CHARLOTTE, N.C., Nov. 5, 2020 /PRNewswire/ -- NN, Inc.,
(NASDAQ: NNBR), a diversified industrial company, today reported
its financial results for the third quarter ended September 30, 2020.
GAAP Results
Net sales from the Mobile Solutions and Power Solutions segments
for the third quarter of 2020 decreased $6.7 million, or 5.6%,
to $113.8 million, compared to $120.5
million for the third quarter of 2019, driven by a
decline in organic sales volume of $4.3
million, as a result of continued lower demand due to the
COVID-19 pandemic within the global automotive, electrical
products, and oil and gas end markets, along with unfavorable
foreign exchange effects of $2.4
million.
On a GAAP basis, loss from operations from the Mobile Solutions
segment, Power Solutions segment, and corporate for the third
quarter of 2020 was $1.5 million, compared to loss from
operations of $1.8 million for the same period in 2019.
In the third quarter of 2020, the loss from operations was
primarily driven by the above-referenced sales volume decline,
which was partially offset by cost reduction initiatives that
resulted in lower personnel and travel costs.
Net income on a GAAP basis for the third quarter of 2020
was $22.0 million, compared to net loss on a GAAP basis
of $5.9 million in the third quarter of 2019. Income from
continuing operations on a GAAP basis for the third quarter of 2020
was $1.6 million, compared to loss from continuing operations
on a GAAP basis of $4.8 million in the third quarter of
2019.
On a GAAP basis, income from operations for third quarter 2020
in the Mobile Solutions segment was $5.0 million, compared to
income from operations of $3.4 million for the same period in
2019.
On a GAAP basis, income from operations for third quarter 2020
in the Power Solutions segment
was $1.1 million, compared to income from operations
of $3.4 million for the same period in 2019.
Adjusted Results
Adjusted income from operations from the Mobile Solutions
segment, Power Solutions segment, and corporate for the third
quarter of 2020 was $4.9 million, compared to $7.2
million for the same period in 2019. Adjusted EBITDA for the
third quarter of 2020 was $14.7
million, or 12.9% of sales, versus $15.9 million, or 13.2% of sales, for the same
period in 2019. Adjusted net income was $2.9 million,
or $0.07 per diluted share, compared to adjusted net
income of $3.2 million,
or $0.08 per diluted share, for the same period in
2019.
Warren Veltman, President and
Chief Executive Officer, said, "With the sale of Life Sciences
complete, NN has begun a new chapter as a financially strengthened
organization with two focused, highly complementary segments. Our
improved capital structure should enhance NN's ability to
capitalize on the powerful synergies of our Mobile Solutions and
Power Solutions businesses to drive margin improvements, continue
delivering consistent cash flow and generate long-term shareholder
value."
Mr. Veltman continued, "We are encouraged by the stronger
sequential growth we saw across our Mobile Solutions and Power
Solutions businesses in the third quarter, driven by improved
customer demand across our end markets, even amidst ongoing
challenges related to the pandemic. Going forward, we remain
intensely focused on streamlining our cost structure to best align
with the current environment. This includes maintaining a strong
discipline related to capital expenditures and continuing to manage
our debt levels."
Mobile Solutions
Net sales for the third quarter of 2020 were $70.4 million, compared to $73.1 million in the third quarter of 2019, a
decrease of 3.7% or $2.7 million. The
decrease in sales was driven by negative effects from foreign
exchange movements, as well as lingering challenges from the
COVID-19 pandemic. Adjusted income from operations for the third
quarter of 2020 was $6.3 million,
compared to $5.1 million of adjusted
operating income in the third quarter of 2019. Despite lower sales,
adjusted operating income increased as a result of prior year
product launches maturing and becoming more profitable. Further,
certain of the fixed cost reduction actions initiated in the first
half of 2020 in response to the decline in sales volume caused by
the COVID-19 pandemic remained in place during the quarter,
improving fixed cost leverage for the quarter.
Power Solutions
Net sales for the third quarter of 2020 were $43.4 million, compared to $47.4 million in the third quarter of 2019, a
decrease of $4.0 million or 8.5%. The
decline in sales was driven by lower customer demand across the
segment's end markets, resulting from the COVID-19 pandemic.
