NN, Inc. Reports Third Quarter Results
NN, Inc. (NASDAQ: NNBR) has once again highlighted its resilience and strategic focus through the latest financial results for the third quarter. The company has continued to deliver noticeable improvements across various key performance metrics, with operational income, margin performance, and free cash flow showing robust growth.
Financial Highlights of the Quarter
In the third quarter, NN, Inc. reported net sales amounting to $103.9 million. This figure reflects a decrease of 8.5% compared to the previous fiscal year, primarily influenced by the overall softness in automotive markets. However, it is worth noting that the Power Solutions segment reported increased sales growth of 4.7%. Meanwhile, the Mobile Solutions segment experienced a decline of 16.4% during the same period.
Key Performance Indicators
The operational performance indicators for the third quarter have shown positive trends. The gross margin improved significantly to $17.5 million, equating to 16.8% of total sales. When adjusting for one-time factors, the adjusted gross margin reached $19.6 million, which stands at 18.8% of sales, a marked increase from the previous year. The operating loss decreased to $2.2 million, reflecting improved operational efficiency, compared to a loss of $3.8 million in the prior year.
Further enhancements included an adjusted EBITDA of $12.4 million, translating to a margin rate of 11.9%. Free cash flow also saw considerable improvement at $9.1 million, marking a significant step toward better financial health.
Strategic Movements and Business Wins
During the quarter, NN, Inc. secured new business wins totalling $11.3 million, with significant contributions from automotive, fire protection, and aerospace and defense sectors. Year-to-date wins reached an impressive $44.4 million, with the company targeting approximately $48 million in run-rate value from new programs anticipated to launch in 2025.
Comments from Leadership
President and CEO Harold Bevis highlighted the balanced approach taken by NN, Inc. to foster growth, rationalize unprofitable segments, and optimize costs. He expressed confidence in the company's transformation initiatives, which are expected to further boost operational income, gross margins, and positive free cash flow. He said, “While we face macroeconomic challenges, we are also seeing optimistic forecasts from our recent program wins, contributing positively to our performance.”
Rationalization Efforts
Bevis mentioned the nearing completion of the rationalization of the unprofitable segments within the Mobile Solutions business. The company has embarked on consolidating operations as part of its five-year plan to enhance operational efficiency and cash flow management.
Preparation for Future Growth
Moving forward, NN, Inc. is gearing up for substantial growth in various segments, with a keen focus on electrical, medical, and defense industries. Key hires in these domains are aimed at expanding the company's commercial capabilities. With over $60 million worth of new business launches forecasted for 2026, NN, Inc. is poised for solid growth trajectories in the upcoming fiscal periods.
2025 and 2026 Outlook
Looking ahead, NN, Inc. has adjusted its 2025 full-year guidance for net sales between $420 million and $440 million while maintaining existing expectations for adjusted EBITDA, free cash flow, and new business wins. For 2026, an improving outlook for core markets is anticipated, which supports growth targets in net sales and profitability.
Conclusion and Contacts
As NN, Inc. continues to execute its strategic initiatives, shareholders can look forward to strengthened cash flows and enhanced operational performance. For further inquiries, the company’s investor relations can be reached via the email address NNBR@alpha-ir.com or by calling 312-445-2870.
Frequently Asked Questions
1. What were NN, Inc.'s net sales for the third quarter?
Net sales for the third quarter amounted to $103.9 million, reflecting an 8.5% decrease compared to the previous year.
2. How did the Power Solutions segment perform?
The Power Solutions segment achieved a sales growth of 4.7% compared to the previous fiscal year.
3. What improvements did NN, Inc. see in its gross margin?
The company reported a gross margin of $17.5 million, which is 16.8% of sales, compared to 14.5% the previous year.
4. What are the company's expectations for the future growth?
NN, Inc. anticipates over $60 million in new business launches for 2026, contributing to a solid growth outlook.
5. How can I contact NN, Inc. for investor inquiries?
You can reach NN, Inc. investor relations at NNBR@alpha-ir.com or call 312-445-2870 for assistance.
