NNBR - Earnings call transcript Q4 2023

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Operator

Good day, and welcome to the NN, Inc. Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note today's event is being recorded.I would now like to turn the conference over to Stephen Poe with Alpha IR Group. Please go ahead, sir.

Unknown Executive

Thank you, operator. thanks us. and everyone, morning, for joining Good I'm Investor Relations NN, Inc. contact for Stephen Poe, to for supplemental Relations our website. thank update.Last like as the full I'd And you Investor XX, December has issued the quarter XXXX, press been year for on ended evening, as attending our a release which results section announcing a of financial well fourth and presentation, we business today's posted you may anyone this or Officer. presentation, Senior If Financial Bevis, Chief a the nnbr@alpha-ir.com.Our Executive at Felcher, the copy morning Chief President and Officer; Harold call Alpha release press contact presenters needs of be President the Group and and Vice Mike IR supplemental on will join to the callPlease information. us of the our and X, forward-looking Slide portion for Chief French, Tim Vice also President Q&A turn Senior you'll disclosure and statements find where our will Operating Officer,

call, subject release, of regarding live results, inflation, measures pandemic fiscal contain filed, such is company's language including Before cautionary industrial contained A divestitures, comments operating company's and cash of December session on turn markets, various today's tax supplemental health in will in should Harold acquisitions risks tables foreign we flow, today presentation.Please contained rates, to SEC future uncertainties, the you outside and chain non-GAAP as forward-looking in the to the section Form and worldwide the topics. of as savings, performance the to and control.The exchange note synergies, Annual defined Q&A press conference financial constraints, general The XXXX. XX, of of begin, military used in our These well and ended webcast.Our statements as presentation, final applies the supply regarding conditions non-GAAP I the cost certain the of many margins, will and presentation our conflicts X, presentation economic sales, made also ask and and the I'd economic reconciliation sector, call Report, rates, language cash XX-K, statements public forward-looking Risk take the Factors are supplemental for are and the by section Bevis. caution in year the crises, the with that today's the Slide same the company's impacts rules. be measures includes which other the to statements release over condition on CEO, other press turn conditions and now of when and

Harold Bevis

good everyone. and you, Stephen, morning, Thank

and year, their Before the results thank commitment excellence business, and cash reviewing recognize flow new members our accountability, evident were on collective winning the for renewed core strong results XXXX business have efforts of transformation strategy.Our our full in ongoing new delivering improvements culture our and quick globally our business team focus NN in increased for and on yielded operational I'd all to of as EBITDA, like our free to results.

earlier to compared closing make.Looking of and the and million well hard million line needs the respectively. as underperforming largely to in prior quarter in results results were Slide expectations. changes $XXX were as proud at part the to associates our in full down were building, how clearly have fourth is that XXXX, due year, sales our and These embraced $XXX momentum Our year, our slightly X necessary deck, Net some for facilities the we're your NN with on of our transformation cash up stated flow now since helped for the of and thinking cash imperative company. decisions The business the the allowed generation, was we unprofitable year-over-year.As we our drive deliver EBITDA year. million $XX which the and flow areas. of adjusted free results $XX Those that to exit the us certain million EBITDA performance strong in launch quarter ingrained to have for reset million is XXXX, delivering $XX in decision strategic million plan, $XX full in

call While cash win it's performance, we're our bring to simultaneously address expansion the more in refocus that line the and growth extensive launch of to headed more includes executing And efforts of note areas time are reported programs. on underperforming flow and to company X into EBITDA but and and continue seeing fully program flow and capabilities. of startup which NN Protect experience a top our up important initiatives.Our new and business Medical, improvements leadership globally, track We expanded free results. immediate are that little refresh the them to fix growth Connect take internal we both while by

ground already solid our generating participation up this deliver XXXX, to coming Connect our through our will is more is from million division is that compared XX% revenue the growth to over business helps the Protect being in from results. evident year. up growth relaunched Medical us which top $XX the we in, program was and our newly wins contribute approximately awards balance program be able start, platform dead year across types.Given were to new and built to a all in traction and that the line new XXXX Our prior and powertrain NN likely vehicle But in in

win which X. at building we halfway continue transformation year. is through and plan, we quote, prospect, have roughly to turn last on hit our rate.Please like to update I'd an and this certain provide rates to and here, unveiled at Our organized momentum Slide

