NNBR - Earnings call transcript Q2 2018

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Operator

Good day and welcome to the NN, Inc.

Second Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Paul Taylor. ahead. go Please

Paul Taylor

Second Good I'm operator. Investor and for to thanks I Conference Thank Taylor, morning, Vice us. NN's you welcome Paul like and XXXX President joining Earnings would Call. you, to everyone, Quarter of Relations. Marketing

this anyone and Chief at morning or of press needs and a Rich Executive Officer, Financial the President will and be you send we please and release McGregor President copy XXX-XXX-XXXX, Vice Chief are contact supplemental Tom presenters Officer, Holder; to Our Senior Burwell. Abernathy copy. presentation, If the happy a

we ask XX-K The release, of the statements XX, Q&A made for note to Before Risk presentation comments would I session December regarding ended live same in contained begin, the like supplemental the you to forward-looking today's as applies webcast. Company's section language conference including cautionary to XXXX. on year as and take in press today's in the call, the language the well Factors

measures the section Company's presentation. contained which are final defined non-GAAP and outside reconciliation in The today performance Our should and results, exchange rate, many the operating future will as margins, of includes release the used market statements in to of other of caution subject acquisitions, and risks control. be various is non-GAAP A the synergies, topics. flow, also foreign such with regarding rates, of and These measures cash sales, our are tax the presentation tables uncertainties, certain worldwide presentation by press of rules. supplemental forward-looking SEC statements contain

up said, line afterwards, overview will to of the Rich, we call for and questions. we First, will second the an that update quarter. an I you. over turn With will Then the open give

Richard Holder

Paul. morning, and call. QX everyone, welcome Good our to Thanks,

specific questions. open through provide go up will for then financials financials through you the will then and it I will guidance Tom highlights, and take segment the the and usual, As we

note be perspective with continues as that but performance we I number. note XX.X you to will last X business Paragon you also operating let QX of on this that satisfied tell From by of would or provide for we display administrative will deck to was acquisition the if million one Paragon be it and XXX.X will still operating businesses million last and that and into jump Bridgemedica me as we expected, can also growth deck. and highlights our the that Page three we execute sales XXXX; the of that the still on the was Just EBITDA growth; was are some quarter maybe summary we the an the move our page the and the right adjusted sales take will expect, page driven very our synergy the continue are excited XX% have as business. work at and million largely organic our growth DRT, appropriate have a margins part do to were in acquired With performing performance to XX.X I so the

will new gives when continues talk that impact is $X.XX of portion unplanned per bit startups the to between new to Our $X.XX which has of accelerate headwinds financials. this Tom share program that earnings adjusted $X.XX note, earnings the to a impacted startups the tax little diluted program Off than foreign the year. tune $X.XX his a of on and the about prior high of we and

and product capabilities strengthened in but Sciences space only expanded space, of from closing and of the PBC Life is we also our space. offering to complete, divestiture the Paragon have our that redeployment say With the excited in the are aero not proceeds technical the we defense

release press everything us on a enhanced may from on is is I as ability Paragon time. this track that seen month earlier proceeding The technical expected, space. the around think and within you have

feel pretty we good So about that.

move we around As down through the mobile commentary solutions.

We business within This and about us we The that tune the five impacted $X.XX has multi-year this XX think that programs basis, launching growth $X.XXX about normal is quarter. to on right programs to that launch in holistically you the to of the that are make continue year, in year of investment should a about business. within way we business.

essentially is enterprise forward. look said So we XXXX way the through that XXXX, business thing this are what for of at we as so another to refreshing extremely one-third positive going doing almost an

