NNBR - Earnings call transcript Q3 2021

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Operator

Good morning everyone, and welcome to NN Incorporated Third Quarter 2021 Conference Call. My name is Tom, and I will be your operator for today's call. All participants will be in a listen-only mode until we reach the question-and-answer session of the conference call. This call is being recorded at the request of NN. If anyone has any objections you may disconnect at any time. to like now would introduce Mr. I with Tryka, Lambert IR, firm. Relations Investor NNs Jeff Mr. proceed. you Tryka, may

Jeff Tryka

of I'd Tom. press you, us. Relations Inc., afternoon, presentation, the our XX, for Tryka, joining supplemental XXXX, everyone third Lambert update. business our I'm Investor thank Yesterday If release and Investor financial as which supplemental have XXX-XXX-XXXX. September a the attending NN press been Company for ended today's & a quarter Relations for issued presentation, needs Thank contact morning as announcing section Jeff Good a website. anyone and we to the you contact copy release on posted well like at you thanks of may the for results or

morning the Chief be Chief Senior on President and Mike this Officer and Vice President presenters Veltman, call Executive Warren and Felcher, Officer. will Financial Our

same months XX, September on Form Session as three quarterly live and XX, the when webcast. report notice forward-looking today's for release, Before and December for the that year I'd cautionary Factors section comments XX-K Report the XXXX. take including you filed Company’s XX-Q made Company's press to ended the Q&A XXXX the language The today's on fiscal the call, in in applies Annual regarding we ended on ask supplemental conference the contained Risk Form of language the well in begin, presentation statements as

the tables the markets, topics. condition will are defined of of financial supplemental measures Company's Felcher flow, the of with other results, cost before business update Warren the and provide over section corona the The Then financial discuss and will of to operating today Q&A results presentation Mike the President will the Veltman, a presentation statements savings, sales, back the cash tax certain worldwide Reviewing includes Warren? final a should agenda and pandemic, caution, to of as in today's rules. and contained various the which the as of also or cash segment remarks, COVID-XX A the by the is our XXXX. subject of statements markets, prepared Our as detailed forward-looking remainder such risks call These turning time, the synergies, the rates, impacts this release At non-GAAP for outlook turn well control. CEO. Warren our At non-GAAP to on are virus outside call, performance regarding SEC acquisitions, provide quarter. a will the of the of company’s will foreign update and reconciliation for margins, I contain used to there press from be presentation. over the call in many conclusion rate, measures uncertainties, Warren be exchange future and Session. results

Warren Veltman

good Thanks, and morning everyone. Jeff,

If we review you would the quarter. for of turn third to the five, highlights will some page

supply supply and automotive business our year-over-year chain Mobile sector, production growth semiconductor sizable responding most Solutions operations impact affected revenue, growth strong as materials, chip our operations While we These was our the shortage and a and a shut in as in of year-over-year The Power OEMs which commercial recovery electric residential highlighted within a were our offset suppliers. quickly Solutions partially address in our the Power affected we XX% end impacting third remain able to acute in in our by production but fell constraints market were operations, the as X.X% supply the on customer To and quarter. by our Solutions flexible in challenges, revenues, quarter within group. where its on chain ongoing disruptions our challenging had This challenges which well. in year-over-year supply in third demand. to continued globally, only to the continue pandemic one areas, not particularly changes growth lines, increasing quarter, number chain proved post trend to markets be a of

also continue customers maintain have work to We our and to to their and together production vendors inventory adequate with we ensure meet needs.

and Our salary in XXXX that COVID, a reinstatement also reductions, and the profitability suspended of travel-related to benefit quarter was in the third impacted compensation including response programs temporarily incentive number in of by programs expenses. were

material fully on experienced also were we during labor inflation to that pass and to not We able quarter. customers the

our we of customers in with initiated for have increases, negotiations to However, increases. these price most response cost

material that increases our freight certain associated Where vast will the associated with costs. increases and recover manufacturing We cost price underutilized with expect pricing other we and charges are labor manufacturing for increased and all increases increases operations, majority capacity. pursuing of appropriate, outsourced

