10-Q

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 June 30, 2012

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, Inc.

(Exact name of registrant as specified in its charter)

Delaware	62-1096725
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

2000 Waters Edge Drive

Building C, Suite 12

Johnson City, Tennessee 37604

(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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of August 3, 2012, there were 17,044,132 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

NN, Inc.

INDEX

		Page No.
Part I. Financial Information
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011 (unaudited)		2
	Condensed Consolidated Balance Sheets at June 30, 2012 and December 31, 2011 (unaudited)		3
	Condensed Consolidated Statement of Changes in Stockholders’ Equity for the six months ended June 30, 2012 (unaudited)		4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011 (unaudited)		5
	Notes to Condensed Consolidated Financial Statements (unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		21
Item 4.	Controls and Procedures		21
Part II. Other Information
Item 1.	Legal Proceedings		21
Item 1A.	Risk Factors		22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		22
Item 3.	Defaults Upon Senior Securities		22
Item 4.	Mine Safety Disclosures		22
Item 5.	Other Information		22
Item 6.	Exhibits		22
Signatures			23

1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NN, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
(In Thousands of Dollars, Except Per Share Data)	2012			2011		2012			2011
Net sales	$	98,824		$	115,922	$	203,343		$	227,229
Cost of products sold (exclusive of depreciation and amortization shown separately below)		77,848			94,657		160,817			184,955
Selling, general and administrative		8,312			7,720		16,379			15,686
Depreciation and amortization		4,389			4,291		8,846			8,326
Loss/(gain) on disposal of assets		—			3		(8	)		3
Gain from deconsolidation of a bankrupt subsidiary		—			—		—			(209	)
Income from operations		8,275			9,251		17,309			18,468
Interest expense		1,116			1,220		2,327			2,444
Other (income) expense, net		(1,239	)		155		(800	)		1,191
Income before provision for income taxes		8,398			7,876		15,782			14,833
Provision for income taxes		1,360			2,049		2,835			3,499
Net income		7,038			5,827		12,947			11,334
Other comprehensive income:
Foreign currency translation gain (loss)		(6,552	)		1,964		(3,158	)		8,494
Comprehensive income	$	486		$	7,791	$	9,789		$	19,828
Basic income per common share:	$	0.41		$	0.35	$	0.76		$	0.68
Weighted average shares outstanding		17,026			16,864		16,985			16,733
Diluted income per common share:	$	0.41		$	0.34	$	0.76		$	0.67
Weighted average shares outstanding		17,139			17,119		17,097			16,974

The accompanying notes are an integral part of the condensed consolidated financial statements.

2

NN, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In Thousands of Dollars)	June  30, 2012		December  31, 2011
Assets
Current assets:
Cash	$	12,002	$	4,536
Accounts receivable, net of allowance for doubtful accounts of $538 and $438, respectively		71,317		66,707
Inventories, net		45,364		46,023
Other current assets		5,530		6,759
Total current assets		134,213		124,025
Property, plant and equipment, net		118,734		120,528
Goodwill, net		7,606		8,039
Intangible asset, net		900		900
Other non-current assets		3,305		5,969
Total assets	$	264,758	$	259,461
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	40,146	$	48,217
Accrued salaries, wages and benefits		10,846		11,697
Current maturities of long-term debt		6,650		6,503
Income taxes payable		605		1,858
Other current liabilities		6,845		4,766
Total current liabilities		65,092		73,041
Non-current deferred tax liabilities		3,668		3,810
Long-term debt, net of current portion		74,915		71,629
Other non-current liabilities		10,728		11,305
Total liabilities		154,403		159,785
Total stockholders’ equity		110,355		99,676
Total liabilities and stockholders’ equity	$	264,758	$	259,461

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

NN, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(Unaudited)

	Common Stock
(In Thousands of Dollars and Shares)	Number Of Shares		Par Value		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income			Total
Balance, January 1, 2012		16,949	$	169	$	55,071	$	27,612	$	16,824		$	99,676
Net income		—		—		—		12,947		—			12,947
Shares issued for options		5		—		6		—		—			6
Stock option expense		—		—		519		—		—			519
Restricted stock expense		75		1		364		—		—			365
Foreign currency translation loss		—		—		—		—		(3,158	)		(3,158	)
Balance, June 30, 2012		17,029	$	170	$	55,960	$	40,559	$	13,666		$	110,355

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

NN, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
(In Thousands of Dollars)	2012			2011
Operating Activities:
Net income	$	12,947		$	11,334
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization		8,846			8,326
Amortization of debt issuance costs		410			409
Deferred income taxes		417			—
(Gain)/loss on disposal of assets		(8	)		3
Non-cash gain from deconsolidation of bankrupt subsidiary		—			(209	)
Share-based compensation expense		884			116
Change in value of long-term note receivable		(173	)		(126	)
Changes in operating assets and liabilities:
Accounts receivable		(5,383	)		(19,141	)
Inventories		137			(1,668	)
Accounts payable		(7,518	)		(627	)
Other assets and liabilities		1,074			(434	)
Net cash provided (used) by operating activities		11,633			(2,017	)
Investing Activities:
Acquisition of property, plant and equipment		(9,090	)		(10,173	)
Cash lost on deconsolidation of Eltmann subsidiary		—			(979	)
Proceeds received from long-term note receivable		1,945			—
Proceeds from disposals of property, plant and equipment		368			106
Net cash used by investing activities		(6,777	)		(11,046	)
Financing Activities:
Proceeds from short-term debt		148			941
Principal payment on capital lease		(57	)		(32	)
Proceeds from long term debt		3,286			12,486
Proceeds from issuance of stock		6			2,302
Debt issuance costs paid		—			(334	)
Net cash provided by financing activities		3,383			15,363
Effect of exchange rate changes on cash flows		(773	)		2,067
Net Change in Cash		7,466			4,367
Cash at Beginning of Period		4,536			5,556
Cash at End of Period	$	12,002		$	9,923
Supplemental schedule of non-cash investing and financing activities:
Certain amounts were deconsolidated from the Balance Sheet of NN, Inc. due to the bankruptcy of a subsidiary on January 20, 2011 and are not reflected in the 2011 cash flow statement above (See Note 1 of Notes to Condensed Consolidated Financial Statements)

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

NN, Inc.

Notes To Condensed Consolidated Financial Statements

(In Thousands, Except Per Share Data)

(unaudited)

Note 1. Interim Financial Statements

The accompanying condensed consolidated financial statements of NN, Inc. have not been audited, except that the balance sheet at December 31, 2011 was derived from our audited consolidated financial statements. In our opinion, the financial statements reflect all adjustments necessary to fairly state the results of operations for the three and six month periods ended June 30, 2012 and 2011, our financial position at June 30, 2012 and December 31, 2011, and the cash flows for the six month periods ended June 30, 2012 and 2011. These adjustments are of a normal recurring nature and are, in the opinion of management, necessary for fair statement of the financial position and operating results for the interim periods. As used in this Quarterly Report on Form 10-Q, the terms “NN”, “the Company”, “we”, “our”, or “us” mean NN, Inc. and its subsidiaries.

Certain information and footnote disclosures normally included in the consolidated 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. These unaudited, condensed and consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our most recent Annual Report on Form 10-K for the year ended December 31, 2011 which we filed with the Securities and Exchange Commission on March 15, 2012. The results for the three and six month periods ended June 30, 2012 are not necessarily indicative of results for the year ending December 31, 2012 or any other future periods.

Due to the impacts of the global economic recession and the resulting reduction in revenue and increased operating losses, our wholly owned German subsidiary, Kugelfertigung Eltmann GbmH (“Eltmann” or “Eltmann Plant”), sustained a significant weakening of its financial condition. As a result, it became insolvent at which point it was required to file for bankruptcy under German bankruptcy law. The filing was made in the bankruptcy court in Germany on January 20, 2011. As of that date, NN lost the ability to control or manage Eltmann as a result of the bankruptcy court trustee taking over effective control and day to day management of this subsidiary. As a result of loss of control of this subsidiary, NN deconsolidated the assets and liabilities of Eltmann from our Consolidated Financial Statements effective January 20, 2011.

We were informed in early April 2011, that the bankruptcy trustee had sold the majority of the production assets of Eltmann to a non-affiliated manufacturing company. It is our understanding the remaining assets and liabilities of Eltmann will be liquidated sometime in the future by the bankruptcy court. NN does not expect any further significant impact on our consolidated financial statements as a result of the liquidation of this subsidiary.

The following table summarizes the effects of the deconsolidation of Eltmann originally reported in the first quarter of 2011:

Cash	$	(979	)
Accounts receivable		(3,388	)
Inventory		(2,407	)
Other assets		(193	)
Property, plant and equipment		(1,343	)
Reduction of total assets	$	(8,310	)
Accounts payable		(1,947	)
Accrued salaries		(1,500	)
Accrued pension		(5,623	)
Accumulated other comprehensive income		551
Reduction of total liabilities and stockholders’ equity	$	(8,519	)
Gain from deconsolidation of bankrupt subsidiary	$	209

The amounts above are reflected in the comparative 2011 financial statements. During the fourth quarter of

6

NN, Inc.

Notes To Condensed Consolidated Financial Statements

(In Thousands, Except Per Share Data)

(unaudited)

2011, we determined it was more likely than not we would potentially owe an additional $209 in payables related to the Eltmann bankruptcy. As such, we accrued for these potential payables during the fourth quarter of 2011 and as a result have now realized a zero gain on deconsolidation.

Note 2. Long Term Notes Receivable

Certain property, plant and equipment of the Tempe Plant was sold on August 31, 2010, the day the Tempe Plant ceased operations, to a newly formed company not affiliated with NN in exchange for a promissory note. This note had an original face value of $2,500, a 60 month term, a 7% interest rate, interest only payments for 24 months, principal and interest payments totaling $40 per month for the next 36 months followed by a balloon payment of $1,525. On March 31, 2012, we accepted a $1,945 cash payment to settle the note and relieved the debtor of all future liability for the note. The estimated fair value and carrying value of note prior to the payment was $1,772.

Note 3. Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method.

Inventories are comprised of the following:

	June  30, 2012		December  31, 2011
Raw materials	$	14,647	$	13,855
Work in process		8,833		8,425
Finished goods		21,884		23,743
	$	45,364	$	46,023

Inventories on consignment at customer locations as of June 30, 2012 and December 31, 2011 totaled $3,201 and $4,156, respectively.

The inventory valuations above were developed using normalized production capacities for each of our manufacturing locations. Any costs from abnormal excess capacity or under-utilization of fixed production overheads are expensed in the period incurred and are not included as a component of inventory valuation.

Note 4. Net Income Per Share

Excluded from the dilutive shares outstanding for the three and six month periods ended June 30, 2012 were 1,201 anti-dilutive options which had exercise prices ranging from $8.86 to $14.13. There were 201 anti-dilutive options with an exercise price of $14.13 excluded from the dilutive shares outstanding for the three and six month period ended June 30, 2011.

Note 5. Segment Information

The segment information and the accounting policies of each segment are the same as those described in the notes to the consolidated financial statements entitled “Segment Information” and “Summary of Significant Accounting Policies and Practices,” respectively, included in our annual report on Form 10-K for the fiscal year ended December 31, 2011. We evaluate segment performance based on segment net income or loss after income taxes. We account for inter-segment sales and transfers at current market prices. We did not have any significant inter-segment transactions during the three and six month periods ended June 30, 2012 and 2011.

