Page 1

NN NN , Inc. Reports Strong Sales Growth And Improved Operating Margins For First Quarter 2021 May 6 , 2021 First Quarter Net Sales Increased 9.1 % Over Prior Year , Driving EBITDA to $ 16.9 Million on an Adjusted Basis CHARLOTTE , N.C. , May 6 , 2021 / PRNewswire / -- NN , Inc. ( NASDAQ : NNBR ) , a diversified industrial company , today reported its financial results for the first quarter ended March 31 , 2021 . GAAP Results Net sales for the first quarter of 2021 increased $ 10.6 million , or 9.1 % , to $ 126.8 million , compared to $ 116.2 million for the first quarter of 2020 , led by strong sales from Mobile Solutions , which increased 11.3 % . On a GAAP basis , income from operations for the first quarter of 2021 was $ 1.0 million , compared to loss from operations of $ 103.9 million for the same period in 2020. In the first quarter of 2021 , the income from operations was primarily driven by an increase in sales volume and cost reduction initiatives . Income from operations for the first quarter of 2020 was impacted by a non - cash goodwill impairment of $ 92.9 million in the Power Solutions segment . On a GAAP basis , income from operations for first quarter 2021 in the Mobile Solutions segment was $ 6.1 million , compared to income from operations of $ 0.3 million for the same period in 2020. On a GAAP basis , income from operations for first quarter 2021 in the Power Solutions segment was $ 2.4 million , compared to loss from operations of $ 90.3 million for the same period in 2020 . Net loss on a GAAP basis for the first quarter of 2021 was $ 4.9 million , compared to net loss on a GAAP basis of $ 248.2 million in the first quarter of 2020. Net loss on a GAAP basis for the first quarter of 2021 was driven by costs related to the refinancing transaction and termination of the interest rate swap , which were partially offset by the gross profit generated from incremental sales volume , operating efficiencies , reductions in SG & A , and interest expense . Net loss on a GAAP basis for the first quarter of 2020 was impacted by the non - cash goodwill impairment referenced above and the loss from discontinued operations of $ 140.1 million from the former Life Sciences business . Adjusted Results Adjusted income from operations for the first quarter of 2021 was $ 6.4 million , compared to $ 1.3 million for the same period in 2020. Adjusted EBITDA for the first quarter of 2021 was $ 16.9 million , or 13.3 % of sales , versus $ 10.1 million , or 8.7 % of sales , for the same period in 2020. Adjusted net income was $ 2.2 million , or $ 0.05 per diluted share , compared to adjusted net loss of $ 6.6 million , or $ 0.16 per diluted share , for the same period in 2020. Free cash flow for the first quarter of 2021 was $ 2.4 million , compared to a use of cash of $ 1.0 million for the same period in 2020 . Warren Veltman , President and Chief Executive Officer , said , " We are encouraged by the strong sequential and year - over - year growth we saw across our Mobile Solutions and Power Solutions businesses in the first quarter . We experienced strong growth in North America and our wholly owned China operations , driven by improved customer demand across our end markets . Our China joint venture also showed strong profitability during the quarter contributing to a $ 1.7 million improvement from prior year . Our sales volume , cost reductions , and improved manufacturing efficiencies all contributed to improve our bottom line and free cash flow generation during the quarter . " Mobile Solutions Net sales for the first quarter of 2021 were $ 77.8 million , compared to $ 69.9 million in the first quarter of 2020 , an increase of $ 7.9 million , or 11.3 % . The increase in sales was driven by higher demand within all markets that were negatively impacted by the pandemic in the prior year , as well as new business in the general industrial market . Adjusted income from operations for the first quarter of 2021 was $ 7.1 million , compared to $ 1.5 million of adjusted operating income in the first quarter of 2020. Adjusted operating income increased as a result of the increase in sales as well as variable and fixed cost reduction initiatives . Power Solutions Net sales for the first quarter of 2021 were $ 49.1 million , compared to $ 46.4 million in the first quarter of 2020 , an increase of $ 2.7 million , or 5.8 % . The increase in sales was driven primarily by higher commodity pricing on precious metals which are passed through at lower margins . The increase in sales was partially offset by decreases in demand from the electrical and medical markets as demand has been dampened by the pandemic , which did not begin to impact the segment until the second quarter of 2020. Adjusted income from operations for the quarter was $ 5.5 million , compared to $ 7.0 million in the first quarter of 2020 . The reduction in adjusted operating income was due primarily to the lower margins on precious metals as well as the product mix which reduced overall segment profitability . Mr. Veltman concluded , " Throughout the first quarter of 2021 , we continued to make progress in executing our strategic plan by successfully completing our refinancing , providing us a long - term runway to achieve our 2025 goals for revenue and profitability growth . We also added new directors to our Board who possess specific experience and skill sets to assist our management team in shaping our strategy to leverage growth opportunities created by the evolution of the power grid and electric vehicles . Looking forward , we will continue to maintain our focus on end market penetration to drive growth and cost discipline to improve profitability , while remaining judicious in our capital investments . " Conference Call NN will discuss its results during its quarterly investor conference call on May 7 , 2021 , at 9:00 a.m. ET . The call and supplemental presentation may be accessed via NN's website , www.nninc.com . The conference call can also be accessed by dialing 1-877-317-6789 or 1-412-317-6789 , Conference ID : 10155479. For those who are unavailable to listen to the live broadcast , a replay will be available shortly after the call until May 7 , 2022 . NN discloses in this press release the non - GAAP financial measures of adjusted income from operations , adjusted EBITDA , adjusted net income ( loss ) , adjusted net income per diluted share , and free cash flow . Each of these non - GAAP financial measures provides supplementary information about the impacts of restructuring and integration expense , acquisition and transition expenses , foreign exchange impacts on inter - company loans , amortization of intangibles and deferred financing costs , and other non - operating impacts on our business . The financial tables found later in this press release include a reconciliation of adjusted income from operations , adjusted operating margin , adjusted EBITDA ,