nnbr-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-39268

NN, Inc.

(Exact name of registrant as specified in its charter)


Delaware						62-1096725
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

6210 Ardrey Kell Road, Suite 120

Charlotte, North Carolina 28277

(Address of principal executive offices, including zip code)

(980) 264-4300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, par value $0.01

NNBR

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 25, 2025, there were 50,447,151 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

Table of Contents

NN, Inc.

INDEX


		Page
PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)	3
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows (Unaudited)	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
	Note 1. Interim Financial Statements	7
	Note 2. Segment Information	8
	Note 3. Revenue from Contracts with Customers	9
	Note 4. Accounts Receivable	10
	Note 5 . Inventories	10
	Note 6 . Intangible Assets	10
	Note 7 . Investment in Joint Venture	11
	Note 8 . Debt	11
	Note 9 . Preferred Stock	12
	Note 10 . Leases	13
	Note 1 1 . Commitments and Contingencies	13
	Note 1 2 . Income Taxes	14
	Note 13 . Net Loss Per Common Share	14
	Note 14 . Share-Based Compensation	15
	Note 1 5 . Accumulated Other Comprehensive Income	16
	Note 16 . Fair Value Measurements	16

	Note 17 . Plant Optimization Activities	17
	Note 18 . Subsequent Event	18

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23

PART II. OTHER INFORMATION		25

Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	26
SIGNATURES		27

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NN, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)


	Three Months Ended March 31,
(in thousands, except per share data)	2025		2024
Net sales	$	105,688	$	121,198
Cost of sales (exclusive of depreciation and amortization shown separately below)	91,646		101,086
Selling, general, and administrative expense	11,170		13,348
Depreciation and amortization	8,774		12,547

Other operating income, net	(1,113)		(1,000)
Loss from operations	(4,789)		(4,783)
Interest expense	5,194		5,366



Other expense (income), net	(2,169)		4,153
Loss before provision for income taxes and share of net income from joint venture	(7,814)		(14,302)
Provision for income taxes	(1,310)		(506)
Share of net income from joint venture	2,439		2,271


Net loss	$	(6,685)	$	(12,537)
Other comprehensive income (loss):
Foreign currency translation gain (loss)	$	3,125	$	(2,346)


Reclassification adjustments from the interest rate swap included in net loss, net of tax	—		(449)
Other comprehensive income (loss)	$	3,125	$	(2,795)
Comprehensive loss	$	(3,560)	$	(15,332)












Basic and diluted net loss per share	$	(0.23)	$	(0.34)
Shares used to calculate basic and diluted net loss per share	49,075		47,724

See notes to condensed consolidated financial statements (unaudited).

Table of Contents

NN, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


(in thousands, except per share data)	March 31, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	11,739	$	18,128
Accounts receivable, net of allowances of $1,375 and $1,515 at March 31, 2025 and December 31, 2024	67,750		61,549
Inventories	62,927		61,877
Income tax receivable	12,688		12,634
Prepaid assets	5,600		2,855
Other current assets	12,270		10,519
Total current assets	172,974		167,562
Property, plant and equipment, net of accumulated depreciation of $247,739 and $240,532 at March 31, 2025 and December 31, 2024	162,040		162,034
Operating lease right-of-use assets	38,305		39,317
Intangible assets, net	41,005		44,410
Investment in joint venture	37,622		34,971
Deferred tax assets	1,329		1,329
Other non-current assets	7,449		7,270
Total assets	$	460,724	$	456,893
Liabilities, Preferred Stock, and Stockholders’ Equity
Current liabilities:
Accounts payable	$	45,876	$	38,879
Accrued salaries, wages and benefits	17,698		19,915
Income tax payable	534		659
Short-term debt and current maturities of long-term debt	3,719		5,039
Current portion of operating lease liabilities	5,566		6,038
Other current liabilities	16,711		13,382
Total current liabilities	90,104		83,912
Deferred tax liabilities	5,088		4,969

Long-term debt, net of current maturities	147,604		143,591
Operating lease liabilities, net of current portion	41,007		42,291
Other non-current liabilities	11,673		14,111
Total liabilities	295,476		288,874
Commitments and contingencies (Note 11)
Series D perpetual preferred stock - $0.01 par value per share, 65 shares authorized, issued and outstanding at March 31, 2025 and December 31, 2024	97,904		93,497
Stockholders’ equity:
Common stock - $0.01 par value per share, 90,000 shares authorized, 50,526 and 49,908 shares issued and outstanding at March 31, 2025 and December 31, 2024	505		499
Additional paid-in capital	452,187		455,811
Accumulated deficit	(340,306)		(333,621)
Accumulated other comprehensive loss	(45,042)		(48,167)
Total stockholders’ equity	67,344		74,522
Total liabilities, preferred stock, and stockholders’ equity	$	460,724	$	456,893

See notes to condensed consolidated financial statements (unaudited).

