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Share Name | Share Symbol | Market | Type |
---|---|---|---|
NN Inc | NASDAQ:NNBR | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.17 | 5.06% | 3.53 | 3.41 | 3.84 | 3.59 | 3.345 | 3.39 | 303,802 | 01:00:00 |
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
62-1096725
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
Large accelerated filer
|
|
☐
|
|
Accelerated filer
|
|
☒
|
|
|
|
|
|||
Non-accelerated filer
|
|
☐ (Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
|||
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 2.
|
||
|
|
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Item 3.
|
||
|
|
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Item 4.
|
||
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
Item 1.
|
Financial Statements
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
|
$
|
205,683
|
|
|
$
|
148,156
|
|
|
$
|
571,180
|
|
|
$
|
463,658
|
|
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
|
156,408
|
|
|
111,272
|
|
|
431,492
|
|
|
340,266
|
|
||||
Selling, general and administrative expense
|
|
22,480
|
|
|
16,985
|
|
|
71,298
|
|
|
51,630
|
|
||||
Acquisition related costs excluded from selling, general and administrative expense
|
|
597
|
|
|
619
|
|
|
5,810
|
|
|
619
|
|
||||
Depreciation and amortization
|
|
21,259
|
|
|
13,384
|
|
|
51,798
|
|
|
39,006
|
|
||||
Other operating income, net
|
|
(733
|
)
|
|
—
|
|
|
(638
|
)
|
|
(270
|
)
|
||||
Restructuring and integration expense (adjustments), net
|
|
(209
|
)
|
|
345
|
|
|
2,137
|
|
|
362
|
|
||||
Income from operations
|
|
5,881
|
|
|
5,551
|
|
|
9,283
|
|
|
32,045
|
|
||||
Interest expense
|
|
18,608
|
|
|
12,739
|
|
|
46,592
|
|
|
39,916
|
|
||||
Loss on extinguishment of debt and write-off of debt issuance costs
|
|
6,624
|
|
|
—
|
|
|
19,562
|
|
|
39,639
|
|
||||
Derivative gain on change in interest rate swap fair value
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(14
|
)
|
||||
Other (income) expense, net
|
|
308
|
|
|
(755
|
)
|
|
1,882
|
|
|
(1,192
|
)
|
||||
Loss from continuing operations before benefit for income taxes and share of net income from joint venture
|
|
(19,659
|
)
|
|
(6,406
|
)
|
|
(58,753
|
)
|
|
(46,304
|
)
|
||||
Benefit for income taxes
|
|
5,609
|
|
|
1,724
|
|
|
12,732
|
|
|
14,204
|
|
||||
Share of net income from joint venture
|
|
266
|
|
|
1,202
|
|
|
1,744
|
|
|
4,139
|
|
||||
Loss from continuing operations
|
|
(13,784
|
)
|
|
(3,480
|
)
|
|
(44,277
|
)
|
|
(27,961
|
)
|
||||
Income from discontinued operations, net of tax (Note 2)
|
|
—
|
|
|
129,441
|
|
|
—
|
|
|
140,195
|
|
||||
Net income (loss)
|
|
$
|
(13,784
|
)
|
|
$
|
125,961
|
|
|
$
|
(44,277
|
)
|
|
$
|
112,234
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Reclassification adjustment for discontinued operations
|
|
$
|
—
|
|
|
$
|
(9,243
|
)
|
|
$
|
—
|
|
|
$
|
(9,243
|
)
|
Foreign currency translation gain (loss)
|
|
(4,193
|
)
|
|
6,411
|
|
|
(14,509
|
)
|
|
21,027
|
|
||||
Other comprehensive income (loss)
|
|
$
|
(4,193
|
)
|
|
$
|
(2,832
|
)
|
|
$
|
(14,509
|
)
|
|
$
|
11,784
|
|
Comprehensive income (loss)
|
|
$
|
(17,977
|
)
|
|
$
|
123,129
|
|
|
$
|
(58,786
|
)
|
|
$
|
124,018
|
|
Basic net loss per share:
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations per share
|
|
$
|
(0.48
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
(1.02
|
)
|
Income from discontinued operations per share
|
|
—
|
|
|
4.70
|
|
|
—
|
|
|
5.12
|
|
||||
Net income (loss) per share
|
|
$
|
(0.48
|
)
|
|
$
|
4.57
|
|
|
$
|
(1.59
|
)
|
|
$
|
4.10
|
|
Weighted average shares outstanding
|
|
28,688
|
|
|
27,544
|
|
|
27,784
|
|
|
27,403
|
|
||||
Diluted net loss per share:
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations per share
|
|
$
|
(0.48
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
(1.02
|
)
|
Income from discontinued operations per share
|
|
—
|
|
|
4.70
|
|
|
—
|
|
|
5.12
|
|
||||
Net income (loss) per share
|
|
$
|
(0.48
|
)
|
|
$
|
4.57
|
|
|
$
|
(1.59
|
)
|
|
$
|
4.10
|
|
Weighted average shares outstanding
|
|
28,688
|
|
|
27,544
|
|
|
27,784
|
|
|
27,403
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
17,789
|
|
|
$
|
224,446
|
|
Accounts receivable, net
|
|
149,982
|
|
|
108,446
|
|
||
Inventories
|
|
124,109
|
|
|
82,617
|
|
||
Income tax receivable
|
|
39,357
|
|
|
43,253
|
|
||
Other current assets
|
|
22,735
|
|
|
18,518
|
|
||
Total current assets
|
|
353,972
|
|
|
477,280
|
|
||
Property, plant and equipment, net
|
|
352,138
|
|
|
259,280
|
|
||
Goodwill
|
|
624,455
|
|
|
454,612
|
|
||
Intangible assets, net
|
|
384,683
|
|
|
237,702
|
|
||
Investment in joint venture
|
|
39,324
|
|
|
39,822
|
|
||
Other non-current assets
|
|
8,750
|
|
|
6,307
|
|
||
Total assets
|
|
$
|
1,763,322
|
|
|
$
|
1,475,003
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
66,302
|
|
|
$
|
52,990
|
|
Accrued salaries, wages and benefits
|
|
27,921
|
|
|
21,145
|
|
||
Current maturities of long-term debt
|
|
31,726
|
|
|
