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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 SEPTEMBER 30, 1997
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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 November 12, 1997 there were 14,804,271 shares of the registrant's common
stock, par value $0.01 per share, outstanding.
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NN BALL & ROLLER, INC.
INDEX
Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Statements of Income for the three and nine months
ended September 30, 1997 and 1996 2
Condensed Balance Sheets at September 30, 1997 and December 31, 1996 3
Condensed Statements of Changes in Stockholders' Equity
for the nine months ended September 30, 1997 and 1996 4
Condensed Statements of Cash Flows for the nine months
ended September 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 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Index to Exhibits 15
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PART I. FINANCIAL INFORMATION
NN BALL & ROLLER, INC.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA 1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------
Net sales $ 17,231 $ 16,558 $ 58,514 $ 65,477
Cost of goods sold 12,386 10,828 40,531 43,759
------------- ------------ ------------- ------------
Gross profit 4,845 5,730 17,983 21,718
Selling, general and administrative 1,519 1,263 4,051 3,527
Depreciation 1,060 826 3,164 2,530
------------- ------------ ------------- ------------
Income from operations 2,266 3,641 10,768 15,661
Interest expense 2 87 21 274
------------- ------------ ------------- ------------
Income before provision for income taxes 2,264 3,554 10,747 15,387
Provision for income taxes 965 1,359 4,077 5,440
============= ============ ============= ============
Net income $ 1,299 $ 2,195 $ 6,670 $ 9,947
============= ============ ============= ============
Net income per common share: $ 0.09 $ 0.15 $ 0.45 $ 0.66
============= ============ ============= ============
Weighted average number of
shares outstanding 14,811,381 14,961,082 14,805,067 15,072,547
============= ============ ============= ============
SEE ACCOMPANYING NOTES.
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NN BALL & ROLLER, INC.
CONDENSED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
1997 1996
THOUSANDS OF DOLLARS (UNAUDITED)
- --------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equilvalents $ 1,875 $ --
Accounts receivable, net 12,362 15,754
Inventories, net (Note 2) 10,788 10,408
Income taxes refundable 329 --
Other current assets 1,220 565
------------ ------------
Total current assets 26,574 26,727
Property, plant and equipment, net 36,143 32,419
Other 102 146
============ ============
Total assets $ 62,819 $ 59,292
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,920 $ 4,054
Revolving credit facility -- 2,308
Accrued vacation expense 474 370
Income taxes payable -- 96
Other current liabilities 2,600 1,546
------------ ------------
Total current liabilities 7,994 8,374
Deferred income taxes 2,208 2,208
------------ ------------
Total liabilities 10,202 10,582
Total stockholders' equity 52,617 48,710
------------ ------------
Total liabilities and stockholders' equity $ 62,819 $ 59,292
============ ============
SEE ACCOMPANYING NOTES.
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NN BALL & ROLLER, INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
COMMON STOCK ADDITIONAL RETAINED FOREIGN
NUMBER PAR PAID IN EARNINGS CURRENCY
THOUSANDS OF DOLLARS OF SHARES VALUE CAPITAL (DEFICIT) TRANSLATION TOTAL
- -------------------------------------------------------------------------------------------------------------------
Balance, January 1, 1996 14,473 $ 144 $ 25,289 $ 13,785 $ - $ 39,218
Net income 9,947 9,947
Dividends (3,497) (3,497)
Stock options exercised (Note 3) 156 2 1,694 1,696
======== ======= ========= ========== ====== ==========
Balance, September 30, 1996 14,629 $ 146 $ 26,983 $ 20,235 $ - $ 47,364
======== ======= ========= ========== ====== ==========
Balance, January 1, 1997 14,629 $ 146 $ 26,983 $ 21,581 $ - $ 48,710
Net income 6,670 6,670
Dividends (3,520) (3,520)
Stock options exercised (Note 3) 361 4 2,918 2,922
Stock repurchased (186) (1) (2,123) (2,124)
Cummulative currency translation (41) (41)
-------- ------- --------- ---------- ====== ----------
Balance, September 30, 1997 14,804 $ 149 $ 27,778 $ 24,731 $ (41) $ 52,617
======== ======= ========= ========== ====== ==========
SEE ACCOMPANYING NOTES.
