|
|
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☒
|
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)
|
Securities registered pursuant to Section 12(b) of the Act:
|
||||
Title of each class
|
|
Trading symbol
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
|
NNBR
|
|
The Nasdaq Stock Market, LLC
|
Large accelerated filer
|
|
☐
|
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Accelerated filer
|
|
☒
|
|
|
|
|
|||
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
|||
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|
|
|
Emerging growth company
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☐
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Item 1.
|
||
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|
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Item 2.
|
||
|
|
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Item 3.
|
||
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Item 4.
|
||
|
|
|
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|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
Item 1.
|
Financial Statements
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
|
$
|
221,666
|
|
|
$
|
196,349
|
|
|
$
|
434,922
|
|
|
$
|
365,497
|
|
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
|
163,513
|
|
|
148,640
|
|
|
324,782
|
|
|
275,084
|
|
||||
Selling, general and administrative expense
|
|
26,743
|
|
|
26,641
|
|
|
54,868
|
|
|
48,818
|
|
||||
Acquisition related costs excluded from selling, general and administrative expense
|
|
—
|
|
|
3,437
|
|
|
—
|
|
|
5,213
|
|
||||
Depreciation and amortization
|
|
22,924
|
|
|
16,258
|
|
|
46,349
|
|
|
30,539
|
|
||||
Restructuring and integration expense, net
|
|
—
|
|
|
1,591
|
|
|
(12
|
)
|
|
2,346
|
|
||||
Other operating (income) expense, net
|
|
388
|
|
|
74
|
|
|
236
|
|
|
96
|
|
||||
Income (loss) from operations
|
|
8,098
|
|
|
(292
|
)
|
|
8,699
|
|
|
3,401
|
|
||||
Interest expense
|
|
13,958
|
|
|
15,988
|
|
|
27,759
|
|
|
27,984
|
|
||||
Loss on extinguishment of debt and write-off of debt issuance costs
|
|
—
|
|
|
12,938
|
|
|
2,699
|
|
|
12,938
|
|
||||
Other (income) expense, net
|
|
57
|
|
|
1,887
|
|
|
786
|
|
|
1,574
|
|
||||
Loss before (provision) benefit for income taxes and share of net income from joint venture
|
|
(5,917
|
)
|
|
(31,105
|
)
|
|
(22,545
|
)
|
|
(39,095
|
)
|
||||
Benefit (provision) for income taxes
|
|
(577
|
)
|
|
5,947
|
|
|
(2,818
|
)
|
|
7,123
|
|
||||
Share of net income (loss) from joint venture
|
|
(203
|
)
|
|
647
|
|
|
66
|
|
|
1,478
|
|
||||
Net loss
|
|
$
|
(6,697
|
)
|
|
$
|
(24,511
|
)
|
|
$
|
(25,297
|
)
|
|
$
|
(30,494
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
||||||||
Change in fair value of interest rate swap, net of tax
|
|
(6,962
|
)
|
|
—
|
|
|
(10,818
|
)
|
|
—
|
|
||||
Foreign currency translation loss
|
|
(1,434
|
)
|
|
(15,781
|
)
|
|
(172
|
)
|
|
(10,316
|
)
|
||||
Other comprehensive loss
|
|
$
|
(8,396
|
)
|
|
$
|
(15,781
|
)
|
|
$
|
(10,990
|
)
|
|
$
|
(10,316
|
)
|
Comprehensive loss
|
|
$
|
(15,093
|
)
|
|
$
|
(40,292
|
)
|
|
$
|
(36,287
|
)
|
|
$
|
(40,810
|
)
|
Basic net loss per share
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(1.10
|
)
|
Weighted average shares outstanding
|
|
42,028
|
|
|
27,696
|
|
|
42,000
|
|
|
27,632
|
|
||||
Diluted net loss per share
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(1.10
|
)
|
Weighted average shares outstanding
|
|
42,028
|
|
|
27,696
|
|
|
42,000
|
|
|
27,632
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
22,077
|
|
|
$
|
17,988
|
|
Accounts receivable, net
|
|
151,289
|
|
|
133,421
|
|
||
Inventories
|
|
128,526
|
|
|
122,615
|
|
||
Income tax receivable
|
|
419
|
|
|
946
|
|
||
Other current assets
|
|
16,433
|
|
|
21,901
|
|
||
Total current assets
|
|
318,744
|
|
|
296,871
|
|
||
Property, plant and equipment, net
|
|
368,445
|
|
|
361,028
|
|
||
Operating lease right-of-use assets
|
|
65,300
|
|
|
—
|
|
||
Goodwill
|
|
439,632
|
|
|
439,452
|
|
||
Intangible assets, net
|
|
351,797
|
|
|
376,248
|
|
||
Investment in joint venture
|
|
20,406
|
|
|
20,364
|
|
||
Other non-current assets
|
|
7,961
|
|
|
7,607
|
|
||
Total assets
|
|
$
|
1,572,285
|
|
|
$
|
1,501,570
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
63,500
|
|
|
$
|
65,694
|
|
Accrued salaries, wages and benefits
|
|
29,980
|
|
|
24,636
|
|
||
Current maturities of long-term debt
|
|
25,115
|
|
|
31,280
|
|
||
Current portion of operating lease liabilities
|
|
7,272
|
|
|
—
|
|
||
Other current liabilities
|
|
23,472
|
|
|
23,420
|
|
||
Total current liabilities
|
|
149,339
|
|
|
145,030
|
|
||
Deferred tax liabilities
|
|
83,623
|
|
|
93,482
|
|
||
Non-current income tax payable
|
|
3,671
|
|
|
3,875
|
|
||
Long-term debt, net of current portion
|
|
850,376
|
|
|
811,471
|
|
||
Operating lease liabilities, net of current portion
|
|
64,152
|
|
|
—
|
|
||
Other non-current liabilities
|
|
43,263
|
|
|
29,417
|
|
||
Total liabilities
|
|
1,194,424
|
|
|
1,083,275
