Financial Performance - Net sales were $103.9 million, a decrease of 8.5% year-over-year[11, 16] - Adjusted EBITDA increased by 6.9% to $12.4 million, with a margin of 11.9%, up 170 bps year-over-year[11, 16] - Adjusted gross margin improved to 18.8%, a 350 bps increase compared to Q1 2025[11] - Adjusted operating income increased significantly by 207.7% to $4.0 million[11, 16] - Free cash flow was $9.1 million, reflecting a $20.9 million improvement over the past two years[11] Business Segments - Power Solutions net sales increased by 4.6% to $44.9 million, with adjusted EBITDA up 39.1% to $8.9 million[27] - Mobile Solutions net sales decreased by 16.4% to $59.1 million, with adjusted EBITDA down to $6.7 million[31] Strategic Initiatives - New business wins totaled $11.3 million, representing 3.9% of net sales[11] - The company is actively pursuing strategic M&A opportunities to scale and accelerate growth[9, 49] - The company is initiating discussions to refinance preferred equity to create a new capital structure for sustained M&A and common equity value accretion[9] Outlook and Guidance - The company maintains its guidance for adjusted EBITDA ($53 - $63 million), free cash flow ($14 - $16 million), and new business wins ($60 - $70 million) on slightly lower sales ($420 - $440 million)[52]

Core Insights - NN Inc. reported a quarterly loss of $0.01 per share, aligning with the Zacks Consensus Estimate, compared to a loss of $0.05 per share a year ago [1] - The company generated revenues of $103.88 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 7.44% and down from $113.59 million year-over-year [2] - NN shares have declined approximately 42.5% year-to-date, contrasting with the S&P 500's gain of 17.2% [3] Financial Performance - The company has surpassed consensus EPS estimates three times over the last four quarters, with a notable surprise of +300% in the previous quarter [1] - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $110.2 million, with breakeven expected on revenues of $436.04 million for the current fiscal year [7] Industry Context - NN operates within the Zacks Metal Products - Procurement and Fabrication industry, which is currently ranked in the top 8% of over 250 Zacks industries [8] - The performance of NN's stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8] Future Outlook - The sustainability of NN's stock price movement will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The estimate revisions trend for NN was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Financial Performance - Net sales for Q3 2025 were $103.9 million, a decrease of 8.5% compared to $113.6 million in Q3 2024, primarily due to the rationalization of the underperforming Mobile Solutions business[4] - Adjusted EBITDA for Q3 2025 was $12.4 million, or 11.9% of sales, compared to $11.6 million, or 10.2% of sales, for the same period in 2024[9] - The company expects full-year 2025 net sales to range between $420 to $440 million, with adjusted EBITDA between $53 to $63 million[18] - Net sales for Q3 2025 were $103,882 thousand, a decrease of 8.5% from $113,587 thousand in Q3 2024[25] - GAAP net sales decreased to $103,882,000 in Q3 2025 from $113,587,000 in Q3 2024, a decline of 8.6%[34] Profitability Metrics - Gross margin improved to $17.5 million (16.8% of sales) and adjusted gross margin improved to $19.6 million (18.8% of sales), up from $16.5 million (14.5%) and $18.6 million (16.3%) in the prior year[4] - Adjusted gross profit for Q3 2025 was $19,538 thousand, with an adjusted gross margin of 18.8%, up from 16.3% in Q3 2024[30] - Non-GAAP adjusted income from operations for Q3 2025 was $4,049 thousand, compared to $1,285 thousand in Q3 2024, indicating improved operational efficiency[31] - Non-GAAP adjusted EBITDA for Q3 2025 was $12,365,000, up from $11,576,000 in Q3 2024, reflecting a growth of 6.8%[34] - Non-GAAP adjusted EBITDA margin improved to 11.9% in Q3 2025 from 10.2% in Q3 2024[34] Cash Flow and Working Capital - Free cash flow improved to $9.1 million, compared to $0.3 million for the same period in 2024, indicating a significant step change in working capital management[11] - Net cash provided by operating activities rose to $11,125,000 in Q3 2025, up from $4,958,000 in Q3 2024, marking a growth of 124.0%[38] Segment Performance - Power Solutions segment net sales increased to $44.9 million in Q3 2025 from $42.9 million in Q3 2024, driven by higher precious metal pass-through pricing[12] - Mobile Solutions segment net sales decreased to $59.1 million in Q3 2025 from $70.7 million in Q3 2024, primarily due to the rationalization of underperforming business[14] - New business wins for Q3 2025 totaled $11.3 million, with a total of $44.4 million in wins through the third quarter, and approximately $48 million expected run-rate value from new programs[4] Losses and Expenses - The net loss for Q3 2025 was $6,679 thousand, compared to a net loss of $2,557 thousand in Q3 2024, reflecting a significant increase in losses[25] - GAAP net loss for Q3 2025 was $6,679,000, compared to a loss of $2,557,000 in Q3 2024, representing an increase in losses of 161.5%[34] - The company incurred interest expenses of $5,666 thousand in Q3 2025, compared to $5,404 thousand in Q3 2024, indicating rising financing costs[25] - Personnel costs increased to $2,075,000 in Q3 2025 from $734,000 in Q3 2024, an increase of 183.4%[34] - Depreciation and amortization expenses decreased to $9,064,000 in Q3 2025 from $10,844,000 in Q3 2024, a reduction of 16.4%[34] Balance Sheet Highlights - Cash and cash equivalents at the end of Q3 2025 were $12,215 thousand, down from $18,128 thousand at the beginning of the year[29] - Total assets decreased to $450,962 thousand as of September 30, 2025, from $456,893 thousand at the end of 2024[27] - Total liabilities increased to $294,043 thousand as of September 30, 2025, compared to $288,874 thousand at the end of 2024[27] - The company reported a share of net income from joint ventures of $1,979 thousand in Q3 2025, slightly down from $2,185 thousand in Q3 2024[25] - The company reported a non-GAAP adjusted net loss of $279,000 in Q3 2025, compared to a loss of $2,482,000 in Q3 2024[37] - GAAP net loss per diluted common share was $0.24 in Q3 2025, compared to $0.13 in Q3 2024[37] Strategic Outlook - The company is actively evaluating multiple acquisition opportunities as part of an aggressive M&A program to enhance shareholder value[6] - NN anticipates an improving core markets outlook in 2026, supporting net sales growth and profitability, with over $60 million of new business launches already forecasted[18]

