NN reports first quarter sales and earnings both up sharply

NN Inc. (USA) reported first quarter 2003 financial results, with sales and earnings both up sharply from 2002. NN is the world's largest manufacturer of high precision bearing balls and rollers, also producing seals and retainers. First quarter 2003 sales were USD $57.6 million, up 22% from $47.2 million in 2002. Half of the sales improvement, said NN, was due to international currency effects. Net income doubled, to $3.6 million in 2003 from $1.8 million in 2002. NN credited the better-than-expected net income to three factors: volume increases, favorable currency exchange rates, and increases in customers' inventory levels. CFO David Dyckman said, "As a percentage of net sales, the gross profit margin was 25.8% in the first quarter of 2003 versus 24.7% in the first quarter of 2002 and 24.8% in the fourth quarter of 2002. This improvement over prior years reflects the continuing benefit of the initiatives to lower our cost structure and the associated benefits of higher volumes and inventory builds. Similarly, selling, general and administrative expenses for the first quarter of 2003 declined to 8.0% as a percentage of net sales compared to 9.5% for the same period in the prior year." Rock Baty, Chairman and CEO, said, "We are pleased with our results for the first quarter. We experienced solid growth in a sluggish global economic environment. Looking forward, we remain cautious regarding the balance of 2003. However, we continue to believe our businesses are well positioned to achieve good results in the current economic environment." NN is in the final stages of acquiring SKF's tapered roller and metal cage business in Veenendaal, The Netherlands. NN also said it is in the final stages of negotiations regarding the acquisition of SKF's 23% ownership stake in NN Euroball ApS. This would make NN the exclusive owner of NN Euroball ApS, a venture which originally involved NN, FAG and SKF. Earlier this year, NN bought out FAG's 23% interest in NN Euroball.