CHARLOTTE, N.C., March 13, 2019 /PRNewswire/ -- NN, Inc., (NASDAQ:
NNBR), a diversified industrial company, today reported its
financial results for the fourth quarter and the year ended
December 31, 2018.
GAAP Results
Fourth Quarter
Net sales for the fourth quarter of 2018 increased $43.4 million, or 27.8%, to $199.5 million, compared to $156.1 million for the fourth quarter of 2017.
Growth was driven by $39.2 million
from acquisitions at their historical amounts prior to being
acquired, and organic growth of $6.9
million representing the year over year increase in sales
from acquired and legacy businesses combined, offset by foreign
exchange impacts of $2.7
million.
On a GAAP basis, the operating loss for the fourth quarter of
2018 was $188.2 million, compared to
income from operations of $1.1 million for the same period in
2017. The loss was the result of the previously disclosed
non-cash impairment charges recorded in the Power Solutions and
Mobile Solutions segments in the amounts of $109.1 million and $73.4
million, respectively. The Company does not expect the
impairment charge to have any impact on future operations, affect
its liquidity, affect cash flows from operating activities, or
affect compliance with the financial covenants set forth in its
debt instruments. The Company did not record any impairment charges
in the Life Sciences segment.
Net loss on a GAAP basis for fourth quarter of 2018 was
$220.2 million. This compares to net
income on a GAAP basis of $50.8 million in the fourth quarter of 2017.
The fourth quarter of 2018 net income included $199.1 million of impairment impacts previously
discussed, while the fourth quarter of 2017 included a $52 million benefit from the Tax Cuts and Jobs
Act.
On a GAAP basis, income from operations for fourth quarter 2018
in the Life Sciences segment was $6.2 million, driven by the Paragon
acquisition and operating improvements, compared to $2.8 million for the same period in
2017.
On a GAAP basis, loss from operations for fourth quarter 2018 in
the Mobile Solutions segment was $75.9 million, compared to income from
operations of $6.3 million for
the same period in 2017, with 2018 being unfavorably impacted due
to the goodwill impairment of $73.4
million.
On a GAAP basis, loss from operations for fourth quarter 2018 in
the Power Solutions segment was $109.1 million, compared to income from
operations of $5.7 million for
the same period in 2017 with 2018 being unfavorably impacted due to
the goodwill impairment of $109.1
million.
Full Year
Net sales for 2018 increased $150.9
million, or 24.3%, to $770.7 million, compared to $619.8 million for 2017. Growth was driven by
$133.9 million from acquisitions at
their historical amounts prior to being acquired, and organic
growth of $19.1 million representing
the year over year increase in sales from acquired and legacy
businesses combined, offset by foreign exchange impacts of
$2.1 million. Organic growth
primarily in the Life Sciences segment accounted for the
increase.
On a GAAP basis, loss from operations for 2018 was $178.9 million, compared to income from
operations of $33.1 million for
the same period in 2017, due to non-cash impairment
charges. Net loss on a GAAP basis for 2018 was
$264.5 million., This compared to net
income on a GAAP basis of $163.1 million in 2017. 2018 net
income included $199.1 million of
impairment impacts. 2017 net income included $137.7 million of income from discontinued
operations, net of tax which was primarily related to the gain on
sale of our former Precision Bearings business plus $52 million benefit from the Tax Cuts and Jobs
Act.
On a GAAP basis, income from operations for 2018 in the Life
Sciences segment was $19.1 million, compared to $13.3 million for the same period in 2017.
Growth was driven by the Paragon acquisition and operating
improvements.
On a GAAP basis, the loss from operations for 2018 in the Mobile
Solutions segment were $54.1 million,
compared to income from operations of $34.4 million for the same period in 2017,
with 2018 unfavorably impacted due to a goodwill impairment of
$73.4 million.
On a GAAP basis, the loss from operations for 2018 in the Power
Solutions segment were $95.1 million,
compared to income from operations of $23.4 million for the same period in 2017,
with 2018 unfavorably impacted due to a goodwill impairment of
$109.1 million.
Adjusted Results
Fourth Quarter
Adjusted income from operations for the fourth quarter of 2018
was $23.6 million, compared to
$13.7 million for the same period in
2017. Adjusted net income was $9.3
million, or $0.22 per diluted
share, compared to $8.3 million, or
$0.30 per diluted share, for the same
period in 2017. Prior to the fourth quarter 2018, NN issued
14.2 million shares.
