UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number 0-23486
NN Ball & Roller, Inc.
(Exact name of registrant as specified in its charter)
Delaware 62-1096725
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
800 Tennessee Road
Erwin, Tennessee 37650
(Address of principal executive offices, including zip code)
(423) 743-9151
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- ---------
As of August 11, 1997 there were 14,901,646 shares of the registrant's common
stock, par value $0.01 per share, outstanding.
NN Ball & Roller, Inc.
INDEX
Page No
---------
Part I. Financial Information
Item 1. Financial Statements:
Condensed Statements of Income for the three and six months ended June 30, 1997 and 1996....... 2
Condensed Balance Sheets at June 30, 1997 and December 31, 1996................................ 3
Condensed Statements of Changes in Stockholders' Equity for the six months ended June 30, 1997
and 1996.................................................................................... 4
Condensed Statements of Cash Flows for the six months ended June 30, 1997 and 1996............. 5
Notes to Condensed Financial Statements........................................................ 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......... 7
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders............................................... 11
Item 5. Other Information................................................................................. 11
Item 6. Exhibits and Reports on Form 8-K.................................................................. 11
Signatures................................................................................................ 12
Index To Exhibits......................................................................................... 13
PART I. FINANCIAL INFORMATION
NN Ball & Roller, Inc.
Condensed Statements of Income
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- --------------------------
THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA 1997 1996 1997 1996
- --------------------------------------------------------- ------------ ------------ ------------ ------------
Net sales................................................ $ 20,964 $ 22,834 $ 41,283 $ 48,919
Cost of goods sold....................................... 14,307 15,363 28,145 32,931
------------ ------------ ------------ ------------
Gross profit............................................ 6,657 7,471 13,138 15,988
Selling, general and administrative...................... 1,227 1,155 2,532 2,265
Depreciation............................................. 1,052 852 2,104 1,704
------------ ------------ ------------ ------------
Income from operations................................... 4,378 5,464 8,502 12,019
Interest expense......................................... -- 107 19 187
------------ ------------ ------------ ------------
Income before provision for income taxes................. 4,378 5,357 8,483 11,832
Provision for income taxes............................... 1,646 1,877 3,112 4,080
------------ ------------ ------------ ------------
Net income............................................. $ 2,732 $ 3,480 $ 5,371 $ 7,752
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net income per common share (Note 2):................... $ 0.19 $ 0.23 $ 0.37 $ 0.51
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted average number of shares outstanding (Note 2)... 14,712,555 15,130,771 14,712,975 15,116,540
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
See accompanying notes.
2
NN Ball & Roller, Inc.
Condensed Balance Sheets
JUNE 30, DECEMBER 31,
THOUSANDS OF DOLLARS 1997 1996
- --------------------------------------------------------------------- ----------- ------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents.......................................... $ 2,762 $ --
Accounts receivable, net........................................... 14,004 15,754
Inventories, net (Note 2).......................................... 10,553 10,408
Other current assets............................................... 754 565
----------- ------------
Total current assets............................................. 28,073 26,727
Property, plant and equipment, net.................................. 32,722 32,419
Other............................................................... 102 146
----------- ------------
Total assets..................................................... $ 60,897 $ 59,292
----------- ------------
----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................... $ 5,148 $ 4,054
Revolving credit facility.......................................... -- 2,308
Accrued vacation expense........................................... 495 370
Income taxes payable............................................... 716 96
Other current liabilities.......................................... 1,577 1,546
----------- -----------
Total current liabilities........................................ 7,936 8,374
Deferred income taxes............................................... 2,208 2,208
----------- ------------
Total liabilities................................................ 10,144 10,582
Total stockholders' equity....................................... 50,753 48,710
----------- ------------
Total liabilities and stockholders' equity....................... $ 60,897 $ 59,292
----------- ------------
----------- ------------
See accompanying notes.
3
NN Ball & Roller, Inc.
