1 =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 1997 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------- ---------- Commission File Number 0-23486 NN BALL & ROLLER, INC. (Exact name of registrant as specified in its charter) DELAWARE 62-1096725 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 800 TENNESSEE ROAD ERWIN, TENNESSEE 37650 (Address of principal executive offices, including zip code) (423) 743-9151 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- As of November 12, 1997 there were 14,804,271 shares of the registrant's common stock, par value $0.01 per share, outstanding. ===============================================================================
2 NN BALL & ROLLER, INC. INDEX <TABLE> <CAPTION> Page No. -------- PART I. FINANCIAL INFORMATION <S> <C> Item 1. Financial Statements: Condensed Statements of Income for the three and nine months ended September 30, 1997 and 1996 2 Condensed Balance Sheets at September 30, 1997 and December 31, 1996 3 Condensed Statements of Changes in Stockholders' Equity for the nine months ended September 30, 1997 and 1996 4 Condensed Statements of Cash Flows for the nine months ended September 30, 1997 and 1996 5 Notes to Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14 Index to Exhibits 15 </TABLE>
3 PART I. FINANCIAL INFORMATION NN BALL & ROLLER, INC. CONDENSED STATEMENTS OF INCOME (UNAUDITED) <TABLE> <CAPTION> THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA 1997 1996 1997 1996 - -------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> Net sales $ 17,231 $ 16,558 $ 58,514 $ 65,477 Cost of goods sold 12,386 10,828 40,531 43,759 ------------- ------------ ------------- ------------ Gross profit 4,845 5,730 17,983 21,718 Selling, general and administrative 1,519 1,263 4,051 3,527 Depreciation 1,060 826 3,164 2,530 ------------- ------------ ------------- ------------ Income from operations 2,266 3,641 10,768 15,661 Interest expense 2 87 21 274 ------------- ------------ ------------- ------------ Income before provision for income taxes 2,264 3,554 10,747 15,387 Provision for income taxes 965 1,359 4,077 5,440 ============= ============ ============= ============ Net income $ 1,299 $ 2,195 $ 6,670 $ 9,947 ============= ============ ============= ============ Net income per common share: $ 0.09 $ 0.15 $ 0.45 $ 0.66 ============= ============ ============= ============ Weighted average number of shares outstanding 14,811,381 14,961,082 14,805,067 15,072,547 ============= ============ ============= ============ </TABLE> SEE ACCOMPANYING NOTES. 2
4 NN BALL & ROLLER, INC. CONDENSED BALANCE SHEETS <TABLE> <CAPTION> SEPTEMBER 30, DECEMBER 31, 1997 1996 THOUSANDS OF DOLLARS (UNAUDITED) - -------------------------------------------------------------------------------------------------------- <S> <C> <C> ASSETS Current assets: Cash and cash equilvalents $ 1,875 $ -- Accounts receivable, net 12,362 15,754 Inventories, net (Note 2) 10,788 10,408 Income taxes refundable 329 -- Other current assets 1,220 565 ------------ ------------ Total current assets 26,574 26,727 Property, plant and equipment, net 36,143 32,419 Other 102 146 ============ ============ Total assets $ 62,819 $ 59,292 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,920 $ 4,054 Revolving credit facility -- 2,308 Accrued vacation expense 474 370 Income taxes payable -- 96 Other current liabilities 2,600 1,546 ------------ ------------ Total current liabilities 7,994 8,374 Deferred income taxes 2,208 2,208 ------------ ------------ Total liabilities 10,202 10,582 Total stockholders' equity 52,617 48,710 ------------ ------------ Total liabilities and stockholders' equity $ 62,819 $ 59,292 ============ ============ </TABLE> SEE ACCOMPANYING NOTES. 3
5 NN BALL & ROLLER, INC. CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) <TABLE> <CAPTION> COMMON STOCK ADDITIONAL RETAINED FOREIGN NUMBER PAR PAID IN EARNINGS CURRENCY THOUSANDS OF DOLLARS OF SHARES VALUE CAPITAL (DEFICIT) TRANSLATION TOTAL - ------------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> Balance, January 1, 1996 14,473 $ 144 $ 25,289 $ 13,785 $ - $ 39,218 Net income 9,947 9,947 Dividends (3,497) (3,497) Stock options exercised (Note 3) 156 2 1,694 1,696 ======== ======= ========= ========== ====== ========== Balance, September 30, 1996 14,629 $ 146 $ 26,983 $ 20,235 $ - $ 47,364 ======== ======= ========= ========== ====== ========== Balance, January 1, 1997 14,629 $ 146 $ 26,983 $ 21,581 $ - $ 48,710 Net income 6,670 6,670 Dividends (3,520) (3,520) Stock options exercised (Note 3) 361 4 2,918 2,922 Stock repurchased (186) (1) (2,123) (2,124) Cummulative currency translation (41) (41) -------- ------- --------- ---------- ====== ---------- Balance, September 30, 1997 14,804 $ 149 $ 27,778 $ 24,731 $ (41) $ 52,617 ======== ======= ========= ========== ====== ========== </TABLE> SEE ACCOMPANYING NOTES. 4
