NN(NNBR) - 2025 Q3 - Quarterly Results

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]