Improvement in Operating Income, Adjusted EBITDA, and New Business Program
Company Reiterates Full Year 2025 Guidance
CHARLOTTE, N.C., Aug. 06, 2025 (GLOBE NEWSWIRE) — NN, Inc. (NASDAQ:NNBR) (“NN” or the “Company”), a global diversified industrial company that engineers and manufactures high-precision components and assemblies, today reported results for the second quarter ended June 30, 2025.
Second Quarter Highlights: (results from continuing operations compared with prior year, where comparisons are noted)
- Net sales of $107.9 million, down 2.4% on a pro forma basis
- Gross margin of 16.9%, and adjusted gross margin of 19.5%
- Operating loss of $1.5 million and adjusted operating income of $4.9 million, an increase of $2.8 million
- Adjusted EBITDA of $13.2 million, with an adjusted EBITDA margin of 12.2%
- New business wins were $32.7 million in the first half of 2025, and NN has over 100 programs launching in 2025 that are expected to add greater than $45 million in future sales at full run-rate
Harold Bevis, President and Chief Executive Officer, said, “NN delivered a solid quarter for gross margins, operating income, adjusted operating income, and adjusted EBITDA. We are pleased with our reported results, new business acquisition, and new business launches. We leveraged the soft market environment to upsize our business development activities and investments. Our soft top-line centers around certain automotive customers. Conversely, we have been able to partially offset this weakness through the contribution of new business launches and precious metals pass-through pricing.”
“We have increased the size of our new business program in terms of prospecting, launching, and investing. We now have over 40 people in business development and launch, and we expect to launch over 100 new programs in 2025. We expect those launches will add over $45 million in future sales at run-rate. We plan to invest $18 to $20 million on capital projects in 2025. The twin goals of lowering our costs overall as a company while adding increased focus on growth is working and will be the main drivers of sustained top-line growth and increased profitability.”
Mr. Bevis continued, “Our current expectation is that some of our automotive markets may have similar soft patterns in the second half of 2025. In response, we have activated our own mitigation levers including tight cost controls and working capital actions. We are underway with tariff mitigation efforts with our customers and have positioned ourselves as a tariff problem solver.”
“We are using this opportunity to accelerate our transformation activities. We are actively investing in growth capex, and we have hired additional personnel to accelerate growth in our targeted areas. We recently announced the hiring of Tim Erro as NN’s new Chief Commercial Officer and have also added new account managers in our targeted areas of medical, stampings, and electrical products. We now have a core team of electrical harness experts and are evaluating an organic entry into this new market, just as we have done to enter the medical market.”
Mr. Bevis concluded, “Our transformation plan is working and we have increased our efforts during this slow auto market. Lastly, we have fully kicked off an M&A program and are seeking targets that are consistent with our strategy and can help refinance our preferred stock.”
Second Quarter Results
Net sales were $107.9 million, a decrease of 12.3% compared to the second quarter of 2024 net sales of $123.0 million, primarily due to the rationalization of underperforming business and plants in 2024, the sale of our Lubbock operations in 2024, and lower automotive volumes. These decreases were partially offset by the contribution of 70 new business launches in the first half of 2025 and higher precious metals pass-through pricing. Loss from operations for the second quarter of 2025 was $1.5 million, an improvement of 28.6% compared to the second quarter of 2024 loss from operations of $2.1 million.
Second Quarter Adjusted Results
Pro forma net sales when adjusted for rationalized sales, currency changes, and the sale of Lubbock, were a decrease of 2.4% in the second quarter when compared to the second quarter of 2024.
Adjusted income from operations for the second quarter of 2025 was $4.9 million compared to adjusted income from operations of $2.1 million for the same period in 2024. Adjusted EBITDA was $13.2 million, or 12.2% of sales, compared to $13.4 million, or 10.9% of sales, for the same period in 2024.
Adjusted net income was $0.7 million, or $0.02 per diluted share, compared to adjusted net loss of $0.7 million, or $(0.02) per diluted share, for the same period in 2024. Free cash flow was a use of cash of $3.2 million compared to a use of cash of $1.3 million for the same period in 2024.
Power Solutions
Net sales for the second quarter of 2025 were $44.6 million compared to $50.2 million in the same period in 2024. The decrease is primarily due to the sale of our Lubbock operations, partially offset by higher precious metals pass-through pricing. Income from operations was $5.8 million compared to income from operations of $5.3 million for the same period in 2024.