7

NN, Inc.

Notes To Condensed Consolidated Financial Statements

(In Thousands, Except Per Share Data)

(unaudited)

(In Thousands of Dollars)	Metal Bearing Components     Segment		Precision Metal Components     Segment		Plastic and Rubber Components     Segment		Corporate and     Consolidations			Total
Three Months ended June 30, 2012
Revenues from external customers	$	65,768	$	22,561	$	10,495	$	—		$	98,824
Net income (loss)	$	6,250	$	1,911	$	800	$	(1,923	)	$	7,038
Six Months ended June 30, 2012
Revenues from external customers	$	137,898	$	43,873	$	21,572	$	—		$	203,343
Net income (loss)	$	13,215	$	3,550	$	1,760	$	(5,578	)	$	12,947
Total assets	$	198,615	$	41,490	$	21,249	$	3,404		$	264,758

(In Thousands of Dollars)	Metal Bearing Components     Segment		Precision Metal Components     Segment			Plastic and Rubber Components     Segment		Corporate and     Consolidations			Total
Three Months ended June 30, 2011
Revenues from external customers	$	84,827	$	19,534		$	11,561	$	—		$	115,922
Net income (loss)	$	8,898	$	(1,130	)	$	918	$	(2,859	)	$	5,827
Six Months ended June 30, 2011
Revenues from external customers	$	168,609	$	35,936		$	22,684	$	—		$	227,229
Net income (loss)	$	18,729	$	(3,338	)	$	1,736	$	(5,793	)	$	11,334
Total assets	$	208,313	$	44,703		$	21,559	$	4,155		$	278,730

Note 6. Pensions and Other Post-Employment Liabilities

Effective January 20, 2011, the defined benefit pension plan covering the employees at our Eltmann Plant came under the control of the bankruptcy trustee and has been or will be taken over by the German government’s pension security fund. The plan is no longer a responsibility of NN, resulting in a reduction of Accrued pension liabilities of $5,623 on January 20, 2011. We have no remaining pension obligations. (See Note 1 of the Notes to Condensed Consolidated Financial Statements).

8

NN, Inc.

Notes To Condensed Consolidated Financial Statements

(In Thousands, Except Per Share Data)

(unaudited)

Severance Indemnity

In accordance with Italian law, we have an unfunded severance plan covering our Pinerolo Plant employees under which all employees at that location are entitled to receive severance indemnities upon termination of their employment. The table below summarizes the changes to the severance indemnity, included in Other non-current liabilities, for the three and six month periods ended June 30, 2012 and 2011:

	Three months ended June 30,						Six months ended June 30,
(In Thousands of Dollars)	2012			2011			2012			2011
Beginning balance	$	(7,112	)	$	(7,658	)	$	(6,922	)	$	(7,115	)
Amounts accrued		(315	)		(311	)		(628	)		(651	)
Payments to employees		496			120			661			134
Payments to government managed plan		81			168			261			403
Currency impacts		400			(133	)		178			(585	)
Ending balance	$	(6,450	)	$	(7,814	)	$	(6,450	)	$	(7,814	)

Service and Early Retirement Provisions

We have certain plans that cover our Veenendaal Plant employees. A plan provides an award for employees who achieve 25 or 40 years of service and another plan is an award for employees upon retirement. These plans are both unfunded and the benefits are based on years of service and rate of compensation at the time the award is paid. The table below summarizes the combined changes in the plans, included in Other non-current liabilities, during the three month and six month periods ended June 30, 2012 and 2011:

	Three months ended June  30,						Six months ended June 30,
(In Thousands of Dollars)	2012			2011			2012			2011
Beginning balance	$	(829	)	$	(835	)	$	(783	)	$	(749	)
Service cost		(5	)		(6	)		(30	)		(26	)
Interest cost		(7	)		(17	)		(17	)		(38	)
Benefits paid		39			33			54			36
Currency impacts		47			(15	)		21			(63	)
Ending balance	$	(755	)	$	(840	)	$	(755	)	$	(840	)

Note 7. New Accounting Pronouncements

In June 2011, the FASB issued amended accounting guidance related to presentation of comprehensive income. The standards update is intended to help financial statement users better understand the causes of an entity’s change in financial position and results of operation. It is effective for reporting periods beginning after December 15, 2011. We adopted this guidance during the first quarter of 2012. Since this new guidance affected disclosure requirements only, it did not have a material impact on our financial position or results of operations.

9

NN, Inc.

Notes To Condensed Consolidated Financial Statements

(In Thousands, Except Per Share Data)

(unaudited)

Note 8. Long-Term Debt and Short-Term Debt

Long-term debt and short-term debt at June 30, 2012 and December 31, 2011 consisted of the following:

	June 30, 2012		December 31, 2011
Borrowings under our $100,000 revolving credit facility bearing interest at a floating rate equal to LIBOR (0.25% at June 30, 2012) plus an applicable margin of 3.00% at June 30, 2012, expiring December 21, 2014.	$	50,136	$	40,989
Borrowings under our $40,000 aggregate principal amount of fixed rate notes bearing interest at a fixed rate of 5.39% maturing on April 26, 2014. Annual principal payments of $5,714 began on April 26, 2008 and extend through the date of maturity.		11,429		17,143
Borrowings under our $20,000 aggregate principal amount of fixed rate notes bearing interest at a fixed rate of 4.64% maturing on December 20, 2018. Annual principal payments of $4,000 will begin on December 22, 2014 and extend through the date of maturity.		20,000		20,000
Total debt		81,565		78,132
Less current maturities of long-term debt		6,650		6,503
Long-term debt, excluding current maturities of long-term debt	$	74,915	$	71,629

On December 20, 2011, we borrowed an additional $20,000 in seven-year fixed rate notes from Prudential Capital at a rate of 4.64%. These notes, which mature on December 20, 2018, are interest-only for the first two years followed by five equal annual principal payments. The proceeds were used to repay existing revolving credit bank debt and to fund growth capital projects.

On September 30, 2011, we amended our $100 million revolving credit agreement agented by KeyBank and our long-term loan agreement with Prudential Capital in order to adjust the fixed charge coverage ratio covenant to better correlate current and expected levels of capital spending and other fixed charges with earnings before taxes, interest and depreciation (EBITDA). The minimum fixed charge coverage ratio was reduced from “not less than 1.25 to 1.00” to “not to be less than 1.00 to 1.00 as of the last day of any fiscal quarter” for the quarters ending September 30, 2011 through September 30, 2012. Starting October 1, 2012, the minimum fixed charge coverage ratio increases to “not to be less than 1.25 to 1.00 as of the last day of any fiscal quarter”. The amendments also provide that we will assure that the total outstanding under the revolving credit agreement shall be at least $10 million less than the total committed amount of $100 million during the period commencing September 30, 2011 and ending on September 30, 2012.

The $100 million revolving credit agreement interest rate is LIBOR plus a margin of 2.5% to 3.5% (depending on the level of the ratio of debt to EBITDA). The facility may be expanded upon our request with approval of the lenders by up to $35 million, under the same terms and conditions. The loan agreement contains customary restrictions on, among other things, additional indebtedness, liens on our assets, sales or transfers of assets, investments, restricted payments (including payment of dividends and stock repurchases), issuance of equity securities, and merger, acquisition and other fundamental changes in our business including a “material adverse change” clause, which if triggered would accelerate the maturity of the debt. The facility has a $10 million swing line feature to meet short term cash flow needs. Any borrowings under this swing line are considered short term. Costs associated with entering into the revolving credit facility were capitalized and will be amortized into interest expense over the life of the facility. As of June 30, 2012, $1,458 of net capitalized loan origination costs related to the revolving credit facility were recorded on the balance sheet within other non-current assets.

10

NN, Inc.

Notes To Condensed Consolidated Financial Statements

(In Thousands, Except Per Share Data)

(unaudited)

Our original $40,000 fixed rate notes agreement with Prudential Capital has an interest rate of 5.39%, which was reduced from 6.50% on December 20, 2011. The $40,000 and $20,000 fixed rate agreements contain customary restrictions on, among other things, additional indebtedness, liens on our assets, sales or transfers of assets, investments, restricted payments (including payment of dividends and stock repurchases), issuance of equity securities, and mergers, acquisitions and other fundamental changes in our business including a “material adverse change” clause, which if triggered would accelerate the maturity of the debt. We incurred costs as a result of issuing these notes which have been recorded on the balance sheet within other non-current assets and are being amortized over the term of the notes. The unamortized balance at June 30, 2012 was $221.

Note 9. Goodwill, net

The changes in the carrying amount of goodwill, net for the six month period ended June 30, 2012 are as follows:

(In Thousands of Dollars)	Metal Bearing Components Segment
Balance as of January 1, 2012	$	8,039
Currency translation impacts		(433	)
Balance as of June 30, 2012	$	7,606

The goodwill balance is tested for impairment on an annual basis during the fourth quarter and between annual tests if a triggering event occurs. As of June 30, 2012, there are no indications of impairment at the remaining reporting unit with a goodwill balance.

Note 10. Intangible Assets, Net

The Precision Metal Components Segment has an indefinite lived intangible asset not subject to amortization of $900 related to the value of the trade names of Whirlaway. There are no indicators of impairment for this indefinite lived intangible asset as of June 30, 2012.

Note 11. Shared-Based Compensation

During the three and six month periods ended June 30, 2012 and 2011, approximately $525 and $884 in 2012 and $116 and $116 in 2011, respectively, of compensation expense was recognized in selling, general and administrative expense for all share-based awards. During the six month period ended June 30, 2012, there were 75 share awards and 285 option awards granted to non-executive directors, officers and certain other key employees. There were 75 share awards and 201 option awards granted to non-executive directors, officers and certain other key employees during the three and six month periods ended June 30, 2011.

The 75 restricted shares granted during the six month period ended June 30, 2012, vest pro-rata over three years. During the six month periods ended June 30, 2012 and 2011, we incurred $365 and $50, respectively, in expense related to restricted stock. The fair value of the shares issued was determined by using the grant date closing price of our common stock.

We incurred $519 and $66 of stock option expense in the six month periods ended June 30, 2012 and 2011, respectively. The fair value of our options cannot be determined by market value, as our options are not traded in an open market. Accordingly, the Black Scholes financial pricing model is utilized to estimate the fair value.

11

NN, Inc.

Notes To Condensed Consolidated Financial Statements

(In Thousands, Except Per Share Data)

(unaudited)

The following table provides a reconciliation of option activity for the six month period ended June 30, 2012:

Options	Shares (000)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2012		1,141		$	10.12
Granted		285		$	8.85
Exercised		(5	)	$	1.30
Forfeited or expired		(12	)	$	11.69
Outstanding at June 30, 2012		1,409		$	9.88		6.2	$	2,307	(1)
Exercisable at June 30, 2012		979		$	9.61		4.7	$	1,892	(1)

⁽¹⁾  The intrinsic value is the amount by which the market price of our stock was greater than the exercise price of any individual option grant at June 30, 2012.

