NN's Debt Refinancing: A Strategic Move for Future Growth

NN Successfully Completes Debt Refinancing Initiative

In a significant move for its financial health and operational growth, NN (NASDAQ: NNBR) has successfully finalized its debt refinancing program. This financial maneuver, executed in two strategic steps, showcases NN's commitment to strengthening its balance sheet and supporting future endeavors.

Details of the Refinancing Steps

The refinancing initiative consists of two distinct steps, aimed at enhancing the company's borrowing capacity and financial flexibility.

Step One: ABL Refinancing with PNC Bank

NN executed its first step by securing an Asset Backed Loan (ABL) refinancing with PNC Bank. This refinancing had initially been disclosed earlier in the year. Key features of this $65 million facility include:

• A five-year maturity extending to 2030.
• Enhanced collateral and improved borrowing limits.
• A $15 million capital expenditure line available at ABL rates.
• In slightly lowered interest rates compared to the previous ABL.

Step Two: Term Loan Refinancing with Marathon Asset Management

Following the ABL, NN announced a new term loan refinancing with Marathon Asset Management. This second step involved an impressive $118 million facility with notable features such as:

• A five-year maturity also set to 2030.
• Enhanced leverage and liquidity covenants, providing a stronger framework for future financial stability.
• A $10 million add-on facility for selective borrowing options.
• While the rates are slightly higher than the previous Term Loan, the overall structure supports aggressive growth.

Leadership Insights on Transformation Goals

Harold Bevis, President and Chief Executive Officer of NN, expressed enthusiasm regarding the completion of this refinancing initiative. In his remarks, he highlighted how this new partnership with Marathon Asset Management marks a pivotal moment for NN, enabling enhanced operational capabilities and accelerating the company's transformation.

Randy Raisman, the Head of US Opportunistic Credit at Marathon Asset Management, added that this partnership aims to facilitate NN's ambitious growth strategy. His team looks forward to working closely with NN as they navigate this transformative period, showcasing a strong commitment to supporting the company’s objectives.

Strategic Goals for Future Growth

Bevis outlined three primary goals for the company's transformation:

1. Organic growth by leveraging the company's existing asset base, valued at $340 million, and over four decades of industry expertise.
2. Streamlining costs by unifying operations and creating a cohesive team structure.
3. Exploring significant merger and acquisition opportunities when favorable conditions arise.

This innovative capital structure empowers NN to advance its transformation plans with vigor and confidence. Bevis reassured stakeholders of the company's commitment to achieving higher performance outcomes moving forward.

Continued Evaluation of Financial Opportunities

NN is actively seeking additional opportunities to optimize its balance sheet and leverage its newly established capital framework. The successful collaboration with PNC Bank and Marathon Asset Management sets the stage for accelerated growth initiatives, marking a future filled with potential for NN.

As NN prepares to move forward, it has committed to transparency by filing a Current Report on Form 8-K with the United States Securities and Exchange Commission to provide further insights on the transaction details.

About NN

NN is recognized as a leading global industrial firm, renowned for its advanced engineering and production capabilities. It specializes in delivering high-precision components and assemblies across diverse markets globally. Headquartered in Charlotte, NN maintains facilities in key regions, including North America, Asia, Europe, and South America, showcasing its extensive footprint in the industrial sector. For further information, please contact NN's Investor Relations at NNBR@alpha-ir.com or reach out at 312-445-2870.

Frequently Asked Questions

What is the significance of NN's refinancing initiative?

NN's refinancing initiative strengthens its financial position and enables future growth by enhancing its borrowing capacity and operational capabilities.

Who are the key partners involved in the refinancing?

The refinancing involves partnerships with PNC Bank for the ABL refinancing and Marathon Asset Management for the term loan.

What are the main goals of NN's transformation plan?

NN's transformation goals include organic growth, cost reduction through team unification, and strategic M&A pursuits.

How will this refinancing impact NN's future strategies?

This refinancing provides NN with the financial flexibility needed to pursue aggressive growth and operational enhancements.

What steps will NN take next after the refinancing?

NN will evaluate additional opportunities to optimize its balance sheet and further accelerate its transformation plans with its new capital structure.

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