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock - $0.01 par value, authorized 90,000 shares, 42,367 and 42,104 shares issued and outstanding at June 30, 2019, and December 31, 2018, respectively
|
|
424
|
|
|
421
|
|
||
Additional paid-in capital
|
|
513,380
|
|
|
511,545
|
|
||
Retained deficit
|
|
(93,328
|
)
|
|
(62,046
|
)
|
||
Accumulated other comprehensive loss
|
|
(42,615
|
)
|
|
(31,625
|
)
|
||
Total stockholders’ equity
|
|
377,861
|
|
|
418,295
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,572,285
|
|
|
$
|
1,501,570
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Number
of shares |
|
Par
value |
|
Additional
paid in capital |
|
Retained
deficit |
|
Accumulated other comprehensive loss
|
|
Total
|
|||||||||||
Balance, March 31, 2019
|
|
42,367
|
|
|
$
|
424
|
|
|
$
|
512,274
|
|
|
$
|
(83,639
|
)
|
|
$
|
(34,219
|
)
|
|
$
|
394,840
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,697
|
)
|
|
—
|
|
|
(6,697
|
)
|
|||||
Cash dividends declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,992
|
)
|
|
—
|
|
|
(2,992
|
)
|
|||||
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
1,106
|
|
|
—
|
|
|
—
|
|
|
1,106
|
|
|||||
Change in fair value of interest rate swap, net of tax of $1,993
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,962
|
)
|
|
(6,962
|
)
|
|||||
Foreign currency translation loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,434
|
)
|
|
(1,434
|
)
|
|||||
Adoption of new accounting standard (Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance, June 30, 2019
|
|
42,367
|
|
|
$
|
424
|
|
|
$
|
513,380
|
|
|
$
|
(93,328
|
)
|
|
$
|
(42,615
|
)
|
|
$
|
377,861
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Number
of shares |
|
Par
value |
|
Additional
paid in capital |
|
Retained
earnings |
|
Accumulated other comprehensive loss
|
|
Total
|
|||||||||||
Balance, March 31, 2018
|
|
27,666
|
|
|
$
|
276
|
|
|
$
|
293,704
|
|
|
$
|
203,159
|
|
|
$
|
(12,280
|
)
|
|
$
|
484,859
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,511
|
)
|
|
—
|
|
|
(24,511
|
)
|
|||||
Cash dividends declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,930
|
)
|
|
—
|
|
|
(1,930
|
)
|
|||||
Shares issued for option exercises
|
|
4
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||
Share-based compensation expense
|
|
78
|
|
|
1
|
|
|
1,077
|
|
|
—
|
|
|
—
|
|
|
1,078
|
|
|||||
Restricted shares and performance shares forgiven for taxes and forfeited
|
|
(19
|
)
|
|
—
|
|
|
(433
|
)
|
|
—
|
|
|
—
|
|
|
(433
|
)
|
|||||
Foreign currency translation loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,781
|
)
|
|
(15,781
|
)
|
|||||
Balance, June 30, 2018
|
|
27,729
|
|
|
$
|
277
|
|
|
$
|
294,380
|
|
|
$
|
176,718
|
|
|
$
|
(28,061
|
)
|
|
$
|
443,314
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Number
of shares |
|
Par
value |
|
Additional
paid in capital |
|
Retained
deficit |
|
Accumulated other comprehensive loss
|
|
Total
|
|||||||||||
Balance, December 31, 2018
|
|
42,104
|
|
|
$
|
421
|
|
|
$
|
511,545
|
|
|
$
|
(62,046
|
)
|
|
$
|
(31,625
|
)
|
|
$
|
418,295
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,297
|
)
|
|
—
|
|
|
(25,297
|
)
|
|||||
Cash dividends declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,934
|
)
|
|
—
|
|
|
(5,934
|
)
|
|||||
Share-based compensation expense
|
|
281
|
|
|
3
|
|
|
1,976
|
|
|
—
|
|
|
—
|
|
|
1,979
|
|
|||||
Restricted shares forgiven for taxes and forfeited
|
|
(18
|
)
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|||||
Change in fair value of interest rate swap, net of tax of $3,097
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,818
|
)
|
|
(10,818
|
)
|
|||||
Foreign currency translation loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
|
(172
|
)
|
|||||
Adoption of new accounting standard (Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
(51
|
)
|
|||||
Balance, June 30, 2019
|
|
42,367
|
|
|
$
|
424
|
|
|
$
|
513,380
|
|
|
$
|
(93,328
|
)
|
|
$
|
(42,615
|
)
|
|
$
|
377,861
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,494
|
)
|
|
—
|
|
|
(30,494
|
)
|
|||||
Cash dividends declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,884
|
)
|
|
—
|
|
|
(3,884
|
)
|
|||||
Shares issued for option exercises
|
|
27
|
|
|
—
|
|
|
274
|
|
|
—
|
|
|
—
|
|
|
274
|
|
|||||
Share-based compensation expense
|
|
165
|
|
|
2
|
|
|
2,332
|
|
|
—
|
|
|
—
|
|
|
2,334
|
|
|||||
Restricted shares and performance shares forgiven for taxes and forfeited
|
|
(35
|
)
|
|
—
|
|
|
(720
|
)
|
|
—
|
|
|
—
|
|
|
(720
|
)
|
|||||
Foreign currency translation loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,316
|
)
|
|
(10,316
|
)
|
|||||
Adoption of new accounting standard
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Balance, June 30, 2018
|
|
27,729
|
|
|
$
|
277
|
|
|
$
|
294,380
|
|
|
$
|
176,718
|
|
|
$
|
(28,061
|
)
|
|
$
|
443,314
|
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net loss
|
|
$
|
(25,297
|
)
|
|
$
|
(30,494
|
)
|