17,283
|
|
||
Other current liabilities
|
|
23,854
|
|
|
17,003
|
|
||
Total current liabilities
|
|
149,803
|
|
|
108,421
|
|
||
Deferred tax liabilities
|
|
102,195
|
|
|
71,564
|
|
||
Non-current income tax payable
|
|
—
|
|
|
5,593
|
|
||
Long-term debt, net of current portion
|
|
843,520
|
|
|
790,805
|
|
||
Other non-current liabilities
|
|
26,770
|
|
|
12,516
|
|
||
Total liabilities
|
|
1,122,288
|
|
|
988,899
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
||||
Total stockholders’ equity
|
|
641,034
|
|
|
486,104
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,763,322
|
|
|
$
|
1,475,003
|
|
|
|
Number
of shares |
|
Par
value |
|
Additional
paid in capital |
|
Retained
earnings |
|
Accumulated other comprehensive loss
|
|
Total
|
|||||||||||
Balance, December 31, 2017
|
|
27,572
|
|
|
$
|
275
|
|
|
$
|
292,494
|
|
|
$
|
211,080
|
|
|
$
|
(17,745
|
)
|
|
$
|
486,104
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44,277
|
)
|
|
—
|
|
|
(44,277
|
)
|
|||||
Cash dividends declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,835
|
)
|
|
—
|
|
|
(5,835
|
)
|
|||||
Shares issued
|
|
14,375
|
|
|
144
|
|
|
217,168
|
|
|
—
|
|
|
—
|
|
|
217,312
|
|
|||||
Share-based compensation expense
|
|
165
|
|
|
2
|
|
|
3,423
|
|
|
—
|
|
|
—
|
|
|
3,425
|
|
|||||
Shares issued for option exercises
|
|
27
|
|
|
—
|
|
|
274
|
|
|
—
|
|
|
—
|
|
|
274
|
|
|||||
Restricted shares and performance shares forgiven for taxes and forfeited
|
|
(35
|
)
|
|
—
|
|
|
(723
|
)
|
|
—
|
|
|
—
|
|
|
(723
|
)
|
|||||
Change in estimate of performance share vesting
|
|
—
|
|
|
—
|
|
|
(802
|
)
|
|
49
|
|
|
—
|
|
|
(753
|
)
|
|||||
Foreign currency translation loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,509
|
)
|
|
(14,509
|
)
|
|||||
Adoption of new accounting standard (Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Balance, September 30, 2018
|
|
42,104
|
|
|
$
|
421
|
|
|
$
|
511,834
|
|
|
$
|
161,033
|
|
|
$
|
(32,254
|
)
|
|
$
|
641,034
|
|
|
|
Nine Months Ended
September 30, |
|
||||||
|
|
2018
|
|
2017
|
|
||||
Cash flows from operating activities
|
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
(44,277
|
)
|
|
$
|
112,234
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used by) operating activities:
|
|
|
|
|
|
||||
Depreciation and amortization of continuing operations
|
|
51,798
|
|
|
39,006
|
|
|
||
Depreciation and amortization of discontinued operations
|
|
—
|
|
|
7,722
|
|
|
||
Amortization of debt issuance costs
|
|
3,631
|
|
|
3,237
|
|
|
||
Loss on extinguishment of debt and write-off of debt issuance costs
|
|
19,562
|
|
|
39,639
|
|
|
||
Share of net income from joint venture, net of cash dividends received
|
|
(1,744
|
)
|
|
17
|
|
|
||
Gain on disposal of discontinued operations, net of tax and cost to sell
|
|
—
|
|
|
(123,010
|
)
|
|
||
Compensation expense from issuance of share-based awards
|
|
2,623
|
|
|
3,220
|
|
|
||
Deferred income taxes
|
|
(14,737
|
)
|
|
70
|
|
|
||
Other
|
|
255
|
|
|
(123
|
)
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||
Accounts receivable
|
|
(19,656
|
)
|
|
(14,867
|
)
|
|
||
Inventories
|
|
(18,207
|
)
|
|
(10,328
|
)
|
|
||
Accounts payable
|
|
3,733
|
|
|
(3,317
|
)
|
|
||
Income taxes receivable and payable, net
|
|
(1,681
|
)
|
|
(19,409
|
)
|
|
||
Other
|
|
5,485
|
|
|
(2,765
|
)
|
|
||
Net cash provided by (used by) operating activities
|
|
(13,215
|
)
|
|
31,326
|
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
||||
Acquisition of property, plant and equipment
|
|
(46,998
|
)
|
|
(31,674
|
)
|
|
||
Cash paid to acquire businesses, net of cash received
|
|
(399,011
|
)
|
|
—
|
|
|
||
Short term investment
|
|
—
|
|
|
(8,000
|
)
|
|
||
Proceeds from sale of business, net of cash sold
|
|
—
|
|
|
371,436
|
|
|
||
Other
|
|
650
|
|
|
1,184
|
|
|
||
Net cash provided by (used by) investing activities
|
|
(445,359
|
)
|
|
332,946
|
|
|
||
Cash flows from financing activities
|
|
|
|
|
|
||||
Cash paid for debt issuance or prepayment costs
|
|
(20,703
|
)
|
|
(38,130
|
)
|
|
||
Dividends paid
|
|
(5,812
|
)
|
|
(5,764
|
)
|
|
||
Proceeds from issuance of common shares
|
|
217,435
|
|
|
—
|
|
|
||
Proceeds from long-term debt
|
|
288,594
|
|
|
317,000
|
|
|
||
Repayment of long-term debt
|
|
(234,000
|
)
|
|
(301,313
|
)
|
|
||
Proceeds from (repayments of) short-term debt, net
|
|
10,474
|
|
|
(3,968
|
)
|
|
||
Other
|
|
(3,161
|
)
|
|
(490
|
)
|
|
||
Net cash provided by (used by) financing activities
|
|
252,827
|
|
|
(32,665
|
)
|
|
||
Effect of exchange rate changes on cash flows
|
|
(910
|
)
|
|
1,368
|
|
|
||
Net change in cash and cash equivalents
|
|
(206,657
|
)
|
|
332,975
|
|
|
||
Cash and cash equivalents at beginning of period
|
|
224,446
|
|
|
14,405
|
|
(1)
|
||
Cash and cash equivalents at end of period
|
|
$
|
17,789
|
|
|
$
|
347,380
|
|
|
(1)
|
Cash and cash equivalents as of
December 31, 2016
, includes
$8.1 million
of cash and cash equivalents that were included in current assets of discontinued operations.