Condensed Statements of Changes in Stockholders' Equity
(Unaudited)
COMMON STOCK
---------------------- ADDITIONAL RETAINED
NUMBER PAR PAID-IN EARNINGS
THOUSANDS OF DOLLARS, EXCEPT SHARE DATA OF SHARES VALUE CAPITAL (DEFICIT) TOTAL
- ------------------------------------------------------------- ----------- --------- ----------- --------- ---------
Balance, January 1, 1996..................................... 14,473 $ 144 $ 25,289 $ 13,785 $ 39,218
Net income.................................................. 7,752 7,752
Dividends................................................... (2,327) (2,327)
Stock options exercised..................................... 156 2 1,694 -- 1,696
----------- --------- ----------- --------- ---------
Balance, June 30, 1996....................................... 14,629 $ 146 $ 26,983 $ 19,210 $ 46,339
----------- --------- ----------- --------- ---------
----------- --------- ----------- --------- ---------
Balance, January 1, 1997..................................... 14,629 $ 146 $ 26,983 $ 21,581 $ 48,710
Net income.................................................. 5,371 5,371
Dividends.................................................... (2,329) (2,329)
Stock repurchased........................................... (86) -- (999) -- (999)
----------- --------- ----------- --------- ---------
Balance, June 30, 1997....................................... 14,543 $ 146 $ 25,984 $ 24,623 $ 50,753
----------- --------- ----------- --------- ---------
----------- --------- ----------- --------- ---------
See accompanying notes.
4
NN Ball & Roller, Inc.
Condensed Statements of Cash Flows
(Unaudited)
SIX MONTHS ENDED
JUNE 30,
--------------------
THOUSANDS OF DOLLARS 1997 1996
- ----------------------------------------------------------------------------------------------- --------- ---------
OPERATING ACTIVITIES:
Net income.................................................................................... $ 5,371 $ 7,752
Adjustments to reconcile net income:
Depreciation................................................................................. 2,104 1,704
Changes in operating assets and liabilities:
Accounts receivable......................................................................... 1,750 (2,622)
Inventories................................................................................. (145) (791)
Taxes Refundable/Payable.................................................................... 620 (984)
Other current assets........................................................................ (189) (143)
Accounts payable............................................................................ 1,094 (2,512)
Other liabilities........................................................................... 156 769
--------- ---------
Net cash provided by operating activities.................................................. 10,761 3,173
--------- ---------
INVESTING ACTIVITIES:
Acquisition of plant, property, and equipment.................................................. (2,407) (6,574)
Other assets................................................................................... 44 9
--------- ---------
Net cash used by investing activities...................................................... (2,363) (6,565)
--------- ---------
FINANCING ACTIVITIES:
Proceeds (Payments) under revolving credit facility............................................ (2,308) 4,023
Dividends...................................................................................... (2,329) (2,327)
Stock options exercised........................................................................ -- 1,696
Stock repurchased.............................................................................. (999) --
--------- ---------
Net cash (used) provided by financing activities........................................... (5,636) 3,392
--------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS........................................................ 2,762 --
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............................................... -- --
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD..................................................... $ 2,762 $ --
--------- ---------
--------- ---------
See accompanying notes.
5
NN BALL & ROLLER, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed financial statements of NN Ball & Roller, Inc.
have not been audited by independent accountants, except for the balance
sheet at December 31, 1996. In the opinion of the Company's management, the
financial statements reflect all adjustments necessary to present fairly the
results of operations for the three and six month periods ended June 30, 1997
and 1996, the Company's financial position at June 30, 1997 and December 31,
1996, and the cash flows for the six month periods ended June 30, 1997 and
1996. These adjustments are of a normal recurring nature and are, in the
opinion of management, necessary for fair presentation of the financial
position and operating results for the interim periods.
In February 1997, the FASB issued Statement No. 128 "Earnings Per Share"
(FAS 128), which requires the computation and presentation of earnings per
share (EPS) for entities with publicly held common stock or potential common
stock. FAS 128 requires (a) presentation of basic and diluted EPS, if
applicable, on the face of the income statement and (b) reconciliation of the
numerator and denominator for each basic EPS computation and the numerator
and denominator of each diluted EPS computation. FAS 128 is effective for
financial statements for both interim and annual periods ending after
December 15, 1997. The Company will adopt FAS 128 in the fourth quarter of
1997. Had FAS 128 been effective for the second quarter of 1997, basic and
diluted EPS would have been $0.19 for the three months ended June 30, 1996,
and $0.24 and $0.23, respectively for the three months ended June 30, 1996.
