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NN Inc. (USA; NASDAQ: NNBR) announced it expects fourth quarter 2008 results to come in significantly below expectations.
Previously, the company said it expected fourth quarter sales to trail 2007 by 20%, with profits dropping to breakeven. Now, NN says fourth quarter sales will come in 30% below 2007, and that it will record a loss of approximately $2.5 million for the quarter.
Magnifying the loss, NN will take fourth quarter hits for restructuring charges associated with closing its Kilkenny, Ireland and Hamilton, Ohio manufacturing facilities. In addition, the company will take one-time charges against goodwill. With all of those factors -- including the one-time charges -- combined, results for fourth quarter 2008 will show a significant loss.
Even with the loss, however, the ever-critical cash flow remained positive and the company deployed $13.5 million to reduce debt and debt service. It is also taking additional steps to address costs.
Rock Baty, Chairman and CEO, said: "Since our third quarter earnings release, the global business environment has deteriorated significantly. In response to this situation, on November 26th of last year, we announced several steps to enhance our liquidity position and cash flow including the reduction of capital expenditures, the elimination of discretionary spending and the temporary suspension of our regular quarterly dividend. These measure allowed us to remain cash flow positive for the fourth quarter and to pay down approximately $13.5 million in debt for the quarter and approximately $14.9 million in debt for the year."
Mr. Baty continued: "After we recorded record breaking revenues and earning for the first nine months of 2008, the fourth quarter proved to be very challenging for us and our industry. We believe these conditions and a prolonged period of global economic uncertainty will continue into 2009. As a result of this forecast, the Board of Directors, the executive officers and salaried employees throughout the organization have taken reductions in salaries and fees ranging from 10% to 20%. Unfortunately, our actions have also included a more than 25% reduction of our global employment."
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| 7000C KOYO | 10 | 26 | 8 |
| 7000B KOYO | 10 | 26 | 8 |