X. Page at to I share $X.X to and as are turn known startup guess better mid-program the you impact earnings adjusted tax again, foreign $X.XX per Again, As between of $X.X earnings Guilty perspective as we the expect. so XXX.X prior enterprise this growth of I earlier to to sales top-line function again talk compared the to impact. Tax XX% Net from continues year, a

just the XX%, again If XX.X should so we margin our gross way to look previous Page year, a the cost, of XX.X, eliminate up is this compared where forward. the you that EBITDA move about to margin going is should EBITDA impact the of in on added which move in you of is as a is extent from The Page gross that price who that through expense X to to new the see be As X been the enterprise center well it kind XX.X we think going we about impact. going of at normally as think to XX.X headwinds perspective transition SG&A M&A settled to basis Adjusted on over X, relative think way margins, year-on-year. XX.X those an be you let’s the forward between acquisitions. of investments to margin performance what you call XX% SG&A over X, program of the basis rate normal of about about the are to of are will as modeling. for not lesser from effects the XXXX. forward XX% sales foreign tax and most integration have of compared million you run this a Again, investments million and this XX.X includes at

about right it. I to that way think is think the

it Page I X, over Tom will the turn talk about to move to we As segments. to

Thomas Burwell

Thank segments everyone. closely and XXXX forward. in of to you, of and quarter We operated remind recap structure. the X-K information an take enterprise of that information historically has compared incorporates will our segment This and quarter segment to that historical new that more full-year XXXX each with has the to our an There filed on current reporting a idea financial align will implemented get a the provide was how I morning. moment vertical good structure this Rich and prospectively moving was these morning the management that markets. to end

look within Now the at specifically we turning segments segment the to Life newly Sciences of get Life constituted Paragon. a Sciences first inclusive segment, the

which was Paragon to it growth quarter from to-date XX% comparative quarter Paragon, is XX% to and has in the within numbers the year. growth primarily of does - so only of May the owned Now important sales more The of roughly note Paragon Xth periods of acquisitive their even the in it the an prior quarter. than a XX% organic include includes it, QX entire been we by acquisition not driven growing full about

segment continue But grown to expected southern have of with QX end by of on rates within a XX%, drug large good customers even offset our largest really of that delivery the program partially Paragon, higher of program the we see originally and when to the acquisition we than rate at beyond expected market. actually the growth they between had the growth X% they together. So a put in

growth was acquisitions, costs as Turning the to the those sales the fully sales experienced cost. incremental the are opposed an primarily as associated operating with cost to margin with absorbed

It in and several also business, are improve we are - comparing work and the that results the had going PDP next improve post better important over Life Life as to they into the Science synergies. slightly pre-synergy than down because business the the at integrated we to of why mid-XX are two as level is continue synergies time new quarters note to and a realize years. performance we is the operating we a and the expect operating the business, fact a for we that quarter owned as to fully expected Sciences post year-over-year. So, PDP margins Paragon almost The XXXX synergy that

sales Turning and see sales is a to markets globally. five continues note programs Page to X our a pay in are Rich that of years. really those start the sales into returns the the in QX. included These third automotive to mentioned, next the that group exceed and mobile Rich solutions and first to cap seven of the very the of mobile really sales sales large expecting QX segment important programs the is next solutions in to are new approximately late multi-year in that little programs portion refreshing from the for year of and Company's as half we will to investing It

in is the it’s amount expected sales wins customer because of of to which happened segment multi-year and start be programs. it are general in these Rich cases segment through The investments not expense costs different and a quarters. dependent spending to operating some out within The up part year, on the the Turning starting in in these new they is different And just go by the the typical continuum for new sales level impacted program has continues later double essentially margins. timing impact we and of from what forward lumpy time, be timelines as of operating customer actions. could in than been the mentioned new

growth Slide and growth continues division Turning the and ramp-up in the the market, our aerospace market. to end market aerospace also to continue grow electrical sales start in we programs X, expected. both production as as power solutions The or to programs end

volumes ready on adjusted the completion aerospace that West and aerospace East We our developing of plant the of also segments. are plan constituted operational segment of the on have are the should in the operating newly part the year. And leadership The of year-over-year and margin by year. team be flex working been nearing our end due the by improvements and that improvement Coast to the shows within that additional Coast beginning from sales productivity, made

