What changed in this filing

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Item 1. Business

2024-03-12 compared with 2023-03-10 · 43 added, 74 removed, 183 unchanged (39% of the section changed)

is a diversified industrial company that combines in-depth materials science expertise with advanced engineering and production capabilities to design and manufacture high-precision metal and plastic components and assemblies for a variety of end markets on a global basis.

As used in this Annual Report, the terms “NN,” the “Company,” “we,” “our,” or “us” refer to NN, Inc., and its subsidiaries.

As of December 31, 2022, we had 31 facilities in North America, Europe, South America, and Asia.

NN, Inc., a Delaware corporation, is a diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies for a variety of end markets on a global basis.

As used in this Annual Report, the terms the “Company,” “we,” “our,” or “us” refer to NN, Inc., and its subsidiaries.

As of December 31, 2023, we had 27 facilities in North America, South America, Europe, and China.

Our enterprise and management structure is designed to accelerate growth and further balance our portfolio by aligning our strategic assets and businesses.

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Mobile Solutions

Mobile Solutions is focused on growth in the automotive and general industrial end markets.

Mobile Solutions is focused on growth in the automotive, general industrial, and medical end markets.

We have developed an expertise in manufacturing highly complex, tight tolerance, system critical components.

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Our ability to make products with tight-tolerance and extreme precision requirements enables our customers to satisfy the critical functionality and performance requirements of their products.

We are included in customer designs and deployed in critical systems that involve high cost of failure applications and significant regulatory certification processes, including those for the Underwriters Laboratories (“UL”).

Complete product lifecycle focus

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We have no significant retail exposure, which limits volatility and provides enhanced sales visibility.

Relationships with our top ten customers, in terms of revenue, average more than ten years.

Relationships with many of our largest customers, in terms of revenue, average more than ten years.

We have significant exposure to emerging markets in Asia, South America, and Europe through these global customers as well as key local manufacturers.

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North America constitutes the largest portion of our manufacturing operations with facilities in the U.S.

The North American facilities are strategically located to serve major customers in the United States and Mexico.

Our foreign facilities are located in regional manufacturing hubs in France, Poland, China, and Brazil, and primarily serve global customers in those local markets.

We believe that the Asian and South American facilities have significant growth potential as local customer bases expand and the markets for high-precision products grow in those regions.

and Mexico which are strategically located to serve major customers in those markets.

Our foreign facilities are located in regional manufacturing hubs in France, Poland, China, and Brazil, and primarily serve global customers in those markets.

We believe that the Chinese and South American facilities have significant growth potential as local customer bases expand and the markets for high-precision products grow in those regions.

We continue to realize synergy effects between Mobile Solutions and Power Solutions by pairing our experienced engineering resources and wide-ranging portfolio of process technologies from each business to serve our customers’ ever evolving needs.

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In general, we pass through material cost fluctuations when incurred to our customers in the form of changes in selling prices.

We ordinarily ship our products directly to customers within 60 days, and in many cases, during the same calendar month of the date on which a sales order is placed.

ordinarily ship our products directly to customers within 60 days, and in many cases, during the same calendar month of the date on which a sales order is placed.

Sales and Marketing

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We believe we have a good working relationship with our employees and the unions that represent them.

Diversity, Equity, and Inclusion (“DE&I”)

Diversity, Equity, and Inclusion

Diversity, equity, and inclusion are at the core of our values and strategic business priorities.

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We maintain comprehensive safety programs focused on identifying hazards and eliminating risks that can lead to work-place injuries.

In addition to the strong safety focus that we maintain within our operations, our emphasis during the COVID-19 pandemic has been on protecting the health and safety of our employees and the communities in which we operate.

Our team monitors country, state, and local guidance, and uses these to implement best practice guidelines for employees and visitors.

Throughout the COVID-19 pandemic, we increased communications, including the addition of virtual “town hall” style meetings at the

group and organizational level.

This has helped employees across our global footprint stay connected, whether working from home or at one of our manufacturing sites.

Talent Development

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Power Solutions

Power Solutions operates in intensely competitive but very fragmented supply chains.

Power Solutions operates in competitive but very fragmented supply chains.

We must compete with numerous companies in each industry market segment.

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Generally, we do not enter into written supply contracts with our suppliers or commit to maintain minimum monthly purchases of materials.

However, we carefully manage raw material price volatility, particularly with respect to precious metals, through the use of consignment agreements.

In effect, we contract the precious metals for our own stock and buy the raw materials on the same day customer shipments are priced, thereby eliminating risk of price changes from procurement to product shipment.

However, we carefully manage raw material price volatility, particularly with respect to precious metals, through the use of consignment agreements, which allow us to buy the precious metals on the same day customer shipments are priced, thereby eliminating risk of price changes from procurement to product shipment.