Table of Contents

NN, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,
(in thousands)	2025		2024
Cash flows from operating activities
Net loss	$	(6,685)	$	(12,537)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	8,774		12,547
Amortization of debt issuance costs and discount	716		544
Paid-in-kind interest	316		730


Total derivative loss (gain), net of cash settlements	(1,762)		3,331
Share of net income from joint venture	(2,439)		(2,271)

Share-based compensation expense	839		846
Deferred income taxes	174		(260)
Other	(519)		(666)
Changes in operating assets and liabilities:
Accounts receivable	(5,403)		(6,888)
Inventories	(220)		(1,554)
Other operating assets	(3,444)		(4,821)
Income taxes receivable and payable, net	(163)		(163)
Accounts payable	6,468		6,130
Other operating liabilities	3		5,744
Net cash provided by (used in) operating activities	(3,345)		712
Cash flows from investing activities
Acquisition of property, plant and equipment	(3,907)		(5,460)
Proceeds from sale of property, plant, and equipment	177		98


Net cash used in investing activities	(3,730)		(5,362)
Cash flows from financing activities
Proceeds from long-term debt	11,000		13,001
Repayments of long-term debt	(9,026)		(29,808)

Cash paid for debt issuance costs	—		(646)


Proceeds from sale-leaseback of equipment	—		4,910
Proceeds from sale-leaseback of land and buildings	—		16,863
Repayments of financing obligations	(297)		(99)
Repayments of short-term debt	(63)		—
Other	(1,031)		(651)
Net cash provided by financing activities	583		3,570
Effect of exchange rate changes on cash flows	103		(213)
Net change in cash and cash equivalents	(6,389)		(1,293)
Cash and cash equivalents at beginning of period	18,128		21,903
Cash and cash equivalents at end of period	$	11,739	$	20,610

See notes to condensed consolidated financial statements (unaudited).

Table of Contents

NN, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended March 31, 2025 and 2024

(Unaudited)


	Common Stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive loss		Total
(in thousands)	Number of shares	Par value
Balance as of December 31, 2024	49,908	$	499	$	455,811	$	(333,621)	$	(48,167)	$	74,522
Net loss	—	—		—		(6,685)		—		(6,685)

Dividends accrued for preferred stock	—	—		(4,407)		—		—		(4,407)

Shares issued under stock incentive plans, net of forfeitures and tax withholdings	637	6		(7)		—		—		(1)
Share-based compensation expense	—	—		839		—		—		839
Restricted shares surrendered for tax withholdings under stock incentive plans	(19)	—		(49)		—		—		(49)

Other comprehensive income	—	—		—		—		3,125		3,125

Balance as of March 31, 2025	50,526	$	505	$	452,187	$	(340,306)	$	(45,042)	$	67,344


	Common Stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive loss		Total
(in thousands)	Number of shares	Par value
Balance as of December 31, 2023	47,269	$	473	$	457,632	$	(295,348)	$	(37,755)	$	125,002
Net loss	—	—		—		(12,537)		—		(12,537)

Dividends accrued for preferred stock	—	—		(3,670)		—		—		(3,670)
Shares issued for warrants exercised	1,896	19		9,367		—		—		9,386
Shares issued under stock incentive plans, net of forfeitures	374	4		(4)		—		—		—
Share-based compensation expense	—	—		846		—		—		846
Restricted shares surrendered for tax withholdings under stock incentive plans	(19)	(1)		(90)		—		—		(91)

Other comprehensive loss	—	—		—		—		(2,795)		(2,795)

Balance as of March 31, 2024	49,520	$	495	$	464,081	$	(307,885)	$	(40,550)	$	116,141

See notes to condensed consolidated financial statements (unaudited).

Table of Contents

NN, Inc.

Notes to Condensed Consolidated Financial Statements

March 31, 2025

(Unaudited)

Note 1. Interim Financial Statements

Nature of Business

NN, Inc., a Delaware corporation, is a diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies for a variety of end markets on a global basis. As of March 31, 2025, we had 24 facilities in North America, South America, Europe and China. As used in this Quarterly Report on Form 10-Q (this “Quarterly Report”), the terms “NN,” the “Company,” “we,” “our,” or “us” refer to NN, Inc. and its subsidiaries.

