NN(NNBR)2025-05-07 21:15Financial Performance - Net sales decreased by $15.5 million, or 12.8%, to $105.7 million for the three months ended March 31, 2025, compared to $121.2 million for the same period in 2024, primarily due to the rationalization of underperforming business and plants, the sale of Lubbock operations, lower volumes, and unfavorable foreign exchange effects of $2.8 million [125]. - Cost of sales decreased by $9.4 million, or 9.3%, to $91.6 million for the three months ended March 31, 2025, compared to $101.1 million for the same period in 2024, primarily due to the decrease in sales [126]. - Selling, general, and administrative expenses decreased by $2.2 million to $11.2 million for the three months ended March 31, 2025, compared to $13.3 million for the same period in 2024, primarily due to lower incentive compensation expense [126]. - Net loss for the three months ended March 31, 2025, was $6.7 million, an improvement of $5.9 million compared to a net loss of $12.5 million for the same period in 2024 [125]. Segment Performance - Net sales in the Mobile Solutions segment decreased by $10.8 million, or 14.8%, to $62.2 million for the three months ended March 31, 2025, primarily due to the closure of the Juarez, Mexico plant and lower volumes [133]. - Net sales in the Power Solutions segment decreased by $4.7 million, or 9.8%, to $43.5 million for the three months ended March 31, 2025, primarily due to the sale of Lubbock operations and lower volumes [135]. - Share of net income from joint venture increased by $0.2 million to $2.4 million for the three months ended March 31, 2025, compared to $2.3 million for the same period in 2024, with the joint venture recognizing net sales of $32.7 million [132]. Assets and Liabilities - Total assets increased by $3.8 million from December 31, 2024, to March 31, 2025, primarily due to increases in accounts receivable and prepaid assets [137]. - Total liabilities increased by $6.6 million during the same period, primarily due to increases in accounts payable and long-term debt [138]. Cash Flow and Operations - Cash used in operations was $3.3 million for the three months ended March 31, 2025, compared to cash provided of $0.7 million for the same period in 2024, primarily due to lower gross margin contributions and an increase in working capital [140]. Debt and Interest Rates - As of March 31, 2025, the principal amount outstanding under the 2021 Term Loan Facility was $114.3 million, with $8.0 million outstanding borrowings under the ABL Facility and $18.3 million available for future borrowings [142][144]. - The effective fixed interest rate for the sale-leaseback transactions of properties was 9.715%, while the weighted average effective interest rate for equipment sale-leaseback transactions was 10.540% [145]. - A one-percent increase in one-month SOFR would result in a net increase in interest expense of $1.1 million on an annualized basis, with the interest rate on outstanding borrowings under the ABL Facility at 5.92% as of March 31, 2025 [153]. Tax and Compliance - The company received a $12.4 million tax refund receivable from the IRS, expected to be received in the first half of 2025 [148]. - The company is in compliance with all requirements under its credit facilities as of March 31, 2025, allowing for optional expansion of available borrowings [144]. Financial Risk Management - The company has established policies to mitigate exposure to financial market risks, including interest rate and foreign currency risks [151][154]. - The company does not hold any foreign currency derivatives as of March 31, 2025 [154]. Working Capital Management - The company participates in accounts receivable sales programs to improve working capital and cash flows, dependent on customer agreements [146][147]. - The company is not materially impacted by seasonality, although certain businesses experience seasonal trends [149].