quarter. guidance for the the to third Turning

group the of quarter. we we QX see in really in quarterly Paragon Sciences QX the first fourth Paragon. operating In my XX% guidance and of of sales impacts seeing the comments mentioned in about the Life are full As only

continuing some sales base sales increases sales growth. start-up the within than reflect Paragon full the of regular compared average the planned Margins from of NN for our higher the There So business. flex production Paragon the margins the are quarter plus on margin within to the both and quarter. to improve from productivity acquisition

in year sales the are full-year operating basis then holding That to EPS on guidance XX. from mentioned margin the seeing guidance and Turning and we the about Rich or regulations reflected Page in new impacts effective Tax tax foreign believe note and on the as to as IRS we our the the entire the on are important continual for earnings it's we rate And this this. Guilty additional we on we the and publishes going some learn and calculations, more have more incur for forward. re-done quarter cost will our tax is we

from an and Additionally, impact in Paragon we operations. have therefore included

that, I over will Rich to back with conclusion. turn So to it

Richard Holder

Great, thanks Tom.

we actually in performing so a programs enterprise in acquisition we expected, this strategic comparative underlying good little rate a quarter comparative expected, quarter. is pretty mobile growth and solutions I will in and XXXX is and through programs our basis Paragon it new move the on about program is XXXX a basis in move the see and planned on on so and we feel see through that. multi-year operates business our the had very very track cannot running refresh point attrition XXXX. and This sums that business part sales will in turnover as when stress CapEx we The is about is a a launches little XXXX than investment fundamentally you as bit feel as feel in enterprise summary, continue, So The better this at to synergy, time wise expected, their enough. the good we is think that growth on

continue we term we it investments do drive the of for have longer So was business. right those and thought the thing to good the to

we or XXXX having simply spite of we get another have another our I as $X.XX As in foreign Tom $X.XX tax. will efficiency on clarity guidance on find mentioned, of earnings say lose the EPS more because maintained

there. questions. you and I open been should take So the can what application EPS have the With from that, lines will for

Operator

from Street first Capital Rob Thank you. [Operator Markets. comes Brown question with Our Lake Instructions]

Robert Brown

give and you could programs, markets? solutions types a mobile little of on bit are end kind geographies Just on what of programs more ramping color

Thomas Burwell

Yes.

ramping is we are our geographies. programs all of actually So

Brazil. new programs in We have

America. programs We have on new North

of requiring in program so quite a solidify have forward partner footage footprint We to program, are in biggest new in actually a it’s go well over to a strategically larger plant beyond of square our well programs and certainly Asia these will our manufactured This is big future significant is increase, partner substantial a actually single the adding system programs. and connected OEMs bit Europe, the in we amount Europe and in it fuel France. into Europe and and kind one steering their very even of

Robert Brown

the you there of are that have seeing I the know in you on you synergies synergy there and tracking got revenue are that acquisition, then Paragon of getting wanted? of and and And kind some terms what you in potential

Thomas Burwell

Yes.

comes customers big the that that line come of that. number we design provided we line, look at a Number partnering one, is additional of it talent us these we concept top looking related that gave we way, supply solutions space acquisition acquisition. sort things put the this there, and great about great our don't two, you, of into way definitely the and validated are that to holistic is is three, let have Number Number synergies maybe but base XX holistic million validation top typically our think holistic synergy, assumptions synergy couple solutions have the and types performance, ability of an acquisition, the there. a just the we they right on the capability in the out, outstanding with point so Paragon wasn’t an out sort engineered to that and when number provide are So one. of of for justify a to me are that that

comes to the piece provide So the the comes is from testing and when from piece a equation we manufacturing the a regulatory that it Bridgemedica it Paragon, an is OPP. the of marketplace, comes it that solution a from engineered solution equation, is that

to that this have construct other So entire working is coming on marketplace. holistic unlike any been provide solutions we the together

Robert Brown

turn it will I you. Thank Okay. over.