Basis of Presentation

The accompanying condensed consolidated financial statements have not been audited. The Condensed Consolidated Balance Sheet as of December 31, 2024, was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”), which we filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 6, 2025. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to fairly state our results of operations for the three months ended March 31, 2025 and 2024; financial position as of March 31, 2025 and December 31, 2024; and cash flows for the three months ended March 31, 2025 and 2024, on a basis consistent with our audited consolidated financial statements. These adjustments are of a normal recurring nature and are, in the opinion of management, necessary to state fairly the our financial position and operating results for the interim periods. Certain prior period amounts have been reclassified to conform to the current year’s presentation.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted from the unaudited condensed consolidated financial statements presented in this Quarterly Report. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the 2024 Annual Report. The results for the three months ended March 31, 2025, are not necessarily indicative of results for the year ending December 31, 2025, or any other future periods.

Except for per share data or as otherwise indicated, all U.S. dollar amounts and share counts presented in the tables in these Notes to Condensed Consolidated Financial Statements are in thousands.

Accounting Standards Recently Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07, Segment Reporting (Topic 832): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires additional disclosures related to reportable segments, including significant segment expenses and other segment items. ASU 2023-07 also permits entities to disclose more than one measure of a segment’s profit or loss and requires quarterly disclosure of certain information that is now only required annually. We adopted ASU 2023-07 for the year ended December 31, 2024 and have presented the required interim disclosures on a retrospective basis in this March 31, 2025 Form 10-Q.

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires additional annual income tax disclosures. These include a tabular rate reconciliation comprised of eight specific categories, the disaggregation of income taxes paid between federal, state, and foreign jurisdictions, and to disaggregate income from continuing operations before income tax expense and income tax expense from continuing operations between domestic and foreign. ASU 2023-09 eliminates the disclosure of the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made. ASU 2023-09 is effective for fiscal years beginning on or after December 15, 2024, with early adoption permitted, and can be applied on a prospective or retrospective basis. We plan to adopt ASU 2023-09 in our Form 10-K for the year ended December 31, 2025 and are in the process of assessing the impact on our disclosures.

In November 2024, the FASB issued ASU 2024-03, “Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disaggregated disclosures of certain categories of expenses that are included in income statement line items. ASU 2024-03 is effective for fiscal years beginning on or after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Companies may early adopt and can apply the guidance prospectively or retrospectively. The Company has not yet determined the potential impact of adopting this standard.

Table of Contents

Assets Held for Sale

During the quarter ended March 31, 2025, we ceased production activity at our Mobile Solutions plant in Dowagiac, Michigan. The land and building, which we own, have been classified as held for sale as of March 31, 2025 as we are actively marketing the property for sale. The net book value of $1.4 million is included in “Other current assets” on the Condensed Consolidated Balance Sheets as of March 31, 2025.

Note 2. Segment Information

Our business is aggregated into the following two reportable segments:

•Mobile Solutions, which is focused on growth in the automotive, general industrial, and medical end markets; and

•Power Solutions, which is focused on growth in the electrical, general industrial, automotive, and medical end markets.

These components are operating segments as each has engaged in business activities for which it earns revenues and incurs expenses, discrete financial information is available for each, and this is the level at which the chief operating decision maker (“CODM”) reviews discrete financial information for purposes of allocating resources and assessing performance. The CODM, who is our President and Chief Executive Officer, uses segment income (loss) from operations to evaluate the performance of our segments each quarter and for annual forecasting purposes. Income (loss) from operations is used to make key operating decisions, such as the amount and timing of capital expenditures, plant optimization actions, and allocation of management resources. In addition to our two reportable segments, we report a Corporate category which includes corporate costs and unallocated expenses.

The following tables reconcile segment revenues to consolidated loss before provision for income taxes and share of net income from joint venture.


