Q2 2026 NN Inc Earnings Call Transcript
Key Points
- NN Inc (NNBR) reported strong Q2 2026 results with sales up 19% year-over-year and adjusted EBITDA up 36%, driven by growth across both segments.
- The company successfully completed a $124 million refinancing transaction, retiring $89 million of preferred stock and reducing annual PIK interest by approximately $13 million.
- New business wins totaled $80 million through July, exceeding the full-year guidance range, with a record 27% hit rate on closed opportunities.
- Power Solutions segment saw net sales increase 40% year-over-year, driven by higher precious metals pass-through pricing and volumes, with adjusted EBITDA margins at 20%.
- The company is expanding into high-growth markets like data center, defense electronics, and medical, with a $150 million revenue base and a strong pipeline of opportunities.
- Management raised full-year guidance for sales to $460-$480 million and adjusted EBITDA to $55-$65 million, reflecting confidence in continued growth.
- NN Inc (NNBR) faces potential margin pressure from high precious metals pass-through costs, which can negatively impact EBITDA margins despite volume growth.
- The company is experiencing capacity constraints, particularly in China, requiring expansion of about 100,000 square feet to accommodate new equipment for data center business.
- The refinancing transaction increased share count to 82.6 million shares, nearing the authorized limit of 90 million, limiting future equity issuance flexibility.
- The company's Q4 is typically the lightest quarter due to customer inventory adjustments, which could temper second-half growth despite new business ramps.
- NN Inc (NNBR) is dependent on customer commitments for large programs, and there is risk if customers do not provide the expected multi-year volume commitments.
- The company is still working on refinancing its term loan, which could limit financial flexibility and increase costs if not addressed favorably.
Hello, everyone. Thank you for joining us and welcome to the NN, Inc. Second quarter earnings call and webcast.(Operator Instructions)
I will now hand the conference over to Joseph Caminiti, Investor Relations. Joseph, please go ahead.
Thank you, Christine. Good morning, everyone, and thanks for joining us. I'm Joe Caminitti 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, 2026, 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 [email protected]. Joining us today from NN Management are Harold Bevis, President and Chief Executive Officer. And Christopher Bohnert, Senior Vice President and Chief Financial Officer.
Please turn to slide 2
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