Q4 & Full Year 2025 EARNINGS PRESENTATION Transforming Precision and Powering the Next Generation of Innovation FORWARD LOOKING STATEMENTS This presentation contains express and implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook forthe full year of fiscal2026, the impact of, and our ability to execute, ourcorporate strategies and businessinitiatives, the potential impact tariffs, high interest ra ...

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Investment Rating - The report indicates a contraction in the manufacturing sector with a PMI of 49.0 in February, signaling a negative investment outlook for the industry [1][3]. Core Insights - The manufacturing sector is experiencing a contraction due to seasonal factors, particularly the Chinese New Year, which has dampened factory activity [1][3]. - The output index has dropped to 49.6, the lowest level since May 2023, indicating a decline in production [1][3]. - Business expectations have improved slightly, with the index rising to 53.2, suggesting potential optimism for future performance [1][3]. Summary by Relevant Sections PMI Overview - The manufacturing PMI is reported at 49.0, indicating contraction [1][3]. - The output index is at 49.6, new orders at 48.6, and new export orders at 45.0, all showing declines [1][3]. Sub-Indices Performance - 10 out of 13 sub-indices declined compared to the previous month, reflecting a broad contraction in the sector [1][3]. - The new orders index decreased by 0.6 points to 48.6, while new export orders fell by 2.8 points to 45.0 [1][3]. - The employment index edged down to 48.0, indicating a contraction in employment levels [1][3]. Enterprise Size Analysis - The PMI for large enterprises increased to 51.5, while medium and small enterprises saw declines to 47.5 and 44.8, respectively [4][5]. - New orders for large enterprises remained in the expansionary zone at 53.3, contrasting with medium and small enterprises which are in contraction [6][7]. Price Indices - Input prices index decreased to 54.8, indicating rising material costs but at a slower pace [1][3][13]. - Ex-factory prices remained unchanged at 50.6, suggesting stable pricing conditions for manufacturers [1][3][14]. Future Outlook - The business expectations index rose to 53.2, indicating a more optimistic outlook for the coming months [1][3][17].

Core Insights - NN, Inc. has achieved its third consecutive year of improved financial performance, with expectations for continued growth in 2026, including a return to organic net sales growth [4][6] - The company has completed the most capital-intensive phase of its transformation plan, which involved plant closures and realignment of headcount, positioning itself as a healthier and more focused entity [4][6] - NN forecasts adjusted EBITDA for 2026 to be between $50 million and $60 million, indicating a fourth consecutive year of improvement [4][27] Financial Highlights - Q4 2025 net sales were $104.7 million, a decrease of 1.7% from Q4 2024's $106.5 million, primarily due to rationalization efforts and lower volumes [5][7] - Full-year 2025 net sales totaled $422.2 million, down 9.1% from $464.3 million in 2024, attributed to business rationalization and unfavorable foreign exchange effects [10] - Q4 2025 adjusted EBITDA was $12.9 million, representing 12.3% of net sales, compared to $12.1 million or 11.3% of sales in Q4 2024 [13][51] Operational Highlights - The company secured approximately $70 million in new business wins in 2025, exceeding guidance and bringing the three-year cumulative total to over $200 million [5][6] - NN achieved a hit rate of over 20% on new business opportunities, with more than 170 new sales program awards launched in 2025 or set to launch in 2026 [5][6] - The sales pipeline exceeds $800 million across more than 800 programs, focusing on higher-growth markets such as data centers and electrical infrastructure [5][6] 2026 Outlook - For fiscal 2026, NN is guiding net sales between $445 million and $465 million, reflecting a return to year-over-year growth [27][34] - The company plans to launch approximately 100 new programs in 2026, which are expected to enhance EBITDA and cash flow profiles [6][34] - New business wins are anticipated to increase to a range of $70 million to $80 million in 2026 [6][34]

Revenue growth of 21.6% was primarily driven by the manufacturing team's efficient conversion of a robust order book despite seasonal holiday shutdowns and adverse weather. The company achieved a 'six for six' win rate on major 2026 Major League Baseball projects, attributed partly to a key competitor taking a 'backseat' in the marketplace. Transportation segment orders reached record levels, increasing 130% year-over-year due to significant wins with a top-five U.S. airport and Caltrans. Gross prof ...

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Core Insights - The company faced a challenging fiscal 2025, with revenue declining 9% year-over-year to $249 million and adjusted EBITDA decreasing to $19.4 million, representing a 7.8% margin compared to 9.6% in the previous year [1][6][11] - Despite the overall decline, there were signs of stabilization in the market towards the end of the fiscal year, with sequential improvement in the fourth quarter suggesting a potential trough in performance [2][3][7] Financial Performance - Fiscal 2025 revenue was reported at $249 million, down from $272.8 million in fiscal 2024, while fourth-quarter sales fell to $57.5 million, a 13.7% decrease year-over-year but a 4% increase sequentially [6][11] - Gross margin for the fourth quarter was 22.8%, slightly down from 23.0% in the prior year, attributed to higher material costs [8] - Operating profit in the fourth quarter was $2.2 million, or 3.8% of sales, compared to $3.0 million, or 4.5%, in the prior year [11] Cost Management and Restructuring - The company executed restructuring initiatives that generated approximately $4 million in annual savings and divested the underperforming Centralia Mold unit [5][14] - Selling and administrative expenses decreased by $1.2 million, or 10.5%, in the fourth quarter due to lower commissions and legal fees [10] Debt and Capital Management - The company refinanced its credit facility, entering into a new $100 million, five-year revolving credit facility, with $66 million available as of March 3, 2026 [16] - Debt was reduced by $8.7 million, and the company returned $2.7 million to shareholders through dividends and share repurchases [18] Future Outlook - Leadership expressed cautious optimism for fiscal 2026, citing improving order flow and OEM signals, and plans for disciplined M&A to drive growth [4][19] - Governance changes were implemented to improve agility and shareholder alignment, including board size reduction and bylaw updates [20]

Core Insights - US private employers added 63,000 jobs in February, surpassing expectations and marking the best monthly gains since July [1][2] - Economists had anticipated an increase of 50,000 jobs, following a revised lower gain of 11,000 positions in January [2] - The hiring surge was primarily driven by the construction, education, and healthcare sectors, while manufacturing and business services experienced job losses [2] Employment and Wage Trends - ADP's chief economist noted an increase in hiring and solid pay gains, particularly for those who remain in their jobs [3] - However, the data indicated that hiring was concentrated in a few sectors, leading to a record low pay premium for job-switchers in February [3] - Annual pay increased by 4.5%, while the median pay change for job-changers was 6.3% [3] Labor Market Outlook - The upcoming Labor Department report is expected to provide a more comprehensive view of February's labor situation, suggesting potential stabilization in the job market [4] - The narrative of dismal hiring rates in 2025 may be shifting, with relatively low layoffs and a trend of job-hugging becoming evident [4]

Group 1 - Private sector added 63,000 jobs in January, below economists' estimates of 50,000 jobs [1] - Previous month's payrolls were revised down to a gain of 11,000 from an initial report of 22,000 [1] Group 2 - Hiring and pay gains are solid, particularly for job-stayers, but concentrated in a few sectors [2] - The pay premium for switching employers reached a record low in February [2] - Education and health services led job creation with 58,000 positions added [2] Group 3 - Construction added 19,000 jobs, information gained 11,000, and other services added 6,000 [2] - Financial activities and natural resources and mining each added 2,000 jobs, while leisure and hospitality added 1,000 [3] - Professional and business services lost 30,000 jobs, manufacturing lost 5,000, and trade, transportation, and utilities lost 1,000 [3]