|
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended
September 30, 2017 |
||||
Net sales
|
$
|
31,600
|
|
|
$
|
168,287
|
|
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
26,070
|
|
|
130,555
|
|
||
Selling, general and administrative expense
|
2,466
|
|
|
11,587
|
|
||
Depreciation and amortization
|
1,611
|
|
|
7,722
|
|
||
Restructuring and integration expense
|
—
|
|
|
429
|
|
||
Income from operations
|
1,453
|
|
|
17,994
|
|
||
Interest income (expense)
|
7
|
|
|
(181
|
)
|
||
Other income (expense)
|
(66
|
)
|
|
(84
|
)
|
||
Income from discontinued operations before gain on disposal and provision for income taxes
|
1,394
|
|
|
17,729
|
|
||
Provision for income taxes
|
5,362
|
|
|
(219
|
)
|
||
Income (loss) from discontinued operations before gain on disposal
|
6,756
|
|
|
17,510
|
|
||
Gain on disposal of discontinued operations
|
208,896
|
|
|
208,896
|
|
||
Provision for income taxes on gain on disposal
|
(86,211
|
)
|
|
(86,211
|
)
|
||
Income from discontinued operations, net of tax
|
$
|
129,441
|
|
|
$
|
140,195
|
|
|
Nine Months Ended
September 30, 2017 |
||
Depreciation and amortization
|
$
|
7,722
|
|
Acquisition of property, plant and equipment
|
$
|
7,316
|
|
Fair value of assets acquired and liabilities assumed
|
As Reported on June 30, 2018
|
|
Subsequent Adjustments
|
|
September 30, 2018
|
||||||
Cash and cash equivalents
|
$
|
13,418
|
|
|
$
|
134
|
|
|
$
|
13,552
|
|
Accounts receivable
|
22,853
|
|
|
(721
|
)
|
|
22,132
|
|
|||
Inventories
|
23,606
|
|
|
(98
|
)
|
|
23,508
|
|
|||
Other current assets
|
937
|
|
|
734
|
|
|
1,671
|
|
|||
Property, plant and equipment
|
69,322
|
|
|
(5,625
|
)
|
|
63,697
|
|
|||
Intangible assets subject to amortization
|
164,200
|
|
|
(700
|
)
|
|
163,500
|
|
|||
Other non-current assets
|
3,304
|
|
|
(129
|
)
|
|
3,175
|
|
|||
Goodwill
|
157,421
|
|
|
5,017
|
|
|
162,438
|
|
|||
Total assets acquired
|
$
|
455,061
|
|
|
$
|
(1,388
|
)
|
|
$
|
453,673
|
|
Current liabilities
|
$
|
16,767
|
|
|
$
|
119
|
|
|
$
|
16,886
|
|
Deferred tax liability
|
46,713
|
|
|
(1,407
|
)
|
|
45,306
|
|
|||
Other non-current liabilities
|
620
|
|
|
—
|
|
|
620
|
|
|||
Total liabilities assumed
|
$
|
64,100
|
|
|
$
|
(1,288
|
)
|
|
$
|
62,812
|
|
Net assets acquired
|
$
|
390,961
|
|
|
$
|
(100
|
)
|
|
$
|
390,861
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Pro forma net sales
|
$
|
205,683
|
|
|
$
|
183,424
|
|
|
$
|
626,414
|
|
|
$
|
568,270
|
|
Pro forma income (loss) from continuing operations
|
$
|
(11,830
|
)
|
|
$
|
(8,436
|
)
|
|
$
|
(31,909
|
)
|
|
$
|
(52,840
|
)
|
Pro forma net income (loss)
|
$
|
(11,830
|
)
|
|
$
|
121,005
|
|
|
$
|
(31,909
|
)
|
|
$
|
87,355
|
|
Basic income (loss) from continuing operations per share
|
$
|
(0.41
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(1.15
|
)
|
|
$
|
(1.93
|
)
|
Diluted income (loss) from continuing operations per share
|
$
|
(0.41
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(1.15
|
)
|
|
$
|
(1.93
|
)
|
(a)
|
Includes eliminations of intersegment transactions occurring during the ordinary course of business.
|
|
|
Total Assets as of
|
||||||
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Mobile Solutions
|
|
$
|
446,830
|
|
|
$
|
428,321
|
|
Power Solutions
|
|
404,701
|
|
|
383,063
|
|
||
Life Sciences
|
|
806,828
|
|
|
355,703
|
|
||
Corporate and Consolidations
|
|
104,963
|
|
|
307,916
|
|
||
Total
|
|
$
|
1,763,322
|
|
|
$
|
1,475,003
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Raw materials
|
|
$
|
54,439
|
|
|
$
|
37,337
|
|
Work in process
|
|
45,801
|
|
|
27,669
|
|
||
Finished goods
|
|
23,869
|
|
|
17,611
|
|
||
Inventories
|
|
$
|
124,109
|
|
|
$
|
82,617
|
|
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Total
|
||||||||
Balance as of December 31, 2017
|
|
$
|
74,147
|
|
|
$
|
201,881
|
|
|
$
|
178,584
|
|
|
$
|
454,612
|
|
Currency impacts
|
|
(705
|
)
|
|
27
|
|
|
(3,037
|
)
|
|
(3,715
|
)
|
||||
Goodwill acquired in acquisitions
|
|
—
|
|
|
2,657
|
|
|
165,454
|
|
|
168,111
|
|
||||
Measurement period adjustments
|
|
—
|
|
|
—
|
|
|
5,447
|
|
|
5,447
|
|
||||
Balance as of September 30, 2018
|
|
$
|
73,442
|
|
|
$
|
204,565
|
|
|
$
|
346,448
|
|
|
$
|
624,455
|
|
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Total
|
||||||||
Balance as of December 31, 2017
|
|
$
|
39,446
|
|
|
$
|
105,030
|
|
|
$
|
93,226
|
|
|
$
|
237,702
|
|
Amortization
|
|
(2,655
|
)
|
|
(8,746
|
)
|
|
(12,713
|
)
|
|
(24,114
|
)
|
||||
Currency impacts
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||
Intangible assets acquired in acquisitions
|
|
—
|
|
|
1,900
|
|
|
169,917
|
|
|
171,817
|
|
||||
Measurement period adjustments
|
|
—
|
|
|
—
|
|
|
(700
|
)
|
|
(700
|
)
|
||||
Balance as of September 30, 2018
|
|
$
|
36,769
|
|
|
$
|
98,184
|
|
|
$
|
249,730
|
|
|
$
|
384,683
|
|
|
|
Gross Carrying Value as of Acquisition Date
|
|
Weighted Average Estimated Useful Life in Years
|
||
Customer relationships
|
|
$
|
146,800
|
|
|
20
|
Trademark and trade name
|
|
14,700
|
|
|
29
|
|
Other
|
|
9,617
|
|
|
1
|
|
Total intangible assets acquired in current year
|
|
$
|
171,117
|
|
|
19
|
Balance as of December 31, 2017
|
$
|
39,822
|
|
Share of earnings
|
2,087
|
|
|
Accretion of basis difference from purchase accounting
|
(343
|
)
|
|
Foreign currency translation loss
|
(2,242
|
)
|
|
|
|
||
Balance as of September 30, 2018
|
$
|
39,324
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Current assets
|
|
$
|
43,351
|
|
|
$
|
47,600
|
|
Non-current assets
|
|
32,352
|
|
|
24,763
|
|
||
Total assets
|
|
$
|
75,703
|
|
|
$
|
72,363
|
|
Current liabilities
|
|
$
|
27,982
|
|
|
$
|
26,165
|
|
Non-current liabilities
|
|
5
|
|
|
22
|
|
||
Total liabilities
|
|
$
|
27,987
|
|
|
$
|
26,187
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
|
$
|
16,026
|
|
|
$
|
18,582
|
|
|
$
|
52,140
|
|
|
$
|
55,166
|
|
Cost of sales
|
|
$
|
14,442
|
|
|
$
|
15,156
|
|
|
$
|
45,126
|
|
|
$
|
43,316
|