Adjusted income from operations for the quarter was $5.4 million, compared to $8.5 million in the third quarter of 2019.
The reduction in adjusted operating income was due to lost
variable margin on the sales volume decline, which was partially
offset by fixed cost reduction actions taken in response to the
decline in sales volume. Additionally, commodity prices on precious
metals, particularly gold and silver, dramatically increased during
the current period, driving up materials costs and decreasing
profitability margin of certain products.
Conference Call
NN will discuss its results during its quarterly investor
conference call on November 6, 2020
at 9:00 a.m. ET. The call and
supplemental presentation may be accessed via NN's website,
www.nninc.com. The conference call can also be accessed by dialing
1-888-204-4368 or 1-323-994-2093, Conference ID: 3591787. For those
who are unavailable to listen to the live broadcast, a replay will
be available shortly after the call for 30 days.
NN discloses in this press release the non-GAAP financial
measures of adjusted income from operations, adjusted EBITDA,
adjusted net income (loss), and adjusted net income per diluted
share. Each of adjusted income from operations, adjusted
EBITDA, adjusted net income (loss), and adjusted net income per
diluted share provides supplementary information about the impacts
of restructuring and integration expense, acquisition and
transition expenses, foreign exchange impacts on inter-company
loans, amortization of intangibles and deferred financing costs,
and other non-operating impacts on our business.
The financial tables found later in this press release include a
reconciliation of adjusted income from operations, adjusted
operating margin, adjusted EBITDA, adjusted EBITDA margin, adjusted
net income (loss), adjusted net income (loss) per diluted share to
the U.S. GAAP financial measures of income from operations, net
income (loss), and net income (loss) per diluted share.
About NN, Inc.
NN, Inc., a diversified industrial company, combines advanced
engineering and production capabilities with in-depth materials
science expertise to design and manufacture high-precision
components and assemblies for a variety of markets on a global
basis. Headquartered in Charlotte, North
Carolina, NN has 30 facilities in North America, Europe, South
America, and China.
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, the impacts of the coronavirus (COVID-19)
pandemic on the Company's financial condition, business operations
and liquidity, 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 the successful implementation of the
global growth plan including development of new products.
Similarly, statements made herein and elsewhere regarding pending
and completed transactions are also forward-looking statements,
including statements relating to the future performance and
prospects of an acquired business, the expected benefits of an
acquisition on the Company's future business and operations and the
ability of the Company to successfully integrate recently acquired
businesses.
For additional information concerning such risk factors and
cautionary statements, please see the section titled "Risk Factors"
in the Company's periodic reports filed with the Securities and
Exchange Commission, including, but not limited to, the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and when filed, the
Company's Quarterly Report on Form 10-Q for the three months ended
September 30, 2020. Except as
required by law, we undertake no obligation to update or revise any
forward-looking statements we make in our press releases, whether
as a result of new information, future events or otherwise.
Financial Tables Follow
NN,
Inc.
