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The eBearing News
November 10, 2003
NN Reports Third Quarter 2003 Results
copyright © 2003 eBearing Inc.
NN Inc. (USA) reported third quarter 2003 financial results, with sales up 36% and
profits surging 50% over third quarter 2002. Into fourth quarter, NN said sales and profits
should hold at current levels.
Sales hit $64.6 million, now including sales from NN Netherlands after the acquisition of SKF's Veenendaal
plant, and the sales of NN Euroball ApS after NN acquired full ownership, taking SKF's 23% share. NN also
closed NN Arte prior to the third quarter, reducing comparable year-on-year sales. Currency fluctuations,
according to NN, contributed $3.2 million during the quarter.
eBearing reported these transactions in detail:
• article: NN acquiring SKF Veenendaal plant
• article: NN Acquires full ownership of NN Euroball ApS
• article: NN results, including NN Arte closure
Excluding the currency and acquisition effects, NN sales rose 4% from continuing operations.
Net income for third quarter was $3.2 million, up from $2.1 million in 2002, again largely due to
acquisitions and divestiture.
Gross profit margins dipped to 22.2% of sales during the quarter, from 24.9% in 2002. NN attributed
the drop to lower margins earned in the Veenendaal business and a generally unfavorable product
mix sold this quarter. Meanwhile, SG&A dropped to 8.1% from 8.6%.
Rock Baty, Chairman and CEO, said, "During October we announced that we had entered into an asset
purchase agreement with KLF-Gulickaren, based in Kysucke Nove Mesto, Slovakia, to acquire their
precision ball operations for approximately €1.7 million. The assets of this operation are being
utilized in the formation of a new manufacturing facility which will better allow us to serve our
worldwide bearing customers, many of whom have already established Eastern European operations.
We are optimistic about the outlook for this operation and believe that it will provide
new opportunities to create value for our customers. We anticipate that this facility will be
operational in 2004 and contribute approximately $2 to $3 million in revenues for the first year of operation."
• article: NN acquires KLF rolling elements business
Mr. Baty went on to say, "Additionally, in the fourth quarter, we are initiating a
company-wide program in all nine of our global manufacturing operations that will continue NN's history of
being in the forefront of low cost, high quality component manufacturing companies. This program
integrates the principles of Lean Enterprise, Six Sigma and Total Productive Maintenance and will
provide our employees with the tools o excel in an increasingly demanding and competitive global marketplace."
"Looking forward into the fourth quarter of 2003 and into 2004, we continue to remain cautious on the outlook
of economies around the world. The addition of Veenendaal and the purchase of the remaining SKF minority
interest will benefit fourth quarter results and continue into 2004. With this being said,
we currently expect to report fourth quarter revenue in a range of $64 to $65 million and earnings
per diluted share from underlying operations of $0.17 to $0.18."
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
trademarks of eBearing Inc.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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