NN, Inc. Reports Third Quarter 2025 Results

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]