|
Condensed
Consolidated Statements of Operations and Comprehensive Income
(Loss)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(in thousands,
except per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales
|
|
$
113,761
|
|
$
120,459
|
|
$
308,506
|
|
$
378,838
|
Cost of sales
(exclusive of depreciation and amortization shown separately
below)
|
|
90,076
|
|
96,654
|
|
249,612
|
|
300,666
|
Selling, general and
administrative expense
|
|
13,745
|
|
15,493
|
|
44,178
|
|
52,994
|
Depreciation and
amortization
|
|
11,435
|
|
11,284
|
|
34,119
|
|
33,552
|
Restructuring and
integration expense, net
|
|
-
|
|
-
|
|
-
|
|
(12)
|
Goodwill
impairment
|
|
-
|
|
-
|
|
92,942
|
|
-
|
Other operating
expense (income), net
|
|
(39)
|
|
(1,161)
|
|
4,138
|
|
(905)
|
Loss from
operations
|
|
(1,456)
|
|
(1,811)
|
|
(116,483)
|
|
(7,457)
|
Interest
expense
|
|
6,873
|
|
3,805
|
|
17,036
|
|
8,829
|
Loss on
extinguishment of debt and write-off of debt issuance
costs
|
|
144
|
|
-
|
|
144
|
|
308
|
Other expense
(income), net
|
|
(262)
|
|
633
|
|
67
|
|
863
|
Loss from continuing
operations before benefit (provision) for income taxes and share of
net
income from joint venture
|
|
(8,211)
|
|
(6,249)
|
|
(133,730)
|
|
(17,457)
|
Benefit (provision)
for income taxes
|
|
8,715
|
|
1,134
|
|
7,935
|
|
(3,694)
|
Share of net income
from joint venture
|
|
1,136
|
|
279
|
|
1,792
|
|
345
|
Income (loss) from
continuing operations
|
|
$
1,640
|
|
$
(4,836)
|
|
$
(124,003)
|
|
$
(20,806)
|
Income (loss) from
discontinued operations, net of tax
|
|
20,330
|
|
(1,019)
|
|
(123,966)
|
|
(11,850)
|
Net income
(loss)
|
|
$
21,970
|
|
$
(5,855)
|
|
$
(247,969)
|
|
$
(32,656)
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
Foreign currency
translation gain (loss)
|
|
6,712
|
|
(11,178)
|
|
(6,636)
|
|
(11,354)
|
Interest rate
swap:
|
|
|
|
|
|
|
|
|
Change in fair value,
net of tax
|
|
21
|
|
(1,181)
|
|
(12,443)
|
|
(11,999)
|
Reclassification
adjustment for losses included in net income (loss), net of
tax
|
|
3,148
|
|
238
|
|
6,838
|
|
238
|
Other comprehensive
income (loss)
|
|
$
9,881
|
|
$
(12,121)
|
|
$
(12,241)
|
|
$
(23,115)
|
Comprehensive income
(loss)
|
|
$
31,851
|
|
$
(17,976)
|
|
$
(260,210)
|
|
$
(55,771)
|
Basic net income
(loss) per common share:
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations per common share
|
|
$
(0.04)
|
|
$
(0.12)
|
|
$
(3.16)
|
|
$
(0.50)
|
Income (loss) from
discontinued operations per common share
|
|
$
0.49
|
|
$
(0.02)
|
|
$
(2.94)
|
|
$
(0.28)
|
Net income (loss) per
common share
|
|
$
0.45
|
|
$
(0.14)
|
|
$
(6.10)
|
|
$
(0.78)
|
Weighted average
common shares outstanding
|
|
42,202
|
|
42,038
|
|
42,170
|
|
42,013
|
Diluted net income
(loss) per common share:
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations per common share
|
|
$
(0.04)
|
|
$
(0.12)
|
|
$
(3.16)
|
|
$
(0.50)
|
Income (loss) from
discontinued operations per common share
|
|
$
0.49
|
|
$
(0.02)
|
|
$
(2.94)
|
|
$
(0.28)
|
Net income (loss) per
common share
|
|
$
0.45
|
|
$
(0.14)
|
|
$
(6.10)
|
|
$
(0.78)
|
Weighted average
common shares outstanding
|
|
42,202
|
|
42,038
|
|
42,170
|
|
42,013
|
Cash dividends
declared per common share
|
|
$
-
|
|
$
0.07
|
|
$
-
|
|
$
0.21
|
NN,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(in
thousands)
|
|
September 30,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
56,131
|
|
$
17,911
|
Accounts receivable,
net
|
|
87,411
|
|
83,240
|
Inventories
|
|
63,718
|
|
67,078
|
Income tax
receivable
|
|
13,640
|
|
5,973
|
Current assets held
for sale
|
|
630,900
|
|
117,000
|
Other current
assets
|
|
11,753
|
|
11,778
|
Total current
assets
|
|
863,553
|
|
302,980
|
Property, plant and
equipment, net
|
|
225,514
|
|
255,977
|
Operating lease
right-of-use assets
|
|
51,601
|
|
45,452
|
Goodwill
|
|
-
|
|
94,779
|
Intangible assets,
net
|
|
106,652
|
|
117,413
|
Investment in joint
venture
|
|
24,147
|
|
21,755
|
Deferred tax
assets
|
|
38,026
|
|
-
|
Non-current assets
held for sale
|
|
-
|
|
695,054
|
Other non-current
assets
|
|
6,716
|
|
8,574
|
Total
assets
|
|
$
1,316,209
|
|
$
1,541,984
