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."