Note 12. Provision for Income Taxes

As of June 30, 2012, we continued to place a valuation allowance on all of the net deferred tax assets of our U.S. locations, the balance of which approximated $10,300 at June 30, 2012. The ongoing necessity of this valuation allowance is based on the negative financial performance of our U.S. operations during the global economic recession of 2008 and 2009 and the negative financial performance during 2010 from losses incurred at the Precision Metal Components Segment. During the six months ended June 30, 2012, the valuation allowance on a portion of these deferred tax assets was reversed to offset tax expense, as our U.S. based units had a combined pre-tax income of $5,966. While our U.S. entities have generated pre-tax income of $5,966 and $1,633 during the six months ended June 30, 2012 and the year ended December 31, 2011, respectively, the substantial cumulative losses in 2009 and 2010 outweigh the positive evidence of the year to date 2012 and 2011 taxable income. If the profitability of the U.S. entities continues, it is likely that a significant portion of the valuation allowance (except for the valuation allowance on the foreign tax credits of approximately $3,250) will be reversed. This will result in a material benefit to income tax expense and a resulting benefit to net income in the period in which the valuation allowances are reversed.

For the six month period ended June 30, 2012, the difference between the U.S. federal statutory tax rate of 34% and our effective tax rate of 18% was primarily due to utilization of the fully reserved net operating losses to offset U.S. based taxable income, which lowered tax expense by $2,189. Additionally, the tax rate was impacted by non-U.S. based earnings being taxed at lower rates, which reduced tax expense by $657.

We do not foresee any significant changes to our unrecognized tax benefits within the next twelve months.

Note 13. Commitments and Contingencies

As described more fully in our Form 10-K for 2011, we continue to monitor the remediation efforts at a former waste recycling vendor used by our former Walterboro, South Carolina facility. The costs associated with the remediation, which has been tentatively approved by the EPA, are estimated to be approximately $10,000. Our allocated share is approximately $132 which has been paid in full as of June 30, 2012. While there can be no assurances, we believe that $132 is the maximum amount for which we will be liable under the tentatively accepted remediation plan.

As discussed more fully in Note 1 of the Notes to Condensed Consolidated Financial Statements, the ultimate impact on NN of Eltmann filing for bankruptcy will depend on the findings of the bankruptcy court. However, until such court proceedings are finalized, we will not be able to determine what liabilities and contingent obligations, if any, might remain as the responsibility of NN. Under advice from legal counsel, NN does not expect any further significant impacts on our consolidated financial statements as a result of the liquidation of this subsidiary.

All other legal matters are of an ordinary and routine nature and are incidental to our operations. Management believes that such proceedings should not, individually or in the aggregate, have a material adverse effect on our business or financial condition or on the results of operations.

12

NN, Inc.

Notes To Condensed Consolidated Financial Statements

(In Thousands, Except Per Share Data)

(unaudited)

Note 14. Fair Value of Financial Instruments

The fair values of our fixed rate long-term borrowings are calculated by using a discounted cash flow analysis factoring in current market borrowing rates for similar types of borrowing arrangements under our credit profile. The current market borrowing rates are Level 2 inputs under the U.S. GAAP fair value hierarchy. The carrying amounts and fair values of our long-term debt are in the table below:

	June 30, 2012				December 31, 2011
(In Thousands of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Variable rate long-term debt	$	50,136	$	50,136	$	40,989	$	40,989
Fixed rate long-term debt	$	31,429	$	32,870	$	37,143	$	37,500

13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

We wish to caution readers that this report contains, and our future filings, press releases and oral statements made by our authorized representatives may contain, forward-looking statements that involve certain risks and uncertainties. Readers can identify these forward-looking statements by the use of such verbs as expects, anticipates, believes or similar verbs or conjugations of such verbs. Our actual results could differ materially from those expressed in such forward-looking statements due to important factors bearing on our business, many of which already have been discussed in this filing and in our prior filings. The differences could be caused by a number of factors or combination of factors including the risk factors discussed in “Item 1A Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011 which we filed with the Securities and Exchange Commission on March 15, 2012.

Results of Operations

Three Months Ended June 30, 2012 Compared to the Three Months Ended June 30, 2011.

OVERALL RESULTS

	Consolidated NN, Inc.
(In Thousands of Dollars)	2012			2011		Change
Net sales	$	98,824		$	115,922	$	(17,098	)
Foreign exchange effects									(4,676	)
Volume									(13,202	)
Price									219
Mix									93
Material inflation pass-through									468
Cost of products sold (exclusive of depreciation and amortization shown separately below)		77,848			94,657		(16,809	)
Foreign exchange effects									(3,758	)
Volume									(9,492	)
Cost reduction projects and other cost changes									(4,449	)
Mix									(134	)
Inflation									1,024
Selling, general and administrative		8,312			7,720		592
Foreign exchange effects									(257	)
Increase in spending									849
Depreciation and amortization		4,389			4,291		98
Foreign exchange effects									(214	)
Net increase in depreciation expense									312
Interest expense		1,116			1,220		(104	)
Loss on disposal of assets		—			3		(3	)
Other expense (income), net		(1,239	)		155		(1,394	)
Income before provision for income taxes		8,398			7,876		522
Provision for income taxes		1,360			2,049		(689	)
Net income	$	7,038		$	5,827	$	1,211

Net Sales. Net sales decreased during the second quarter of 2012 from the second quarter of 2011 due to lower sales volumes experienced at our Metal Bearing Components and our Plastics and Rubber Components Segments. These effects were partially offset by increased sales volume in our Precision Metal Components Segment. The majority of the reduction in sales volume was experienced at our units located in Europe, the U.S. and Asia that sold into the European market due to macro-economic issues within the European Union and from overall lower automotive demand in Europe. Additionally, we believe demand for our products was affected by our customers and their

14

customers adjusting inventory levels, as our sales volume reduction was much greater than the reduction in actual end market demand within the markets we serve. Finally, sales were reduced as the strengthening of the US Dollar caused a lower translated value of Euro denominated sales.

Cost of Products Sold (exclusive of depreciation and amortization shown separately below). A large portion of the decrease was from the lower sales volumes, as discussed above, and the related reductions in production costs at those units of the Metal Bearing Components Segment that sold product in Europe. Additionally, 2012 cost of products sold was lower in comparison to 2011, as the start-up costs incurred during 2011 for new multi-year sales programs at our Precision Metal Components Segment did not repeat during 2012. The 2012 cost of products sold was further reduced by benefits from specific cost reduction projects undertaken during 2012. Finally, cost of products sold was reduced as the strengthening of the US Dollar caused a lower translated value of Euro denominated costs.

Selling, General and Administrative. The increase in spending in selling, general and administrative expenses was primarily due to higher stock based compensation costs.

Depreciation and Amortization. The increase was due to the carryover effects of depreciation expense generated by 2011 capital expenditures placed in service after the second quarter of 2011.

Other expense (income), net. Included in other expense(income), net, during the three months ended June 30, 2012, was $1.1 million related to foreign exchange gains on inter-company loans. During the three months ended June 30, 2011, inter-company loans generated foreign exchange losses of $0.3 million. The gains and losses are a function of the appreciation or depreciation of the Euro versus the U.S. Dollar.

RESULTS BY SEGMENT

METAL BEARING COMPONENTS SEGMENT

(In Thousands of Dollars)	Three months ended June 30,
	2012		2011		Change
Net sales	$	65,768	$	84,827	$	(19,059	)
Foreign exchange effects								(4,676	)
Volume								(15,148	)
Price/mix								215
Material inflation pass-through								550
Net income	$	6,250	$	8,898	$	(2,648	)

The decrease in sales during the second quarter of 2012 was driven mainly by volume reductions at our European units of this segment; however, all locations experienced sales volume reductions compared to the second quarter of 2011 due largely to lower demand for our products sold into the European market. The reductions were due to European macro-economic issues, much lower automotive demand in Europe and, we believe, overall reductions of inventory levels in the supply chains we serve. Additionally, sales were reduced as the strengthening of the US Dollar caused a lower translated value of Euro denominated sales.

The segment net income in the second quarter of 2012 was negatively impacted by lost profits from much lower sales volumes and related production inefficiencies from lower production levels. These reductions were driven by much lower demand for our products at our European operating units of this segment and at those segment units importing into Europe, as discussed above. Partially offsetting the volume effects were benefits from specific cost reduction projects undertaken during 2012.

15

PRECISION METAL COMPONENTS SEGMENT

(In Thousands of Dollars)	Three months ended June 30,
	2012		2011			Change
Net sales	$	22,561	$	19,534		$	3,027
Volume								3,070
Price/mix								(43	)
Net income (loss)	$	1,911	$	(1,130	)	$	3,041

The majority of the increase in sales at this segment was due to fulfilling sales orders, at the full year run rate, for a new sales program started in 2011. This new sales program was just being launched during the second quarter of 2011 and had much lower sales levels during that period.

The segment improved from a net loss to a net income due to profits from increased sales volumes and from the elimination of start-up costs on the new multi-year sales programs incurred during 2011. This segment incurred $2.0 million of operational inefficiencies and additional costs related to ramping up production for the new large multi-year sales programs during the second quarter of 2011 which did not repeat during the second quarter of 2012.

PLASTIC AND RUBBER COMPONENTS SEGMENT

(In Thousands of Dollars)	Three months ended June 30,
	2012		2011		Change
Net sales	$	10,495	$	11,561	$	(1,066	)
Volume								(1,123	)
Price/material pass-through								57
Net income	$	800	$	918	$	(118	)

Lower sales volumes were due to expirations of certain sales programs. Segment net income decreased due to the lower sales volumes partially offset by specific cost reduction projects undertaken during 2012.

16

Results of Operations

Six Months Ended June 30, 2012 Compared to the Six Months Ended June 30, 2011.

OVERALL RESULTS

	Consolidated NN, Inc.
(In Thousands of Dollars)	2012			2011			Change
Net sales	$	203,343		$	227,229		$	(23,886	)
Foreign exchange effects										(6,335	)
Volume										(20,121	)
Price										433
Mix										640
Material inflation pass-through										1,497
Cost of products sold (exclusive of depreciation and amortization shown separately below)		160,817			184,955			(24,138	)
Foreign exchange effects										(5,116	)
Volume										(13,876	)
Cost reduction projects and other cost changes										(7,876	)
Mix										18
Inflation										2,712
Selling, general and administrative		16,379			15,686			693
Foreign exchange effects										(349	)
Increase in spending										1,042
Depreciation and amortization		8,846			8,326			520
Foreign exchange effects										(291	)
Net increase in depreciation expense										811
Gain from deconsolidation of bankrupt subsidiary		—			(209	)		209
Interest expense		2,327			2,444			(117	)
Gain (loss) on disposal of assets		(8	)		3			(11	)
Other expense (income), net		(800	)		1,191			(1,991	)
Income before provision for income taxes		15,782			14,833			949
Provision for income taxes		2,835			3,499			(664	)
Net income	$	12,947		$	11,334		$	1,613

Net Sales. Net sales decreased during the first half of 2012 from the first half of 2011 primarily due to volume reductions experienced at our European operating units of our Metal Bearing Components Segment and to a lesser extent at units importing into Europe. These effects were partially offset by increased sales volume in our Precision Metal Components Segment. The reduction of our sales volumes into the European market was due in part to macro-economic issues within the European Union and from overall lower automotive demand in Europe. Additionally, we believe demand for our products was affected by our customers and their customers adjusting inventory levels, as our sales volume reduction was much greater than the reduction in actual end market demand within the markets we serve. Finally, sales were reduced as the strengthening of the US Dollar caused a lower translated value of Euro denominated sales.