|
Liabilities,
Preferred Stock, and Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
42,890
|
|
$
40,973
|
Accrued salaries,
wages and benefits
|
|
19,159
|
|
15,584
|
Income tax
payable
|
|
810
|
|
684
|
Current maturities of
long-term debt
|
|
713,350
|
|
19,106
|
Current portion of
operating lease liabilities
|
|
5,005
|
|
4,288
|
Current liabilities
held for sale
|
|
120,832
|
|
41,546
|
Other current
liabilities
|
|
25,113
|
|
17,300
|
Total current
liabilities
|
|
927,159
|
|
139,481
|
Deferred tax
liabilities
|
|
2,127
|
|
24,461
|
Non-current income
tax payable
|
|
-
|
|
1,272
|
Long-term debt, net
of current portion
|
|
117,482
|
|
757,250
|
Operating lease
liabilities, net of current portion
|
|
56,111
|
|
48,575
|
Non-current
liabilities held for sale
|
|
-
|
|
84,199
|
Other non-current
liabilities
|
|
25,137
|
|
40,457
|
Total
liabilities
|
|
1,128,016
|
|
1,095,695
|
Commitments and
contingencies
|
|
|
|
|
Series B convertible
preferred stock - $0.01 par value per share, 100 shares
authorized,
100 shares issued and outstanding at December 31, 2019, and
September 30, 2020
|
|
101,846
|
|
93,012
|
Stockholders'
equity:
|
|
|
|
|
Common stock - $0.01
par value per share, 90,000 shares authorized, 42,313 and
42,739 shares issued and outstanding at December 31, 2019, and
September 30,
2020, respectively
|
|
427
|
|
423
|
Additional paid-in
capital
|
|
495,967
|
|
501,615
|
Warrants
|
|
-
|
|
1,076
|
Accumulated
deficit
|
|
(353,252)
|
|
(105,283)
|
Accumulated other
comprehensive loss
|
|
(56,795)
|
|
(44,554)
|
Total stockholders'
equity
|
|
86,347
|
|
353,277
|
Total liabilities,
preferred stock, and stockholders' equity
|
|
$
1,316,209
|
|
$
1,541,984
|
NN,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
Nine Months
Ended
September 30,
|
(in
thousands)
|
2020
|
|
2019
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
(247,969)
|
|
$
(32,656)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization of continuing operations
|
34,119
|
|
33,552
|
Depreciation and
amortization of discontinued operations
|
35,731
|
|
35,418
|
Amortization of debt
issuance costs
|
4,981
|
|
3,538
|
Goodwill impairment
of continuing operations
|
92,942
|
|
-
|
Goodwill impairment
of discontinued operations
|
146,757
|
|
-
|
Loss on
extinguishment of debt and write-off of debt issuance
costs
|
1,532
|
|
2,699
|
Share of net income
from joint venture, net of cash dividends received
|
(1,792)
|
|
(345)
|
Compensation expense
from issuance of share-based awards
|
3,565
|
|
1,855
|
Deferred income
taxes
|
(61,889)
|
|
(11,024)
|
Other
|
(1,516)
|
|
2,091
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
4,894
|
|
(9,929)
|
Inventories
|
4,149
|
|
(4,825)
|
Accounts
payable
|
(1,702)
|
|
(334)
|
Income taxes
receivable and payable, net
|
(10,753)
|
|
1,696
|
Other
|
16,295
|
|
11,871
|
Net cash provided by
operating activities
|
19,344
|
|
33,607
|
Cash flows from
investing activities
|
|
|
|
Acquisition of
property, plant and equipment
|
(20,518)
|
|
(40,720)
|
Proceeds from
liquidation of short-term investment
|
-
|
|
8,000
|
Proceeds from sale of
property, plant, and equipment
|
3,153
|
|
2,435
|
Other
|
-
|
|
(712)
|
Net cash used in
investing activities
|
(17,365)
|
|
(30,997)
|
Cash flows from
financing activities
|
|
|
|
Cash paid for debt
issuance costs
|
(661)
|
|
(1,016)
|
Dividends
paid
|
-
|
|
(8,879)
|
Proceeds from
long-term debt
|
64,716
|
|
52,144
|
Repayments of
long-term debt
|
(17,123)
|
|
(26,634)
|
Proceeds from
(repayments of) short-term debt, net
|
(849)
|
|
(6,086)
|
Other
|
(2,142)
|
|
(2,636)
|
Net cash provided by
financing activities
|
43,941
|
|
6,893
|
Effect of exchange
rate changes on cash flows
|
(5,506)
|
|
(3,082)
|
Net change in cash
and cash equivalents
|
40,414
|
|
6,421
|
Cash and cash
equivalents at beginning of period
|
31,703
|
|
17,988
|
Cash and cash
equivalents at end of period
|
$
72,117
|
|
$
24,409
|
Reconciliation of
GAAP Income from Operations to Non-GAAP Adjusted Income from
Operations
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
$000s
|
September
30,
|
|
$000s
|
September
30,
|
NN, Inc.
