CHARLOTTE, N.C., Nov. 4, 2021 /PRNewswire/ -- NN, Inc.
(NASDAQ: NNBR), a diversified industrial company, today reported
its financial results for the third quarter ended September 30, 2021.
GAAP Results
Net sales for the third quarter of 2021 increased $3.5 million, or 3.1%, to $117.2 million compared to $113.8 million for the third quarter of
2020. The increase in sales from prior year is attributable
to continued recovery from the COVID-19 pandemic in Power
Solutions, which was partially offset by the semiconductor chip
shortage impact on Mobile Solutions sales. Third quarter
Power Solutions sales increased 12.1% and Mobile Solutions sales
decreased 2.5% compared to the prior year.
Loss from operations for the third quarter of 2021 was
$4.6 million compared to loss from
operations of $1.5 million for the
same period in 2020. The increase in loss from operations was
primarily driven by the reinstatement of certain costs that had
been temporarily suspended in the prior year, material and labor
inflation, and operational inefficiencies driven by variability of
customer production schedules and supply chain issues.
Loss from operations for third quarter 2021 in the Mobile
Solutions segment was $0.3 million
compared to income from operations of $5.0
million for the same period in 2020. Income from
operations for third quarter 2021 in the Power Solutions segment
was $1.3 million compared to income
from operations of $1.1 million for
the same period in 2020.
Net loss for the third quarter of 2021 was $3.4 million compared to net income of
$22.0 million for the same period in
2020. The reduction in net income for the third quarter of 2021 was
driven by the income of discontinued operations of the former Life
Sciences business in 2020 as well as the reinstatement of certain
costs that were temporarily suspended in the prior year due to the
COVID-19 pandemic and increased income tax expense. The
decrease in net income was partially offset by a favorable
revaluation of warrants and reductions in interest expense
resulting from termination of the interest rate swap in place in
the prior year.
Adjusted Results
Adjusted loss from operations for the third quarter of 2021 was
$0.2 million compared to an adjusted
income from operations of $4.9
million for the same period in 2020. Adjusted EBITDA for the
third quarter of 2021 was $9.7
million, or 8.3% of sales, versus $14.7 million, or 12.9% of sales, for the same
period in 2020. Adjusted net income for the third quarter of 2021
was $0.5 million, or $0.01 per diluted share, compared to adjusted net
income of $2.9 million, or
$0.07 per diluted share, for the same
period in 2020. Free cash flow for the third quarter of 2021 was a
use of cash of $3.7 million compared to use of cash of
$1.4 million for the same period in
2020.
Warren Veltman, President and
Chief Executive Officer, said, "During the quarter we saw strong
growth in Power Solutions, particularly in commercial and
residential electrical end product which grew 25% year over year.
This strong growth was partially offset by the ongoing
semiconductor chip shortage affecting customers in our Mobile
Solutions business. In addition, broader supply chain
constraints and material and other inflationary cost pressures have
affected margins across our business segments. We have
implemented, or are negotiating, price adjustments to recover these
cost increases, and we believe that these increases coupled with
expected operational improvements will enable us to achieve
normalized margins as our operating environment stabilizes."
Mobile Solutions
Net sales for the third quarter of 2021 were
$68.6 million compared to
$70.4 million in the third quarter of
2020, a decrease of 2.5% or $1.8
million. The decrease in sales was driven by the ongoing
impact of the semiconductor shortage's affecting the automotive
industry, resulting in production shutdowns at a number of our
customers' facilities during the quarter. Adjusted income from
operations for the third quarter of 2021 was $1.0 million compared to $6.3 million of adjusted operating income in the
third quarter of 2020. Adjusted operating income decreased as a
result of lower sales volume, the reintroduction of costs that were
suspended in the prior year due to the COVID-19 pandemic, including
certain benefits and overtime pay, as well as an increase in input
costs during the third quarter of 2021.
Power Solutions
Net sales for the third quarter of 2021 were $48.7 million compared to $43.4 million in the third quarter of 2020, an
increase of 12.1% or $5.3 million.
The increase in sales was primarily driven by stronger demand
within the end markets which were adversely impacted by the
COVID-19 pandemic in the prior year. Adjusted income from
operations for the third quarter was $4.0
million compared to $5.4
million in the third quarter of 2020. The decrease in
adjusted operating income was primarily due to higher sales volumes
that were offset by an increase in input costs and the
reintroduction of expenses and benefits that were temporarily
suspended in the prior year due to the COVID-19 pandemic.