|
Income from operations
|
|
$
|
1,207
|
|
|
$
|
3,204
|
|
|
$
|
5,872
|
|
|
$
|
11,000
|
|
Net income
|
|
$
|
753
|
|
|
$
|
2,685
|
|
|
$
|
4,257
|
|
|
$
|
9,144
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
$545.0 million Senior Secured Term Loan B (“Senior Secured Term Loan”) bearing interest at the greater of 0.75% or one-month LIBOR (2.26% at September 30, 2018), plus an applicable margin of 3.75% at September 30, 2018, expiring October 19, 2022
|
|
$
|
534,250
|
|
|
$
|
534,250
|
|
$300.0 million Incremental Term Loan (“Incremental Term Loan”) bearing interest at one-month LIBOR (2.26% at September 30, 2018), plus an applicable margin of 3.25% at September 30, 2018, expiring April 3, 2021
|
|
282,000
|
|
|
291,000
|
|
||
$143.0 million Senior Secured Revolver (“Senior Secured Revolver”) bearing interest at one-month LIBOR (2.26% at September 30, 2018), plus an applicable margin of 3.5% at September 30, 2018, expiring October 19, 2020
|
|
69,401
|
|
|
—
|
|
||
International lines of credit and other loans
|
|
7,584
|
|
|
3,315
|
|
||
Total
|
|
893,235
|
|
|
828,565
|
|
||
Less current maturities of long-term debt
|
|
31,726
|
|
|
17,283
|
|
||
Principal, net of current portion
|
|
861,509
|
|
|
811,282
|
|
||
Less unamortized debt issuance costs
|
|
17,989
|
|
|
20,477
|
|
||
Long-term debt, net of current portion
|
|
$
|
843,520
|
|
|
$
|
790,805
|
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Corporate and
Consolidations
|
|
Total
|
||||||||||
Severance and other employee costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(260
|
)
|
|
$
|
—
|
|
|
$
|
(260
|
)
|
Site closure and other associated costs
|
|
51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|||||
Total
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
(260
|
)
|
|
$
|
—
|
|
|
$
|
(209
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
|
|
Mobile
Solutions |
|
Power
Solutions |
|
Life
Sciences |
|
Corporate and
Consolidations |
|
Total
|
||||||||||
Severance and other employee costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,336
|
|
|
$
|
728
|
|
|
$
|
2,064
|
|
Site closure and other associated costs
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|||||
Total
|
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
1,336
|
|
|
$
|
728
|
|
|
$
|
2,137
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Corporate and
Consolidations
|
|
Total
|
||||||||||
Severance and other employee costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Site closure and other associated costs
|
|
345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|||||
Total
|
|
$
|
345
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
345
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||
|
|
Mobile
Solutions |
|
Power
Solutions |
|
Life
Sciences |
|
Corporate and
Consolidations |
|
Total
|
||||||||||
Severance and other employee costs
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Site closure and other associated costs
|
|
345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|||||
Total
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
362
|
|
|
|
Reserve
Balance as of December 31, 2017 |
|
Charges
|
|
Non-cash
Adjustments
|
|
Cash
Reductions
|
|
Reserve
Balance as of September 30, 2018 |
||||||||||
Severance and other employee costs
|
|
$
|
—
|
|
|
$
|
2,064
|
|
|
$
|
—
|
|
|
$
|
(683
|
)
|
|
$
|
1,381
|
|
Site closure and other associated costs
|
|
1,099
|
|
|
73
|
|
|
(61
|
)
|
|
(902
|
)
|
|
209
|
|
|||||
Total
|
|
$
|
1,099
|
|
|
$
|
2,137
|
|
|
$
|
(61
|
)
|
|
$
|
(1,585
|
)
|
|
$
|
1,590
|
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
|
|
Mobile
Solutions |
|
Power
Solutions |
|
Life
Sciences |
|
Intersegment
Sales Eliminations |
|
Total
|
||||||||||
United States
|
|
$
|
144,138
|
|
|
$
|
120,189
|
|
|
$
|
142,863
|
|
|
$
|
(1,798
|
)
|
|
$
|
405,392
|
|
China
|
|
34,273
|
|
|
4,140
|
|
|
3,843
|
|
|
—
|
|
|
42,256
|
|
|||||
Mexico
|
|
21,042
|
|
|
8,799
|
|
|
429
|
|
|
—
|
|
|
30,270
|
|
|||||
Brazil
|
|
27,722
|
|
|
157
|
|
|
29
|
|
|
—
|
|
|
27,908
|
|
|||||
Germany
|
|
4,500
|
|
|
24
|
|
|
11,138
|
|
|
—
|
|
|
15,662
|
|
|||||
Switzerland
|
|
3,915
|
|
|
35
|
|
|
3,827
|
|
|
—
|
|
|
7,777
|
|
|||||
Poland
|
|
5,485
|
|
|
23
|
|
|
1
|
|
|
—
|
|
|
5,509
|
|
|||||
Italy
|
|
4,424
|
|
|
214
|
|
|
243
|
|
|
—
|
|
|
4,881
|
|
|||||
Czech Republic
|
|
4,791
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
4,838
|
|
|||||
Netherlands
|
|
—
|
|
|
2,556
|
|
|
—
|
|
|
—
|
|
|
2,556
|
|
|||||
Other
|
|
9,388
|
|
|
8,400
|
|
|
6,343
|
|
|
—
|
|
|
24,131
|
|
|||||
Total net sales
|
|
$
|
259,678
|
|
|
$
|
144,584
|
|
|
$
|
168,716
|
|
|
$
|
(1,798
|
)
|
|
$
|
571,180
|
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Intersegment
Sales
Eliminations
|
|
Total
|
||||||||||
United States
|
|
$
|
46,341
|
|
|
$
|
38,137
|
|
|
$
|
63,869
|
|
|
$
|
(567
|
)
|
|
$
|
147,780
|
|
China
|
|
11,111
|
|
|
1,696
|
|
|
2,405
|
|
|
—
|
|
|
15,212
|
|
|||||
Mexico
|
|
6,570
|
|
|
2,254
|
|
|
90
|
|
|
—
|
|
|
8,914
|
|
|||||
Germany
|
|
1,415
|
|
|
17
|
|
|
7,321
|
|
|
—
|
|
|
8,753
|
|
|||||
Brazil
|
|
8,200
|
|
|
107
|
|
|
—
|
|
|
—
|
|
|
8,307
|
|
|||||
Poland
|
|
1,215
|
|
|
6
|
|
|
2,107
|
|
|
—
|
|
|
3,328
|
|
|||||
Italy
|
|
1,514
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
1,519
|
|
|||||
Czech Republic
|
|
1,285
|
|
|
105
|
|
|
106
|
|
|
—
|
|
|
1,496
|
|
|||||
Switzerland
|
|
1,420
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
1,467
|
|
|||||
Netherlands
|
|
—
|
|
|
649
|
|
|
—
|
|
|
—
|
|
|
649
|
|
|||||
Other
|
|
2,734
|
|
|
3,059
|
|
|
2,465
|
|
|
—
|
|
|
8,258
|
|
|||||
Total net sales
|
|
$
|
81,805
|
|
|
$
|
46,082
|
|
|
$
|
78,363
|
|
|
$
|
(567
|
)
|
|
$
|
205,683
|
|
|
Deferred
Revenue
|
||
Balance at January 1, 2018
|
$
|
2,124
|
|
Balance at September 30, 2018
|
$
|
3,216
|
|
•
|
The performance obligation is part of a contract that has an original expected duration of one year or less.
