STOCK OF THE WEEK: ROLLING ALONG...NN, INC

If you were driving through Johnson City, TN and saw NN, Inc. would you know they were a global company employing 1,715 employees?

Their U.S. manufacturing units include the NN Ball & Roller Division which supplies precision steel balls and cylindrical rollers for various applications including bearings, automotive parts, hydraulic motors, oil drilling and mining. Industrial Molding Corporation provides precision injection molded plastic parts for bearings, the automotive industry and a variety of other applications. Delta Rubber Company supplies rubber sealing solutions for bearings, oil drilling and other industries.

NN, Inc.’s European subsidiary, NN Europe, includes a total of five manufacturing facilities within the European Union. They provide precision steel balls, tapered rollers and stamped steel components for various applications including bearings and automotive parts. Their newest subsidiary, NN Asia is under construction now in Kunshan, Jiangsu Province, China. The first products produced will be precision steel balls available by mid-2005.

The primary customers of NN, Inc. include SKF Bearing Industries, FAG Bearings Corporation, SNR Roulements, and the Torrington Company.

NN, Inc. (NNBR) closed on the NASDAQ Exchange June 7th @ $12.91. Their 52 week high come on 12/22/04 @ $13.50 and their low came on 8/9/04 @ $9.40.

February 28th NN, Inc. reported its financial results for 2004. Net sales for the year 2004 were up 20.0% compared to 2003. Read the complete report on their Website but this is what Roderick R. Baty, Chairman and Chief Executive Officer commented, “Although 2004 was a challenging year, operationally, our businesses continued to perform well.” NN, Inc. did face some one time expenses last year resulting in a difficult year from an earnings perspective.

Mr. Baty continued, “We continued to generate solid cash flow and made significant progress in reducing our debt in 2004. As of December 31, 2004, total debt minus cash was $63.9 million compared to $79.5 million at December 31, 2003, a reduction of $15.6 million.”
Mr. Baty, concluded, “Looking forward into 2005, we face both exciting opportunities and challenges. The start-up of our facilities in Slovakia in 2004 and China in the second half of 2005 will provide us opportunities to both better service our worldwide customers and to realize greater operating efficiencies and additional cost reductions.”

NN, Inc. anticipates total year revenues for 2005 to be approximately 11.0% from 2004 levels. Currency accounts for 4.4%, market share improvements 3.6% and price increases associated with raw material pass through 3.0%.

The report also indicates their plans to invest approximately $17.0 million in capital for 2005. This is an increase of $5.0 million from 2004 levels and is a result of their need to fund approximately $8.0 million of capital for the continuing expansion of their Slovakian facility and the start-up of the facility in China. The remaining $9.0 million is related to the ongoing capital requirements of their existing U.S. and European facilities.

To learn more about the anti-friction bearing industry and the global market I went to Anti Friction and found the following information:

World bearings demand to reach $36 billion in 2007
Worldwide demand for bearings is projected to increase more than five percent per annum to $36 billion in 2007. Gains will exceed the 1997- 2002 pace because of accelerating global economic growth, which will stimulate motor vehicle production and fixed investment activity, two major determinants of bearings demand.

Demand in developing regions to spur growth
The most rapid growth in bearings demand is forecast for the developing areas of Asia/Pacific, Latin America, Eastern Europe and Africa/Mideast. Increasing industrialization in these regions will lead to rising OEM output for bearings-consuming products. While these factors will support growth in the developing nations of the Asia/Pacific region, the region also derives a large share of demand from the mature economy of Japan, where gains for bearings are projected to lag the global average.

I think it is pretty cool that NN, Inc., (formally NN Ball Bearings) located in Johnson City, TN had the foresight to think globally. You never know what might be behind a company just by looking at its headquarters’ location.

STOCK OF THE WEEK: ROLLING ALONG...NN, INC

If you were driving through Johnson City, TN and saw NN, Inc. would you know they were a global company employing 1,715 employees?

Their U.S. manufacturing units include the NN Ball & Roller Division which supplies precision steel balls and cylindrical rollers for various applications including bearings, automotive parts, hydraulic motors, oil drilling and mining. Industrial Molding Corporation provides precision injection molded plastic parts for bearings, the automotive industry and a variety of other applications. Delta Rubber Company supplies rubber sealing solutions for bearings, oil drilling and other industries.

NN, Inc.’s European subsidiary, NN Europe, includes a total of five manufacturing facilities within the European Union. They provide precision steel balls, tapered rollers and stamped steel components for various applications including bearings and automotive parts. Their newest subsidiary, NN Asia is under construction now in Kunshan, Jiangsu Province, China. The first products produced will be precision steel balls available by mid-2005.

The primary customers of NN, Inc. include SKF Bearing Industries, FAG Bearings Corporation, SNR Roulements, and the Torrington Company.

NN, Inc. (NNBR) closed on the NASDAQ Exchange June 7th @ $12.91. Their 52 week high come on 12/22/04 @ $13.50 and their low came on 8/9/04 @ $9.40.

February 28th NN, Inc. reported its financial results for 2004. Net sales for the year 2004 were up 20.0% compared to 2003. Read the complete report on their Website but this is what Roderick R. Baty, Chairman and Chief Executive Officer commented, “Although 2004 was a challenging year, operationally, our businesses continued to perform well.” NN, Inc. did face some one time expenses last year resulting in a difficult year from an earnings perspective.

Mr. Baty continued, “We continued to generate solid cash flow and made significant progress in reducing our debt in 2004. As of December 31, 2004, total debt minus cash was $63.9 million compared to $79.5 million at December 31, 2003, a reduction of $15.6 million.”
Mr. Baty, concluded, “Looking forward into 2005, we face both exciting opportunities and challenges. The start-up of our facilities in Slovakia in 2004 and China in the second half of 2005 will provide us opportunities to both better service our worldwide customers and to realize greater operating efficiencies and additional cost reductions.”

NN, Inc. anticipates total year revenues for 2005 to be approximately 11.0% from 2004 levels. Currency accounts for 4.4%, market share improvements 3.6% and price increases associated with raw material pass through 3.0%.

The report also indicates their plans to invest approximately $17.0 million in capital for 2005. This is an increase of $5.0 million from 2004 levels and is a result of their need to fund approximately $8.0 million of capital for the continuing expansion of their Slovakian facility and the start-up of the facility in China. The remaining $9.0 million is related to the ongoing capital requirements of their existing U.S. and European facilities.

To learn more about the anti-friction bearing industry and the global market I went to Anti Friction and found the following information:

World bearings demand to reach $36 billion in 2007
Worldwide demand for bearings is projected to increase more than five percent per annum to $36 billion in 2007. Gains will exceed the 1997- 2002 pace because of accelerating global economic growth, which will stimulate motor vehicle production and fixed investment activity, two major determinants of bearings demand.

Demand in developing regions to spur growth
The most rapid growth in bearings demand is forecast for the developing areas of Asia/Pacific, Latin America, Eastern Europe and Africa/Mideast. Increasing industrialization in these regions will lead to rising OEM output for bearings-consuming products. While these factors will support growth in the developing nations of the Asia/Pacific region, the region also derives a large share of demand from the mature economy of Japan, where gains for bearings are projected to lag the global average.

I think it is pretty cool that NN, Inc., (formally NN Ball Bearings) located in Johnson City, TN had the foresight to think globally. You never know what might be behind a company just by looking at its headquarters’ location.

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