Conference Call
NN will discuss its results during its quarterly investor
conference call on November 5, 2021, 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 1-877-317-6789 or
1-412-317-6789, Conference ID: 10155662. For those who are
unavailable to listen to the live broadcast, a replay will be
available shortly after the call until November 5, 2022.
NN discloses in this press release the non-GAAP financial
measures of adjusted income (loss) from operations, adjusted
EBITDA, adjusted net income (loss), adjusted net income (loss) per
diluted share, and free cash flow. Each of these non-GAAP
financial measures 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 (loss) from operations, adjusted
operating margin, adjusted EBITDA, adjusted EBITDA margin, adjusted
net income (loss), adjusted net income (loss) per diluted share,
and free cash flow to the U.S. GAAP financial measures of income
(loss) from operations, net income (loss), net income (loss) per
diluted share, and cash provided (used) by operating
activities.
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 31 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, 2020, and, when filed, the Company's
Quarterly Report on Form 10-Q for the three months ended
September 30, 2021. 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.
FOR FURTHER INFORMATION:
Jeff Tryka, CFA
Investor Relations Contact
jtryka@lambert.com
(616) 258-5766
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)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net sales
|
|
$
|
117,244
|
|
|
$
|
113,761
|
|
|
$
|
367,205
|
|
|
$
|
308,506
|
|
Cost of sales
(exclusive of depreciation and amortization shown separately
below)
|
|
98,642
|
|
|
90,076
|
|
|
298,127
|
|
|
249,612
|
|
Selling, general, and
administrative expense
|
|
12,181
|
|
|
13,745
|
|
|
40,341
|
|
|
44,178
|
|
Depreciation and
amortization
|
|
11,605
|
|
|
11,435
|
|
|
34,860
|
|
|
34,119
|
|
Goodwill
impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,942
|
|
Other operating
expense (income), net
|
|
(572)
|
|
|
(39)
|
|
|
(901)
|
|
|
4,138
|
|
Loss from
operations
|
|
(4,612)
|
|
|
(1,456)
|
|
|
(5,222)
|
|
|
(116,483)
|
|
Interest
expense
|
|
3,578
|
|
|
6,873
|
|
|
9,175
|
|
|
17,036
|
|
Loss on extinguishment
of debt and write-off of debt issuance costs
|
|
—
|
|
|
144
|
|
|
2,390
|
|
|
144
|
|
Derivative payments on
interest rate swap
|
|
—
|
|
|
—
|
|
|
1,717
|
|
|
—
|
|
Loss on interest rate
swap
|
|
—
|
|
|
—
|
|
|
2,033
|
|
|
—
|
|
Other expense
(income), net
|
|
(4,346)
|
|
|
(262)
|
|
|
(2,788)
|
|
|
67
|
|
Loss from continuing
operations before benefit (provision) for income taxes
and share of net income from joint venture
|
|
(3,844)
|
|
|
(8,211)
|
|
|
(17,749)
|
|
|
(133,730)
|
|
Benefit (provision)
for income taxes
|
|
(375)
|
|
|
8,715
|
|
|
612
|
|
|
7,935
|
|
Share of net income
from joint venture
|
|
842
|
|
|
1,136
|
|
|
3,456
|
|
|
1,792
|
|
Income (loss) from
continuing operations
|
|
(3,377)
|
|
|
1,640
|
|
|
(13,681)
|
|
|
(124,003)
|
|
Income (loss) from
discontinued operations, net of tax
|
|
—
|
|
|
20,330
|
|
|
—
|
|
|
(123,966)
|
|
Net income
(loss)
|
|
$
|
(3,377)
|
|
|
$
|
21,970
|
|
|
$
|
(13,681)
|
|
|
$
|
(247,969)
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
Foreign currency
translation gain (loss)
|
|
$
|
(2,612)
|
|
|
$
|
6,712
|
|
|
$
|
(1,550)
|
|
|
$
|
(6,636)
|
|
Interest rate
swap:
|
|
|
|
|
|
|
