Q2 2024 NN Inc Earnings Call

August 8, 2024

Good day and welcome to the NN Inc. Second Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode.

Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

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Operator: 2024 Earnings Conference Call Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, today's event is being recorded. I would now like to turn the conference over to Stephen Poe with Investor Relations. Please go ahead.

Operator: I'd like to turn the conference over to Stephen Poe with Investor Relations. Please go ahead.

Please note, today's event is being recorded.

I would now like to turn the conference over to Stephen Poe with Investor Relations. Please go ahead.

Stephen Poe: Thank you, operator. Good morning, everyone, and thanks for joining us.

Stephen Poe: Thank you, Operator. Good morning, everyone, and thanks for joining us.

Stephen Poe: Thank you, operator. Good morning, everyone, and thanks for joining us. I'm Stephen Poe with NN Inc's investor relations team, and I'd like to thank you for attending today's earnings call and business update.

Stephen Poe: I'm Stephen Poe on NN Inc.'s Investor Relations team, and I'd like to thank you for attending today's earnings call and business update. Last evening, we issued a press release announcing our financial results for the second quarter ended June 30, 2024, as well as a supplemental presentation, which has been posted on the Investor Relations section of our website. If anyone needs a copy of the press release or the supplemental presentation, they may contact Alpha IR Group at nnbr@alpha-ir.com.

Stephen Poe: I'm Stephen Poe with NN Inc's Investor Relations team, and I'd like to thank you for attending today's earnings call and business update. Last evening, we issued a press release announcing our financial results for the second quarter ended June 30, 2024, as well as a supplemental presentation, which has been posted on the Investor Relations section of our website. If anyone needs a copy of the press release or the supplemental presentation, you may contact Alpha IR Group at nnbr at alpha-ir.com.

Speaker Change: Last evening, we issued a press release announcing our financial results for the second quarter ended June 30, 2024, as well as a supplemental presentation, which has been posted on the investor relations section of our website.

Speaker Change: If anyone needs a copy of the press release or the supplemental presentation, you may contact Alpha IR Group at nnbr at alpha-ir.com.

Stephen Poe: Our presenters on the call this morning will be Harold Bevis, President and Chief Executive Officer, and Chris Bohnert, Senior Vice President and Chief Financial Officer. Tim French, our Senior Vice President and Chief Operating Officer, will also join us for the Q&A portion of the call.

Speaker Change: Our presenters on the call this morning will be Harold Bevis, President and Chief Executive Officer, and Chris Bonner, Senior Vice President and Chief Financial Officer. Tim French, our Senior Vice President and Chief Operating Officer, will also join us for the Q&A portion of the call.

Stephen Poe: Please turn to slide two, where you'll find our forward-looking statements and disclosure information. Before we begin, I'd ask that you take note of the cautionary language regarding forward-looking statements contained in today's press release, supplemental presentation, and when filed in the risk factors section of the company's quarterly report, 10-Q, for the fiscal quarter ended June 30, 2024. The same language applies to comments made on today's conference call, including the Q&A session, as well as the live webcast.

Stephen Poe: Please turn to slide 2, where you'll find our forward-looking statements and disclosure information. Before we begin, I'd ask that you take note of the cautionary language regarding forward-looking statements contained in today's press release, supplemental presentation, and when filed in the risk factors section of the company's quarterly report, 10-Q, for the fiscal quarter ended June 30, 2024. The same language applies to comments made on today's conference call, including the Q&A session as well as the live webcast.

Stephen Poe: Please turn to slide 2, where you'll find our forward-looking statements and disclosure information. Before we begin, I'd ask that you take note of the cautionary language regarding forward-looking statements contained in today's press release, supplemental presentation, and when filed in the risk factors section in the company's quarterly report 10-Q for the fiscal quarter ended June 30, 2024. Same language applies to comments made on today's conference call, including the Q&A session, as well as live webcast.

Stephen Poe: Please turn to slide 2 where you'll find our forward-looking statements and disclosure information.

Stephen Poe: Our presentation today will contain forward-looking statements regarding sales, margins, inflation, supply chain constraints, foreign exchange rates, cash flow, tax rates, acquisitions and investments, synergies, cash and cost savings, future operating results, performance of our worldwide markets, general economic conditions and economic conditions in the industrial sector, the impacts of pandemics and other public health crises and military conflicts on the company's financial condition and other topics. [inaudible] These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside of the company's control.

Stephen Poe: Our presentation today will contain forward-looking statements regarding sales, margins, inflation, supply chain constraints, foreign exchange rates, cash flow, tax rates, acquisitions and divestitures, synergies, cash and cost savings, future operating results, performance of our worldwide markets, general economic conditions and economic conditions in the industrial sector, the impacts of pandemics and other public health crises and military conflicts on the company's financial condition and other topics.

Stephen Poe: Our presentation today will contain forward-looking statements regarding sales, margins, inflation, supply chain constraints, foreign exchange rates, cash flow, tax rates, acquisitions and divestitures, synergies, cash and cost savings, future operating results, performance of our worldwide markets, general economic conditions and economic conditions in the industrial sector, the impacts of pandemics and other public health crises and military conflicts on the company's financial condition and other topics. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside of the company's control.

Speaker Change: Before we begin, I'd ask that you take note of the cautionary language regarding forward-looking statements contained in today's press release, supplemental presentation, and when filed in the risk factors section in the company's quarterly report 10-Q for the fiscal quarter ended June 30, 2024.

Speaker Change: Same language applies to comments made on today's conference call, including the Q&A session, as well as live webcasts.

Stephen Poe: performance of our worldwide markets, general economic conditions and economic conditions in the industrial sector, the impacts of pandemics and other public health crises and military conflicts on the company's financial condition and other topics.

Speaker Change: These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside of the company's control.

Stephen Poe: The presentation also includes non-GAAP measures as defined by SEC rules. Reconciliation of such non-GAAP measures is contained in the tables in the final section of the press release and the supplemental presentation. Please turn to slide three, and I will now turn the call over to our CEO, Harold Bevis.

Stephen Poe: The presentation also includes non-GAAP measures as defined by SEC rules. Reconciliation of such non-GAAP measures is contained in the tables in the final section of the press release and the supplemental presentation. Please turn to slide three and I will now turn the call over to our CEO, Harold Bevis.

Harold Bevis: The presentation also includes non-GAAP measures as defined by SEC rules. Reconciliation of such non-GAAP measures is contained in the tables in the final section of the press release in the supplemental presentation. Please turn to slide 3 and I will now turn the call over to our CEO , Harold Bevis.

Harold Bevis: Thank you, Stephen. Good morning, everyone, for calling in. I am going to be speaking and referring to the presentation. That's on our website. And if you could turn to slide four in the earnings presentation, I'd appreciate it. NN delivered strong second quarter results driven by the continued execution of our transformation plan, which is on track. We are increasing the scope and magnitude of our goals across our operational footprint and have advanced an aggressive cultural reset centered around customer service and our leading qualities.

Harold Bevis: Thank you, Stephen. Good morning, everyone, for calling in. I am going to be speaking and referring to the presentation that's on our website. And if you could turn to slide four in the earnings presentation, I'd appreciate it, and we delivered strong second-quarter results, driven by the continued execution of our transformation plan, which is on track. We are increasing the scope and magnitude of our goals across our operational footprint and have advanced an aggressive cultural reset centered around customer service and our leading quality.

Unknown Executive: Thank you, Stephen. Good morning, everyone, for calling in. I am going to be speaking and referring to the presentation.

Harold Bevis: thank you stephen good morning everyone for calling in i am going to be speaking and referring to the presentation

Speaker Change: That's on our website. And if you could turn to slide four in the earnings presentation, I'd appreciate it.

Unknown Executive: NN delivered strong second-quarter results, driven by the continued execution of our transformation plan, which is on track. Our operational advancements are aiding our business development efforts as well. To that end, we continue to add targeted growth capacity, have revitalized several key customer relationships, and have won $34.3 million in new business awards year-to-date through June. We're also getting more aggressive in the areas of new product development and product innovation. We will touch more on this encouraging development later in the call.

Unknown Executive: NN delivered strong second quarter results driven by the continued execution of our transformation plan, which is on track.

Speaker Change: We are increasing the scope and magnitude of our goals across our operational footprint and have advanced an aggressive cultural reset centered around customer service and our leading quality.

Harold Bevis: These efforts to structurally improve our business performance are evident in our quarterly results, and help deliver our fourth consecutive quarter of year-over-year adjusted EVA-DA growth. Our operational advancements are aiding our business development efforts as well, as we have seen can significantly increase. Customer Satisfaction as evidenced by improved customer scorecards and feedback.

Harold Bevis: These efforts to structurally improve our business performance are evident and are quarterly results, and help deliver our fourth consecutive quarter of year-over-year adjusted EVA-DA growth. Our operational advancements are aiding our business development efforts as well, as we have seen can significantly increase customer satisfaction, as evidenced by improved customer scorecards and feedback.

Unknown Executive: These efforts to structurally improve our business performance are evident in our quarterly results and help deliver our fourth consecutive quarter of year-over-year adjusted EVA-DA growth.

Unknown Executive: Our operational advancements are aiding our business development efforts as well, as we have seen significantly increased customer satisfaction as evidenced by improved customer scorecards and feedback.

Harold Bevis: To that end, we continue to add targeted growth capacity, have revitalized several key customer relationships, established new partnerships in several markets, and have won $34.3 million in new business awards year to date through June. We expect our new business pipeline of over $600 million to grow as we continue to execute. As part of our commercial growth strategy, We're also getting more aggressive in the areas of new product development and product innovation, with particular emphasis applied within our medical, electrical, and high-end automotive market. We're currently bidding on R&D projects with key targeted accounts, which in turn, strengthening our knowledge of leading edge competitiveness.

Harold Bevis: To that end, we continue to add targeted growth capacity, have revitalized several key customer relationships, established new partnerships in several markets, and have won $34.3 million in new business awards year-to-date through June. We expect our new business pipeline of over $600 million to grow as we continue to execute. As part of our commercial growth strategy, we're also getting more aggressive in the areas of new product development and product innovation, with particular emphasis applied within our medical, electrical, and high-end automotive market. We're currently bidding on R&D projects with key targeted accounts, which, in turn, strengthens our knowledge of leading-edge competitiveness.

Unknown Executive: to that end we continue to add targeted grow capacity every revitalized several key customer relationships

Unknown Executive: established new partnerships in several markets.

Harold Bevis: and have won $34.3 million in new business awards year-to-date through June .

Harold Bevis: We expect our new business pipeline of over $600 million to grow as we continue to execute.

Unknown Executive: As part of our commercial growth strategy,

Speaker Change: We're also getting more aggressive in the areas of new product development and product innovation.

Unknown Executive: with particular emphasis applied within our medical, electrical, and high-end automotive markets.

Harold Bevis: We're currently bidding on R&D projects with key targeted accounts, which in turn, strengthening our knowledge of leading edge competitiveness.

Harold Bevis: Specific to the medical market, our NN medical team is building out dedicated capacity and developing advanced industrial and mechanical capabilities to service the fast-growing pipeline of opportunity. We will touch more on this encouraging development later in the call. For the full year 2024, we continue to expect to deliver bottom-line growth, along with continued momentum and growth and new business wins. The success across the first year of our transformation has not only bolstered our financial results, but it has helped position the company for a refinancing of our obligation, which will help reduce our cost of capital, support stronger earnings and cash flow performance, and accelerate future strategic growth. And Chris will cover this in more detail.

Harold Bevis: Specific to the medical market, our NN medical team is building out dedicated capacity and developing advanced industrial and mechanical capabilities to service the fast-growing pipeline of opportunity. We will touch more on this encouraging development later in the call. For the full year 2024, we continue to expect to deliver bottom line growth, along with continued momentum and growth and new business wins. The success across the first year of our transformation has not only bolstered our financial results, but it has helped position the company for refinancing of our obligation, which will help reduce our cost of capital, support stronger earnings and cash flow performance, and accelerate future strategic growth. And Chris will cover this in more detail.

Unknown Executive: specific to the medical market our n-n medical team is building out ediccated capacity and developing advan industrial and mechanical capabilities to service the fast-growing pipeline of opportunities

Unknown Executive: We will touch more on this encouraging development later in the call.

Unknown Executive: For the full year 2024, we continue to expect to deliver bottom-line growth, along with continued momentum and growth and new business wins. The success across the first year of our transformation has not only bolstered our financial results, but our diversified positioning across the powertrain train spectrum is a comparative advantage. NN's new business wind program reflects an alignment with these evolving trends. Our general industrial markets are forecasted to grow by about 3%.

Unknown Executive: For the full year 2024, we continue to expect to deliver bottom line growth, along with continued momentum and growth in new business wins. The success across the first year of our transformation has not only bolstered our financial results,

Unknown Executive: but it is help position the company for a refinancing of our obligations

Unknown Executive: which will help reduce our cost of capital, support stronger earnings and cash flow performance, and accelerate future strategic growth. And Chris will cover this in more detail.