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NN BALL & ROLLER, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
THOUSANDS OF DOLLARS 1997 1996
- ----------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income $ 6,670 $ 9,947
Adjustments to reconcile net income:
Depreciation 3,164 2,530
Changes in operating assets and liabilities:
Accounts receivable 3,392 2,250
Inventories (380) (1,420)
Income taxes (425) (196)
Other current assets (655) (376)
Accounts payable 866 (4,284)
Other liabilities 1,158 1,210
---------- ---------
Net cash provided by operating activities 13,790 9,661
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INVESTING ACTIVITIES:
Acquisition of plant, property, and equipment (6,888) (7,522)
Other assets 44 10
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Net cash used by investing activities (6,844) (7,512)
---------- ---------
FINANCING ACTIVITIES:
Payments under revolving credit facility (2,308) (348)
Dividends (3,520) (3,497)
Stock options exercised (Note 3) 2,922 1,696
Stock repurchased (2,124) --
Cummulative effect of currency translation (41) --
---------- ---------
Net cash (used) provided by financing activities (5,071) (2,149)
---------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,875 --
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -- --
=========== =========
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,875 $ --
=========== =========
SEE ACCOMPANYING NOTES.
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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 nine month periods ended September 30, 1997 and
1996, the Company's financial position at September 30, 1997 and December 31,
1996, and the cash flows for the nine month periods ended September 30, 1997
and 1996. These adjustments, except for the adjustments described below in Note
2, 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 third quarter of 1997, basic and diluted EPS would have been $0.09 for
the three months ended September 30, 1997, and $0.15 for the three months ended
September 30, 1996. Basic and diluted EPS would have been $0.45 for the nine
months ended September 30, 1997 and $0.68 and $0.66 respectively, for the nine
months ended September 1996.
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 three 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):
SEPTEMBER 30, DECEMBER 31,
1997 1996
(UNAUDITED)
------------- --------------
Raw materials $ 1,360 $ 1,452
Work in process 2,308 2,586
Finished goods 7,180 6,430
------------ -------------
10,848 10,468
Less - Reserve for excess and obsolete inventory 60 60
============ =============
$ 10,788 $ 10,408
============ =============
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NOTE 3. STOCK OPTIONS EXERCISED
During the first nine months of 1997, certain employees exercised options to
purchase the Company's common stock under the Company's Stock Incentive Plan.
Options to purchase 358,404 shares were exercised at $6.22 per share, options
to purchase 1,125 shares were exercised at $9.39 per share and options to
purchase 1,500 shares were exercised at $11.50 per share.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1996
Net Sales. Net sales increased by approximately $673,000, or 4.1%, from $16.6
million for the third quarter of 1996 to $17.3 million for the third quarter of
1997. Although net sales in the third quater of 1997 were marginally better
than sales for the comparable period in 1996, the Company's current growth
prospects continue to reflect weaker business conditions impacting a Korean
customer, the fact that captive producers are ceasing to increase the
outsourcing of ball production, the continuing strengthening of the U.S. dollar
against foreign currencies, and an increasingly competitive marketplace.
Foreign sales increased $949,000, or 14.1%, from $6.7 million in the third
quarter of 1996 to $7.7 million during the third quarter of 1997. The increase
in foreign sales was due primarily to improved economic conditions in Europe.
Also, sales in the third quarter of 1996 were negatively impacted by the
over-building of inventories by customers in the first half of 1996. Similar
over-building did not occur in the first half of 1997. Domestic sales decreased
$276,000, or 2.8%, from $9.8 million in the third quarter of 1996 to $9.6
million in the third quarter of 1997. This decrease was due primarily to
decreased sales to one customer. With respect to 1998, according to preliminary
estimates, which are subject to change, and taking into account both the
negative factors that are driving the Company's short-term outloook as well as
the commitments for increased roller production, the Company anticipates net
sales will approximate $81 million.