|
|
Change in fair value,
net of tax
|
|
(176)
|
|
|
21
|
|
|
(176)
|
|
|
(12,443)
|
|
Reclassification
adjustment for losses included in net income (loss), net
of tax
|
|
22
|
|
|
3,148
|
|
|
2,873
|
|
|
6,838
|
|
Other comprehensive
income (loss)
|
|
$
|
(2,766)
|
|
|
$
|
9,881
|
|
|
$
|
1,147
|
|
|
$
|
(12,241)
|
|
Comprehensive
income (loss)
|
|
$
|
(6,143)
|
|
|
$
|
31,851
|
|
|
$
|
(12,534)
|
|
|
$
|
(260,210)
|
|
Basic net income
(loss) per common share:
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations per common share
|
|
$
|
(0.13)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.75)
|
|
|
$
|
(3.16)
|
|
Income (loss) from
discontinued operations per common share
|
|
—
|
|
|
0.49
|
|
|
—
|
|
|
(2.94)
|
|
Net income (loss) per
common share
|
|
$
|
(0.13)
|
|
|
$
|
0.45
|
|
|
$
|
(0.75)
|
|
|
$
|
(6.10)
|
|
Weighted average
common shares outstanding
|
|
44,455
|
|
|
42,202
|
|
|
43,862
|
|
|
42,170
|
|
Diluted net income
(loss) per common share:
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations per common share
|
|
$
|
(0.13)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.75)
|
|
|
$
|
(3.16)
|
|
Income (loss) from
discontinued operations per common share
|
|
—
|
|
|
0.49
|
|
|
—
|
|
|
(2.94)
|
|
Net income (loss) per
common share
|
|
$
|
(0.13)
|
|
|
$
|
0.45
|
|
|
$
|
(0.75)
|
|
|
$
|
(6.10)
|
|
Weighted average
common shares outstanding
|
|
44,455
|
|
|
42,202
|
|
|
43,862
|
|
|
42,170
|
|
NN,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
(in thousands,
except per share data)
|
|
September 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
24,611
|
|
|
$
|
48,138
|
|
Accounts receivable,
net
|
|
83,990
|
|
|
84,615
|
|
Inventories
|
|
75,321
|
|
|
62,517
|
|
Income tax
receivable
|
|
11,742
|
|
|
8,800
|
|
Other current
assets
|
|
11,837
|
|
|
11,148
|
|
Total current
assets
|
|
207,501
|
|
|
215,218
|
|
Property, plant and
equipment, net
|
|
212,468
|
|
|
223,690
|
|
Operating lease
right-of-use assets
|
|
47,449
|
|
|
50,264
|
|
Intangible assets,
net
|
|
92,305
|
|
|
103,065
|
|
Investment in joint
venture
|
|
30,799
|
|
|
26,983
|
|
Deferred tax
assets
|
|
131
|
|
|
—
|
|
Other non-current
assets
|
|
4,053
|
|
|
5,742
|
|
Total
assets
|
|
$
|
594,706
|
|
|
$
|
624,962
|
|
Liabilities,
Preferred Stock, and Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
44,033
|
|
|
$
|
37,435
|
|
Accrued salaries,
wages and benefits
|
|
18,858
|
|
|
21,296
|
|
Income tax
payable
|
|
1,339
|
|
|
3,557
|
|
Current maturities of
long-term debt
|
|
3,355
|
|
|
4,885
|
|
Current portion of
operating lease liabilities
|
|
5,505
|
|
|
4,797
|
|
Other current
liabilities
|
|
11,983
|
|
|
31,261
|
|
Total current
liabilities
|
|
85,073
|
|
|
103,231
|
|
Deferred tax
liabilities
|
|
8,344
|
|
|
11,178
|
|
Long-term debt, net of
current portion
|
|
151,323
|
|
|
79,025
|
|
Operating lease
liabilities, net of current portion
|
|
52,417
|
|
|
55,053
|
|
Other non-current
liabilities
|
|
21,337
|
|
|
17,237
|
|
Total
liabilities
|
|
318,494
|
|
|
265,724
|
|
Commitments and
contingencies
|
|
|
|
|
Series D perpetual
preferred stock - $0.01 par value per share, 65 shares authorized,
issued and outstanding at
September 30, 2021
|
|
51,383
|
|
|
—
|
|
Series B convertible
preferred stock - $0.01 par value per share, 100 shares authorized,
issued and outstanding at
December 31, 2020
|
|
—
|
|
|
105,086
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock - $0.01