Harold Bevis: Given our solid progress and successful execution thus far to date, we are reaffirming our guidance for net sales, adjusted EBITDA, free cash flow, and new business wins, which we issued in our July press release as part of the sale of our non-core plastics plan. Aside from our continued operational and financial execution, our financial outlook is supported by exposure to healthy and growing industrial, electrical, and medical end markets, where our capabilities and quality are very valued. The global automotive market backdrop is slightly more variable, with several puts and takes governing demand in the short term, particularly across domestic EVs.

Harold Bevis: Given our solid progress and successful execution thus far, we are reaffirming our guidance for net sales, adjusted EBITDA, free cash flow, and new business wins, which we issued in our July press release as part of the sale of our non-core plastics business. Aside from our continued operational and financial execution, our financial outlook is supported by exposure to healthy and growing industrial, electrical, and medical end markets, where our capabilities and quality are very valued. The global automotive market backdrop is slightly more variable, with several puts and takes governing demand in the short term, particularly across domestic EVs.

Unknown Executive: Given our solid progress and successful execution thus far today, we are reaffirming our guidance for net sales, adjusted EBITDA, free cash flow, and new business wins, which we issued in our July press release as part of the sale of our non-core plastics plant.

Unknown Executive: aside from our continued operational and financial execution our financial outlook is supported by exposure to help the andgrowing industrial electrical and medical end markets where our capabilities and quality are very valued

Unknown Executive: The global automotive market backdrop is slightly more variable.

Unknown Executive: with several puts and takes governing demand in the short term, particularly across domestic EVs. But we believe our diversified positioning across the powertrain spectrum is a comparative advantage.

Harold Bevis: But we believe, Our diversified positioning across the powertrain train spectrum is a comparative advantage. Please turn to slide 5 in the presentation, where we've provided a summary and current outlook for our primary end market. Global Passenger Vehicle, which has constituted roughly 40% of our trailing revenue, is expected to show flat to modest growth. And the market is undergoing a broader demand rebalancing across BASC, hybrid, and ICE drivetrain types.

Unknown Executive: Please turn to slide 5 in the presentation.

Unknown Executive: where we've provided a summary and current outlook for our primary end markets.

Unknown Executive: Global passenger vehicle, which has constituted roughly 40% of our trailing revenue, is expected to show flat to modest growth.

Unknown Executive: and the market is undergoing a broader demand rebalancing across b hybrid and ice drive train types

Harold Bevis: NN's new business wind program reflects an alignment with these evolving trends. Our general industrial markets are forecasted to grow by about 3%, and we're seeing steady demand in these areas. Power grid and electricity control markets are expected to display modest growth globally and NN's business in electrical distribution and control, is seeing a balancing of demand across those markets.

Harold Bevis: NN's new business wind program reflects an alignment with these evolving trends. Our general investor markets are forecasted to grow by about 3%, and we're seeing steady demand in these areas. Power grid and electricity control markets are expected to display modest growth globally, and NN's business in electrical distribution and control is seeing a balancing of demand across those markets. However, our smart meter business remains healthy and continues to show solid growth, and demand for circuit breaker products is steady. Commercial vehicle markets forecast a decline this year, but NN anticipates minimal impact, supported by exposure to unique applications where demand profiles outstripped that of the broader market.

Unknown Executive: NN's new business wind program reflects an alignment with these evolving trends. Our general industrial markets are forecasted to grow by about 3 percent.

Unknown Executive: and we are seeing steady demand in these areas

Speaker Change: power grid and electricity controlled markets are expected to display modest growth globally and nend's business and inteelectal ribution and control

Harold Bevis: Our smart meter business remains healthy and continues to show solid growth and demand in circuit breaker products is steady. Commercial vehicle markets face a forecasted decline this year, but NN anticipates minimal impact supported by exposure to unique applications where demand profiles outstripped that of the broader market. And finally, the market forecast in our small but growing medical business anticipates orthopedic sales to grow 3-4% year-over-year through 2026. Our organic growth in this recently relaunched business is accelerating, and we're adding new capacity to support our new business wins, giving NN the confidence to expand beyond our original goals and now set our targets to grow the business to 100 million.

Unknown Executive: It's seeing a balancing of demand across those markets.

Unknown Executive: our smart meter business remains healthy and continues to show solid growth and demand in circuit breaker products is steady

Speaker Change: commercial vehicle markets base forecast a decline this year but and then anticipateates minimal impact supported by the exposure to unique applications where demand profiles outstripped out of the broader market

Harold Bevis: And finally, the market forecast for our small but growing medical business anticipates orthopedic sales to grow three to four percent year over year through 2026. Our organic growth in this recently relaunched business is accelerating, and we're adding new capacity to support our new business wins, giving NN the confidence to expand beyond our original goals and now set our targets to grow the business to 100 million. Before turning to our second quarter financial results, I'd like to highlight two key recent additions to our leadership team on slide six.

Unknown Executive: And finally, the market forecast and our small but growing medical business anticipate orthopedic sales to grow 3 to 4% year over year through 2026. Before turning to our second quarter financial results, I'd like to highlight two key recent additions to our leadership team on slide six.

Unknown Executive: and finally the market forecast and our small butgrowing medical business anticipates or comedic sales to grow three to four percent year-over-year through two thousand and twenty-six

Unknown Executive: our organic growth in this recently relaunch business is accelerating and we're adding new capacity to support our new business wins giving in in the confidence to expand beyond our original goals and now set our targets to grow the business to one hundred million

Harold Bevis: Before turning to our second quarter financial results, I'd like to highlight two key recent additions to our leadership team on slide six, excuse me. First, I'm excited to welcome our new Chief Financial Officer, Chris Bohnert, to the team. Chris and I have worked together in the past, and his deep experience as a dynamic and operational CFO will be an accelerator for our company's transformation. Welcome, Chris.

Unknown Executive: Before turning to our second quarter financial results, I'd like to highlight two key recent additions to our leadership team on slide six. Excuse me.

Harold Bevis: First, I'm excited to welcome our new Chief Financial Officer, Chris Bohnert, to the team. Chris and I have worked together in the past, and his deep experience as a dynamic and operational CFO will be an accelerator for our company's transformation. Welcome, Chris.

Unknown Executive: First, I'm excited to welcome our new Chief Financial Officer, Chris Bonner, to the team. Chris and I have worked together in the past, and his deep experience as a dynamic and operational CFO will be an accelerator for our company's transformation. Welcome, Chris.

Unknown Executive: first i'm excited to welcome our new chief financial officer chris bonor to the team

Unknown Executive: Chris and I have worked together in the past and his deep experience as a dynamic and operational CFO will be an accelerator for our company's transformation. Welcome Chris.

Harold Bevis: We're also very pleased to welcome Jamie Statham, our new General Counsel to the team. Jamie joins us with close to 20 years of experience in the legal field and brings a strong background working with both public and private companies, including automotive suppliers. She will be a tremendous and complimentary asset to our team as we look to grow our business globally. Please turn to the next slide, slide 7, NN delivered solid second quarter results, with net sales of $123 million and adjusted EBITDA of $13.4 million. Year-over-year net sales volumes were down slightly, driven by unfavorable FX impact, in addition to a deliberate rationalization of certain dilutive volumes at underperforming plants.

Harold Bevis: We're also very pleased to welcome Jamie Statham, our new General Counsel, to the team. Jamie joins us with close to 20 years of experience in the legal field and brings a strong background working with both public and private companies, including automotive suppliers. She will be a tremendous and complementary asset to our team as we look to grow our business globally. Please turn to slide 7, where NN delivered solid second-quarter results with net sales of $123 million and adjusted EBITDA of $13.4 million. Year-over-year net sales volumes were down slightly, driven by an unfavorable FX impact, in addition to a deliberate rationalization of certain dilutive volumes at underperforming plants.

Speaker Change: We are also very pleased to welcome Jamie Stepham, our new General Counsel to the team. Jamie joins us with close to 20 years of experience in the legal field and brings a strong background working with both public and private companies, including automotive suppliers.

Speaker Change: She will be a tremendous and complimentary asset to our team as we look to grow our business globally.

Unknown Executive: Please turn to the next slide, slide 7. NN delivered solid second quarter results.

Speaker Change: with net sales and motor and twenty-three million and adjusted ebitda of thirteen point four millions

Speaker Change: Year-over-year net sales volumes were down slightly, driven by unfavorable FX impacts.

Speaker Change: In addition to a deliberate rationalization of certain diluted volumes at underperforming plants. Encouragingly, this targeted and strategic volume rationalization is being largely offset by sales growth at our stronger, more profitable plants.

Harold Bevis: Encouragingly, this targeted a strategic volume rationalization as being largely offset by sales growth at our stronger, more profitable plants. Despite a modestly lower revenue base, our adjusted EBITDA grew by 28% year-over-year, reflecting the impacts of our transformation work. This marks our fourth consecutive quarter of year-over-year growth in Adjusted EVDA, and our trailing 12-month Adjusted EVDA results are now 49.2 million, which is up almost 29% compared to the same figure at the same time last year.

Harold Bevis: Encouragingly, this targeted a strategic volume rationalization was largely offset by sales growth at our stronger, more profitable plants. Despite a modestly lower revenue base, our adjusted EBITDA grew by 28% year-over-year, reflecting the impacts of our transformation work. This marks our fourth consecutive quarter of year-over-year growth in Adjusted EVDA, and our trailing 12-month Adjusted EVDA results are now 49.2 million, which is up almost 29% compared to the same figure at the same time last year. Our Justity the Gay Margin of 10.9% is up significantly as well compared to last year due to the turn around of trouble plans and broader operating cost reduction.

Unknown Executive: Despite a modestly lower revenue base, our adjusted EBITDA grew by 28% year-over-year, reflecting the impacts of our transformation work. We have longer-term targets to grow our EBITDA margin and raise it to the 13 to 14 percent range, and these results show that we're on our way to meeting those targets. Roughly half of the sales decline was caused by unfavorable foreign exchange impacts of approximately $1 million, or 0.8%, largely within our mobile business. Additionally, rationalization of low-margin business in the mobile solutions segment accounted for most of the remaining decline versus last year.

Unknown Executive: despite a modestly lower revenue basase are adjusted ebitda grew by twenty-eight percent year-over-year reflecting the impacts of our transformation work

Unknown Executive: This marks our fourth consecutive quarter of year-over-year growth in Adjusted EVDA, and our trailing 12-month Adjusted EVDA results are now 49.2 million, which is up almost 29% compared to the same figure at the same time last year.

Harold Bevis: Our Justity Bidet margin of 10.9% is up significantly as well compared to last year, as the turnaround of travel plans and broader operating cost reduction, continue to improve our bottom line. As a result of our transformation.

Speaker Change: our adjustany the gay margin of ten point nine percent is up significantly as well compared to last year as the turnaround of trouble plants and broader operating cost reductions continue to improve our bottom line

Harold Bevis: We will continue to improve our bottom line. As a result of our transformation, we have longer-term targets to grow our EBITDA margin rates to the 13 to 14 percent range. And these results show that we're on our way to delivery. To sum it up, our business transformation is on track, and our recent actions will help accelerate our pace of growth and plant-level performance across the organization. I thank all our talented employees for their commitment and effort in making this success possible.

Harold Bevis: We have longer-term targets to grow our EBITDA margin rates to the 13% to 14% range. And these results show that we're on our way to delivering. To sum it up, our business transformation is on track and our recent actions will help accelerate our pace of growth and plant-level performance across the organization. I thank all our talented employees for their commitment and effort in making this success possible.

Unknown Executive: as a result of our transformation

Unknown Executive: We have longer-term targets to grow our EBITDA margin rates to the 13 to 14 percent range, and these results show that we're on our way to delivering that.

Unknown Executive: To sum it up, our business transformation is on track and our recent actions will help accelerate our pace of growth and plant-level performance across the organization.

Speaker Change: i think all our talented employees for their commitment and effort in making this success possible

Harold Bevis: Our improved performance is generated through their hard work. And with that, I'd like to turn it over to Chris to walk through our financial performance in a more detailed manner. Chris?

Chris Bohnert: Our improved performance is generated through their hard work. And with that, I'd like to turn it over to Chris to walk through our financial performance in a more detailed manner. Chris?

Speaker Change: Our improved performance is generated through their hard work.

Unknown Executive: And with that, I'd like to turn it over to Chris to walk through our financial performance in a more detailed manner. Chris?

Chris Bohnert: Thank you, Harold, and good morning everyone. I'll start on slide eight where we'll detail our results for the second quarter. Net sales for the quarter of 123 million were down slightly by 1.8% or 2.2 million compared to last year's second quarter. Roughly half of the sales decline was caused by unfavorable foreign exchange impacts of approximately $1 million, or 0.8%, largely within our mobile business. Additionally, rationalization of low-margin business in the mobile solutions segment accounted for most of the remaining decline versus last year.

Chris Bohnert: Thank you, Harold, and good morning, everyone. I'll start on slide 8, where we detail our results for the second quarter. Net sales for the quarter of 123 million were down slightly by 1.8% or 2.2 million compared to last year's second quarter. Roughly half of the sales decline was caused by unfavorable foreign exchange impacts of approximately $1 million, or 0.8%, largely within our mobile business. Additionally, rationalization of low-margin business in the mobile solutions segment accounted for most of the remaining decline versus last year.