Adjusted income from operations was $8.4 million compared to $8.1 million in the second quarter of 2024. The increase in adjusted income from operations was primarily due to favorable product mix, and lower operating costs.
Mobile Solutions
Net sales for the second quarter of 2025 were $63.4 million compared to $72.9 million in the second quarter of 2024. The decrease in sales was primarily due to rationalized volume and lower automotive volume. Loss from operations was $1.1 million compared to loss from operations of $1.6 million for the same period in 2024.
Adjusted income from operations was $2.3 million compared to adjusted loss from operations of $0.7 million in the second quarter of 2024. The increase in adjusted income from operations was primarily due to improved margin mix of sales and lower operating costs.
2025 Outlook
NN is maintaining its full-year 2025 outlook.
- Net sales to range between $430 to $460 million
- Adjusted EBITDA to range between $53 to $63 million
- Free cash flow to range between $14 to $16 million; guidance assumes receipt of CARES Act refund in 2025
- New business wins to range between $60 to $70 million
Chris Bohnert, Senior Vice President and Chief Financial Officer, commented, “Our second quarter results were largely in line with expectations. We are maintaining our current guidance and given the ongoing tariff-driven uncertainties and the anticipated downstream effects for our customers, we continue to direct expectations towards the lower end of our guided ranges. We note that the uncertainty of the current macroeconomic environment, particularly the potential for shifts in trade policy and interest rates could drive variability in our results, which may fall above or below our current forecasts. Irrespective of the near-term macroeconomic backdrop, we continue to pursue expense mitigation and operational efficiencies to partially offset potential impacts to end market demand. We are investing in commercial enhancements to accelerate future growth, and we remain optimistic about the strong pace of our transformation and growth opportunities.”
Conference Call
NN will discuss its results during its quarterly investor conference call on August 7, 2025, at 9 a.m. ET. The call and supplemental presentation may be accessed via NN’s website, www.nninc.com. The conference call can also be accessed by dialing 1-888-999-3182 or 1-848-280-6330. For those who are unavailable to listen to the live broadcast, a replay will be available shortly after the call until August 7, 2026.
NN discloses in this press release the non-GAAP financial measures of adjusted income (loss) from operations, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted net income (loss) per diluted common share, and free cash flow. Each of these non-GAAP financial measures provides supplementary information about the impacts of acquisition, divestiture and integration related expenses, foreign-exchange impacts on inter-company loans, reorganizational and impairment charges.
The financial tables found later in this press release include a reconciliation of adjusted income (loss) from operations, adjusted operating margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted net income (loss) per diluted share, free cash flow to the U.S. GAAP financial measures of income (loss) from operations, net income (loss), net income (loss) per diluted common share, and cash provided (used) by operating activities.
About NN, Inc.
NN, Inc., a global diversified industrial company, combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies for a variety of markets on a global basis. Headquartered in Charlotte, North Carolina, NN has facilities in North America, South America, Europe and China. For more information about the company and its products, please visit www.nninc.com.
This press release contains express and implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the full year of fiscal 2025, the impact of, and our ability to execute, our corporate strategies and business initiatives and the potential impact tariffs, high interest rates, high metal costs and additional economic uncertainties may have on our financial statements and results of operations. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “growth,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project”, “trajectory” or other similar words, phrases or expressions. Forward-looking statements involve a number of risks and uncertainties that are outside of management’s control and that may cause actual results to be materially different from such statements. Such factors include, among others, general economic conditions and economic conditions in the industrial sector; the potential impacts of tariffs on the U.S. economy, the economy of other countries in which we conduct operations and our industry, as well as the potential implications and ramifications of tariffs on our business and the local and global supply chains supporting the same, and our ability to mitigate any adverse impacts of such; competitive influences; risks that current customers will commence or increase captive production; risks of capacity underutilization; quality issues; material changes in the costs and availability of raw materials; economic, social, political and geopolitical instability, military conflict, currency fluctuation, and other risks of doing business outside of the United States; inflationary pressures and changes in the cost or availability of materials, supply chain shortages and disruptions, the availability of labor and labor disruptions along the supply chain; our dependence on certain major customers, some of whom are not parties to long-term agreements (and/or are terminable on short notice); the impact of acquisitions and divestitures, as well as expansion of end markets and product offerings; our ability to hire or retain key personnel; the level of our indebtedness; the restrictions contained in our debt agreements; our ability to obtain financing at favorable rates, if at all, and to refinance existing debt as it matures; our ability to secure, maintain or enforce patents or other appropriate protections for our intellectual property; uncertainty of government policies and actions after recent U.S. elections in respect to global trade, tariffs and international trade agreements; and cyber liability or potential liability for breaches of our or our service providers’ information technology systems or business operations disruptions. The foregoing factors should not be construed as exhaustive and should be read in conjunction with the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s filings made with the U.S. Securities and Exchange Commission. Any forward-looking statement speaks only as of the date of this press release and are based on information available to NN at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. The Company qualifies all forward-looking statements by these cautionary statements.