Richard Holder, President and
Chief Executive Officer, commented, "During the fourth quarter of
2018, we were faced with significant market headwinds, customer
issues within Power Solutions and a slowing market in Mobile
Solutions, which challenged our top line. Organic sales growth in
our Life Sciences group, coupled with synergy capture, offset some
of these challenges and drove NN's overall margin expansion and net
income growth."
Life Sciences
Net sales for the fourth quarter of 2018 were $79.5 million, compared to $29.9 million in the fourth quarter of 2017, an
increase of 165.9% or $49.6 million.
Adjusted income from operations for the quarter was $15.7 million, compared to $6.1 million in 2017.
Mr. Holder commented, "Life Sciences continued its strong
momentum throughout the fourth quarter, in line with our
expectations in both revenue and adjusted operating profit."
Mobile Solutions
Net sales for the fourth quarter of 2018 were $75.4 million, compared to $82.1 million in the fourth quarter of 2017, a
decrease of 8.2% or $6.7
million. Adjusted income from operations for the
quarter decreased $2.9 million to
$4.5 million, compared to
$7.4 million in the fourth quarter of
2017. The slowing demand in China,
coupled with costs incurred in new program launches impacted sales
and adjusted operating income during the quarter.
Mr. Holder commented, "Despite facing some market headwinds,
Mobile Solutions continues to focus on improving its operating
performance and production efficiency as we transition our record
number of new programs to full production during 2019."
Power Solutions
Net sales for the fourth quarter of 2018 were $45.2 million, compared to $44.6 million in the fourth quarter of 2017, an
increase of 1.3% or $0.6 million.
Adjusted income from operations for the quarter was $5.8 million, compared to $9.0 million in 2017.
Mr. Holder commented, "We are making targeted strategic
investments in Power Solutions, primarily in Aerospace and Defense,
to support this growing segment of the business. This approach is
consistent with NN's portfolio strategy and overall focus on
expanding our presence in the growing electrical and aerospace end
markets."
Full Year
Adjusted income from operations for 2018 was $92.5 million, compared to $68.5 million for the same period in 2017.
Adjusted net income increased to $37.2
million, or $1.17 per diluted
share, from $30.6 million, or
$1.10 per diluted share, for the same
period in 2017.
Richard Holder, President and
Chief Executive Officer, commented, "The acquisitions completed
during late 2017 and early 2018 have transformed our business, in
line with our strategic objectives. We have seen strong
organic sales growth in our Life Sciences segment and improving
margins from these additions to the NN portfolio. After
facing some market-driven challenges in our Mobile Solutions
business and customer manufacturing issues in our Power Solutions
business, we have focused on maximizing our processes and systems
to improve profitability while investing in new program start-ups
and product line expansions to continue to capture growth
opportunities in line with our strategic plan."
Life Sciences
Net sales for 2018 were $248.2
million, compared to $98.3
million in 2017, an increase of 152.5% or $149.9 million. Adjusted income from operations
for the year was $51.6 million,
compared to $23.2 million in
2017.
Mr. Holder commented, "With the full acquisitions of Paragon and
Bridgemedica in 2018, and ongoing organic growth from our legacy
portfolio, Life Sciences has been a significant growth and
profitability driver of 2018 for NN. We continue to grow
sales at double digit rates and improve profitability each
sequential quarter."
Mobile Solutions
Net sales for 2018 were $335.0
million, compared to $336.9
million in 2017, a decrease of 0.6% or $1.9 million. Adjusted income from
operations for the year decreased $7.9
million to $31.1 million,
compared to $39.0 million in
2017. The slowing demand in China, coupled with costs incurred in new
program launches impacted sales and adjusted operating income
during the year.
Mr. Holder commented, "While the global automotive market
continues to experience challenges, the launch of a record number
of large multi-year programs helped offset these market
headwinds."
Power Solutions
Net sales for 2018 were $189.8
million, compared to $186.6
million in 2017, an increase of 1.7% or $3.2 million. Adjusted income from operations for
the year was $33.6 million, compared
to $35.5 million in 2017.
Mr. Holder commented, "Power Solutions continues to be a
business in transformation, and we are focused on investing in and
growing our aerospace business in line with market demands. This
has been an important step as our 2018 order intake run rate was
consistent with our expectations."
The full set of financial guidance for the fourth quarter and
full year 2018 can be found in our supplemental presentation posted
in the Investor Relations section of our website at
www.nninc.com.