6 NN BALL & ROLLER, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) <TABLE> <CAPTION> NINE MONTHS ENDED SEPTEMBER 30, THOUSANDS OF DOLLARS 1997 1996 - ---------------------------------------------------------------------------------------------------------- <S> <C> <C> OPERATING ACTIVITIES: Net income $ 6,670 $ 9,947 Adjustments to reconcile net income: Depreciation 3,164 2,530 Changes in operating assets and liabilities: Accounts receivable 3,392 2,250 Inventories (380) (1,420) Income taxes (425) (196) Other current assets (655) (376) Accounts payable 866 (4,284) Other liabilities 1,158 1,210 ---------- --------- Net cash provided by operating activities 13,790 9,661 ---------- --------- INVESTING ACTIVITIES: Acquisition of plant, property, and equipment (6,888) (7,522) Other assets 44 10 ---------- --------- Net cash used by investing activities (6,844) (7,512) ---------- --------- FINANCING ACTIVITIES: Payments under revolving credit facility (2,308) (348) Dividends (3,520) (3,497) Stock options exercised (Note 3) 2,922 1,696 Stock repurchased (2,124) -- Cummulative effect of currency translation (41) -- ---------- --------- Net cash (used) provided by financing activities (5,071) (2,149) ---------- --------- NET CHANGE IN CASH AND CASH EQUIVALENTS 1,875 -- CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -- -- =========== ========= CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,875 $ -- =========== ========= </TABLE> SEE ACCOMPANYING NOTES. 5
7 NN BALL & ROLLER, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS NOTE 1. INTERIM FINANCIAL STATEMENTS The accompanying condensed financial statements of NN Ball & Roller, Inc. have not been audited by independent accountants, except for the balance sheet at December 31, 1996. In the opinion of the Company's management, the financial statements reflect all adjustments necessary to present fairly the results of operations for the three and nine month periods ended September 30, 1997 and 1996, the Company's financial position at September 30, 1997 and December 31, 1996, and the cash flows for the nine month periods ended September 30, 1997 and 1996. These adjustments, except for the adjustments described below in Note 2, are of a normal recurring nature, and are, in the opinion of management, necessary for fair presentation of the financial position and operating results for the interim periods. In February 1997, the FASB issued Statement No. 128 "Earnings Per Share" (FAS 128), which requires the computation and presentation of earnings per share (EPS) for entities with publicly held common stock or potential common stock. FAS 128 requires (a) presentation of basic and diluted EPS, if applicable, on the face of the income statement and (b) reconciliation of the numerator and denominator for each basic EPS computation and the numerator and denominator of each diluted EPS computation. FAS 128 is effective for financial statements for both interim and annual periods ending after December 15, 1997. The Company will adopt FAS 128 in the fourth quarter of 1997. Had FAS 128 been effective for the third quarter of 1997, basic and diluted EPS would have been $0.09 for the three months ended September 30, 1997, and $0.15 for the three months ended September 30, 1996. Basic and diluted EPS would have been $0.45 for the nine months ended September 30, 1997 and $0.68 and $0.66 respectively, for the nine months ended September 1996. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. The results for the first three quarters of 1997 are not necessarily indicative of future results. NOTE 2. INVENTORIES Inventories are stated at the lower of cost or market, with cost being determined by the first-in, first-out method. Inventories are comprised of the following (in thousands): <TABLE> <CAPTION> SEPTEMBER 30, DECEMBER 31, 1997 1996 (UNAUDITED) ------------- -------------- <S> <C> <C> Raw materials $ 1,360 $ 1,452 Work in process 2,308 2,586 Finished goods 7,180 6,430 ------------ ------------- 10,848 10,468 Less - Reserve for excess and obsolete inventory 60 60 ============ ============= $ 10,788 $ 10,408 ============ ============= </TABLE> 6
8 NOTE 3. STOCK OPTIONS EXERCISED During the first nine months of 1997, certain employees exercised options to purchase the Company's common stock under the Company's Stock Incentive Plan. Options to purchase 358,404 shares were exercised at $6.22 per share, options to purchase 1,125 shares were exercised at $9.39 per share and options to purchase 1,500 shares were exercised at $11.50 per share. 7
