NN (NNBR) Small-Cap Growth Virtual Investor Conference summary

Strategic transformation and leadership

• New executive leadership team, including CEO and COO, is driving an enterprise-wide transformation focused on operational improvement, accountability, and growth.

• Transformation plan targets leadership, cost structure, margin expansion, capital structure, and consistent growth, with about 35-40% complete and expectations to reach halfway by year-end.

• Initiatives include culling unprofitable areas, optimizing costs, and leveraging proprietary engineering for diverse end markets.

• Aggressive investment in medical and electrical segments, and expansion into low-cost countries to enhance competitiveness.

• All North American plant managers and much of the procurement team have been replaced to drive contemporary practices and fix underperforming plants.

Business model, growth strategy, and market outlook

• Operates in long-cycle, precision metal parts manufacturing for automotive, industrial, power control, and medical markets, serving over 1,100 customers globally.

• Five-year plan targets at least $650 million in revenue and 12–14% adjusted EBITDA margin by 2028, with $65 million in new business wins targeted annually.

• Growth strategy leverages existing assets, technical leadership, and selective acquisitions, with focus on medical and electrical markets.

• $89 million in new business won since January 2023, aiming for $130 million by December 2024, with a pipeline of $600 million in opportunities and a 10% win rate.

• New business awards since 2023 average 25% ROIC and 24% gross margin, above current margins.

Operational improvements and financial management

• Three consecutive quarters of improved year-over-year results, with guidance reconfirmed and adjusted EBITDA up 20% year-over-year.

• Over 1,000 cost-out projects in progress, focusing on headcount reduction, productivity gains, and operational improvements in underperforming plants.

• Free cash flow turned positive, supported by asset sales, operational efficiencies, and $20 million in term loan paid down via sale-leasebacks.

• Refinancing efforts underway to lower cost of capital, potentially retire preferred stock, and favor lease financing over traditional debt.

• Q1'24 net sales were $121.2 million, with adjusted EBITDA margin rising to 9.3%; 2024 outlook projects net sales of $480–500 million and adjusted EBITDA of $48–54 million.