customers, and the
loss of any major customer would have a material adverse effect on our
business.
Sales to various U.S. and foreign divisions of SKF, which is one of the
largest bearing manufacturers in the world, accounted for approximately 35% of
consolidated net sales in 2001, and sales to INA/FAG accounted for approximately
19% of consolidated net sales in 2001. During 2001, our ten largest customers
accounted for approximately 73% of our consolidated net sales. None of our other
customers individually accounted for more than 5% of our consolidated net sales
for 2001. The loss of all or a substantial portion of sales to these customers
would cause us to lose a substantial portion of our revenue and would lower our
profit margin and cash flows from operations.
The costs and difficulties of integrating acquired business could
impede our future growth.
We cannot assure you that any future acquisition will enhance our
financial performance. Our ability to effectively integrate any future
acquisitions will depend on, among other things, the adequacy of our
implementation plans, the ability of our management to oversee and operate
effectively the combined operations and our ability to achieve desired operating
efficiencies and sales goals. The integration of any acquired businesses might
cause us to incur unforeseen costs, which would lower our profit margin and
future earnings and would prevent us from realizing the expected benefits of
these acquisitions.
We may not be able to continue to make the acquisitions necessary for
us to realize our growth strategy.
Acquiring businesses that complement or expand our operations has been
and continues to be an important element of our business strategy. This strategy
calls for growth through acquisitions constituting approximately two-thirds of
our future growth, with the remainder resulting from internal growth and market
penetration. We bought our plastic bearing
4
component business in 1999, formed Euroball with our two largest bearing
customers, SKF and INA/FAG, in 2000 and acquired our bearing seal operations in
2001. We cannot assure you that we will be successful in identifying attractive
acquisition candidates or completing acquisitions on favorable terms in the
future. In addition, we may borrow funds to acquire other businesses, increasing
our interest expense and debt levels. Our inability to acquire businesses, or to
operate them profitably once acquired, could have a material adverse effect on
our business, financial position, results of operations and cash flows.
Additionally, SKF, the minority shareholder in Euroball, has the right
to require us to purchase its interest beginning in January 2003. The Company
may need to borrow funds to pay for all or a portion of the purchase of SKF's
interest or may be required to make a purchase at a time that is less favorable
to the Company.
Our growth strategy depends on outsourcing, and if the industry trend
toward outsourcing does not continue, our business could be adversely
affected.
Our growth strategy depends in significant part on major bearing
manufacturers continuing to outsource components, and expanding the number of
components being outsourced. This requires manufacturers to depart significantly
from their traditional methods of operations. If major bearing manufacturers do
not continue to expand outsourcing efforts or determine to reduce their use of
outsourcing, our ability to grow our business could be materially adversely
affected.
Our market is highly competitive and many of our competitors have
significant advantages that could adversely affect our business.
The global market for bearing components is highly competitive, with a
majority of production represented by the captive production operations of
certain large bearing manufacturers and the balance represented by independent
manufacturers. Captive manufacturers make components for internal use and for
sale to third parties. All of the captive manufacturers, and many independent
manufacturers, are significantly larger and have greater resources than do we.
Our competitors are continuously exploring and implementing improvements in
technology and manufacturing processes in order to improve product quality, and
our ability to remain competitive will depend, among other things, on whether we
are able to keep pace with such quality improvements in a cost effective manner.
The production capacity we have added over the last several years has
at times resulted in our having more capacity than we need, causing
our operating costs to be higher than expected.
We have significantly expanded our ball and roller production
facilities and capacity over the last several years. During 1997, we built an
additional manufacturing plant in Kilkenny, Ireland, and we continued this
expansion in 2000 through the formation of Euroball with SKF and INA/FAG. Our
ball and roller facilities currently are not operating at full capacity and our
results of operations for 2001 and the first and second quarters of 2002 were
adversely affected by the under-utilization of our production facilities, and we
face risks of further under-utilization or inefficient utilization of our
production facilities in future years.
5
The price of our common stock may be volatile.