Unknown Executive: Thank you, Harold, and good morning, everyone. I'll start on slide 8, where we'll detail our results for the second quarter.

Speaker Change: net sales for the quarter of one hundred and twenty-three million were down slightly by one point eight percent or two point two nineill compared to last year's second quarter

Unknown Executive: Roughly half of the sales decline was caused by unfavorable foreign exchange impacts of approximately a million dollars, or 0.8%, largely within our mobile business.

Unknown Executive: Additionally, rationalization of low-margin business in the mobile solutions segment accounted for most of the remaining decline versus last year.

Chris Bohnert: Our operating loss declined significantly to $2.1 million, an improvement of $1.9 million compared to the $4 million operating loss in last year's second quarter. On an adjusted basis, we delivered adjusted operating income of $2.1 million, which again grew relative to the adjusted operating income of $1.3 million seen in the prior year. As Harold referenced earlier, I just, even as a result of 13.64 million, grew by 2.9 million, or 28% versus a 10.5 million last year.

Chris Bohnert: Our operating loss declined significantly to $2.1 million, an improvement of $1.9 million compared to the $4 million operating loss in last year's second quarter. On an adjusted basis, we delivered adjusted operating income of $2.1 million, which again grew relative to the adjusted operating income of $1.3 million seen in the prior year. As Harold referenced earlier, I just even now resolved 13.64 million, which grew by 2.9 million or 28 percent versus 10.5 million last year.

Unknown Executive: Our operating loss declined significantly to $2.1 million, an improvement of $1.9 million compared to the $4 million operating loss in last year's second quarter. On an adjusted basis, we delivered adjusted operating income of $2.1 million, which again grew relative to the adjusted operating income of $1.3 million seen in the prior year. As Harold referenced earlier, Adjusted EBITDA results of $13.4 million grew by $2.9 million, or 28%, versus $10.5 million last year.

Speaker Change: our operating loss declined significantly to two point one million and improvement of one point nine million compared to the four million operating loss in last year's second quarter

Unknown Executive: On an adjusted basis, we delivered adjusted operating income of $2.1 million, which again grew relative to the adjusted operating income of $1.3 million seen in the prior year.

Unknown Executive: as harald referenced earlier adjust even i results of thirteen pointts at four million grew by two point nine million or twenty eight percent versus a ten point five million last year

Unknown Executive: As a result of our Adjusted EBITDA growth, our consolidated Adjusted EBITDA margin of 10.9% expanded by 250 basis points versus last year's second quarter, driven in part by improved operational performance across our base business and a stronger first half of the year for our China joint venture. We think it's worth noting to point out that the depreciation applied to our AutoCamp business is expected to roll off in the coming quarter, the third quarter, and had the timing of that effect been applied to this quarter, our results would have reflected positive net earnings per share on an adjusted basis.

Speaker Change: as a result of our adjusted ebitda growth are consolidated adjusted bit a marg of ten point nine percent expanded by two hundred and fifty basis points

Unknown Executive: versus last year's second quarter, driven in part by improved operational performance across our base business and a stronger first half of the year for our China joint venture.

Unknown Executive: This step up in our profitability on a modestly lower revenue base again speaks to the success of NN's transformation and our improved ability to generate stronger profits from our existing business.

Chris Bohnert: We have shown solid progress in optimizing our sales mix through the transformation and expect these benefits to carry forward supporting long term margin improvement goals. On a gap basis, our quarterly net loss per share of 12 cents showed marked improvement compared to the 38th cent net loss per share seen in last year's second quarter. On an adjusted basis, our quarterly net loss per share came in at two cents, We think it's worth noting to point out that the depreciation applied to our AutoCamp business is expected to roll off in the coming quarter, the third quarter, and had the timing of that effect been applied to this quarter, our results would have reflected a positive net earnings per share on an adjusted basis.

Unknown Executive: We have shown solid progress in optimizing our sales mix through the transformation and expect these benefits to carry forward, supporting long-term margin improvement goals.

Chris Bohnert: We have shown solid progress in optimizing our sales mix through the transformation and expect these benefits to carry forward supporting long-term margin improvement goals. On a GAAP basis, our quarterly net loss per share of $0.12 showed a marked improvement compared to the $0.38 net loss per share seen in last year's second quarter. On an adjusted basis, our quarterly net loss per share came in at $0.02.

Unknown Executive: On a gap basis, our quarterly net loss per share of $0.12 showed marked improvement compared to the $0.38 net loss per share seen in last year's second quarter. On an adjusted basis, our quarterly net loss per share came in at $0.02.

Chris Bohnert: We think it's worth noting to point out that the depreciation applied to our AutoCamp business is expected to roll off in the coming quarter, the third quarter, and had the timing of that effect been applied to this quarter, our results would have reflected positive net earnings per share on an adjusted basis. For the remainder of 2024, our focus on attacking all underperforming areas of the business and cutting costs will continue to anchor our priorities as part of our multi-year transformation effort.

Unknown Executive: We think it's worth noting to point out that the depreciation applied to our AutoCAM business is expected to roll off in the coming quarter, the third quarter, and had the timing of that effect been applied to this quarter, our results would have reflected positive net earnings per share on an adjusted basis.

Chris Bohnert: For the remainder of 2024, our focus on attacking all underperforming areas of the business and cutting costs will continue to anchor our priorities as part of our multi year transformation effort. We remain committed to improving our profitability with our actions to improve the business. I'll now turn over to our segment results starting on slide 9. In our Power Solutions segment, where a business consists largely of stamped products, sales increased 4.3% year-over-year to $50.2 million, growing by $2.1 million from the $48.1 million of sales in last year's second quarter. The lift in sales was primarily due to pricing impacts, including the pass-through impact on precious metals, as well as other pricing actions to offset inflation.

Unknown Executive: For the remainder of 2024, our focus on attacking all underperforming areas of the business and cutting costs will continue to anchor our priorities as part of our multi-year transformation effort. We remain committed to improving our profitability with our actions to improve the business.

Chris Bohnert: We remain committed to improving our profitability through our actions to improve the business. I'll now turn over to our segment results, starting on slide 9. In our par solution segment, where our business consists largely of stance products, sales increased 4.3% year over year to 50.2 million, growing by 2.1 million from the 48.1 million sales in last year's second quarter. The lift in sales was primarily due to pricing impacts, including the pass-through impact on precious metals as well as other pricing actions to offset inflation.

Unknown Executive: In our Power Solutions segment, where the business consists largely of stamped products, sales increased 4.3 percent year-over-year to $50.2 million, growing by $2.1 million from the $48.1 million of sales in last year's second quarter. The lift in sales was primarily due to pricing impacts, including the pass-through impact on precious metals, as well as other pricing actions to offset inflation.

Speaker Change: I will now turn over to our segment results starting on slide 9.

Unknown Executive: In our Power Solutions segment, where a business consists largely of stamped products, sales increased 4.3% year-over-year to $50.2 million, growing by $2.1 million from the $48.1 million of sales in last year's second quarter.

Unknown Executive: The lift in sales was primarily due to pricing impacts, including the pass-through impact on precious metals, as well as other pricing actions to offset inflation.

Chris Bohnert: [inaudible] Power Solutions' quarterly adjusted EBITDA of $9.5 million and improved meaningfully, going by $3 million compared to $6.5 million last year's second quarter. Adjusted EBITDA margins increased from 13.5% to 18.8% quarter over quarter. The positive impacts from past facility closures and the ongoing productivity improvement programs have driven these solid results. We believe it's representative of our refocused efforts and commitment to our strategic transformation plans, which enabled the business to deliver a 46% improvement as compared to the prior year second quarter.

Unknown Executive: Power Solutions' quarterly adjusted EBITDA of $9.5 million and improved meaningfully, going by $3 million compared to $6.5 million last year's second quarter. Adjusted EBITDA margins increased from 13.5% to 18.8% quarter over quarter. The positive impacts from past facility closures and the ongoing productivity improvement programs have driven these solid results. We believe it's representative of our refocused efforts and commitment to our strategic transformation plans, which enabled the business to deliver a 46% improvement as compared to the prior year second quarter.

Chris Bohnert: Power Solutions quarterly adjusted EBITDA of $9.5 million and improved meaningfully, growing by $3 million compared to $6.5 million last year's second quarter. Adjusted EBITDA margins increased from 13.5% to 18.8% quarter over quarter. The positive impacts from past facility closures and the ongoing productivity improvement programs have driven these solid results. We believe it's representative of our refocused efforts and commitment to our strategic transformation plan, which enabled the business to deliver 46% improvement as compared to the prior year second quarter.

Speaker Change: our solutions quarterly adjustedthe ebitda nine point five million improved meaningfully going by three million compared to six point five million last year's second quarter

Unknown Executive: Adjusted EBITDA margins increased from 13.5% to 18.8% quarter-over-quarter. The positive impacts from past facility closures and the ongoing productivity improvement programs have driven these solid results.

Unknown Executive: We believe it's representative of our refocused efforts and commitment to our strategic transformation plan, which enabled the business to deliver 46% improvement as compared to the prior year second quarter.

Chris Bohnert: As we begin to layer in the sales from new business wins, we expect to continue expanding our profitability as we capture improved fixed cost absorption through operating leverage, combined with the ongoing benefits from our cost and productivity programs. In the near term, our key priorities for this segment remain centered around continued cost out and an acceleration of targeted new business sales efforts. We have upgraded our commercial teams with the addition of dedicated business development professionals.

Unknown Executive: As we begin to layer in the sales from new business wins, we expect to continue expanding our profitability as we capture improved fixed cost absorption through operating leverage, combined with the ongoing benefits from our cost and productivity programs. We have upgraded our commercial teams with the addition of dedicated business development professionals. We remain highly focused on operational lead times to improve our customer service and strengthen our IT systems and management processes, all of which have contributed to our recent successes, including the ramp-up of our electrical connectors and shields platform.

Chris Bohnert: As we begin to layer in the sales from new business wins, we expect to continue expanding our profitability as we capture improved fixed cost absorption through operating leverage, combined with the ongoing benefits from our cost and productivity program. In the near term, our key priorities for this segment remain centered around continued cost out and an acceleration of targeted new business sales efforts. We have upgraded our commercial teams with the addition of dedicated business development professionals.

Unknown Executive: In the near term, our key priorities for this segment remain centered around continued cost out and an acceleration of targeted new business sales efforts.

Unknown Executive: We have upgraded our commercial teams with the addition of dedicated business development professionals. We remain highly focused on operational lead times.

Chris Bohnert: We remain highly focused on operational lead times to improve our customer service and strengthen our IT systems and management processes, all of which have contributed to our recent successes, including the ramp-up of our electrical connectors and shields platform. Now turning to slide 10, in our mobile solutions segment, which covers our machine products business, sales decreased 5.6% versus the prior year's second quarter, declining 4.3 million to 72.9 million for the period. The decrease was primarily due to our exit from unprofitable business and contractual reductions in pricing and unfavorable foreign exchange impacts, as I mentioned earlier.

Chris Bohnert: We remain highly focused on operational lead times to improve our customer service and strengthen our IT systems and management processes, all of which have contributed to our recent successes, including the ramp up of our electrical connectors and shields platform. Now turning to slide 10 in our mobile solutions segment, which covers our machine products business, sales decreased 5.6% versus the prior year's second quarter, declining 4.3 million to 72.9 million for the period. The decrease was primarily due to our exit from unprofitable business and contractual reductions in pricing and unfavorable foreign exchange impacts I mentioned earlier.

Unknown Executive: to improve our customer service and strengthen our IT systems and management processes, all of which have contributed to our recent successes, including the ramp-up of our electrical connectors and shields platforms.

Unknown Executive: Now turning to slide 10, in our mobile solutions segment, which covers our machine products business, sales decreased 5.6% versus the prior year's second quarter, declining 4.3 million to 72.9 million for the period. The decrease was primarily due to our exit from unprofitable businesses and contractual reductions in pricing and unfavorable foreign exchange impacts, as I mentioned earlier.

Chris Bohnert: Profitability in the mobile solution segment grew versus last year's second quarter, as the segment suggests the EBITDA results of $8.2 million increased by $0.7 million compared to the $7.5 million in the second quarter of 2023. Again, our focus on fixing the cost structure and productivity is to help drive solid margin expansion. As Harold noted, the income contribution from our China JV has been strong in the first half, and we've taken early steps to reduce indirect labor and its impact on our cost structure.

Unknown Executive: Now turning to slide 10 in our mobile solutions segment, which covers our machine products business, sales decreased 5.6% versus the prior year's second quarter, declining $4.3 million to $72.9 million for the period.

Unknown Executive: The decrease was primarily due to our exit from unprofitable business and contractual reductions in pricing and unfavorable foreign exchange impacts I mentioned earlier.

Chris Bohnert: Profitability in the mobile solution segment versus last year's second quarter as the segments adjust EBITDA results of 8.2 million increased by 0.7 million compared to 7.5 million in the second quarter of 2023. Again, our focus on fixing the cost structure and productivity is to help drive solid margin expansion. As Harold noted, the income contribution from our China JV has been strong in the first half, and we've taken early steps to reduce indirect labor and its impact on our cost structure.

