NN (NASDAQ:NNBR) executives used the company’s fourth-quarter 2025 earnings call to frame 2025 as the third consecutive year of improved results, while emphasizing that 2026 is expected to mark a return to net sales growth as the company pivots toward higher-value end markets and ramps a record slate of new program launches.
Management highlights transformation progress
President and CEO Harold Bevis said NN has completed “the majority of the heavy spending portion” of its transformation plan, including closing and consolidating four plants and “right sizing about 800 people.” Bevis said the company is intentionally shifting its sales profile away from “low value commodity automotive part making” and toward higher-value markets and capabilities, while fixing or exiting unprofitable operations and replacing that volume with new awards.
Despite the upbeat tone, management cautioned that volatility remains elevated across end markets, pointing to tariffs, precious metal pricing, geopolitical unrest, and ongoing disruption in global automotive supply chains.
Q4 and full-year 2025 results: margin improvement amid softer sales
Bevis said fourth-quarter net sales were $104.7 million and full-year sales were $422.2 million, calling results “a little lighter than we had hoped” as some customers reduced inventories late in the year. He said the company saw improved shipping backlogs in the first quarter as customers worked through those inventory decisions.
On profitability, Bevis reported adjusted operating income of $3.3 million in Q4 and $14.2 million for the full year, describing the full-year result as roughly three times the prior year and attributing improvement to a leaner operating model and the company’s exit from lower-end business. He also cited adjusted EBITDA of $12.9 million in Q4 and $49 million for the full year, with adjusted gross margin of 18.8% in Q4 and 18.5% for the year.
CFO Chris Bonner provided additional context using both GAAP and pro forma views to reflect the impacts of strategically rationalized volumes and foreign currency translation, and for the full year also the sale of the Lubbock business divested in 2024. Bonner said that on an as-reported basis Q4 sales declined about $1.8 million year-over-year, while on a pro forma basis sales increased $1.4 million, or 1.4%.
Bonner said adjusted EBITDA margin in Q4 was 12.3% of net sales, representing roughly 90 basis points of expansion on a pro forma basis. For the full year, he said pro forma net sales decreased $7.4 million, or 1.7%, while pro forma adjusted EBITDA increased $2.2 million, or 4.7%, with pro forma adjusted EBITDA margin expanding about 70 basis points to 11.6%.
Segment performance: Power Solutions grows; Mobile Solutions reshapes mix
In Power Solutions, Bonner said Q4 net sales were $45.5 million, up 14.9% year-over-year, driven by higher precious metals pass-through pricing and new program launches in electrical and defense, partially offset by lower volumes at one stamping customer. Full-year pro forma net sales were $178.6 million, up 5.3%. Power Solutions adjusted EBITDA for the full year was $30.7 million, up 10.8%, with segment margins expanding 90 basis points versus 2024. The segment also added $13.2 million of new business awards in 2025.
In Mobile Solutions, Bonner said Q4 net sales were $59.3 million versus $63.8 million a year ago, impacted by rationalization of dilutive business and lower volumes at North American auto customers, partly offset by favorable foreign exchange. Full-year pro forma net sales were $244 million, down 9.3%, and the company noted that much of the sales weakness was concentrated in one auto parts customer that pushed out volumes due to production disruptions.
Mobile Solutions Q4 adjusted EBITDA was $10 million, with pro forma adjusted EBITDA margins of 16.9%, up about 160 basis points year-over-year, reflecting shedding of unprofitable sales and lower operating costs. For the full year, segment adjusted EBITDA was $33.5 million, down 4%, though adjusted EBITDA margins expanded about 70 basis points to 13.7%.
Commercial momentum and new business launches
COO Tim French said NN’s new business momentum is translating into “meaningful scale and future growth,” with awards over the last three years averaging about 27% gross margin and concentrated in strategic markets including defense, medical, and data center. French said the company expects to launch more than 100 programs in 2026.
Asked about revenue contribution from those launches, French said NN expects “somewhere around between $20 million and $25 million of revenue” in 2026 from programs launched during the year, while launches from 2025 are expected to continue ramping as well.
French also outlined long-term objectives, including continuing progress toward a 20% adjusted gross margin goal and an expectation of reaching $80 million in adjusted EBITDA by 2030, supported by market growth and share gains in targeted end markets.
2026 outlook: sales growth guidance, cost-out plans, and capital allocation
Management guided to 2026 net sales of $445 million to $465 million and said the outlook is anchored by new program launches and strengthening in certain end markets. Bevis highlighted improving commercial vehicle orders and ongoing strength in U.S. defense electronics, while maintaining “tempered expectations” for global automotive due to continued volatility and supply chain disruption.
The company also outlined the following 2026 operational priorities and targets discussed on the call:
- New business wins target: $70 million to $80 million for 2026, up from prior expectations, with management saying Q1 is already tracking at that pace.
- Cost reductions: A planned $10 million cost-out program in 2026, following $15 million achieved in 2025, intended to offset inflation and pricing pressures.
- Growth investment: Management said it is shifting cash flow toward growth-related capital spending now that most restructuring spending is complete, with Bevis stating the company is “roughly doubling” growth-related capex versus 2025.
On capital spending, French said the bulk of capex will be tied to program launches and capability needs, and that about 75% of spending will support new business. Bevis added that net capex was about $10 million last year and is expected to be about $20 million this year, with much of the incremental spending intended to support growth into 2027.
Bevis also said the board has an ongoing committee reviewing financial and strategic options related to the company’s “problematic” capital stack, describing it as “too much debt plus preferred equity.” He said there were no concrete updates to share yet and that management remains focused on executing the business plan while the review continues.
In Q&A, management also described early-2026 demand visibility as improving. Bevis said NN has customer releases into Q2 and a “healthy backlog,” supported in part by a stronger-than-expected uptick in commercial vehicle orders over the prior three months.
About NN (NASDAQ:NNBR)
NN, Inc (NASDAQ: NNBR) is a diversified industrial manufacturing company specializing in engineered metal components, powder metal parts and friction materials. Through its subsidiaries, the company develops and produces precision-rolled products for powertrain and chassis applications, engineered friction products for brake and transmission systems, and various metal powders used in automotive, industrial and energy markets. Its offerings span a wide range of component sizes and complexity, from thin‐gauge strips for hybrid and electric vehicle applications to high‐volume sintered parts for commercial and consumer products.
The company’s operations are organized into three business segments.
