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.