9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 1996 Net Sales. Net sales increased by approximately $673,000, or 4.1%, from $16.6 million for the third quarter of 1996 to $17.3 million for the third quarter of 1997. Although net sales in the third quater of 1997 were marginally better than sales for the comparable period in 1996, the Company's current growth prospects continue to reflect weaker business conditions impacting a Korean customer, the fact that captive producers are ceasing to increase the outsourcing of ball production, the continuing strengthening of the U.S. dollar against foreign currencies, and an increasingly competitive marketplace. Foreign sales increased $949,000, or 14.1%, from $6.7 million in the third quarter of 1996 to $7.7 million during the third quarter of 1997. The increase in foreign sales was due primarily to improved economic conditions in Europe. Also, sales in the third quarter of 1996 were negatively impacted by the over-building of inventories by customers in the first half of 1996. Similar over-building did not occur in the first half of 1997. Domestic sales decreased $276,000, or 2.8%, from $9.8 million in the third quarter of 1996 to $9.6 million in the third quarter of 1997. This decrease was due primarily to decreased sales to one customer. With respect to 1998, according to preliminary estimates, which are subject to change, and taking into account both the negative factors that are driving the Company's short-term outloook as well as the commitments for increased roller production, the Company anticipates net sales will approximate $81 million. Gross Profit. Gross profit decreased $885,000, or 15.4%, from $5.7 million for the third quarter of 1996 to $4.8 million for the third quarter of 1997. As a percentage of net sales, gross profit decreased from 34.6% in the third quarter of 1996 to 28.1% for the same period in 1997. This decrease is due primarily to costs related to the new facility start-up in Ireland and increased costs associated with excess capacity. Additionally, in the third quarter of 1996, the Company recorded $300,000 of duty drawback associated with 1995 imports of raw material which had not been previously recorded. This amount is an offset to export fees paid. Selling, General and Administrative. Selling, general and administrative expenses increased by 20.3%, from $1.3 million in the third quarter of 1996 to $1.5 million in the third quarter of 1997. This increase was due primarily to increased travel, legal, accounting and employee relocation expenses related to the Ireland facility start-up as well as increased legal and consulting expenses related to potential acquisitions and the Company's current strategic development process. As a percentage of net sales, selling, general and administrative expenses increased from 7.6% for the third quarter of 1996 to 8.8% for the same period in 1997. Depreciation. Depreciation expense increased from $826,000 for the third quarter of 1996 to $1.1 million for the same period in 1997. This increase was due primarily to purchases of capital equipment. Also, new assets added in 1996 related to the new Mountain City facility were depreciated utilizing the half-year convention in the prior year versus a full year of depreciation taken during the current year. As a percentage of net sales, depreciation expense increased from 5.0% for in the third quarter of 1996 to 6.2% in the third quarter of 1997. Net Income. Net income decreased by $896,000, or 40.8%, from $2.2 million for the third quarter of 1996 to $1.3 million for the same period in 1997. As a percentage of net sales, net income decreased from 13.3% in the third quarter of 1996 to 7.5% for the third quarter of 1997. This decrease in net income as a percentage of net sales was due primarily to costs associated with the new Ireland facility start-up, excess capacity at the Company's plants, increased selling, general and administrative expenses and the increased 8
10 depreciation expenses discussed above. In addition, the Company increased the provision for income taxes due to the decrease in foreign sales as a percentage of total sales and the anticipated decrease in the level of tax benefit from the Company's participation in a shared foreign sales corporation. NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 Net Sales. Net sales decreased by approximately $7.0 million, or 10.6%, from $65.5 million for the first nine months of 1996 to $58.5 million for the same period in 1997. Foreign sales decreased $5.5 million, or 16.7%, from $32.8 million in the first nine months of 1996 to $27.3 million during the same period of 1997. This decrease was due primarily to a slowing in the overall rate of outsourcing of captive production