Core Insights - NN, Inc. reported a decrease in net sales of 8.5% to $103.9 million for Q3 2025, primarily due to the rationalization of the underperforming Mobile Solutions business and lower volumes [4][6][12] - The company achieved improvements in gross margin, adjusted EBITDA, and free cash flow, indicating progress in its transformation plan [3][4][8] - NN is actively pursuing strategic value creation through M&A and refinancing initiatives, while also addressing operational inefficiencies [3][5][22] Financial Performance - Net sales decreased from $113.6 million in Q3 2024 to $103.9 million in Q3 2025, with Power Solutions segment sales growing by 4.7% and Mobile Solutions declining by 16.4% [4][6][12] - Gross margin improved to $17.5 million (16.8% of sales) and adjusted gross margin to $19.6 million (18.8% of sales), up from $16.5 million (14.5%) and $18.6 million (16.3%) respectively [4][8] - Adjusted EBITDA increased to $12.4 million with an 11.9% margin, compared to $11.6 million and a 10.2% margin in Q3 2024 [8][36] Strategic Initiatives - The company is nearing completion of the rationalization of its unprofitable Mobile Solutions business, with one plant consolidation remaining [3][5] - NN is launching approximately $48 million in new programs in 2025, which are expected to contribute to top-line growth [3][5] - The company is expanding its Electrical, Medical, and Defense commercial teams to enhance its market position [5][22] Cash Flow and Working Capital - Free cash flow improved significantly to $9.1 million in Q3 2025, compared to $0.3 million in Q3 2024, reflecting better working capital management [4][9][41] - The company has seen a step change in working capital, strengthening its cash flow performance [5][9] Market Outlook - NN anticipates an improving outlook for core markets in 2026, which is expected to support net sales growth and profitability [16][22] - The company is adjusting its full-year 2025 guidance for net sales while maintaining existing ranges for adjusted EBITDA and free cash flow [14][22]