Consolidated
|
2020
|
2019
|
|
Mobile
Solutions
|
2020
|
2019
|
GAAP income (loss)
from operations
|
$
(1,456)
|
$
(1,811)
|
|
GAAP income (loss)
from operations
|
$
4,954
|
$
3,423
|
Acquisition and
transition expense*
|
2,762
|
5,429
|
|
Acquisition and
transition expense
|
507
|
775
|
Amortization of
intangibles
|
3,587
|
3,618
|
|
Amortization of
intangibles
|
838
|
869
|
Non-GAAP adjusted
income from operations (a)
|
$
4,893
|
$
7,235
|
|
Non-GAAP adjusted
income from operations (a)
|
$
6,300
|
$
5,067
|
|
|
|
|
|
|
|
Non-GAAP adjusted
operating margin (1)
|
4.3%
|
6.0%
|
|
Share of net income
from joint venture
|
1,136
|
279
|
GAAP net
sales
|
$
113,761
|
$
120,459
|
|
Non-GAAP adjusted
income from operations with JV
|
7,436
|
5,346
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Non-GAAP adjusted
operating margin (1)
|
10.6%
|
7.3%
|
$000s
|
September
30,
|
|
GAAP net
sales
|
$
70,371
|
$
73,071
|
Power
Solutions
|
2020
|
2019
|
|
|
|
|
GAAP income (loss)
from operations
|
$
1,143
|
$
3,351
|
|
|
Three Months
Ended
|
Acquisition and
transition expense
|
1,515
|
2,430
|
|
$000s
|
September
30,
|
Amortization of
intangibles
|
2,748
|
2,748
|
|
Elimination
|
2020
|
2019
|
Non-GAAP adjusted
income from operations (a)
|
$
5,407
|
$
8,530
|
|
GAAP net
sales
|
$
(25)
|
$
(42)
|
|
|
|
|
|
|
|
Non-GAAP adjusted
operating margin (1)
|
12.5%
|
18.0%
|
|
|
|
|
GAAP net
sales
|
$
43,415
|
$
47,430
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP adjusted
operating margin = Non-GAAP adjusted income from operations/ GAAP
net sales
|
* 2020 Includes
Capacity & Capabilities Dev - $0.6 / Prof Fees - $0.3 /
Integration & Transformation - $1.9 / Acq Transaction Costs -
$0.0 / Asset Write-Downs/Inventory Step-Up - $0.0
|
* 2019 Includes
Capacity & Capabilities Dev - $1.4 / Prof Fees - $0.5 /
Integration & Transformation - $3.2 / Acq Transaction Costs -
$0.0 / Asset Write-Downs/Inventory Step-Up - $0.3
|
Reconciliation of
Net Income (Loss) to Non-GAAP Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
September
30,
|
|
|
$000s
|
|
2020
|
2019
|
|
|
GAAP net income
(loss)
|
|
$
21,970
|
$
(5,855)
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
(8,715)
|
(1,134)
|
|
|
Interest
expense
|
|
6,873
|
3,805
|
|
|
Write-off of
unamortized debt issuance cost
|
|
144
|
-
|
|
|
Change in fair value
of preferred stock tax withholding
|
(73)
|
-
|
|
|
Depreciation and
amortization
|
|
11,435
|
11,284
|
|
|
Acquisition and
transition expense
|
|
2,762
|
5,246
|
|
|
Non-cash stock
compensation
|
|
1,222
|
829
|
|
|
Non-cash foreign
exchange (gain) loss on inter-company loans
|
(630)
|
668
|
|
|
(Income) loss from
discontinued operations
|
|
(20,330)
|
1,019
|
|
|
Non-GAAP adjusted
EBITDA (b)
|
|
$
14,658
|
$
15,860
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted
EBITDA margin (2)
|
|
12.9%
|
13.2%
|
|
|
GAAP net
sales
|
|
$
113,761
|
$
120,459
|
|
|
|
|
|
|
|
|
(2) Non-GAAP adjusted
EBITDA margin = Non-GAAP adjusted EBITDA / GAAP net
sales
|