The market price of our common stock could be subject to significant
fluctuations after this offering, and may decline below the public offering
price. Among the factors that could affect our stock price are:
o our operating and financial performance and prospects;
o quarterly variations in the rate of growth of our financial
indicators, such as earnings per share, net income and revenues;
o changes in revenue or earnings estimates or publication of
research reports by analysts;
o loss of any member of our senior management team;
o speculation in the press or investment community;
o strategic actions by us or our competitors, such as acquisitions
or restructurings;
o sales of our common stock by stockholders;
o general market conditions; and
o domestic and international economic, legal and regulatory factors
unrelated to our performance.
The stock markets in general have experienced extreme volatility that
has often been unrelated to the operating performance of particular companies.
These broad market fluctuations may adversely affect the trading price of our
common stock.
Provisions in our charter documents and Delaware law may inhibit a
takeover, which could adversely affect the value of our common stock.
Our certificate of incorporation and bylaws, as well as Delaware
corporate law, contain provisions that could delay or prevent a change of
control or changes in our management that a stockholder might consider favorable
and may prevent you from receiving a takeover premium for your shares. These
provisions include, for example, a classified board of directors and the
authorization of our board of directors to issue up to 5,000,000 preferred
shares without a stockholder vote. In addition, our restated certificate of
incorporation provides that stockholders may not call a special meeting.
We are a Delaware corporation subject to the provisions of Section 203
of the Delaware General Corporation Law, an anti-takeover law. Generally, this
statute prohibits a publicly-held Delaware corporation from engaging in a
business combination with an interested stockholder for a period of three years
after the date of the transaction in which such person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
A business combination includes a merger, asset sale or other transaction
resulting in a financial benefit to the stockholder. We anticipate that the
provisions of Section 203 may encourage
6
parties interested in acquiring us to negotiate in advance with our board of
directors, because the stockholder approval requirement would be avoided if a
majority of the directors then in office approve either the business combination
or the transaction that results in the stockholder becoming an interested
stockholder.
These provisions apply even if the offer may be considered beneficial
by some of our stockholders. If a change of control or change in management is
delayed or prevented, the market price of our common stock could decline.
7
NN, INC.
NN manufactures and supplies high precision bearing components,
consisting of balls, rollers, seals and retainers, for leading bearing
manufacturers on a global basis. We are the leading independent manufacturer of
precision steel bearing balls for the North American and European markets. In
1998, we began implementing a strategic plan designed to position us as a
worldwide supplier of a broad line of bearing components. Through a series of
acquisitions executed as part of that plan, we have built on our strong core
ball business and greatly expanded our bearing component product offering.
Today, we offer the industry's most complete line of bearing components. We
emphasize engineered products that take advantage of our competencies in product
design and high tolerance manufacturing processes. Our bearing customers use our
components in fully assembled ball and roller bearings, which serve a wide
variety of industrial applications in the transportation, electrical,
agricultural, construction, machinery, mining and aerospace markets.
Our bearing component products presently account for approximately 90%
of our consolidated revenue and sales of high precision plastic products account
for the balance. We estimate that the size of the global market for balls,
rollers, seals and plastic retainers is $3.5 billion. Captive component
production of bearing manufacturers accounts for approximately 65% of this
market, while independent manufacturers currently serve approximately 35% of the
market. We believe that we are a leader in the independent manufacturers segment
of the market with a 14% market share. We also believe that the percentage of
the market served by independent manufacturers is growing due to the ongoing
component outsourcing trend among our major customers. Outsourcing components
enables our global bearing customers to focus on their core competencies in the
design and engineering of finished bearing technologies. In addition, it
provides them with significant financial advantages, including lower long-term
component costs and improved returns on invested capital.
We intend to continue to capitalize on this growing trend of
outsourcing within our global bearing customer base. Recent successes include
joining with our two largest bearing customers, SKF and INA/FAG, to create our
majority-owned subsidiary, Euroball. In forming Euroball, we contributed our
Ireland ball manufacturing facility, while SKF and INA/FAG contributed their
captive ball manufacturing facilities in Italy and Germany. On December 20,
2002, we purchased all of INA/FAG's interest in Euroball, increasing our
holdings in Euroball to 77 percent. This transaction is described in the Section
entitled "Recent Developments" beginning on page 1. Both SKF and INA/FAG
independently entered into long-term supply agreements designating Euroball as
their primary supplier of ball products in Europe. Through Euroball, we are
Europe's leading provider of precision balls.
