CHARLOTTE, N.C., March 13, 2019 /PRNewswire/ -- NN, Inc.,
(NASDAQ: NNBR) ("NN" or "the Company") a diversified industrial
company, today announced that the Company expects to record a
non-cash intangible asset impairment charge in its Mobile Solutions
and Power Solutions groups in the fourth quarter of its fiscal year
ending December 31, 2018 (FY18). The
Company does not expect the impairment charge to have any impact on
future operations, nor affect its liquidity, cash flows from
operating activities, or compliance with the financial covenants
set forth in its debt instruments.
In accordance with Accounting Standards Codification (ASC) 350
"Intangibles Goodwill and Other," the Company is required to test
its goodwill and other indefinite-lived intangible assets for
impairment annually. During the fourth quarter of FY18, NN's
market capitalization declined to a level that was less than the
net book value of stockholders' equity. NN performed its
annual goodwill impairment analysis as of October 1, 2018. The goodwill impairment analysis
required the Company to calculate the fair value for each of its
business groups, including estimation of future cash flows, which
is dependent on internal forecasts, estimation of the long-term
growth rate for each operating segment, and determination of
weighted average cost of capital. As a result of the
analysis, the Company expects to record an impairment loss on
goodwill of $73.4 million and
$109.1 million for Mobile Solutions
and Power Solutions, respectively. NN does not expect to
record any such charges for its Life Sciences group.
In addition, as a result of changing market conditions in
China, NN determined that the
carrying amount of the Company's investment in the Mobile
Solutions' China joint venture
exceeded its estimated fair market value. As a result, the Company
expects to record an impairment charge of $16.6 million against its investment in the
China joint venture.
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. NN has 51 facilities in North America, Western Europe, Eastern 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, 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 or
the possibility that the Company will be unable to execute on the
intended redeployment of proceeds from a divestiture, whether due
to a lack of favorable investment opportunities or
otherwise.
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, 2017. 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.
View original
content:http://www.prnewswire.com/news-releases/nn-inc-announces-anticipated-non-cash-intangible-asset-impairment-charges-300811455.html
SOURCE NN, Inc.