Adjustments to reconcile net loss to net cash provided by (used by) operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
46,349
|
|
|
30,539
|
|
||
Amortization of debt issuance costs
|
|
2,354
|
|
|
2,313
|
|
||
Loss on extinguishment of debt and write-off of debt issuance costs
|
|
2,699
|
|
|
12,938
|
|
||
Share of net income from joint venture, net of cash dividends received
|
|
(66
|
)
|
|
(1,478
|
)
|
||
Compensation expense from issuance of share-based awards
|
|
1,979
|
|
|
2,334
|
|
||
Deferred income taxes
|
|
(6,762
|
)
|
|
(34
|
)
|
||
Other
|
|
540
|
|
|
214
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
||||
Accounts receivable
|
|
(17,723
|
)
|
|
(17,256
|
)
|
||
Inventories
|
|
(5,826
|
)
|
|
(10,742
|
)
|
||
Accounts payable
|
|
(1,405
|
)
|
|
(4,653
|
)
|
||
Income taxes receivable and payable, net
|
|
315
|
|
|
(8,695
|
)
|
||
Other
|
|
7,210
|
|
|
5,589
|
|
||
Net cash provided by (used by) operating activities
|
|
4,367
|
|
|
(19,425
|
)
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Acquisition of property, plant and equipment
|
|
(28,994
|
)
|
|
(28,888
|
)
|
||
Proceeds from liquidation of short-term investment
|
|
8,000
|
|
|
—
|
|
||
Cash paid to acquire businesses, net of cash received
|
|
—
|
|
|
(393,481
|
)
|
||
Other
|
|
1,223
|
|
|
625
|
|
||
Net cash used by investing activities
|
|
(19,771
|
)
|
|
(421,744
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Cash paid for debt issuance or prepayment costs
|
|
(967
|
)
|
|
(16,703
|
)
|
||
Dividends paid
|
|
(5,913
|
)
|
|
(3,854
|
)
|
||
Proceeds from long-term debt
|
|
46,630
|
|
|
270,000
|
|
||
Repayment of long-term debt
|
|
(12,055
|
)
|
|
(16,000
|
)
|
||
Proceeds from (repayments of) short-term debt, net
|
|
(6,218
|
)
|
|
9,703
|
|
||
Other
|
|
(1,759
|
)
|
|
(2,410
|
)
|
||
Net cash provided by financing activities
|
|
19,718
|
|
|
240,736
|
|
||
Effect of exchange rate changes on cash flows
|
|
(225
|
)
|
|
(806
|
)
|
||
Net change in cash and cash equivalents
|
|
4,089
|
|
|
(201,239
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
17,988
|
|
|
224,446
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
22,077
|
|
|
$
|
23,207
|
|
|
|
Three Months Ended
June 30, 2018 |
|
Six Months Ended
June 30, 2018 |
||||
Pro forma net sales
|
|
$
|
210,902
|
|
|
$
|
420,731
|
|
Pro forma net loss
|
|
$
|
(12,017
|
)
|
|
$
|
(20,078
|
)
|
Basic net loss per share
|
|
$
|
(0.43
|
)
|
|
$
|
(0.73
|
)
|
Diluted net loss per share
|
|
$
|
(0.43
|
)
|
|
$
|
(0.73
|
)
|
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Corporate
and
Consolidations
|
|
|
|
Total
|
||||||||||
Three Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
79,444
|
|
|
$
|
51,393
|
|
|
$
|
91,332
|
|
|
$
|
(503
|
)
|
|
(a)
|
|
$
|
221,666
|
|
Income (loss) from operations
|
|
$
|
4,092
|
|
|
$
|
5,682
|
|
|
$
|
9,305
|
|
|
$
|
(10,981
|
)
|
|
|
|
$
|
8,098
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
(13,958
|
)
|
|||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
(57
|
)
|
|||||||||
Loss before provision for income taxes and share of net income from joint venture
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(5,917
|
)
|
||||||||
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
88,079
|
|
|
$
|
49,820
|
|
|
$
|
59,153
|
|
|
$
|
(703
|
)
|
|
(a)
|
|
$
|
196,349
|
|
Income (loss) from operations
|
|
$
|
7,380
|
|
|
$
|
6,000
|
|
|
$
|
2,041
|
|
|
$
|
(15,713
|
)
|
|
|
|
$
|
(292
|
)
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
(15,988
|
)
|
|||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
(14,825
|
)
|
|||||||||
Loss before benefit for income taxes and share of net income from joint venture
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(31,105
|
)
|
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Corporate
and
Consolidations
|
|
|
|
Total
|
||||||||||
Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
157,519
|
|
|
$
|
101,050
|
|
|
$
|
177,340
|
|
|
$
|
(987
|
)
|
|
(a)
|
|
$
|
434,922
|
|
Income (loss) from operations
|
|
$
|
8,199
|
|
|
$
|
9,506
|
|
|
$
|
13,151
|
|
|
$
|
(22,157
|
)
|
|
|
|
$
|
8,699
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
(27,759
|
)
|
|||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
(3,485
|
)
|
|||||||||
Loss before benefit for income taxes and share of net income from joint venture
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(22,545
|
)
|
||||||||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
177,873
|
|
|
$
|
98,502
|
|
|
$
|
90,353
|
|
|
$
|
(1,231
|
)
|
|
(a)
|
|
$
|
365,497
|
|
Income (loss) from operations
|
|
$
|
17,165
|
|
|
$
|
11,233
|
|
|
$
|
6,245
|
|
|
$
|
(31,242
|
)
|
|
|
|
$
|
3,401
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
(27,984
|
)
|
|||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
(14,512
|
)
|
|||||||||
Loss before benefit for income taxes and share of net income from joint venture
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(39,095
|
)
|
(a)
|
Includes elimination of intersegment transactions occurring during the ordinary course of business.