Supply and Cost Pressures

In each of our segments, we have historically been affected by upward price pressure on steel principally due to general increases in global demand.

In each of our segments, we at times have been affected by upward price pressure on steel principally due to general increases in global demand.

In general, we pass through material cost fluctuations to our customers in the form of changes in selling price.

Most of the raw materials we use are purchased from various suppliers and are typically available from numerous sources, some of which are located in China and Europe.

The COVID-19 pandemic and ongoing supply chain disruptions, resulting in supply shortages and higher shipping charges, have impacted our suppliers and could continue to impact our ability

to maintain supplies of products and the costs associated with obtaining raw materials and key components.

We continue to monitor the effects of these impacts on our supply chain in order to maintain regular and timely supply of raw materials to our business segments.

Supply chain disruptions, resulting in supply shortages and higher shipping charges, have impacted our suppliers and could continue to impact our ability to maintain supplies of products and the costs associated with obtaining raw materials and key components.

We continue to monitor impacts on our supply chain in order to maintain regular and timely supply of raw materials to our business segments.

Patents, Trademarks and Licenses

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Furthermore, third parties may assert infringement claims against us based on their patents or other intellectual property, and we may have to pay substantial damages and/or redesign our products if we are ultimately found to infringe.

Even if such intellectual property claims against us are without merit, investigating and defending these types of lawsuits takes significant time, may be expensive and may divert management attention from other business concerns.

intellectual property claims against us are without merit, investigating and defending these types of lawsuits takes significant time, may be expensive and may divert management attention from other business concerns.

Additionally, we rely on certain data and processes, including trade secrets and know-how, and the success of our business depends, to some extent, on such information remaining confidential.

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Such privacy and data protection laws and regulations, and the interpretation and enforcement of such laws and regulations, are continuously developing and evolving and there is significant uncertainty with respect to how compliance with these laws and regulations may evolve and the costs and complexity of future compliance.

Based on information compiled to date, management believes that our current operations are in substantial compliance with applicable governmental laws and regulations, the violation of which could have a material adverse effect on our business and financial condition.

Based on information compiled to date, management believes that our current operations are in compliance with applicable governmental laws and regulations, the violation of which could have a material adverse effect on our business and financial condition.

As of the date hereof, compliance with these laws and regulations has not had a material effect on our capital expenditures, results of operations, and competitive position.

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Increased regulation and other climate change concerns, however, could subject us to additional costs and restrictions and could negatively affect our business, operations and financial results.

On May 5, 2022, we released our 2021 Sustainability Report which established our global sustainability strategy.

In May 2022, we released our inaugural Sustainability Report which established our global sustainability strategy.

We conducted a comprehensive environmental, social and governance (“ESG”) materiality assessment to identify our most significant economic, environmental and social impacts.

The material ESG topics identified during this process enable our organization to prioritize our investments and actions and provide meaningful disclosures throughout this report.

We intend to regularly review and update our ESG priorities on an ongoing basis to ensure they continue to reflect our evolving business operations.

The information provided in our 2021 Sustainability Report as well as on our website, is not part of this Annual Report, and is therefore not incorporated by reference into this Annual Report or other filings with the SEC.

The material ESG topics identified during this process enable our organization to prioritize our investments and actions and provide meaningful disclosures.

We continue to strengthen our focus towards providing meaningful disclosures through the publishing of our 2022 ESG Annual Report in June 2023, in which we identified specific actions that we have taken, and will continue to take, to address our ESG priorities.

The information provided in our 2021 Sustainability Report and 2022 ESG Annual Report, as well as on our website, is not part of this Annual Report, and is therefore not incorporated by reference into this Annual Report or other filings with the SEC.

Information about our Executive Officers

Our executive officers are:

The following table lists our executive officers as of February 28, 2024:

Name Age Position

Veltman 61 President and Chief Executive Officer

Felcher 50 Senior Vice President – Chief Financial Officer

Buchan 61 Executive Vice President – Mobile Solutions and Power Solutions

Heiter 62 Senior Vice President, General Counsel and Secretary

Bevis 64 President, Chief Executive Officer and Director

Felcher 51 Senior Vice President and Chief Financial Officer

French 60 Senior Vice President and Chief Operating Officer

Gail Nixon 53 Senior Vice President and Chief Human Resources Officer

Andrew Wall 44 Senior Vice President and Chief Commercial Officer

Veltman was appointed President and Chief Executive Officer in September 2019, having previously served as Executive Vice President of Mobile Solutions since January 2018.

Veltman joined NN as part of the Autocam acquisition in 2014 as the Senior Vice President and General Manager of our former Autocam Precision Components Group.

Prior to the acquisition, Mr.

Veltman served as Chief Financial Officer of Autocam Corporation from 1990 and Secretary and Treasurer since 1991.

As previously announced, Mr.