Cost of Products Sold (exclusive of depreciation and amortization shown separately below). A large portion of the decrease was from the lower sales volumes, as discussed above, and the related reductions in production costs at those units of the Metal Bearing Components Segment that sold into European markets. Additionally, 2012 cost of products sold was lower in comparison to 2011, as the additional start-up costs incurred during 2011 for new multi-year sales programs at our Precision Metal Components Segment did not repeat during 2012. The 2012 cost of products sold was further reduced by benefits from specific cost reduction projects undertaken during 2012. Finally, cost of products sold was reduced as the strengthening of the US Dollar caused a lower translated value of Euro denominated costs.

17

Selling, General and Administrative. The increase in spending in selling, general and administrative expenses was primarily due to higher stock based compensation costs.

Depreciation and Amortization. The increase was due to the carryover effects of depreciation expense generated by 2011 capital expenditures placed in service after the first half of 2011.

Other expense(income), net. Included in other expense(income), net, during the six months ended June 30, 2012, was $0.4 million related to foreign exchange gains on inter-company loans. During the six months ended June 30, 2011, inter-company loans generated foreign exchange losses of $1.2 million. The gains and losses are a function of the appreciation or depreciation of the Euro versus the U.S. Dollar. Additionally, 2012 included $0.2 million in gains realized with receipt of the final payment of a note receivable. (See Note 2 of the Notes to Condensed Consolidated Financial Statements).

RESULTS BY SEGMENT

METAL BEARING COMPONENTS SEGMENT

(In Thousands of Dollars)	Six months ended June 30,
	2012		2011		Change
Net sales	$	137,898	$	168,609	$	(30,711	)
Foreign exchange effects								(6,335	)
Volume								(26,255	)
Price/mix								339
Material inflation pass-through								1,540
Net income	$	13,215	$	18,729	$	(5,514	)

The decrease in sales during the first half of 2012 was driven mainly by volume reductions at our European units of this segment and at those segment units importing into Europe, as discussed above. The reductions were due to European macro-economic issues, much lower automotive demand in Europe and, we believe, overall reductions of inventory levels in the supply chains we serve. Additionally, sales were reduced as the strengthening of the US Dollar caused a lower translated value of Euro denominated sales.

The segment net income in the first half of 2012 was negatively impacted by lost profits from much lower sales volumes and related production inefficiencies from lower production levels. These reductions were driven by much lower demand for our products at our European operating units of this segment and at those segment units importing into Europe, as discussed above. Partially offsetting the volume effects were benefits from specific cost reduction projects undertaken in the first half of 2012.

PRECISION METAL COMPONENTS SEGMENT

(In Thousands of Dollars)	Six months ended June 30,
	2012		2011			Change
Net sales	$	43,873	$	35,936		$	7,937
Volume								7,485
Price/mix								452
Net income (loss)	$	3,550	$	(3,338	)	$	6,888

18

The majority of the increase in sales at this segment was due to fulfilling sales orders, at the full year run rate, for a new sales program started in 2011. This new sales program was just being launched during the first half of 2011 and had minimal sales levels during that period.

The segment improved from a net loss to a net income due to profits from increased sales volumes and from the elimination of start-up costs on the new multi-year sales programs incurred during 2011. This segment incurred $4.5 million of operational inefficiencies and additional costs related to ramping up production for new large multi-year sales programs during the first half of 2011 which did not repeat during the first half of 2012.

PLASTIC AND RUBBER COMPONENTS SEGMENT

(In Thousands of Dollars)	Six months ended June 30,
	2012		2011		Change
Net sales	$	21,572	$	22,684	$	(1,112	)
Volume								(1,350	)
Price/material pass-through								238
Net income	$	1,760	$	1,736	$	24

Lower sales volumes were due to expirations of certain sales programs. Segment net income was impacted by the lower sales volumes offset by specific cost reduction projects undertaken during 2012.

Changes in Financial Condition

From December 31, 2011 to June 30, 2012, our total assets increased $5.3 million and our current assets increased $10.2 million. Excluding foreign exchange effects, total assets and current assets increased approximately $8.7 million and $11.9 million, respectively, from December 31, 2011.

Excluding the foreign exchange effects, accounts receivable was higher by $5.4 million due to the 9% increase in sales volume experienced in June and May of 2012 from sales levels in December and November of 2011. The days sales outstanding at June 30, 2012 was consistent with days sales outstanding at December 31, 2011. Net overdue receivables were approximately 18% and 19% of total accounts receivable at June 30, 2012 and December 31, 2011, respectively, the vast majority of which were 0-30 days past due.

The remainder of the increase in total and current assets was due principally to the $7.5 million increase in cash from the current year net cash flow. The increases in accounts receivable and cash were partially offset by receipt of $1.9 million for the pay off a note receivable.

From December 31, 2011 to June 30, 2012, our total liabilities decreased $5.4 million. Excluding foreign exchange effects, total liabilities decreased approximately $4.3 million from December 31, 2011. The majority of the reduction was from a $7.5 million accounts payable decrease, excluding foreign exchange effects, driven by timing of payments to certain vendors and lower levels of spending for raw material during June/May of 2012 compared to December/November of 2011.

Working capital, which consists principally of accounts receivable and inventories offset by accounts payable and current maturities of long-term debt, was $69.1 million at June 30, 2012 as compared to $51.0 million at December 31, 2011. The ratio of current assets to current liabilities increased from 1.70:1 at December 31, 2011 to 2.06:1 at June 30, 2012. The increase in working capital was due primarily to the growth in accounts receivable, the growth in cash and the reduction in accounts payable, all as discussed above.

Cash flow provided by operations was $11.6 million for the first six months of 2012 compared with cash flow used by operations of $2.0 million for the same period in 2011. The favorable variance was principally due to a much smaller increase in accounts receivables experienced during the first half of 2012 than the increase experienced in the first half of 2011 driven by the lower sales volumes in the first half of 2012 versus the first half of 2011.

19

Liquidity and Capital Resources

Amounts outstanding under our $100.0 million credit facility and our $60.0 million in fixed rate notes as of June 30, 2012 were $50.1 million (including $0.9 million under our swing line of credit) and $31.4 million, respectively. As of June 30, 2012, we can borrow up to an additional $38.9 million under the $100.0 million credit facility (including $9.1 million under our swing line of credit) subject to limitations based on existing financial covenants. The $38.9 million of availability is net of $1.0 million of outstanding letters of credit at June 30, 2012 which are considered as usage of the facility and considers our new liquidity requirement, from the September 30, 2011 amendment, that the total outstanding under the revolving credit agreement shall be at least $10 million less than the total committed amount of $100 million during the period commencing September 30, 2011 and ending on September 30, 2012.

We were in compliance with all covenants related to the amended and restated $100.0 million credit facility and the amended and restated $60.0 million in fixed rate notes as of June 30, 2012. The specific covenants to which we are subject and the actual results achieved for the three month period ended June 30, 2012 are stated below:

Financial Covenants	Required Covenant Level	Actual Level Achieved
Interest coverage ratio	Not to be less than 3.00 to 1.00 as of the last day of any fiscal quarter	7.00 to 1.00
Fixed charge coverage	Not to be less than 1.00 to 1.00 as of the last day of any fiscal quarter	1.31 to 1.00
Leverage ratio	Not to exceed 2.50 to 1.00 for the most recently completed four fiscal quarters	1.74 to 1.00
Capital expenditures	Not to invest more than $25,524 during the fiscal year 2012	9,090

Starting October 1, 2012, the minimum fixed charge coverage ratio increases to “not to be less than 1.25 to 1.00 as of the last day of any fiscal quarter”.

Many of our locations use the Euro as their functional currency. In 2012, the fluctuation of the Euro against the U.S. Dollar unfavorably impacted revenue, decreased the value of assets and liabilities of certain foreign subsidiaries and had an unfavorable impact on net income from the translation of net income of certain foreign subsidiaries. As of June 30, 2012, no currency hedges were in place. Changes in value of the U.S. Dollar and/or Euro against foreign currencies could impair our ability to compete with international competitors for foreign as well as domestic sales.

We have made planned capital expenditures totaling $9.1 million as of June 30, 2012. During 2012, we expect to spend between $15.0 million and $20.0 million on capital expenditures, the majority of which relate to new or expanded business. We believe that funds generated from operations and borrowings from our credit facilities will be sufficient to finance our capital expenditures and working capital needs through June 2013. We base this assertion on our current availability for borrowing of up to $38.9 million and our forecasted positive cash flow from operations for the remaining quarters of 2012.

Seasonality and Fluctuation in Quarterly Results

Historically, our net sales in the Metal Bearing Components Segment have been of a seasonal nature due to the fact that a significant portion of our sales are to European customers that have significantly slower production during the month of August.

20

Critical Accounting Policies

Our critical accounting policies, including the assumptions and judgments underlying them, are disclosed in our annual report on Form 10-K for the year ended December 31, 2011, including those policies as discussed in Note 1 to the annual report. There have been no changes to these policies during the six month period ended June 30, 2012.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to changes in financial market conditions in the normal course of our business due to use of certain financial instruments as well as transacting in various foreign currencies. To mitigate the exposure to these market risks, we have established policies, procedures and internal processes governing our management of financial market risks. We are exposed to changes in interest rates primarily as a result of our borrowing activities. At June 30, 2012, we had $50.1 million outstanding under our variable rate revolving credit facilities and $31.4 million fixed rate notes outstanding. See Note 8 of the Notes to Condensed Consolidated Financial Statements. At June 30, 2012, a one-percent increase in the interest rate charged on our outstanding variable rate borrowings would result in interest expense increasing annually by approximately $0.5 million.

Translation of our operating cash flows denominated in foreign currencies is impacted by changes in foreign exchange rates. We did not hold a position in any foreign currency hedging instruments as of June 30, 2012.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15 of the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures are effective as of June 30, 2012, the end of the period covered by this quarterly report.

There have been no changes in the fiscal quarter ended June 30, 2012 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

As described more fully in our Form 10-K for 2011, we continue to monitor the remediation efforts at a former waste recycling vendor used by our former Walterboro, South Carolina facility. The costs associated with the remediation, which has been tentatively approved by the EPA, are estimated to be approximately $10 million of which our allocated share is approximately $0.1 million which has been fully paid as of June 30, 2012. While there can be no assurances, we believe that the $0.1 million is the maximum amount for which we will be liable under the tentatively accepted remediation plan.

As discussed more fully in Note 1of the Notes to Condensed Consolidated Financial Statements, the ultimate impact on NN of Eltmann filing for bankruptcy will depend on the findings of the bankruptcy court. However, until such court proceedings are finalized, we will not be able to determine what liabilities and contingent obligations, if any, might remain as the responsibility of NN. Under advice from legal counsel, NN does not expect any further significant impacts on our consolidated financial statements as a result of the liquidation of this subsidiary.

