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NN, Inc. Presentation.

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Presentation on theme: "NN, Inc. Presentation."— Presentation transcript:

1 NN, Inc. Presentation

2 Precision Metal Components
NN, Inc. Today Bearing Components Precision Metal Components

3 NN, Inc. Today A leading independent supplier of high precision components and assemblies 14 manufacturing facilities in North America, Europe and Asia Global manufacturing presence Serving diverse industrial end markets

4 NN makes the Forbes “200 Best” List for the 4th Time

5 Key Events - History $400 $300 $250 $200 $150 $100 $50 $0
Revenue ($ millions) Acquired Whirlaway ($405 mm*) $400 Launched Precision Metal Components Strategic Plan $300 Acquired SNR ($321 mm) China Factory Start-Up Acquired Slovakia Factory ($268 mm) $250 Acquired Veenendaal (Netherlands) Acquired 100% of Euroball Joint Venture (Italy, Germany, Ireland) $200 Acquired Delta Rubber ($180 mm) $150 Acquired IMC ($85 mm) $100 Launched Bearing Components Strategic Plan ($73 mm) Initial Public Offering ($61 mm) $50 Company Founded $0 * Proforma

6 + NN Inc. \ Whirlaway Whirlaway NN Inc.
Diversified public company with history of financial stability Company with global footprint to accelerate support of customer globalization Commitment to quality and customer service Broad depth of technical and manufacturing resources Integrated marketing and technical services approach Customer solutions focus Whirlaway + NN Inc.

7 NN Inc. \ Whirlaway Whirlaway NN Inc.
Proven provider of collaborative technical solutions - Value added engineering Comprehensive manufacturing process technology experience Competent mechanical engineering team for design, build, and integration of equipment and software Program management system Diversified global market presence Experience in metal components manufacturing Focused on Lean manufacturing, six sigma, TPM Expertise in applications marketing Publicly traded company with solid financial history

8 Competitive Advantages
NN Strengths Result In Customer needs driven culture High precision component and assembly manufacturing Collaborative component and tooling design Component and tooling design “Level 3” - Six Sigma, Lean Manufacturing, Total Productive Maintenance Unparalleled service High quality Value-enhancing, engineering capability Cost competitive global structure

9 Global Market Presence
Veenendaal, The Netherlands Kilkenny, Ireland Eltmann, Germany Wellington, OH Hamilton, OH Slovakia Danielson, CT Tempe, AZ Erwin, TN Mt. City, TN Pinerolo, Italy Lubbock, TX Kunshan, Jiangsu, China Plant Locations: NN Ball and Roller Whirlaway NN Europe - Euroball NN Europe - Veenendaal IMC Delta Rubber China Customer/Country Locations

10 Facilities and Employment
US Ball and Roller Division Whirlaway Division Plastic and Rubber Division Erwin, TN Employees: 215 Mt. City, TN Employees: 92 Wellington, OH 1 Employees: 230 Wellington, OH 2 Employees: 200 Hamilton, OH Employees: 30 Triumph LLC Tempe, AZ Employees: 200 Industrial Molding Lubbock, TX Employees: 286 Delta Rubber Danielson, CT Employees: 196 NN Asia NN Europe Kunshan, China Employees: 47 NN Italy Pinerolo, Italy Employees: 336 NN Netherlands Veenendaal, NL Employees: 377 NN Ireland Kilkenny, Ireland Employees: 76 NN Germany Eltmann, Germany Employees: 129 NN Slovakia Kysucke, NM Slovakia Employees: 49 14 Manufacturing Facilities - North America - Europe - Asia 2,450 Global Employees

11 Management

12 Business Unit Revenue $405 MM NN Americas
Balls $53 MM Cylindrical Rollers $13 MM NN Euroball Balls $128 MM Delta Rubber Bearing Seals $26 MM Whirlaway Metal Components $80 MM $405 MM Veenendaal Tapered Rollers Metal Cages $69 MM IMC Plastic Components $22 MM IMC Plastic Bearing Retainers $10 MM

