Slide 1: First Quarter 2016 Earnings Release
First Quarter 2016 Earnings Release May 4,
Slide 2: Forward Looking Statements
Forward Looking Statements Forward Looking Statement: With the exception of the historical information contained in this presentation, the matters described herein contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act
Slide 3: First Quarter
First Quarter
Slide 4: Highlights of 1st Quarter 2016
Highlights of 1st Quarter 2016 Sales of $212.2M PEP acquisition contributed $56.0M Adjusted Earnings Per Share of $0.27 above the midpoint of our guidance Adjusted EBITDA of $35.6M at the top of our guidance range Adjusted Operating Margins increased 220 bps compared to Q1 2015, exceeding our guidan
Slide 5: 1st Quarter 2016 Financial Summary
1st Quarter 2016 Financial Summary Adjusted Earnings Per Share Net Sales Issued 7.6M shares in Q3 2015 30% growth compared to prior year In Millions $0.45 $ 220.0 $ 210.0 $0.40 $ 212.2 $ 0.41 $ 200.0 $0.35 $ 190.0 $0.30 $ 180.0 $ 170.0 $0.25 $0.27 $ 160.0 $163.7 $0.20 $ 150.0 $0.15 $ 140.0 $ 130.0 $
Slide 6: 1st Quarter 2016 Financial Summary
1st Quarter 2016 Financial Summary Gross Margin Adjusted Operating Margin 370 bps improvement driven by acquisition of Continued margin expansion resulting from acquisitions PEP and the NN Operating System and improvements in the NN Operating System 30.0% 14.0% 13.0% 25.0% 12.0% 24.7% 11.0% 11.3% 10
Slide 7: 1st Quarter 2016 Financial Summary
1st Quarter 2016 Financial Summary Adjusted EBITDA Margin SG&A 210 bps improvement resulting from the $5.4 million of the increase from the acquisition acquisition of PEP & the NN Operating System of PEP In Millions 18.0% $22.0 16.0% 16.8% $20.0 $20.7 $18.0 14.0% 14.7% $16.0 12.0% $14.0 10.0% $12.0
Slide 8: Autocam Precision Components Group
Autocam Precision Components Group Net Sales Adjusted Operating Margin CAFE adoption continues to drive increased content & margin expansion In Millions $90.0 14.0% 13.0% $80.0 $82.6 $84.0 13.2% 12.0% $70.0 11.0% 11.5% $60.0 10.0% 9.0% $50.0 8.0% $40.0 7.0% 6.0% $30.0 5.0% $20.0 4.0% 3.0% $10.0 2.0%
Slide 9: Precision Bearing Components Group
Precision Bearing Components Group Net Sales Adjusted Operating Margin Negative impact of currency translation and industrial end Margins were in line with expectations for the market softness impacted the quarter by $8.5M 1st quarter, rebounding from Q4 In Millions $80.0 14.0% 13.0% $70.0 $73.2 12.
Slide 10: Precision Engineered Products Group
Precision Engineered Products Group Net Sales Adjusted Operating Margin Acquisition of PEP added $56M In Millions $70.0 24.0% 22.0% $60.0 $63.5 20.0% 20.8% $50.0 18.0% 16.0% $40.0 14.0% 12.0% $30.0 10.0% $20.0 8.0% 6.0% $10.0 4.0% $7.9 2.7% $0.0 2.0% 2015 2016 2015 2016
Slide 11: 1st Quarter Summary
1st Quarter Summary First quarter in line with expectations NN Operating System continues to drive margin expansion Free Cash Flow better than expected PBC group rebounded from difficult Q4 Integration of PEP is on track Reaffirm our 2016 guidance
Slide 12: Guidance
Guidance
Slide 13: 2nd Quarter 2016 Guidance
2nd Quarter 2016 Guidance First Quarter Second Quarter Commentary Actual Guidance Net Sales $212.2M $215M—$225M Sales continue to increase Adj. Op Margin 11.3% 13.2%—14.0% Margin expansion driven by end market diversification Adj. EBITDA $35.6M $40.2M—$43M Adj. EPS $0.27 $0.41—$0.48 In line with str
Slide 14: 2016 Guidance Reaffirmed
2016 Guidance Reaffirmed 2016 Commentary Sales growth of ~30% driven by PEP Net Sales $875M—$905M acquisition Adj. Operating Margin 12.5%—13.2% Driven by improvements in the NN Adj. EBITDA $162.5M—$175M Operating System & PEP acquisition Adj. EPS1 $1.60—$1.80 CAPEX $40M—$50M We continue to invest in
Slide 15: Reconciliation Tables
Reconciliation Tables
Slide 16: Reconciliation of Adjusted Income from Operations
Reconciliation of Adjusted Income from Operations Reconciliation of income from operations to adjusted income from operations: NN, Inc—Total Company Three Months Ended March 31, 2016 2015 $‘000% of Sales $‘000% of Sales Income from operations $11,874 5.6% $13,934 8.5% Restructuring & impairment char
Slide 17: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Reconciliation of net income to adjusted EBITDA: NN, Inc—Total Company Three Months Ended March 31, Reconciliation of net income to adjusted EBITDA: NN, Inc—Total Company 2016 2015 Change Net income($1,299) $ 6,001 -$ 7,300 Provision for income taxes(720) 1,456(2,17
Slide 18: Reconciliation of Adjusted Net Income
Reconciliation of Adjusted Net Income Reconciliation of net income to adjusted net income: NN, Inc—Total Company Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Diluted Earnings Per Diluted Earnings Per In Thousands Share In Thousands Share Net income($1,299)(0.05) 6,001 $ 0.31 A
Slide 19: 2nd Quarter Guidance – Adjusted Operating Margin
2nd Quarter Guidance – Adjusted Operating Margin Reconciliation of income from operations to adjusted income from operations: NN, Inc—Total Company Three Months Ending June 30, 2016 Twelve Months Ending December 31, 2016 Low High Low High $‘000% of Sales $‘000% of Sales $‘000% of Sales $‘000% of Sal
Slide 20: 2nd Quarter Guidance – Adjusted EBITDA
2nd Quarter Guidance – Adjusted EBITDA Reconciliation of net income to adjusted EBITDA: NN, Inc—Total Company Three Months Ending June 30, 2016 Low High Net income $4,267 $6,129 Provision for income taxes 247 1,104 Interest Expense 16,598 16,598 Depreciation & Amortization 15,286 15,286 Acquisition
Slide 21: 2nd Quarter Guidance – Adjusted Net Income & EPS
2nd Quarter Guidance – Adjusted Net Income & EPS Reconciliation of EPS to adjusted EPS: NN, Inc—Total Company Three Months Ending June 30, 2016 Low High In In Thousand Earnings Per Thousand s Share s Earnings Per Share Net income $4,267 $0.16 $6,129 $0.23 After-tax acquisition and integration costs
Slide 22: Guidance – Free Cash Flow
Guidance – Free Cash Flow Free Cash Flow NN, Inc—Total Company Year Ending December 31, Low High EBITDA $162,500 $175,000 CAPEX(40,000)(50,000) Interest Expense*(62,000)(60,000) Dividends(6,072)(6,072) Income Tax Expense(6,000)(6,444) Working Capital 1,572 7,516 Free Cash Flow+ $50,000 $60,000 *Excl