EXHIBIT 99.1
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NEWS
FINANCIAL
RELATIONS BOARD
RE: NN, Inc.
2000 Waters Edge Drive
Johnson City, TN 37604
FOR FURTHER INFORMATION:
AT THE COMPANY AT FINANCIAL RELATIONS BOARD
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Will Kelly Marilynn Meek Susan Garland
Treasurer & Manager of Investor Relations (General info) (Analyst info)
(423) 743-9151 212-827-3773 212-827-3775
FOR IMMEDIATE RELEASE
April 28, 2005
NN, INC. REPORTS FIRST QUARTER 2005 RESULTS
Revenues Up 12%, Earnings Per Share Up 21%
Johnson City, Tenn, April 28, 2005 - NN, Inc. (Nasdaq: NNBR) today reported its
financial results for the first quarter ended March 31, 2005. Net sales for the
first quarter of 2005 were $86.7 million, an increase of 11.7% from $77.6
million for the same period of 2004. Net income for the first quarter of 2005
totaled $4.0 million, or $0.23 per diluted share, compared to $3.2 million, or
$0.19 per diluted share for the first quarter of 2004, an increase of 25% and
21% respectively.
Roderick R. Baty, Chairman and Chief Executive Officer, commented, "Of the total
revenue growth of $9.1 million in the first quarter, the impact of foreign
currency translation accounted for $3.4 million, price increases associated with
raw material pass through accounted for $3.1 million and market share/volume
improvements accounted for $2.6 million. Our 2005 first quarter revenues reflect
flat demand in both the North American and European automotive sectors and
strong industrial demand in both markets. As a result, our first quarter revenue
of $86.7 million was slightly lower than anticipated, but we remain on track
with the previously announced 2005 full year revenue guidance of $337.0 million.
"As a percentage of net sales, 2005 first quarter cost of goods sold of 78.0%
was essentially flat to the 2004 first quarter cost of goods sold of 77.8%.
However, cost of goods sold in the first quarter of 2005 was 3.8% and 1.1% lower
than our 2004 fourth quarter and 2004 full year levels, respectively. As a
percentage of sales, selling, general and administrative expenses for the first
quarter of 2005 was on plan at 8.6% as compared to 9.2% for the same period in
2004 and 9.8% for the full year of 2004.
"Although debt decreased by $2.4 million during the first quarter, total debt
minus cash increased by $3.9 million, reflecting traditionally higher working
capital needs of the first quarter. We anticipate a debt reduction of
approximately $12.0 million to $13.0 million for the full year 2005.
"Mr. Baty continued, "While we continue to have concerns regarding the overall
volatility of steel and raw material inflation, we do expect to recover the
impact of any future inflation in the form of price increases to our customers.
With the overall competitiveness of the markets our customers serve, this
obviously creates a difficult environment for both our customers and NN.
Mr. Baty concluded, "Overall, we are pleased with the progress we have made
during the first quarter of 2005. Several actions we implemented in 2004 have
positioned the company well for ongoing improved financial performance. This
included the start-up investment in both our Slovakian and Chinese facilities as
well as strategic restructuring initiatives in Europe and North America which
were previously announced in the fourth quarter of 2004. Additionally, our Level
3 initiative is playing an increasingly major role in achieving significant
improvements in cost, quality and customer service. The combination of these
actions continue to have a positive impact on our global manufacturing
operations."
NN, Inc. manufacturers and supplies high precision bearing components consisting
of balls, rollers, seals, and retainers for leading bearing manufacturers on a
global basis. In addition, the company manufactures a variety of other plastic
components. NN, Inc. had sales of US $304 million in 2004.
Except for specific historical information, many of the matters discussed in
this press release may express or imply projections of revenues or expenditures,
statements of plans and objectives or future operations or statements of future
economic performance. These, and similar statements are forward-looking
statements concerning matters that involve risks, uncertainties and other
factors which may cause the actual performance of NN, Inc. and its subsidiaries
to differ materially from those expressed or implied by this discussion. All
forward-looking information is provided by the Company pursuant to the safe
harbor established under the Private Securities Litigation Reform Act of 1995
and should be evaluated in the context of these factors. Forward-looking
statements generally can be identified by the use of forward-looking terminology
such as "assumptions", "target", "guidance", "outlook", "plans", "projection",
"may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe",
"potential" or "continue" (or the negative or other derivatives of each of these
terms) or similar terminology. Factors which could materially affect actual
results include, but are not limited to: general economic conditions and
economic conditions in the industrial sector, inventory levels, regulatory
compliance costs and the Company's ability to manage these costs, start-up costs
for new operations, debt reduction, competitive influences, risks that current
customers will commence or increase captive production, risks of capacity
underutilization, quality issues, availability and price of raw materials,
currency and other risks associated with international trade, the Company's
dependence on certain major customers, and other risk factors and cautionary
statements listed from time to time in the Company's periodic reports filed with
the Securities and Exchange Commission, including, but not limited to, the
Company's Annual Report on 10-K for the fiscal year ended December 31, 2004.
Financial Tables Follow
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NN, Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2005 2004
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Net sales $ 86,715 $ 77,632
Cost of goods sold (exclusive of depreciation
shown separately below) 67,666 60,390
Selling, general and administrative 7,484 7,143
Depreciation and amortization 4,174 3,999
(Gain) loss on disposal of assets 4 (8)
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Income from operations 7,387 6,108
Interest expense, net 984 841
Other income (171) (48)
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Income before provision for income taxes 6,574 5,315
Provision for income taxes 2,551 2,097
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Net income $ 4,023 $ 3,218
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Diluted income per common share $ 0.23 $ 0.19
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Weighted average diluted shares 17,261 17,189
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NN, Inc.
Condensed Balance Sheets
(In thousands)
(Unaudited)
March 31, December 31,
2005 2004
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Assets
Current Assets:
Cash $ 4,445 $ 10,772
Accounts receivable, net 60,110 51,597
Inventories, net 34,272 35,629
Other current assets 13,122 10,340
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Total current assets 111,949 108,338
Property, plant and equipment, net 123,232 131,169
Goodwill, net 43,420 44,457
Other assets 5,983 5,905
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Total assets $284,584 $ 289,869
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 42,012 $ 45,217
Dividends payable 1,351 --
Accrued salaries and wages 14,285 16,332
Income tax payable 3,229 1,599
Short-term portion of long-term notes payable 7,240 7,160
Other liabilities 5,040 4,123
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Total current liabilities 73,157 74,431
Deferred income taxes 17,432 17,857
Long-term notes payable 65,031 67,510
Accrued Pension and Other 14,306 14,931
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Total liabilities 169,926 174,729
Total stockholders' equity 114,658 115,140
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Total liabilities and stockholders' equity $284,584 $ 289,869
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