areas, margins, winning months few and As have focused annual flow, We're fixing the in consistent our team, phase. first a cash leadership free really, business. only and goals this plan, our a new our reminder, on into been driving unprofitable strengthening accountability, overall expanding

operational value as and early made having added XX% out some managers, our and and quick changed success, to have additions of are a go. team and We update. the plant both talk second about leadership areas. believe leadership, of and level and to forward.Let's through the have commercial look that in significantly early experts more more is already we we We've we there to multiple drive changes We've

our higher to to continue higher, we parts the NN and committed fixing will unprofitable upgrade inevitable.Second, of As ongoing goals we reset and is our progress perform company. continue the This and isolating and remains to team. levels at

$XXX which plants. of but previously have loses million centered lot business mentioned, that in of plants, customers we of a million approximately X of touches $XX-plus As money- EBITDA. other customers, It's many in making are

as engagement. margin our is pillar complicated productivity targeted and say cost This intently of we is customer I'm and goals.Third, going notifications at optimization So priority that focused is expanded EBITDA is XXXX this top reduction on that for plants initiative now are been a fix and improvement healthy and all in our underway fully to cost requires our teams, plants overall well. delivered and a XXXX in into and XXXX. improving has a program our we Cost savings with profile proud to

we we here. the cost are While transformation, proud delivered of lots early of the in opportunities savings the days there's of

We in as continue year.Next, drive our we along organization cost generation identify to go very cash business. and the across margins flow team committed free the opportunities reduction to is higher this

in XXXX will free again. We cash deliver flow

in at which are this in XXXX. cover Our he we outstanding million, business core of goal continuing accelerating helped at becoming to with growth business of our XXXX, wins of supports back $XX into and reduction detail awards of is a culture the new and our 'XX plan. new and speaks.And improvements transformation to growing to these greater key existing into We're a as debt. positive both won and generate NN, in wins We and customers. half new of Mike continue is this the transformation stated our future level lastly, debt expect will and our mentioned, when this I record program momentum through XXXX significant refinancing 'XX,

in won along sales proud Our also summary, to slide.Additionally, are the full growing customers, more place a and X. of new represents have to market this of a to here, you across a at the we're further initiatives business proud just give on it new our positioned and of historically feel reporting that company, we're the of turn highlighted we're and we're top our the Page like is Page forward results.Please across bit 'XX, grow. new more limited forward half X, the to win as and accretive This would participated multiple on markets beginning we're made that at initiatives in first its stages electrical very speak you looking orthopedic progress although we've wins is these market to the value as our and progressing production we've early And new deliver We've we great opportunity about we a I've pretty this that a believe balance little in and of to I delivered well a and our a the sets ramped up we really entering, expanding is we're transformation. business average new multitude had wins, a commercial new business. small, wins while we skill XX X product on a creation we but we to and medical programs and half, new exhibit in our shielding. winning couple acutely assets. focused showcased second annual electrical that.Moving of We've of end very degree, we're and highlights. markets, mentioned, given multiple operating more in connectors in which team second business as healthy And reach, we as the and spoken.So onto record on existing platforms, profitability rates. We company with particularly to products importantly, in

take the new is electrical products metal deep we're are knowledgeable here.And some we multi-station specific expertise us components, same adding by capacity, these leaders, force, a to have as existing which plating market with our to look in strong knowledge to the approach skilled of and especially differentiates and very advantages and, victories reenter using early engineered advantage a progressive when and sales of customers. targeting knowledgeable die coupled design, products and medical leading XXXX, competitive precision and We

customers conversations and operational early go market deliver we that foundation exciting are so patient a and solid business the this and as thoroughly along, we And And manner great potential a we results will large. if we us over eye-opening it growing. are long-term, to long-term entering in business consistent with flip financials. Our Mike expect and to help over Page to leadership that, will us, us this for Mike? to walk a growth.With X, and strong call the turn support where the I'd through become you like market build Mike,