|
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||
|
|
As Reported
|
|
Balances
Without
Adoption of
ASC 606
|
|
Effect of
Change
|
|
As Reported
|
|
Balances
Without Adoption of ASC 606 |
|
Effect of
Change |
||||||||||||
Net sales
|
|
$
|
205,683
|
|
|
$
|
205,691
|
|
|
$
|
(8
|
)
|
|
$
|
571,180
|
|
|
$
|
571,260
|
|
|
$
|
(80
|
)
|
Cost of sales
|
|
156,408
|
|
|
156,424
|
|
|
(16
|
)
|
|
431,492
|
|
|
431,544
|
|
|
(52
|
)
|
||||||
Income (loss) from operations
|
|
5,881
|
|
|
5,873
|
|
|
8
|
|
|
9,283
|
|
|
9,311
|
|
|
(28
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
As of September 30, 2018
|
|
|
|
|
|
|
||||||||||||||||
|
|
As Reported
|
|
Balances
Without
Adoption of
ASC 606
|
|
Effect of
Change
|
|
|
|
|
|
|
||||||||||||
Accounts receivable, net
|
|
$
|
149,982
|
|
|
$
|
149,454
|
|
|
$
|
528
|
|
|
|
|
|
|
|
||||||
Inventories
|
|
124,109
|
|
|
124,427
|
|
|
(318
|
)
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Stock options
|
|
$
|
173
|
|
|
$
|
527
|
|
|
$
|
531
|
|
|
$
|
1,102
|
|
Restricted stock
|
|
388
|
|
|
773
|
|
|
1,244
|
|
|
1,628
|
|
||||
Performance share units
|
|
530
|
|
|
467
|
|
|
1,650
|
|
|
1,255
|
|
||||
Change in estimate of performance share vesting (1)
|
|
(802
|
)
|
|
$
|
—
|
|
|
(802
|
)
|
|
—
|
|
|||
Share-based compensation expense
|
|
$
|
289
|
|
|
$
|
1,767
|
|
|
$
|
2,623
|
|
|
$
|
3,985
|
|
(1)
|
Reflects decrease in share-based compensation expense of
$0.8 million
to reflect the change in estimate of the probability of vesting of performance share units as described in the “Performance Share Units” section of this Note.
|
|
2018
Stock Option Awards |
|
Expected term
|
6 years
|
|
Risk free interest rate
|
2.66
|
%
|
Dividend yield
|
1.15
|
%
|
Expected volatility
|
47.69
|
%
|
Expected forfeiture rate
|
4.00
|
%
|
Options
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Exercise
Price
(per share)
|
|
Weighted-
Average
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic
Value
|
|
|
|||||
Outstanding at January 1, 2018
|
|
746
|
|
|
$
|
14.33
|
|
|
|
|
|
|
|
||
Granted
|
|
58
|
|
|
24.41
|
|
|
|
|
|
|
|
|||
Exercised
|
|
(27
|
)
|
|
10.15
|
|
|
|
|
$
|
477
|
|
|
|
|
Forfeited or expired
|
|
(4
|
)
|
|
23.51
|
|
|
|
|
|
|
|
|||
Outstanding at September 30, 2018
|
|
773
|
|
|
$
|
15.19
|
|
|
5.9
|
|
$
|
319
|
|
|
(1)
|
Exercisable at September 30, 2018
|
|
626
|
|
|
$
|
13.63
|
|
|
5.2
|
|
$
|
1,232
|
|
|
(1)
|
(1)
|
The intrinsic value is the amount by which the market price of our stock was greater than the exercise price of any individual option grant at
September 30, 2018
.