|
|
|
Total Assets as of
|
||||||
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Mobile Solutions
|
|
$
|
396,398
|
|
|
$
|
356,387
|
|
Power Solutions
|
|
309,516
|
|
|
297,947
|
|
||
Life Sciences
|
|
815,626
|
|
|
802,770
|
|
||
Corporate and Consolidations
|
|
50,745
|
|
|
44,466
|
|
||
Total
|
|
$
|
1,572,285
|
|
|
$
|
1,501,570
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Raw materials
|
|
$
|
53,789
|
|
|
$
|
52,930
|
|
Work in process
|
|
49,051
|
|
|
42,578
|
|
||
Finished goods
|
|
25,686
|
|
|
27,107
|
|
||
Total inventories
|
|
$
|
128,526
|
|
|
$
|
122,615
|
|
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Total
|
||||||||
Balance as of December 31, 2018
|
|
$
|
—
|
|
|
$
|
94,505
|
|
|
$
|
344,947
|
|
|
$
|
439,452
|
|
Currency impacts/Other
|
|
—
|
|
|
196
|
|
|
(16
|
)
|
|
180
|
|
||||
Balance as of June 30, 2019
|
|
$
|
—
|
|
|
$
|
94,701
|
|
|
$
|
344,931
|
|
|
$
|
439,632
|
|
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Total
|
||||||||
Balance as of December 31, 2018
|
|
$
|
35,892
|
|
|
$
|
95,991
|
|
|
$
|
244,365
|
|
|
$
|
376,248
|
|
Amortization
|
|
(1,770
|
)
|
|
(5,497
|
)
|
|
(17,193
|
)
|
|
(24,460
|
)
|
||||
Currency impacts/Other
|
|
2
|
|
|
—
|
|
|
7
|
|
|
9
|
|
||||
Balance as of June 30, 2019
|
|
$
|
34,124
|
|
|
$
|
90,494
|
|
|
$
|
227,179
|
|
|
$
|
351,797
|
|
Balance as of December 31, 2018
|
$
|
20,364
|
|
Share of earnings
|
66
|
|
|
Foreign currency translation gain
|
(24
|
)
|
|
Balance as of June 30, 2019
|
$
|
20,406
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Senior Secured Term Loan
|
|
$
|
529,188
|
|
|
$
|
532,063
|
|
Incremental Term Loan
|
|
273,000
|
|
|
279,000
|
|
||
Senior Secured Revolver
|
|
76,382
|
|
|
38,720
|
|
||
International lines of credit and other loans
|
|
9,683
|
|
|
9,810
|
|
||
Total principal
|
|
888,253
|
|
|
859,593
|
|
||
Less
—
current maturities of long-term debt
|
|
25,115
|
|
|
31,280
|
|
||
Principal, net of current portion
|
|
863,138
|
|
|
828,313
|
|
||
Less
—
unamortized debt issuance costs
|
|
12,762
|
|
|
16,842
|
|
||
Long-term debt, net of current portion
|
|
$
|
850,376
|
|
|
$
|
811,471
|
|
•
|
Equipment used in the manufacturing process as well as office equipment with terms between
thirteen months
and
five years
; and
|
•
|
Manufacturing plants and office facilities with terms between
thirteen months
and
25 years
.
|
|
|
Financial Statement Line Item
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Lease cost:
|
|
|
|
|
|
|
||||
Finance lease cost
|
|
|
|
|
|
|
||||
Amortization of right-of-use assets
|
|
Depreciation and amortization
|
|
$
|
361
|
|
|
$
|
683
|
|
Interest expense
|
|
Interest expense
|
|
56
|
|
|
109
|
|
||
Operating lease cost
|
|
Cost of sales and selling, general and administrative expense
|
|
3,398
|
|
|
6,833
|
|
||
Short-term lease cost
(1)
|
|
Cost of sales and selling, general and administrative expense
|
|
105
|
|
|
211
|
|
||
Total lease cost
|
|
|
|
$
|
3,920
|
|
|
$
|
7,836
|
|
|
|
Financial Statement Line Item
|
|
June 30, 2019
|
||
Lease assets and liabilities:
|
|
|
|
|
||
Assets
|
|
|
|
|
||
Operating lease assets
|
|
Operating lease right-of-use assets
|
|
$
|
65,300
|
|
Finance lease assets
|
|
Property, plant and equipment, net
|
|
13,534
|
|
|
Total lease assets
|
|
|
|
$
|
78,834
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
||
Operating lease liabilities
|
|
Current portion of operating lease liabilities
|
|
$
|
7,272
|
|
Finance lease liabilities
|
|
Other current liabilities
|
|
2,331
|
|
|
Non-current liabilities
|
|
|
|
|
||
Operating lease liabilities
|
|
Operating lease liabilities, net of current portion
|
|
64,152
|
|
|
Finance lease liabilities
|
|
Other non-current liabilities
|
|
6,376
|
|
|
Total lease liabilities
|
|
|
|
$
|
80,131
|
|
Supplemental Cash Flows Information
|
|
Six Months Ended
June 30, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
||
Operating cash flows from finance leases
|
|
$
|
109
|
|
Operating cash flows from operating leases
|
|
10,667
|
|
|
Financing cash flows from finance leases
|
|
1,618
|
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
|
$
|
2,878
|
|
|
|
Weighted-Average Remaining Lease Term (years)
|
|
Weighted-Average Discount Rate
|
|
Finance leases
|
|
3.9
|
|
2.4
|
%
|
Operating leases
|
|
10.1
|
|
8.2
|
%
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
2019
(1)
|
|
$
|
6,612
|
|
|
$
|
1,542
|
|
2020
|
|
11,885
|
|
|
2,263
|
|
||
2021
|
|
11,025
|
|
|
2,249
|
|
||
2022
|
|
10,768
|
|
|
2,030
|
|
||
2023
|
|
9,233
|
|
|
1,118
|
|
||
Thereafter
|
|
57,127
|
|
|
72
|
|
||
Total future minimum lease payments
|
|
106,650
|
|
|
9,274
|
|
||
Less: imputed interest
|
|
35,226
|
|
|
567
|
|
||
Total lease liabilities
|
|
$
|
71,424
|
|
|
$
|
8,707
|
|
(1)
|
For the period from July 1,
2019
to December 31,
2019
.
