NN INC Q2 FY26 Results

NN delivered strong financial performance in the second quarter with record results in many areas. Additionally, after the quarter ended, we implemented a game-changing improvement to our balance sheet. Our 5 pillar growth program is delivering results. These new sales are higher margin, attached to higher growth rate end markets, and mostly immediate 2026 startup. The second half of 2026 is expected to reflect continued momentum and strong financial performance. We have completed a refinancing of the preferred stock put in place over five years ago. Amongst other benefits, we paid off approximately $89 million of the preferred stock. This refinancing was enabled by sustained multi-year performance of the company in the right market areas. I am also happy to report that, as part of this refinancing, we have expanded our investor roster with new institutional investors. This is a gratifying turning point for the company and NN investors and is indicative of a future based upon sales-driven earnings growth in attractive end-markets. Our 3 part execution on current production, new business startups, and new business prospecting continues to be very good. In the quarter, our mastery of high-volume titanium machining was noteworthy. Our gross margins and adjusted EBITDA margins continue to climb. We are achieving many multi-year goals and revising our outlooks based upon our actual results. We now believe that we can deliver higher margins than previously estimated. During the quarter, NN secured significant 2026 immediate-supply awards for Data Center liquid cooling products, robotic surgery medical products, and defense products. Our year-to-date 5 Pillar growth program performance has delivered above expectations and our prospecting is expanding. We are encouraged by the business results and refinancing results that we have delivered this year. We see continuation into the second half. We believe the second half of 2026 and 2027 will continue to benefit from our multi-year strategic growth focus and operational execution processes. Our 5 pillar growth program is delivering strong results. We are also reengineering our balance sheet right now, reducing leverage and reducing rates. We have a goal to refinance the current securities and convert NN to normal credit statistics. We believe that we are just at the beginning of common stock value-creation and it is an exciting time at NN.

Supported by the continued strength of our financial results year-to-date, the solid momentum we have established in immediate supply business in high-growth markets such as Data Center, Defense, and Medical, and the strong outlook for the remainder of the year, we are again revising our guidance ranges. For fiscal 2026, we are now guiding net sales in the range of $460 million to $470 million and adjusted EBITDA in the range of $55 million to $65 million, reflecting strong, profitable growth versus prior year. We are also raising our high end expectations for new business wins, expecting these new awards to range between $80 million to $100 million for the full year. We are also very happy to report the conclusion to the refinancing of our preferred stock.