by the Company's customers (including, as previously announced by the Company, one of the Company's major customers bringing in house a portion of its business that was previously outsourced to the Company) and general economic conditions in Europe. Domestic sales decreased $1.5 million, or 4.6%, from $32.7 million in the first nine months of 1996 to $31.2 million in the same period of 1997. This decrease was due primarily to decreased sales to one customer. Gross Profit. Gross profit decreased $3.7 million, or 17.2%, from $21.7 million for the first nine months of 1996 to $18.0 million for the same period of 1997. As a percentage of net sales, gross profit decreased from 33.2% in the first nine months of 1996 to 30.7% in the same period of 1997. This decrease is due primarily to costs related to the new facility start-up in Ireland and increased costs associated with excess capacity. Additionally, in the third quarter of 1996, the Company recorded $300,000 of duty drawback associated with 1995 imports of raw material which had not been previously recorded. This amount is an offset to export fees paid. Selling, General and Administrative. Selling, general and administrative expenses increased by $524,000, or 14.9%, from $3.5 million in the first nine months of 1996 to $4.1 million in the same period of 1997. This increase was due primarily to increased travel, legal, accounting and employee relocation expenses related to the Ireland facility start-up as well as increased legal and consulting expenses related to potential acquisitions and the Company's current strategic development process. As a percentage of net sales, selling, general and administrative expenses increased from 5.4% in the first nine months of 1996 to 6.9% for the same period in 1997. Depreciation. Depreciation expense increased from $2.5 million for the first nine months of 1996 to $3.2 million for the same period in 1997. This increase was due primarily to purchases of capital equipment. Also, new assets added in 1996 related to the new Mountain City facility were depreciated utilizing the half-year convention in the prior year versus a full year of depreciation taken during the current year. As a percentage of net sales, depreciation expense increased from 3.9% for the first nine months of 1996 to 5.4% for the same period in 1997. Net Income. Net income decreased by $3.3 million, or 32.9%, from $9.9 million for the first nine months of 1996 to $6.7 million for the same period for 1997. As a percentage of net sales, net income decreased from 15.2% for the first nine months of 1996 to 11.4% for the same period for 1997. This decrease in net income as a percentage of net sales was due primarily to costs associated with the new Ireland facility start-up, excess capacity at the Company's plants, increased selling, general and administrative expenses and the increased depreciation expenses discussed above. In addition, the Company increased the provision for income taxes due to the decrease in foreign sales as a percentage of total sales and the anticipated decrease in the level of tax benefit from the Company's participation in a shared foreign sales corporation. 9
11 LIQUIDITY AND CAPITAL RESOURCES In July 1997, the Company terminated its $10.0 million revolving credit facility and entered into a loan agreement with First American National Bank ("First American"). This loan agreement provides for a revolving credit facility of up to $25 million, which will expire on June 30, 2000. Amounts outstanding under the revolving facility are unsecured and bear interest at a floating rate equal to, at the Company's option, either LIBOR plus 0.65% or the Fed Funds effective rate plus 1.5%. The loan agreement contains customary financial and operating restrictions on the Company, including covenants restricting the Company, without First American's consent, from incurring additional indebtedness from, or pledging any of its assets to, other lenders and from disposing of a substantial portion of its assets. In addition, the Company is prohibited from declaring any dividend if a default exists under the revolving credit facility at the time of, or would occur as a result of, such declaration. The loan agreement also contains customary financial covenants with respect to the Company, including a covenant that the Company's earnings will not decrease in any year by more than fifty percent of earnings in the Company's immediately preceding fiscal year. The Company, as of November 12, 1997, was in compliance with all such covenants. The Company's arrangements with its domestic customers typically provide that payments are due within 30 days following the date of the Company's shipment of goods, while arrangements with