par value per share, 90,000 shares authorized, 42,686 and 43,034
shares issued and
outstanding at December 31, 2020, and September 30, 2021,
respectively
|
|
430
|
|
|
427
|
|
Additional paid-in
capital
|
|
476,540
|
|
|
493,332
|
|
Accumulated
deficit
|
|
(219,556)
|
|
|
(205,875)
|
|
Accumulated other
comprehensive loss
|
|
(32,585)
|
|
|
(33,732)
|
|
Total stockholders'
equity
|
|
224,829
|
|
|
254,152
|
|
Total liabilities,
preferred stock, and stockholders' equity
|
|
$
|
594,706
|
|
|
$
|
624,962
|
|
NN,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
Nine Months
Ended
September
30,
|
(in
thousands)
|
|
2021
|
|
2020
|
Cash flows from
operating activities
|
|
|
|
|
Net loss
|
|
$
|
(13,681)
|
|
|
$
|
(247,969)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization of continuing operations
|
|
34,860
|
|
|
34,119
|
|
Depreciation and
amortization of discontinued operations
|
|
—
|
|
|
35,731
|
|
Amortization of debt
issuance costs and discount
|
|
1,049
|
|
|
4,981
|
|
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
|
|
2,390
|
|
|
1,532
|
|
Total derivative loss,
net of cash settlements
|
|
3,750
|
|
|
—
|
|
Share of net income
from joint venture
|
|
(3,456)
|
|
|
(1,792)
|
|
Compensation expense
from issuance of share-based awards
|
|
2,580
|
|
|
3,565
|
|
Deferred income
taxes
|
|
(3,720)
|
|
|
(61,889)
|
|
Other
|
|
(1,834)
|
|
|
(1,516)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
136
|
|
|
4,894
|
|
Inventories
|
|
(13,252)
|
|
|
4,149
|
|
Accounts
payable
|
|
7,982
|
|
|
(1,702)
|
|
Income taxes
receivable and payable, net
|
|
(5,171)
|
|
|
(10,753)
|
|
Other
|
|
(5,942)
|
|
|
16,295
|
|
Net cash provided by
operating activities
|
|
5,691
|
|
|
19,344
|
|
Cash flows from
investing activities
|
|
|
|
|
Acquisition of
property, plant and equipment
|
|
(14,556)
|
|
|
(20,518)
|
|
Proceeds from sale of
property, plant, and equipment
|
|
1,177
|
|
|
3,153
|
|
Cash paid for
post-closing adjustments on sale of business
|
|
(3,880)
|
|
|
—
|
|
Cash settlements of
interest rate swap
|
|
(15,420)
|
|
|
—
|
|
Net cash used in
investing activities
|
|
(28,799)
|
|
|
(17,365)
|
|
Cash flows from
financing activities
|
|
|
|
|
Cash paid for debt
issuance costs
|
|
(7,360)
|
|
|
(661)
|
|
Proceeds from issuance
of preferred stock
|
|
61,793
|
|
|
—
|
|
Redemption of
preferred stock
|
|
(122,434)
|
|
|
—
|
|
Proceeds from
long-term debt
|
|
166,000
|
|
|
64,716
|
|
Repayments of
long-term debt
|
|
(88,058)
|
|
|
(17,123)
|
|
Repayments of
short-term debt, net
|
|
(1,563)
|
|
|
(849)
|
|
Other
|
|
(3,859)
|
|
|
(2,142)
|
|
Net cash provided by
financing activities
|
|
4,519
|
|
|
43,941
|
|
Effect of exchange
rate changes on cash flows
|
|
(1,058)
|
|
|
(5,506)
|
|
Net change in cash and
cash equivalents
|
|
(19,647)
|
|
|
40,414
|
|
Cash and cash
equivalents at beginning of period (1)
|
|
48,138
|
|
|
31,703
|
|
Cash and cash
equivalents at end of period (1)
|
|
$
|
28,491
|
|
|
$
|
72,117
|
|
_______________________________
|
(1)
|
Cash and cash
equivalents include $16.0 million and $13.8 million of cash
and cash equivalents that were included in current assets of
discontinued operations as of September 30, 2020, and
December 31, 2019, respectively.
|
Reconciliation of
GAAP Income (Loss) from Operations to Non-GAAP Adjusted Income
(Loss) from Operations
|
|
|
Three Months
Ended
September 30,
|
$000s
|
NN, Inc.