$X In swap pursue interest and we $XX expense hedge investments variable three-year rate to ability quarter, entered for the to us offers customer a third For interest our our is single a example, reduce conclude achieve from development for periods underutilized we in as and also million expect arise. growth the And support growth. the year We ratios a rate XXXX, variable $X refinancing long-term factoring that to receive of earlier exposure stock, and solid negotiations sheet into million our current fixed fixed to XXXX and higher to million of during compensation be believe fixed to whereby with we we preferred to rates. on right our paid balance when leverage costs balance to believe We in which exposure. quarter, in debt. capacity our From we expected maintained this standpoint, our expect XXXX. is to between fourth successful did liquidity our rate what opportunities the this interest to

the current semiconductor levels in on significant third $X.X concerns, shortage we turns due address lower We sales also during to working cash to million quarter. contributors solutions higher volumes to due the flow use to inventory the in cash and chain focus maintained inventory quarter were being our though saw decreased carried supply sequentially higher capital, mobile free

from While we cash chain react supply rebound our volumes in automotive quickly, flow our current inventory and in and to inventory our more to when impacted the in free us our also cash flow insulate interruptions will normalized they us as levels allow will XXXX customers to free allow XXXX, return benefit environment better levels. more

the turn Now Felcher, I’d over so to like in-depth more can Mike? Mike a to financial it review performance quarter. our provide of he for

Mike Felcher

Thanks, Warren.

to X. Page Turning

items We for some key of have summarized quarter. the the

million ago mobile was was share a continuing of Sales shortage quarter the year were operations improvement operations a year cost to impact of on from the adjusted in offset was semiconductor million a as per versus the of $X.X continued from loss $X.X COVID-XX of adjusted partially loss for as year operating one the sales inflation progressed. the million from the a quarter from has down up quarter business year-over-year loss as per significantly was of XX.X% sales. were by X.X% posted of solution increased recover $X.XX third for as which EPS million year not $X.XX has in was Non-GAAP EBITDA impact The to was versus $X.X by Reported GAAP labor ago. material sales. suspended impacted the EBITDA we of a was adversely by the share the Profitability or loss Our that XXXX, and compared a quarter $XXX.X the impacted prior well year sales, that costs $XX.X of in year reintroduction X.X% temporarily when of ago. million, from the as growth pandemic. ago.

revaluation Our of current Act. recognized income taxes, period the of offset prior results million related million reflect the by warrants, lower related outstanding were the which in year $X.X and primarily to to million a comparison $X.X income interest expense to attributable unfavorable Cares $X.X of benefit for

Our adjusted operations continuing year. share income the per $X.XX was $X.XX share in prior from versus per

sequential issues a go quarter the X. as to turns, inventory above the inventory shortages working experienced. as material levels. semiconductor carrying capital in in created have Slide impacted inflation times as requiring our also as third of Let’s increased well been by stock levels decrease supply in safety lead We chain normal remained our we has added inventory current The saw amount other

prior efforts X.X to Working turns second year were the prevent result, Sequentially, working offset capital turns our of a turns capital. chain will working in capital our the quarter. quarter from primarily sales the compared prior the capital the customers. as X.X The in supply third year, versus working from increase disruption turns the year, returning the in an We million levels $X.X an increase Net was $XXX.X on due inventory supply million to focus increase the of to end decreased increase as in turns of $XXX.X million. the increase was in part prior by at in normal from to X.X as stabilizes. of inventory impacting

disciplined balance the to investments over approach capital cash X. we we the while taken need prudently in environment manage operating the Slide to our the Turning current growth. to continuing our to have We fund as past in highlight year expenditures

to You of we to have year. two but compared increased XXXX the we absolute can CapEx when first expenditures see an the on basis, reduced compared quarters

$XX.X For million a ago. capital compared year total the first $XX.X to nine months million expenditures XXXX were of

in was our the the lowering cash free third quarter the million to flow of a we $XX for XXXX expected chart to the are $XX year. Slide $X.X the our X, in we last use result, of a prior $X.X a Free from use million communicated shows for the million As million. flow quarter investment compared cash full-year of quarter.