|
Reconciliation of
Net Income (Loss) to Non-GAAP Adjusted Net Income (Loss) and
Net
Income (Loss) per Diluted Share to Non-GAAP Adjusted Net Income
(Loss) per Diluted Share
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
September
30,
|
|
|
$000s
|
|
2020
|
2019
|
|
|
GAAP net income
(loss)
|
|
$
21,970
|
$
(5,855)
|
|
|
|
|
|
|
|
|
Pre-tax acquisition
and transition expense
|
|
2,762
|
5,429
|
|
|
Pre-tax foreign
exchange (gain) loss on inter-company loans
|
(630)
|
668
|
|
|
Pre-tax write-off of
unamortized debt issuance costs
|
144
|
-
|
|
|
Pre-tax change in
fair value of preferred stock tax withholding
|
(73)
|
-
|
|
|
Pre-tax amortization
of intangibles and deferred financing costs
|
4,007
|
3,990
|
|
|
Tax effect of
adjustments reflected above (c)
|
|
(1,308)
|
(2,007)
|
|
|
Non-GAAP discrete tax
adjustments
|
|
(3,685)
|
-
|
|
|
(Income) loss from
discontinued operations
|
|
(20,330)
|
1,019
|
|
|
Non-GAAP adjusted net
income (loss) (d)
|
|
$
2,858
|
$
3,243
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
September
30,
|
|
|
Amounts per
share, diluted
|
|
2020
|
2019
|
|
|
GAAP net income
(loss) per diluted share
|
|
$
0.45
|
$
(0.14)
|
|
|
|
|
|
|
|
|
Pre-tax acquisition
and transition expense
|
|
0.07
|
0.13
|
|
|
Pre-tax foreign
exchange (gain) loss on inter-company loans
|
|
(0.01)
|
0.02
|
|
|
Pre-tax write-off of
unamortized debt issuance costs
|
|
0.00
|
-
|
|
|
Pre-tax change in
fair value of preferred stock tax withholding
|
(0.00)
|
-
|
|
|
Pre-tax amortization
of intangibles and deferred financing costs
|
|
0.09
|
0.09
|
|
|
Tax effect of
adjustments reflected above (c)
|
|
(0.03)
|
(0.05)
|
|
|
Non-GAAP discrete tax
adjustments
|
|
(0.09)
|
-
|
|
|
(Income) loss from
discontinued operations
|
|
(0.48)
|
0.02
|
|
|
Preferred stock
cumulative dividends and deemed dividends
|
|
0.07
|
-
|
|
|
Non-GAAP adjusted net
income (loss) per diluted share (d)
|
|
$
0.07
|
$
0.08
|
|
|
Weighted average
shares outstanding, diluted
|
|
42,202
|
42,038
|
|
The Company discloses in this presentation the non-GAAP
financial measures of adjusted income from operations, adjusted
EBITDA, adjusted net income (loss), adjusted net income per diluted
share, free cash flow and net debt. Each of these non-GAAP
financial measures provides supplementary information about the
impacts of acquisition, divestiture and integration related
expenses, foreign-exchange impacts on inter-company loans,
reorganizational and impairment charges. Over the past five
years, we have completed seven acquisitions, two of which were
transformative for the Company, and sold two of our
businesses. The costs we incurred in completing such
acquisitions, including the amortization of intangibles and
deferred financing costs, and these divestitures have been excluded
from these measures because their size and inconsistent frequency
are unrelated to our commercial performance during the period, and
which we believe are not indicative of our ongoing operating costs.