We operate eight North American and European manufacturing facilities.
Our two U. S. ball and roller production facilities are located in Tennessee and
our Euroball subsidiary operates three manufacturing facilities located in
Ireland, Germany and Italy. Our seal, retainer and other plastic products are
manufactured in three facilities located in Connecticut, Texas and Mexico.
Our principal executive offices are located at 2000 Waters Edge Drive,
Johnson City, Tennessee 37604 and our telephone number is (423) 743-9151. Our
Internet website address is www.nnbr.com. Information contained on our website
is not part of this prospectus.
8
Cautionary Statement Concerning Forward-Looking Statements
This prospectus includes and incorporates by reference "forward-looking
statements" as that term is defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are based on our current
expectations, estimates and projections about the industry and markets in which
we operate. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" and variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve risks,
uncertainties and assumptions, which are difficult to predict and many of which
are beyond our control, including those described in "Risk Factors" on pages 4
through 7 of this prospectus. Therefore, actual outcomes and results may differ
materially from what is expressed, forecasted or implied in such forward-looking
statements. We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise,
expect as required by applicable law.
9
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, we intend to use
the net cash proceeds from this offering to repay a portion of the borrowings
outstanding under the term loan portion of our existing credit facilities as
required under those arrangements. The term loan under our credit facility
expires on July 1, 2006 and bears interest at a floating rate equal to LIBOR
(1.38% at December 31, 2002) plus an applicable margin of 0.75% to 2.00% based
upon calculated financial ratios. Additionally, we may receive certain non-cash
manufacturing assets in connection with the potential asset acquisition from SKF
in Veenendaal, The Netherlands (as described in "Recent Developments beginning
on page 1) as proceeds from this offering, which we intend to use in our
business operations.
To the extent that the net cash proceeds of any offering pursuant to
this prospectus are not used to repay indebtedness under our credit facilities,
we anticipate that the proceeds will be used for general operational purposes,
which may include, but are not limited to, working capital, capital expenditures
and future acquisitions. In addition, the minority shareholder in Euroball, SKF,
has the right to require us to purchase its interest beginning January 2003
based on a formula price. The purchase price would be determined at the time SKF
exercises such right based on multiples of the annualized average monthly income
and average monthly EBITDA of Euroball, reduced by its short and long term
borrowings. Under this formula, which is set forth in detail in the Euroball
Shareholder Agreement, the purchase price increases as Euroball's annualized
average monthly income and average monthly EBITDA increase and decreases as its
short and long term borrowings increase. If SKF were to exercise that right, we
may use a portion of the shares in this offering to raise funds to purchase the
interest or we may issue shares of common stock directly as all or a portion of
the payment.
We will not receive any of the proceeds from sales of common stock by
the selling stockholders.
10
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of December 31, 2002, and as by the
stockholders who are selling shares of common stock in this offering, and as
adjusted to reflect the sale of shares offered in this prospectus. Unless
otherwise noted, to our knowledge each selling stockholder has sole voting and
investment power over the shares shown.
Shares Shares
Beneficially Owned Beneficially Owned
Prior to Offering Shares After Offering
------------------ Being ------------------------------
Number Percent (%)(1) Offered Number Percent (%)(1)
------------ -------------- --------- ----------- ----------------
Richard D. Ennen (2) 2,844,668(3) 18.5 2,844,668 -0- -0-
Michael D. Huff (4) 662,227(5) 2.8 662,227 -0- -0-
Janet M. Huff 225,000 1.5 225,000 -0- -0-
Monica C. Ennen 129,900(6) * 129,900 -0- -0-
Deborah E. Bagierek 96,869(7) * 96,869 -0- -0-
__________________________
* Amounts are less than one percent.
