Slide 1: Q1 2023 Earnings
NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 1 EARNINGS Q1 2023 NN, Inc. | May 5, 2023
Slide 2: Forward Looking Statement & Disclosures
FORWARD LOOKING STATEMENT & DISCLOSURES NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 Except for specific historical information, many of the matters discussed in this press release may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations
Slide 3: Today's Agenda
TODAY’S AGENDA Overview & Positioning NN For Success NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 Market Review First Quarter Financial Update Segment Highlights 2023 Outlook Update Questions & Answers 3
Slide 4: First Quarter 2023 Overview
FIRST QUARTER 2023 OVERVIEW Sales / New Business Wins Pricing / Inflation Operations / Cost Structure NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 • Power Solutions sales down 5.7% from prior • Net price / inflation positive impact of ~$2 • Facility closures on track with ~$9 million year on lower
Slide 5: Positioning NN For Success
POSITIONING NN FOR SUCCESS Operational Improvements – NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 • Wellington operational improvements on plan. • Juarez operational improvements slower than expected, remains key area of focus. Major Cost Reduction Initiatives – • Facility closures on schedule wi
Slide 6: Market Review
NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 6 MARKET REVIEW
Slide 7: New Business, Q1 2022 vs. Q1 2023
NEW BUSINESS, Q1 2022 VS. Q1 2023 ✓ Improved start for new business in 2023 over 2022 with 76% in strategic segments NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 ✓ Capex of $2.7 million over life of programs ✓ Positioned strongly for growth in power-electrical segment with multiple pursuits expect
Slide 8: Highlight on Strategic Growth
HIGHLIGHT ON STRATEGIC GROWTH Highlight Summary NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 ▪ Established a relationship with a global, market- ▪ NN value contribution to the relationship leading “new energy” vehicle company ▪ About the customer ▪ Differentiation: unique expertise & experience in
Slide 9: Key Commercial Actions to Drive Growth
KEY COMMERCIAL ACTIONS TO DRIVE GROWTH NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 1 Implemented sales compensation program to align with strategic new business objectives ▪ Incentivize account managers based on individual performance including higher variable component and increase total earning
Slide 10: Driving Growth by Solving Problems in Electrical
DRIVING GROWTH BY SOLVING PROBLEMS IN ELECTRICAL Customer Problem & Needs Unique Value Delivered By NN NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 ▪ Compressed timeline for system integration & installation of a large solar ▪ Engineering expertise to enable finalization of system generation proje
Slide 11: Focused Growth for the Future
FOCUSED GROWTH FOR THE FUTURE NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 ▪ Healthy pipeline ▪ Segment mix aligns with transformation into power & eMobility segments ▪ Incentive structure for selling organization delivering focus and sense of urgency ▪ Quantity of target deals including the sales
Slide 12: Market Update: Residential & Commercial
MARKET UPDATE Residential & Commercial NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 US Total Residential Construction Starts US Total Non-Residential Building Starts Despite near-term demand softness for commercial & residential electrical components due to economic conditions & inventory reductio
Slide 13: Market Update: Automotive
MARKET UPDATE Automotive NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 Commentary of LMC Executive Snapshot (March 2023) ▪ Global Light Duty Vehicle Production is forecasted to increase by ~5.0% YoY in 2023; expect positive production outlook in all key regions. ▪ Although a deep recession in 2023
Slide 14: First Quarter Financial Update
NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 14 FINANCIAL UPDATE FIRST QUARTER 2023
Slide 15: Q1 2023 Financial Highlights
Q1 2023 FINANCIAL HIGHLIGHTS Δ 2023 2022 Net Sales -0.8 % $127.1 million $128.1 million NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 Organic 0% FX Impact -0.8% Operating Income (Loss) ($3.7) million ($7.1) million ($3.4) million Non-GAAP Adjusted Operating Income (Loss) ($3.1) million ($0.4) milli
Slide 16: Working Capital
WORKING CAPITAL $130 NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 Millions 6.4 6.0 WORKING CAPITAL TURNS $120 5.7 5.3 $110 5.0 4.5 $100 4.2 4.2 4.2 4.3 4.6 4.3 $90 3.9 3.6 $80 3.2 2.9 $70 2.5 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Working Capital Working Capital Turns Working capital turns improved from 4.