|
Year Ending December 31,
|
|
|
||
2019
|
|
$
|
13,337
|
|
2020
|
|
11,515
|
|
|
2021
|
|
10,557
|
|
|
2022
|
|
10,293
|
|
|
2023
|
|
8,752
|
|
|
Thereafter
|
|
53,945
|
|
|
Total minimum payments
|
|
$
|
108,399
|
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Corporate and
Consolidations
|
|
Total
|
||||||||||
Severance and other employee costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,596
|
|
|
$
|
—
|
|
|
$
|
1,596
|
|
Site closure and other associated costs
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Total
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
1,596
|
|
|
$
|
—
|
|
|
$
|
1,591
|
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||
|
|
Mobile
Solutions |
|
Power
Solutions |
|
Life
Sciences |
|
Corporate and
Consolidations |
|
Total
|
||||||||||
Severance and other employee costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Site closure and other associated costs
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||||
Total
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Mobile
Solutions |
|
Power
Solutions |
|
Life
Sciences |
|
Corporate and
Consolidations |
|
Total
|
||||||||||
Severance and other employee costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,596
|
|
|
$
|
728
|
|
|
$
|
2,324
|
|
Site closure and other associated costs
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Total
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
1,596
|
|
|
$
|
728
|
|
|
$
|
2,346
|
|
|
|
Reserve
Balance as of December 31, 2018 |
|
Charges
|
|
Non-cash
Adjustments
|
|
Cash
Reductions
|
|
Reserve
Balance as of June 30, 2019 |
||||||||||
Severance and other employee costs
|
|
$
|
1,122
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(392
|
)
|
|
$
|
730
|
|
Site closure and other associated costs
|
|
24
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|||||
Total
|
|
$
|
1,146
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(404
|
)
|
|
$
|
730
|
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||
|
|
Mobile
Solutions |
|
Power
Solutions |
|
Life
Sciences |
|
Intersegment
Sales Eliminations |
|
Total
|
||||||||||
United States
|
|
$
|
44,512
|
|
|
$
|
40,580
|
|
|
$
|
74,229
|
|
|
$
|
(503
|
)
|
|
$
|
158,818
|
|
China
|
|
9,318
|
|
|
1,598
|
|
|
1,873
|
|
|
—
|
|
|
12,789
|
|
|||||
Germany
|
|
1,316
|
|
|
21
|
|
|
8,447
|
|
|
—
|
|
|
9,784
|
|
|||||
Brazil
|
|
9,636
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
9,716
|
|
|||||
Mexico
|
|
5,066
|
|
|
4,235
|
|
|
117
|
|
|
—
|
|
|
9,418
|
|
|||||
Switzerland
|
|
1,153
|
|
|
25
|
|
|
3,509
|
|
|
—
|
|
|
4,687
|
|
|||||
Other
|
|
8,443
|
|
|
4,854
|
|
|
3,157
|
|
|
—
|
|
|
16,454
|
|
|||||
Total net sales
|
|
$
|
79,444
|
|
|
$
|
51,393
|
|
|
$
|
91,332
|
|
|
$
|
(503
|
)
|
|
$
|
221,666
|
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Intersegment
Sales
Eliminations
|
|
Total
|
||||||||||
United States
|
|
$
|
48,142
|
|
|
$
|
41,924
|
|
|
$
|
48,441
|
|
|
$
|
(703
|
)
|
|
$
|
137,804
|
|
China
|
|
11,581
|
|
|
959
|
|
|
1,312
|
|
|
—
|
|
|
13,852
|
|
|||||
Mexico
|
|
7,236
|
|
|
3,348
|
|
|
167
|
|
|
—
|
|
|
10,751
|
|
|||||
Brazil
|
|
9,637
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
9,666
|
|
|||||
Germany
|
|
1,551
|
|
|
—
|
|
|
3,816
|
|
|
—
|
|
|
5,367
|
|
|||||
Switzerland
|
|
1,294
|
|
|
29
|
|
|
1,720
|
|
|
—
|
|
|
3,043
|
|
|||||
Other
|
|
8,638
|
|
|
3,560
|
|
|
3,668
|
|
|
—
|
|
|
15,866
|
|
|||||
Total net sales
|
|
$
|
88,079
|
|
|
$
|
49,820
|
|
|
$
|
59,153
|
|
|
$
|
(703
|
)
|
|
$
|
196,349
|
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||
|
|
Mobile
Solutions |
|
Power
Solutions |
|
Life
Sciences |
|
Intersegment
Sales Eliminations |
|
Total
|
||||||||||
United States
|
|
$
|
88,969
|
|
|
$
|
81,695
|
|
|
$
|
142,572
|
|
|
$
|
(987
|
)
|
|
$
|
312,249
|
|
China
|
|
18,471
|
|
|
3,436
|
|
|
3,565
|
|
|
—
|
|
|
25,472
|
|
|||||
Germany
|
|
2,722
|
|
|
37
|
|
|
17,332
|
|
|
—
|
|
|
20,091
|
|
|||||
Brazil
|
|
18,018
|
|
|
149
|
|
|
—
|
|
|
—
|
|
|
18,167
|
|
|||||
Mexico
|
|
10,444
|
|
|
6,944
|
|
|
244
|
|
|
—
|
|
|
17,632
|
|
|||||
Switzerland
|
|
2,512
|
|
|
41
|
|
|
6,775
|
|
|
—
|
|
|
9,328
|
|
|||||
Other
|
|
16,383
|
|
|
8,748
|
|
|
6,852
|
|
|
—
|
|
|
31,983
|
|
|||||
Total net sales
|
|
$
|
157,519
|
|
|
$
|
101,050
|
|
|
$
|
177,340
|
|
|
$
|
(987
|
)
|
|
$
|
434,922
|
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Mobile
Solutions
|
|
Power
Solutions
|
|
Life
Sciences
|
|
Intersegment
Sales
Eliminations
|
|
Total
|
||||||||||
United States
|
|
$
|
97,797
|
|
|
$
|
82,052
|
|
|
$
|
78,994
|
|
|
$
|
(1,231
|
)
|
|
$
|
257,612
|
|
China
|
|
23,162
|
|
|
2,444
|
|
|
1,438
|
|
|
—
|
|
|
27,044
|
|
|||||
Mexico
|
|
14,472
|
|
|
6,545
|
|
|
339
|
|
|
—
|
|
|
21,356
|
|
|||||
Brazil
|
|
19,522
|
|
|
50
|
|
|
29
|
|
|
—
|
|
|
19,601
|
|
|||||
Germany
|
|
3,085
|
|
|
7
|
|
|
3,817
|
|
|
—
|
|
|
6,909
|
|
|||||
Switzerland
|
|
2,700
|
|
|
29
|
|
|
1,720
|
|
|
—
|
|
|
4,449
|
|
|||||
Poland
|
|
3,971
|
|
|
18
|
|
|
1
|
|
|
—
|
|
|
3,990
|
|
|||||
Other
|
|
13,164
|
|
|
7,357
|
|
|
4,015
|
|
|
—
|
|
|
24,536
|
|
|||||
Total net sales
|
|
$
|
177,873
|
|
|
$
|
98,502
|
|
|
$
|
90,353
|
|
|
$
|
(1,231
|
)
|
|
$
|
365,497
|
|
|
|
Deferred
Revenue
|
||
Balance at January 1, 2019
|
|
$
|
2,974
|
|
Balance at June 30, 2019
|
|
$
|
2,953
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Stock options
|
|
$
|
169
|
|
|
$
|
152
|
|
|
$
|
361
|
|
|
$
|
358
|
|
Restricted stock
|
|
502
|
|
|
397
|
|
|