Michael Felcher

morning, Net compared X.X% down will on to detail start the Slide our Good quarter. quarter. Thanks, for for million year's results everyone. last I'll where sales were the $XXX.X quarter Harold. X, fourth we of fourth

versus operating quarter. and line million this million our top XX%, associated last in helped million, was While our compared pricing in of $X.X results referenced lower $X.X year's the Harold $XX which $X year's by more $X.X improved by or operating million the was impact quarter to offset million part prior million drive by earlier, of strength benefit the year's adjusted than $X.X grew operating of loss the last improved fourth the million loss on to $X.X Irvine adjusted $X fourth the EBITDA our our versus fourth driven compared an of basis, seen result. additional Taunton last also operating in profitability, year.As quarter, by million discipline $XX On loss closure to adjusted million loss volume, million, $X.X facilities.Looking an to of with sales pricing

results operations, These despite profitability to reductions the including improve transformative and profitability applied lower targeted better impact of our allowed we've to Our planning. cost the efforts us initiatives operational volume. early reflect

the $X and million in approximately benefit contributed the contributed Our of million Taunton efforts of cost facilities the $X approximately quarter, benefit. savings closures of and Irvine

had absorption We prior million overhead the $X compared year. also to favorable of

basis EBITDA versus adjusted margin to fourth XXX X, X.X% year Our by performance. XXXX financial year's Slide last consolidated quarter.Turning points our results to full I'll summarize expanded

million total the year, The the sales translation. marginally in sales observed foreign $X mentioned largely million million, $XX decline slight a $X facility by million driven the XXXX. to currency year-over-year from For full net a impact relative decline full declined in year $XXX.X was sales closures, number negative impact and that previously were volumes, the from

full the of were while negative basis. year.Our to favorable settlements, $X.X the $X.X Full $X.X our results pricing both drive impact million inflation, prior loss million XXXX. included our the year comparative the representing adjusted million to of compared impacts $XX.X efforts income results million. for to $X.X was by income totaled recover net periods $XX million of $X.X million full offset $XX.X lower approximately in EBITDA a versus million, loss million million the customer XXXX marginal Additionally, marked an a operating On These million full continued were increase generated on of adjusted year down in $XX.X grew adjusted partially EBITDA which $X operating GAAP year year. by of in operating basis, adjusted for

on our our a of figures the our Our performance, the revenue.As same offset facility we the our continue adjusted $X the settlements XXXX.These the headwinds overhead X.X% impact priorities by more EBITDA items as us positive from approximately a efforts supported led will to only year closures and our approximately see by EBITDA in expect to as customer million cost-out improved that and with and of third XXXX, these results that actions favorable prior operational many anchor fourth the to move These by particular, improvement were areas transformation effort. adjusted overall in thoroughly further performance, any were accreting pull-through the absorption began were benefit to at cost driven profitability we operating of of to to part quarters in focus flat $X attributable with business productivity and and margins net all of of and the those a attacking largely benefiting programs, sales volumes XXXX. total underperforming initiatives net lower results more of largely sales lower impacts of impacts In into of impacted multi-year pronounced million.

million segment, in parts driven performance the observed new benefits million as currency The As This $X.X offset for year foreign operating mix our on to have machined adjusted Mobile line to improved our in was sales our the the positive our we our overall X.X% prior Slide pricing capturing are Solutions $X.X enter Solutions past, the as quarter, as translation, cost grew build strong in segment back business, well and plans were in to to in $XX volume.Profitability by XXXX. in segment's we lower able primarily versus across million by committed remain our fourth million by million EBITDA facilities as $X.X $X.X last was products period. upon fourth partially wins, perform a compared EBITDA actions to we impact programs.Looking of at and in adjusted quarterly by of multiple increased to improvement year, shift a driven part the productivity sales XXXX. an adjusted deliver the which to improved once the by million which year's stated quarter gives EBITDA with we our in business quarter fourth us of the stronger machined all against additional original increased products, improving expectation platform $XX.X versus in the and completed.Turning our increase sales covers the X, results Mobile of generate

within seeing momentum traction business as Mobile in operations Additionally, from this China-based new demonstrated we're area has our business Solutions solid our we're by wins. pleased the

the applications ones we targets We are business more achieving. business the are we set perform into planning.Regarding and China we capable business grow ahead for very business, our enter capturing attractive of efforts on our we've the within growth new platforms, of deliver electric as to the attractive original wins, growth believe non-fuel helping

supplemented our we targeted and will months, addition improved of recently to generation tools, by efforts the new SEO launched and been recent Our stronger ultimately digital by over team sales and the and marketing lead including efforts. sales expand enhance the global supported be have able that further

