Breaking Down NN, Inc. (NNBR) Financial Health: Key Insights for Investors

Are you keeping a close watch on NNBR and wondering about its financial stability? Did you know that in 2024, the company reported net sales of $464.3 million, a 5.1% decrease compared to the previous year? But, the company also secured $73 million in new business wins, surpassing 2023's record of $63 million! Want to understand how these figures, along with an adjusted EBITDA of $48.3 million, impact the overall financial health? Keep reading to discover key insights into NN, Inc.'s financial performance and strategic moves.

NN, Inc. (NNBR) Revenue Analysis

NN, Inc. (NNBR) operates as a global diversified industrial company, primarily focusing on two main business segments: Mobile Solutions and Power Solutions. Understanding the revenue streams from these segments is crucial for investors to gauge the company's financial health and growth potential. Let's delve into a detailed analysis of NN, Inc.'s revenue.

Breakdown of Primary Revenue Sources:

NN, Inc.'s revenue is generated from the following:

• Mobile Solutions: This segment focuses on precision metal and plastic components, assemblies for the auto industry.
• Power Solutions: This segment produces high-precision components and assemblies for fuel systems, and rotating and hybrid technologies.

Year-over-Year Revenue Growth Rate:

Analyzing NN, Inc.'s historical revenue trends provides insights into its growth trajectory. For instance, examining the year-over-year revenue growth rate helps investors understand whether the company is expanding, contracting, or maintaining a steady financial performance. A significant percentage increase indicates strong growth, while a decrease may signal challenges in the market or within the company.

According to the NN, Inc. Q4 2023 Earning Results, NN, Inc. reported total net sales of $112.9 million for the fourth quarter of 2023, a decrease of $13.8 million or 10.9%, compared to $126.7 million for the fourth quarter of 2022. Net sales for the year ended December 31, 2023 were $472.3 million, a decrease of $26.6 million or 5.3%, compared to $498.9 million for the year ended December 31, 2022.

Contribution of Different Business Segments to Overall Revenue:

To understand NN, Inc.'s revenue composition, it's essential to examine the contribution of each business segment to the overall revenue. Here is a detailed breakdown:

These figures provide a clear view of which segments are the primary revenue drivers for NN, Inc.

Analysis of Significant Changes in Revenue Streams:

Significant changes in revenue streams could be attributed to various factors, such as shifts in market demand, strategic acquisitions, or divestitures. Understanding these changes is crucial for assessing the sustainability and future prospects of NN, Inc.'s revenue generation. The decrease in revenue was primarily due to:

• Volume declines
• Pricing givebacks to customers
• Unfavorable foreign exchange rates
• The sale of the Life Sciences division in 2022

For further insights into NN, Inc. (NNBR) and its investors, check out: Exploring NN, Inc. (NNBR) Investor Profile: Who’s Buying and Why?

NN, Inc. (NNBR) Profitability Metrics

Analyzing NN, Inc.'s profitability involves examining several key metrics that provide insights into the company's financial health. For the full year 2024:

• Net Sales: NN, Inc. reported net sales of $464.3 million, a 5.1% decrease compared to the previous year.
• GAAP Earnings per Share: The company experienced a loss of $1.11 per share.
• Adjusted EBITDA: Adjusted EBITDA increased to $48.3 million.

To get a clearer picture of NN, Inc.'s profitability, let's delve into specific margin trends.

Here’s a look at some key profitability metrics for NN, Inc. as of December 31, 2024:

• Net Profit Margin: -8.05%
• Operating Margin: -2.57%

A negative net profit margin indicates that the company incurred a net loss for the year. Similarly, a negative operating margin suggests that the company's core operations were not profitable before accounting for interest and taxes.

While specific gross profit margin data for 2024 isn't available in the search results, a couple of factors impacting profitability can be deduced:

• New Business Wins: NN, Inc. secured $73 million in new business wins in 2024, exceeding the previous year's record. These new wins are expected to be accretive to the company's gross margin rates, averaging 16% gross margin.
• Transformation Plan: NN's transformation plan included rationalizing money-losing legacy businesses and securing new program awards. This plan contributed to increased gross profit margins, decreased borrowing rates, and decreased leverage.

The company's strategic focus on high-growth sectors such as electrical grid devices and vehicle control systems positions it well for future growth. The new business pipeline, valued at over $720 million, provides strong visibility for future revenue expansion.

NN, Inc. is targeting $600 million in sales with 13% adjusted EBITDA margins. The company's new business pipeline has grown to over $720 million and fully supports the 2025 new win program which is already underway.

NN Inc. experienced a 5% decline in net sales both for the fourth quarter and the full year 2024, totaling $464.3 million for the year. However, the company saw a significant increase in adjusted EBITDA, which rose by 21% in Q4 and 12% for the full year. The EBITDA margin expanded by 160 basis points to 10.4%, indicating improved operational efficiency.

Here is a link to more in-depth information: Breaking Down NN, Inc. (NNBR) Financial Health: Key Insights for Investors

NN, Inc. (NNBR) Debt vs. Equity Structure

Understanding how NN, Inc. (NNBR) finances its operations and growth is crucial for investors. The balance between debt and equity reveals insights into the company's financial risk and stability.

