Nn, Inc. · NASDAQ:NNBR
Nn — Sidoti Virtual Investor Conference June 2024
27 slides from Nn's conference presentation, Jun 12, 2024
Slide 1: Investor Presentation Sidoti Virtual Investor Conference June 2024
Investor Presentation Sidoti Virtual Investor Conference June 2024
Slide 2: Forward Looking Statement & Disclosures
2 Forward Looking Statement & Disclosures Forward Looking Statement & Disclosures Except for specific historical information, many of the matters discussed in this presentation may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations or st
Slide 3: Presenters: Harold Bevis and Mike Felcher
Harold Bevis President & Chief Executive Officer Mike Felcher SVP & Chief Financial Officer 3
Slide 4: Investment highlights
• Leveraging current footprint and capabilities to drive organic growth and more wins • Investing aggressively into a few areas: o Medical o Electrical o Low-Cost Country Capacity New Approach to Winning Future Business • Just beginning transformation; sales wins, culling portfolio, increasing profi
Slide 5: NN At A Glance
5 NN At A Glance (1) Trailing Twelve Months as of 3/31/24 • Best-In-Class maker of high-precision, complex metal products • Achieved $89 million in new business wins since Jan 2023 with wins in multiple markets passenger vehicle, industrial, electrical, medical. Goal is $130 million of wins in 2 yea
Slide 6: Two Primary Business Segments: Stamped and Machined Metal Products
6 Two Primary Business Segments: Stamped Metal Products and Machined Metal Products Provides: Customers with precision stamping and plating capabilities to help codesign and produce safe, durable, and high-quality mission-critical components across a flexible volume/mix platform End Markets: Electri
Slide 7: Globally Competitive Operational Footprint
7 • Most of our top customers are global and we have a global footprint to serve them. • Have a pipeline of new business opportunities >$600 million • Company is underway with a footprint upgrade and pivoting more assets into Low-cost countries and Medical Globally Competitive Operational Footprint
Slide 8: Transformation goals, results and next steps
8 Goal Results Next Steps New Leadership • Adding been-there, done-that leadership talent across full organization – Executive leadership to plant-level • Strengthening customer relationships • Organizational accountability to end results • Selectively adding experienced team leaders where necessary
Slide 9: Progressively Driving Cost Out of the Company
Progressively Driving Cost Out of the Company By Improving Operational Processes 9 *Does not include China JV employees $39 $38 $41 $43 $46 $35 $40 $45 $50 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 TTM Adjusted EBITDA ($millions) 3,645 3,357 3,230 3,159 3,087 2,500 3,000 3,500 4,000 Q1'23 Q2'23 Q3'23 Q4'23 Q1'2
Slide 10: Repositioning Balance Sheet for a Refinancing
10 Management Repositioning Balance Sheet for a Refinancing of ABL, Term Loan, and Preferred Equity Capital expenditures average ~$20 million per year, utilizing leasing to lower cost of capital and provide additional investing flexibility • FY’24 Capex forecasted to be ~$20-23 million • Equipment s
Slide 11: Five-Year Plan for Growth
11 NN’s 5 Year Plan for Growth: • Sales CAGR of 4-5% on organic business • Higher growth targeted in Medical and Electrical Systems • Strategic acquisitions to accelerate strategy when timing is right • Metal parts business across multiple end markets • Strengthen commercial organization to win new
Slide 12: NN's Organic Growth Program
12 NN’s Organic Growth Program Program has Resulted in Expanded Opportunity Set for Growth – NN is Creating its Own Growth Curve • Use legacy strengths to grow share by winning next-gen product development projects for new / existing customers • Leverage existing ~$600 million(1) installed base of p
Slide 13: New Business Awards
13 • New awards (1/1/23 to 6/10/24): $89 million • Number of individual awards: 32 for 2024 • Average time to peak annual sales: 27 months • Average ROIC: 25% • Average gross margin versus current NN margins: 24% versus 11% • Estimated new capital investment: ~$16 million Top Product Applications Ve
Slide 14: Medical Business: Growing and Building
14 Medical Business: Growing and Building Re-entered the medical market October 2023 – Initial Organic Goal is a $50 million Business • Business is at ~$18 million sales rate now • Adding specialized capacity and specialized people to grow faster NN Positioning Itself to Win • Approved supplier to a
Slide 15: 2024 Outlook: Markets Healthy, Business On-Track
15 2024 Outlook: Markets Healthy, Business On-Track Primary End Market Outlook End Market % of NN Revenue Market Indicators NN’s Outlook vs. Market Global Passenger Vehicle 50% Market reflecting an expectation of flat to modest growth in 2024 BEV market production slowdown more broadly NN’s legacy d
Slide 16: Investment highlights
• Leveraging current footprint and capabilities to drive organic growth and more wins • Investing aggressively into a few areas: o Medical o Electrical o Low-Cost Country Capacity New Approach to Winning Future Business • Just beginning transformation; sales wins, culling portfolio, increasing profi
Slide 17: Appendix
PNNS Appendix BEYOND Nn! RELIABLE.
Slide 18: Q1 2024 Financial Summary
18 ▪ Rationalized some volume at underperforming & closed plant locations, achieved volume growth at profitable locations, and had non-recurring end- of-life premium pricing of $3 million in Q1’23 associated with plant closures. ▪ Improvement in margins due to strong improvements in troubled plants
Slide 19: Q1'24 Financial Results
19 Sales ▪ Volume: ($4M) rationalization at underperforming plants, mostly offset by $3M growth at healthy plants; roughly flat ▪ Pricing: ~($3M) Q1 2023 end-of- life premium pricing during the Irvine plant closure that didn’t reoccur in 2024 (Dollars in millions, except per share data) Q1’23 Q1’24
Slide 20: Power Solutions Q1 Results
20 Q1 Sales down 1.7%, or $0.9 million, vs. prior year ▪ Some year-over-year volume was rationalized as part of the Irvine, CA and Taunton, MA 2023 facility closures. ▪ Strong demand from US electrical grid business. Q1 adjusted EBITDA and margins increased vs. prior year ▪ Improved product mix and
Slide 21: Mobile Solutions Q1 Results
21 Q1 Sales down 6.4%, or $4.9 million, vs. prior year ▪ Rationalized some business at underperforming plants. ▪ Some negative mix shift in retained business. ▪ Improvement opportunities remain on certain dilutive business, especially at underperforming plants. Q1 adjusted EBITDA strongly improved o
Slide 22: NN's Strong Product and Capability Portfolio
22 NN's Strong Product and Capability Portfolio • ISO-9001, ISO-13485, IATF-16949, NADCAP AC7108 AND AC7014, ITAR Multifaceted Certifications: Automobile, Commercial Vehicle, Aerospace & Defense, Medical • Nanometer and single-micron specifications and tolerances • Unique knowledge of metal grades/m
Slide 23: Non-GAAP financial measures
23 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 financial measures provides suppleme
Slide 24: Reconciliation of GAAP Income from Operations to Adjusted EBITDA
24 Reconciliation of GAAP Income (Loss) from Operations to Non-GAAP Adjusted Income (Loss) from Operations and Non-GAAP Adjusted EBITDA
Slide 25: Reconciliation of GAAP Net Income to Adjusted Net Income
25 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
Slide 26: Reconciliation of Operating Cash Flow to Free Cash Flow
26 Reconciliation of Operating Cash Flow to Free Cash Flow
Slide 27: Thank You
Thank You 27 Joe Caminiti or Stephen Poe, Investors Tim Peters, Media NNBR@alpha-ir.com 312-445-2870 Investor & Media Contacts