Gross Profit. Gross profit decreased $885,000, or 15.4%, from $5.7 million for
the third quarter of 1996 to $4.8 million for the third quarter of 1997. As a
percentage of net sales, gross profit decreased from 34.6% in the third quarter
of 1996 to 28.1% for the same period in 1997. This decrease is due primarily to
costs related to the new facility start-up in Ireland and increased costs
associated with excess capacity. Additionally, in the third quarter of 1996,
the Company recorded $300,000 of duty drawback associated with 1995 imports of
raw material which had not been previously recorded. This amount is an offset
to export fees paid.
Selling, General and Administrative. Selling, general and administrative
expenses increased by 20.3%, from $1.3 million in the third quarter of 1996 to
$1.5 million in the third quarter of 1997. This increase was due primarily to
increased travel, legal, accounting and employee relocation expenses related to
the Ireland facility start-up as well as increased legal and consulting
expenses related to potential acquisitions and the Company's current strategic
development process. As a percentage of net sales, selling, general and
administrative expenses increased from 7.6% for the third quarter of 1996 to
8.8% for the same period in 1997.
Depreciation. Depreciation expense increased from $826,000 for the third
quarter of 1996 to $1.1 million for the same period in 1997. This increase was
due primarily to purchases of capital equipment. Also, new assets added in 1996
related to the new Mountain City facility were depreciated utilizing the
half-year convention in the prior year versus a full year of depreciation taken
during the current year. As a percentage of net sales, depreciation expense
increased from 5.0% for in the third quarter of 1996 to 6.2% in the third
quarter of 1997.
Net Income. Net income decreased by $896,000, or 40.8%, from $2.2 million for
the third quarter of 1996 to $1.3 million for the same period in 1997. As a
percentage of net sales, net income decreased from 13.3% in the third quarter
of 1996 to 7.5% for the third quarter of 1997. This decrease in net income as a
percentage of net sales was due primarily to costs associated with the new
Ireland facility start-up, excess capacity at the Company's plants, increased
selling, general and administrative expenses and the increased
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depreciation expenses discussed above. In addition, the Company increased the
provision for income taxes due to the decrease in foreign sales as a percentage
of total sales and the anticipated decrease in the level of tax benefit from
the Company's participation in a shared foreign sales corporation.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1996
Net Sales. Net sales decreased by approximately $7.0 million, or 10.6%, from
$65.5 million for the first nine months of 1996 to $58.5 million for the same
period in 1997. Foreign sales decreased $5.5 million, or 16.7%, from $32.8
million in the first nine months of 1996 to $27.3 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 its business that was previously
outsourced to the Company) and general economic conditions in Europe. Domestic
sales decreased $1.5 million, or 4.6%, from $32.7 million in the first nine
months of 1996 to $31.2 million in the same period of 1997. This decrease was
due primarily to decreased sales to one customer.
Gross Profit. Gross profit decreased $3.7 million, or 17.2%, from $21.7 million
for the first nine months of 1996 to $18.0 million for the same period of 1997.
As a percentage of net sales, gross profit decreased from 33.2% in the first
nine months of 1996 to 30.7% in the same period of 1997. This decrease is due
primarily to costs related to the new facility start-up in Ireland and
increased costs associated with excess capacity. Additionally, in the third
quarter of 1996, the Company recorded $300,000 of duty drawback associated with
1995 imports of raw material which had not been previously recorded. This
amount is an offset to export fees paid.
Selling, General and Administrative. Selling, general and administrative
expenses increased by $524,000, or 14.9%, from $3.5 million in the first nine
months of 1996 to $4.1 million in the same period of 1997. This increase was
due primarily to increased travel, legal, accounting and employee relocation
expenses related to the Ireland facility start-up as well as increased legal
and consulting expenses related to potential acquisitions and the Company's
current strategic development process. As a percentage of net sales, selling,
general and administrative expenses increased from 5.4% in the first nine
months of 1996 to 6.9% for the same period in 1997.