(1) Based on 15,369,807 shares of NN's common stock outstanding on December 31,
2002. The percentage of shares owned after the offering assumes that NN sells
3,830,000 shares pursuant to this prospectus.
(2) Mr. Ennen currently sits on the Company's Board of Directors and has since
the Company's formation in 1980. He was Chairman of the Board from the formation
of the Company until September of 2001.
(3) Includes 1,800,000 shares held by the Richard D. Ennen Charitable Remainder
Unitrust of which Mr. Ennen is the trustee and 200,000 shares held by the Ennen
Charitable Trust of which Mr. Ennen is the trustee. Mr. Ennen disclaims
beneficial ownership to the shares held by his former spouse, Monica Ennen, and
his daughter, Deborah E. Bagierek.
(4) Mr. Huff currently sits on the Company's Board of Directors and has since
the Company's formation in 1980.
(5) Includes (i) 23,000 shares subject to presently exercisable options, and
(ii) 225,000 shares held directly by Mr. Huff's spouse, for which Mr. Huff
disclaims beneficial ownership.
(6) All of Ms. Ennen's shares are held by the Monica Conway Ennen Trust, of
which Ms. Ennen is a trustee.
(7) All of Ms. Bagierek's shares are held by the Deborah Ennen Bagierek Trust,
of which Ms. Bagierek is a trustee.
11
PLAN OF DISTRIBUTION
Company Offering
We may offer and sell the shares being offered by this prospectus and
any accompanying prospectus supplement:
o Through agents;
o Through one or more underwriters or dealers;
o Through a block trade in which the broker or dealer engaged to
handle the block trade will attempt to sell the shares as agent,
but may position and resell a portion of the block as principal
to facilitate the transaction;
o Directly to one or more purchasers in exchange for cash or other
assets; or
o Through a combination of any of these methods of sale.
To the extent required, this prospectus may be amended and/or supplemented from
time to time to describe a specific plan of distribution.
Selling Stockholders Offering
The selling stockholders, separately or together, may offer and sell
their portion of the shares being offered by this prospectus and any
accompanying prospectus supplement only on the following terms and conditions:
1. No shares may be offered or sold by any selling stockholder prior
to March 31, 2003 unless the Company agrees otherwise.
2. Any shares offered or sold by any selling stockholder prior to
December 31, 2003 must be offered or sold through McDonald
Investments Inc. and Legg Mason Wood Walker Incorporated together
or with one or more underwriters or dealers.
3. Any sale by any selling stockholder must include a minimum of
500,000 shares in aggregate unless the Company agrees otherwise.
4. The Company must receive at least five business days prior
written notice of any proposed sale by any selling stockholder.
5. The Company may delay any sale by any selling stockholder for up
to 90 days by written notice to the selling stockholder.
6. In the event the Company and any selling stockholder participates
together in an offering under this prospectus, the Company will
have the right to choose to sell shares from its portion of this
offering in priority to sales by the selling stockholders.
12
The selling stockholders and any underwriters, dealers or agents that
the selling stockholders use to sell their shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended, and
any discount, commission or concession received by them and any profit on the
resale of shares as principal may be deemed to be underwriting discounts or
commissions under the Securities Act. Because the selling stockholders may be
deemed to be underwriters, the selling stockholders may be subject to the
prospectus delivery requirements of the Securities Act.
The selling stockholders may also transfer the common stock held by
them by gift or other non-sale related transfer, in which case the donees,
transferees or other successors-in-interest will be deemed to be selling
stockholders. The number of shares offered by a particular selling stockholder
under this prospectus will decrease as and when it takes any of the above
actions, although the aggregate number of shares offered by the selling
stockholders will remain unchanged. The plan of distribution for that selling
stockholder's shares will otherwise remain unchanged. In addition, any offered
shares by the selling stockholders covered by this prospectus that qualify for
sale pursuant to Rule 144 may be sold under Rule 144 under the Securities Act
rather than pursuant to this prospectus.