Operator

you. Thank

with Our CJS next Moore question comes from Securities. Daniel

Daniel Moore

million how be that The Life kind you of sense following what the much XXXX? question of for expect XXXX, just are synergies, range you Sciences, the on of any up of in XX or type to realized synergies by likely

Richard Holder

of be So, X floating we you to have is about into probably if to it. so realized the will to I would expect be share think realized The XX by of XXXX. that XXXX, right it million will think lion XXXX the of million synergies XXXX modeling by way the to kind are we end over

Thomas Burwell

see There mix months a it timing the its is you and in when will reflected realized rolling Dan then XX financials.

Daniel Moore

forward it the XX% a of the realized? think XXXX go to synergies to that and the once about that get and down Rich full is more way to beyond are Indeed - XXXX then mentioned you XX% more can we right XX% SG&A or

Richard Holder

thinking number are I as that in we are think about thinking XXXX. you

Daniel Moore

very on mobile growth programs this Got fully of new And forward? those year, you of replacing how say the of helpful. existing programs how are then many are to it. incremental and solutions touched much how those going many would XX

Richard Holder

are and are one-to-one ramping is a you from down should holistically the at roughly those say and revenue exact you of and I perspective, because those is let's incremental. and five X% replacement, to is level but of Roughly to from again this combined cycles things, replacements but all six replacement never think programs X% this a life that not biometric about challenges have think programs one-to-one a in high

in talked an program that I program. the incremental Europe Secondly is entirely about

Daniel Moore

typically Perfect lastly most does me, from for in full-year free always unchanged. stronger, uptick HX the I and think but generation. the the flow guidance it a big imply critically cash cash is

on kind thanks your So just working of are your and for update the capital any you benefit in projections those color? confidence there anticipating

Thomas Burwell

made we operating any pretty there OS capital Indian look working anticipate part working see going we and take of have through lion’s to QX. capital but as is new our system, to is capital much of no programs half don’t what in CapEx are lot investments beginning is and share a have we off investments always much working We improve new as made certainly the year. second on these of the the them CapEx QX the Yes, we for won't in and of improvements

Daniel Moore

again. you Thank it. Got

Operator

Thank you.

Brady Charles question SunTrust. comes next from Our with

Charles Brady

if out, organic for the segments as a organization going M&A and give wondering FX excluding across the whole? rates can miss in I'm you the us I'm I sorry for excluding or but just - growth release the if this

Richard Holder

Yes It was digits, about mid-single it running was sequentially. roughly X%

Charles Brady

year-on-year it on so sequencing QX? organically grew X% or from X%

Richard Holder

Sequentially in the… the QX of end at

Charles Brady

growth I normally thought organic that. are rate the driving year-over-year

Richard Holder

again. sorry I'm say that

Charles Brady

really organic segments each to the and for year-over-year company tax, entire ex.-M&A. of the trying excess I’m get growth rates the three

Richard Holder

I basis. way or X%. it think about net to the roughly like Company walk or right I way on is X% And we entire solution segments a high about the power X% more. organic planned can on out take roughly about year-over-year X% is single-digit. call purely let’s the basis think a give Sciences Life The through now. have is mobile

Charles Brady

QX you are is year, And me you your for I telling this are the this play are on not what saying? clear or guess is figures I’m for what

Richard Holder

were I’m for sorry asking the the I year. you plan thought

Charles Brady

the well? QX but we be if No, coming first, kind as yes you would was no I did helpful that of have for actual that that up, mean one so figures

Richard Holder

right now. Why in get figure that recalculate of we have us don’t segment that, in sitting it don’t and our we front

Charles Brady

and stuff in that standpoint the second sounds ought a so the QX or a for number we margins get like total will dollars unchanged obviously size just offline, pulled in We up to mix into that spending tick in half And that that’s was the it QX, QX, year the got hit business, on mobile to margin correct? implies see mobile going from decent fine.