We exclude the impact of currency translation from these measures
because foreign exchange rates are not under management's control
and are subject to volatility. Other non-operating charges are
excluded as the charges are not indicative of our ongoing operating
cost. We believe the presentation of adjusted income from
operations, adjusted EBITDA, adjusted net income (loss), adjusted
net income per diluted share, free cash flow and net debt provides
useful information in assessing our underlying business trends and
facilitates comparison of our long-term performance over given
periods.
The non-GAAP financial measures provided herein may not
provide information that is directly comparable to that provided by
other companies in the Company's industry, as other companies may
calculate such financial results differently. The Company's
non-GAAP financial measures are not measurements of financial
performance under GAAP and should not be considered as alternatives
to actual income growth derived from income amounts presented in
accordance with GAAP. The Company does not consider these non-GAAP
financial measures to be a substitute for, or superior to, the
information provided by GAAP financial results.
(a) Non-GAAP adjusted income from operations represents GAAP
income from operations, adjusted to exclude the effects of
restructuring and integration expense; non-operational charges
related to acquisition and transition expense, intangible
amortization costs for fair value step-up in values related to
acquisitions, non-cash impairment charges, and when
applicable, our share of income from joint venture operations. We
believe this presentation is commonly used by investors and
professional research analysts in the valuation, comparison, rating
and investment recommendations of companies in the industrial
industry. We use this information for comparative purposes within
the industry. Non-GAAP adjusted income from operations is not a
measure of financial performance under GAAP and should not be
considered as a measure of liquidity or as an alternative to GAAP
income from operations.
(b) Non-GAAP adjusted EBITDA represents GAAP net income
(loss), adjusted to include income taxes, interest expense,
Interest rate swaps and write-offs, depreciation and amortization,
charges related to acquisition and transition costs, non-cash stock
compensation expense, foreign exchange gain (loss) on inter-company
loans, restructuring and integration expense, income from
discontinued operations, and non-cash impairment charges, to the
extent applicable. We believe this presentation is commonly used by
investors and professional research analysts in the valuation,
comparison, rating and investment recommendations of companies in
the industrial industry. We use this information for comparative
purposes within the industry. Non-GAAP adjusted EBITDA is not a
measure of financial performance under GAAP and should not be
considered as a measure of liquidity or as an alternative to GAAP
income (loss) from continuing operations.
(c) This line item reflects the aggregate tax effect of all
nontax adjustments reflected in the respective table. NN, Inc.
estimates the tax effect of the adjustment items identified in the
reconciliation schedule above by applying the applicable statutory
rates by tax jurisdiction unless the nature of the item and/or the
tax jurisdiction in which the item has been recorded requires
application of a specific tax rate or tax treatment.
(d) Non-GAAP adjusted net income (loss) represents GAAP
net income (loss) adjusted to exclude the tax-affected effects of
restructuring and integration charges (related to plant closures
and other charges incurred to implement our strategic goals that do
not necessarily represent a major strategic shift in operations),
charges related to acquisition and transition costs,
amortization of intangibles costs for fair value step-up in values
related to acquisitions and amortization of deferred financing
costs, foreign exchange gain (loss) on inter-company loans,
estimated interest expense on cash held from divestiture,
non-cash impairment charges, the impact of enactment
of the Tax Cut and Jobs Act and income from discontinued
operations. We believe this presentation is commonly used by
investors and professional research analysts in the valuation,
comparison, rating and investment recommendations of companies in
the industrial industry. We use this information for comparative
purposes within the industry. Non-GAAP adjusted income (loss) from
segment operations is not a measure of financial performance under
GAAP and should not be considered as a measure of liquidity or as
an alternative to GAAP income (loss) from continuing
operations.
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content:http://www.prnewswire.com/news-releases/nn-inc-reports-third-quarter-2020-results-301167630.html
SOURCE NN, Inc.