Financial Performance - Net sales decreased by $9.7 million, or 8.5%, during the three months ended September 30, 2025, primarily due to the rationalization of underperforming business and lower volumes [147]. - Net loss for the three months ended September 30, 2025, was $6.7 million, compared to a net loss of $2.6 million in the same period of 2024, representing an increase in loss of $4.1 million [147]. - For the nine months ended September 30, 2025, net sales decreased by $40.3 million, or 11.3%, primarily due to the rationalization of underperforming business and lower volumes [161]. - Net sales in the Mobile Solutions segment decreased by $31.8 million, or 14.7%, during the nine months ended September 30, 2025, primarily due to rationalization of underperforming business and lower volume in North America [170]. - Net sales in the Power Solutions segment decreased by $8.2 million, or 5.8%, during the nine months ended September 30, 2025, primarily due to the sale of Lubbock operations and lower volumes [172]. Cost Management - Cost of sales decreased by $10.7 million, or 11.0%, during the same period, primarily due to the decrease in sales [148]. - Cost of sales decreased by $31.7 million, or 10.6%, during the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to the decrease in sales [162]. - Selling, general, and administrative expenses decreased by $2.8 million during the nine months ended September 30, 2025, primarily due to lower compensation expenses from a reduction in headcount [162]. - The company identified two manufacturing facilities to close, which is expected to reduce costs and improve operational efficiency [146]. Tax and Interest - The effective tax rate for the three months ended September 30, 2025, was (10.4)%, compared to (23.5)% for the same period in 2024 [153]. - The effective tax rate was (11.5)% for the nine months ended September 30, 2025, compared to (5.3)% for the same period in 2024, impacted by accrual of tax on unremitted earnings [167]. - Interest expense increased by $0.3 million during the three months ended September 30, 2025, primarily due to average debt balances and interest rates [151]. Assets and Liabilities - Total assets decreased by $5.9 million from December 31, 2024, to September 30, 2025, primarily due to a decrease in property, plant, and equipment [174]. - Total liabilities increased by $5.2 million during the same period, primarily due to increases in accounts payable and long-term debt [175]. Financing Activities - The principal amount outstanding under the Term Loan Facility as of September 30, 2025, was $119.8 million [180]. - The company entered into a Term Loan Credit Agreement establishing a new $128.0 million senior secured Term Loan Facility, maturing on April 16, 2030 [179]. Joint Ventures - The share of net income from the joint venture decreased during the three months ended September 30, 2025, with net sales of $33.3 million compared to $32.4 million in 2024 [154]. Cash Flow - Cash provided by operations was $7.1 million for the nine months ended September 30, 2025, compared to $4.4 million for the same period in 2024, due to improved management of working capital [177].

Core Viewpoint - NN, Inc. is set to release its third quarter 2025 financial results on October 29, 2025, with a conference call scheduled for October 30, 2025, at 9:00 a.m. E.T. [1] Company Information - NN, Inc. is a global diversified industrial company that specializes in engineering and manufacturing high-precision components and assemblies for various markets [3] - The company is headquartered in Charlotte, North Carolina, and operates facilities across North America, Europe, South America, and Asia [3] Investor Relations - Investors and interested parties can participate in the conference call by registering through the company's Investor Relations website [2] - A replay of the conference call will be available on NN's website until October 31, 2026 [2] - Contact information for investor relations includes Joe Caminiti and Stephen Poe, reachable via email at NNBR@alpha-ir.com or by phone at 312-445-2870 [4]

