NN, Inc Reports Fourth Quarter and Twelve Months Results
Resource from: NN, Inc Likes:109
Nov 07,2013
* Full year earnings from normal operations of $19.1 million represent record earnings for NN.
* Earnings from normal operations of $19.1 million in 2012 higher than $18.6 million from normal operations in 2011, despite a 12.9% drop in sales from the previous year.
Johnson City, Tenn, March 11, 2013 – NN, Inc. (NASDAQ: NNBR) today reported its financial results for the fourth quarter and twelve months ended December 31, 2012. Net sales for the fourth quarter of 2012 were $80.2 million, a decrease of $16.2 million or 16.8%, compared to net sales of $96.3 million for the fourth quarter of 2011. Approximately $14.9 million of the decrease was due primarily to lower demand for the Company’s products in European and Asian automotive end markets. Sales were further affected by the negative impact of foreign currency exchange of approximately $1.2 million and the net unfavorable effect of price/mix of approximately $0.1 million.
Reported net income for the fourth quarter of $8.2 million, or $0.48 per diluted share included approximately $5.4 million, net of tax, in net non-operating gains. The majority of these gains consisted of $7.2 million in net tax benefits related to the reversing of valuation allowances on deferred tax assets at U.S. business units, taxes on international distributions and increasing tax reserves. Partially offsetting this net benefit was $1.0 million of impairments made on certain non-operating assets and $0.8 million in foreign currency exchange losses on intercompany loans. Excluding this net gain, net income from normal operations was $2.8 million, or $0.16 per diluted share. Reported net income for the fourth quarter of 2011 of $4.9 million, or $0.29 per diluted share included approximately $0.8 million, net of tax, non-operating foreign currency exchange gains on intercompany loans and $0.6 million in other non-operating income. Excluding these gains, net income from normal operations was $3.5 million, or $0.21 per diluted share.
Net sales for the twelve months of 2012 were $370.1 million, a decrease of $54.6 million, or 12.9% (10.1% net of the effect of foreign currency) compared to net sales of $424.7 million for the twelve months of 2011. Approximately $46.0 million of the decrease was attributable to lower demand for the Company’s products in European and Asian automotive end markets. The negative effect of foreign currency translation accounted for another $11.7 million of the decrease. Price increases, favorable mix and the positive effect of raw material pass through of $3.1 million slightly offset these decreases.
Reported net income for the twelve months of 2012 of $24.3 million, or $1.42 per diluted share included net of tax, non-operating net gains of $5.1 million. The majority of these gains consisted of $7.2 million in net tax benefits related to the reversing of valuation allowances on deferred tax assets at U.S. business units, taxes on international distributions and increasing tax reserves. Partially offsetting this net benefit was $1.0 million of impairments made on certain non-operating assets and $1.1 million in foreign currency exchange losses on intercompany loans. Excluding these items, net income from normal operations was $19.1 million, or $1.12 per diluted share. Reported net income for the twelve months of 2011 of $20.9 million, or $1.24 per diluted share included $0.9 million net of tax non-operating foreign currency exchange gains on intercompany loans and $1.4 million in other non-operating income. Excluding these gains, the Company generated $18.6 million, or $1.10 per diluted share in net income from normal operations for the twelve months of 2011.
As a percentage of net sales, cost of products sold for the fourth quarter of 2012 decreased to 81.9% from 82.1% for last year’s fourth quarter. Cost of products sold for the twelve months of 2012 was 79.7% as compared to 81.9% for the same period last year. The decrease in the cost of products sold as a percentage of sales was attributable to improved levels of profitability at the Precision Metal Components Segment and operational cost improvements driven by the Level 3 program in each global manufacturing facility.
Debt, net of cash, was $50.5 million at December 31, 2012, a decrease of $23.1 million over the December 31, 2011 amount of $73.6 million. This exceeded the stated goal of a $20 million reduction in net debt. Capital spending totaled $17.1 million for the year.
Roderick R. Baty, Chairman and Chief Executive Officer, commented, “Throughout 2012, weak economic conditions and uncertainty in our served end markets negatively impacted the demand for our products, predominately in the European and Asian automotive markets. However, during the fourth quarter of 2012 the reduction in demand for our products accelerated at a much higher rate than any other quarter of 2012. We feel this was attributable to overall reductions in inventory levels throughout the supply chain which negatively impacted short-term demand for our products during the last two months of the fourth quarter beyond what would be expected from the end markets served and normal seasonality. Despite this weaker demand, our cost structure and operating performance allowed us to significantly improve margins and earnings during 2012 over the prior year. Operational improvements at Whirlaway, coupled with excellent Level 3 cost control initiatives and improved cost flexibility in our European and Chinese facilities, have been the primary drivers in our margin and profitability improvement over 2011 levels, on much lower sales.”
Mr. Baty concluded, “In regards to our outlook for 2013, we are currently forecasting revenues to be in the range of $365 million to $375 million, relatively consistent with our 2012 revenues of $370 million. This forecast assumes no improvement in European demand during 2013 and does not include any recovery from destocking we believe impacted our 2012 sales. Given the current level of economic uncertainty, specifically in Europe, it is very difficult to accurately forecast 2013 revenue. Having said that, the levels of demand we have experienced during the first quarter of 2013 are at higher levels than we expected in our original forecasts. We are unsure if this improvement may be related to improving market conditions or the positive effects of destocking. Given the margin and profitability improvements we have generated during 2012, when our business experiences an increase in sales demand, we can expect additional earnings leverage.
During 2012, we strengthened our balance sheet by reducing net debt by $23 million. We are now in a position to fund our organic and acquisitive growth plans as well as shareholder value initiatives, all of which are key components of our strategic plan for the next 3 years.”
NN, Inc. manufacturers and supplies high precision metal bearing components, industrial plastic and rubber products and precision metal components to a variety of markets on a global basis. Headquartered in Johnson City, Tennessee, NN has 10 manufacturing plants in the United States, Western Europe, Eastern Europe and China. NN, Inc. had sales of US $425 million in 2011.
(NN, Inc)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
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