Consolidated
|
2021
|
|
2020
|
GAAP income (loss)
from operations
|
$
|
(4,612)
|
|
|
$
|
(1,456)
|
|
Acquisition and
transition expense*
|
832
|
|
|
2,762
|
|
Amortization of
intangibles
|
3,586
|
|
|
3,587
|
|
Non-GAAP adjusted
income (loss) from operations (a)
|
$
|
(194)
|
|
|
$
|
4,893
|
|
|
|
|
|
Non-GAAP adjusted
operating margin (1)
|
(0.2)
|
%
|
|
4.3
|
%
|
GAAP net
sales
|
$
|
117,244
|
|
|
$
|
113,761
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
$000s
|
Power
Solutions
|
2021
|
|
2020
|
GAAP income (loss)
from operations
|
$
|
1,252
|
|
|
$
|
1,143
|
|
Acquisition and
transition expense*
|
(17)
|
|
|
1,515
|
|
Amortization of
intangibles
|
2,748
|
|
|
2,748
|
|
Non-GAAP adjusted
income (loss) from operations (a)
|
$
|
3,983
|
|
|
$
|
5,406
|
|
|
|
|
|
Non-GAAP adjusted
operating margin (1)
|
8.2
|
%
|
|
12.5
|
%
|
GAAP net
sales
|
$
|
48,680
|
|
|
$
|
43,415
|
|
|
Three Months
Ended
September 30,
|
$000s
|
Mobile
Solutions
|
2021
|
|
2020
|
GAAP income (loss)
from operations
|
$
|
(257)
|
|
|
$
|
4,954
|
|
Acquisition and
transition expense*
|
404
|
|
|
507
|
|
Amortization of
intangibles
|
838
|
|
|
838
|
|
Non-GAAP adjusted
income (loss) from operations (a)
|
985
|
|
|
6,299
|
|
|
|
|
|
Share of net income
from joint venture
|
842
|
|
|
1,137
|
|
Non-GAAP adjusted
income (loss) from operations with JV
|
$
|
1,827
|
|
|
$
|
7,436
|
|
|
|
|
|
Non-GAAP adjusted
operating margin (1)
|
2.7
|
%
|
|
10.6
|
%
|
GAAP net
sales
|
$
|
68,586
|
|
|
$
|
70,371
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
$000s
|
Elimination
|
2021
|
|
2020
|
GAAP net
sales
|
$
|
(22)
|
|
|
$
|
(25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-GAAP adjusted
operating margin = Non-GAAP adjusted income from operations / GAAP
net sales
|
*
|
2021 Includes
Capacity & Capabilities - / Professional Fees -
$0.4 / Integration & Transformation - $0.4
|
*
|
2020 Includes
Capacity & Capabilities - $0.6 / Professional Fees - $0.3 /
Integration & Transformation - $1.8
|
Reconciliation of
Net Income (Loss) to Non-GAAP Adjusted EBITDA
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
000's
|
2021
|
|
2020
|
GAAP net income
(loss)
|
$
|
(3,377)
|
|
|
$
|
21,970
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
375
|
|
|
(8,715)
|
|
Interest
expense
|
3,578
|
|
|
6,873
|
|
Change in fair value
of preferred stock derivatives and warrants
|
(4,829)
|
|
|
(73)
|
|
Depreciation and
amortization
|
11,605
|
|
|
11,435
|
|
Acquisition and
transition expense
|
832
|
|
|
2,762
|
|
Non-cash stock
compensation
|
931
|
|
|
1,222
|
|
Non-cash foreign
exchange (gain) loss on inter-company loans
|
615
|
|
|
(630)
|
|
Loss from
discontinued operations, net of tax
|
—
|
|
|
(20,330)
|
|
Non-GAAP adjusted
EBITDA (b)
|
$
|
9,730
|
|
|
$
|
14,658
|
|
|
|
|
|
Non-GAAP adjusted
EBITDA margin (2)
|
8.3
|
%
|
|
12.9
|
%
|
GAAP net
sales
|
$
|
117,244
|
|
|
$
|
113,761
|
|
|
|
(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,
|
000's
|
2021
|
|
2020
|
GAAP net income
(loss)
|
$
|
(3,377)
|
|
|
$
|
21,970
|
|
|
|
|
|
Pre-tax acquisition
and transition expense
|
832
|
|
|
2,762
|
|
Pre-tax foreign
exchange (gain) loss on inter-company loans
|
615
|
|
|
(630)
|
|
Pre-tax change in
fair value of preferred stock derivatives and warrants
|
(4,829)
|
|
|
(73)
|
|
Pre-tax amortization
of intangibles and deferred financing costs
|
3,918
|
|
|
4,007
|
|
Tax effect of
adjustments reflected above (c)
|
(113)
|
|
|
(1,308)
|
|
Non-GAAP discrete tax