Summary of NN Inc. Conference Call - October 08, 2025 Company Overview - **Company Name**: NN Inc. (NasdaqGS: NNBR) - **Industry**: Precision component manufacturing - **Core Competencies**: Machining, stamping, precious metal plating - **Leadership**: Harold Bevis (President and CEO), Tim French (COO), Chris Bohnert (CFO) [1][2] Key Points and Arguments Transformation and Business Development - NN Inc. is in the second phase of its transformation, having corrected previous issues and initiated a business development program [2][3] - The company aims to secure $200 million in new business by the end of 2025, with a robust pipeline of $750 million [3][10] - The company has pivoted in its business areas, focusing on profitable segments and shedding unprofitable ones [3][10] Financial Performance - Current revenue stands at $434 million, with an additional $130 million from a joint venture not consolidated in financials [4] - EBITDA margin has improved from 8.8% in 2023 to 11.1% in 2025, with a long-term goal of around 14% [10][11] - Adjusted gross margins increased from 16.3% to 18.2%, aiming for a 20% target [9][10] Market Dynamics - 40% of revenue is tied to the automotive sector, which is experiencing turmoil in Europe and the U.S. due to tariffs, while the Chinese market remains strong [6][8] - The company is also focusing on defense and electronic systems, which are growing in the U.S. market [7][22] - Medical equipment is a re-entered market, with ongoing efforts to expand capabilities and production [7][26] Operational Efficiency - The company has implemented a cost program to offset inflation and improve productivity, targeting $15 million in cost reductions for 2025 [9][11] - Working capital improvement is ongoing, with a target to reduce it from 20% of sales to 17% [12] M&A Strategy - NN Inc. is actively pursuing M&A opportunities, focusing on cultural fit and commercial synergies [13][14] - The leadership team has significant experience in acquisitions, with plans to complete transactions by the end of 2025 or early 2026 [14][32] Challenges and Opportunities - Tariffs are impacting the industry but are seen as an opportunity for NN Inc. to attract new business by sourcing materials locally [18][19] - The company is addressing preferred equity and capital structure to reduce costs and support future M&A activities [28][29] Additional Important Content - The company has a global footprint with operations across four continents and 24 plants, including three in China [5] - NN Inc. has a strong focus on quality, achieving Six Sigma standards and maintaining green scorecards with major customers [11][12] - The leadership team emphasizes a culture of continuous improvement and operational efficiency [10][11] This summary encapsulates the key insights from the conference call, highlighting NN Inc.'s strategic direction, financial performance, market dynamics, operational efficiency, and M&A strategy.

Core Viewpoint - NN, Inc. will present at the Noble Capital Markets Emerging Growth Virtual Equity Conference on October 8, 2025, highlighting its position as a global diversified industrial company specializing in high-precision components and assemblies [1][2]. Company Overview - NN, Inc. is a global diversified industrial company that combines advanced engineering and production capabilities with materials science expertise to manufacture high-precision components and assemblies for various markets [4]. - The company is headquartered in Charlotte, North Carolina, and operates facilities across North America, Europe, South America, and Asia [4]. Event Details - The presentation is scheduled to begin at 2:00 p.m. ET on October 8, 2025, and interested investors can register to access the live webcast [2]. - In addition to the webcast, executive management will conduct one-on-one and group meetings with registered investors and analysts during the conference [3].

Core Insights - NN, Inc. has strengthened its Aerospace and Defense business by obtaining a Federal Firearms License (FFL) and registering with the U.S. Department of State's Directorate of Defense Trade Controls (DDTC) under ITAR, enhancing its ability to serve U.S. and allied defense customers [1][2] Aerospace and Defense Business Update - The company views its Aerospace and Defense segment as a significant growth platform, leveraging its ITAR registration and FFL license alongside U.S.-based manufacturing capabilities to deliver high-quality, mission-critical components [2] - NN has secured a new business relationship with a well-known specialty firearms manufacturer, leading to the prototyping and launching of new parts for various programs, indicating potential for substantial growth in this area [2][3] Manufacturing Capabilities - NN's Aerospace and Defense operations provide precision components, plating services, and assemblies for applications including guidance systems, weapon components, and electronic subsystems, supported by ITAR-registered facilities and FFL licensing [1][2] - The General Metal Finishing (GMF) division has over 50 years of experience in high-reliability defense programs, offering various plating and finishing services that meet military specifications [3] - The Polymet division supplies advanced clad metal solutions, enhancing performance in weaponry components and aerospace applications, backed by ISO 9001:2015 quality systems [4] Strategic Positioning - NN's facilities are strategically located across the U.S., enabling secure production of plating, machining, clad metals, and electronics for a range of defense programs [5] - The company anticipates an increase in Aerospace and Defense-related revenue as new opportunities arise from government programs and prime contractors, with plans to expand capabilities and product offerings [6]

Core Insights - NN, Inc. has promoted Gregg Cottage to Chief Information Officer and Chief Information Security Officer, enhancing its focus on information technology and cybersecurity strategies [1][2] - Mr. Cottage has over 30 years of IT experience and has been with NN since 2014, previously holding roles such as Global IT Infrastructure Manager and Global Director of Information Technology [2] - The company emphasizes the importance of aligning enterprise IT with business goals and leveraging data-driven intelligence to drive innovation and customer solutions [2] Company Overview - NN, Inc. is a global diversified industrial company that designs and manufactures high-precision components and assemblies, with a presence in North America, Europe, South America, and Asia [3] - The company combines advanced engineering and production capabilities with materials science expertise to serve various markets globally [3]