21

All of our other legal proceedings are of an ordinary and routine nature and are incidental to our operations. Management believes that such proceedings should not, individually or in the aggregate, have a material adverse effect on our business or financial condition or on the results of operations.

Item 1.A. Risk Factors

Our risk factors are disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 under Item 1.A. “Risk Factors.” There have been no material changes to these risk factors since December 31, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

Item 6. Exhibits

31.1	Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31.2	Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act.
101.	Ins XBRL Instance Document
101.	SCH XBRL Taxonomy Extension Schema
101.	CAL XBRL Taxonomy Calculation Link base
101.	LAB XBRL Taxonomy Label Link base
101.	PRE XBRL Presentation Link base Document
101.	DEF XBRL Definition Link base Document

22

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, Inc.
		(Registrant)
Date:	August 8, 2012		/s/ Roderick R. Baty
			Roderick R. Baty,
			Chairman, President and Chief Executive Officer
			(Duly Authorized Officer)
Date:	August 8, 2012		/s/ James H. Dorton
			James H. Dorton
			Senior Vice President – Corporate Development and Chief Financial Officer
			(Principal Financial Officer)
			(Duly Authorized Officer)
Date:	August 8, 2012		/s/ William C. Kelly, Jr.
			William C. Kelly, Jr.,
			Vice President and Chief Administrative Officer
			(Duly Authorized Officer)
Date:	August 8, 2012		/s/ Thomas C. Burwell, Jr.
			Thomas C. Burwell, Jr.
			Vice President, Chief Accounting Officer and Corporate Controller
			(Principal Accounting Officer)

23

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Roderick R. Baty, certify that:

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) 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):

a) 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

b) 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.

Date:	August 8, 2012	/s/ Roderick R. Baty
		Roderick R. Baty
		Chairman, President and Chief Executive Officer

24

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, James H. Dorton, certify that:

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) 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):

a) 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

b) 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.

Date:	August 8, 2012	/s/ James H. Dorton
		James H. Dorton
		Senior Vice President – Corporate Development and Chief Financial Officer

25

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of NN, Inc. (the “Company”) on Form 10-Q for the interim period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and date indicated below, hereby certifies pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 8, 2012	/s/ Roderick R. Baty
		Roderick R. Baty
		Chairman, President and Chief Executive Officer

[A signed original of this written statement required by Section 906 has been provided to NN, Inc. and will be retained by NN, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.]

26

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of NN, Inc. (the “Company”) on Form 10-Q for the interim period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and date indicated below, hereby certifies pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 8, 2012	/s/ James H. Dorton
		James H. Dorton
		Senior Vice President – Corporate Development and Chief Financial Officer

[A signed original of this written statement required by Section 906 has been provided to NN, Inc. and will be retained by NN, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.]

27

XML

Long-Term Debt and Short-Term Debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Summary of long-term debt and short-term debt
Total debt	$ 81,565	$ 78,132
Less current maturities of long-term debt	6,650	6,503
Long-term debt, excluding current maturities of long-term debt	74,915	71,629
December 21, 2014 [Member]
Summary of long-term debt and short-term debt
Borrowings under our $100,000 revolving credit facility bearing interest at a floating rate equal to LIBOR (0.25% at June 30, 2012) plus an applicable margin of 3.00% at June 30, 2012, expiring December 21, 2014.	50,136	40,989
April 26, 2014 [Member]
Summary of long-term debt and short-term debt
Borrowings under our $40,000 aggregate principal amount of fixed rate notes bearing interest at a fixed rate of 5.39% maturing on April 26, 2014. Annual principal payments of $5,714 began on April 26, 2008 and extend through the date of maturity.	11,429	17,143
December 20, 2018 [Member]
Summary of long-term debt and short-term debt
Borrowings under our $20,000 aggregate principal amount of fixed rate notes bearing interest at a fixed rate of 4.64% maturing on December 20, 2018. Annual principal payments of $4,000 will begin on December 22, 2014 and extend through the date of maturity.	$ 20,000	$ 20,000

XML

Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Variable rate long-term debt [Member]
Long-term debt
Long-term debt carrying amount	$ 50,136	$ 40,989
Long-term debt fair value	50,136	40,989
Fixed rate long-term debt [Member]
Long-term debt
Long-term debt carrying amount	31,429	37,143
Long-term debt fair value	$ 32,870	$ 37,500

XML

Provision for Income Taxes (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Provision for Income Taxes (Textual) [Abstract]
Allowance on all of net deferred tax assets	$ 10,300
Pre-tax income	5,966	1,633
Deferred tax assets valuation allowance, foreign tax credits	3,250
U.S. federal statutory rate	34.00%
State and Local effective income tax rate	18.00%
Tax reduction due to utilization of the fully reserved net operating losses	2,189
Non U S Based Earnings Taxed at Lower Rates	$ 657

XML

Inventories (Details Textual) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Inventories (Textual) [Abstract]
Inventories on consignment at customer locations	$ 3,201	$ 4,156

XML

Long-Term Debt and Short-Term Debt (Tables)

6 Months Ended

Jun. 30, 2012

Long-Term Debt and Short-Term Debt [Abstract]

Summary of long-term debt and short-term debt

	June 30, 2012		December 31, 2011
Borrowings under our $100,000 revolving credit facility bearing interest at a floating rate equal to LIBOR (0.25% at June 30, 2012) plus an applicable margin of 3.00% at June 30, 2012, expiring December 21, 2014.	$	50,136	$	40,989
Borrowings under our $40,000 aggregate principal amount of fixed rate notes bearing interest at a fixed rate of 5.39% maturing on April 26, 2014. Annual principal payments of $5,714 began on April 26, 2008 and extend through the date of maturity.		11,429		17,143
Borrowings under our $20,000 aggregate principal amount of fixed rate notes bearing interest at a fixed rate of 4.64% maturing on December 20, 2018. Annual principal payments of $4,000 will begin on December 22, 2014 and extend through the date of maturity.		20,000		20,000
Total debt		81,565		78,132
Less current maturities of long-term debt		6,650		6,503
Long-term debt, excluding current maturities of long-term debt	$	74,915	$	71,629

XML

Goodwill, net (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Goodwill, net (Textual) [Abstract]
Impairment of goodwill	$ 0

XML

Pensions and Other Post-Employment Liabilities (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Changes to Service and Early Retirement Provisions
Beginning balance	$ (829)	$ (835)	$ (783)	$ (749)
Service cost	(5)	(6)	(30)	(26)
Benefits paid	39	33	54	36
Interest cost	(7)	(17)	(17)	(38)
Currency impacts	47	(15)	21	(63)
Ending balance	$ (755)	$ (840)	$ (755)	$ (840)

XML

Commitments and Contingencies (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Commitments and Contingencies (Textual) [Abstract]
Costs associated with remediation	$ 10,000
Allocated share of remediation costs	$ 132

XML

Inventories

6 Months Ended

Jun. 30, 2012

Inventories [Abstract]

Inventories

Note 3. Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method.

Inventories are comprised of the following:

	June  30, 2012		December  31, 2011
Raw materials	$	14,647	$	13,855
Work in process		8,833		8,425
Finished goods		21,884		23,743
	$	45,364	$	46,023

Inventories on consignment at customer locations as of June 30, 2012 and December 31, 2011 totaled $3,201 and $4,156, respectively.

The inventory valuations above were developed using normalized production capacities for each of our manufacturing locations. Any costs from abnormal excess capacity or under-utilization of fixed production overheads are expensed in the period incurred and are not included as a component of inventory valuation.

XML

Intangible Assets, Net (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Intangible assets, Net (Textual) [Abstract]
Indefinite lived intangible asset not subject to amortization	$ 900
Impairment for indefinite lived intangible asset	$ 0

XML

Interim Financial Statements (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2011	Mar. 31, 2011	Jun. 30, 2011
Summary of the effects of deconsolidation of Eltmann
Accumulated other comprehensive income		$ 551
Gain from deconsolidation of bankrupt subsidiary	0	209	209
Cash		(979)
Accounts receivable		(3,388)
Inventory		(2,407)
Other assets		(193)
Property, plant and equipment		(1,343)
Reduction of total assets		(8,310)
Accounts payable		(1,947)
Accrued salaries		(1,500)
Accrued pension		(5,623)
Reduction of total liabilities and stockholders' equity		$ (8,519)

XML

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value of Financial Instruments [Abstract]

Summary of carrying amounts and fair values of long-term debt

	June 30, 2012				December 31, 2011
(In Thousands of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Variable rate long-term debt	$	50,136	$	50,136	$	40,989	$	40,989
Fixed rate long-term debt	$	31,429	$	32,870	$	37,143	$	37,500

XML

Shared-Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Reconciliation of option activity
Number of options, Outstanding, Beginning Balance		1,141,000
Weighted Average Exercise Price, Outstanding, Beginning Balance		$ 10.12
Number of Options, granted	201	285	201
Weighted Average Exercise Price, granted		$ 8.85
Number of Options, exercised		(5,000)
Weighted Average Exercise Price, exercised		$ 1.30
Weighted Average Exercise Price, forfeited or expired		$ 11.69
Number of Options, forfeited or expired		(12,000)
Number of options, Outstanding, Ending Balance		1,409,000
Weighted Average Exercise Price, Outstanding, Ending Balance		$ 9.88
Weighted Average Remaining Contractual Term, Outstanding, Ending Balance		6 years 2 months 12 days
Aggregate Intrinsic Value, Outstanding, Ending Balance		$ 2,307
Number of Options, Options exercisable		979,000
Weighted Average Exercise Price, Options exercisable		$ 9.61
Weighted Average Remaining Contractual Term, Options exercisable		4 years 8 months 12 days
Aggregate Intrinsic Value, Options exercisable		$ 1,892

XML

Interim Financial Statements (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2011	Mar. 31, 2011	Jun. 30, 2011
Interim Financial Statements (Textual) [Abstract]
Additional amount in payables	$ 209
Realized gain on deconsolidation	$ 0	$ 209	$ 209

XML

Long Term Notes Receivable (Details Textual) (Tempe Fixed Asset Note [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Mar. 31, 2012	Jun. 30, 2012
Tempe Fixed Asset Note [Member]
Long Term Notes Receivable (Textual) [Abstract]
Original face value of Tempe Fixed Asset Note		$ 2,500
Term of notes receivable		60 months
Notes receivable, interest rate		7.00%
Monthly principal and interest amount on notes receivables		40
Payment period of notes receivable interest only		24 months
Term of Premium on notes receivable including principal		36 months
Balloon payment of Notes receivable		1,525
Cash payment to settle the note	1,945
Estimated fair value and carrying value of notes receivables	$ 1,772

XML

Long Term Notes Receivable

6 Months Ended

Jun. 30, 2012

Long Term Notes Receivable [Abstract]

Long Term Notes Receivable

Note 2. Long Term Notes Receivable

Certain property, plant and equipment of the Tempe Plant was sold on August 31, 2010, the day the Tempe Plant ceased operations, to a newly formed company not affiliated with NN in exchange for a promissory note. This note had an original face value of $2,500, a 60 month term, a 7% interest rate, interest only payments for 24 months, principal and interest payments totaling $40 per month for the next 36 months followed by a balloon payment of $1,525. On March 31, 2012, we accepted a $1,945 cash payment to settle the note and relieved the debtor of all future liability for the note. The estimated fair value and carrying value of note prior to the payment was $1,772.