foreign customers (other than foreign customers that have entered into an inventory management program with the Company) generally provide that payments are due within either 90 or 120 days following the date of shipment. Under the Company's inventory management program, payments typically are due within 30 days after the product is used by the customer. Due to the continuing expansion of the Company's foreign sales, management believes that the Company's working capital requirements will increase as a result of longer payment terms provided to foreign customers. The Company's net sales historically have not been of a seasonal nature. However, as foreign sales have increased as a percentage of total sales, seasonality has become a factor for the Company in that many foreign customers cease production during the month of August. Currently, all foreign sales are billed and paid for in United States dollars. To date, the Company has not been materially adversely affected by currency fluctuations or foreign exchange restrictions, although a strengthening of the US dollar against foreign currencies could impair the ability of the Company to compete with international based competitors for foreign as well as domestic sales. The Company is expected to commence production and shipment of goods from its Kilkenny, Ireland facility in the fourth quarter of 1997. It is expected that goods sold from this facility will be billed and paid for in the customer's local currency, as opposed to U. S. dollars. As a result of these sales, the Company's foreign exchange risk will increase. The Company is currently considering various strategies to manage this risk. Working capital, which consists principally of cash and cash equivalents, accounts receivable and inventories was $18.6 million at September 30, 1997 as compared to $18.4 million at December 31, 1996. The ratio of current assets to current liabilities increased slightly to 3.3:1 at September 30, 1997 from 3.2:1 at December 31, 1996. Cash flow from operations increased from $9.7 million during the first nine months 1996 to $13.8 million during the first nine months of 1997. This increase was primarily attributed to the decrease in accounts receivable of $3.4 million and an increases in accounts payable of $866,000 and $1.2 million in other liabilities. During 1997, the Company plans to spend approximately $10.0 million on capital expenditures (of which $6.9 million has been spent through September 30, 1997). Of the $6.9 million spent through September 30, approximately $3.9 million was spent on the purchase and renovation of, and installation of new equipment for the Ireland facility. Production is anticipated to begin at this facility in the fourth quarter of 1997. Capital expenditures in the fourth quarter will be made for the further renovation of the Kilkenny facility and the purchase of additional machinery and equipment for all four of the Company's facilities. The Company intends to finance these activities with cash generated from operations and funds available 10
12 under the credit facility described above. The Company believes that funds generated from operations and borrowings from the credit facility will be sufficient to finance the Company's working capital needs and projected capital expenditure requirements through December 1997. CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 The Company wishes to caution readers that this report contains, and future filings by the Company, press releases and oral statements made by the Company's authorized representatives may contain, forward looking statements that involve certain risks and uncertainties. The Company's actual results could differ materially from those expressed in such forward looking statements due to important factors bearing on the Company's business, many of which already have been discussed in this filling and in the Company's prior fillings. The following paragraphs discuss the risk factors the Company regards as the most significant, although the Company wishes to caution that other factors that are currently not considered significant or that currently cannot be foreseen may in the future prove to be important in affecting the Company's results of operations. