8-K: NN, Inc. Achieves Record New Business Wins for Second Consecutive Year, Exceeding Guidance

NN, Inc. reports record new business wins of $73 million for 2024, surpassing expectations and marking the second consecutive year of record-setting commercial results.

Summary

• NN, Inc. announced new business wins of $73 million for the year ended December 31, 2024.
• This exceeds the high end of the company's guidance range.
• The company has achieved record annualized new business wins for the second consecutive year.
• New business wins were $63 million in 2023 and $38.5 million in 2022.
• The new wins are in key focus areas such as vehicle control, energy efficiency, electrical grid devices, and medical components.
• NN, Inc. is on pace to meet its five-year $325 million new business wins goal.
• This goal is a key driver to growing organically to $600 million in sales at 13% adjusted EBITDA margins.
• The company's new business pipeline has grown to over $720 million.
• NN will launch new programs at a higher rate in 2025 and has over $60 million of prior wins in the last 2 years that are not yet incorporated into its sales run-rate.
• NN has over 50 new business programs underway with Q1 2025 launches.
• New business is accretive to the company's gross margin rates, averaging 16% gross margin.
• Over the trailing two years, NN has captured $136 million in new wins across 300+ new program awards and expects to win another 100+ programs in 2025.
• NN was recently awarded the Cummins Innovation Award at year-end 2024.
• For the full-year 2025, the company expects to launch eighty [80] new programs of which seventy [70] have already been won.
• The $720 million of new business opportunities has grown more than 40% versus the prior year.
• Electrical Power pipeline $250+ million, Vehicle Control pipeline $100+ million, Fuel Efficiency & Hybrid pipeline $100+ million, Medical and Industrial pipeline $100+ million.

Sentiment

Score: 9

Explanation: The document presents a highly positive outlook with record new business wins, exceeding guidance, and a strong pipeline for future growth. The management's comments are optimistic, and the company appears to be executing its strategic plan effectively.

Positives

• Record new business wins for the second consecutive year indicate strong commercial performance.
• Exceeding the high end of the company's guidance range demonstrates effective strategic execution.
• The growing new business pipeline suggests continued growth potential.
• The company's focus on high-value markets and innovation positions it for long-term success.
• The company is on track to meet its five-year goal of $325 million in new business wins.
• New business is accretive to the company's gross margin rates, averaging 16% gross margin.

Risks

• The forward-looking statements are subject to various risks and uncertainties, including economic conditions, competitive influences, and material changes in costs.
• The company's dependence on certain major customers could pose a risk if those relationships change.
• The company's ability to secure, maintain or enforce patents or other appropriate protections for our intellectual property could pose a risk to future earnings.

Future Outlook

The company expects to continue its pace of new business acquisition into 2025 and 2026 and has a $720 million pipeline to support it; 2025 is off to a great start with the simultaneous launch of fifty [50] new programs during the first quarter; For the full-year 2025, the company expects to launch eighty [80] new programs of which seventy [70] have already been won.

Management Comments

• Harold Bevis, Chief Executive Officer of NN Inc. commented, 'We are excited to announce another record year of new business wins in our targeted growth areas.'
• Bevis stated that the company is targeting this level of above-market new wins to achieve its five-year goal of growing to $600 million in sales and delivering 13% adjusted EBITDA rates.
• Bevis continued, 'We will continue this pace of new business acquisition into 2025 and 2026 and have a $720 million pipeline to support it.'

Industry Context

This announcement indicates NN, Inc.'s ability to compete effectively in its target markets and capitalize on growth opportunities in the industrial components sector.

Comparison to Industry Standards

• Without specific competitor data, it's difficult to provide a direct comparison.
• However, achieving record new business wins for two consecutive years suggests NN, Inc. is outperforming some of its peers in securing new contracts.
• The targeted 13% adjusted EBITDA margin is a key metric to compare against industry averages and competitors like RBC Bearings, Altra Industrial Motion, and Timken to assess relative profitability.

Stakeholder Impact

• Shareholders are likely to react positively to the news of record new business wins and the company's strong growth prospects.
• Employees may benefit from increased job security and opportunities for advancement as the company grows.
• Customers can expect continued innovation and value-added solutions from NN, Inc.
• Suppliers may see increased demand for their products and services as the company expands its operations.

Next Steps

• The company will continue to focus on acquiring new business in 2025 and 2026.
• The company will launch new programs at a higher rate in 2025.
• The company intends to acquire additional revenue above $600 million in certain areas, specifically medical and electrical.
• The company looks forward to updating the market with its progress as it wins new business, grows its sales, and delivers expanded profits to drive shareholder value creation.

Key Dates