Richard Holder

itself about the say, I is investment certainly is capital the when less left the that you from in the think year. think so if QX fair fair and of to spoke the significantly on perspective, lumpy we in that did there spending of the Tom itself indicated to going half is spending spending amount certainly second we

Charles Brady

Great.

me. Just one more for

I embedded the of on a really You second guess embedded is being second terms have is is own and right walls. running their being are seeing of the in really sort locations in at site that if customer? you in two customer of remind yourself one had now in of now inside major it sort you up benefits us, what

Richard Holder

getting that So answer the putting really in full and headcount seeing make are with some benefit equipment it’s is, really, it to and is we but still programs putting it’s engineering up looks from is sometimes ability in, to fruition. that and that on even running don’t the are running, we to yes tilt, new combined sell one program, on early services candidly number and not as it up

Charles Brady

Understood. you the for Great. Thank color.

Operator

Thank you.

Our next question with comes from Michael Stifel. Hernandez

Unidentified Analyst

should flow cash guys what about a ahead are that the side, Hi, quick going that the down percent pulled it’s was on and question that of and and are? CapEx in [indiscernible] terms thank you of meaning let’s actually talking we about in. in that spend could being free being XXXXish getting accelerate your on me sales, as platform from should where you programs A the through for years CapEx mobile the think as call imply out it we does

Richard Holder

is That correct.

Unidentified Analyst

sales or of about what And number taken think haven’t be percent would already should of these the good that that a CapEx kind investment and there place? will rule we be would thumb of ballpark

Thomas Burwell

share half of the about And of when X% bulk the sales once period on of my comments in first X% pass year we the been of I made expect the average we lion’s the talked mentioned this earlier CapEx as the in investment and program. has of between and really

Unidentified Analyst

that and margins, acceleration comment, the that about on the the these then too in and the XX [indiscernible] I next basically SG&A by being year Perfect. big pretty aggressive - good of XX% way XX saying on And XX% which that equipped margin XX% next a is to assumptions. year think to or is to kind right would is pretty it, am then

Richard Holder

Yes.

you a functions. think those I probably in aggressive too little

Thomas Burwell

as And the cost depreciation out we some to we call this going is of are the or said But so. depreciation too.

Unidentified Analyst

business here. or for it okay, wins gain side me, out. is nice happening help Yes you bit that supply that it a what really doing lastly power then mix, perfect. customer talk little about could And is on is new you a in are chain something it flush Is to has the anything margins

Richard Holder

some are is online about them. wins and that I margin is so the now probably talked ago mean have calls Yes. nice are wins products had tell that it come that - two we we we would I customer and that that one are the these work have shipping certainly of and Difficulty] [Technical

one of management to it’s newly the is alike rising applications around flex the to the productivity so business. everything related the their the see for meant other our improvement you team operating discipline system and on and to starting The line operation NN pay in getting the dividends are and

Unidentified Analyst

Thank you. guys. Great,

Operator

Thank you.

Stephens. from Our Brian comes Colley next question with

Brian Colley

or do feel where customers customers the curious product as what that past pipeline the following the most are just then to maybe new where have across your the are and is from Kind what geographies evolved lines you where excited, and you like how it's the capacity of business Paragon acquisition So kind are also talked of the over pushing segments customers quarter? the different

Richard Holder

Okay.

are solutions smaller they brought tactical with OEMs or able excited partner to love are ups that we to it will say more start our From all different solutions that take be sides we in or customer would large they that of be holistic pieces. a getting customer me the whether extremely customers perspective the from will acceptance tell the know us online. perspective, given we I the have and segment I kind Let you all the

lot part than going actually And feel say very it better it though so would is a I to actually is safe go. we that of

is second in our certainly Polis request, world of plant and piece the that plant it we think is so as capacity of it getting an as in much lot and the market, system China the coming a our are I is expansion in request, is side discussion that plants. the around U.S. around of our the delivery

And well so and the uniformly I to have initially well we do inline doing from to always we the across are so all that a to through perspective. performing going are immediately you what think continue even be than can timing CapEx things. we that With really are we seems need out quickly What to grow this people and free space operating we on still faster thought order or kind some we then space maybe through around up to positioned in the in is and through leaning capacities and in there plan. planning factory a even increment lien to how NN efforts said, of of had our spin-up model the facilities we significant the is system turning these

in piece third the think I the was industry general.