As of the data available, here’s an overview of NN, Inc.'s debt levels:

• Long-term debt: Analysis of the most recent financial data is needed to provide an accurate figure for NN, Inc.'s current long-term debt.
• Short-term debt: Similarly, up-to-date financial statements would be required to determine the precise amount of short-term debt NN, Inc. is currently carrying.

The debt-to-equity ratio is a key metric for evaluating NN, Inc.'s financial leverage. This ratio indicates how much debt the company is using to finance its assets relative to the amount of equity. To calculate this ratio, we would divide the company’s total liabilities by shareholders' equity. A higher ratio generally indicates greater financial risk, as the company has a higher proportion of debt. To provide an accurate comparison to industry standards, current data for both NN, Inc. and its industry peers would be necessary.

Recent activities, such as debt issuances, credit ratings, or refinancing, can significantly impact NN, Inc.'s financial health. For example, a debt issuance could provide capital for expansion but also increase financial leverage. Credit rating changes can affect borrowing costs and investor confidence. Refinancing activities might lower interest rates or extend debt maturities, improving cash flow management. Without specific, current data on these activities, a detailed analysis is not possible.

NN, Inc. must carefully balance debt financing and equity funding. Debt can offer tax advantages and doesn't dilute ownership, but it also creates fixed payment obligations and increases financial risk. Equity funding, on the other hand, doesn't require repayment but dilutes existing shareholders' ownership and can be more expensive than debt. The optimal mix depends on NN, Inc.'s growth strategy, risk tolerance, and market conditions. Current financial data and strategic announcements would be needed to assess how NN, Inc. is currently managing this balance.

Here is more information about NN, Inc. (NNBR) Financial Health: Key Insights for Investors: Breaking Down NN, Inc. (NNBR) Financial Health: Key Insights for Investors

NN, Inc. (NNBR) Liquidity and Solvency

When evaluating NN, Inc.'s financial health, understanding its liquidity and solvency is crucial. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations.

Here's an assessment of NN, Inc.'s liquidity:

• Current and Quick Ratios: These ratios provide insights into NN, Inc.'s ability to cover its short-term liabilities with its short-term assets.
• Working Capital Trends: Analyzing the trends in NN, Inc.'s working capital (current assets minus current liabilities) can reveal whether the company's liquidity position is improving or deteriorating.

Cash flow statements offer a comprehensive view of NN, Inc.'s cash inflows and outflows, categorized into three main activities:

• Operating Activities: This section reflects the cash generated or used from NN, Inc.'s core business operations. A positive cash flow from operations indicates that the company is generating sufficient cash from its primary activities to sustain and grow its business.
• Investing Activities: This section includes cash flows related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E). These activities can provide insights into NN, Inc.'s capital expenditures and investment strategies.
• Financing Activities: This section involves cash flows related to debt, equity, and dividends. Analyzing financing activities can help understand how NN, Inc. is funding its operations and returning value to shareholders.

NN, Inc.'s financial statements can be scrutinized for potential liquidity concerns or strengths, such as consistent positive cash flow from operations or reliance on short-term borrowing.

Here is a general example of how financial ratios can be used to assess a company's financial health. Please note that this is not NN, Inc.'s actual data, but rather an illustrative example:

For further insights into NN, Inc.'s financial health, you can explore Breaking Down NN, Inc. (NNBR) Financial Health: Key Insights for Investors.

NN, Inc. (NNBR) Valuation Analysis

Assessing whether NN, Inc. (NNBR) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. Here’s a breakdown of essential valuation metrics:

Key Valuation Ratios:

• Price-to-Earnings (P/E) Ratio: This ratio compares NN, Inc.'s stock price to its earnings per share (EPS), indicating how much investors are willing to pay for each dollar of earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers.
• Price-to-Book (P/B) Ratio: The P/B ratio measures the market value of NN, Inc.'s stock relative to its book value (net asset value). A lower P/B ratio may suggest that the stock is undervalued, as it implies the market is not fully recognizing the company's assets' worth.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares NN, Inc.'s enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure than P/E, especially for companies with significant debt. A lower EV/EBITDA ratio might indicate undervaluation.

Stock Price Trends:

Analyzing NN, Inc.'s stock price trends over the past 12 months (or longer) provides insights into market sentiment and potential overvaluation or undervaluation. Here's what to consider:

• Historical Stock Performance: Examine NNBR's stock price movement over the last year, comparing current prices to previous highs and lows.
• Trend Analysis: Determine if the stock has been trending upward (bullish), downward (bearish), or sideways (consolidating).
• Benchmark Comparison: Compare NNBR's stock performance to that of its industry peers and relevant market indices (e.g., S&P 500) to assess relative performance.

Dividend Yield and Payout Ratios:

If NN, Inc. pays dividends, the dividend yield and payout ratios are important valuation considerations:

• Dividend Yield: This is the annual dividend payment per share, divided by the stock price. A higher dividend yield can make a stock more attractive to income-seeking investors.
• Payout Ratio: This is the percentage of earnings paid out as dividends. A lower payout ratio indicates that NN, Inc. has more room to increase dividends in the future.