to in $X.X our plans, year-over-year $X.X continue benefits down sales cost productivity rates from customer multi-year quarter. overall results despite we year-over-year impacts improved and points figures XXX in lower our and of seeing refocused compared actions we to sales million the segment, due mentioned conjunction XXXX productivity as operating plan.Turning layer in XX% year's call. commercially $XX.X Solutions commitment last seen quarterly a basis stamped from and continue closures to sales and we progress delivered transformation facility decreased million expanding through from fourth improve costs improve last sales efforts strategic operating manufacture new the to testament efforts million our automotive structurally EBITDA.Our million to lower our to the programs our and of the engineer to and through heavy delivered business impact on XX to the EBITDA EBITDA it fixed XX.X% our we by stronger expect fourth we profitability Despite million, Power to through positive improvement both begin absorption our higher volume, expanded and business through that as the We year's adjusted $X.X We the that the quarterly the in with leverage, on $XX the levels, where $X driven improved of and our This top products, sales quarter. inventory to solid reduction cost wins, facility as general commitment line.As driven combined million in improved and in of markets. capture adjusted believe the industrial adjusted headwind the is softness with operationally have was walked closures, by cost to truck Harold component expect our the of earlier margin previously by sales Slide

and growth significant a sales to quarter, the Demand as more of into in for grid to that product the you quarter cash average to indicators verticals, element turning is more and to capabilities far to business that taking improved are to solid balance in will first of stamped advancing as the stronger we forward continued metric Our involved XXXX.One summary QX shielding growth. going program daily products going and get showed effort the we can volume our this of connectors which our an market, strengthen Slide shields results involved in has a the thus the versus to market heavily are improving capture we and improvement drive particular we our and flow and a segment carries drive opportunity Protect, connector December where Solutions Connect rates sales leverage, third the announced is share and called Power steps are deeply get be believe well see to free electrification and sheet. forward.Now in contribution our space going optimize of XX, and core

Harold a be encouraged full were we on As than the year, dramatic we in million, have basis throughout bringing a our in cash improvement free lower fourth million.While quarter and by free flow, to quarter of improvement year XX-month cash year million significant able highlighted, continue capital. flow $X the year, our to the to generation trailing generate working free XXXX flow cash by in driven by quarter, flow fourth with seen $XX.X we free full fourth was $XX improving last part cash over

will to year While profitability free company we driven we previously and in positioning have sheet progress plan turns, term help more flow transaction ahead, an towards working expect deliver by expect for flow when by pay that outlined.Looking initiatives consistent flow a the future generation generation loan our vital expect to improvement debt generated to cash continued capital of in our function, performance in similar a balances, cost strategy conditions use overall advance we strategic we be balance market be level serves results achieving our favorable.Our free to We excess reshape lower are of refinancing another down the further the business cash in is deliver flow did while particular, a balance to free as we in XXXX. capital. our free This anticipated sheet tool improvement. cash cash to cash helping full positive

improvement cost supported million portion million of to our $XXX.X transaction quarter, entered The last plan, of and used a our and the net strategy year the of EBITDA, be week debt will net for lower proceeds and when in announced In sheet balance into a we our outstanding capital growth facilities. at loan.Turning liquidity, a capital. X our repay end operating of at improved will not will balance cost versus balance our third term the the with sale-leaseback end the lower launched have Our was of we to by million transaction $XXX.X we QX the leverage, line impact the and sheet, XXXX be of of optimization $XXX our transformation.

to leverage generation, free adjusted EBITDA ratio to to third debt bring profile the stood XXXX.Looking the expansion. year at will net margin debt continue of the compared at to of Our of ahead cash quarter end at down end X.Xx we and flow X.XXx through the our XXXX, paydown,

so bring are below making We business the performance. to expect the still necessary while for to Xx ensure maintaining during our XXXX, our to leverage assets doing into investments and we capital expected

to Our I'd capital our million $X.X compared million to outlook the XX. Slide quarter year cover third quarter $X.X in XXXX.Now was of XXXX the outlay spending like fourth on in full net