Unknown Executive: Profitability in the mobile solution segment grew versus last year's second quarter as the segment suggests the EBITDA results of $8.2 million increased by $0.7 million compared to the $7.5 million in the second quarter of 2023. Again, our focus on fixing the cost structure and productivity is to help drive solid margin expansion. As we communicated previously, a comprehensive refinancing of our debt obligations is a key strategic priority. The improved Adjusted EBITDA and leverage strengthen our ability to engage with the debt capital market.

Unknown Executive: Profitability in the mobile solution segment grew versus last year's second quarter as the segment suggests the EBITDA results of 8.2 million increased by 0.7 million compared to the seven and a half million in the second quarter of 2023.

Unknown Executive: Again, our focus on fixing the cost structure and productivity has helped drive solid margin expansion.

Unknown Executive: As Harold noted, the income contribution from our China JV has been strong in the first half, and we've taken early steps to reduce indirect labor and its impact on our cost structure.

Chris Bohnert: Our near-term priorities are to continue refining and lowering our cost structure in North America and driving growth in China and expanding our capacity where we continue to win new business. We'll also continue to accelerate our focus on product development and innovation, where capabilities can increase competitiveness in next-gen product applications and expand our presence with key industry players. Recently, we saw this take place as we achieved a new program win in our medical market, where a global market powerhouse awarded NN its machined titanium forgings for hip replacement. Harold will provide an update on this later.

Chris Bohnert: Our near-term priorities are to continue refining and lowering our cost structure in North America and driving growth in China and expanding our capacity where we continue to win new business. We'll also continue to accelerate our focus on product development and innovation, where our capabilities can increase competitiveness in next-gen product applications and expand our presence with key industry players. Recently, we saw this take place as we achieved a new program win in our medical market, where a global market powerhouse awarded NN its machine titanium forgings for hip replacement. Harold will provide an update on this later.

Speaker Change: our near-term priorities are to continue refining and lowering our cost structure in north america and driving growth in china and expanding our capacity where we continue to win new business

Unknown Executive: We will also continue to accelerate our focus on product development and innovation, where capabilities can increase competitiveness in next-gen product applications and expand our presence with key industry players.

Unknown Executive: Recently, we saw this take place as we achieved a new program win in our medical market, where a global market powerhouse awarded NN its machine titanium forgings for hip replacements. Harold will provide an update on this later.

Chris Bohnert: Now turning to slide 11, on a trailing 12-month basis, we delivered adjusted EBITDA of 49.2 million, a steady improvement over the past four quarters. The improved adjusted EBITDA results have translated into a reduction of our leverage multiple over the same time period. As we communicated previously, a comprehensive refinancing of our debt obligations is a key strategic priority. The improved adjust EBITDA and leverage strengthen our ability to engage with the debt capital market.

Chris Bohnert: Now turning to slide 11, on a trailing 12-month basis, we delivered adjusted EBITDA of 49.2 million, a steady improvement over the past four quarters. The improved adjusted EBITDA results have translated into a reduction of our leverage multiple over the same time period. As we communicated previously, a comprehensive refinancing of our debt obligations is a key strategic priority. To improve, to just leave it out and strengthen our ability to engage with the debt capital market.

Unknown Executive: Now turning to slide 11. On a trailing 12-month basis, we delivered adjusted EBITDA of $49.2 million, a steady improvement over the past four quarters. The improved adjusted EBITDA results have translated into a reduction of our leverage multiple over the same time period.

Unknown Executive: As we communicated previously, a comprehensive refinancing of our debt obligations is a key strategic priority. The improved adjusted EBITDA and leverage strengthen our ability to engage with the debt capital markets.

Chris Bohnert: Further, the strategic disposition of our non-core plastics plant in Lubbock, Texas, after quarter end brought an additional $15.4 million that we used to pay down debt after quarter end, reducing our leverage multiple to 2.9 times on a pro forma basis.

Chris Bohnert: Further, the strategic disposition of our non-core plastics plant in Lubbock, Texas, after quarter end, brought an additional $15.4 million that we used to pay down debt after quarter end, reducing our leverage multiple to 2.9 times on a pro forma basis.

Unknown Executive: Further, the strategic disposition of our non-core plastics plant in Lubbock, Texas, after quarter end, brought an additional $15.4 million that we used to pay down debt after quarter end, reducing our leverage multiple to 2.9 times on a pro forma basis.

Unknown Executive: Further, the strategic disposition of our non-core plastics plant in Lubbock, Texas, after Quarter End brought an additional $15.4 million that we used to pay down debt after Quarter End, reducing our leverage multiple to 2.9 times on a pro forma basis.

Chris Bohnert: We are underway with a structured process with our partners to refinance our Existing Term Loan, NABL, and have clear balance sheet and capital structure goals that we expect to execute on in the near term as we work through this process. We expect this refinance to lower our borrowing costs, greatly aid our growth and transformation, and allow us to redeem a portion of our preferred equity, which has high carrying costs. Success in lowering our cost of capital and improving financial flexibility will enhance NN's ability to use our available capital base as a platform for future strategic growth and allow a greater degree of the value we generate to be accreted to our shareholders.

Unknown Executive: We are underway with a structured process with our partners to refinance our Existing Term Loan, NABL, and have clear balance sheet and capital structure goals that we expect to execute on in the near term as we work through this process. We expect this refinance to lower our borrowing costs, greatly aid our growth and transformation, and allow us to redeem a portion of our preferred equity, which has high carrying costs. Success in lowering our cost of capital and improving financial flexibility will enhance NN's ability to use our available capital base as a platform for future strategic growth and allow a greater degree of the value we generate to be accreted to our shareholders.

Chris Bohnert: We are underway with a structured process with our partners to refinance, Our Existing Term Loan, NABL, and have clear balance sheet and capital structure goals that we expect to execute on in the near term as we work through this process. We expect this refinance to lower our borrowing costs, greatly aid our growth and transformation, and allow us to redeem a portion of our preferred equity, which has high carrying costs. Success in lowering our cost of capital and improving financial flexibility will enhance NN's ability to use our available capital base as a platform for future strategic growth and allow a greater degree of the value we generate to accrete to our shareholders.

Unknown Executive: We are underway with a structured process with our partners to refinance

Unknown Executive: Our existing term loan, NABL, and have clear balance sheet and capital structure goals that we expect to execute on in the near term as we work through this process.

Unknown Executive: We expect this refinance to lower our borrowing costs, greatly aid our growth and transformation, and allow us to redeem a portion of our preferred equity, which has high carrying costs.

Unknown Executive: success in laureing cost of capital improving financial flexibility will enhance and inability to use our available capital base as a platform for future strategic growth and allow a greater degree of the value we generate to accrete to our shareholders

Chris Bohnert: We're committed to driving improvement in free cash flow and will therefore continue to take measured approaches to the capital investments required to continue advancing our growth. We look forward to sharing more in our next earnings update on this. With that, I'll turn the call back over to Harold to discuss some of our additional developments before wrapping up our prepared remarks. Harold.

Unknown Executive: We're committed to driving improvement in free cash flow and will therefore continue to take measured approaches to the capital investments required to continue advancing our growth. We look forward to sharing more in our next earnings update on this. Please turn to slide 12 in the presentation.

Unknown Executive: With that, I'll turn the call back over to Harold to discuss some of our additional developments before wrapping up our prepared remarks. Harold?

Harold Bevis: Thank you, Chris. Please turn to slide 12 in the presentation. NN's Organic Growth Program continues to perform very well, and we remain encouraged by the acceleration of new award programs. Since January of 2023, NN has secured $97 million of new awards, and we are advancing our pipeline of opportunities in higher margin, higher growth areas of the market. Additionally, our teams have developed a robust product development and prototyping program, which will be a critical step in improving our sales hit rates and overall participation in innovative programs with large key customers. Year to date, we have secured over $34 million of new awards and we remain on track to deliver between 55 and 70 million of new wins in total for this year.

Harold Bevis: Thank you, Chris. Please turn to slide 12 in the presentation. NN's Organic Growth Program continues to perform very well, and we remain encouraged by the Acceleration New Award Program. Since January of 2023, NN has secured $97 million in new awards, and we are advancing our pipeline of opportunities in higher-margin, higher-growth areas of the market. Additionally, our teams have developed a robust product development and prototyping program, which will be a critical step in improving our sales hit rates and overall participation in innovative programs with large key customers. Year-to-date, we have secured over $34 million in new awards and remain on track to deliver between 55 and 70 million in new wins in total for this year.

Chris: Thank you, Chris.

Unknown Executive: NN's Organic Growth Program continues to perform very well, and we remain encouraged by the Acceleration New Award Program. Since January of 2023, NN has secured $97 million in new awards, and we are advancing our pipeline of opportunities in higher-margin, higher-growth areas of the market. We are ramping up quickly and advancing towards our newly upsized goal of $100 million in revenue. Upon reentry into the medical market, we had set our initial goal of organically growing this business to $50 million, and the experience gained in our business development efforts and the quality of opportunities we've been getting are allowing us to expand and upsize our goals.

Speaker Change: please turn to the slide twelve in the presentation in his organic growth program continues to perform very well and we remain encouraged by the acceleration of new award programs as janu area of two thousand and twenty three and and has secured ninety- seven million dollars of noawards

Unknown Executive: and we are advancing our pipeline of opportunities in higher margin, higher growth areas of the market.

Unknown Executive: Additionally, our teams have developed a robust product development and prototyping program, which will be a critical step in improving our sales hit rates and overall participation in innovative programs with large key customers.

Unknown Executive: Year-to-date, we have secured over $34 million of new awards and remain on track to deliver between 55 and 70 million of new wins in total for this year.

Harold Bevis: Our key growth areas continue to be the Chinese auto markets, U.S. electrification and grid technologies, selective vehicle programs in markets in North America, South America, and Europe, as well as selective investments in medical markets, where we have the capacity and know-how to compete and win. Our pipeline is growing, and we remain steady in our efforts to initiate a cultural change to become even more directly customer-oriented, as quality and on-time delivery are key pillars of our customer value proposition. Please turn to page 13.

Unknown Executive: our key growth areas continue to be

Speaker Change: the china auto markets u us electrification and grid technologies selective vehicle programs in markets of north america south american europe as well as selective investments into medical markets where we have the capacity know how to comte win

Unknown Executive: our pipeline is growing and we remain steady in our efforts to initiate cultural change to become even more directly customer oriented as quality and on-time delivery our key pillars of our customer value proposition

Harold Bevis: I'd like to provide an update on our growing NN medical business, which we re-entered in October of last year. We are uniquely positioned to continue growing this business globally, as we leverage our deep expertise in precision manufacturing and capacity. We are ramping up quickly and advancing towards our newly upsized goal of $100 million in revenue. Upon reentry into the medical market, we had set our initial goal of organically growing this business to $50 million. A goal that was based on our available capacity and what we reasonably believed we could achieve based on our capability.

Harold Bevis: Our key growth areas continue to be the China auto markets, U.S. electrification and grid technologies, selective vehicle programs in markets of North America, South America, and Europe, as well as selective investments into medical markets where we have the capacity and know-how to compete and win. Our pipeline is growing, and we remain steady in our efforts to initiate cultural change to become even more directly customer-oriented, as quality and on-time delivery are key pillars of our customer value proposition. Please turn to page 13.

Harold Bevis: I'd like to provide an update on our growing NN Medical business, which we reentered in October of last year. We are uniquely positioned to continue growing this business globally, as we leverage our deep expertise in precision manufacturing and capacity. We are ramping up quickly and advancing towards our newly upsized goal of $100 million in revenue. Upon re-entry into the medical market, we had set our initial goal of organically growing this business to $50 million.

Unknown Executive: Please turn to page 13.

Unknown Executive: I'd like to provide an update on our growing NN Medical business, which we re-entered in October of last year. We are uniquely positioned to continue growing this business globally as we leverage our deep expertise in precision manufacturing and capacity.

Unknown Executive: We are ramping up quickly and advancing towards our newly upsized goal of $100 million in revenue.

Unknown Executive: Upon re-entry into the medical market, we had set our initial goal of organically growing this business to $50 million.

Harold Bevis: A goal that was based on our available capacity and what we reasonably believed we could achieve based on our capabilities. Our early traction, and experience gained in our business development efforts and the quality of opportunities we've been getting are allowing us to expand and upsize our goals. Our current business is at approximately 17 million.

Unknown Executive: A goal that was based on our available capacity and what we reasonably believed we could achieve based on our capabilities.

Harold Bevis: Our early traction, and the experience gained in our business development efforts and the quality of opportunities we've been getting are allowing us to expand and upsize our goals. Our current business is at approximately $17 million, and as I mentioned earlier, new business opportunities are presenting themselves more frequently and are increasing in size. While we are currently focused on organic growth from the ground up and given our current capacity, we're keeping a keen eye on potential opportunities to accelerate growth through M&A, which will become a stronger focus as a function of the strategic refinancing and lowering of our cost of capital that Chris referred to.

Unknown Executive: Early Traction

Unknown Executive: and the experience gained in our business development efforts and the quality of opportunities we've been getting are allowing us to expand and upsize our goals.