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Inventories
Raw materials	$ 14,647	$ 13,855
Work in process	8,833	8,425
Finished goods	21,884	23,743
Inventory net, Total	$ 45,364	$ 46,023

XML

Long-Term Debt and Short-Term Debt (Details Textual) (USD $)	6 Months Ended	9 Months Ended	12 Months Ended			6 Months Ended		6 Months Ended		6 Months Ended
	Jun. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 December 20, 2018 [Member]	Dec. 20, 2011 December 20, 2018 [Member]	Jun. 30, 2012 Revolving Credit Facility [Member]	Jun. 30, 2012 Fixed Rate Notes [Member]	Jun. 30, 2012 Fixed Rate Notes [Member] April 26, 2014 [Member]	Dec. 20, 2011 Fixed Rate Notes [Member] April 26, 2014 [Member]	Jun. 30, 2012 Fixed Rate Notes [Member] December 20, 2018 [Member]	Dec. 21, 2010 Maximum [Member]	Dec. 21, 2010 Minimum [Member]
Line of Credit Facility [Line Items]
Borrowings	$ 100,000,000				$ 20,000,000	$ 100,000,000		$ 40,000,000
Line of credit LIBOR rate						0.25%
Applicable margin added to the interest rate						3.00%					3.50%	2.50%
Expiration date						Dec. 21, 2014
Percentage of fixed interest rate bearing					4.64%				5.39%
Annual principal payment of fixed rate notes				4,000,000				5,714,000
Maturity date for annual payment								Apr. 26, 2014		Dec. 20, 2018
Net capitalized loan origination costs						1,458,000	221,000
Senior notes maturity period	7 years
Long-Term Debt and Short-Term Debt (Textual) [Abstract]
Method for determining interest rate under revolving credit facility	LIBOR plus an applicable margin
Fixed charge coverage ratio expected		1.25
Fixed charge coverage ratio current required minimum		1.00
Increase fixed charge coverage ratio starting October 1, 2012		1.25
Line of credit facility remaining borrowing capacity minimum		10,000,000
Potential to expand credit facility under credit agreement	35,000,000
Amount of credit facility to meet short term cash flow needs	$ 10,000,000
Interest rate of available credit facility			6.50%
Interest rate reduction from available credit facility			5.39%

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net sales	$ 98,824	$ 115,922	$ 203,343	$ 227,229
Cost of products sold (exclusive of depreciation and amortization shown separately below)	77,848	94,657	160,817	184,955
Selling, general and administrative	8,312	7,720	16,379	15,686
Depreciation and amortization	4,389	4,291	8,846	8,326
Loss/(gain) on disposal of assets		3	(8)	3
Non-cash gain from deconsolidation of bankrupt subsidiary				(209)
Income from operations	8,275	9,251	17,309	18,468
Interest expense	1,116	1,220	2,327	2,444
Other (income) expense, net	(1,239)	155	(800)	1,191
Income before provision for income taxes	8,398	7,876	15,782	14,833
Provision for income taxes	1,360	2,049	2,835	3,499
Net income	7,038	5,827	12,947	11,334
Other comprehensive income:
Foreign currency translation gain (loss)	(6,552)	1,964	(3,158)	8,494
Comprehensive income	$ 486	$ 7,791	$ 9,789	$ 19,828
Basic income per common share:	$ 0.41	$ 0.35	$ 0.76	$ 0.68
Weighted average shares outstanding	17,026	16,864	16,985	16,733
Diluted income per common share:	$ 0.41	$ 0.34	$ 0.76	$ 0.67
Weighted average shares outstanding	17,139	17,119	17,097	16,974

XML

Shared-Based Compensation (Details Textual) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Shared-Based Compensation (Textual) [Abstract]
Allocated Share-based Compensation Expense	$ 525	$ 116	$ 884	$ 116
Share awards and options, granted		201	285	201
Vesting period			3 years
Shares granted other than options		75	75	75
Expenses related to issuance of restricted stock			365	50
Stock or Unit Option Plan Expense			$ 519	$ 66

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating Activities:
Net income	$ 12,947	$ 11,334
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization	8,846	8,326
Amortization of debt issuance costs	410	409
Deferred income taxes	417
(Gain)/loss on disposal of assets	(8)	3
Non-cash gain from deconsolidation of bankrupt subsidiary		(209)
Share-based compensation expense	884	116
Change in value of long-term note receivable	(173)	(126)
Changes in operating assets and liabilities:
Accounts receivable	(5,383)	(19,141)
Inventories	137	(1,668)
Accounts payable	(7,518)	(627)
Other assets and liabilities	1,074	(434)
Net cash provided (used) by operating activities	11,633	(2,017)
Investing Activities:
Acquisition of property, plant and equipment	(9,090)	(10,173)
Proceeds received from long-term note receivable	1,945
Cash lost on deconsolidation of Eltmann subsidiary		(979)
Proceeds from disposals of property, plant and equipment	368	106
Net cash used by investing activities	(6,777)	(11,046)
Financing Activities:
Proceeds from short-term debt	148	941
Principal payment on capital lease	(57)	(32)
Proceeds from long term debt	3,286	12,486
Proceeds from issuance of stock	6	2,302
Debt issuance costs paid		(334)
Net cash provided by financing activities	3,383	15,363
Effect of exchange rate changes on cash flows	(773)	2,067
Net Change in Cash	7,466	4,367
Cash at Beginning of Period	4,536	5,556
Cash at End of Period	$ 12,002	$ 9,923

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Segment Information [Abstract]
Revenues from external customers	$ 98,824	$ 115,922	$ 203,343	$ 227,229
Net income (loss)	7,038	5,827	12,947	11,334
Total assets	264,758	278,730	264,758	278,730	259,461
Metal Bearing Components Segment [Member]
Segment Information [Abstract]
Revenues from external customers	65,768	84,827	137,898	168,609
Net income (loss)	6,250	8,898	13,215	18,729
Total assets	198,615	208,313	198,615	208,313
Precision Metal Components Segment [Member]
Segment Information [Abstract]
Revenues from external customers	22,561	19,534	43,873	35,936
Net income (loss)	1,911	(1,130)	3,550	(3,338)
Total assets	41,490	44,703	41,490	44,703
Plastic and Rubber Components Segment [Member]
Segment Information [Abstract]
Revenues from external customers	10,495	11,561	21,572	22,684
Net income (loss)	800	918	1,760	1,736
Total assets	21,249	21,559	21,249	21,559
Corporate and Consolidations [Member]
Segment Information [Abstract]
Net income (loss)	(1,923)	(2,859)	(5,578)	(5,793)
Total assets	$ 3,404	$ 4,155	$ 3,404	$ 4,155

XML

Inventories (Tables)

6 Months Ended

Jun. 30, 2012

Inventories [Abstract]

Inventories

	June  30, 2012		December  31, 2011
Raw materials	$	14,647	$	13,855
Work in process		8,833		8,425
Finished goods		21,884		23,743
	$	45,364	$	46,023

XML

Pensions and Other Post-Employment Liabilities (Details) (Severance Indemnity [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Severance Indemnity [Member]
Restructuring Cost and Reserve [Line Items]
Beginning balance	$ (7,112)	$ (7,658)	$ (6,922)	$ (7,115)
Amounts accrued	(315)	(311)	(628)	(651)
Payments to employees	496	120	661	134
Payments to government managed plan	81	168	261	403
Currency impacts	400	(133)	178	(585)
Ending balance	$ (6,450)	$ (7,814)	$ (6,450)	$ (7,814)

XML

Pensions and Other Post-Employment Liabilities (Tables)

6 Months Ended

Jun. 30, 2012

Pensions and Other Post-Employment Liabilities [Abstract]

Schedule of changes to severance indemnity plan

	Three months ended June 30,						Six months ended June 30,
(In Thousands of Dollars)	2012			2011			2012			2011
Beginning balance	$	(7,112	)	$	(7,658	)	$	(6,922	)	$	(7,115	)
Amounts accrued		(315	)		(311	)		(628	)		(651	)
Payments to employees		496			120			661			134
Payments to government managed plan		81			168			261			403
Currency impacts		400			(133	)		178			(585	)
Ending balance	$	(6,450	)	$	(7,814	)	$	(6,450	)	$	(7,814	)

Changes to service and early retirement provisions

	Three months ended June  30,						Six months ended June 30,
(In Thousands of Dollars)	2012			2011			2012			2011
Beginning balance	$	(829	)	$	(835	)	$	(783	)	$	(749	)
Service cost		(5	)		(6	)		(30	)		(26	)
Interest cost		(7	)		(17	)		(17	)		(38	)
Benefits paid		39			33			54			36
Currency impacts		47			(15	)		21			(63	)
Ending balance	$	(755	)	$	(840	)	$	(755	)	$	(840	)

XML

Interim Financial Statements

6 Months Ended

Jun. 30, 2012

Interim Financial Statements [Abstract]

Interim Financial Statements

Note 1. Interim Financial Statements

The accompanying condensed consolidated financial statements of NN, Inc. have not been audited, except that the balance sheet at December 31, 2011 was derived from our audited consolidated financial statements. In our opinion, the financial statements reflect all adjustments necessary to fairly state the results of operations for the three and six month periods ended June 30, 2012 and 2011, our financial position at June 30, 2012 and December 31, 2011, and the cash flows for the six month periods ended June 30, 2012 and 2011. These adjustments are of a normal recurring nature and are, in the opinion of management, necessary for fair statement of the financial position and operating results for the interim periods. As used in this Quarterly Report on Form 10-Q, the terms “NN”, “the Company”, “we”, “our”, or “us” mean NN, Inc. and its subsidiaries.

Certain information and footnote disclosures normally included in the consolidated 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. These unaudited, condensed and consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our most recent Annual Report on Form 10-K for the year ended December 31, 2011 which we filed with the Securities and Exchange Commission on March 15, 2012. The results for the three and six month periods ended June 30, 2012 are not necessarily indicative of results for the year ending December 31, 2012 or any other future periods.

Due to the impacts of the global economic recession and the resulting reduction in revenue and increased operating losses, our wholly owned German subsidiary, Kugelfertigung Eltmann GbmH (“Eltmann” or “Eltmann Plant”), sustained a significant weakening of its financial condition. As a result, it became insolvent at which point it was required to file for bankruptcy under German bankruptcy law. The filing was made in the bankruptcy court in Germany on January 20, 2011. As of that date, NN lost the ability to control or manage Eltmann as a result of the bankruptcy court trustee taking over effective control and day to day management of this subsidiary. As a result of loss of control of this subsidiary, NN deconsolidated the assets and liabilities of Eltmann from our Consolidated Financial Statements effective January 20, 2011.

We were informed in early April 2011, that the bankruptcy trustee had sold the majority of the production assets of Eltmann to a non-affiliated manufacturing company. It is our understanding the remaining assets and liabilities of Eltmann will be liquidated sometime in the future by the bankruptcy court. NN does not expect any further significant impact on our consolidated financial statements as a result of the liquidation of this subsidiary.