lower a from cash Sciences down chain this have we operating be taxes sale now close margins needs, be would of flow Slide Net supply quarter refund million the will in million the Sciences which believe the tax quarter. the $XXX.X QX, offset XX. for of for a of Free negatively increased at related our Our capital not $XXX.X of remain year receipt if was pay free were versus working following by and cash partially refinancing completed we primarily of the impacted during breakeven and Unfortunately, would year-to-date had was turn we the inflationary group the not resulting impacts sale the reduction until anticipated $X.X Life to third on positive which in generated flow the $X.X levels to to payments million spite Act XXXX. due year-over-year cash received flow previously during our end $XXX Life the earlier Cares offset the our Please debt of cash refund the million. on reduced year. quarter. prior debt flow our of was The million year. during cash the operating on In decrease basis results million by and $XXX.X been operating to a third by the

down from ago. quarter stood times Our third ratio at a net of leverage year X.XX at the times end X.XX the

As we of balances that We availability from increased of the as outflow suppliers maintaining we Compared revolver and reduction I in have free debt important quarter which saw regarding on at initiatives turn growth mentioned, our asset-backed borrowing pay alleviates our principal of financial and below our position. as including quarter undrawn on our as quarter, back our a it end. long-term outstanding cash a due Warren. was result With to and had at cash leverage times a in or ratio to our September during the increases down base the supporting calls cash will availability on on facility, X concerns is prior our to liquidity XX. second while of for million $XX.X it customers

Warren Veltman

in units On a broadly production of pullback IHS have million, the the each $XX.X shortage semiconductor the third impact quarter third XXXX groups. resulting in outline of on Further was truck reduced Thank supply market a XXXX global X% outlook pandemic issues XX.X% chip sizable year the reduced of to our Page the XXXX. Mobile of to outlook within decrease for current production on quarter X.XX in million we industry. volumes for The global expectations or contributed million and $XX.X a approximately to XX.X by Within chain of current in units. just conditions These X.X% $XX.X expectations XXXX operating we auto directly you, light view in was seen for million significant Solutions, of to approximately up volume the production our compared million the XXXX. Mike. from from XX,

transition by up global of For projecting levels XX.X% million than to currently third units the year. The is Inventory production down But the quarter, XX-day fourth $XX.X backed from lowest XX.X remain significant the from is vehicles IHS at in since sequentially their million XXXX quarter. million one OEM or supply. electric prior units XX.X% less investment.

and $XXX vehicles As new in vehicle through battery aggregate, electric will in approximately XXXX example, Stellantis GM, development. and technologies, an Ford invest billion

technologies drivers our needed we power Power supply and Solutions with of through to public Solutions, particularly aging well Solutions for commercial address the demand see the positioned Power for private we prepare operators see groups. Power for increasing mobile both to to storage Within which pushing We use, are believe infrastructure product private are emerging as business. demand long-term and We will electric new infrastructure, under Smart transmission grid. and our vehicles increased benefit and adoption grid

term. of While and the more over details investment that the adopt infrastructure, benefit business infrastructure power know the negotiate in the the we final technology to green long Congress includes and incentives of bill that technology both current the a sides along administration continue to will our bill, passage for significant with

increase may direction driven aligned in with power transformational the market as billions infrastructure Ultimately the pace conversion spending. of energy uncertain, share a policy growth and green by our of While initiatives. will significantly be generation XXXX is

presented from automotive third third for GAAP quarter. ongoing information have quarter in was in production year operating We the units loss industry shortage second from as loss each the chip million quarter starting caused sales the semiconductor versus additional million for page million the a with XX. Solutions X.X in Solutions in of one Mobile X.X Mobile X.X% third groups, million compared last the units or $X.X operating of fell on our sales ago, to the operating quarter, of third million of by requirements. the Adjusted million and reimplementation production profitability year. customer profit the from XX.X% million in $X decreased XXXX. volumes, XX.X% of was reduced availability of costs million EBITDA the suspended caused quarter decreased labor $X year to efficiencies in of prior $X.X Adjusted lower The driven in to $X.X year. operating by income and or $XX.X certain the prior sales ever-changing sales operating

fourth softer inflationary With quarter pressures, current to Looking industry. shortage forward, are to expect active increases. with due to semiconductor the we price finalize discussions recover our to year-over-year, to adjustments automotive these customers remain cost customer impacting the we demand regard in

selling customer recent in development, result a our and between activities operating making our growth as groups, Finally, our engineers of investments are progress of towards sales we XXXX coordination objectives.

