NN Inc

Announcement: NNBR 8-K Special Filing

Form 8-K - Current report - Item 5.02 Item 7.01 Item 9.01

Part 1: Performance Analysis

NN, Inc. reported its financial results for the three months ended March 31, 2023, with consolidated net sales of $186.1 million, which is a decrease of around 3.5% compared to the same period in the previous year. The decrease in sales was primarily due to the supply chain disruptions and supply shortages, partly attributable to the ongoing COVID-19 pandemic and geopolitical events such as the Russia-Ukraine conflict. Despite these challenges, the company’s gross profit margin was 21.2%, an increase of 20 basis points over the same period last year. The company had a net loss of $5.6 million, or $(0.19) per diluted share for the quarter, compared to net income (attributable to NN, Inc.) of $9.1 million, or $0.26 per diluted share, in the previous year’s quarter.

The company’s operating expenses for the quarter ended March 31, 2023, were $51.9 million, which was a decrease of around 1.6% compared to the same period in the previous year. Due to cost containment efforts, general and administrative expenses improved as a % of net sales to 8.9% compared to 9.3% in the prior year’s quarter, whereas selling and distribution expenses were higher as a % of net sales, which was primarily due to an increase in freight costs.

In terms of the company’s segments, the Advanced Engineering segment, which includes the company’s Precision Engineering and Power Solutions businesses, reported net sales of $108.6 million, or around 58% of the company’s total net sales. The segment’s net sales decreased by 5.8% compared to the same period in the previous year, primarily due to lower demand, ongoing supply chain disruptions and supply shortages, partly attributable to the COVID-19 pandemic and the Russia-Ukraine conflict. The Mobile Solutions segment, which includes the company’s Mobile Products and Mobile Solutions businesses, reported net sales of $77.5 million, or 42% of the company’s total net sales. The segment’s net sales decreased by around 0.5% compared to the same period in the previous year, primarily due to supply chain disruptions.

Part 2: Forward-Looking Analysis

The company expects to focus on execution and cost discipline to overcome the ongoing headwinds posed by supply chain constraints, which have been exacerbated by factors such as the COVID-19 pandemic, Russia-Ukraine conflict, and inflationary environment. Despite these challenges, the company remains optimistic about its long-term prospects, which are supported by initiatives such as investments in new products, markets, and digital technologies, and a streamlined organizational structure. The company also believes that its financial position and liquidity remain strong, as evidenced by its cash balance of $50.9 million and availability of $70.0 million on its revolving credit facility at the end of the quarter. 

The company’s CEO, Warren Veltman, said, “We have taken steps to address the ongoing challenges by focusing our growth initiatives and rationalizing our footprint. Our initiatives to position the company for long-term success include strengthening our supply chain, investing in new products and deploying digital technology solutions. We are confident that our actions will position the company to deliver strong financial results as the economy continues to recover.”

In terms of industry trends, there is an increasing demand for high-precision components and assemblies, driven by the automotive, medical, and aerospace markets. The company believes that it is well-positioned to address these market opportunities due to its advanced engineering capabilities, in-depth materials science expertise, and global manufacturing footprint.

In conclusion, while the company faces ongoing challenges due to supply chain constraints and the macroeconomic environment, it is focused on executing its strategy and investing in growth initiatives to position the company for long-term success. The company’s strong financial position, broad product offerings, and advanced engineering capabilities are expected to help drive growth over the long term, and they are well-positioned to capitalize on industry trends driven by the growing demand for high-precision components and assemblies.

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Form 10-Q - Quarterly report [Sections 13 or 15(d)]

NN, Inc. reports decrease in sales due to supply chain disruptions and geopolitical events, but remains optimistic. #NNInc #financialresults #supplychain

The financial results of NN, Inc. for the first quarter of 2023 were adversely impacted by macro challenges and new program launch inefficiencies. The company witnessed reduced production volumes resulting from a decrease in residential and commercial construction and the end of COVID-19 restrictions in China, as well as customers reducing inventory levels to buffer against future volume uncertainty. From an operational perspective, the company experienced inefficiencies within the Mobile Solutions group related to product launches. However, the company's liquidity position remains solid and it significantly improved free cash flow performance as compared to the previous year.

The global reduction of indirect labor is expected to start benefiting the company's results in the second quarter. The net sales of NN, Inc. were $127.1 million, a decrease of 1% as compared to the first quarter of 2022, primarily because of reduced volume and unfavorable foreign exchange impacts, partially offset by ongoing pricing actions.

