$NNBR reports Q4 and FY2022 financial results and progress on facility consolidation.
Mar 9th 2023, 9:55 pm
Analyst Summary: NN, Inc., a global diversified industrial company, reported financial results for the fourth quarter and full year ending December 31, 2022. Fourth-quarter net sales increased by 6% over the prior year, primarily driven by increased pricing and improved demand associated with electrical components. However, the results were adversely impacted by non-material inflationary cost increases, ongoing supply chain interruptions, especially in China, and product launch inefficiencies in certain North America facilities. Actions have been taken to address these issues through significant price increases for non-material inflation effective January 2023 and corrective action plans to address operating performance issues. Substantial progress was made on the facility consolidation initiative that is expected to significantly improve profitability and free cash flow beginning in 2023. NN achieved its free cash flow outlook for the fourth quarter, and announced amendments to its ABL and term loan that will provide additional flexibility to navigate the challenging and uncertain operating environment. The Company is also in the late stages of negotiations for the sublease of its Taunton, Massachusetts and Irvine, California facilities, with the expected net impact of the subleases to be neutral to cash flow over the remaining term of the leases. The CEO stated, “We are focused on making the necessary changes to improve our operational performance and optimize our footprint to increase profitability…” The Board has actively been interviewing qualified candidates for a new CEO and expects to name one by the second quarter of 2023. Forward-looking statements include the expectation that substantial progress in facility consolidation and cost-saving initiatives will significantly improve profitability and free cash flow beginning in 2023, and that the sublease of its Taunton, Massachusetts and Irvine, California facilities will be neutral to cash flow over the remaining term of the leases. Investors are encouraged to review the Company's full financial results and attend the quarterly investor conference call on March 10, 2023, at 9:00 a.m. ET.