NN will discuss its results during its quarterly investor
conference call on March 14, 2019 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
1-888-394-8218 or 1-323-794-2588 Conference ID: 7135086. 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 net income
(loss) and adjusted net income per diluted share. Each of
adjusted income from operations, adjusted net income (loss) and
adjusted net income per diluted share provide supplementary
information about the impacts of restructuring and integration
expense, acquisition and transition expenses, foreign-exchange,
amortization of intangibles 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 net
income (loss) and 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.
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 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.
Financial Tables Follow
|
Three Months
Ended
December 31,
|
Twelve Months
Ended
December 31,
|
|
|
2018
|
2017
|
2018
|
2017
|
Net sales
|
$
199,477
|
$
156,135
|
$
770,657
|
$
619,793
|
Cost of sales
(exclusive of depreciation and amortization shown separately
below)
|
156,713
|
118,814
|
588,205
|
459,080
|
Selling, general and
administrative expense
|
22,285
|
21,863
|
93,583
|
74,112
|
Acquisition related
costs excluded from selling, general and administrative
expense
|
61
|
344
|
5,871
|
344
|
Depreciation and
amortization
|
19,330
|
13,400
|
71,128
|
52,406
|
Other operating
(income) expense, net
|
6,726
|
621
|
6,089
|
351
|
Goodwill
impairment
|
182,542
|
0
|
182,542
|
0
|
Restructuring and
integration expense, net
|
(10)
|
24
|
2,127
|
386
|
Income (loss) from
operations
|
(188,170)
|
1,069
|
(178,888)
|
33,114
|
Interest
expense
|
14,651
|
12,169
|
61,243
|
52,085
|
Loss on
extinguishment of debt and write-off of debt issuance
costs
|
0
|
2,448
|
19,562
|
42,087
|
Derivative payments
on interest rate swap
|
0
|
0
|
0
|
0
|
Derivative loss
(gain) on change in interest rate swap fair value
|
0
|
(87)
|
0
|
(101)
|
Other (income)
expense, net
|
(541)
|
(892)
|
1,341
|
(2,084)
|
Loss from continuing
operations before benefit for income taxes and share of net
income from joint venture
|
(202,280)
|
(12,569)
|
(261,034)
|
(58,873)
|
Benefit for income
taxes
|
(1,775)
|
64,822
|
10,957
|
79,026
|
Share of net income
(loss) from joint venture
|
(16,134)
|
1,072
|
(14,390)
|
5,211
|
Income (loss) from
continuing operations
|
(220,189)
|
53,325
|
(264,467)
|
25,364
|
Income from
discontinued operations, net of tax (Note 2)
|
0
|
(2,507)
|
0
|
137,688
|
Net income
(loss)
|
$
(220,189)
|
$
50,818
|
$
(264,467)
|
$
163,052
|
Other
comprehensive income (loss):
|
|
|
|
|
Change in fair value
of interest rate swap
|
$
0
|
$
0
|
$
0
|
$
0
|
Reclassification
adjustment for discontinued operations
|
0
|
0
|
0
|
(9,243)
|
Foreign currency
translation gain (loss)
|
629
|
1,067
|
(13,880)
|
22,094
|
Other comprehensive
income (loss)
|
$
629
|
$
1,067
|
$
(13,880)
|
$
12,851
|
Comprehensive income
(loss)
|
$
(219,560)
|
$
51,885
|
$
(278,347)
|
$
175,903
|
Basic net income
(loss) per share:
|
|
|
|
|
Income (loss) from
continuing operations per share
|
$
(5.25)
|
$
1.93
|
$
(8.35)
|
$
0.92
|
Income from
discontinued operations per share
|
0.00
|
(0.09)
|
0.00
|
5.02
|
Net income (loss) per
share
|
$
(5.25)
|
$
1.84
|
$
(8.35)
|
$
5.94
|
Weighted average
shares outstanding
|
41,959
|
27,572
|
31,678
|
27,433
|
Diluted net income
(loss) per share:
|
|
|
|
|
Income (loss) from
continuing operations per share
|
$
(5.25)
|
$
1.91
|
$
(8.35)
|
$
0.91
|
Income from
discontinued operations per share
|
$
0.00
|
$
(0.09)
|
$
0.00
|
$
4.96
|
Net income (loss) per
share
|
$
(5.25)
|
$
1.82
|
$
(8.35)
|
$
5.87
|
Weighted average
shares outstanding
|
41,959
|
27,925
|
31,678
|
27,755
|
Reconciliation of
GAAP Income from Operations to Non-GAAP
Adjusted Income from Operations
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
$000s
|
December
31,
|
|
December
31,
|
NN, Inc.