For the six months ended June 30, 1997 and the six months ended June 30,
1996, basic and diluted EPS would have been $0.37, $0.37 and $0.53 and $0.51
respectively.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted from the interim
financial statements presented in this Quarterly Report on Form 10-Q.
The results for the first and second quarters of 1997 are not necessarily
indicative of future results.
NOTE 2. INVENTORIES
Inventories are stated at the lower of cost or market, with cost being
determined by the first-in, first-out method.
Inventories are comprised of the following (in thousands):
JUNE 30, DECEMBER 31,
1997 1996
----------- ------------
(UNAUDITED)
Raw materials..................... $ 1,191 $ 1,452
Work in process................... 2,859 2,586
Finished goods.................... 6,563 6,430
----------- ------------
10,613 10,468
Less--Reserve for excess and
obsolete inventory............... 60 60
----------- -------------
$ 10,553 $ 10,408
----------- ------------
----------- ------------
6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1996
NET SALES. Net sales decreased by approximately $1.9 million, or 8.2%, from
$22.8 million for the second quarter of 1996 to $20.9 million for the second
quarter of 1997. Foreign sales decreased $1.3 million, or 11.7%, from $11.1
million in the second quarter of 1996 to $9.8 million during the second quarter
of 1997. The decrease in foreign sales was due primarily to a slowing in the
overall rate of outsourcing captive production (including, as previously
announced by the Company, one of the Company's major customers bringing in house
a portion of their business that was previously outsourced to the Company) and
general economic conditions in Europe. Domestic sales decreased $661,000, or
5.6%, from $11.7 million in the second quarter of 1996 to $11.1 million in the
second quarter of 1997. This decrease was due primarily to decreased sales to an
existing customer.
GROSS PROFIT. Gross profit decreased $814,000, or 10.9%, from $7.5 million
for the second quarter of 1996 to $6.7 million for the second quarter of 1997.
As a percentage of net sales, gross profit decreased from 32.7% in the second
quarter of 1996 to 31.8% for the same period in 1997. This decrease in gross
profit as a percentage of net sales was due primarily to decreased levels of
volume during the second quarter of 1997 as compared to the second quarter of
1996 and related capacity under-utilization.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased by $72,000 or 6.2%, from $1.2 million in the second quarter
of 1996 to $1.2 million in the second quarter of 1997. This increase was due
primarily to increased foreign travel and increased legal and accounting
expenses related to the new manufacturing facility in Ireland and the Company's
acquisition efforts. As a percentage of net sales, selling, general and
administrative expenses increased from 5.1% for the second quarter of 1996 to
5.8% for the same period in 1997.
DEPRECIATION. Depreciation expense increased from $852,000 for the second
quarter of 1996 to $1.1 million for the same period in 1997. This increase was
due primarily to a full year of depreciation to be taken on the assets related
to the new Mountain City, Tennessee facility in 1997 as compared to one-half
year depreciation taken in 1996. As a percentage of net sales, depreciation
expense increased from 3.7% in the second quarter of 1996 to 5.0% in the second
quarter of 1997.
NET INCOME. Net income decreased by $748,000 or 21.5%, from $3.5 million
for the second quarter of 1996 to $2.7 million for the same period in 1997. As a
percentage of net sales, net income decreased from 15.2% in the second quarter
of 1996 to 13.0% for the second quarter of 1997. This decrease in net income as
a percentage of net sales was due primarily to the factors discussed above as
well as an increase in the Company's effective tax rate.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
1996
NET SALES. Net sales decreased by approximately $7.6 million, or 15.6%,
from $48.9 million for the first six months of 1996 to $41.3 million for the
same period in 1997. Foreign sales decreased $6.5 million, or 24.9%, from $26.1
million in the first six months of 1996 to $19.6 million during the same period
of 1997. This decrease was due primarily to a slowing in the overall rate of
outsourcing of captive production by the Company's customers (including, as
previously announced by the Company, one of the Company's major customers
bringing in house a portion of their business that was previously outsourced to
the Company) and economic conditions in Europe. Domestic sales decreased $1.1
million, or 4.8%, from $22.8 million in
7
the first six months of 1996 to $21.7 million in the same period of
1997. This decrease was due primarily to decreased sales volumes with
existing customers.