beginning year-over-year business new business been with wins or of in production with third operating incentive decreased our from electrical prior through profit On the $X.X increase costs year. pre-pandemic the Mobile million, awarded $XX page level since sales, to in to million salary Profitability from $X.X million also in $X.X new by During in XXXX. in suspended prior Adjusted of costs running to in Solutions compensation to XX precious travel. impacted This $X from of sales, XX.X% quarter Power XX% start million, XXXX of million, rise experienced market, was along XXXX. third in $X.X $X.X Power by XX.X% recovery has quarter is Solutions the XX.X% including of group which the XXXX. and the benefits, year. increase the continued the sales of third prior in of due decreased million wins, group for to Solutions when income certain resumption and with was levels commodity year, pricing annualized or million our compared X.X% in strong EBITDA the consistent or dates an GAAP in sales quarter, a establishing in demand metals XXXX and objectives. of expectations in our longer-term driven in the the a or was sales, operations Adjusted

associated impacted shifts adversely inventory inefficiencies planned reductions. by mix In addition, profitability with and unfavorable was

demand we Solutions approximate increase expectation see forward, fourth of in an Looking Power demand quarter the customer in improving an with trends X% in year-over-year.

passing through We to results in cost XXXX. be have in successful customers, in reflected our which been inflationary beginning impacts QX will

been $XX and through side industry encouraged in working we annualized the CapEx power the toward will resources. prudent shift We beginning this of wins, segment in new of we start XXXX. continuing production with dates million remain the solid cash capital new Longer have term, energy renewable awarded management. flow business demand by in With protective generation throughout are

specific page cash dividend additional million perspective in from the regarding prior flow million XX share relating to $X.X income guidance From making outlook a to Sciences venture the tax Life of $X.X we amounting quarter, some for the a to anticipate payments for our receive year. Turning expect joint XXXX. We our the China sale. fourth our reflecting to from

pushed the that expect million of expectation our timing refund out to to Regarding we now Act, Cares be a relating to XXXX. the $XX of

year outlook of as CapEx our expect approximately necessary make flow. $XX full our maintain desire balanced discussed, growth to long-term with cash Regarding support now we we to Mike our as million, investments

previous drivers year consistent million, be year approximately financial expect million. to our of million as cash addition, full with In approximately full we estimates, are our $XX depreciation $XX interest amortization and approximately of $XX

our year $X.X to XXXX. Finally, Sciences million flow will in payments of approximately group cash the tax Life in solely free include related full the sale

some Turning XX. $XXX us necessary annually. associated sales the XXXX highlight page million activities to to with building achieve goal We blocks our for of

end mix with teams have technology. electric both to our for of quarter the by of X% and and restructured targeted industry-specific business toward have vehicles to the a and aligning vehicles shift propulsion leadership opportunities product results of a the of our engineers been with pipeline electric year Power as target of components a pipeline these customer from such XX% opportunities XX% We Sales increased agnostic XXXX. significant applications sales groups our of at specific have third ago changing cross-training development our to Solutions teams adding efforts strategy. the opportunities and consistent expansion The sales development targeted

braking We toward as of motors our from of programs, primarily the process shift -- our and ICE-dependent ICE-independent systems expansion electric indicator progress pipeline strategic for a XX% that goal. for from applications components XX% to our while is to steering, XXXX and fuel opportunities our XX%. product increased decreased programs Additionally, XX%, leading believe such to mix the sales gasoline

of are the hope experience on with process we Officer quarter. relevant to sales Lastly, an stages have electric in and Chief a in that recruiting current update the final grid Commercial

not pressures, outlook my and formal conclude on our the expect XX, I we resume a are at guidance earnings share but we longer-term still or continued time, outlook As this uncertainty update. inflationary we position year-end supply a the remarks to surrounding detailed revenue to page chain with XXXX in with our provide

now, continuing For the current environment of the sales the shortages, to we expect the the the trends of grid. driven electric semiconductor be resolution towards adoption by electrical and with vehicles along transformation of

closely will We conditions facing to automotive market. evolving chain and particularly and response the flexible monitor to remain semiconductor in our supply with issues changes, industry regards the

concludes and environment and giving with the us flexibility That operations customers improved the in for cash dictates operator turn foundation and current and responsiveness we pursue the to appropriate now future. navigating while free expenditures of material to generating we will and meet the the summary, a our working challenging are that maintaining call improve our make successfully adjustments structure. focus prepared and maintain other performance capital cost questions. to back capital Our margins remarks with capital control on flow customers and an In I needs recover inflation to for future improvements the pricing operational our

Operator

Instructions] the Rob comes Please Capital go question [Operator We And begin ahead. first question-and-answer Brown the from Lake will Street with now Markets. session.