With respect to any non-GAAP financial measures included in the following document, the accompanying information required by SEC Regulation G can be found in the back of this document or in the “Investors” section of the Company’s web site, www.nninc.com, under the heading “News & Events” and subheading “Presentations.”
Investor & Media Contacts:
Joe Caminiti or Stephen Poe
NNBR@alpha-ir.com
312-445-2870
Financial Tables Follow
| NN, Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) |
|||||||||||||||
| Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
| (in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net sales | $ | 107,921 | $ | 122,992 | $ | 213,609 | $ | 244,190 | |||||||
| Cost of sales (exclusive of depreciation and amortization shown separately below) | 89,699 | 101,257 | 181,345 | 202,343 | |||||||||||
| Selling, general, and administrative expense | 12,095 | 13,511 | 23,265 | 26,859 | |||||||||||
| Depreciation and amortization | 8,918 | 11,761 | 17,692 | 24,308 | |||||||||||
| Other operating income, net | (1,327 | ) | (1,390 | ) | (2,440 | ) | (2,390 | ) | |||||||
| Loss from operations | (1,464 | ) | (2,147 | ) | (6,253 | ) | (6,930 | ) | |||||||
| Interest expense | 5,657 | 5,873 | 10,851 | 11,239 | |||||||||||
| Loss on extinguishment of debt | 3,007 | — | 3,007 | — | |||||||||||
| Other expense (income), net | (619 | ) | (3,461 | ) | (2,788 | ) | 692 | ||||||||
| Loss before benefit (provision) for income taxes and share of net income from joint venture | (9,509 | ) | (4,559 | ) | (17,323 | ) | (18,861 | ) | |||||||
| Benefit (provision) for income taxes | (774 | ) | 215 | (2,084 | ) | (291 | ) | ||||||||
| Share of net income from joint venture | 2,181 | 2,141 | 4,620 | 4,412 | |||||||||||
| Net loss | $ | (8,102 | ) | $ | (2,203 | ) | $ | (14,787 | ) | $ | (14,740 | ) | |||
| Other comprehensive income (loss): | |||||||||||||||
| Foreign currency transaction gain (loss) | 4,454 | (3,387 | ) | 7,579 | (5,733 | ) | |||||||||
| Reclassification adjustments from the interest rate swap included in net loss, net of tax | — | (449 | ) | — | (898 | ) | |||||||||
| Other comprehensive income (loss) | $ | 4,454 | $ | (3,836 | ) | $ | 7,579 | $ | (6,631 | ) | |||||
| Comprehensive loss | $ | (3,648 | ) | $ | (6,039 | ) | $ | (7,208 | ) | $ | (21,371 | ) | |||
| Basic and diluted net loss per share | $ | (0.26 | ) | $ | (0.12 | ) | $ | (0.48 | ) | $ | (0.46 | ) | |||
| Shares used to calculate basic and diluted net loss per share | 49,433 | 48,839 | 49,255 | 48,281 | |||||||||||
| NN, Inc. Condensed Consolidated Balance Sheets (Unaudited) |
|||||||
| (in thousands, except per share data) | June 30, 2025 |
December 31, 2024 |
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| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 9,542 | $ | 18,128 | |||
| Accounts receivable, net | 69,825 | 61,549 | |||||
| Inventories | 62,793 | 61,877 | |||||
| Income tax receivable | 13,084 | 12,634 | |||||
| Prepaid assets | 4,602 | 2,855 | |||||
| Other current assets | 12,133 | 10,519 | |||||
| Total current assets | 171,979 | 167,562 | |||||
| Property, plant and equipment, net | 164,248 | 162,034 | |||||