Harold Bevis: And as I mentioned earlier, new business opportunities are presenting themselves more frequently, and are increasing in size. While we are currently focused on organic growth from the ground up and given our current capacity, we're keeping a keen eye on potential opportunities to accelerate growth through M&A, which will become a stronger focus as a function of the strategic refinancing and lowering of our cost of capital that Chris referred to. As part of our organic growth strategy, we continue to position NN Medical to be a key player in the machined medical parts market through several dedicated actions.

Unknown Executive: Our current business is at approximately $17 million, and as I mentioned earlier, new business opportunities are presenting themselves more frequently and are increasing in size.

Unknown Executive: While we are currently focused on organic growth from the ground up and given our current capacity, we're keeping a keen eye on potential opportunities to accelerate growth through M&A, which will become a stronger focus as a function of the strategic refinancing and lowering of our cost of capital that Chris referred to. As part of our organic growth strategy, we continue to position NN Medical to be a key player in the machined medical parts market through several dedicated actions.

Unknown Executive: While we are currently focused on organic growth from the ground up and given our current capacity, we're keeping a keen eye on potential opportunities.

Unknown Executive: to accelerate growth through ea

Unknown Executive: which will become a stronger focus as a function of the strategic refinancing and lowering of our cost of capital that Chris referred to.

Harold Bevis: As part of our organic growth strategy, we continue to position NN Medical to be a key player in the machined medical parts market through several dedicated actions. This includes a focused sales effort that has led to higher-margin sales utilizing existing equipment, obtaining supplier status with several customers in the space, and selectively investing in new equipment to expand our capabilities and meet growing demands. Our strategic actions in the medical space have had early success, as evidenced by the recent launch of our first titanium part, a femur implant section of a hip implant kit, which is depicted on this slide.

Unknown Executive: As part of our organic growth strategy, we continue to position NN Medical to be a key player in the machined medical parts market through several dedicated actions.

Harold Bevis: This includes a focused sales effort, which has led to higher margin sales utilizing existing equipment, obtaining supplier status with several customers in the space, and selectively investing in new equipment to expand our capabilities and meet growing demands. Our strategic actions in the medical space have had early success as evidenced by the recent launch of our first titanium part, a femur implant section of a hip implant kit, which is depicted on this slide.

Chris: This includes a focused sales effort, which has led to higher margin sales utilizing existing equipment, obtaining supplier status with several customers in the space, and selectively investing in new equipment to expand our capabilities and meet growing demand.

Unknown Executive: Our strategic actions in the medical space have had early success, as evidenced by the recent launch of our first titanium part, a femur implant section of a hip implant kit, which is depicted on this slide. Turning to page 14, particularly within the key growth verticals of power, electrical, and the medical market. As a reminder, the key pillars of our transformation include strengthening NN's leadership and customer relationships, and fixing unprofitable plants and operations.

Harold Bevis: Aside from the femur implant, we currently have several high-probability prospects in our near-term pipeline, with more to come as we bring on new advanced manufacturing capacity and increased complexity for additional specifications and capabilities. Our NN Medical sales team has hit the ground running and we're confident this business will drive value, for our customers and our shareholders across the board. Turning to page 14.

Harold Bevis: Aside from the FEMA implant, we currently have several high probability prospects in our near-term pipeline with more to come as we bring on new advanced manufacturing capacity and increased complexity for additional specifications and capabilities. Our NN Medical sales team has hit the ground running, and we're confident this business will drive value for our customers and our shareholders across the board.

Unknown Executive: Aside from the femur implant, we currently have several high probability prospects in our near-term pipeline, with more to come as we bring on new advanced manufacturing capacity and increased complexity for additional specifications and capabilities.

Speaker Change: our n-n medical salesteam is that the ground running and we're fident this business will drive value for our customers and our shareholders across the board

Harold Bevis: And as I covered briefly up front in my opening remarks, we're reaffirming our full year 2024 outlook. As a reminder, for the full year 2024, we're projecting net sales in the $465 to $485 million range, adjusted EBITDA in the range of 47 to 51, up over 13 percent at the midpoint, and free cash flow in the range of 8 to 12 million of slightly at the midpoint compared to the significant FGN improved free cash flow generation, we delivered in 2023, and New Business Wins in the range of $55 to $70 million.

Harold Bevis: And as I covered briefly up front in my opening remarks, we're reaffirming our full year 2024 outlook. As a reminder, for the full year 2024, we're projecting net sales in the $465 to $485 million range, just at EBITDA in the range of 47 to 51, up over 13% at the midpoint, and free cash flow in the range of 8 to 12 million, up slightly at the midpoint compared to the significant and improved free cash flow generation we delivered in 2023, and New Business Wins in the range of 55-70 million.

Speaker Change: turning to page fourteen

Unknown Executive: And as I covered briefly up front in my opening remarks, we're reaffirming our full year 2024 outlook. As a reminder, for the full year 2024, we're projecting net sales in the $465 to $485 million range.

Unknown Executive: adjusted ebitda in the range of forty-seven to fifty-one up over thirteen percent at the midpoint and free cash flow in the range of eight to twelve million of slightly at the midpoint compared to the significantly improved free cash flow generation we delivered in two thousand and twenty three

Unknown Executive: and New Business Wins in the range of $55 to $70 million.

Harold Bevis: As always, our guidance ranges reflect the present state and our view on global markets. Despite a global automotive market that is in transition across the powertrain spectrum, our markets remain healthy broadly, and NN continues to win new business at accelerated rates relative to the market, particularly within the key growth verticals of power, electrical, and the medical market. Please turn to page 15, and in closing, I'd like to provide a high-level overview of where we stand in the current progress of our overall transformation program.

Harold Bevis: As always, our guidance ranges reflect the present state and our view on global markets. Despite a global automotive market that is in transition across the powertrain spectrum, our markets remain healthy broadly, and NN continues to win new business at Accelerator Race relative to the market, particularly within the key growth verticals of power, electrical, and the medical market. Please turn to page 15, and in closing, I'd like to provide a high-level overview of where we stand in the current progress of our overall transformation program.

Unknown Executive: As always, our guidance ranges reflect the present state and our view on global markets.

Unknown Executive: Despite a global automotive market that is in transition across the powertrain spectrum, our markets remain healthy broadly, and NN continues to win new business at accelerated rates relative to the market.

Unknown Executive: particularly within the key growth verticals of power electrical and the medical markets

Unknown Executive: please turn to page fifteen and in closing i'd like to provide a high level overview of where we stand in the current progress of our overall transformation program

Harold Bevis: As a reminder, the key pillars of our transformation include strengthening NN's leadership and customer relationships. Fixing Unprofitable Plants and Operations, expanding margins and profitability through dedicated cost out actions, paying down our debt and refinancing our capital stack, all of which will position NN for continued above market growth and enhanced shareholder value creation. Today, all of our plants and facilities are often in business hold, which marks a significant strategic win and a representation of the solid progress we have made in better integration of our operations and sales. We are focused and on track and we look forward to updating you next quarter. With that, I will now turn the call back to the operator for questions.

Harold Bevis: As a reminder, the key pillars of our transformation include strengthening NN's leadership and customer relationships; fixing unprofitable plants and operations; expanding margins and profitability through dedicated cost-out actions; paying down our debt; and refinancing our capital stack, all of which will position NN for continued above-market growth and enhanced shareholder value creation. Today, all of our plants and facilities are often in business hold, which marks a significant strategic win and a representation of the solid progress we have made in better integration of our operations and sales. We are focused and on track, and we look forward to updating you next quarter. With that, I will now turn the call back to the operator for questions.

Unknown Executive: As a reminder, the key pillars of our transformation include strengthening NN's leadership and customer relationships.

Unknown Executive: Expanding margins and profitability through dedicated cost-out actions, paying down our debt, and refinancing our capital stack, all of which will position NN for continued above-market growth and enhanced shareholder value creation. Today, all of our plants and facilities are often in business hold, which marks a significant strategic win and a representation of the solid progress we have made in better integration of our operations and sales.

Unknown Executive: Fixing Unprofitable Plants and Operations.

Unknown Executive: Expanding margins and profitability through dedicated cost-out actions, paying down our debt and refinancing our capital stack, all of which will position NN for continued above-market growth and enhanced shareholder value creation.

Unknown Executive: Today, all of our plants and facilities are often in business hold, which marks a significant strategic win and a representation of the solid progress we have made in better integration of our operations and sales.

Unknown Executive: We are focused and on track, and we look forward to updating you next quarter.

Speaker Change: With that, I will now turn the call back to the operator for questions.

Operator: Thank you. If you'd like to ask a question, please press star then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the key. To withdraw your question, please press star then 2. Today's first question comes from Joe Gomes with Noble Capital. Please go ahead.

Operator: Thank you. If you'd like to ask a question, please press star then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the key. To withdraw your question, please press star again to... Today's first question comes from Joe Gomes with Noble Capital. Please go ahead.

Speaker Change: Thank you. If you'd like to ask a question, please press star then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys.

Operator: To withdraw your question, please press star then 2.

Speaker Change: today's first question comes from joe gomees wouldn' nobile capital let' go ahead

Joseph Gomes: Good morning. Nice quarter. Thanks for taking my question. Good morning, General.

Joe Gomes: Good morning. Nice quarter. Thanks for taking my question. Morning, General.

Unknown Analyst: Good morning. Nice quarter. Thanks for taking my question. Good morning, General.

Speaker Change: good morning nnights quarter thanks for taking my questions

Unknown Analyst: I just wanted to touch base. You said that you were on track to fix the underperforming plants for break-even. The last time we talked, you had, I think, three of the seven were now at break-even or better. Where do we stand on that number today?

Joseph Gomes: I just wanted to touch base. You said that you were on track to fix the underperforming plants for break-even. The last time we talked, you had, I think, three of the seven were now at break-even or better. Where do we stand on that number today?

Joe Gomes: I just wanted to touch base. You said that you're on track to fix the underperforming plants for breakeven. The last time we talked, you had, I think, three of the seven were now at breakeven or better. Where do we stand on that number today?

General: Good morning, General.

Unknown Analyst: I just wanted to touch base. You said that you're on track to fix the underperforming plants or break even. The last time we talked, you had, I think, three of the seven

Speaker Change: We're now at break even or better. Where do we stand on that number today?

Harold Bevis: Yep, we have Tim French on the phone, our Chief Operating Officer. He's in charge of fixing the underperforming plants.

Unknown Executive: Yep, we have Tim French on the phone, our Chief Operating Officer. He's in charge of fixing the underperforming plants. I'd like Tim to answer the question there.

Harold Bevis: Yep, we have Tim French on the phone, our Chief Operating Officer. He's the commander of fixing the underperforming plants. I'd like Tim to answer the question.

Unknown Executive: yes we have tim french on the phone or chief operating officer he's the commander fixing the underperforming plants i'd like tim to answer the question there

Tim French: I'd like Tim to answer the question there. Sure. And we'll be on mute. Um, are you able to hear me now? Yes. Yes.

Tim French: Sure, I'll be on mute. Um, are you able to hear me now? Yes. Yeah.

Tim French: Sure, I'll be on mute.

Tim French: Are you able to hear me now?

Tim French: Yeah, we're still tracking on a consolidated basis. We expect that group to be at break even or better through Q2. Through Q2, we had three of the seven are profitable, and all of them are performing better than the prior year.

Tim French: Yeah, we're still tracking on a consolidated basis. We expect that group to be at break even or better through Q2. Through Q2, we had three of the seven were profitable, and all of them are performing better than the prior year.

Tim French: Yeah, we're we're still tracking on a consolidated basis. We expect that group to be at break even or better. Through Q2, we had three of the seven are profitable and all of them are performing better than prior year.

unknown: [inaudible]

Tim French: Yes.

Tim French: Yeah, we're still tracking on a consolidated basis. We expect that group to be at breakeven or better. Through Q2, we had three of the seven are profitable and all of them are performing better than prior year.

Unknown Analyst: And we're still at that hundred million dollars in revenue. I think those seven plants were accounted for. We're still on track for that same type of level of revenue, or do you think some of that revenue is going to go to

Joe Gomes: And we're still at that hundred million of revenue. I think those seven plants were accounted for. We're still on track for that same type of level of revenue or do you think, Some of that revenue is going to, you know, go away so that when they're all profitable, that revenue would be somewhat less than 100 million. Yeah.

unknown: And we're still at that hundred million dollars in revenue. I think those seven plants were accounted for. We're still on track for that same type of level of revenue, or do you think some of that revenue is going to, you know, go away so that when they're all profitable, that revenue would be somewhat less than 100 million? Yeah.

Unknown Analyst: Okay.

Unknown Analyst: We're still on track for that same type of level of revenue, or do you think?

Speaker Change: Some of that revenue is going to go away so that when they're all profitable, that revenue would be somewhat less than that $100 million.

Tim French: Yes that we did shed some unprofitable business in that area so there would be it'd be slightly less than the hundred that they started out with. Now there is some organic growth coming in some of the other facilities but net net they'll be slightly down from the hundred.

unknown: Yes, we did shed some unprofitable business in that area, so there would be it'd be slightly less than the hundred that they started out with. Now there is some organic growth coming in some of the other facilities, but net net, they'll be slightly down from the hundred.