961
|
|
|
856
|
|
||||
Performance share units
|
|
435
|
|
|
529
|
|
|
657
|
|
|
1,120
|
|
||||
Share-based compensation expense
|
|
$
|
1,106
|
|
|
$
|
1,078
|
|
|
$
|
1,979
|
|
|
$
|
2,334
|
|
|
2019
|
|
Expected term
|
6 years
|
|
Risk free interest rate
|
2.47
|
%
|
Dividend yield
|
3.53
|
%
|
Expected volatility
|
49.53
|
%
|
Expected forfeiture rate
|
4.00
|
%
|
|
|
Number of Options
(in thousands)
|
|
Weighted-
Average
Exercise
Price
(per share)
|
|
Weighted-
Average
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic
Value
|
|
|
|||||
Outstanding at January 1, 2019
|
|
771
|
|
|
$
|
15.17
|
|
|
|
|
|
|
|
||
Granted
|
|
210
|
|
|
7.93
|
|
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
|
|
|
|
|
$
|
—
|
|
|
|
|
Forfeited or expired
|
|
(5
|
)
|
|
24.41
|
|
|
|
|
|
|
|
|||
Outstanding at June 30, 2019
|
|
976
|
|
|
$
|
13.56
|
|
|
6.1
|
|
$
|
—
|
|
|
(1)
|
Exercisable at June 30, 2019
|
|
701
|
|
|
$
|
14.26
|
|
|
4.8
|
|
$
|
—
|
|
|
(1)
|
(1)
|
The aggregate intrinsic value is the sum of intrinsic values for each exercisable individual option grant. The intrinsic value is the amount by which the closing market price of our stock at
June 30, 2019
, was greater than the exercise price of any individual option grant.
|
|
|
Nonvested
Restricted
Shares
(in thousands)
|
|
Weighted
Average
Grant-Date
Fair Value
(per share)
|
|||
Nonvested at January 1, 2019
|
|
146
|
|
|
$
|
22.07
|
|
Granted
|
|
281
|
|
|
7.93
|
|
|
Vested
|
|
(70
|
)
|
|
20.92
|
|
|
Forfeited
|
|
(18
|
)
|
|
18.98
|
|
|
Nonvested at June 30, 2019
|
|
339
|
|
|
$
|
10.74
|
|
TSR Awards:
|
|
Threshold Performance
(50% of Shares) |
|
Target Performance
(100% of Shares) |
|
Maximum Performance
(150% of Shares) |
|||
2019 grants
|
|
35th Percentile
|
|
50th Percentile
|
|
75th Percentile
|
|||
|
|
|
|
|
|
|
|||
ROIC Awards:
|
|
Threshold Performance
(35% of Shares) |
|
Target Performance
(100% of Shares) |
|
Maximum Performance
(150% of Shares) |
|||
2019 grants
(1)
|
|
4.7
|
%
|
|
5.8
|
%
|
|
7.0
|
%
|
(1)
|
For the ROIC Awards granted in 2019, the denominator of the calculation is different than in prior years, and therefore the target percentages are not comparable to historical target percentages.
|
|
|
TSR Awards
|
|
ROIC Awards
|
||||||||||
Award Year
|
|
Shares
(in thousands)
|
|
Grant Date
Fair Value
(per share)
|
|
Shares
(in thousands)
|
|
Grant Date Fair
Value (per share)
|
||||||
2019
|
|
136
|
|
|
$
|
9.28
|
|
|
174
|
|
|
$
|
7.93
|
|
|
|
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, 2019
|
|
94
|
|
|
$
|
26.84
|
|
|
100
|
|
|
$
|
24.39
|
|
Granted
|
|
136
|
|
|
9.28
|
|
|
174
|
|
|
7.93
|
|
||
Forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Nonvested at June 30, 2019
|
|
230
|
|
|
$
|
16.47
|
|
|
274
|
|
|
$
|
13.93
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
$
|
(6,697
|
)
|
|
$
|
(24,511
|
)
|
|
$
|
(25,297
|
)
|
|
$
|
(30,494
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
42,028
|
|
|
27,696
|
|
|
42,000
|
|
|
27,632
|
|
||||
Effect of dilutive stock options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted shares outstanding
|
|
42,028
|
|
|
27,696
|
|
|
42,000
|
|
|
27,632
|
|
||||
Per common share net loss:
|
|
|
|
|
|
|
|
|
||||||||
Basic net loss per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(1.10
|
)
|
Diluted net loss per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(1.10
|
)
|
Cash dividends declared per share
|
|
$
|
0.07
|
|
|
$
|
0.07
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
|
Notional Amount
|
||
February 12, 2019 - December 30, 2020
|
|
$
|
700,000
|
|
December 31, 2020 - December 30, 2021
|
|
466,667
|
|
|
December 31, 2021 - October 19, 2022
|
|
233,333
|
|
|
|
Fair Value Measurements as of June 30, 2019
|
||||||||||
Description
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||
Derivative liability - other current liabilities
|
|
$
|
—
|
|
|
$
|
4,244
|
|
|
$
|
—
|
|
Derivative liability - other non-current liabilities
|
|
—
|
|
|
9,671
|
|
|
—
|
|
|||
Total
|
|
$
|
—
|
|
|
$
|
13,915
|
|
|
$
|
—
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended June 30,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
221,666
|
|
|
$
|
196,349
|
|
|
$
|
25,317
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
19,457
|
|
||||||
Volume
|
|
|
|
|
|
|
7,579
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(2,371
|
)
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
652
|
|
|||||||
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
|
163,513
|
|
|
148,640
|
|
|
14,873
|
|
|
|||||
Acquisitions
|
|
|
|
|
|
|
$
|
13,159
|
|
||||||
Volume
|
|
|
|
|
|
|
6,757
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(1,882
|
)
|
|||||||
Cost reduction projects
|
|
|
|
|
|
|
(5,637
|
)
|
|||||||
Inflation
|
|
|
|
|
|
|
2,958
|
|
|||||||
Mix/other
|
|
|
|
|
|
|
(482
|
)
|
|||||||
Selling, general and administrative expense
|
|
26,743
|
|
|
26,641
|
|
|
102
|
|
|
|||||
Acquisition related costs excluded from selling, general and administrative expense
|
|
—
|
|
|
3,437
|
|
|
(3,437
|
)
|
|
|||||
Depreciation and amortization
|
|
22,924
|
|
|
16,258
|
|
|
6,666
|
|
|
|||||
Other operating (income) expense, net
|
|
388
|
|
|
74
|
|
|
314
|
|
|
|||||
Restructuring and integration expense, net
|
|
—
|
|
|
1,591
|
|
|
(1,591
|
)
|
|
|||||
Income (loss) from operations
|
|
8,098
|
|
|
(292
|
)
|
|
8,390
|
|
|
|||||
Interest expense
|
|
13,958
|
|
|
15,988
|
|
|
(2,030
|
)
|
|
|||||