Three Months Ended March 31, 2025	Mobile Solutions		Power Solutions		Corporate and Eliminations		Total
Sales	$	62,244	$	43,508	(64)		$	105,688
Cost of sales	56,450		35,268		(72)		91,646
Selling, general, and administrative expense	3,538		2,682		4,950		11,170
Depreciation expense	4,209		780		380		5,369
Other segment items (1)	734		1,755		(197)		2,292
Segment income (loss) from operations	$	(2,687)	$	3,023	$	(5,125)	$	(4,789)
Interest expense							5,194
Other income, net							(2,169)
Loss before provision for income taxes and share of net income from joint venture							$	(7,814)


Three Months Ended March 31, 2024	Mobile Solutions		Power Solutions		Corporate and Eliminations		Total
Sales	$	73,060	$	48,238	(100)		$	121,198
Cost of sales	63,087		38,110		(111)		101,086
Selling, general, and administrative expense	3,785		3,260		6,303		13,348
Depreciation expense	7,572		1,049		470		9,091
Other segment items (1)	759		1,840		(143)		2,456
Segment income (loss) from operations	$	(2,143)	$	3,979	$	(6,619)	$	(4,783)
Interest expense							5,366
Other expense, net							4,153
Loss before provision for income taxes and share of net income from joint venture							$	(14,302)

_______________________________

(1) Other segment items includes amortization expense and other operating expenses and income.

Table of Contents

The following table presents capital expenditures and depreciation and amortization by reportable segment.


	Three Months Ended March 31,
	2025		2024
Capital expenditures:
Mobile Solutions	$	2,666	$	3,828
Power Solutions	874		995
Corporate	367		637
Total	$	3,907	$	5,460
Depreciation and amortization:
Mobile Solutions	$	5,047	$	8,409
Power Solutions	3,347		3,668
Corporate	380		470
Total	$	8,774	$	12,547

The following table summarizes total assets by reportable segment.


	March 31, 2025		December 31, 2024
Mobile Solutions (1)	$	295,563	$	294,204
Power Solutions	128,474		124,460
Corporate	36,687		38,229
Total	$	460,724	$	456,893

_______________________________

(1) Total assets in Mobile Solutions includes $37.6 million and $35.0 million as of March 31, 2025 and December 31, 2024, respectively, related to our investment in a joint venture (see Note 7).

Note 3. Revenue from Contracts with Customers

Revenue is recognized when control of the good or service is transferred to the customer either at a point in time or, in limited circumstances, as our services are rendered over time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or services.

The following tables summarize revenue by customer industry. Our products in the automotive industry include high-precision components and assemblies for electric power steering systems, electric braking, electric motors, fuel systems, emissions control, transmissions, stampings, sensors, and electrical contacts. Our products in the general industrial industry include high-precision metal components for a variety of industrial applications including diesel industrial motors, heating and cooling systems, fluid power systems, power tools, and more. While many of the industries we serve include electrical components, our products in the residential/commercial electrical industry category in the following tables include components used in smart meters, charging stations, circuit breakers, transformers, electrical contact assemblies, precision stampings, welded contact assemblies, specification plating, and surface finishing. The other category includes products sold in aerospace, defense, medical, and other industries.


Three Months Ended March 31, 2025	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	52,887	$	7,237	$	—	$	60,124
General Industrial	4,403		9,579		—		13,982
Residential/Commercial Electrical	—		20,532		—		20,532
Other	4,954		6,160		(64)		11,050
Total net sales	$	62,244	$	43,508	$	(64)	$	105,688

Table of Contents


Three Months Ended March 31, 2024	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	48,975	$	8,256	$	—	$	57,231
General Industrial	18,713		13,138		—		31,851
Residential/Commercial Electrical	—		20,232		—		20,232
Other	5,372		6,612		(100)		11,884
Total net sales	$	73,060	$	48,238	$	(100)	$	121,198

Sales Concentration

During the three months ended March 31, 2025, a customer in our Mobile Solutions segment represented 13% of consolidated revenue, and a customer from our Power Solutions segment represented 11% of consolidated revenue.

Deferred Revenue

Deferred revenue relates to payments received in advance of performance under the contract and recognized as revenue as (or when) we perform under the contract. The balance of deferred revenue was $0.4 million and $0.2 million as of March 31, 2025 and December 31, 2024, respectively. Revenue recognized for performance obligations satisfied or partially satisfied during the three months ended March 31, 2025 included $0.1 million that was included in deferred revenue as of December 31, 2024.

Transaction Price Allocated to Future Performance Obligations

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of March 31, 2025, unless our contracts meet one of the practical expedients. Our contracts met the practical expedient for a performance obligation that is part of a contract that has an original expected duration of one year or less.