$XX at of the midpoint; the the million slightly up For over compared the midpoint million, cash to of to significantly of range midpoint; in in we free year $XX XXXX. in in at net million XX% improved million to are million, $XX range projecting up XXXX, range cash the the generation adjusted flow million, up $XX slightly $XXX flow free we delivered EBITDA at $XXX the to the full sales

to to for also which pleased wins million. new $XX range million are business We provide $XX expected is in XXXX, an

end during Xx full reflects guidance weakness remain the our some net commercial and America steady factors, we on despite Notably, to inform lower observed less in external, continued Finally, expect improvements as helped launched year North new cash market guidance across leverage, continue vehicle in aggressive several we business relative our flow demand, internal program, market to ultimately ranges. both XXXX.Several leverage transformation and we executing than focused our to was early platforms.In our are improvements in market and NN, in our customer which results. we driving to year XXXX. closing, free confident to expect earlier plan, Specific has this driven and profitability growth our

We positive successes in coming team for accelerate a in our day. change to great sharing you importantly, platform, quarters.I the will the capabilities operator right and every execute with have the help now to who I call questions. growth, forward and the to strategy place, and most drive turn back look

Operator

Instructions] And question first [Operator Lake Rob Markets. our from with Capital comes today Brown Street

Robert Brown

good a on quarter. Congratulations

outlook First kind -- wanted question is or the end market guess, the kind do steady seeing I of and or the just the headwinds, overall headwinds sales of on outlook. assuming clarify in the Are automotive here assumptions in guidance? some factor environment. your you some on American to of I but understand the North you

Harold Bevis

We the our markets America, and America China Americas, are are big and and really specifically. X looking -- so North South

a We're exporting over you in with benefiting in So, production assuming as know, flat, their that's then, news supplier.And to America, And from with for that to Rob, with is as vehicle about a China that single-digit Americas, South all doing consumption export we're is outlook North what passenger we're strong the being vehicles. platforms of the increase added an market. the flat China the on. indigenous America, in-country vehicles

to it's up. specifically slightly to our at the platform we So, and flattish look market, exposure

Robert Brown

on then, strength business the And Okay. Great. there. activity, you've gotten new

it Is just a business you color of, competitive of on weakness some taking you're understanding Just wanted advantage little that seeing to more? sales Are Or the are you're engaging efforts? more sort of of getting? traction you some new the get drivers. sort

Harold Bevis

bit good the machined BEV independent. of steering on far And electric parts. Yes. power highlighted It's But high we're categories vehicles. where very the is little point. on platform it's the independent. There's biggest, on a winning steering, Page by are and X kind the It's content that a platform speaking, we tolerance a higher generally steering systems

using lead doing optimization level, wasn't generation or winning have are but competitiveness, I safety There's which in we in management. there's for Zoominfo going to and which search we to vehicle and of We to no keyword lot features, precise vehicle didn't additional vehicles.As Mike for jockeying mentioned would that we a process. company noted within capacity were target-rich which using, decrease changed we that been on cetera.So for, autonomy there the new company. the we're quoting. and which contemporary for ], which our the a weren't lot Google were never level would to same We per did ad the French, tools, competitive which ads a Google quite leading and known. lead manner gave capacity are before. also both that competitors. have to same And we will. thing really, quoting on us. we se, existing up we say that And competing who's open at a more we generation, the changed had already quoting Tim in looks tools, a or phone capacity. higher control, the that of that of bit like expanded same little in we're it everyone of we focused improvements, have if a it's the lead innovation bifurcated engine need The in a leads also, intensity were out is, way and force the campaign to here you sales we and buy big And [ try equipment much we our fill et thinking open environment, we And it on quoting

leads. higher getting we're So,

you giving who's part good businesses looks arena, that of when the leading as reduction is sales we We grid more for have plants phenomenon same the that lets it. X Tim, phone, have right now, and on the a us. more effort, on of our And electrification you a electric focused efforts the position, electrical fixing it targets.In across are is board. I'm kind side the is on as competitive. the have getting healthy cost the be cost better leading well the of

goes kind of it So, together.

on thinking be competitive to combined how how versus Rob, be don't say, would able So, in at we effort think rate. a and target it's higher I to a we existing improvements, have, and about we revised more a capacity capacity tactical quote, win

that's game we're quarter, comments now on making the winning we're So Still right in the that here. plan. and with we're track our

on knock still it's momentum. wood, So, gaining

Robert Brown

And help I takes -- was in, it kicks was program where Medical over want Excellent. of you sound overview. good segment, said but really could frame that XXXX you a developing time? that do just in you That segment there lastly, progress. business understand Okay. to time then, sort [indiscernible]. see on the like a How maybe that that the think steps great