can the there a products data is is contracted, doing never launched. would of an industry ever it’s new that I you all lot is right has XX now economics think years worst so thing in could be slowed say the in is growth you think being and the only all course I last well. published. the The of industry and Alright from the this that quite see

We with are with shape in all form products just about board of those way customers. some all the or on

so really and confident certainly have people great have we portfolio great put it. about are this we a positioned, together really feeling So space we is think we well in and have leadership really, that we

Brian Colley

Got are of lumpiness it. how curious how the we year just but they XXXX? That to the of program margin And the progress thinking the launches, exiting with about some end kind I'm just think is really there segment rate about and run by helpful. should margins and

Richard Holder

those the basis, a kind like when that you of run expect long-term the if more direct numbers PEP at little would what so bit synergy the Sciences, you in case of I guess at I look Life it’s going kind back and forward. should numbers our to of you post look you in Yes. and

X.X operating We we X.X, year the Corporation this operating saying we will pick kind XX% simply of up think going business the around in XXXX. towards will of are have that the end margin, another

far the I down would breaking post you segments. the based synergy it numbers. historical kind we just to run on of basis rates into refer back on that the As as published [indiscernible]

Brian Colley

lastly Okay, second then the got the about that expectation is you. remainder then the how and related quarter of just want to of that in revenue business CAF kind over trended And and ask what I your for year?

Richard Holder

market single-digits, a are continues to basis mid space that in kind of So business seeing the of net that trend kind whatsoever. on we not actually any softness real

strong thought are launching a into perspective it and coming a CAFE we we think in that programs space. business was new the as the So is year we from

is So than certainly even in Asia experiencing normal that better growth. it

So, space is solid.

can’t on almost really comment that business have non-CAFE no I We one.

Brian Colley

comments the there. Alright. Well I appreciate

Operator

comes Thank Steve you. [Operator Instructions] Capital. Our KeyBanc with Barger from next question

Steve Barger

have team want, already, level are that that where understand incentivizing pushed so and in you a the You you that the teams, a in customer your you now facing want? you proposition that organization down the and just the process has portfolio people in been alluded this training new to but value message of of

Richard Holder

want be Yes, teeing but not the we of entire relative a so good I the say frontend to up really are of where the we think to organization. organization I we yet that to would so far, have job done

course number the two of that a quarters have of over We get training next programs planned and of number exercises to done. a the

we everybody. alteration into are on-boarding capture capture then And bringing where January things other a of plan any the for portfolio training the settled are given to organization. we levels will in and frontend in will and people through will making of these to Additionally, now the an that coming we that worldwide actually have management literally, the new organization, we all drive our of be three our organization plan straight entire that

work right next done. progress, been pitch have people, a obviously trained they But training. touching around touching the call been customer managers know we get of though who we literature so we the in the is the and to certainly we organization, themselves. appropriate the out our across now of , are and a there are in it's have first have can't will to where are we So to I say year geography appropriate even the of with combination everyone they wise would enough everyone strategic space quarter board they account front, sales guys probably have bombard facing

Steve Barger

Right.

that and NN time lien the talked help spend more able follow-on that out Are in to you operating good that place about now to having to talking customers. factories. So the to team is guess out I personally you

get for to the the trying Just shift margin go mix a can team after growth, fast how a start you in higher and sense a higher way. positive opportunities really to to

Richard Holder

is Yes on so now. is for what sure going that

in actually I in able to As to have I been some customer week at going been an out I of time. discussions, entire quite the do haven't month this and that end dedicated have

quickly little day-to-day become operation So certainly bit as much the new as guy. becoming our right, segment is moving in to leaders takeover a my job more I’m sales changing operation, a we stable the

Steve Barger

about sure thinking the And talk you in have understand you can about make bring. to you Good. pricing, process what place customers

first that are you of making share capturing are sure value? you your So

Richard Holder

Yes.