Note 4. Accounts Receivable

We participate in programs established by our customers, which allows us to sell certain receivables from that customer on a non-recourse basis to a third-party financial institution. During the three months ended March 31, 2025 and 2024, we incurred fees of $0.1 million and $0.3 million, respectively, related to the sale of receivables, which is recorded in the “Other expense (income), net” line item on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

As of March 31, 2025 and December 31, 2024, one customer represented 11% of consolidated accounts receivable. Amounts due from this customer are primarily related to Mobile Solutions.

Note 5. Inventories

Inventories are comprised of the following amounts:


	March 31, 2025		December 31, 2024
Raw materials	$	21,765	$	20,664
Work in process	22,275		22,139
Finished goods	18,887		19,074
Total inventories	$	62,927	$	61,877

Note 6. Intangible Assets

The following table shows changes in the carrying amount of intangible assets, net, by reportable segment.


	Mobile Solutions		Power Solutions		Total
Balance as of December 31, 2024	$	15,649	$	28,761	$	44,410
Amortization	(838)		(2,567)		(3,405)


Balance as of March 31, 2025	$	14,811	$	26,194	$	41,005

Intangible assets are reviewed for impairment when changes in circumstances indicate the carrying value of those assets may not be recoverable. There were no impairment charges for the three months ended March 31, 2025 and 2024.

Table of Contents

Note 7. Investment in Joint Venture

We own a 49% investment in Wuxi Weifu Autocam Precision Machinery Company, Ltd. (the “JV”), a joint venture located in Wuxi, China. The JV is jointly controlled and managed, and we account for it under the equity method, with the share of net income from the joint venture recorded in the Mobile Solutions segment.

The following table shows changes in our investment in the JV.


Balance as of December 31, 2024	$	34,971
Share of earnings	2,439

Foreign currency translation gain	212

Balance as of March 31, 2025	$	37,622

Note 8. Debt

The following table presents amounts outstanding on our debt facilities.


	March 31, 2025		December 31, 2024
Term Loan Facility	$	114,308	$	114,397
ABL Facility	8,000		5,400
Financing obligations from sale-leaseback transactions	24,229		24,496
International loans	8,417		8,485
Unamortized debt issuance costs and discount (1)	(3,631)		(4,148)
Total debt	$	151,323	$	148,630

_______________________________

(1) In addition to this amount, costs of $1.0 million and $1.2 million related to the ABL Facility were recorded in other non-current assets as of March 31, 2025 and December 31, 2024, respectively.

We capitalized interest costs of $0.2 million and $0.5 million in the three months ended March 31, 2025 and 2024, respectively, related to construction in progress.

Term Loan Facility

On March 22, 2021, we entered into a $150.0 million term loan facility (as amended from time to time, the “2021 Term Loan Facility”), on which outstanding borrowings bear interest at either: 1) one-month, three-month, or six-month term secured overnight finance rate (“SOFR”) with a duration adjustment (“Adjusted Term SOFR”), subject to a 1.000% floor, plus an applicable margin of 6.875%, or 2) the greater of various benchmark rates plus an applicable margin of 5.875%. Beginning in the second quarter of 2023, interest was increased on a paid-in-kind basis at a rate between 1.00% and 2.00% (“PIK interest”), dependent on our net leverage ratio for the most recently reported fiscal quarter and subject to reduction upon the occurrence of certain conditions as set forth in the credit agreement governing the 2021 Term Loan Facility. The PIK interest is payable on the loan maturity date of September 22, 2026. At March 31, 2025, the 2021 Term Loan Facility bore interest, including PIK interest, based on one-month Adjusted Term SOFR, at 12.300%.

The 2021 Term Loan Facility requires quarterly principal payments of $0.4 million with the remaining unpaid principal amount due at the loan maturity date. We may be required to make additional principal payments annually that are calculated as a percentage of our excess cash flow, as defined by the lender, based on our net leverage ratio. The 2021 Term Loan Facility is collateralized by all of our assets. The 2021 Term Loan Facility has a first lien on all domestic assets, other than accounts receivable and inventory and has a second lien on domestic accounts receivable and inventory. We were in compliance with all requirements under the 2021 Term Loan Facility as of March 31, 2025.

The 2021 Term Loan Facility was issued at a $3.8 million discount and we have capitalized an additional $5.5 million in debt issuance costs. These costs are recorded as a direct reduction to the carrying amount of the associated long-term debt and amortized over the term of the debt.

On April 16, 2025, we repaid all of our outstanding obligations under the 2021 Term Loan Facility with the proceeds from a new term loan arrangement that has an initial principal balance of $118.0 million. See Note 18.