GROSS PROFIT. Gross profit decreased $2.9 million, or 17.8%, from $16.0
million for the first six months of 1996 to $13.1 million for the same period of
1997. As a percentage of net sales, gross profit decreased from 32.7% in the
first six months of 1996 to 31.8% in the same period of 1997. This decrease in
gross profit as a percentage of net sales was due primarily to decreased levels
of volume during the first half of 1997 as compared to the first half of 1996
and related capacity under-utilization.
Selling, General and Administrative. Selling, general and administrative
expenses increased by $267,000, or 11.8%, from $2.3 million in the first six
months of 1996 to $2.5 million in the same period of 1997. This increase was due
primarily to increased foreign travel and increased legal and accounting
expenses related to the new manufacturing facility in Ireland and the Company's
acquisition efforts. As a percentage of net sales, selling, general and
administrative expenses increased from 4.6% in the first six months of 1996 to
6.1% for the same period in 1997.
DEPRECIATION. Depreciation expense increased from $1.7 million for the
first six months of 1996 to $2.1 million for the same period in 1997. This
increase was due primarily to a full year depreciation to be taken on the assets
related to the new Mountain City, Tennessee facility in 1997 as compared to
one-half year depreciation taken in 1996. As a percentage of net sales,
depreciation expense increased from 3.5% for the first six months of 1996 to
5.1% for the same period in 1997.
NET INCOME. Net income decreased by $2.4 million, or 30.7%, from $7.8
million for the first six months of 1996 to $5.4 million for the same period for
1997. As a percentage of net sales, net income decreased from 15.8% for the
first six months of 1996 to 13.0% for the same period for 1997. This decrease in
net income as a percentage of net sales was due primarily to the factors
discussed above as well as an increase in the Company's effective tax rate.
LIQUIDITY AND CAPITAL RESOURCES
In July 1997, the Company terminated its $10.0 million revolving credit
facility and entered into a loan agreement with First American National Bank
("First American"). This loan agreement provides for a revolving credit facility
of up to $25 million, which will expire on June 30, 2000.
Amounts outstanding under the revolving facility are unsecured and bear
interest at a floating rate equal to, at the Company's option, either LIBOR plus
0.65% or the Fed Funds effective rate plus 1.5%. The loan agreement contains
customary financial and operating restrictions on the Company, including
covenants restricting the Company, without First American's consent, from
incurring additional indebtedness from, or pledging any of its assets to, other
lenders and from disposing of a substantial portion of its assets. In addition,
the Company is prohibited from declaring any dividend if a default exists under
the revolving credit facility at the time of, or would occur as a result of,
such declaration. The loan agreement also contains customary financial covenants
with respect to the Company, including a covenant that the Company's earnings
will not decrease in any year by more than fifty percent of earnings in the
Company's immediately preceding fiscal year. The Company is in compliance with
all such covenants.
The Company's arrangements with its domestic customers typically provide
that payments are due within 30 days following the date of the Company's
shipment of goods, while arrangements with foreign customers (other than foreign
customers that have entered into an inventory management program with
the Company) generally provide that payments are due within either 90 or 120
days following the date of shipment. Under the Company's inventory management
program, payments typically are due within 30 days after the product is used by
the customer. Due to the continuing expansion of the Company's foreign sales,
management believes that the Company's working capital requirements will
increase as a result of longer payment terms provided to foreign customers. The
Company's net sales historically have not been
8
of a seasonal nature. However, as foreign sales have increased as a
percentage of total sales, seasonality has become a factor for the Company in
that many foreign customers cease production during the month of August.
Currently, all foreign sales are billed and paid for in United States
dollars. To date, the Company has not been materially adversely affected by
currency fluctuations or foreign exchange restrictions, although a strengthening
of the US dollar against foreign currencies could impair the ability of the
Company to compete with international based competitors for foreign as well as
domestic sales. As the Company's international operations continue to grow,
foreign exchange risk may increase, and the Company may be required to develop
and implement additional strategies to manage this risk.