Harold Bevis

good It's been -- It's degree, new in something the connector mentioned to that In startup. it's I there. one we're the it's medical Yes. non-tool shielding the legacy a it And a that of upsizing minor -- case now market, was and We business. were our in one. a basically it's question. as

We we had medical And from to a hire competitor. to manager, Willy and came Barton, operationally. had a to a so, came came commercial Beach, hire Brian hire We who in leader, Dunham, competition. had from leader, who plant Tim engineering who an quote

about then we some buy need gathering deep what expanded about and high about buying.We are a we products, thoughts. if where that consider boring, to the want We to processes we're plants going And on it didn't has on will, the which gun what you getting to to we had And note, the and tolerance plants then, drills, know we we're our medical to We it it's X. X at competitive competitive, customers lines. in scratch. in are and have on this we do them those to we're RFQs, much to and want what so need drills. called sell had equipment having when and initial medical what going automotive recognition might And were arena. we're the what product we pattern -- what's not to going go and it X we So expanding them from we're getting in.Where generate careful then products X and to we're on to but X it's in the stamped call where X manufacturing say business, into certifications a processes, item certifications have team focus we being right now, make

So, we rush money meeting. and out not We're trying have time. We're a waste logically. going waste weekly or to

to the not to expecting. we're we're But our have around. much and plan Rob, there.So, we've embraced So, business. initial build And don't through to we something you trying go an think add that unless too what up to a beginning in we we to win business this year, X-year get to That's all to customer all million are goals happens going building, $XX have certifications. 'XX, it's

a it's longer time. little bit So lead

up I so, our will in And that results, it showing 'XX. in think start

Operator

next our And John with Company. & question from Franzreb today comes Sidoti

John Franzreb

you a guidance to Harold. Can contracts and outlook assumed bit that little like in of of how on much XXXX, existing repriced existing is sales that is contracts? I'd outlook start talk much for exited the how embedded of in

Harold Bevis

Yes.

down. this we same for about activity amount requested have pricing activities on price the up So price year, versus of on

is minimal, regards exiting outlook price right business, of in now here. in to have this do up down. So, or that net we some With

So, we away are million X, say, going now, I've $XX it's to of contribution walk from right a terms the was I'd negotiations X And we're margin of losses now. outlook that the to sales the going -- that with group negative which we've is, business already plants, John, it's of that. that not piece through nicknamed to come certain right from.So, $X million have

not a So massive it's reason. not massive. It's

outlook And know market. a you participate business. end being we market adopted And in and the outlets XX% of It's about vehicle America our think North I in markets. probably has so, third-party negative for And that our really we're 'XX. conservative on commercial

there. decline a assuming we're So,

price, ramping hit to in we'll pieces, that volume million as commercial the on lift primarily on from away slight new business. slight million $XX much those your are X $X So, a in fixing a plants. walk and of hit And vehicles not part the from

John Franzreb

second commercial decline brought have yet? you half on vehicle Since that's you kind a Or it of side, reality? assuming up the seen you are that

Harold Bevis

seen haven't yet. it We

I We engine also. are We the data, still to the half. the the it's rates for primarily haven't going first And serving those in seen it and into FTR ACT you second still track be like vehicles, probably market there. We're the John. build yet, And believe John. in half do

they're not supply a chain. big So,

pretty are Those order. those. made ahead build don't much You to

we're So, first half, yet. not seeing activity much

John Franzreb

the new wins. a business question And on

record at number the company ago what record year, your new got looking XX%. from environment, wins a you good the used X margins last you readdress sense this to to to got or XX% pricing You've a are so? what number in nice as year, Have -- contribution you of, business years a the how to used starting change

Harold Bevis

to programs. spending out John, one. right these Mike, that bit going me ramping able might on to you we're little I'm help up be a now, just money say on

I hairy kind initially business technology, So, X pushing of here won want say don't these would And the ones that we're even, a on in say, the of I capability and of to we're our edge expansion We're is technology but prototype we new mode. largest wins. expansion. breaking on

up set budgets haven't for it. We

go results expensing run And full Tim's startup they're every along. we accretive now plant as comment, week. every right rate, at the because So, in I and plant my costs we review why the we said that's know

And requests associated X points to a It's it's group, accretive. a CER, know John. a with so, we look better. going the say, the to few we of run when that points these better, do we rates a the ups some not costing ramp they're at But money. just little wins. it's capital I'm it X miracle, we are the And do, us as

John Franzreb

question. Okay. All Fair last And enough. just X right.

much internally managers? any replaced feedback XX% of externally? mentioned And I'm your your plant of in curious much You that of and about were how roughly kind those prepared those were brought remarks in the how of promoted initial plant you managers.