The following table summarizes the effects of the deconsolidation of Eltmann originally reported in the first quarter of 2011:

Cash	$	(979	)
Accounts receivable		(3,388	)
Inventory		(2,407	)
Other assets		(193	)
Property, plant and equipment		(1,343	)
Reduction of total assets	$	(8,310	)
Accounts payable		(1,947	)
Accrued salaries		(1,500	)
Accrued pension		(5,623	)
Accumulated other comprehensive income		551
Reduction of total liabilities and stockholders’ equity	$	(8,519	)
Gain from deconsolidation of bankrupt subsidiary	$	209

The amounts above are reflected in the comparative 2011 financial statements. During the fourth quarter of 2011, we determined it was more likely than not we would potentially owe an additional $209 in payables related to the Eltmann bankruptcy. As such, we accrued for these potential payables during the fourth quarter of 2011 and as a result have now realized a zero gain on deconsolidation.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash	$ 12,002	$ 4,536
Accounts receivable, net of allowance for doubtful accounts of $538 and $438, respectively	71,317	66,707
Inventories, net	45,364	46,023
Other current assets	5,530	6,759
Total current assets	134,213	124,025
Property, plant and equipment, net	118,734	120,528
Goodwill, net	7,606	8,039
Intangible asset, net	900	900
Other non-current assets	3,305	5,969
Total assets	264,758	259,461
Current liabilities:
Accounts payable	40,146	48,217
Accrued salaries, wages and benefits	10,846	11,697
Current maturities of long-term debt	6,650	6,503
Income taxes payable	605	1,858
Other current liabilities	6,845	4,766
Total current liabilities	65,092	73,041
Non-current deferred tax liabilities	3,668	3,810
Long-term debt, net of current portion	74,915	71,629
Other non-current liabilities	10,728	11,305
Total liabilities	154,403	159,785
Total stockholders' equity	110,355	99,676
Total liabilities and stockholders' equity	$ 264,758	$ 259,461

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Shared-Based Compensation

6 Months Ended

Jun. 30, 2012

Shared-Based Compensation [Abstract]

Shared-Based Compensation

Note 11. Shared-Based Compensation

During the three and six month periods ended June 30, 2012 and 2011, approximately $525 and $884 in 2012 and $116 and $116 in 2011, respectively, of compensation expense was recognized in selling, general and administrative expense for all share-based awards. During the six month period ended June 30, 2012, there were 75 share awards and 285 option awards granted to non-executive directors, officers and certain other key employees. There were 75 share awards and 201 option awards granted to non-executive directors, officers and certain other key employees during the three and six month periods ended June 30, 2011.

The 75 restricted shares granted during the six month period ended June 30, 2012, vest pro-rata over three years. During the six month periods ended June 30, 2012 and 2011, we incurred $365 and $50, respectively, in expense related to restricted stock. The fair value of the shares issued was determined by using the grant date closing price of our common stock.

We incurred $519 and $66 of stock option expense in the six month periods ended June 30, 2012 and 2011, respectively. The fair value of our options cannot be determined by market value, as our options are not traded in an open market. Accordingly, the Black Scholes financial pricing model is utilized to estimate the fair value.

The following table provides a reconciliation of option activity for the six month period ended June 30, 2012:

Options	Shares (000)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2012		1,141		$	10.12
Granted		285		$	8.85
Exercised		(5	)	$	1.30
Forfeited or expired		(12	)	$	11.69
Outstanding at June 30, 2012		1,409		$	9.88		6.2	$	2,307	(1)
Exercisable at June 30, 2012		979		$	9.61		4.7	$	1,892	(1)

⁽¹⁾  The intrinsic value is the amount by which the market price of our stock was greater than the exercise price of any individual option grant at June 30, 2012.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 03, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	NN INC
Entity Central Index Key	0000918541
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,044,132

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Provision for Income Taxes

6 Months Ended

Jun. 30, 2012

Provision for Income Taxes [Abstract]

Provision for Income Taxes

Note 12. Provision for Income Taxes

As of June 30, 2012, we continued to place a valuation allowance on all of the net deferred tax assets of our U.S. locations, the balance of which approximated $10,300 at June 30, 2012. The ongoing necessity of this valuation allowance is based on the negative financial performance of our U.S. operations during the global economic recession of 2008 and 2009 and the negative financial performance during 2010 from losses incurred at the Precision Metal Components Segment. During the six months ended June 30, 2012, the valuation allowance on a portion of these deferred tax assets was reversed to offset tax expense, as our U.S. based units had a combined pre-tax income of $5,966. While our U.S. entities have generated pre-tax income of $5,966 and $1,633 during the six months ended June 30, 2012 and the year ended December 31, 2011, respectively, the substantial cumulative losses in 2009 and 2010 outweigh the positive evidence of the year to date 2012 and 2011 taxable income. If the profitability of the U.S. entities continues, it is likely that a significant portion of the valuation allowance (except for the valuation allowance on the foreign tax credits of approximately $3,250) will be reversed. This will result in a material benefit to income tax expense and a resulting benefit to net income in the period in which the valuation allowances are reversed.

For the six month period ended June 30, 2012, the difference between the U.S. federal statutory tax rate of 34% and our effective tax rate of 18% was primarily due to utilization of the fully reserved net operating losses to offset U.S. based taxable income, which lowered tax expense by $2,189. Additionally, the tax rate was impacted by non-U.S. based earnings being taxed at lower rates, which reduced tax expense by $657.

We do not foresee any significant changes to our unrecognized tax benefits within the next twelve months.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Allowance for doubtful accounts	$ 538	$ 438

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Pensions and Other Post-Employment Liabilities

6 Months Ended

Jun. 30, 2012

Pensions and Other Post-Employment Liabilities [Abstract]

Pensions and Other Post-Employment Liabilities

Note 6. Pensions and Other Post-Employment Liabilities

Effective January 20, 2011, the defined benefit pension plan covering the employees at our Eltmann Plant came under the control of the bankruptcy trustee and has been or will be taken over by the German government’s pension security fund. The plan is no longer a responsibility of NN, resulting in a reduction of Accrued pension liabilities of $5,623 on January 20, 2011. We have no remaining pension obligations. (See Note 1 of the Notes to Condensed Consolidated Financial Statements).

Severance Indemnity

In accordance with Italian law, we have an unfunded severance plan covering our Pinerolo Plant employees under which all employees at that location are entitled to receive severance indemnities upon termination of their employment. The table below summarizes the changes to the severance indemnity, included in Other non-current liabilities, for the three and six month periods ended June 30, 2012 and 2011:

	Three months ended June 30,						Six months ended June 30,
(In Thousands of Dollars)	2012			2011			2012			2011
Beginning balance	$	(7,112	)	$	(7,658	)	$	(6,922	)	$	(7,115	)
Amounts accrued		(315	)		(311	)		(628	)		(651	)
Payments to employees		496			120			661			134
Payments to government managed plan		81			168			261			403
Currency impacts		400			(133	)		178			(585	)
Ending balance	$	(6,450	)	$	(7,814	)	$	(6,450	)	$	(7,814	)

Service and Early Retirement Provisions

We have certain plans that cover our Veenendaal Plant employees. A plan provides an award for employees who achieve 25 or 40 years of service and another plan is an award for employees upon retirement. These plans are both unfunded and the benefits are based on years of service and rate of compensation at the time the award is paid. The table below summarizes the combined changes in the plans, included in Other non-current liabilities, during the three month and six month periods ended June 30, 2012 and 2011:

	Three months ended June  30,						Six months ended June 30,
(In Thousands of Dollars)	2012			2011			2012			2011
Beginning balance	$	(829	)	$	(835	)	$	(783	)	$	(749	)
Service cost		(5	)		(6	)		(30	)		(26	)
Interest cost		(7	)		(17	)		(17	)		(38	)
Benefits paid		39			33			54			36
Currency impacts		47			(15	)		21			(63	)
Ending balance	$	(755	)	$	(840	)	$	(755	)	$	(840	)

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Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

Note 5. Segment Information

The segment information and the accounting policies of each segment are the same as those described in the notes to the consolidated financial statements entitled “Segment Information” and “Summary of Significant Accounting Policies and Practices,” respectively, included in our annual report on Form 10-K for the fiscal year ended December 31, 2011. We evaluate segment performance based on segment net income or loss after income taxes. We account for inter-segment sales and transfers at current market prices. We did not have any significant inter-segment transactions during the three and six month periods ended June 30, 2012 and 2011.

(In Thousands of Dollars)	Metal Bearing Components     Segment		Precision Metal Components     Segment		Plastic and Rubber Components     Segment		Corporate and     Consolidations			Total
Three Months ended June 30, 2012
Revenues from external customers	$	65,768	$	22,561	$	10,495	$	—		$	98,824
Net income (loss)	$	6,250	$	1,911	$	800	$	(1,923	)	$	7,038
Six Months ended June 30, 2012
Revenues from external customers	$	137,898	$	43,873	$	21,572	$	—		$	203,343
Net income (loss)	$	13,215	$	3,550	$	1,760	$	(5,578	)	$	12,947
Total assets	$	198,615	$	41,490	$	21,249	$	3,404		$	264,758

(In Thousands of Dollars)	Metal Bearing Components     Segment		Precision Metal Components     Segment			Plastic and Rubber Components     Segment		Corporate and     Consolidations			Total
Three Months ended June 30, 2011
Revenues from external customers	$	84,827	$	19,534		$	11,561	$	—		$	115,922
Net income (loss)	$	8,898	$	(1,130	)	$	918	$	(2,859	)	$	5,827
Six Months ended June 30, 2011
Revenues from external customers	$	168,609	$	35,936		$	22,684	$	—		$	227,229
Net income (loss)	$	18,729	$	(3,338	)	$	1,736	$	(5,793	)	$	11,334
Total assets	$	208,313	$	44,703		$	21,559	$	4,155		$	278,730

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

(In Thousands of Dollars)	Metal Bearing Components     Segment		Precision Metal Components     Segment		Plastic and Rubber Components     Segment		Corporate and     Consolidations			Total
Three Months ended June 30, 2012
Revenues from external customers	$	65,768	$	22,561	$	10,495	$	—		$	98,824
Net income (loss)	$	6,250	$	1,911	$	800	$	(1,923	)	$	7,038
Six Months ended June 30, 2012
Revenues from external customers	$	137,898	$	43,873	$	21,572	$	—		$	203,343
Net income (loss)	$	13,215	$	3,550	$	1,760	$	(5,578	)	$	12,947
Total assets	$	198,615	$	41,490	$	21,249	$	3,404		$	264,758

(In Thousands of Dollars)	Metal Bearing Components     Segment		Precision Metal Components     Segment			Plastic and Rubber Components     Segment		Corporate and     Consolidations			Total
Three Months ended June 30, 2011
Revenues from external customers	$	84,827	$	19,534		$	11,561	$	—		$	115,922
Net income (loss)	$	8,898	$	(1,130	)	$	918	$	(2,859	)	$	5,827
Six Months ended June 30, 2011
Revenues from external customers	$	168,609	$	35,936		$	22,684	$	—		$	227,229
Net income (loss)	$	18,729	$	(3,338	)	$	1,736	$	(5,793	)	$	11,334
Total assets	$	208,313	$	44,703		$	21,559	$	4,155		$	278,730

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 13. Commitments and Contingencies

As described more fully in our Form 10-K for 2011, we continue to monitor the remediation efforts at a former waste recycling vendor used by our former Walterboro, South Carolina facility. The costs associated with the remediation, which has been tentatively approved by the EPA, are estimated to be approximately $10,000. Our allocated share is approximately $132 which has been paid in full as of June 30, 2012. While there can be no assurances, we believe that $132 is the maximum amount for which we will be liable under the tentatively accepted remediation plan.