Depreciation. Depreciation expense increased from $2.5 million for the first
nine months of 1996 to $3.2 million for the same period in 1997. This increase
was due primarily to purchases of capital equipment. Also, new assets added in
1996 related to the new Mountain City facility were depreciated utilizing the
half-year convention in the prior year versus a full year of depreciation taken
during the current year. As a percentage of net sales, depreciation expense
increased from 3.9% for the first nine months of 1996 to 5.4% for the same
period in 1997.
Net Income. Net income decreased by $3.3 million, or 32.9%, from $9.9 million
for the first nine months of 1996 to $6.7 million for the same period for 1997.
As a percentage of net sales, net income decreased from 15.2% for the first
nine months of 1996 to 11.4% for the same period for 1997. This decrease in net
income as a percentage of net sales was due primarily to costs associated with
the new Ireland facility start-up, excess capacity at the Company's plants,
increased selling, general and administrative expenses and the increased
depreciation expenses discussed above. In addition, the Company increased the
provision for income taxes due to the decrease in foreign sales as a percentage
of total sales and the anticipated decrease in the level of tax benefit from
the Company's participation in a shared foreign sales corporation.
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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, as of
November 12, 1997, was 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 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. The Company is expected to commence production and shipment of goods
from its Kilkenny, Ireland facility in the fourth quarter of 1997. It is
expected that goods sold from this facility will be billed and paid for in the
customer's local currency, as opposed to U. S. dollars. As a result of these
sales, the Company's foreign exchange risk will increase. The Company is
currently considering various strategies to manage this risk.
Working capital, which consists principally of cash and cash equivalents,
accounts receivable and inventories was $18.6 million at September 30, 1997 as
compared to $18.4 million at December 31, 1996. The ratio of current assets to
current liabilities increased slightly to 3.3:1 at September 30, 1997 from
3.2:1 at December 31, 1996. Cash flow from operations increased from $9.7
million during the first nine months 1996 to $13.8 million during the first
nine months of 1997. This increase was primarily attributed to the decrease in
accounts receivable of $3.4 million and an increases in accounts payable of
$866,000 and $1.2 million in other liabilities.
During 1997, the Company plans to spend approximately $10.0 million on capital
expenditures (of which $6.9 million has been spent through September 30, 1997).
Of the $6.9 million spent through September 30, approximately $3.9 million was
spent on the purchase and renovation of, and installation of new equipment for
the Ireland facility. Production is anticipated to begin at this facility in
the fourth quarter of 1997. Capital expenditures in the fourth quarter will be
made for the further renovation of the Kilkenny facility and the purchase of
additional machinery and equipment for all four of the Company's facilities.
The Company intends to finance these activities with cash generated from
operations and funds available
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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.
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 pace 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 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 during the third quarter of 1997
purchased 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 duties or taxes,
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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. 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.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits Required by Item 601 of Regulation S-K
Exhibit
Number Description
10.14 Employment Agreement, dated August 1, 1997, between
the Company and Roderick R. Baty
10.15 Severance Agreement, dated August 28, 1997, between
the Company and James J. Mitchell
27 EDGAR Financial Data Schedules (for SEC use only).
(b) No reports on Form 8-K were filed during the quarter ended September
30, 1997
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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: November 12, 1997 /s/ Roderick R. Baty
----------------- --------------------------------
Roderick R. Baty, President
and Chief Executive
Officer
(Duly Authorized Officer)
Date: November 12, 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)
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INDEX TO EXHIBITS
Exhibit
Number Description
10.14 Employment Agreement, dated August 1, 1997, between the Company and
Roderick R. Baty
10.15 Severance Agreement, dated August 28, 1997, between the Company and
James J. Mitchell
27 EDGAR Financial Data Schedules (for SEC use only).
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