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Industry Risks. The precision ball and roller industry is cyclical and tends to decline in response to overall declines in industrial production. The Company's sales in the past have been negatively affected, and in the future very likely would be negatively affected, by adverse conditions in the industrial production sector of the economy or by adverse global or national economic conditions generally. Competition. The precision ball and roller market is highly competitive, and many of the ball and roller manufacturers in the market are larger and have substantially greater resources than the Company. The Company's competitors are continuously exploring and implementing improvements in technology and manufacturing processes in order to improve product quality, and the Company's ability to remain competitive will depend, among other things, on whether it is able, in a cost effective manner, to keep pace with such quality improvements. In addition, the Company competes with many of its customers that, in addition to producing bearings, also internally produce balls and rollers for sale to third parties. The Company faces a risk that its customers will decide to produce balls and rollers internally rather than outsourcing their needs to the Company. Rapid Growth. The Company has significantly expanded its production facilities and capacity over the last several years, and during the third quarter of 1997 purchased an additional manufacturing plant in Kilkenny, Ireland. The Company currently is not operating at full capacity and faces risks of further under-utilization or inefficient utilization of its production facilities in future years. The Company also faces risks associated with start-up expenses, inefficiencies , delays and increased depreciation costs associated with its plant expansions. Raw Material Shortages. Because the balls and rollers manufactured by the Company have highly-specialized applications, their production requires the use of very particular types of steel. Due to quality constraints, the Company obtains the majority of its steel from overseas suppliers. Steel shortages or transportation problems, particularly with respect to 52100 Steel, could have a detrimental effect on the Company's business. Risks Associated with International Trade. Because the Company obtains a majority of its raw materials from overseas suppliers and sells to a large number of international customers, the Company faces risks associated with (i) adverse foreign currency fluctuations, (ii) changes in trade, monetary and fiscal policies, laws and regulations, and other activities of governments, agencies and similar organizations, (iii) the imposition of trade restrictions or prohibitions, (iv) the imposition of import or other duties or taxes, 11
13 and (v) unstable governments or legal systems in countries in which the Company's suppliers and customers are located. Currently, all foreign sales are billed and paid for in United States dollars. An increase in the value of the United States dollar relative to foreign currencies may adversely affect the ability of the Company to compete with its foreign-based competitors for international as well as domestic sales. Dependence on Major Customers. During 1996, the Company's ten largest customers accounted for approximately 78% of its net sales. Sales to various US and foreign divisions of SKF, which is one of the largest bearing manufacturers in the world, accounted for approximately 37% of net sales in 1996, and sales to FAG accounted for approximately 10% of net sales. None of the Company's other customers accounted for more than 10% of its net sales in 1996, but sales to three of its customers each represented more than 5% of the Company's 1996 net sales. The loss of all or a substantial portion of sales to these customers would have a material adverse effect on the Company's business. 12
14 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits Required by Item 601 of Regulation S-K Exhibit Number Description 10.14 Employment Agreement, dated August 1, 1997, between the Company and Roderick R. Baty 10.15 Severance Agreement, dated August 28, 1997, between the Company and James J. Mitchell 27 EDGAR Financial Data Schedules (for SEC use only). (b) No reports on Form 8-K were filed during the quarter ended September 30, 1997 13
15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NN Ball & Roller, Inc. -------------------------------- (Registrant) Date: November 12, 1997 /s/ Roderick R. Baty ----------------- -------------------------------- Roderick R. Baty, President and Chief Executive Officer (Duly Authorized Officer) Date: November 12, 1997 /s/ William C. Kelly, Jr. ----------------- -------------------------------- William C. Kelly, Jr., Treasurer, Assistant Secretary and Chief Accounting Officer (Principal Financial and Accounting Officer) (Duly Authorized Officer) 14
16 INDEX TO EXHIBITS Exhibit Number Description 10.14 Employment Agreement, dated August 1, 1997, between the Company and Roderick R. Baty 10.15 Severance Agreement, dated August 28, 1997, between the Company and James J. Mitchell 27 EDGAR Financial Data Schedules (for SEC use only). 15