Veltman will retire as President and Chief Executive Officer on March 31, 2023;

however, such date may be extended in order to facilitate an orderly transition.

Felcher was appointed Senior Vice President and Chief Financial Officer in July 2021 having previously served as Vice President, Chief Accounting Officer since June 2018.

Bevis was appointed President, Chief Executive Officer and Director in May 2023.

Prior to joining the Company, Mr.

Bevis served as President and Chief Executive Officer of Commercial Vehicle Group, Inc., from March 2020 to May 2023, and as a Director from June 2014 to May 2023.

Bevis served as Chief Executive Officer of Boxlight Corporation from January 2020 to March 2020 and as a Director from March 2018 to March 2020.

Previously, Mr.

Bevis served as President of OmniMax International from October 2017 to February 2019 and President, Chief Executive Officer and Director of Xerium Technologies, Inc.

from August 2012 to April 2017.

Felcher has served the Company as Senior Vice President and Chief Financial Officer since July 2021.

Felcher joined the Company in June 2018 and served as Vice President, Chief Accounting Officer until July 2021.

Prior to joining the Company, Mr.

Felcher served as the Vice President, North America Chief Financial Officer for JELD-WEN, Inc., a publicly held, global manufacturer of doors and windows, from 2013 to 2017.

Before assuming his role at JELD-WEN, Inc., Mr.

Felcher served as a Director of Finance for United Technologies Corp.

following its acquisition of Goodrich Corporation in 2012.

Previously, Mr.

Felcher served in a variety of finance roles at Goodrich.

Felcher began his career at PricewaterhouseCoopers and is a licensed CPA.

Buchan was appointed Executive Vice President of Mobile Solutions in September 2019 and Executive Vice President of Mobile Solutions and Power Solutions in November 2019 having previously served as Vice President of Operations of Mobile Solutions.

Buchan joined NN as part of the Autocam acquisition in 2014, where he served as the Chief Operations Officer.

Prior to joining Autocam in 2002, Mr.

Buchan held a variety of technical leadership roles at Benteler Automotive, culminating in his appointment as Executive Vice President of the Exhaust Products Group.

Buchan has spent his entire career in operations roles, beginning with General Motors Central Foundry and Rochester Products Divisions.

As previously announced, Mr.

Buchan will retire as Executive Vice President of Mobile Solutions and Power Solutions on March 31, 2023;

however, such date may be extended in order to facilitate an orderly transition.

Heiter joined us as Senior Vice President, General Counsel and Secretary in July 2015.

Prior to joining NN, Mr.

Heiter was a shareholder in the law firm of Baker, Donelson, Bearman, Caldwell and Berkowitz, P.C.

from May 1996 to December 1999 and from July 2002 to July 2015, where he served as chairman of the firm’s Securities and Corporate Governance Practice Group.

From January 2000 to July 2002, Mr.

Heiter served as the Executive Vice President, General Counsel, and Secretary of Internet Pictures Corporation, a publicly traded internet technology company.

Gail Nixon joined us in 2007 and was appointed Senior Vice President and Chief Human Resources Officer in January 2018.

Nixon previously served as our Vice President of Human Resources as well as Corporate Human Resources Manager.

Felcher served in a variety of finance roles at United Technologies Corporation and Goodrich Corporation.

French was appointed Senior Vice President and Chief Operating Officer in August 2023.

Prior to joining the Company, Mr.

French was President of Synergein Solutions Limited, which provides executive and C-suite level interim management and consulting services to manufacturing companies, from September 2018 to August 2023.

Previously, Mr.

French served as Chief Operating Officer at ProAmpac, a leading global flexible packaging company, from 2010 to 2018.

Gail Nixon has served the Company as Senior Vice President and Chief Human Resources Officer since January 2018.

Nixon joined the Company in 2007 and previously served as our Vice President of Human Resources as well as Corporate Human Resources Manager.

Nixon is a member of the Society for Human Resource Management (“SHRM”) and has earned her Senior Professional in Human Resources and SHRM – Senior Certified Professional designations.

From 2000 to 2007, she held various accounting and human resources positions with a multi-state healthcare organization, ultimately serving as its corporate human resources director.

Andrew Wall joined us as Senior Vice President and Chief Commercial Officer in January 2022.

Prior to joining NN, he served in numerous management positions for ABB, Ltd.

(“ABB”), a publicly held, global manufacturer of heavy electrical equipment and automation technology.

Wall served as ABB’s Vice President, Product Marketing and Sales, Electrification U.S.

from January 2018 through December 2021, where he was responsible for leading the creation and implementation of ABB's U.S.

product marketing strategy.

Before that, Mr.

Wall served as Vice President and General Manager, Power Products Services U.S.

for ABB from July 2015 through December 2017.

Available Information - SEC Filings

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What changed 10-K

Item 1. Business