Working capital, which consists principally of cash and cash equivalents,
accounts receivable and inventories was $20.1 million at June 30, 1997 as
compared to $18.4 million at December 31, 1996. The ratio of current assets to
current liabilities increased slightly to 3.5:1 at June 30, 1997 from 3.2:1 at
December 31, 1996. Cash flow from operations increased from $3.2 million during
the first half 1996 to $10.8 million during the first half of 1997. This
increase was primarily attributed to the decrease in accounts receivable of $1.7
million and an increases in accounts payable and taxes payable of $1.1 million
and $620,000 respectively.
During 1997, the Company plans to spend approximately $10.0 million on
capital expenditures (of which $2.4 million has been spent through June 30,
1997) including the purchase and further renovation of a manufacturing facility
in Kilkenny, Ireland, as well as the purchase of additional machinery and
equipment for all four of the Company's facilities. Approximately $5.0 million
is anticipated to be spent during 1997 on the purchase, renovation and
installation of new equipment for the Ireland facility. Production is
anticipated to begin at this facility late in the third quarter of 1997. The
Company intends to finance these activities with cash generated from operations
and funds available under the credit facility described above. The Company
believes that funds generated from operations and borrowings from the credit
facility will be sufficient to finance the Company's working capital needs and
projected capital expenditure requirements through December 1997.
CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The Company wishes to caution readers that this report contains, and future
filings by the Company, press releases and oral statements made by the Company's
authorized representatives may contain, forward looking statements that involve
certain risks and uncertainties. The Company's actual results could differ
materially from those expressed in such forward looking statements due to
important factors bearing on the Company's business, many of which already have
been discussed in this filling and in the Company's prior fillings.
The following paragraphs discuss the risk factors the Company regards as the
most significant, although the Company wishes to caution that other factors that
are currently not considered significant or that currently cannot be foreseen
may in the future prove to be important in affecting the Company's
results of operations. The Company undertakes no obligation to publicly update
or revise any forward looking statements, whether as a result of new
information, future events or otherwise.
INDUSTRY RISKS. The precision ball and roller industry is cyclical and
tends to decline in response to overall declines in industrial production. The
Company's sales in the past have been negatively affected, and in the future
very likely would be negatively affected, by adverse conditions in the
industrial production sector of the economy or by adverse global or national
economic conditions generally.
9
COMPETITION. The precision ball and roller market is highly competitive,
and many of the ball and roller manufacturers in the market are larger and have
substantially greater resources than the Company. The Company's competitors are
continuously exploring and implementing improvements in technology and
manufacturing processes in order to improve product quality, and the Company's
ability to remain competitive will depend, among other things, on whether it is
able, in a cost effective manner, to keep apace with such quality improvements.
In addition, the Company competes with many of its customers that, in addition
to producing bearings, also internally produce balls and rollers for sale to
third parties. The Company also faces a risk that its customers will decide to
produce balls and rollers internally rather than outsourcing their needs to the
Company.
RAPID GROWTH. The Company has significantly expanded its production
facilities and capacity over the last several years, and is currently in the
process of purchasing and renovating an additional manufacturing plant in
Kilkenny, Ireland. The Company currently is not operating at full capacity and
faces risks of further under-utilization or inefficient utilization of its
production facilities in future years. The Company also faces risks associated
with start-up expenses, inefficiencies , delays and increased depreciation costs
associated with its plant expansions.
RAW MATERIAL SHORTAGES. Because the balls and rollers manufactured by the
Company have highly-specialized applications, their production requires the use
of very particular types of steel. Due to quality constraints, the Company
obtains the majority of its steel from overseas suppliers. Steel shortages or
transportation problems, particularly with respect to 52100 Steel, could have a
detrimental effect on the Company's business.