Speaker Change: Yes that we did shed some unprofitable business in that area so there would be it'd be slightly less than the hundred that they started out with. Now there is some organic growth coming in some of the other facilities but net net they'll be slightly down from the hundred million.

Joe Gomes: Fair enough. Thanks for that. And I'm just wondering, Harold, maybe talk a little bit, you know, the Chinese joint venture has shown some really good strength. Maybe give us a little more color as to kind of what's driving the strength there. And do you see that continuing here, at least through the end of 24?

unknown: Fair enough. Thanks for that. And I'm just wondering, Harold, maybe you could talk a little bit about the Chinese joint venture that has shown some really good strength. Maybe give us a little more color as to kind of what's driving the strength there. And do you see that continuing here, at least through the end of 24?

Unknown Analyst: Okay.

Harold Bevis: Yeah, you're correct that the JB is showing strength and we have a big customer there named UAES, and that JV is focused in on high end fuel systems. And the market in China has a strong hybrid component and the hybrid vehicles themselves also have fuel injection systems, and the business has been flat, in terms of units made, but, We've benefited from a good cost out program in that business also, and our outlook for the year, is for the business to continue to do better than last year, Joe.

Speaker Change: Fair enough. Thanks for that.

Speaker Change: And I'm just wondering, Harold, maybe talk a little bit, you know, the Chinese joint venture has shown some really good strength, maybe give us a little more color as to kind of what's driving the strength there, and do you see that?

Unknown Analyst: continuing here lease through the end of twenty-four

Harold Bevis: Yeah, you're correct that the JV is showing strength, and we have a big customer there named UAES, and that the JV is focused on high-end fuel systems. And the market in China has a strong hybrid component, and the hybrid vehicles themselves also have fuel injection systems, and the business has been flat in terms of units made, but we've benefited from a good cost-cutting program in that business also, and our outlook for the year is for the business to continue to do better than last year.

Unknown Executive: Yeah, you're correct that the JV is showing strength and we have a big customer there named UAES, and that JV is focused in on high end fuel systems. And the market in China has a strong hybrid component and the hybrid vehicles themselves also have fuel injection systems. In terms of units made, but.

Unknown Executive: you're correct that the jb is showing strength then we have a big customer there named

Unknown Executive: and that JV is focused in on high-end fuel systems.

Unknown Executive: And the market in China has a strong hybrid component, and the hybrid vehicles themselves also have fuel injection systems. And the business has been flat.

Unknown Executive: In terms of units made, but

Unknown Executive: We've benefited from a good cost out program in that business also.

Unknown Executive: and our outlook for the year.

Harold Bevis: I don't know if it's going to be as strong in the second half as it was in the first half, but it's going to continue to be stronger year over year, and the outlook for the business is fine also going into next year and the year after. Tim and I were just in China last week, and we had a thorough review of the JV business unit, and we had a JV board meeting, and that business is good for us, Joe.

Harold Bevis: I don't know if it's going to be as strong in the second half as it was in the first half, but it's going to continue to be year over year stronger and the outlook for the business is fine also going into next year and the year after. Tim and I were just in China last week and we had a thorough review of the JV business unit and we had a JV board meeting and that business is good for us, Joe.

Unknown Executive: is for the business to continue to do better than last year. Joe, I don't know if it's going to be as strong in the second half.

Unknown Executive: As it was in the first half, but it's going to continue to be year over year stronger, and the outlook for the business is fine also for going into next year and the year after. Tim and I were just in China last week.

Unknown Executive: and we had a thorough review of the JV business unit and we had a JV board meeting and that business is good for us, Joe.

Joe Gomes: Good, good. And one more for me, I'll get back in queue. On the strategic refi, I was wondering if you could give us a little more color on, you know, what kind of rates you're thinking you can get versus where your rates are today. And, you know, how much of the convert do you think you're going to be able to take out initially?

Harold Bevis: Good, good. And one more for me, I'll get back in queue. On the strategic refi, I was wondering if you could give us a little more color on, you know, what kind of rates you think you can get versus where your rates are today. And, you know, how much of the refinance do you think you're going to be able to take out initially?

Unknown Analyst: Good, good. And one more for me, I'll get back in queue. On the strategic refi, I was wondering if you could give us a little more color on, you know, what kind of rates you think you can get versus where your rates are today. And, you know, how much of the refinance do you think you're going to be able to take out initially?

Unknown Analyst: Good, good. And one more from me, I'll get back in queue.

Unknown Analyst: I'm the strategic refi. I was wondering if you could give us a little more color on, you know, what kind of rates you're thinking you can get versus where your rates are today and, you know, how much of the convert do you think you're going to be able to take out?

Unknown Analyst: initially

Joe Gomes: Yeah, Chris.

Harold Bevis: Yeah, Chris, do you want to take that one? Sure, Harold. Thanks. Hey, Joe.

Harold Bevis: Yeah, Chris.

Unknown Executive: Yeah, Chris.

Chris Bohnert: Yes, Chris, you want to take that one? Sure, Harold. Thanks. Hey, Joe.

Chris: yes chris you want to take thatone sure pareill thankans that jo

Chris Bohnert: Yeah, so we're in the middle of our refinance process. Right now, the markets are pretty good. Rates are lower than what we're paying today. As you know, we're closer to the 14 percent range with the PIC interest. So we expect to have lower rates than that. You know, as far as use, the primary driver of this is obviously to aid with our transformation as well as, you know, reducing our overall cost of capital.

Chris Bohnert: Yeah, so we're in the middle of our refinance process. Right now, the markets are pretty good. Rates are lower than what we're paying today, as you know. We're closer to the 14 percent range with the PIC interest, so we expect to have lower rates than that. As far as usage is concerned, the primary driver of this is obviously to aid with our transformation as well as to reduce our overall cost of capital, and that includes potentially paying down some of the preferred debt as well.

Chris: Yeah, so we're in the middle of our refinance process. Right now, the markets are pretty good. Rates are lower than what we're paying today, as you know, we're closer to the 14% range with the PIC.

Chris: Interests, so we expect to have lower rates than that.

Chris: As far as use, the primary driver of this is obviously to aid with our transformation as well as...

Chris Bohnert: And that includes potentially paying down some of the preferred debt as well. So the timing of that we'll talk about in the future, but hopefully we'll have the capacity and then the lower rates to really help the business grow and transform in the future. Those are the key goals.

Chris: Reproducing our overall cost of capital, and that includes...

Chris Bohnert: So the timing of that we'll talk about in the future, but hopefully, we'll have the capacity and then the lower rates to really help the business grow and transform in the future. Those are the key goals.

Chris: potentially paying down some of the preferred debt as well. So the timing of that we'll talk about in the future, but hopefully we'll have the capacity and then the lower race to really help the business grow and transform in the future. Those are the key goals.

Joseph Gomes: Great. Thanks for taking the questions. I'll get back in queue.

Joe Gomes: Thanks for taking the questions, I'll get back in queue.

Chris: Okay, great. Thanks for taking the questions. I'll get back to you.

unknown: Thanks, Joe. Thank you.

Harold Bevis: Thanks, Joe. Thank you.

John Franzreb: And our next question today comes from John Franzreb with Sidoti & Company. Please go ahead. Good morning.

John Franzreb: And our next question today comes from John Franzreb with Sidoti and Company. Please go ahead. Good morning.

Chris: Thanks, Joe. Thank you.

Unknown Executive: And our next question today comes from John Franzreb with Sidoti & Company. Please go ahead.

John Franzreb: Good morning, everyone, and thanks for taking the questions. Harold, I'm kind of curious, it seems like this earnings season, we've seen a lot of tempering of expectations, but it doesn't seem like you're seeing the exact same thing. I'm just curious what you see stronger or weaker today in your guidance versus, say, three months ago.

Chris: Good morning, everyone, and thanks for taking the questions.

Chris: I'm kind of curious, it seems like this earning season we've seen a lot of tempering of expectations, but it doesn't seem like you're seeing the exact same thing. I'm just curious what you see stronger or weaker today in your guidance versus say three months ago.

Harold Bevis: Well, for sure, there's a rebalancing between EV hybrid and ice across Our customer base, which is 40% of the company's revenue. What it what it does for us is it extends the outlook on the ICE programs, some pushouts on conversions to electric and hybrid, There's been an increase in R&D programs in hybrid. So for us, that's a that's a positive mix shift. So the desire for the vehicles to do more, whether it be range on electric or efficiency on hybrid and ice, that that's a good mix for us.

Harold Bevis: Well, for sure, there's a rebalancing between EV hybrid and ICE across our customer base, which is 40% of the company's revenue. What it does for us is it extends the outlook on the ICE programs, some pushouts on conversions to electric and hybrid. There's been an increase in R&D programs in hybrids. So for us, that's a positive mix shift. The desire for the vehicles to do more, whether it be range on the electric vehicle or efficiency on the hybrid and ice, that's a good mix for us.

Unknown Executive: Well, for sure, there's a rebalancing between EVs, hybrids, and ICE across So, for us, that's a positive mix shift. So, the desire for the vehicles to do more, whether it be range on the electric vehicle or efficiency on the hybrid and ICE, that's a good mix for us. So, it trends towards our good mix. If you look at China's exporting of Chinese-made vehicles around the world, that's net impacting Europe and some other markets. So we have some puts and takes, you know; we have three plants in China, and we're spotting a fourth plant in China. So we're benefiting from the strength. That's happening, and I wouldn't say we have a dramatically different view, John, than we had three months ago on end market demand.

Unknown Executive: Well, for sure there's a rebalancing between EV hybrid and ICE across

Unknown Executive: our customer base, which is 40% of the company's revenue. What it does for us is it extends the outlook on the ICE programs, some pushouts on conversions to electric and hybrid.

Unknown Executive: there's been an increase in rnd programs and hybrid

Unknown Executive: So for us

Unknown Executive: That's a that's a positive next shift so

Unknown Executive: The desire for the vehicles to do more, whether it be range on electric or efficiency on hybrid and ICE, that's a good mix for us, so it trends towards our good mix.

Harold Bevis: So it trends towards our good mix. If you look at China's exporting of China-made vehicles around the world, that's net impact in Europe, and some other markets. So we have some puts and takes. You know, we have three plants in China, and we're spotting a fourth plant in China.

Harold Bevis: So it trends towards our good mix. If you look at China's exporting of Chinese-made vehicles around the world, that's a net impact in Europe and some other markets. So, we have some puts and takes. You know, we have three plants in China, and we're spotting a fourth plant in China.

Unknown Executive: If you look at China's exporting of China-made vehicles around the world, that's net impacting Europe .

Unknown Executive: and some other markets. So we have some puts and takes, you know, we have three plants in China and we're spotting a fourth plant in China.

Harold Bevis: So we're benefiting from the strength. That's happening and, You know, we're feeling it a little bit on the where it's weaker. So there's some there are some puts and takes. But overall, the amount of vehicles being made is steady on the on the power side. That's been largely unimpacted. You know what's been happening to the grid and, and Power Grid Upgrade, and Medical is a new one for us, so we're stepping into that market and participating it where we weren't doing that before.

Harold Bevis: So we're benefiting from the strength that's happening, and You know, we're feeling it a little bit on where it's weaker. So there's some there are some puts and takes. But overall, the amount of vehicles being made is steady on the power side. That's largely unaffected. You know what's been happening to the grid and and Power Grid Upgrade, and medical is a new one for us, so we're stepping into that market and participating in it where we weren't doing that before.

Unknown Executive: So we're benefiting from the strength.

Unknown Executive: that's happening and

Unknown Executive: You know, we're feeling it a little bit where it's weaker. So there are some puts and takes, but overall, the amount of vehicles being made is steady. On the power side, that's been largely unimpacted, you know, what's been happening to the grid.

Unknown Executive: and the power grid upgrade. And medical is a new one for us, so we're stepping into that market and participating in it where we weren't doing that before.

Harold Bevis: And so, overall, for us, our demand is okay, John, and the revenue moves that we have are largely deliberate by us as we negotiate and confront dilutive situations, and we're willing to take a loss if it's negative EBITDA. So, our revenue, Downside, if you will, is of our own doing as we confront areas of the company to fix, so... I wouldn't say we have. I wouldn't say we have a dramatically different view, John, than we had three months ago on end market demand.

Harold Bevis: And so, overall, for us, our demand is okay, John, and the revenue moves that we have are largely deliberate by us as we negotiate and confront dilutive situations, and we're willing to take a loss if it's negative EBITDA, so our revenue..., downside, if you will, is of our own doing as we confront areas of the company to fix. So, I wouldn't say we have. I wouldn't say we have a dramatically different view, John, than we had three months ago on end market demand.

Unknown Executive: And so, overall, for us, our demand is okay, John .

Speaker Change: the revenue moves that we have largely deliber by us as we negotiate in confront dilute of situations and we're willing to to take a loss if it's if it's negative ebitda so our revenue our revenue

Speaker Change: Downside, if you will, is of our own doing as we confront areas of the company to fix.

Unknown Executive: I wouldn't say we have a dramatically different view, John , than we had three months ago on end market demand.

John Franzreb: Fair enough. And regarding your pricing actions, I came away with the impression that it was largely positive in the quarter, even though you had some contractual givebacks in the mobile solution side of the business. Is that the case? Can you walk through how much you had a positive pricing impact on a year-over-year basis?