As discussed more fully in Note 1 of the Notes to Condensed Consolidated Financial Statements, the ultimate impact on NN of Eltmann filing for bankruptcy will depend on the findings of the bankruptcy court. However, until such court proceedings are finalized, we will not be able to determine what liabilities and contingent obligations, if any, might remain as the responsibility of NN. Under advice from legal counsel, NN does not expect any further significant impacts on our consolidated financial statements as a result of the liquidation of this subsidiary.

All other legal matters are of an ordinary and routine nature and are incidental to our operations. Management believes that such proceedings should not, individually or in the aggregate, have a material adverse effect on our business or financial condition or on the results of operations.

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Goodwill, net

6 Months Ended

Jun. 30, 2012

Goodwill, net/Intangible Assets, Net [Abstract]

Goodwill, net

Note 9. Goodwill, net

The changes in the carrying amount of goodwill, net for the six month period ended June 30, 2012 are as follows:

(In Thousands of Dollars)	Metal Bearing Components Segment
Balance as of January 1, 2012	$	8,039
Currency translation impacts		(433	)
Balance as of June 30, 2012	$	7,606

The goodwill balance is tested for impairment on an annual basis during the fourth quarter and between annual tests if a triggering event occurs. As of June 30, 2012, there are no indications of impairment at the remaining reporting unit with a goodwill balance.

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New Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

New Accounting Pronouncements [Abstract]

New Accounting Pronouncements

Note 7. New Accounting Pronouncements

In June 2011, the FASB issued amended accounting guidance related to presentation of comprehensive income. The standards update is intended to help financial statement users better understand the causes of an entity’s change in financial position and results of operation. It is effective for reporting periods beginning after December 15, 2011. We adopted this guidance during the first quarter of 2012. Since this new guidance affected disclosure requirements only, it did not have a material impact on our financial position or results of operations.

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Long-Term Debt and Short-Term Debt

6 Months Ended

Jun. 30, 2012

Long-Term Debt and Short-Term Debt [Abstract]

Long-Term Debt and Short-Term Debt

Note 8. Long-Term Debt and Short-Term Debt

Long-term debt and short-term debt at June 30, 2012 and December 31, 2011 consisted of the following:

	June 30, 2012		December 31, 2011
Borrowings under our $100,000 revolving credit facility bearing interest at a floating rate equal to LIBOR (0.25% at June 30, 2012) plus an applicable margin of 3.00% at June 30, 2012, expiring December 21, 2014.	$	50,136	$	40,989
Borrowings under our $40,000 aggregate principal amount of fixed rate notes bearing interest at a fixed rate of 5.39% maturing on April 26, 2014. Annual principal payments of $5,714 began on April 26, 2008 and extend through the date of maturity.		11,429		17,143
Borrowings under our $20,000 aggregate principal amount of fixed rate notes bearing interest at a fixed rate of 4.64% maturing on December 20, 2018. Annual principal payments of $4,000 will begin on December 22, 2014 and extend through the date of maturity.		20,000		20,000
Total debt		81,565		78,132
Less current maturities of long-term debt		6,650		6,503
Long-term debt, excluding current maturities of long-term debt	$	74,915	$	71,629

On December 20, 2011, we borrowed an additional $20,000 in seven-year fixed rate notes from Prudential Capital at a rate of 4.64%. These notes, which mature on December 20, 2018, are interest-only for the first two years followed by five equal annual principal payments. The proceeds were used to repay existing revolving credit bank debt and to fund growth capital projects.

On September 30, 2011, we amended our $100 million revolving credit agreement agented by KeyBank and our long-term loan agreement with Prudential Capital in order to adjust the fixed charge coverage ratio covenant to better correlate current and expected levels of capital spending and other fixed charges with earnings before taxes, interest and depreciation (EBITDA). The minimum fixed charge coverage ratio was reduced from “not less than 1.25 to 1.00” to “not to be less than 1.00 to 1.00 as of the last day of any fiscal quarter” for the quarters ending September 30, 2011 through September 30, 2012. Starting October 1, 2012, the minimum fixed charge coverage ratio increases to “not to be less than 1.25 to 1.00 as of the last day of any fiscal quarter”. The amendments also provide that we will assure that the total outstanding under the revolving credit agreement shall be at least $10 million less than the total committed amount of $100 million during the period commencing September 30, 2011 and ending on September 30, 2012.

The $100 million revolving credit agreement interest rate is LIBOR plus a margin of 2.5% to 3.5% (depending on the level of the ratio of debt to EBITDA). The facility may be expanded upon our request with approval of the lenders by up to $35 million, under the same terms and conditions. The loan agreement contains customary restrictions on, among other things, additional indebtedness, liens on our assets, sales or transfers of assets, investments, restricted payments (including payment of dividends and stock repurchases), issuance of equity securities, and merger, acquisition and other fundamental changes in our business including a “material adverse change” clause, which if triggered would accelerate the maturity of the debt. The facility has a $10 million swing line feature to meet short term cash flow needs. Any borrowings under this swing line are considered short term. Costs associated with entering into the revolving credit facility were capitalized and will be amortized into interest expense over the life of the facility. As of June 30, 2012, $1,458 of net capitalized loan origination costs related to the revolving credit facility were recorded on the balance sheet within other non-current assets.

Our original $40,000 fixed rate notes agreement with Prudential Capital has an interest rate of 5.39%, which was reduced from 6.50% on December 20, 2011. The $40,000 and $20,000 fixed rate agreements contain customary restrictions on, among other things, additional indebtedness, liens on our assets, sales or transfers of assets, investments, restricted payments (including payment of dividends and stock repurchases), issuance of equity securities, and mergers, acquisitions and other fundamental changes in our business including a “material adverse change” clause, which if triggered would accelerate the maturity of the debt. We incurred costs as a result of issuing these notes which have been recorded on the balance sheet within other non-current assets and are being amortized over the term of the notes. The unamortized balance at June 30, 2012 was $221.

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Intangible Assets, Net

6 Months Ended

Jun. 30, 2012

Goodwill, net/Intangible Assets, Net [Abstract]

Intangible Assets, Net

Note 10. Intangible Assets, Net

The Precision Metal Components Segment has an indefinite lived intangible asset not subject to amortization of $900 related to the value of the trade names of Whirlaway. There are no indicators of impairment for this indefinite lived intangible asset as of June 30, 2012.

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Net Income Per Share (Details Textual) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net Income Per Share (Textual) [Abstract]
Anti-dilutive option excluded from dilutive shares outstanding	1,201	201	1,201	201
Anti-dilutive securities excluded from computation of earnings per share minimum price range	$ 8.86		$ 8.86
Anti-dilutive securities excluded from computation of earnings per share maximum price range one	$ 14.13		$ 14.13
Anti-dilutive securities excluded from computation of earnings per share maximum price range two		$ 14.13		$ 14.13

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Interim Financial Statements (Tables)

6 Months Ended

Jun. 30, 2012

Interim Financial Statements [Abstract]

Summary of the effects of deconsolidation of Eltmann

Cash	$	(979	)
Accounts receivable		(3,388	)
Inventory		(2,407	)
Other assets		(193	)
Property, plant and equipment		(1,343	)
Reduction of total assets	$	(8,310	)
Accounts payable		(1,947	)
Accrued salaries		(1,500	)
Accrued pension		(5,623	)
Accumulated other comprehensive income		551
Reduction of total liabilities and stockholders’ equity	$	(8,519	)
Gain from deconsolidation of bankrupt subsidiary	$	209

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Goodwill, net (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill, net/Intangible Assets, Net [Abstract]

Change in carrying amount of goodwill

(In Thousands of Dollars)	Metal Bearing Components Segment
Balance as of January 1, 2012	$	8,039
Currency translation impacts		(433	)
Balance as of June 30, 2012	$	7,606

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Goodwill, net (Details) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 Metal Bearing Components Segment [Member]
Change in carrying amount of goodwill
Beginning Balance	$ 7,606	$ 8,039
Currency translation impacts			(433)
Ending Balance	$ 7,606	$ 8,039

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Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (USD $) In Thousands	Total	Common Stock	Additional Paid in Capital	Retained Earnings	Accumulated Other Comprehensive Income
Beginning Balance at Dec. 31, 2011	$ 99,676	$ 169	$ 55,071	$ 27,612	$ 16,824
Beginning Balance, Shares at Dec. 31, 2011		16,949
Net income	12,947			12,947
Shares issued for options	6		6
Shares issued for options, Shares	5	5
Stock option expense	519		519
Restricted stock expense	365	1	364
Restricted stock expense, Shares		75
Foreign currency translation loss	(3,158)				(3,158)
Ending Balance at Jun. 30, 2012	$ 110,355	$ 170	$ 55,960	$ 40,559	$ 13,666
Ending Balance, Shares at Jun. 30, 2012		17,029

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Net Income Per Share

6 Months Ended

Jun. 30, 2012

Net Income Per Share [Abstract]

Net Income Per Share

Note 4. Net Income Per Share

Excluded from the dilutive shares outstanding for the three and six month periods ended June 30, 2012 were 1,201 anti-dilutive options which had exercise prices ranging from $8.86 to $14.13. There were 201 anti-dilutive options with an exercise price of $14.13 excluded from the dilutive shares outstanding for the three and six month period ended June 30, 2011.

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Shared-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Shared-Based Compensation [Abstract]

Reconciliation of option activity

Options	Shares (000)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2012		1,141		$	10.12
Granted		285		$	8.85
Exercised		(5	)	$	1.30
Forfeited or expired		(12	)	$	11.69
Outstanding at June 30, 2012		1,409		$	9.88		6.2	$	2,307	(1)
Exercisable at June 30, 2012		979		$	9.61		4.7	$	1,892	(1)

⁽¹⁾  The intrinsic value is the amount by which the market price of our stock was greater than the exercise price of any individual option grant at June 30, 2012.

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Pensions and Other Post-Employment Liabilities (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jan. 20, 2011
Pensions (Textual) [Abstract]
Accrued pension liabilities		$ 5,623
Other pension liabilities		$ 0
First plan for service and early retirement provision	25 or 40 years

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2012

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

Note 14. Fair Value of Financial Instruments

The fair values of our fixed rate long-term borrowings are calculated by using a discounted cash flow analysis factoring in current market borrowing rates for similar types of borrowing arrangements under our credit profile. The current market borrowing rates are Level 2 inputs under the U.S. GAAP fair value hierarchy. The carrying amounts and fair values of our long-term debt are in the table below:

	June 30, 2012				December 31, 2011
(In Thousands of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Variable rate long-term debt	$	50,136	$	50,136	$	40,989	$	40,989
Fixed rate long-term debt	$	31,429	$	32,870	$	37,143	$	37,500