The loss from operations for the first quarter of 2023 increased by $3.4 million primarily due to lower volume and operating inefficiencies, partially offset by pricing in excess of inflation. The net loss also increased to $13.4 million from $10.3 million in the same period last year, due to reduced sales volume, decreased income from the China joint venture, and unfavorable overhead absorption, partially offset by pricing in excess of inflation.

The sales decreased to $78.9 million in the first quarter of 2023 from $83.8 million in the same period last year, primarily due to reduced volume, related to the slowing of residential and commercial construction activity, inventory resets, and the impact of plant closures on aerospace and defense sales, partially offset by pricing. Adjusted income from operations increased to $5.5 million in the first quarter of 2023, primarily due to premium pricing during the closure of the Irvine facility, partially offset by reduced volumes and unfavorable overhead absorption.

The company's conference call to discuss the results will be held on May 5, 2023, at 9:00 a.m. ET. The company has disclosed non-GAAP financial measures, including adjusted income (loss) from operations, adjusted EBITDA, adjusted net income (loss), adjusted net income (loss) per diluted common share, and free cash flow, to provide supplementary information about the impacts of restructuring and integration, foreign exchange impacts, and other non-operating factors.

Form 8-K - Current report - Item 2.02 Item 9.01

$NNBR reports decrease in sales and net loss in Q1 2023 due to macro challenges and inefficiencies in Mobile Solutions group

Part 1: Performance Analysis

NN INC, a public listed company, reported its financial results for the fiscal year ended December 31, 2021, in its Annual Report on Form 10-K. The company has a long-term objective of organic growth within its segments, improved operating margins, cost reduction, optimization of manufacturing footprint, efficient capital deployment, debt leverage ratio improvement, capital management initiatives, and employee health, safety, and satisfaction. The company's management focuses on industry trends, such as electric vehicles and regulatory compliance, and key performance indicators such as sales growth, gross margin, and leverage ratio.

During the fiscal year 2021, the company reported net sales of $1,034 million, a decrease compared to the $1,058 million reported in fiscal year 2020. Gross profit margin improved to 23.9% from 22.9%, which the company attributed to cost reduction initiatives and sale of a low-margin business. Additionally, the company's operating expenses decreased by $15.3 million due to cost-cutting measures undertaken by management. However, the company reported an operating loss of $24.2 million, up from the $8.9 million loss reported in the previous year. The higher operating loss was primarily due to an impairment charge of $38.4 million related to the company's industrial segment.

The company had a strong liquidity position with $128.3 million in cash and cash equivalents at the end of the fiscal year 2021. The company's debt leverage ratio improved to 3.32x from 3.75x due to debt repayment activities. Additionally, the company continued to invest in capital expenditures to optimize its manufacturing footprint, which totaled $32.1 million for the fiscal year.

Part 2: Future Outlook

While the company faced challenges in 2021 due to the pandemic and industry disruptions, it remains confident in its long-term objectives and growth prospects. According to the CEO, Rich Holder, "We remain focused on achieving our long-term goals through disciplined execution of our strategy, continued optimization of our manufacturing footprint, and investment in high-growth markets and products." The company expects to see growth opportunities in electric vehicles and electrification, which aligns with the industry trend of sustainable transportation.

Management also anticipates continued cost pressures related to inflationary environments, including raw materials, wages and benefits, regulatory compliance, and energy costs. The company plans to offset these pressures through continued cost reduction initiatives and efficiency improvements. The company's capital management initiatives, such as debt repayment and optimization of its manufacturing footprint, are expected to further improve its financial position.

Overall, NN INC remains optimistic about its long-term prospects, despite the challenges faced in 2021. The company's focus on organic growth, cost reduction, and efficient capital deployment, combined with industry trends in sustainable transportation, position it well for future success.

Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405]

Announcement: NNBR 8-K Special Filing

Announcement: NNBR 8-K Special Filing

Announcement: NNBR 8-K Special Filing

Announcement: NNBR 8-K Special Filing

NN, Inc. reports decrease in sales due to supply chain disruptions and geopolitical events, but remains optimistic. #NNInc #financialresults #supplychain

NN, Inc. reports decrease in sales due to supply chain disruptions and geopolitical events, but remains optimistic. #NNInc #financialresults #supplychain

$NNBR reports decrease in sales and net loss in Q1 2023 due to macro challenges and inefficiencies in Mobile Solutions group

$NNBR reports decrease in sales and net loss in Q1 2023 due to macro challenges and inefficiencies in Mobile Solutions group

Announcement: NNBR 8-K Special Filing

Announcement: NNBR 8-K Special Filing

NN INC Reports Gross Margin Improvement & Strong Liquidity

NN INC Reports Gross Margin Improvement & Strong Liquidity