Rob Brown

morning. Good

Warren Veltman

Good morning, Rob.

Rob Brown

ability sense new how to bit give discussion flexibility us on want have Are little the a you just negotiate pricing. these ramp you up around Could a there? of much the to to of help pricing talk you pricing, long-term times about pricing pricing redo part ability Just can negotiation? that contracts these back here. the me understand a as future or are get you're Just

Warren Veltman

Sure.

two metal side -- a our if that of of into about pricing of from you precious standpoint, If break down groups, first, Power material – break most it on shipment. So date you most business our right? on Solutions is the reflected talk the down

the increase the So for power that last material price in we the precious have metals year. we’ve been throughout seen adjusting over within

reflect As of group board in to some we implemented right across X% was plastic it costs, pressures an quarter our to increase related out that relates inflationary for inflationary an this customers of resin that injection and the molding the material beginning to our near business. increase of cost the the approximate other

that’s So done.

other we're forward. to them going to customers with inflation standpoint having successful outside relates an re it that expect cost doing right increases As material the conversations now of we from for and be

On to more volumes fall to the we our a for the allow contracts, of of under that contract event re-price the have most in XX% contracts where mobile longer side opportunities tend term window. the outside

industry, They an as successful that And back going and our to right? they customers opportunity are going and the pressures customers. used go in on to to like understand our stable we’ve that So would understand what’s look have suppliers. on the

we’ve that and you business. a gone s supplies little have the for it’s truly it’s half X% that looking of tell X% in less mobile would relates And those reasonably I for that, at related the breaking inflationary that of maybe is solutions to it real conversations increases in material increase a about half costs, cost rest seen freight of of So our freight, pressure type that The associated well. manufacturing to basis outsource seen overall thing. look that it’s price an range we’ve at down on just with But we group, than annually. increases okay. When price that we’re bit

in comes piece to My X, hoping some on end done So that we’re other pieces And of of all easiest resolve to about we’re will done this of well. the of the the them, and January expect it have to year. pricing as the piece material with it most have customers play by all that of talking when to that. currently of is our we be expectation

Rob Brown

will dig that you’ve out? kind are design a or won activity. really maybe for executing comprehensive and little wins of that great. Thanks in opportunities Is the And or pipeline developing, EV pipeline, now bit these revenue increase Okay, then you're a they this sales year by two turn overview. into on into your

Warren Veltman

Yes.

it us. are So that quoting in with of the we’ve that would that’s that actively Rob various we’re about that It’s a lot stages. talk identified. not business expansion we’ve targeted, business or be is that But applications And quote. in are brought long-term. ICE-dependent when terms opportunities have these to identified over us that why the we’ve It’s customers we at away And in new have business to we’ve in of last it to us has awarded we large it’s today type business more for us as been that of the me seen, development opportunities. cases key allowed outside see encouraging the base, indicated customer from into shift the bringing for extremely engineers our provide existing opportunities we’ve to six growth I opportunities to customer going to over of that substantially you nine applications from months the reach our much that expand

Rob Brown

Thank you. Okay.

Operator

from question Please with Steve KeyBanc. The comes ahead. next Barger go

Steve Barger

morning. Good

Warren Veltman

Morning Steve.

Steve Barger

more price and cost-neutral in from quarter? negative compensated you get see will recovering Warren. better Can the what tell for costs you impact to was margin Yeah, to the really actions price/cost you’ve taken or And great in appropriately us getting proactive XQ? capacity. getting in the and

Warren Veltman

see of from we’ll fourth the the it on that we standpoint we the side in the in in a beginning next X% negotiations quicker. the the I quarter fourth that lengthy. on of power increase it’s the is hopefully first Steve, mobile Like be some will quarter. the going auto where power on more neutral I cost board come to at quarter. be of The across expectation bit I said a is little think, would year a side implemented to say that tend more our side

So injection was business. That It be will implemented we’ll has there. excuse the board rest -- of across benefit wasn’t across The it plastic molding for see been implemented the the our some quarter. was me throughout board. that