Consolidated
|
2018
|
2017
|
|
2018
|
2017
|
GAAP income from
operations
|
$
(188,170)
|
$
1,069
|
|
$
(178,888)
|
$
33,114
|
Restructuring and
integration expense
|
(10)
|
24
|
|
2,127
|
386
|
Acquisition and
transition expense
|
15,568
|
6,696
|
|
48,952
|
11,570
|
Amortization of
intangibles
|
8,439
|
5,938
|
|
32,553
|
23,454
|
Impairments (Goodwill
and fixed assets)
|
187,778
|
-
|
|
187,778
|
-
|
Non-GAAP adjusted
income from operations (a)
|
$
23,605
|
$
13,727
|
|
$
92,522
|
$
68,524
|
|
|
|
|
|
|
GAAP net
sales
|
$
199,477
|
$
156,135
|
|
$
770,657
|
$
619,793
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
$000s
|
December
31,
|
|
December
31,
|
Mobile
Solutions
|
2018
|
2017
|
|
2018
|
2017
|
GAAP income from
operations
|
$
(75,925)
|
$
6,317
|
|
$
(54,103)
|
$
34,405
|
Restructuring and
integration expense
|
(10)
|
24
|
|
63
|
386
|
Acquisition and
transition expense
|
1,493
|
195
|
|
3,567
|
695
|
Amortization of
intangibles
|
885
|
859
|
|
3,540
|
3,474
|
Impairments (Goodwill
and fixed assets)
|
78,054
|
-
|
|
78,054
|
-
|
Non-GAAP adjusted
income from operations (a)
|
$
4,497
|
$
7,395
|
|
$
31,121
|
$
38,960
|
|
|
|
|
|
|
GAAP net
sales
|
$
75,359
|
$
82,084
|
|
$
335,037
|
$
336,852
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
$000s
|
December
31,
|
|
December
31,
|
Power
Solutions
|
2018
|
2017
|
|
2018
|
2017
|
GAAP income from
operations
|
$
(109,054)
|
$
5,660
|
|
$
(95,115)
|
$
23,440
|
Restructuring and
integration expense
|
-
|
-
|
|
-
|
-
|
Acquisition and
transition expense
|
3,524
|
664
|
|
8,698
|
1,164
|
Amortization of
intangibles
|
2,193
|
2,724
|
|
10,939
|
10,899
|
Impairments (Goodwill
and fixed assets)
|
109,100
|
-
|
|
109,100
|
-
|
Non-GAAP adjusted
income from operations (a)
|
$
5,763
|
$
9,048
|
|
$
33,622
|
$
35,503
|
|
|
|
|
|
|
GAAP net
sales
|
$
45,194
|
$
44,620
|
|
$
189,778
|
$
186,602
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
$000s
|
December
31,
|
|
December
31,
|
Life
Sciences
|
2018
|
2017
|
|
2018
|
2017
|
GAAP income from
operations
|
$
6,174
|
$
2,840
|
|
$
19,136
|
$
13,271
|
Restructuring and
integration expense
|
-
|
-
|
|
1,336
|
-
|
Acquisition and
transition expense
|
4,122
|
884
|
|
13,064
|
884
|
Amortization of
intangibles
|
5,361
|
2,355
|
|
18,074
|
9,081
|
Impairments (Goodwill
and fixed assets)
|
-
|
-
|
|
-
|
-
|
Non-GAAP adjusted
income from operations (a)
|
$
15,657
|
$
6,079
|
|
$
51,610
|
$
23,236
|
|
|
|
|
|
|
GAAP net
sales
|
$
79,457
|
$
29,932
|
|
$
248,173
|
$
98,329
|
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
|
|
Twelve Months
Ended
|
|
|
December
31,
|
|
December
31,
|
$000s
|
|
2018
|
2017
|
|
2018
|
2017
|
GAAP net income
(loss)
|
|
$
(220,189)
|
$
50,818
|
|
$
(264,467)
|
$
163,052
|
|
|
|
|
|
|
|
Pre-tax acquisition
and transition expense
|
|
15,568
|
6,696
|
|
48,952
|
11,570
|
Pre-tax foreign
exchange (gain) loss on inter-company loans
|
|
(547)
|
559
|
|
2,620
|
258
|
Pre-tax restructuring
and integration expense
|
|
(10)
|
24
|
|
2,127
|
386
|
Pre-tax write-off
unamortized debt issuance costs
|
|
-
|
2,448
|
|
19,562
|
42,087
|
Pre-tax gain on
change in fair value of interest rate swap
|
|
-
|
(87)
|
|
-
|
(101)
|
Pre-tax amortization
of intangibles and deferred financing costs
|
|
9,653
|
7,111
|
|
37,741
|
28,206
|
Pre-tax interest
