NN Inc. (USA) reported third quarter 2002 sales rose more than 11% and profits
climbed 185% from third quarter 2001.
NN is a key manufacturer of bearing balls, rollers, retainers and seals,
with operations and joint ventures worldwide.
Clearly bucking the trend in the bearing industry and easily besting their own
projections, third quarter sales hit $47.5
million, up 11.5% from third quarter 2001's $42.6 million.
NN originally projected third quarter sales would be only $45 million, down
8% from second quarter's $49.2 million.
Profits were even stronger, with third quarter net income reaching $2.1 million
(4.4% of sales, from a gross margin of 24.9% of sales),
while the same period in 2001 netted $744,000 (1.7% of sales, from a gross
margin of 23% of sales). Second quarter net income had been $2.2 million
(4.5% of sales).
In the past year, the company took charges of $480,000 for the closing of its
Walterboro, South Carolina plant and a gain of $870,000 from insurance
proceeds from a fire at its Erwin, Tennessee plant. Goodwill amortization in
the third quarter totaled $273,000.
Chief Financial Officer David Dyckman said, "We are very pleased with our third
quarter when you consider that the third quarter has traditionally been our
weakest as manufacturing activity in Europe typically slows during August."
Mr. Dyckman went on to say, "Our earnings improvement reflects the ongoing benefit
of the cost structure programs we initiated last year as well as tax rate
improvements and a 35.1% reduction in interest expense resulting from aggressive
debt reduction. We also experienced a 3.8% decline in selling, general and administrative
expenses."
Chairman and CEO Rock Baty commented, "We continue to see incremental improvements
in our revenue in comparison to 2001. However, 2002 revenues still reflect what we
consider to be below normal levels of demand in both Europe and North America."
"With respect to our outlook for 2003, given the continuing uncertainty of the current
global economic environment, we expect earnings ... to increase approximately
19% from 2002, on revenues of approximately $200 million."