Steve Barger

it. Got

it to for XQ, and margin how get that we can see you gross Is sequentially? XQ? volume Given a look think going how like and pricing, more better little about should or mix

Warren Veltman

relates customers us tell movement our a you during our We’ve their customers are it we’re planning expecting. seen the for is as levels what as on still shifts seeing tremendous Look I right would are the difficulty significant amount volumes of now holidays. week-to-week to production

So at you say at a would safer it’s would this you impact. tell I -- to volumes for implemented would these somewhere would increases somewhere on if price third in would of range are it to what looked pro the we be X% point tell quarter I forma that you margins. X.X% expect the you improvement the looked in once time me basis at in – be if would be

Steve Barger

Got you.

Warren Veltman

Ultimately going volume happens what in to QX. dictate is

Steve Barger

right. stabilize. you that to point things right, Right, to Well normalized when achieve X says margins slide expect

Warren Veltman

Yes.

Steve Barger

margins Haven’t that when happens? set can for while right? seen will stable a So you you think segment just level expectations on trend where

Warren Veltman

Yes.

to margin where be overall at from which our that I we’re on we in think an XX% our you in towards a is down moving looked a was XXXX. to standpoint goal XXXX that expectation were margins if going XX% EBITDA we established that path basis

to improvement my see XX% you look toward is year-over-year view well where you the going mean we’re expectation production once if that take that. -- Maybe it volumes our from So I is at been if they’re we’ve a up rebound standpoint.

expecting to significantly. be fourth still the down quarter We’re volumes

I of it answer it back to as expect production into your that the volumes to some So XXs. relates That’s up would volumes question see? we’re margins on when that jump about basis to a production is fourth the volumes you’ll global difficult start high talking to relates quarter when as

Steve Barger

Got it.

did any For business roll-off? net the number? $XX million in you Meaning new year-to-date business have what’s the wins

Warren Veltman

Yes.

obviously would we production together when is to XXXX goals put off. right Steve business we run So in for be our -- as that of normal some when our we programs end there expected

expectations. new targeted have wins comment my any our with we was for year. expected we had business when That next that was the it year that $XX level that So offset we was million in runoff landed this consistent for to

Steve Barger

was it lot that tooling And that upfront have Great. dynamics? to think of better a for I more skewed $XX Okay. million? more spend power. Does --

Warren Veltman

Yes.

million $XX mobile power, in had million we yes. So, and $XX So right? in

business in we about business from pure We’ve from been on the excess So at have. standpoint capacity have we the the machine CapEx some standpoint talking look shift that we a both and a standpoint fact had. a that tools existing the of hour that we’ve from

center So There there to had reviewed will some list our it as specific profile may the that by we CapEx growth grinders It's and with that. buy, $XX launched didn't you million needed would that be what currently. much some higher expectation example, we that expect was is because be that associated have that that other But program-by-program. than we've to other with I an large where seen is program a we some capacity really profile to we historically. we day and a programs CapEx less there tell some CapEx are that a have

with the million to So, looking we've that maintaining to we at CapEx this And forward what but annual expect we we're to an which been still estimates consistent amount $XX $XX is as business. level cash for down million, where going grow revised continue million to our year okay? $XX running, is we be

Steve Barger

of it. line a but Got out have shot. I'll else take anybody more, to I some jump let

Warren Veltman

Sure.

Operator

Warren This turn Veltman Mr. question-and-answer the I'll to over back session. any closing concludes our conference for now remarks.

Warren Veltman

have just had he make sure line. he if was question, Well, he it. get I to a going a and questions more back to said does we that in first, address want Steve couple

Operator

again. have line I open right. All Steve's

Steve Barger

Thank great. you. Yes,

Warren Veltman

Yes.

Steve. about that Sorry

Steve Barger

it's anybody to No to just is okay. Officer. Chief The if -- wanted see I else a see Commercial recruiting encouraging that’s there.

have them Like taking I Do place? from? And where you candidates? was recruiting are you interviews said think focused. he grid the are you already

Warren Veltman

as we it help of recruiting our we that electrical side Obviously, our -- expand characterize some Steve. are in business. And would on them the there. additional with the stages at That's in us resources we are time I this need focused where think final we're reach point Look we from? the of where Yes. to

some our interviewing within from been have we are Obviously, from Executives So, Power what that Group. the customers end Solutions industry.