Analyst Consensus:

Tracking analyst ratings and price targets provides valuable insights into market sentiment and potential valuation discrepancies. Here's what to consider:

• Consensus Rating: Determine the overall analyst consensus on NNBR stock (e.g., buy, hold, or sell). This reflects the average recommendation from analysts covering the stock.
• Price Targets: Compare the current stock price to the average analyst price target. If the price target is significantly higher than the current price, it may suggest that the stock is undervalued.

For more in-depth insights into NN, Inc. and its investors, check out: Exploring NN, Inc. (NNBR) Investor Profile: Who’s Buying and Why?

NN, Inc. (NNBR) Risk Factors

Several factors, both internal and external, could significantly impact NN, Inc.'s (NNBR) financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges highlighted in their financial reports.

Here's a breakdown of key risk areas:

• Industry Competition: The industries in which NN, Inc. operates are highly competitive. This competition can put pressure on pricing and margins, potentially impacting profitability.
• Regulatory Changes: Changes in environmental regulations, trade policies, or other governmental regulations could increase costs or limit NN, Inc.'s ability to operate effectively in certain markets.
• Market Conditions: Fluctuations in global economic conditions, including recessions, trade disputes, or changes in interest rates, could affect demand for NN, Inc.'s products and services.

Recent earnings reports and filings may highlight specific operational, financial, or strategic risks. These could include:

• Operational Risks: Disruptions in the supply chain, production inefficiencies, or quality control issues could impact NN, Inc.'s ability to meet customer demand and maintain profitability.
• Financial Risks: High levels of debt, difficulty in accessing capital markets, or fluctuations in currency exchange rates could strain NN, Inc.'s financial resources.
• Strategic Risks: Unsuccessful acquisitions, failure to innovate, or inability to adapt to changing market conditions could negatively impact NN, Inc.'s long-term growth prospects.

Mitigation strategies or plans, if available, are crucial for addressing these risks. These might include:

• Diversification: Expanding into new markets or product lines to reduce reliance on specific industries or customers.
• Cost Reduction: Implementing measures to improve operational efficiency and reduce costs.
• Financial Management: Actively managing debt levels, hedging currency risks, and maintaining access to capital markets.
• Innovation: Investing in research and development to create new products and services that meet evolving customer needs.

For more insights into NN, Inc.'s (NNBR) financial health, read this comprehensive analysis: Breaking Down NN, Inc. (NNBR) Financial Health: Key Insights for Investors

NN, Inc. (NNBR) Growth Opportunities

NN, Inc. (NNBR) is focusing on several key strategies to drive future growth. These include product innovations, market expansions, strategic initiatives, and leveraging competitive advantages.

Analysis of key growth drivers:

• Product Innovations: NN, Inc. emphasizes innovation and technical expertise to provide value-added solutions. The company's technology platform includes advanced precision machining, progressive stamping, injection molding, laser welding, material science, assembly, and design optimization.
• Market Expansions: NN, Inc. is targeting high-growth sectors such as vehicle control, energy efficiency, electrical grid devices, and medical components. The company is expanding its presence in China, driven by the automotive market and electrical grid demand.
• Acquisitions: NN, Inc. has a history of strategic acquisitions to expand its capabilities and market reach. For instance, it acquired DRT Medical, a supplier of precision manufactured medical instruments and orthopedic implants.

Future revenue growth projections and earnings estimates:

• Analysts estimate revenue should grow by 2.8% per annum over the next three years.
• NN Inc. aims to grow sales to $650 million, with $600 million organically.
• The company projects 2025 net sales between $450 million and $480 million.

According to Zacks Investment Research, the consensus EPS forecast for the quarter is -$0.03.

Strategic initiatives or partnerships that may drive future growth:

• New Business Wins: NN, Inc. has achieved over $150 million in new business wins from Q1 2023 to Q1 2025. In 2024, new business wins totaled $73 million. The company is targeting $65 million of new business awards in 2025.
• Strategic Initiatives: NN, Inc. is focusing on cost reduction through employee rightsizing and plant consolidations.
• Partnerships: NN, Inc. is partnering with innovative customers on innovative programs.

Competitive advantages that position the company for growth:

• Precision Manufacturing Capabilities: NN, Inc. emphasizes its high-precision manufacturing capabilities. Management believes that the company's competitive strengths are its precision manufacturing capabilities, its wide product assortment, its reputation for consistent quality and reliability, its global manufacturing footprint and the productivity of its workforce.
• Global Manufacturing Platform: NN, Inc. operates a global manufacturing platform with plants in six countries and a joint venture in China.
• Focus on targeted areas: NN, Inc. is attacking desirable high-value markets where its unique capabilities and distinct technical advantages can be put in place for true value.

Here's a summary of NN, Inc.'s recent financial performance and future targets:

NN, Inc. has a new business pipeline that has grown to over $720 million and fully supports the 2025 new win program which is already underway.

Explore more about NN, Inc. (NNBR) Investor Profile: Exploring NN, Inc. (NNBR) Investor Profile: Who’s Buying and Why?