John Franzreb: Fair enough. And regarding your pricing actions, I came away with the impression that it was largely positive in the quarter, even though you had some contractual givebacks in the mobile solution side of the business. Is that the case? Can you walk through how much you had positive pricing impact on the year-over-year basis?

Speaker Change: Fair enough. And regarding your pricing actions,

Speaker Change: i came with the impression that it was was more positive in the quarter even though you had some contractor givebacks in the mobile solution side of the business is that the case can wal through how much at positive pricing impact on the over-year basis

Unknown Executive: Help me out, Chris, but our pricing was minimal. We had a good mix.

Harold Bevis: Help me out, Chris, but we pricing was minimal. We had a good mix, on on our contractual price downs in mobile, you're correct, we do have some, it's not big. And on our power business and medical business and industrial business, it's largely PO based. So we price each order we get. But the net price impact on the business wasn't that great, John. Yeah, that's right, Harold. Yep. And, you know, we had some inflation pricing in the power side. And then, you know, precious metals have increased. So we had a little inflation there on the pricing side as well, which is passed through. That's a pass-through, John.

Harold Bevis: Help me out, Chris, but our pricing was minimal. We had a good mix, and on our contractual price downs in mobile, you're correct, we do have some, but it's not big. And on our power business and medical business and industrial business, it's largely PO based. So we price each order we get. But the net price impact on the business wasn't that great, John. Yeah, that's right, Harold. Yep. And, you know, we had some inflation pricing on the power side. And then, you know, precious metals have increased. So we had a little inflation on the pricing side as well, which is passed through. That's a pass-through, John.

Unknown Executive: Help me out, Chris, but pricing was minimal. We had a good mix.

Chris: On our contractual price down to mobile, you're correct, we do have some. It's not big. And on our power business and medical business and industrial business, it's largely PO based. So we price each order we get.

Chris: but the net price impact on the business wasn't that wasn't that great John.

Chris: That's right, Harold. And we had some inflation pricing in the power side and then precious metals have increased, so we had a little inflation there on the pricing side as well, which has passed through.

John Franzreb: Got it. And just can you remind me on the commercial vehicle side, how you're able to outperform some negative, you know, industry trends that we're seeing in the broader marketplace?

John Franzreb: Got it. And just can you remind me on the commercial vehicle side, how you're able to out the form for some negative, you know, industry trends that we're seeing across the marketplace.

Speaker Change: That's a pass through, John . Yep.

John: Got it. And just can you remind me on the commercial vehicle side, how you're able to outperform some negative, you know, industry trends that we're seeing in the broader marketplace?

Harold Bevis: Yep, our biggest exposure in that market is with Cummins, and the part of Cummins where we are a supply chain participant is the very fuel efficient lineup that they have. And the vehicles that are getting made are moving towards high energy efficiency, which is a move towards the products that we make, John. And we've been winning new positions. So, also on the Accelero side of Cummins. So overall, for us, although the Class A trucks, or whatever you want to look at the truck market, as the units are expected to come down, the units that are getting ordered are mixed, shifting towards the type of engines that we participate in.

Unknown Executive: Yep, our biggest exposure in that market is with Cummins. Of course, for us, although the Class 8 trucks or whatever you want to look at the truck market,

Harold Bevis: Yep, our biggest exposure in that market is with Cummins, and the part of Cummins where we, are a supply chain participant is on the very fuel efficient lineup that they have. And the vehicles that are getting made are mixing towards high energy efficiency, which is a mix towards the products that we make, John. And we've been winning new positions, so also on the Accelero side, of Cummins. So overall for us, although the, you know, the Class 8 trucks or however you want to look at the truck market, As the units are expected to come down, the units that are getting ordered are mixed shifting towards the type of engines that we participate in.

Speaker Change: Yep, our biggest exposure in that market is with Cummins.

Chris: and the part of Cummins where we

Chris: are a supply chain participant is on the very fuel-efficient lineup that they have. And the vehicles that are getting made are mixing towards high energy efficiency.

Chris: which is a mix towards the products that we make, John . And we've been winning new positions. So, also on the Accelerer side.

Chris: of Cummins. So, overall for us, although the, you know, the Class 8 trucks or however you want to look at the truck market,

Speaker Change: As the units are expected to come down, the units that are getting ordered are mixed shifting towards the type of engines that we participate in.

John Franzreb: Got it. And I guess just quickly on the medical side, you kind of upsized the target potential. Can you talk about the timeline of the new $100 million versus the $50 million? And the wins, from what I recall, they churn quicker than the balance of the portfolio. How much capex are you going to need to support some of those new wins?

John Franzreb: Got it, got it. And I guess, just quick, just quickly on the medical side, you kind of upsized the target potential. Can you talk about the timeline of the new $100 million versus the $50 million? And the wins, from what I recall, they churn quicker than the balance of the portfolio. How much capex are you going to need to support some of those new wins?

Speaker Change: Got it, got it. And I guess just quick, just quickly on the medical side, you kind of upsized the target potential.

Speaker Change: Can you talk about the timeline of the new $100 million versus the $50 million?

Speaker Change: The winds from what I recall, they churn quicker than the balance of the portfolio. How much capex are you going to need to support some of those new winds?

Harold Bevis: Yep, so there's two pieces to it. There's, there's the The capital expansion that we are underway with, in the medical side. And I'll ask Tim French to speak to that. He's leading it.

Harold Bevis: Yep, so there's two pieces to it. There's the capital expansion that we are underway with on the medical side, and I'll ask Tim French to speak to that. He's leading it.

Chris: Yep, so there's two pieces to it. There's, there's the

Unknown Executive: The capital expansion that we are underway with I'll ask Tim French to speak to that, he's leading it, and then there's the addition of targeted acquisitions, the acquisition program, we're just getting organized to do that. Tim, myself, Chris have all bought plenty of companies in the past, we're not really set up at this moment to do it, we're working with an investment bank, B. Riley, to help us get set up, we're looking at our first small acquisitions, we don't really have a capital structure that would be accommodative or supportive of any type of acquisition, so it's tied into the outlook that we have right now when we're refinancing, that Chris is leading, so in parallel, we're gearing up to do targeted acquisitions in the areas that we're focused on to get bigger, faster than we can kind of go one win at a time at the accounts we're selling into. With regards to the capacity expansion and what we're doing, Tim, could you give a couple comments there?

Tim French: The Capital Expansion that we are underway with

Unknown Executive: and the medical side. And I'll ask Tim French to speak to that. He's leading it. And then there's the addition of targeted acquisitions. The acquisition program

Tim French: And then there's the addition of targeted acquisitions. The acquisition program; we're just getting organized to do that. Tim, myself, and Chris have all bought plenty of companies in the past, but we're not really set up at this moment to do it. We're working with an investment bank, B. Riley, to help us get set up, and we're looking at our first small acquisitions. We don't really have a capital structure that would be accommodative or supportive of any type of acquisition.

Tim French: And then there's the addition of targeted acquisitions. The acquisition program, we're just getting organized to do that. Tim, myself, Chris, have all bought plenty of companies in the past. We're not really set up at this moment to do it. We're working with an investment bank, B. Riley, to help us get set up. We're looking at our first small acquisitions. We don't really have a capital structure that would be accommodative or supportive of any type of acquisition.

Speaker Change: we're just getting organized to do that tim tim myself chris of all bought plenty of companies in the past

Speaker Change: we're not really set up at this moment to do we're working

Speaker Change: with an investment bank be riley to help us get set up we're looking at our first

Unknown Executive: Small acquisitions, we don't really have a capital structure.

Tim French: So it's tied in to the outlook that we have right now when we're refinancing that Chris is leading. So in parallel, we're gearing up to do targeted acquisitions in the areas that we're focused on to get bigger, faster than we can kind of go one win at a time at the accounts we're selling into. With regards to the capacity expansion of what we're doing, Tim, could you give a couple comments there?

Unknown Executive: that would be accommodative or supportive of any type of acquisition. So it's

Tim French: So it's tied in to the outlook that we have right now when we are refinancing that Chris is leading. So in parallel, we're gearing up to do targeted acquisitions in the areas that we're focused on to get bigger faster than we can, kind of going one win at a time with the accounts we're selling into. With regard to the capacity expansion and what we're doing, Tim, could you give a couple comments there?

Unknown Executive: It's tied in to the outlook that we have right now when our refinancing that Chris is leading. So in parallel, we're gearing up to do targeted acquisitions in the areas that we're focused on to get bigger, faster.

Tim French: then we can kind of go one one winat a time at the counts we selling into with regards to the capacity expansion of what we're doing tim could you give a couple of comments there

Tim French: Sure, the primary difference in this market is the need to have versatile, flexible, and capable capacity ready. The timeline from new business award to revenue is significantly shorter in this segment.

Tim French: Sure. The primary difference in this market is the need to have versatile, flexible and capable capacity ready. The timeline from

Tim French: New Business Award to Revenue is significantly shorter in this segment. So, we've identified very flexible

Tim French: So, we've identified very flexible, multi-access ways that are pretty much industry standard within the medical industry, and we're putting together a program to begin acquiring that capacity as necessary. We've already placed orders for 2 of these lines that should be installed later this year. And we will continue to invest in this capability as the demand gets utilized by the sales team.

Tim French: So, we've identified very flexible, multi access ways that are pretty much industry standard within the medical industry, and we're putting together a program to begin acquiring that capacity as as necessary. We've already placed orders for 2 of these lines that should be installed later this year. And we will continue to invest in that in this capability as the demand gets, utilized by the sales team.

Tim French: multi-access ways that are pretty much industry standard within the medical industry and we're putting together a program to begin acquiring that capacity as as necessary. We've already placed orders.

Tim French: for two of these lines that should be installed later this year and we will continue to invest in that in this capability as the demand gets

Tim French: Utilized by the sales team.

Unknown Analyst: Great. Thanks, guys, for taking my questions. I'll get back into the queue.

John Franzreb: Great. Thanks, guys, for taking my questions. I'll get back into queue. Thank you, John.

John Franzreb: Great. Thanks, guys, for taking my questions. I'll get back into the queue. Thank you, John.

Unknown Analyst: Thanks guys for taking my questions. I'll get back into queue.

Operator: And as a reminder, if you would like to ask a question, please press star then 1.

Operator: And as a reminder, if you would like to ask a question, please press star then 1. Today's next question comes from Rob Brown with Lake Street Capital Markets. Please go ahead.

Rob Brown: And as a reminder, if you would like to ask a question, please press star then 1. Today's next question comes from Rob Brown with Lake Street Capital Markets. Please go ahead.

John: Thank you, John .

Operator: And as a reminder, if you would like to ask a question, please press star then 1.

Operator: Today's next question comes from Rob Brown with Lake Street Capital Markets. Please go ahead.

Rob Brown: Rob? On the new medical goal of 100 million from sort of 17 million run rate, what do you have to do to get there in terms of new program wins, or how many steps does it take to sort of get to that level?

Rob Brown: On the new medical goal of 100 million from sort of 17 million run rate, what do you have to do to get there in terms of new program wins, or how many steps does it take to sort of get to that level?

Operator: Good morning.

Speaker Change: On the new medical goal of 100 million from sort of 17 million run rate, what do you have to do to get there in terms of new program wins or how many steps does it take to sort of get to that level?

John Franzreb: Good morning, everyone, and thanks for taking the questions. I'm kind of curious about earnings season. You've seen a lot of tempering of expectations, but it doesn't seem like you're seeing the exact same thing. I'm just curious what you see stronger or weaker today in your guidance versus, say, three months ago.

Unknown Executive: So the type of machine that we're ordering is one that Tim referred to as an industry standard workhorse. We have some of these machines now. When we look at the first six months of quoting, And when we look at our pipeline, it continues to be centered on these types of capabilities, is a bit different than our other ones in that. It's a first mover advantage to have the open capacity of the type needed.

Harold Bevis: So, the type of machine that we're ordering is.., that Tim referred to is an industry standard workhorse. We have some of these machines now, and, um, [inaudible] When we look at the first six months of quoting, We can already tell that $8 million worth of wins we've had to walk away from because we didn't have an open capacity of this type. And when we look at our pipeline, it continues to be centered on these type of capabilities.

Harold Bevis: So the type of machine that we're ordering is one that Tim referred to as an industry standard workhorse. We have some of these machines now, and... When we look at the first six months of quoting, we can already tell that $8 million worth of wins we've had to walk away from because we didn't have an open capacity of this type. And when we look at our pipeline, it continues to be centered on these types of capabilities.

Unknown Executive: Yep, so the type of machine that we're ordering is...

Unknown Executive: referred to as an industry standard workhorse. We have some of these machines now.

Speaker Change: When we look at the first six months of quoting, we can already tell that $8 million worth of wins we've had to walk away from because we didn't have an open capacity of this type. And when we look at our pipeline, it continues to be centered on these type of capabilities.

Harold Bevis: And we have a decent sized pipeline here. It's somewhat, held down because we don't have open capacity as Tim referred to this market, is a bit different than our other ones in that. It's a it's a first mover advantage to have the open capacity of the type needed.