expense on cash held from divestiture
|
|
-
|
3,720
|
|
3,607
|
6,160
|
Pre-tax impairments
of fixed asset costs
|
|
5,236
|
-
|
|
5,236
|
-
|
Tax effect of
adjustment reflected above (b)
|
|
(6,772)
|
(5,695)
|
|
(24,525)
|
(23,485)
|
Impairments (Goodwill
and JV)
|
|
199,131
|
-
|
|
199,131
|
-
|
Impact due to tax
cuts and jobs act
|
|
-
|
(51,823)
|
|
-
|
(51,823)
|
Diversture of
Business Segment, exclusive of tax reform
|
|
7,198
|
(7,983)
|
|
7,198
|
(7,983)
|
Income from
discontinued operations
|
|
-
|
2,507
|
|
-
|
(137,688)
|
Non-GAAP adjusted net
income (loss) (c)
|
|
$
9,268
|
$
8,295
|
|
$
37,182
|
$
30,638
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December
31,
|
|
December
31,
|
Amounts per
share, diluted
|
|
2018
|
2017
|
|
2018
|
2017
|
GAAP net income
(loss) per diluted share
|
|
$
(5.25)
|
$
1.82
|
|
$
(8.35)
|
$
5.87
|
|
|
|
|
|
|
|
Pre-tax acquisition
and transition expense
|
|
0.37
|
0.24
|
|
1.55
|
0.42
|
Pre-tax foreign
exchange (gain) loss on inter-company loans
|
|
(0.01)
|
0.02
|
|
0.08
|
0.01
|
Pre-tax restructuring
and integration expense
|
|
(0.00)
|
0.00
|
|
0.07
|
0.01
|
Pre-tax write-off
unamortized debt issuance costs
|
|
-
|
0.09
|
|
0.62
|
1.52
|
Pre-tax gain on
change in fair value of interest rate swap
|
|
-
|
(0.00)
|
|
-
|
(0.00)
|
Pre-tax amortization
of intangibles and deferred financing costs
|
|
0.23
|
0.25
|
|
1.19
|
1.02
|
Pre-tax interest
expense on cash held from divestiture
|
|
-
|
0.13
|
|
0.11
|
0.22
|
Pre-tax impairments
of fixed asset costs
|
|
0.12
|
-
|
|
0.17
|
-
|
Tax effect of
adjustment reflected above (b)
|
|
(0.16)
|
(0.20)
|
|
(0.77)
|
(0.85)
|
Impairments (Goodwill
and JV)
|
|
4.75
|
-
|
|
6.29
|
-
|
Impact due to tax
cuts and jobs act
|
|
-
|
(1.86)
|
|
-
|
(1.87)
|
Diversture of
Business Segment, exclusive of tax reform
|
|
0.17
|
(0.29)
|
|
0.23
|
(0.29)
|
Income from
discontinued operations
|
|
-
|
0.09
|
|
-
|
(4.96)
|
Non-GAAP adjusted net
income (loss) per diluted share (c)
|
|
$
0.22
|
$
0.30
|
|
$
1.17
|
$
1.10
|
Weighted average
shares outstanding, diluted
|
|
41,959
|
27,925
|
|
31,678
|
27,755
|
The Company discloses in this presentation the non-GAAP
financial measures of adjusted income from operations, adjusted net
income (loss), and adjusted net income per diluted share.
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 four 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 net income (loss), and adjusted net income per
diluted share provide 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) This line item reflects the aggregate tax effect of all
nontax adjustments reflected in the table above. In addition, the
footnotes above indicate the after-tax amount of each individual
adjustment item. NN, Inc. estimates the tax effect of the
adjustment items identified in the reconciliation schedule above by
applying NN, Inc's. overall estimated effective tax rate to the
pretax amount, 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.
(c) 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,
gains and losses in the fair value of interest rate swaps,
estimated interest expense on cash held from divestiture, non-cash
impairment charges, the impact 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-fourth-quarter-and-full-year-2018-results-300812205.html
SOURCE NN, Inc.