NN, Inc.

Q2 net sales were $128.7 million, up $20.8 million, or roughly 19%, year over year. Q2 adjusted gross margin dollars were $26.1 million, up $5 million, or 24%, and adjusted gross margin was 20.3%, up 80 basis points. Q2 adjusted EBITDA was $17.9 million, up $4.7 million, or 36%, with adjusted EBITDA margin of 13.9%, up 170 basis points. For the first half, net sales were $247.2 million, up $33.6 million, or 16%; adjusted gross margin dollars were $49.2 million, up $10.3 million, or 26%; and adjusted EBITDA was $32.1 million, up $8.3 million, or 35%. Full-year 2026 guidance was raised to sales of $460 million to $480 million, adjusted EBITDA of $55 million to $65 million, and new business wins of $80 million to $100 million. Management said new business wins through July were already $80 million. On the financing side, NN completed a $124 million refinancing transaction, used $70 million from the PIPE to redeem preferred, equitized roughly $19 million, and left about $35 million of preferred at a 10% PIK rate for one year, reducing annual PIK interest by about $13 million.

Harold Bevis characterized the quarter as “really good” and said performance was consistent with Q1, with profitable growth across both reporting segments. He emphasized that the company’s transformation is shifting NN toward higher-growth markets, especially data center/electric grid, defense electronics, and medical products, where he said the company is winning at an above-expectation rate. He also said the refinancing was a major strategic step that helps more of the value created by the turnaround accrue to common shareholders.

Chris Bohnert focused on capital structure repair and margin progress. He said the company raised $75 million in PIPE capital, then completed a $124 million refinancing that used $70 million to redeem preferred, equitized about $19 million, and reduced the remaining preferred’s PIK rate to 10% from 14.5%, cutting annual PIK interest by about $13 million. On operations, he pointed to Q2 sales of $128.7 million, adjusted gross margin of 20.3%, and adjusted EBITDA margin of 13.9%, noting that margin gains have come from cost-out actions, better mix, new business ramp-ups, and higher precious-metals pass-through pricing.

Analysts pressed on how much of the new business is already flowing through the P&L, and management said the major announcements in data center, medical, and defense do not materially affect the first half and will ramp in the second half, with data center volume expected to start hitting stride in November. Questions also focused on margin sustainability; management said margins have benefited from prior cost-outs and new business mix, but precious-metals pass-through can affect percentages, and longer term adjusted EBITDA margin should be more like 14% to 16%. On the financing side, management said the transaction increased share count by swapping about 5.5 million shares for roughly $19 million of preferred reduction, and they are exploring a future term-loan refinance with Marathon, though nothing has been announced.