Steve Barger

about the how you industry-specific that that's development about and talk works? conjunction pretty in but more can with that descriptive customer just a name, how And engineers

Warren Veltman

Yes sure.

four terminology we five more new might brought four So, widely sales accepted, we engineers. be five that a that's into So, brought new in or engineers right? or That group. sales

Vice added amount moved specific -- general experience didn't electrical had new our of standpoint. President over experience have have out And strong tremendous although and experience from a he a mobile industrial leadership a leadership, group. sales of We closing

some the period specific engineers had business really time. selling So, solid electrical company they've But a have brought either NN some are the programs that with in on introduce us electric -- five been development the that guy new there doors of quoted to that new side long actually experience had been or has experience an customer where four side with in focus a with we vehicles. And opened and for we've those with as customers opportunity of direct of potential into auto these the have has with or customers quoting where for well.

Steve Barger

great. That's

or the direct of this group will And efforts development take Commercial essentially so new people control the programs? and of new towards product Officer

Warren Veltman

And and experience most sales because business next Right. growth this standpoint was a But we from with above grid is person of us and opportunity side that to that and there an side that up have auto including group somebody business. a side the group, envelope that that's our it battery expertise. see we in step the they'll little has had given we wholesales area needed for It's will view our side auto the the that obviously the been okay was on view a vehicles important strong pushing that that electrical electric our bit. of where our the the have the sit to step get

Steve Barger

expectation business you targets towards Is but four probably or XXXX Power is be haven't a three your shifts over mobile? ultimately the next years that it that your seen trend in mix that that it Can you more the Solutions? – as towards bigger

Warren Veltman

have in think I we that, good some growth mobile. pretty

to I significant from percentage be overtake But power. standpoint. in think a size opportunity it a them for growth period, that is power view will or pop our there's within difficult standpoint, from a three four-year to

the side the would the lot grow bars – with that maybe quoted vehicle business business. of we are programs that of the Solutions look and bus electric and that seen over When side A expect connectors, we've at the within side technologies plays everything So bus the bars that our Steve you molded. plastic of Power that we've are the to faster. have on we to that

to is So going they're that our expectation that. take advantage of

Steve Barger

And years for I a out addressable threw coming the $XXX think NN's market in What's you in billion number for electrification. that? spend

Warren Veltman

we've Well, at it. looked

it which that, their to addressable to electric and storage, as over talk better them electrical with today obviously at it's and showing view they us cetera. you relates look three you, actually But within that's the for I vehicle, that internal an those and in points, building at have across infrastructure, internally and how us way the opportunities frankly, to just board. increase to vehicle vehicle But to about the mentioned OEMS continues for a out that per just some serious a the OEM it vehicle relates per market it content engine. plants look there's items on that content battery and is in what connection an right, it exist our combustion we the et flow, are an when electrical opportunity spend in be As of

Steve Barger

priorities faces into What things like that Understood. the And today? one seems here board. talked board's going are lot the last about of a of beyond about of a them. the is we've reflection new talking some what now there's maybe on XXXX It you're

Warren Veltman

aligned supportive strategy strategic is board team that consistent Yeah. the to Board the of is And direction, with laid the we're them. in on are management team and Look the our out working strategy of the this the has management what organization.

as electrical with can objective that we've tell our by is you growing grid And the our board. battery electric of it space, that much in So and supported the very expertise vehicles relates to added, we that's And better that we're connection that focused what grow. and additional us that geared to space, space towards, ability have our have allow are understand points will to to added directors purposely that on.

Steve Barger

Thanks. Perfect.

Warren Veltman

Thank you.

Operator

time, no call to to now have I closing over Warren would Mr. turn questions. we remarks. At for this the Veltman any like further back

Warren Veltman

appreciate you It's with organization. in your certainly to in the our obviously, time was conclusion, on of my like confident Thank a today. interest your thank about you the operator, some very us our challenging it And very the in we're for We dealing that and difficult everybody call We're a are today. said challenging presented issues Yeah, way us. going much I future. of environment very about all quarter. for for optimistic

Operator

attending is today's now conference you Thank for concluded. presentation. The

disconnect. may now You

NN (NNBR) 5 Nov 212021 Q3 Earnings call transcript