Loss on extinguishment of debt and write-off of debt issuance costs
|
|
—
|
|
|
12,938
|
|
|
(12,938
|
)
|
|
|||||
Other (income) expense, net
|
|
57
|
|
|
1,887
|
|
|
(1,830
|
)
|
|
|||||
Loss before (provision) benefit for income taxes and share of net income from joint venture
|
|
(5,917
|
)
|
|
(31,105
|
)
|
|
25,188
|
|
|
|||||
Benefit (provision) for income taxes
|
|
(577
|
)
|
|
5,947
|
|
|
(6,524
|
)
|
|
|||||
Share of net income (loss) from joint venture
|
|
(203
|
)
|
|
647
|
|
|
(850
|
)
|
|
|||||
Net loss
|
|
$
|
(6,697
|
)
|
|
$
|
(24,511
|
)
|
|
$
|
17,814
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Interest on debt
|
|
$
|
13,067
|
|
|
$
|
14,875
|
|
Amortization of debt issuance costs
|
|
1,162
|
|
|
1,225
|
|
||
Capitalized interest
|
|
(532
|
)
|
|
(253
|
)
|
||
Other
|
|
261
|
|
|
141
|
|
||
Total interest expense
|
|
$
|
13,958
|
|
|
$
|
15,988
|
|
|
|
Three Months Ended June 30,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
79,444
|
|
|
$
|
88,079
|
|
|
$
|
(8,635
|
)
|
|
||
Volume
|
|
|
|
|
|
|
$
|
(7,264
|
)
|
||||||
Foreign exchange effects
|
|
|
|
|
|
|
(1,823
|
)
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
452
|
|
|||||||
Income from operations
|
|
$
|
4,092
|
|
|
$
|
7,380
|
|
|
$
|
(3,288
|
)
|
|
|
|
Three Months Ended June 30,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
51,393
|
|
|
$
|
49,820
|
|
|
$
|
1,573
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
1,719
|
|
||||||
Volume
|
|
|
|
|
|
|
219
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(365
|
)
|
|||||||
Income from operations
|
|
$
|
5,682
|
|
|
$
|
6,000
|
|
|
$
|
(318
|
)
|
|
|
|
Three Months Ended June 30,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
91,332
|
|
|
$
|
59,153
|
|
|
$
|
32,179
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
17,738
|
|
||||||
Volume
|
|
|
|
|
|
|
14,624
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(183
|
)
|
|||||||
Income from operations
|
|
$
|
9,305
|
|
|
$
|
2,041
|
|
|
$
|
7,264
|
|
|
|
|
Six Months Ended June 30,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
434,922
|
|
|
$
|
365,497
|
|
|
$
|
69,425
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
74,705
|
|
||||||
Volume
|
|
|
|
|
|
|
(1,184
|
)
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(5,244
|
)
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
1,148
|
|
|||||||
Cost of sales (exclusive of depreciation and amortization shown separately below)
|
|
324,782
|
|
|
275,084
|
|
|
49,698
|
|
|
|||||
Acquisitions
|
|
|
|
|
|
|
$
|
51,024
|
|
||||||
Volume
|
|
|
|
|
|
|
1,689
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(4,286
|
)
|
|||||||
Cost reduction projects
|
|
|
|
|
|
|
(11,676
|
)
|
|||||||
Inflation
|
|
|
|
|
|
|
5,154
|
|
|||||||
Mix/other
|
|
|
|
|
|
|
7,793
|
|
|||||||
Selling, general and administrative expense
|
|
54,868
|
|
|
48,818
|
|
|
6,050
|
|
|
|||||
Acquisition related costs excluded from selling, general and administrative expense
|
|
—
|
|
|
5,213
|
|
|
(5,213
|
)
|
|
|||||
Depreciation and amortization
|
|
46,349
|
|
|
30,539
|
|
|
15,810
|
|
|
|||||
Other operating (income) expense, net
|
|
236
|
|
|
96
|
|
|
140
|
|
|
|||||
Restructuring and integration expense, net
|
|
(12
|
)
|
|
2,346
|
|
|
(2,358
|
)
|
|
|||||
Income (loss) from operations
|
|
8,699
|
|
|
3,401
|
|
|
5,298
|
|
|
|||||
Interest expense
|
|
27,759
|
|
|
27,984
|
|
|
(225
|
)
|
|
|||||
Loss on extinguishment of debt and write-off of debt issuance costs
|
|
2,699
|
|
|
12,938
|
|
|
(10,239
|
)
|
|
|||||
Other (income) expense, net
|
|
786
|
|
|
1,574
|
|
|
(788
|
)
|
|
|||||
Loss before (provision) benefit for income taxes and share of net income from joint venture
|
|
(22,545
|
)
|
|
(39,095
|
)
|
|
16,550
|
|
|
|||||
Benefit (provision) for income taxes
|
|
(2,818
|
)
|
|
7,123
|
|
|
(9,941
|
)
|
|
|||||
Share of net income (loss) from joint venture
|
|
66
|
|
|
1,478
|
|
|
(1,412
|
)
|
|
|||||
Net loss
|
|
$
|
(25,297
|
)
|
|
$
|
(30,494
|
)
|
|
$
|
5,197
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Interest on debt
|
|
$
|
26,185
|
|
|
$
|
25,839
|
|
Amortization of debt issuance costs
|
|
2,354
|
|
|
2,313
|
|
||
Capitalized interest
|
|
(1,084
|
)
|
|
(458
|
)
|
||
Other
|
|
304
|
|
|
290
|
|
||
Total interest expense
|
|
$
|
27,759
|
|
|
$
|
27,984
|
|
|
|
Six Months Ended June 30,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
157,519
|
|
|
$
|
177,873
|
|
|
$
|
(20,354
|
)
|
|
||
Volume
|
|
|
|
|
|
|
$
|
(16,561
|
)
|
||||||
Foreign exchange effects
|
|
|
|
|
|
|
(4,697
|
)
|
|||||||
Price/mix/inflation/other
|
|
|
|
|
|
|
904
|
|
|||||||
Income from operations
|
|
$
|
8,199
|
|
|
$
|
17,165
|
|
|
$
|
(8,966
|
)
|
|
|
|
Six Months Ended June 30,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
101,050
|
|
|
$
|
98,502
|
|
|
$
|
2,548
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
3,331
|
|
||||||
Volume
|
|
|
|
|
|
|
(418
|
)
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(365
|
)
|
|||||||
Income from operations
|
|
$
|
9,506
|
|
|
$
|
11,233
|
|
|
$
|
(1,727
|
)
|
|
|
|
Six Months Ended June 30,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
|||||||||
Net sales
|
|
$
|
177,340
|
|
|
$
|
90,353
|
|
|
$
|
86,987
|
|
|
||
Acquisitions
|
|
|
|
|
|
|
$
|
71,374
|
|
||||||
Volume
|
|
|
|
|
|
|
15,795
|
|
|||||||
Foreign exchange effects
|
|
|
|
|
|
|
(182
|
)
|
|||||||
Income from operations
|
|
$
|
13,151
|
|
|
$
|
6,245
|
|
|
$
|
6,906
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
No.