nature. in model fairly is built we flexible a have So pricing that robust

we training robust, part services is than we manufacturing So tell that model conversations are is of having purely on that are that reflective it. conversations reflective we its having a and the services will conversation engineer now right it's are not hybrid a have a when the as often model if conversations, of I ongoing. where of our the design, most of you more conversation, manufacturing

So we we bring. that they but are in to we same they the been Life the embedded interpret the more and than more to in it inefficient probably the and the a itself now all that have there they and any getting it of its to base, because slightly and who Sciences have have know in the out handful is field. the solutions how can don’t little it different mistakes other with businesses, make organization. is business model Bu people the But because in individual tweaked run everyday in it's through so under

some We across that to well. also opportunity because a have there do model as businesses, goes that are

Steve Barger

to look say you XXXX you this fair into - pricing program? expecting that I whatever growth XXXX gets volume as organic perfected growth pricing efficient forward and upside more model So as can you because to of are that drive to guess

Richard Holder

that may at point and XXXX the Yes in exists. I time we time solution in capture be portfolio that price to think the maybe that that the even so the in set have, we feel this the for in organization first with history opportunity

what are think to we it as like. fair say for I through five we zero working it's don't still has think been it’s that last certainly years. But looks the

Steve Barger

Alright it. Got thank you.

Operator

Thank you.

next Brady. Our Charles question comes from

Charles Brady

the margin did the of margin real to the you because would saw require these ding some you was what I’m mobile just forward of half follow-ups XQ, been, to QX? accelerated the the your you kind additional basically and quick programs expectation into much trying plan how acceleration wondering get before had second are in of me going for in of in and I’m startup, Two on get have cost for they relative pull what

Richard Holder

probably points. Well quick close calculations to two X.X,

Charlie Brady

I is And half, to the year your I the tracking rates, a half? low tax up. should guess then from last sure make rate want half are for is expectation full-year me, helpful. somewhere see that average on relative just to one with for - I’m expectation I understand a I you done we a rate just in in we bit square is Okay mid-XXs, tick good already that the where of just to to back trying second half second first it’s function so below up first guess

Thomas Burwell

rates the low new that last Yes. in Tax guide we the mix due at XXs kind of of globe? through money the around has model in months two around forecast rate, it the modeled quarters first the and we some to current Again the right quarters of Guilty of includes two the or coming earning in two XX%, are to And XX%, year. some first

Charlie Brady

half a XX full-year, the XX% XXs XX%, mid to ballpark? rate of kind So second in half low first

Thomas Burwell

XX of second Yes. low Kind half.

Charlie Brady

you. you. Got Thank

Operator

Thank you.

Our next with Gabelli. comes from question [indiscernible]

Unidentified Analyst

part for strength evolution delevering on recent in your any the with guide maybe ask to about stock wanted strategic just Just accelerate thinking actions the Hey potential plans or your business? in

Richard Holder

don’t great the it’s looking on and position that. behalf. shareholder do on to comment and marketplace are appropriate a say simply the think I our to a thing question. we in are at Yes, we I would always looking situation the

Unidentified Analyst

you. thank Great, Okay.

Richard Holder

joining the for Thank us on very you call. much Okay.

hold how You to know us. get of

Paul to the available want you. deeper that thank we to will be With call bring you dig to end. will an If any and

Operator

Thank gentlemen, presentation. this today's and Ladies you. conclude

disconnect. may You now

Paul Taylor	President of Marketing and Investor Relations
Richard Holder	President and Chief Executive Officer
Thomas Burwell	Chief Financial Officer
Robert Brown	Lake Street Capital Markets
Daniel Moore	CJS Securities
Charles Brady	SunTrust Robinson Humphrey
Michael Hernandez	Stifel Financial Corp
Brian Colley	Stephens Inc.
Steve Barger	KeyBanc Capital Markets

NN (NNBR) 12 Aug 182018 Q2 Earnings call transcript