Slide 17: Capital Expenditures
CAPITAL EXPENDITURES QTD NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 $6 Millions $5 $4 $3 $2 $1 $- Q1 2022 Q1 2023 Mobile Solutions Power Solutions Corporate Maintaining disciplined approach on capital expenditures, prioritizing capex spend in strategic growth areas. Capital expenditures represen
Slide 18: Free Cash Flow
FREE CASH FLOW Millions NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 $15 $10.4 $10 $6.4 $5 $2.7 $0.2 $- $(0.1) $(5) $(2.4) $(4.4) $(3.7) $(5.2) $(10) $(9.4) $(15) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Free cash flow positive $2.7 million over past six months, $5.7 million favorable to prior year
Slide 19: Net Debt & Leverage
NET DEBT & LEVERAGE Liquidity Millions $50 NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 $45 $40 $35 $30 $35.3 $32.5 $25 $20 $15 $0.3 $0.5 $10 $5 $12.5 $10.0 $0 Q4 2022 Q1 2023 Foreign Cash Domestic Cash Available Credit Line Potential preferred equity raise: Note: The Available Credit Line is redu
Slide 20: Segment Highlights
20 NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 SEGMENT HIGHLIGHTS
Slide 21: Power Solutions – Q1 2023
POWER SOLUTIONS – Q1 2023 Sales down 5.7%, or $2.9 million, from prior year • (-) Decreased electrical and general industrial NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 component sales primarily due to lower housing starts and customer inventory reductions. • (+) Premium pricing achieved in 2023
Slide 22: Mobile Solutions – Q1 2023
MOBILE SOLUTIONS – Q1 2023 Sales up 2.6%, or $1.9 million, from prior year • (+) Pricing. NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 • (-) Reduced volumes. • (-) Foreign exchange effects. Profitability • (-) Wellington and Juarez performance challenges: • Wellington is making good progress. • Ju
Slide 23: 2023 Outlook Revision
2023 OUTLOOK REVISION (in millions) NET SALES ADJUSTED EBITDA FREE CASH FLOW NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 PREVIOUS OUTLOOK $525-$555 $50-60 $10-20 REVISED OUTLOOK $515-$545 $47-57 $7-17 Sales: • Reflects lower expected volume across end markets driven by market conditions as well a
Slide 24: Questions & Answers
24 NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 QUESTIONS & ANSWERS
Slide 25: Appendix
25 NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 APPENDIX
Slide 26: Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income (Loss)
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED NET INCOME (LOSS) AND GAAP NET INCOME (LOSS) PER DILUTED COMMON SHARE TO NON-GAAP ADJUSTED NET INCOME (LOSS) PER DILUTED COMMON SHARE NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 26
Slide 27: Reconciliation of GAAP Income (Loss) from Operations to Non-GAAP Adjusted EBITDA
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS TO NON- GAAP ADJUSTED INCOME (LOSS) FROM OPERATIONS AND NON-GAAP ADJUSTED EBITDA NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 27
Slide 28: Reconciliation of Operating Cash Flow to Free Cash Flow
RECONCILIATION OF OPERATING CASH FLOW TO FREE CASH FLOW NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23 28
Slide 29: Non-GAAP Financial Measures Footnotes
NON-GAAP FINANCIAL MEASURES FOOTNOTES The Company discloses in this presentation the non-GAAP financial measures of adjusted income (loss) from operations, adjusted EBITDA, adjusted net income (loss), adjusted net income (loss) per diluted share, free cash flow and net debt. Each of these non-GAAP f
Slide 30: NN In c. Q 1 2 0 2 3 E a r n ings
30 NN In c. Q 1 2 0 2 3 E a r n ings | Ma y 20 23