adjustments
|
3,469
|
|
|
(3,685)
|
|
(Income) loss from
discontinued operations
|
—
|
|
|
(20,330)
|
|
Non-GAAP adjusted net
income (loss) (d)
|
$
|
515
|
|
|
$
|
2,857
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
Amounts per
share, diluted
|
2021
|
|
2020
|
GAAP net income
(loss) per diluted share
|
$
|
(0.13)
|
|
|
$
|
0.45
|
|
|
|
|
|
Pre-tax acquisition
and transition expense
|
0.02
|
|
|
0.07
|
|
Pre-tax foreign
exchange (gain) loss on inter-company loans
|
0.01
|
|
|
(0.01)
|
|
Pre-tax change in
fair value of preferred stock derivatives and warrants
|
(0.11)
|
|
|
—
|
|
Pre-tax amortization
of intangibles and deferred financing costs
|
0.09
|
|
|
0.09
|
|
Tax effect of
adjustments reflected above (c)
|
—
|
|
|
(0.03)
|
|
Non-GAAP discrete tax
adjustments
|
0.08
|
|
|
(0.09)
|
|
(Income) loss from
discontinued operations
|
—
|
|
|
(0.48)
|
|
Preferred stock
cumulative dividends and deemed dividends
|
0.05
|
|
|
0.07
|
|
Non-GAAP adjusted net
income (loss) per diluted share (d)
|
$
|
0.01
|
|
|
$
|
0.07
|
|
Weighted average
common shares outstanding
|
44,455
|
|
|
42,202
|
|
Reconciliation of
Operating Cash Flow to Free Cash Flow
|
|
|
Three Months
Ended
September
30,
|
000's
|
2021
|
|
2020
|
Net cash provided by
(used in) operating activities
|
$
|
(207)
|
|
|
$
|
3,482
|
|
Acquisition of
property, plant and equipment
|
(3,541)
|
|
|
(4,894)
|
|
Free cash
flow
|
$
|
(3,748)
|
|
|
$
|
(1,412)
|
|
The Company discloses in this presentation the non-GAAP
financial measures of adjusted income (loss) from operations,
adjusted EBITDA, adjusted net income (loss), adjusted net income
(loss) 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 several acquisitions,
one of which was 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 (loss) from
operations, adjusted EBITDA, adjusted net income (loss), adjusted
net income (loss) 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 (loss) from operations
represents GAAP income (loss) 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 (loss) 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 (loss) from operations.
(b) Non-GAAP adjusted EBITDA represents GAAP net income
(loss), adjusted to include income taxes, interest expense,
write-off of unamortized debt issuance costs, interest rate swap
payments and change in fair value, change in fair value of
preferred stock derivatives and warrants, 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,
costs related to divested businesses and litigation settlements,
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
non-tax 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 charges related to acquisition and transition costs,
foreign exchange gain (loss) on inter-company loans, restructuring
and integration charges, amortization of intangibles costs for fair
value step-up in values related to acquisitions and amortization of
deferred financing costs, non-cash impairment charges, write-off of
unamortized debt issuance costs, interest rate swap payments and
change in fair value, change in fair value of preferred stock
derivatives and warrants, costs related to divested businesses and
litigation settlements, income (loss) from discontinued operations,
and preferred stock cumulative dividends and deemed dividends. 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:https://www.prnewswire.com/news-releases/nn-inc-reports-financial-results-for-third-quarter-2021-301417089.html
SOURCE NN, Inc.