NN (NNBR) Sidoti Small-Cap Virtual Conference summary

Business overview and recent performance

• Manufactures high-precision metal parts for automotive, industrial, power control, and medical markets, with a global footprint and a successful JV in China.

• Achieved $464 million in revenue and $48 million adjusted EBITDA (10.4% margin) for 2024, serving over 1,100 customers with no significant concentration.

• New leadership team is driving a transformation program focused on share price, operational improvements, and cost optimization.

• Over $150 million in new business wins from Q1 2023 to Q1 2025, targeting $65 million in new business annually as part of a five-year growth plan.

• Cost reduction initiatives include employee rightsizing, plant consolidations, and continuous improvement programs.

Strategic growth and market focus

• Five-year plan targets $650 million in sales, with $600 million organic and $50 million from bolt-on acquisitions.

• Growth leverages existing machine assets, keeping CapEx at its lowest in four years.

• Expanding in electrical and industrial markets through stampings, and in medical and automotive via machining.

• M&A strategy focuses on acquiring electrical and medical machine capabilities to support growth.

• China automotive market is a key growth driver, outperforming North America, which remains steady.

Operational and financial initiatives

• Transformation plan includes leadership changes, fixing unprofitable plants, and expanding gross margins to 20%.

• China operations are profitable, with $75 million in sales at 20% EBITDA and JV at $125 million with 25% EBITDA; combined China sales exceed $200 million.

• China business is expanding, supplying both APAC and European markets, and is positioned for further growth.

• Refinancing efforts underway to reduce cost of capital, improve leverage covenants, and enable tuck-in acquisitions.

• Deleveraging and cash flow improvements are ongoing, with China now financing its own growth and sending funds back.