|
|
|
Nonvested
Restricted
Shares
(in thousands)
|
|
Weighted
Average
Grant-Date
Fair Value
(per share)
|
|||
Nonvested at January 1, 2018
|
|
152
|
|
|
$
|
19.21
|
|
Granted
|
|
87
|
|
|
$
|
24.55
|
|
Vested
|
|
(93
|
)
|
|
$
|
19.69
|
|
Nonvested at September 30, 2018
|
|
146
|
|
|
$
|
22.07
|
|
TSR:
|
|
|
|
Threshold Performance
(50% of Shares) |
|
Target Performance
(100% of Shares) |
|
Maximum Performance
(150% of Shares) |
|||
|
|
2018 grants
|
|
35th Percentile
|
|
50th Percentile
|
|
75th Percentile
|
|||
|
|
|
|
|
|
|
|
|
|||
ROIC:
|
|
|
|
Threshold Performance
(35% of Shares) |
|
Target Performance
(100% of Shares) |
|
Maximum Performance
(150% of Shares) |
|||
|
2018 grants
|
|
15.5
|
%
|
|
18.0
|
%
|
|
19.5
|
%
|
|
|
TSR Awards
|
|
ROIC Awards
|
||||||||||
Award Year
|
|
Shares
(in thousands)
|
|
Grant Date
Fair Value
(per share)
|
|
Shares
(in thousands)
|
|
Grant Date Fair
Value (per share)
|
||||||
2018
|
|
55
|
|
|
$
|
24.65
|
|
|
55
|
|
|
$
|
24.55
|
|
|
|
Nonvested TSR Awards
|
|
Nonvested ROIC Awards
|
||||||||||
|
|
Shares
(in thousands)
|
|
Weighted
Average
Grant-Date
Fair Value
(per share)
|
|
Shares
(in thousands)
|
|
Weighted
Average
Grant-Date
Fair Value
(per share)
|
||||||
Nonvested at January 1, 2018
|
|
130
|
|
|
$
|
16.60
|
|
|
136
|
|
|
$
|
16.27
|
|
Granted
|
|
55
|
|
|
$
|
24.65
|
|
|
55
|
|
|
$
|
24.55
|
|
Forfeited
|
|
(13
|
)
|
|
$
|
14.50
|
|
|
(14
|
)
|
|
$
|
14.86
|
|
Nonvested at September 30, 2018
|
|
172
|
|
|
$
|
18.47
|
|
|
177
|
|
|
$
|
18.31
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Loss from continuing operations
|
|
$
|
(13,784
|
)
|
|
$
|
(3,480
|
)
|
|
$
|
(44,277
|
)
|
|
$
|
(27,961
|
)
|
Income from discontinued operations, net of tax (Note 2)
|
|
—
|
|
|
129,441
|
|
|
—
|
|
|
140,195
|
|
||||
Net income (loss)
|
|
$
|
(13,784
|
)
|
|
$
|
125,961
|
|
|
$
|
(44,277
|
)
|
|
$
|
112,234
|
|
Weighted average shares outstanding
|
|
28,688
|
|
|
27,544
|
|
|
27,784
|
|
|
27,403
|
|
||||
Effect of dilutive stock options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted shares outstanding
|
|
28,688
|
|
|
27,544
|
|
|
27,784
|
|
|
27,403
|
|
||||
Basic loss from continuing operations per share
|
|
$
|
(0.48
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
(1.02
|
)
|
Basic income from discontinued operations per share
|
|
—
|
|
|
4.70
|
|
|
—
|
|
|
5.12
|
|
||||
Basic net loss per share
|
|
$
|
(0.48
|
)
|
|
$
|
4.57
|
|
|
$
|
(1.59
|
)
|
|
$
|
4.10
|
|
Diluted loss from continuing operations per share
|
|
$
|
(0.48
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
(1.02
|
)
|
Diluted income from discontinued operations per share
|
|
—
|
|
|
4.70
|
|
|
—
|
|
|
5.12
|
|
||||
Diluted net loss per share
|
|
$
|
(0.48
|
)
|
|
$
|
4.57
|
|
|
$
|
(1.59
|
)
|
|
$
|
4.10
|
|
Cash dividends declared per common share
|
|
$
|
0.07
|
|
|
$
|
0.07
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||
|
|
As Originally
Reported |
|
Adjustment
|
|
As Revised
|
||||||
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
|
$
|
339,345
|
|
|
$
|
921
|
|
|
$
|
340,266
|
|
Selling, general and administrative expense
|
|
52,606
|
|
|
(976
|
)
|
|
51,630
|
|
|||
Depreciation and amortization
|
|
38,432
|
|
|
574
|
|
|
39,006
|
|
|||
Other operating income
|
|
—
|
|
|
(270
|
)
|
|
(270
|
)
|
|||
Income from operations
|
|
32,294
|
|
|
(249
|
)
|
|
32,045
|
|
|||
Other (income) expense, net
|
|
(945
|
)
|
|
(247
|
)
|
|
(1,192
|
)
|
|||
Loss from continuing operations before benefit for income taxes and share of net income from joint venture
|
|
(46,302
|
)
|
|
(2
|
)
|
|
(46,304
|
)
|
|||
Benefit for income taxes
|
|
14,145
|
|
|
59
|
|
|
14,204
|
|
|||
Loss from continuing operations
|
|
(28,018
|
)
|
|
57
|
|
|
(27,961
|
)
|
|||
Income from discontinued operations, net of tax (Note 2)
|
|
146,579
|
|
|
(6,384
|
)
|
|
140,195
|
|
|||
Net income (loss)
|
|
$
|
118,561
|
|
|
$
|
(6,327
|
)
|
|
$
|
112,234
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation gain
|
|
20,327
|
|
|
700
|
|
|
21,027
|
|
|||
Other comprehensive income
|
|
11,084
|
|
|
700
|
|
|
11,784
|
|
|||
Comprehensive income
|
|
$
|
129,645
|
|
|
$
|
(5,627
|
)
|
|
$
|
124,018
|
|
Basic net income per share
|
|
$
|
4.33
|
|
|
$
|
(0.23
|
)
|
|
$
|
4.10
|
|
Diluted net income per share
|
|
$
|
4.33
|
|
|
$
|
(0.23
|
)
|
|
$
|
4.10
|
|
|
|
Three Months Ended September 30, 2017
|
||||||||||
|
|
As Originally
Reported |
|
Adjustment
|
|
As Revised
|
||||||
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
|
$
|
110,836
|
|
|
$
|
436
|
|
|
$
|
111,272
|
|
Depreciation and amortization
|
|
13,075
|
|
|
309
|
|
|
13,384
|
|
|||
Income from operations
|
|
6,296
|
|
|
(745
|
)
|
|
5,551
|
|
|||
Other (income) expense, net
|
|
(848
|
)
|
|
93
|
|
|
(755
|
)
|
|||
Loss from continuing operations before benefit for income taxes and share of net income from joint venture
|
|
(5,568
|
)
|
|
(838
|
)
|
|
(6,406
|
)
|
|||
Benefit for income taxes
|
|
1,436
|
|
|
288
|
|
|
1,724
|
|
|||
Loss from continuing operations
|
|
(2,930
|
)
|
|
(550
|
)
|
|
(3,480
|
)
|
|||
Income from discontinued operations, net of tax (Note 2)
|
|
135,825
|
|
|
(6,384
|
)
|
|
129,441
|
|
|||
Net income (loss)
|
|
$
|
132,895
|
|
|
$
|
(6,934
|
)
|
|
$
|
125,961
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation gain
|
|
6,083
|
|
|
328
|
|
|
6,411
|
|
|||
Other comprehensive income (loss)
|
|
(3,160
|
)
|
|
328
|
|
|
(2,832
|
