• Fourth Quarter Net Sales: $106.5 million, reflecting a 5% decline compared to Q4 of last year.
• Fourth Quarter Adjusted Operating Income: $2.4 million, a $3.8 million improvement over the prior-year quarter.
• Fourth Quarter Adjusted EBITDA: $12.1 million, a 21% increase from the $10 million in Q4 of 2023.
• Full Year Net Sales: $464.3 million, declining 5% compared to 2023.
• Full Year Adjusted Operating Income: $5.1 million, up 65% versus $3.1 million in fiscal 2023.
• Full Year Adjusted EBITDA: $48.3 million, marking a 12% increase year-over-year.
• Power Solutions Fourth Quarter Net Sales: $39.2 million, a decline primarily due to the sale of the Lubbock facility.
• Power Solutions Full Year Net Sales: $180.5 million, down slightly from $185.9 million in the prior year.
• Mobile Solutions Fourth Quarter Revenue: $67.4 million, a decline of just over 2%.
• Mobile Solutions Fourth Quarter Adjusted EBITDA: $10 million, up from $7.1 million in the prior-year period.
• Mobile Solutions Full Year Revenue: $283.9 million, down from $303.3 million in fiscal 2023.
• Mobile Solutions Full Year Adjusted EBITDA: $35.6 million, up more than 19% from $29.8 million in full-year 2023.
• 2025 Outlook Net Sales: Projected in the range of $450 million to $480 million.
• 2025 Outlook Adjusted EBITDA: Projected in the range of $53 million to $63 million.

• Warning! GuruFocus has detected 5 Warning Signs with NNBR.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NN Inc (NASDAQ:NNBR) has secured approximately $150 million in new business awards, indicating strong business development efforts.
• The company has implemented a 'fix-it or close-it' program for underperforming plants, leading to operational improvements.
• NN Inc (NASDAQ:NNBR) has successfully closed two plants and is in the process of closing another, which is expected to improve profitability.
• The company has achieved a 21% increase in adjusted EBITDA for the fourth quarter, reflecting improved operational efficiencies.
• NN Inc (NASDAQ:NNBR) is on track with its five-year plan, having completed 60% of its transformation goals, including leadership restructuring and cost reduction initiatives.

Negative Points

• Fourth-quarter net sales declined by 5% compared to the previous year, impacted by the sale of a facility and strategic volume rationalization.
• The company faces challenges with tariffs and reshoring, which could impact future operations and profitability.
• Despite improvements, some facilities still need to focus on improving free cash flow, particularly in the Marnaz, France facility.
• The company is still in the process of refinancing its term loan, which could affect financial flexibility.
• NN Inc (NASDAQ:NNBR) has experienced a decline in full-year net sales by 5%, driven by strategic exits and foreign exchange impacts.

Q & A Highlights

Q: Can the EBITDA margin of the Group of 7 plants reach the 10% level, and how would that affect the company's overall adjusted EBITDA margin? A: Harold Bevis, CEO, explained that the Group of 7 plants have open capacity and good machinery, which can be optimized for better revenue. Tim French, COO, added that eliminating past due backlogs has improved customer scorecards, allowing for better commercial opportunities. Increasing volume and operational improvements are key to reaching higher margins.

Q: Could you provide an update on the medical and electrical components businesses? A: Harold Bevis, CEO, stated that the medical business aims to grow to $50 million organically, with a current pipeline of $25 million. The company is on track with its goals, shipping medical products from 11 plants. The electrical components business is largely an approved supplier, with a focus on stamped products across various sectors.

Q: How might tariffs and reshoring impact NN Inc.? A: Harold Bevis, CEO, noted that NN Inc. is not heavily impacted by Class 8 truck tariffs but is seeing some reshoring benefits. The company is launching 11 programs that have moved from China to the U.S., which should help optimize revenue and capacity utilization.

Q: What steps are needed to achieve the long-term 20% gross margin goal? A: Harold Bevis, CEO, mentioned that fixing underperforming plants and onboarding accretive business are crucial. The company is implementing shared overhead structures and focusing on revenue growth, particularly in the France plant, which has secured a significant win.

Q: How is NN Inc. managing the impact of tariffs and reshoring on its operations? A: Harold Bevis, CEO, explained that the automotive segment is most affected by tariffs, but changes are slow due to safety and testing requirements. The company is seeing some proactive reshoring, with minimal direct impacts on costs and pipeline, and is monitoring industry-wide effects.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.