ABL Facility

On December 30, 2024, we entered into a new asset backed credit facility (the “ABL Facility”) which provides for a senior secured revolving credit facility in the amount of $50.0 million, of which $15.0 million is available in the form of letters of credit and $5.0 million is available for the issuance of short-term swingline loans. The availability of credit under the ABL Facility is limited by a borrowing base calculation derived from accounts receivable and inventory held in the United States. Outstanding borrowings under the ABL Facility bear interest at either: 1) the one, three or six month SOFR plus 1.50%, plus an

Table of Contents

adjustment of 0.10% (“Term SOFR Rate”); or 2) the highest of the base commercial lending rate of the lender or various benchmark rates plus an applicable margin of 0.50% or 1.00%, depending on the benchmark (“Alternative Base Rate”). At March 31, 2025, based on a one-month Term SOFR Rate, the interest rate on outstanding borrowings under the ABL Facility was 5.922%. We incur a commitment fee of 0.25% for unused capacity under the ABL Facility and a 1.85% fee on the amount of letters of credit outstanding. The final maturity date of the ABL Facility is the earlier of: 1) December 30, 2029; or 2) 91 days prior to the loan maturity date of the 2021 Term Loan Facility. We capitalized a total of $1.2 million in new debt issuance costs related to the ABL Facility.

As of March 31, 2025, we had $8.0 million outstanding borrowings under the ABL Facility, $10.4 million of outstanding letters of credit, and $18.3 million available for future borrowings under the ABL Facility. The ABL Facility is secured by a perfected lien over substantially all of the Company’s assets. We were in compliance with all requirements under the ABL Facility as of March 31, 2025.

Sale-Leaseback Transactions

In March 2024, we sold three of our properties for an aggregate sales price of $16.9 million, with the net proceeds used to repay a portion of the outstanding borrowings under the 2021 Term Loan Facility. Concurrent with the sale, we entered into a 20-year lease agreement for these properties. Since the lease agreement allows for us to exercise renewal options that extend for substantially all of the remaining economic life, we have the ability to maintain the risks and rewards of ownership. Since the transaction did not transfer control of the assets, it cannot be accounted for as a sale under ASC 606. As a result, the properties remain on our Condensed Consolidated Balance Sheets and the non-land assets will continue to be depreciated over their remaining useful lives. The $16.9 million of gross proceeds was recognized as a financing obligation as a component of long-term debt. The monthly lease payments, which increase 3.0% each year, are being amortized as principal payments and interest expense based on an effective interest rate of 9.715%. We incurred $0.6 million in debt issuance costs related to this transaction, which are being amortized over the term of the debt.

In March 2024, we sold multiple pieces of manufacturing equipment for an aggregate sales price of $4.9 million. Concurrent with the sale, we entered into a 5-year lease agreement that includes a repurchase option for this equipment. In May 2024, we sold additional pieces of manufacturing equipment for an aggregate sales price of $3.4 million and entered into 5-year and 6-year lease agreements for the equipment. Since the three lease agreements allow for us to exercise an early buyout option, we have the ability to maintain the risks and rewards of ownership. Since the transactions did not transfer control of the assets, they cannot be accounted for as sales under ASC 606. As a result, the assets remain on our Condensed Consolidated Balance Sheets and will continue to be depreciated over their remaining useful lives. The $8.3 million of gross proceeds was recognized as a financing obligation as a component of long-term debt. The monthly lease payments are being amortized as principal payments and interest expense on a weighted average effective interest rate of 10.540%.

International Loans

We have fixed rate debt with various financial institutions in France, Poland and China, with maturity dates between 2025 and 2033. These loans, which were obtained to fund working capital and equipment purchases, had a weighted average interest rate of 2.335% at March 31, 2025.

Note 9. Preferred Stock

On March 22, 2021, we completed a private placement of 65,000 shares of newly designated Series D Perpetual Preferred Stock, with a par value of $0.01 per share (the “Series D Preferred Stock”), at a price of $1,000 per share. The Series D Preferred Stock has an initial liquidation preference of $1,000 per share and is redeemable at our option in cash at a redemption price equal to the liquidation preference then in effect. Series D Preferred Stock shares earn cash dividends at a rate of 10.0% per year, payable quarterly in arrears, accruing whether or not earned or declared. If no cash dividend is paid, then the liquidation preference per share effective on the dividend date increases by 12.0% per year. On March 22, 2026, the cash dividend rate and in-kind dividend rate increase by

SEC Form 10-Q filed by NN Inc.