General Matters
We have agreed to pay the majority of the costs and expenses incurred
in connection with the registration under the Securities Act of the offered
shares, including:
o All registration and filing fees related to the company's portion
of the offering;
o Printing fees and expenses related to the company's portion of
the offering or to an offering including both Company shares and
shares owned by the selling stockholders; and
o Fees and disbursements of counsel, accountants and underwriters
for us.
The selling stockholders will pay:
o All registration and filing fees related to their portion of an
offering;
o Printing fees and expenses related to any offering exclusively of
their shares;
o Any underwriting discounts and commissions with respect to the
shares of common stock they sell hereunder;
o Fees and disbursements of any counsel retained by the selling
stockholders; and
o Transfer taxes, if any.
The distribution of the common stock may be effected from time to time
in one or more transactions:
o At a fixed price or prices, which may be changed;
13
o At market prices prevailing at the time of sale;
o At prices related to the market prices prevailing at the time of
sale; or
o At negotiated prices.
Offers to purchase the common stock may be solicited by agents
designated by us from time to time. Any agent involved in the offer or sale of
the common stock will be named, and any commissions payable by us to the agent
will be described, in the applicable prospectus supplement. Any agent may be
deemed to be an underwriter, as such term is defined in the Securities Act of
1933, of the common stock so offered and sold.
If we and/or any selling stockholders offer and sell common stock
through an underwriter or underwriters, we and/or the selling stockholders will
execute an underwriting agreement with the underwriter or underwriters at the
time the common stock is sold to them. The names of the specific managing
underwriter or underwriters, as well as any other underwriters, and the terms of
the transactions, including compensation of the underwriters and dealers, which
may be in the form of discounts, concessions or commissions, if any, will be
described in the applicable prospectus supplement, which will be used by the
underwriters to make resales of the common stock. That prospectus supplement and
this prospectus will be used by the underwriters to make resales of the common
stock. If underwriters are used in the sale of any common stock in connection
with this prospectus, the common stock will be acquired by the underwriters for
their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at fixed public offering prices
or at varying prices determined by the underwriters and us at the time of sale.
Common stock may be offered to the public either through underwriting syndicates
represented by managing underwriters or directly by one or more underwriters. If
any underwriter or underwriters are used in the sale of common stock, unless
otherwise indicated in a related prospectus supplement, the underwriting
agreement will provide that the obligations of the underwriters are subject to
some conditions precedent and that with respect to a sale of the common stock
the underwriters will be obligated to purchase all such common stock if any are
purchased.
If any underwriters are involved in the offer and sale, they will be
permitted to engage in transactions that maintain or otherwise affect the price
of the common stock. These transactions may include over-allotment transactions,
purchases to cover short positions created by the underwriter in connection with
the offering and the imposition of penalty bids. If an underwriter creates a
short position in the common stock in connection with the offering, i.e., if it
sells more common stock than set forth on the cover page of the applicable
prospectus supplement, the underwriter may reduce that short position by
purchasing the common stock in the open market. In general, purchases of common
stock to reduce a short position could cause the price of the common stock to be
higher than it might be in the absence of such purchases. As noted above,
underwriters may also choose to impose penalty bids on other underwriters and/or
selling group members. This means that if underwriters purchase common stock on
the open market to reduce their short position or to stabilize the price of the
common stock, they may reclaim the amount of the selling concession from those
underwriters and/or selling group members who sold such common stock as part of
the offering.
14
Neither we nor any underwriter make any representation or prediction
as to the direction or magnitude of any effect that the transactions described
above may have on the price of the common stock. In addition, neither we nor any
underwriter make any representation that such underwriter will engage in such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
If we and/or the selling stockholders offer and sell common stock
through a dealer, we, the selling stockholders or an underwriter will sell the
common stock to the dealer, as principal. The dealer may then resell the common
stock to the public at varying prices to be determined by the dealer at the time
of resale. Any such dealer may be deemed to be an underwriter, as such term is
defined in the Securities Act of 1933, of the common stock so offered and sold.
The name of the dealer and the terms of the transactions will be set forth in
the applicable prospectus supplement.