13 Precision Metal Components
Served Markets Bearing Components Precision Metal Components Automotive General Industrial Diesel Engines Commercial Refrig. Thermal Systems Oil and Gas Aerospace Medical Automotive General Industrial Current Market Future Market

14 Served Markets Serves wide variety of industrial end markets 55% 45%
Automotive Engine Brake/Chassis Steering Power Train Industrial Thermal Systems Commercial Refrig. Diesel Engine Material Handling Construction General Industrial 55% 45% Future Markets Oil & Gas Aerospace Medical

15 Precision Metal Components
Product Platforms Bearing Components Precision Metal Components Precision Balls Rollers Retainers Seals Fluid Control Components Assemblies Shafts Prisms, Rings Housings, Brackets

16 Product Mix Overview

17 Customer Overview

18 Financial Highlights Thank you Rock,. Good Morning.
I joined NN last June, and it has certainly been nice to have the company start out with a record year in my first reporting year. This company has a tremendous amount of strategic focus. I think you’ve seen it in our very focused growth since Rock has been in charge, and I think you will see it continue into the future.

19 Historical Sales 22% CAGR (2006 Proforma)
($Millions) $405 $321 $325 $304 $253 $192 $180 As I mentioned, 2005 was a record year for sales, capping off a solid growth trend. Sales last year were $321 million, up 6% from the previous year. We made only one relatively small acquisition at the end of the year, so the growth in 2005 was primarily due to strong organic growth in our rollers and cages business combined with price increases to pass through higher steel costs. Since the strategic plan was begun in 1998, we have achieved a 25% CAGR on sales, which, as a newcomer, I think is pretty impressive for a company in our industrial space. $132 $85

20 Annual EBITDA 14% CAGR $ millions $45 $44 $37 $36 $31 $27 $26 $18 EB ITDA increased to $44 million from $36 million the previous year. The primary driver was an increase in earnings due to improved gross margins and lower SG&A costs due to lower SOX compliance costs in our 2nd year of SOX. We also had a significant improvement in our plastics business during the year, due mostly to improved operations and partly to price increases passing thru increased resin costs.

21 EPS from Operations 8% CAGR
$’s/Share $0.86-$0.92 $0.87 Earnings per share dramatically improved over the previous year, from $.57 per share in 2004 to .$87 per share in 2005, which is a 53% increase. If you eliminate the effects of currency conversion, we would have had been 5 cents per share better, which lines up exactly with our initial guidance for the year.

22 Historic EBITDA To Debt Levels
Debt/EBITDA* This chart shows our net debt levels over the past five years with our debt to EBITDA ratio shown at the bottom. Our pattern has been to pay for acquisitions with borrowed cash, then repay the loans with cash flow from the acquisitions. In today’s debt market, we have relatively low leverage at 1.4 times EBITDA, and we have a lot of excess debt capacity to fund acquisitions over the next few of years. 1.5X 2.0X 1.4X 2.2X 2.1X 1.4X 1.9X *Year end ratio. EBITDA adjusted to include full year EBITDA for acquisitions made during indicated year and to exclude effects of one-time unusual charges.

23 Strategic Plan

24 Strategic Plan Operational Execution Initiatives: Enhance R&D and create applications marketing expertise Continue growth and expansion of operations in Asia region Accelerate Level 3 Initiatives (Lean, Six Sigma, TPM)

25 2006 - 2010 Strategic Plan Grow existing bearing components:
Growth Initiatives: Double Revenue and Income in 5 Years Grow existing bearing components: Roller product expansion Geographic expansion of existing products Creation of new metal related component product platform via acquisition

26 Sales Development 2006 – 2010 By Product Group
2006 Business Plan 2010 Pro-Forma $325 million $720 million

27 Sales Development 2006-2010 By End Market
2006 Business Plan 2010 Pro-Forma $325 million $720 million

28 Conclusions NN has developed a strong core business in high precision bearing components New strategy provides for growth via following strategic initiatives: Continued growth of core bearing components core business Creation of new high precision metal components product platform Growth goals are achievable and closely related to our core


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