)
|
|||
Comprehensive income (loss)
|
|
$
|
129,735
|
|
|
$
|
(6,606
|
)
|
|
$
|
123,129
|
|
Basic net income per share
|
|
$
|
4.82
|
|
|
$
|
(0.25
|
)
|
|
$
|
4.57
|
|
Diluted net income per share
|
|
$
|
4.82
|
|
|
$
|
(0.25
|
)
|
|
$
|
4.57
|
|
|
Nine Months Ended September 30, 2017
|
|
|||||||||||||
|
As
Originally Reported |
|
Adjustment
|
|
Reclasses (1)
|
|
As
Revised |
|
|||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
$
|
118,561
|
|
|
$
|
(6,327
|
)
|
|
|
|
$
|
112,234
|
|
|
|
Adjustments to reconcile net income to net cash provided by (used by) operating activities:
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization of continuing operations
|
38,432
|
|
|
574
|
|
|
|
|
39,006
|
|
|
||||
Loss on extinguishment of debt and write-off of debt issuance costs
|
8,054
|
|
|
|
|
|
31,585
|
|
|
39,639
|
|
|
|||
Share of net income from joint venture, net of cash dividends received
|
|
|
|
|
17
|
|
|
17
|
|
|
|||||
Gain on disposal of discontinued operations, net of tax and cost to sell
|
(129,353
|
)
|
|
6,343
|
|
|
|
|
(123,010
|
)
|
|
||||
Deferred income taxes
|
—
|
|
|
|
|
70
|
|
|
70
|
|
|
||||
Other
|
439
|
|
|
(545
|
)
|
|
(17
|
)
|
|
(123
|
)
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||||||
Accounts receivable
|
(15,094
|
)
|
|
227
|
|
|
|
|
(14,867
|
)
|
|
||||
Inventories
|
(10,764
|
)
|
|
436
|
|
|
|
|
(10,328
|
)
|
|
||||
Income taxes receivable
|
(19,178
|
)
|
|
(231
|
)
|
|
|
|
(19,409
|
)
|
|
||||
Other
|
(1,674
|
)
|
|
(1,021
|
)
|
|
(70
|
)
|
|
(2,765
|
)
|
|
|||
Net cash provided by (used by) operating activities
|
285
|
|
|
(544
|
)
|
|
31,585
|
|
|
31,326
|
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Proceeds from disposals of property, plant and equipment
|
639
|
|
|
|
|
(639
|
)
|
|
—
|
|
|
||||
Other
|
—
|
|
|
545
|
|
|
639
|
|
|
1,184
|
|
|
|||
Net cash provided by (used by) investing activities
|
332,401
|
|
|
545
|
|
|
—
|
|
|
332,946
|
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash paid for debt issuance or prepayment costs
|
(6,545
|
)
|
|
|
|
(31,585
|
)
|
|
(38,130
|
)
|
|
||||
Proceeds from issuance of stock and exercise of stock options
|
2,945
|
|
|
|
|
(2,945
|
)
|
|
—
|
|
|
||||
Shares withheld to satisfy income tax withholding
|
(580
|
)
|
|
|
|
|
580
|
|
|
—
|
|
|
|||
Principal payments on capital leases
|
(2,855
|
)
|
|
|
|
2,855
|
|
|
—
|
|
|
||||
Other
|
—
|
|
|
|
|
|
(490
|
)
|
|
(490
|
)
|
|
|||
Net cash provided by (used by) financing activities
|
(1,080
|
)
|
|
|
|
(31,585
|
)
|
|
(32,665
|
)
|
|
(1)
|
Includes the reclassification of prior period amounts to reflect current period presentation, including the adoption of ASU 2016-15 and condensing immaterial amounts.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended September 30,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
205,683
|
|
|
$
|
148,156
|
|
|
$
|
57,527
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
54,431
|
|
||||||
Volume
|
|
|
|
|
|
|
5,562
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(2,016
|
)
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
(450
|
)
|
|||||||
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
|
156,408
|
|
|
111,272
|
|
|
45,136
|
|
|
|||||
Acquisitions
|
|
|
|
|
|
|
$
|
39,538
|
|
||||||
Volume
|
|
|
|
|
|
|
3,881
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(1,596
|
)
|
|||||||
Cost reduction projects
|
|
|
|
|
|
|
(1,950
|
)
|
|||||||
Inflation
|
|
|
|
|
|
|
2,350
|
|
|||||||
Mix/other
|
|
|
|
|
|
|
2,913
|
|
|||||||
Selling, general and administrative expense
|
|
22,480
|
|
|
16,985
|
|
|
5,495
|
|
|
|||||
Acquisition related costs excluded from selling, general and administrative expense
|
|
597
|
|
|
619
|
|
|
(22
|
)
|
|
|||||
Depreciation and amortization
|
|
21,259
|
|
|
13,384
|
|
|
7,875
|
|
|
|||||
Other operating income, net
|
|
(733
|
)
|
|
—
|
|
|
(733
|
)
|
|
|||||
Restructuring and integration expense (adjustments), net
|
|
(209
|
)
|
|
345
|
|
|
(554
|
)
|
|
|||||
Income from operations
|
|
5,881
|
|
|
5,551
|
|
|
330
|
|
|
|||||
Interest expense
|
|
18,608
|
|
|
12,739
|
|
|
5,869
|
|
|
|||||
Loss on extinguishment of debt and write-off of debt issuance costs
|
|
6,624
|
|
|
—
|
|
|
6,624
|
|
|
|||||
Derivative gain on change in interest rate swap fair value
|
|
—
|
|
|
(27
|
)
|
|
27
|
|
|
|||||
Other (income) expense, net
|
|
308
|
|
|
(755
|
)
|
|
1,063
|
|
|
|||||
Loss from continuing operations before benefit for income taxes and share of net income from joint venture
|
|
(19,659
|
)
|
|
(6,406
|
)
|
|
(13,253
|
)
|
|
|||||
Benefit for income taxes
|
|
5,609
|
|
|
1,724
|
|
|
3,885
|
|
|
|||||
Share of net income from joint venture
|
|
266
|
|
|
1,202
|
|
|
(936
|
)
|
|
|||||
Loss from continuing operations
|
|
(13,784
|
)
|
|
(3,480
|
)
|
|
(10,304
|
)
|
|
|||||
Income from discontinued operations, net of tax
|
|
—
|
|
|
129,441
|
|
|
(129,441
|
)
|
|
|||||
Net income (loss)
|
|
$
|
(13,784
|
)
|
|
$
|
125,961
|
|
|
$
|
(139,745
|
)
|
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Interest on debt
|
|
$
|
17,451
|
|
|
$
|
11,591
|
|
Amortization of debt issuance costs
|
|
1,318
|
|
|
1,084
|
|
||
Interest on capital leases and other
|
|
139
|
|
|
286
|
|
||
Capitalized interest (1)
|
|
(300
|
)
|
|
(222
|
)
|
||
Total interest expense
|
|
$
|
18,608
|
|
|
$
|
12,739
|
|
(1)
|
Capitalized interest primarily relates to equipment construction efforts at various plants.