RISKS ASSOCIATED WITH INTERNATIONAL TRADE. Because the Company obtains a
majority of its raw materials from overseas suppliers and sells to a large
number of international customers, the Company faces risks associated with (i)
adverse foreign currency fluctuations, (ii) changes in trade, monetary and
fiscal policies, laws and regulations, and other activities of governments,
agencies and similar organizations, (iii) the imposition of trade restrictions
or prohibitions, (iv) the imposition of import or other changes or taxes, and
(v) unstable governments or legal systems in countries in which the Company's
suppliers and customers are located. Currently, all foreign sales are billed and
paid for in United States dollars. An increase in the value of the United States
dollar relative to foreign currencies may adversely affect the ability of the
Company to compete with its foreign-based competitors for international as well
as domestic sales.
DEPENDENCE ON MAJOR CUSTOMERS. During 1996, the Company's ten largest
customers accounted for approximately 78% of its net sales. Sales to various US
and foreign divisions of SKF, which is one of the largest bearing manufacturers
in the world, accounted for approximately 37% of net sales in 1996, and sales to
FAG accounted for approximately 10% of net sales. The Company currently
negotiates and contracts with various purchasing units within SKF and believes
that, in certain respects, such units operate independently with respect to
purchasing decisions. There can be no assurance, however, that SKF will not
centralize purchasing decisions in the future. None of the Company's other
customers accounted for more than 10% of its net sales in 1996, but sales to
three of its customers each represented more than 5% of the Company's 1996 net
sales. The loss of all or a substantial portion of sales to these customers
would have a material adverse effect on the Company's business.
10
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company's Annual Meeting of Stockholders was held on May 1, 1997. As of
March 20, 1997, the record date for the meeting, there were 14,543,242 shares of
common stock outstanding and entitled to vote at the meeting. There were present
at said meeting, in person or by proxy, stockholders holding 12,140,545 shares
of common stock, constituting approximately 83% of the shares of common stock
outstanding and entitled to vote, which constituted a quorum.
The first matter voted upon at the meeting was the election of Richard D.
Ennen and Roderick R. Baty as Class III Directors to serve for three year terms.
The results of the voting in connection with such elections were as follows:
FOR WITHHELD
------------ -------------
Richard D. Ennen............................................... 12,062,844 77,701
Roderick R. Baty............................................... 12,062,844 77,701
Accordingly, all nominees were elected to serve until the 2000 Annual
Meeting of Stockholders and until their successors are duly elected and
qualified. In addition to the foregoing directors, Deborah Ennen Bagierek,
Michael D. Huff and Michael E. Werner are serving terms of office as directors
which are to expire at the 1998 Annual Meeting of Stockholders, and G. Ronald
Morris is serving a term to expire at the 1999 Annual Meeting of Stockholders.
James J. Mitchell resigned from his positions as Chief Operating Officer,
President and a director of the Company effective July 28, 1997. On such date,
Mr. Baty, the Company's Vice President and Chief Financial Officer, was promoted
to the positions of President and Chief Executive Officer. In connection with
this promotion, Mr. Ennen, the Company's founder, resigned as Chief Executive
Officer, but continues in his position as Chairman of the Company's Board of
Directors.
The second matter voted upon at the 1997 Annual Meeting of Stockholders was
the ratification of Price Waterhouse, LLP as independent public accountants to
audit the Company's accounts for the fiscal year ending December 31, 1997. The
vote was 12,133,019 For and 1,520 Against, and there were 6,006 Abstentions.
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits Required by Item 601 of Regulation S-K
10.13 Loan Agreement, dated as of July 25, 1997, between the Company
and First American National Bank (filed herewith)
27 Financial Data Schedules (for information of SEC only)
(b) No reports on Form 8-K were filed during the quarter ending June 30,
1997.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NN Ball & Roller, Inc.
--------------------------
(Registrant)
Date: August 11, 1997 /s/ Roderick R. Baty
------------------ ---------------------------
Roderick R. Baty,
President and Chief Executive
Officer
(Duly Authorized Officer)
Date: August 11, 1997 /s/ William C. Kelly, Jr.
------------------- -----------------------------
William C. Kelly, Jr.,
Treasurer, Assistant Secretary and
Chief Accounting Officer
(Principal Financial and Accounting Officer)
(Duly Authorized Officer)
12
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ----------- ----------------------------------------------------------
10.13 Loan Agreement, dated as of July 25, 1997, between the Company
and First American National Bank (filed herewith)
27 Financial Data Schedules (for information of SEC only)
13