Harold Bevis

speak? to able you are Tim,

Tim French

sir. Yes,

internal of the they promotions. For majority them, are

X the We specifically most running from the medical and the outside, facility. promotions. brought for internal X But are have that's from coming in they part,

John Franzreb

Any initial thoughts?

Harold Bevis

group? regarding thoughts Initial the

John Franzreb

Correct.

Harold Bevis

might on metrics the that putting Tim, plan quality you're big in and place and say want time? to and on safety you

Tim French

Well, exactly.

the with tune the and outlook facilities, to accountability good plant is KPIs within the so implementing with down big the strategic what very managers are very the new the far capabilities in And far adopting are the selected we've that the driving well. of transformation facilities. with so and the facilities KPIs plan Very Our focus lowest done. we've level within possible

John Franzreb

it. what right. of That's All kind was Okay. for. Appreciate I looking

Operator

Our Gomes Noble Instructions] Capital. Joe today question with [Operator comes next from

Joseph Gomes

And So, you group wondering, the of arrangement of the And the sale-leaseback for are kind if the length of what X? facilities. those leases? those just announced was in I the so, X those facilities, of lease if is X facilities,

Harold Bevis

Yes.

to take want Mike? that, You

Joseph Gomes

not in an The we be group X. Yes. of term expect the lease XX of facilities And are the X initial term will years.

So, to those on. the change there's facilities doing at the plan no transaction operations that we're

Operator

Kerr question next Tom Investment today from our at Research. comes And Zacks

Thomas Kerr

there that? couple quick opportunities Back sale-leaseback is one-and-done that is for are more that the a of issue, kind of deal? A on questions. -- Or

Harold Bevis

We've looked at both real estate and equipment.

on near time. the we're that's evaluate that's what probably to on real looking we'll it over something the estate I think, the in going And at. also to we're side, that term, then, although side, do continue equipment

debt finance to pay So, opportunity more for capital. potential there down or to leasing use is us

Thomas Kerr

that XX is it awards? a the customers? program on XX, back awards Or concentrated of And roughly Okay. base large mentioned, a number those customer in is

Harold Bevis

of big had number there but Tom. large couple a we wins, a customers, It's

we specific those had data just So, big wins with customers. points,

in was big X announced and there. a fourth high-end, for stamped existing equipment for customers was next that was So X in quarter, new the off-road, X and engines, and parts heavy And electrical there customer X were generation. X customer, was engines, We diesel an shielding.

big customers products. and So, different quite X

Thomas Kerr

it. Got

can couple give my hits? second on and A much timing any refresh you -- first carry it in into XXXX on the Taunton can more on quick Irvine that? memory that me does that, in color and of terms of the ones how closures, other words, you Okay. the Is volume quarter, or

Harold Bevis

was QX closed were by closed ran the of mid-year in QX. Yes. and Irvine most into effectively XXXX, for last year. They part Taunton both

Thomas Kerr

Okay.

So okay. still from volume hit half, in that little a bit first of the

Harold Bevis

had And premium with at Correct. some we ramp-down. the associated pricing Irvine

So, of pressure a yes, little will volume bit sequential be there still.

Operator

this Thank I'd any closing gentlemen, and conference question-and-answer back remarks. team you. to ladies concludes like over And turn the for the to session. management our

Harold Bevis

about focus us our plans, and you a going to Everyone, you. forward value-adding for committed with Thank about and great And have and Thank day. team, excited performance, speaking XXXX today Yes. pretty transformation forward. speaking you with we look spending We're its again. time a areas. and global NN's we're

Operator

call. We thank concludes all you This today's presentation. for you. Thank conference attending today's

and lines, now disconnect day. wonderful You your a have may

NN (NNBR) 12 Mar 242023 Q4 Earnings call transcript