|
|
Description
|
|
|
|
3.1
|
|
Certificate of Amendment to Restated Certificate of Incorporation of NN, Inc
. (Declassification)
(incorporated by reference to Exhibit 3.1 to NN, Inc.’s Current Report on Form 8-K filed on May 20, 2019)
|
|
|
|
3.2
|
|
Certificate of Amendment to Restated Certificate of Incorporation of NN, Inc.
(Share Increase)
(incorporated by reference to Exhibit 3.2 to NN, Inc.’s Current Report on Form 8-K filed on May 20, 2019)
|
|
|
|
3.3
|
|
Amendment to Amended and Restated Bylaws of NN, Inc
.
(incorporated by reference to Exhibit 3.3 to NN, Inc.’s Current Report on Form 8-K filed on May 20, 2019)
|
|
|
|
10.1
|
|
NN, Inc. 2019 Omnibus Incentive Plan
(incorporated by reference to Appendix C to NN, Inc.’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 8, 2019)
|
|
|
|
10.2
|
|
Amendment No. 7 to Amended and Restated Credit Agreement, dated as of June 11, 2019, by and among NN, Inc., certain NN, Inc. subsidiaries named therein, SunTrust Bank, as administrative agent, and certain lenders named therein
(incorporated by reference to Exhibit 10.1 to NN, Inc.’s Current Report on Form 8-K filed on June 12, 2019)
|
|
|
|
10.3*
|
|
Separation Agreement and Release, dated as of July 12, 2019, by and between NN, Inc. and Thomas C. Burwell, Jr.
(incorporated by reference to Exhibit 10.1 to NN, Inc.’s Current Report on Form 8-K filed on July 15, 2019)
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
31.1
|
|
|
|
|
|
32.1
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Service
|
|
|
|
101.CAL
|
|
Taxonomy Calculation Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Definition Linkbase Document
|
* Management contract or compensatory plan or arrangement
|
|
NN, Inc.
|
|
(Registrant)
|
|
|
Date: August 9, 2019
|
/s/ Richard D. Holder
|
|
Richard D. Holder
|
|
President, Chief Executive Officer and Director
|
|
(Principal Executive and Financial Officer)
|
|
(Duly Authorized Officer)
|
|
|
Date: August 9, 2019
|
/s/ Michael C. Felcher
|
|
Michael C. Felcher
|
|
Vice President—Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
|
|
NN, INC.
|
GRANTEE
|
|||
|
|
|||
|
|
|||
By:
|
|
|
By:
|
|
Print Name:
|
|
|
Print Name:
|
|
Title:
|
|
|
Address:
|
_________________________________
|
|
|
________________________________
|
NN, INC.
|
GRANTEE
|
|||
|
|
|||
|
|
|||
By:
|
|
|
By:
|
|
Print Name:
|
|
|
Print Name:
|
|
Title:
|
|
|
Address:
|
_________________________________
|
|
|
________________________________
|
Grantee:
|
___________________________
|
|
|
|
|
Grant Date:
|
___________________________
|
|
|
|
|
Total Number of Restricted Shares:
|
___________ shares
|
|
|
|
|
Vesting Schedule:
|
Vesting Date
|
Percentage of Restricted Shares Which Become
Vested
|
|
_____________________
_____________________
_____________________
|
_____________________
_____________________
______________________
|
NN, INC.
|
GRANTEE
|
|||
|
|
|||
|
|
|||
By:
|
|
|
By:
|
|
Print Name:
|
|
|
Print Name:
|
|
Title:
|
|
|
Address:
|
_________________________________
|
|
|
________________________________
|
Grantee:
|
______________________________
|
|
|
Grant Date:
|
______________________________
|
|
|
Target Number of Performance Share Units:
|
_________ Performance Share Units
|
|
|
Performance Period:
|
______________________________
|
Determination Date:
|
The date on which the Committee determines whether the performance goals to which this Performance Share Unit Award relates have been met.
|
|
|
|
|
NN, INC.
|
GRANTEE
|
|||
|
|
|||
|
|
|||
By:
|
|
|
By:
|
|
Print Name:
|
|
|
Print Name:
|
|
Title:
|
|
|
Address:
|
_________________________________
|
|
|
_________________________________
|
1)
|
I have reviewed this quarterly report on Form 10-Q of NN, Inc.;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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August 9, 2019
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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 and Financial Officer)
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August 9, 2019
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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
(Principal Executive and Financial Officer)
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