We and/or the selling stockholders may solicit offers to purchase the
common stock directly and we and/or the selling stockholders may sell the common
stock directly to institutional or other investors, who may be deemed an
underwriter within the meaning of the Securities Act of 1933 with respect to any
resales of the common stock. The terms of these sales will be described in the
applicable prospectus supplement.
We and/or the selling stockholders may enter into agreements with
agents, underwriters and dealers under which we and/or the selling stockholders
may agree to indemnify the agents, underwriters and dealers against certain
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments they may be required to make with respect to these
liabilities. The terms and conditions of this indemnification or contribution
will be described in the applicable prospectus supplement. Some of the agents,
underwriters or dealers, or their affiliates may be customers of, engage in
transactions with or perform services for us and/or the selling stockholders in
the ordinary course of business.
We and/or the selling stockholders may authorize our respective agents,
dealers or underwriters to solicit offers to purchase common stock at the public
offering price under delayed delivery contracts. The terms of these delayed
delivery contracts, including when payment for and delivery of the common stock
sold will be made under the contracts and any conditions to each party's
performance set forth in the contracts, will be described in the applicable
prospectus supplement. The compensation received by underwriters or agents
soliciting purchases of common stock under delayed delivery contracts will also
be described in the applicable prospectus supplement.
15
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for
us by Blackwell Sanders Peper Martin LLP, Two Pershing Square, 2300 Main Street,
Suite 1000, Kansas City, Missouri 64108.
EXPERTS
Our consolidated financial statements as of December 31, 2001 and 2000,
and for each of the years in the two-year period ended December 31, 2001, have
been incorporated by reference in this prospectus and the registration statement
on Form S-3 in reliance upon the report of KPMG LLP, independent accountants
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing. The audit report covering the December 31, 2001
financial statements refers to a change in the Company's method of accounting
for derivative instruments and hedging activities.
Our consolidated financial statements as of December 31, 1999 and for
the year then ended have been incorporated in this registration statement by
reference to the Annual Report on Form 10-K for the year ended December 31,
2001, and have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any of these materials at
the SEC's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. Our SEC filings, including the registration
statement, will also be available to you on the SEC's website. The address of
this website is http://www.sec.gov.
We have filed a registration statement on Form S-3 with the SEC to
register shares of our common stock. This prospectus is part of that
registration statement and, as permitted by the SEC's rules, does not contain
all of the information included in the registration statement. For further
information about us and this offering, you may refer to the registration
statement and its exhibits. You can review and copy the registration statement
and its exhibits at the public reference rooms maintained by the SEC or on the
SEC's website described above.
This prospectus may contain summaries of contracts or other documents.
Because they are summaries, they will not contain all of the information that
may be important to you. If you would like complete information about a contract
or other document, you should read the copy filed as an exhibit to the
registration statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference is
considered to be a part of this prospectus, and information that we file with
the SEC at a later date will automatically update or
16
supersede this information. We incorporate by reference the following documents
as well as any future filing we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
o Our Annual Report on Form 10-K for the year ended December 31,
2001, as amended by Form 10-K/A;
o Our Quarterly Reports on Form 10-Q for the quarters ended March
31, 2002, June 30, 2002 and September 30, 2002;
o Our Current Reports on Form 8-K filed with the SEC on June 7,
2002, July 18, 2002, August 6, 2002, September 27, 2002, November
1, 2002, November 5, 2002, December 9, 2002 and December 20,
2002;
o The description of our common stock contained in the amended
registration statement on Form 8-A/A filed with the SEC on
November 22, 2002.
You may request a copy of these filings, at no cost, by written or
telephone request to:
NN, Inc.
Attn: Corporate Secretary
2000 Waters Edge Drive
Johnson City, Tennessee 37604
(423) 743-9151
This prospectus may contain information that updates, modifies or is contrary to
information in one or more of the documents incorporated by reference in this
prospectus. Reports we file with the SEC after the date of this prospectus may
also contain information that updates, modifies or is contrary to information in
this prospectus or in documents incorporated by reference in this prospectus.
Investors should review these reports as they may disclose a change in our
business, prospects, financial condition or other affairs after the date of this
prospectus.
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