Harold Bevis: And we have a decent-sized pipeline here. It's somewhat held down because we don't have open capacity, as Tim referred to this market. It's a first mover advantage to have the open capacity of the type needed.

Unknown Executive: And we have a decent-sized pipeline here. It's somewhat...

Unknown Executive: held down because we don't have open capacity. As Tim referred to, this market is a bit different than our other ones in that

Unknown Executive: It's a first mover advantage to have the open capacity of the type needed.

Harold Bevis: So we're going to put it in place, and the eight machines that we have in our game plan, of which we've ordered the first two, add up to $50 million with the machines that we already have in place. And I think it's probably going to take. Probably two and a half years or so, Rob, to work our way into that with the normal hit rates that we have. So it's a three-year plan is what we have, and we have a five-person team, and that's the first move that we're making.

Harold Bevis: So we're going to put it in place and the eight machines that we have in our game plan of which we've ordered the first two, are the add up to $50 million with the machines that we already have in place. And I think it's probably going to take. Probably two and a half years or so, Rob, to work our way into that with the normal hit rates that we have. And so it's a three-year plan is what we have. And we have a five-person team. And that's the first move that we're making.

Unknown Executive: So we're going to put it in place, and the eight machines that we have in our game plan, of which we've ordered the first two, are the add-up to $50 million with the machines that we already have in place.

Unknown Executive: And I think it's probably going to take. And so it's a three-year plan is what we have. And we have a five-person team, and that's the first move that we're making. We're still kind of timing our coding because we don't have the machines installed yet. We are close to sold out with the call. We've basically sold out the capacity we have, but we haven't onboarded it all yet. And so we need to get this next increment of capacity. So if you're putting a model down, I would model it over three years.

Unknown Executive: And I think it's probably going to take...

Unknown Executive: Probably two and a half years or so, Rob, to work our way into that with the normal hit rates that we have.

Unknown Executive: And so it's a three-year plan is what we have, and we have a five-person team, and that's the first move that we're making. We're still kind of timing our coding because we don't have the machines installed.

Harold Bevis: We're still kind of timing our coding because we don't have the machines installed. We are close to sold out. We've basically sold out the capacity we have. We haven't onboarded it all yet. And so we need to get this next increment of capacity. So if you're putting a model down, I would model it over three years.

Unknown Executive: We are close to sold out. We've basically sold out the capacity we have. We haven't onboarded it all yet.

Unknown Executive: and so we need to get this next increment of capacity. So if you're putting a model down, I would model it over three years.

Rob Brown: Okay, thank you. That's helpful. And then on the, on your efforts to kind of reduce the legacy loss contracts, you've made good progress. Could you characterize how much you have to go there, how far you're through that, that effort?

Rob Brown: Okay, thank you. That's helpful. And then in your efforts to kind of reduce the legacy loss contracts, you've made good progress. Could you characterize how much you have to go there, how far you're through that effort?

Speaker Change: Okay, thank you. That's helpful. And then on your efforts to kind of reduce the legacy loss contracts, you've made good progress. Could you characterize how much you have to go there, how far you're through that effort?

Harold Bevis: The first phase and first goal that we set was to have these businesses break even and make a little money, and then the second phase was for them to make money at the company average, and we keep raising the average. We're now riding at 11%. And these businesses were close to a negative 11%, you know, when we walked in the door. So they were way, way off the mark in terms of being able to be at the company average.

Harold Bevis: The first phase and first goal that we set was to have these businesses break even and make a little money. And then the second phase is for them to make money at the company average, and we keep raising the average. We're now right at 11%. And these businesses were close to a negative 11%, you know, when we walked in the door. So they were way, way off the mark in terms of being able to, be a company average.

Speaker Change: Yeah, so...

Speaker Change: The first phase and first goal that we set was to have these businesses break even and make a little money. And the second phase is for them to make money at the company average, and we keep raising the average. We're now right at 11%.

Speaker Change: And these businesses were close to a negative 11%, you know, when we walked in the door. So they were way, way off the mark in terms of being able to.

Harold Bevis: So relative to Joe, I think Joe brought it up on whether we're going to have to say goodbye to some of the business that is still holding us back. Probably, you know, but you know, we're trying to hold on to as much as we can and negotiate with with our customers. And, I'm going to say that. Tim Tim's on track actually is a little bit ahead of a plan with getting the group, to be breakeven or above, but a few of the plants are still losing money.

Harold Bevis: So, relative to Joe, I think Joe brought up the question of whether we're going to have to say goodbye to some of the business that is still holding us back. Probably, you know, but you know, we're trying to hold on to as much as we can and negotiate with our customers. And, um, I'm going to say that Tim Tim's on track actually is a little bit ahead of the plan with getting the group to be breakeven or above, but a few of the plants are still losing money. And so.

Unknown Executive: Relative to Joe, I think Joe brought up whether we're going to have to say goodbye to some of the business that is still holding us back, probably, you know, but you know, we're trying to hold on to as much as we can and negotiate with our customers, and I'm going to say that, to be breakeven or above, but a few of the plants are still losing money. And so.

Unknown Executive: the company average so relative to joe i think joe ought it up on whether we're going to have to say goodbyey to some of the business that this still hold us back probably but we're trying to hold on as much as we can negotiate with with our customers and

Unknown Executive: I'm going to say...

Unknown Executive: that

Unknown Executive: Tim's on track, actually he's a little bit ahead of a plan with getting the group

Unknown Executive: to be breakeven or above, but a few of the plants are still losing money.

Harold Bevis: As we look forward to that, into that reality, it might be that we need to rationalize some of the rooftop. If we can't fix the business in place, and we're prepared to do that also, we, you know, those are, those require cash, and so you don't rush into those things that, phase one, we've been trying to fix every plant right where it's at. But some of the capabilities in these plants are limited, and whether they'll be able to make 11% EBITDA down the road remains to be seen. Tim, do you have any further comments you'd like to make on that? Ann...

Unknown Executive: As we look forward to that and into that reality, it might be that we need to rationalize some of the rooftops. If we can't fix the business in place, and we're prepared to do that, also, we, you know, those are, those require cash. And so you don't rush into those things in phase one, we've been trying to fix every plant right where it is at. But some of the capabilities in these plants are limited, and whether they'll be able to make 11% EBITDA down the road remains to be seen. Tim, I don't know if you have any further comments you'd like to make on that.

Harold Bevis: And so. As we look forward into that and into that reality, it might be that we need to rationalize some of the rooftops. If we can't fix the business in place, and we're prepared to do that also, those require cash, and so you don't rush into those things. Phase one, we've been trying to fix every plant right where it's at. But some of the capabilities in these plants are limited, and whether they'll be able to make 11% EBITDA down the road remains to be done. Tim, I don't know if you have any further comments you'd like to make on that. An- An- An-

Unknown Executive: And so, as we look forward into that reality, it might be that we need to rationalize some of the rooftops.

Tim French: If we can't fix the business in place and we're prepared to do that also, those require cash and so you don't rush into those things that phase one we've been trying to fix every plant right where it sits.

Unknown Executive: But some of the capabilities in these plants are limited, and whether they'll be able to make 11% EBITDA down the road remains to be done. Tim, I don't know if you have any further comments you'd like to make on that.

Tim French: Nothing specific. I think we've addressed a large portion of it. There may be a little left, as you indicated, Harold, but for the most part, I think we've cleaned up a lot of that underperforming, substandard business at this point.

Tim French: Nothing, nothing specific. I think we've we've addressed a large portion of it. There may be a little left as you indicated, Harold, but for the most part I think we've cleaned up a lot of that underperforming, substandard business at this point.

Tim French: Nothing, nothing specific. I think we've addressed a large portion of it. There may be a little left as you indicated, Harold, but for the most part, I think we've cleaned up a lot of that underperforming.

Tim French: Substandard Business at this point.

Rob Brown: Okay, great. Thank you. I'll turn it over to you.

Unknown Analyst: Okay, great. Thank you. I'll turn it over to you.

Rob Brown: Okay, great. Thank you. I'll turn it over.

Harold: Okay, great. Thank you. I'll turn it over.

Operator: Thank you. And this concludes our question and answer session. I'd like to turn the conference back over to the company for any closing remarks.

Operator: Thank you, Rob. Thank you. And this concludes our question and answer session. I'd like to turn the conference back over to the company for any closing remarks.

Unknown Executive: Thank you very much. We appreciate you joining us today. And I'd just like to reiterate that our transformation is still underway, and it's taking shape, and we're showing progress as we go through it. We are happy with our progress so far, and we can obviously see what we need to do next, and so can you. And we're being very deliberate with our activities, and the transformation plan, which we have on our deck today, is what we're following.

Harold Bevis: Thank you very much. We appreciate you joining us today. And I'd just like to reiterate that our transformation is still underway, and it's taking shape, and we're showing progress as we go through it. We're happy with our progress so far, and we can obviously see what we need to do next, and so can you. And we're being very deliberate with our activities, and the transformation plan, which we have in our deck today, is what we're following.

Harold Bevis: Thank you very much. We appreciate you joining us today. And I'd just like to reiterate that our transformation is still underway, and it's taking shape, and we're showing progress as we go through it. We are happy with our progress so far, and we can obviously see what we need to do next, and so can you. And we're being very deliberate with our activities, and the transformation plan, which we have on our deck today, is what we're following.

Unknown Executive: ok

Unknown Executive: Thank you very much. We appreciate you joining us today, and I'd just like to reiterate that our transformation

Unknown Executive: is still underway, and it's taking shape, and we're showing progress as we go through it. We're happy with our progress so far, and we can obviously see what we need to do next, and so can you.

Unknown Executive: We are being very deliberate with our activities and the transformation plan which we have in our deck today is

Unknown Executive: And although there's more work to do, we're gaining momentum and confidence in our new growth program. We're off new business holds at every plant globally now, and that's a first, and that's due to operational performance and saying what we're doing, and doing what we say with our customers. And our quality has been great all the way through, and we're looking at green scorecards. And so our aperture has expanded somewhat to grow the company and puts us in a good position to execute. I look forward to speaking with you in the next quarter and wish everyone a good day. Thank you.

Harold Bevis: And although there's more work to do, we're gaining momentum and confidence in our new growth program. We're off new business holds at every plant globally now, and that's a first, and that's due to operational performance and saying what we're doing, doing what we say with our customers. And our quality has been great all the way through, and we're looking at green scorecards. And so our aperture has expanded somewhat to grow the company and puts us in a good position to execute. Look forward to speaking with you in the next quarter and wish everyone a good day. Thank you.

Harold Bevis: And although there's more work to do, we're gaining momentum and confidence in our new growth program. We're off new business holds at every plant globally now, and that's a first, and that's due to operational performance and saying what we're doing, and doing what we say with our customers. And our quality has been great all the way through, and we're looking at green scorecards. And so our aperture has expanded somewhat to grow the company, and it puts us in a good position to execute. I look forward to speaking with you in the next quarter and wish everyone a good day. Thank you.

Unknown Executive: is what we're following.

Unknown Executive: And although there's more work to do, we're gaining momentum and confidence in our new growth program.

Unknown Executive: We're off new business holds at every plant globally now, and that's a first.

Unknown Executive: And that's due to operational performance and saying what we're doing, doing what we say with our customers. And our quality has been great all the way through, and we're looking at green scorecards. And so our aperture has expanded somewhat to grow the company and puts us in a good position to execute.

Unknown Executive: I look forward to speaking with you in the next quarter and wish everyone a good day. Thank you.

Operator: Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You made it through two extra lines, and have a wonderful day. [inaudible]

Operator: Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Operator: Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation.

Operator: ...

Speaker Change: Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation.

unknown: Sew refers to a number of the perpetual and annual retreat opportunities that were together in 2000.

Speaker Change: You may now disconnect your lines and have a wonderful day.

Harold Bevis: So we believe... Our diversified positioning across the powertrain train spectrum is a comparative advantage. Please turn to slide five in the presentation, where we've provided a summary and current outlook for our primary end markets. Global Passenger Vehicle, which has constituted roughly 40% of our trailing revenue, is expected to show flat to modest growth, and the market is undergoing a broader demand rebalancing across BASC, hybrid, and ICE drivetrain

Harold Bevis: We're still kind of timing our coding because we don't have the machines installed. We are close to sold out. We've basically sold out the capacity we have. We haven't onboarded it all yet. And so if you're putting a model down, I would model it over three years.

Chris Bohnert: As a result of our adjusted EBITDA growth, our consolidated adjusted EBITDA margin of 10.9% expanded by 250 basis points versus last year's second quarter, driven in part by improved operational performance across our base business. And a stronger first half of the year for our China joint venture. This step up in our profitability on a modestly lower revenue base again speaks to the success of NN's transformation and our improved ability to generate stronger profits from our existing business.

Chris Bohnert: As a result of our adjusted ebit.grove, our consolidated adjusted ebit.margin of 10.9 percent expanded by 250 basis points versus last year's second quarter, driven in part by improved operational performance across our base business and a stronger first half of the year for our China joint venture. This step-up in our profitability on a modestly lower revenue base again speaks to the success of NN's transformation and our improved ability to generate stronger profits from our existing business.

Q2 2024 NN Inc Earnings Call

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