|
|
|
Three Months Ended September 30,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
46,082
|
|
|
$
|
44,824
|
|
|
$
|
1,258
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
883
|
|
||||||
Volume
|
|
|
|
|
|
|
1,282
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
9
|
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
(916
|
)
|
|||||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
$
|
2,706
|
|
|
$
|
4,166
|
|
|
$
|
(1,460
|
)
|
|
|
|
Three Months Ended September 30,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
78,363
|
|
|
$
|
22,154
|
|
|
$
|
56,209
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
53,548
|
|
||||||
Volume
|
|
|
|
|
|
|
909
|
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
1,752
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
$
|
6,717
|
|
|
$
|
3,011
|
|
|
$
|
3,706
|
|
|
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
571,180
|
|
|
$
|
463,658
|
|
|
$
|
107,522
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
100,570
|
|
||||||
Volume
|
|
|
|
|
|
|
11,466
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
575
|
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
(5,089
|
)
|
|||||||
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
|
431,492
|
|
|
340,266
|
|
|
91,226
|
|
|
|||||
Acquisitions
|
|
|
|
|
|
|
$
|
76,250
|
|
||||||
Volume
|
|
|
|
|
|
|
7,842
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
550
|
|
|||||||
Cost reduction projects
|
|
|
|
|
|
|
(6,851
|
)
|
|||||||
Inflation
|
|
|
|
|
|
|
7,294
|
|
|||||||
Mix/Other
|
|
|
|
|
|
|
6,141
|
|
|||||||
Selling, general and administrative expense
|
|
71,298
|
|
|
51,630
|
|
|
19,668
|
|
|
|||||
Acquisition related costs excluded from selling, general and administrative expense
|
|
5,810
|
|
|
619
|
|
|
5,191
|
|
|
|||||
Depreciation and amortization
|
|
51,798
|
|
|
39,006
|
|
|
12,792
|
|
|
|||||
Other operating income, net
|
|
(638
|
)
|
|
(270
|
)
|
|
(368
|
)
|
|
|||||
Restructuring and integration expense, net
|
|
2,137
|
|
|
362
|
|
|
1,775
|
|
|
|||||
Income from operations
|
|
9,283
|
|
|
32,045
|
|
|
(22,762
|
)
|
|
|||||
Interest expense
|
|
46,592
|
|
|
39,916
|
|
|
6,676
|
|
|
|||||
Loss on extinguishment of debt and write-off of debt issuance costs
|
|
19,562
|
|
|
39,639
|
|
|
(20,077
|
)
|
|
|||||
Derivative gain on change in interest rate swap fair value
|
|
—
|
|
|
(14
|
)
|
|
14
|
|
|
|||||
Other (income) expense, net
|
|
1,882
|
|
|
(1,192
|
)
|
|
3,074
|
|
|
|||||
Loss from continuing operations before benefit for income taxes and share of net income from joint venture
|
|
(58,753
|
)
|
|
(46,304
|
)
|
|
(12,449
|
)
|
|
|||||
Benefit for income taxes
|
|
12,732
|
|
|
14,204
|
|
|
(1,472
|
)
|
|
|||||
Share of net income from joint venture
|
|
1,744
|
|
|
4,139
|
|
|
(2,395
|
)
|
|
|||||
Loss from continuing operations
|
|
(44,277
|
)
|
|
(27,961
|
)
|
|
(16,316
|
)
|
|
|||||
Income from discontinued operations, net of tax (Note 2)
|
|
—
|
|
|
140,195
|
|
|
(140,195
|
)
|
|
|||||
Net income (loss)
|
|
$
|
(44,277
|
)
|
|
$
|
112,234
|
|
|
$
|
(156,511
|
)
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Interest on debt
|
|
$
|
43,289
|
|
|
$
|
36,689
|
|
Amortization of debt issuance costs
|
|
3,631
|
|
|
3,237
|
|
||
Interest on capital leases and other
|
|
430
|
|
|
856
|
|
||
Capitalized interest (1)
|
|
(758
|
)
|
|
(866
|
)
|
||
Total interest expense
|
|
$
|
46,592
|
|
|
$
|
39,916
|
|
(1)
|
Capitalized interest primarily relates to equipment construction efforts at various plants.
|
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
144,584
|
|
|
$
|
141,982
|
|
|
$
|
2,602
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
883
|
|
||||||
Volume
|
|
|
|
|
|
|
2,501
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
27
|
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
(809
|
)
|
|||||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
$
|
13,939
|
|
|
$
|
17,780
|
|
|
$
|
(3,841
|
)
|
|
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
168,716
|
|
|
$
|
68,397
|
|
|
$
|
100,319
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
99,687
|
|
||||||
Volume
|
|
|
|
|
|
|
1,012
|
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
(380
|
)
|
|||||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
$
|
12,962
|
|
|
$
|
10,431
|
|
|
$
|
2,531
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
•
|
We did not maintain an effective control environment due to a lack of a sufficient complement of personnel with an appropriate level of knowledge, experience and training commensurate with our financial reporting requirements.
|
•
|
We did not maintain effective controls over information and communication as it relates to the accounting for income taxes. Specifically, we did not implement and reinforce an adequate process for communication and information sharing necessary to support the functioning of internal control between our tax group and our corporate accounting group.
|
•
|
We did not design and maintain effective internal controls over the accounting for business combinations, which specifically included not designing and maintaining effective controls over the (a) accuracy, valuation and presentation and disclosure for allocating goodwill to our international businesses and (b) completeness, accuracy and valuation of deferred income taxes recorded in connection with business combinations;
|
•
|
We did not design and maintain effective internal controls over the accounting for income taxes, which specifically included not designing and maintaining controls over the completeness, accuracy, valuation and presentation and disclosure of deferred income tax accounts, income tax provision and related disclosures.
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of
Shares Purchased (1)
|
|
Average Price Paid
Per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (1)
|
|
Maximum Number (or
Approximate Dollar Value)
of Shares That May Yet
Be Purchased Under the
Plan or Programs (1)
|
|||||
July 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
August 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
September 2018
|
|
168
|
|
|
19.85
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
168
|
|
|
$
|
19.85
|
|
|
—
|
|
|
—
|
|
(1)
|
Shares were withheld to pay for tax obligations due upon the vesting of restricted stock held by certain employees granted under the NN, Inc. Amended and Restated 2011 Stock Incentive Plan (the “Plan”). The Plan provides for the withholding of shares to satisfy tax obligations. It does not specify a maximum number of shares that can be withheld for this purpose. These shares may be deemed to be “issuer purchases” of shares that are required to be disclosed pursuant to this Item.
|
Item 3.
|
Defaults upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
No.
|
|
Description
|
|
|
|
10.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Service
|
|
|
|
101.CAL
|
|
Taxonomy Calculation Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase
|
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101.PRE
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XBRL Presentation Linkbase Document
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101.DEF
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XBRL Definition Linkbase Document
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NN, Inc.
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(Registrant)
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Date: November 8, 2018
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/s/ Richard D. Holder
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Richard D. Holder,
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President, Chief Executive Officer and Director
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(Principal Executive Officer)
(Duly Authorized Officer)
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Date: November 8, 2018
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/s/ Thomas C. Burwell, Jr.
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Thomas C. Burwell, Jr.
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Senior Vice President—Chief Financial Officer
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(Principal Financial and Accounting Officer)
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(Duly Authorized Officer)
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1 Year NN Chart |
1 Month NN Chart |
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