Slide 1: Q2'23 Earnings
Q2’23 Earnings NN Inc. | August 4, 2023
Slide 2: Forward Looking Statement & Disclosures
Forward Looking Statement & Disclosures 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 or statements of future economic performance.
Slide 3: Introducing Harold Bevis, CEO
Introducing Harold Bevis, CEO Harold Bevis, CEO Why NN Inc.? ▪ Decades of engineering and technical depth in multiple end markets ▪ Competitive moat supported by vertical integration, large installed base of equipment, and unique know-how ▪ Excellent reputation by diverse customer set for delivering
Slide 4: Q2'23 Business Highlights
Q2’23 Business Highlights Enhancing Leadership ▪ Promoting and aligning strong legacy team into new roles with expanded responsibilities $125.2M $19M Net Sales Gross NBW YTD ▪ Supplementing NN's veteran team with veteran transformational leaders • Power Solutions (7.7%) • Expanding both legacy oppor
Slide 5: New Leadership: First 75 Days
New Leadership: First 75 Days End of May First 30 Days 31 - 60 Days Today Introductions On the Road Initial Actions Focused • Assessment • 15 plant site visits in • Targeted cost • Continue of capabilities and three countries reductions implementation of teams Transformation Plan • Meeting top custo
Slide 6: The Transformation Plan
“The Transformation Plan” Increased Organizational Commitment to Accelerate Sales, Profits, & Free Cash Flow 1. Modify the top team and personnel • Flattened the org chart and expanded Harold’s direct reports; better ability to directly manage the operations • Adding transformation-experienced execu
Slide 7: Experienced & Capable Team Empowered to Win
Experienced & Capable Team Empowered to Win Verlin Bush Douglas Campos Gunars Vinkels Jeff Fenwick Chief Commercial Officer VP/GM Mobile Solutions VP/GM Power Solutions VP/GM APAC Region ▪ Verlin brings over 30 ▪ Douglas brings over 28 ▪ Gunars brings over 30 ▪ Jeff brings over 20 years years of man
Slide 8: New Business Wins: $19M YTD Gross
New Business Wins: $19M YTD Gross 2023 YTD New Business Wins (NBW): Driving NBW Annual Peak Value (millions) Momentum $19 $19 ▪ Over 20 program awards in steering systems, electric motors, commercial vehicles, passenger vehicles, air bag systems, battery management, defense, and sensors ▪ Refocusing
Slide 9: Q2'23 Financial Results
Q2’23 Financial Results (Dollars in millions) 2023 2022 Δ Sales Drivers ▪ Pricing: ~$9M Net Sales $125.2 $125.4 -0.1% ▪ Volume: ~($7)M ▪ Customer settlement in Operating Income (Loss) ($4) ($4.5) $0.5 prior year: ($2.3)M Non-GAAP Adjusted Operating Income (Loss) $1.3 $0.1 $1.2 Non-GAAP Adjusted EBIT
Slide 10: Mobile Solutions: Q2'23 Highlights
Mobile Solutions: Q2’23 Highlights ▪ Sales up 5.2%, or $3.8 million, YOY 2023 Net Sales Trends (+) Pricing 2022 (millions) (+) New business & increased volumes on existing $155.2 $149.4 business (-) Foreign exchange $77.2 $73.4 ▪ Profitability (+) Improved China JV performance Second Quarter YTD (-)
Slide 11: Power Solutions: Q2'23 Highlights
Power Solutions: Q2’23 Highlights ▪ Sales down 7.7%, or $4 million, YOY 2023 Net Sales Trends (+) Pricing (millions) 2022 $97.1 $104.1 (-) Electrical and general industrial component sales reflect lower housing starts and customer $52.0 $48.1 inventory reductions (-) Rationalized unprofitable busine
Slide 12: Cash Flows & Working Capital
Cash Flows & Working Capital ▪ Free Cash Flow (FCF) positive for trailing 12-month ▪ Effectively managing working capital period, beginning of a turnaround ▪ Three consecutive quarters of improved working ▪ Remain focused on improving FCF performance capital turns moving forward Cash Flows Trends Wo
Slide 13: Balance Sheet & Liquidity
Balance Sheet & Liquidity Liquidity $50 (millions) Capital Allocation Priorities and Actions $40 $30 $29.7 ▪ Only spend money that we have, strengthen low-cost $32.5 $20 country footprint $1.5 $0.5 $10 ▪ Focus growth capex in key strategic areas $12.8 $10.0 $0 Q2'23 Q1'23 ▪ Improve liquidity through
Slide 14: 2023 Outlook: Sales Flat in 2H'23
2023 Outlook: Sales Flat in 2H'23 Outlook Reflects: ▪ Overall demand consistent with first half, versus prior expectation of increasing demand Current (millions) Outlook ▪ Adjusted EBITDA revision reflects lower volume ▪ Working capital management and spending control Net Sales $485 - $505 ▪ Aggress
Slide 15: Appendix
Appendix NN Inc., Q2‘23 Earnings | August 2023 15
Slide 16: 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 Inc., Q2’23 Earnings | August 2023 16
Slide 17: Reconciliation of GAAP Income (Loss) from Operations to Non-GAAP Adjusted
Reconciliation of GAAP Income (Loss) from Operations to Non-GAAP Adjusted Income (Loss) from Operations and Non-GAAP Adjusted EBITDA NN Inc., Q2’23 Earnings | August 2023 17
Slide 18: Reconciliation of Operating Cash Flow to Free Cash Flow
Reconciliation of Operating Cash Flow to Free Cash Flow NN Inc., Q2’23 Earnings | August 2023 18
Slide 19: 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 20: Thank You
Investor & Media Contacts Joe Caminiti or Alec Steinberg, Investors Tim Peters, Media NNBR@alpha-ir.com 312-445-2870 Thank You NN Inc., Q2‘23 Earnings | August 2023 20