What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2024-10-31 · 208 added, 234 removed, 351 unchanged (56% of the section changed)

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share data) 2025 2024

7 unchanged sentences

Other expense (income), net ( 2,169 ) 4,153

Loss before benefit (provision) for income taxes and share of net income from joint venture ( 3,839 ) ( 7,015 ) ( 22,700 ) ( 31,315 )

Benefit (provision) for income taxes ( 903 ) 245 ( 1,194 ) ( 1,381 )

Loss before provision for income taxes and share of net income from joint venture ( 7,814 ) ( 14,302 )

Provision for income taxes ( 1,310 ) ( 506 )

Share of net income from joint venture 2,439 2,271

2 unchanged sentences

Foreign currency translation gain (loss) $ 3,125 $ ( 2,346 )

Interest rate swap:

Change in fair value, net of tax — — — ( 230 )

Reclassification adjustments included in net loss, net of tax ( 109 ) ( 449 ) ( 1,007 ) ( 1,366 )

Reclassification adjustments from the interest rate swap included in net loss, net of tax — ( 449 )

Other comprehensive income (loss) $ 3,125 $ ( 2,795 )

Comprehensive income (loss) $ 1,304 $ ( 8,578 ) $ ( 20,067 ) $ ( 34,811 )

Comprehensive loss $ ( 3,560 ) $ ( 15,332 )

Basic and diluted net loss per share $ ( 0.23 ) $ ( 0.34 )

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands, except per share data) September 30,

(in thousands, except per share data) March 31,

2025 December 31,

1 unchanged sentence

Cash and cash equivalents $ 11,739 $ 18,128

Accounts receivable, net of allowances of $ 1,913 and $ 1,241 at September 30, 2024 and December 31, 2023

Accounts receivable, net of allowances of $ 1,375 and $ 1,515 at March 31, 2025 and December 31, 2024

67,750 61,549

4 unchanged sentences

Total current assets 172,974 167,562

Property, plant and equipment, net of accumulated depreciation of $ 248,473 and $ 254,013 at September 30, 2024 and December 31, 2023

Property, plant and equipment, net of accumulated depreciation of $ 247,739 and $ 240,532 at March 31, 2025 and December 31, 2024

162,040 162,034

20 unchanged sentences

Commitments and contingencies (Note 11)

Series D perpetual preferred stock - $ 0.01 par value per share, 65 shares authorized, issued and outstanding at September 30, 2024 and December 31, 2023

Series D perpetual preferred stock - $ 0.01 par value per share, 65 shares authorized, issued and outstanding at March 31, 2025 and December 31, 2024

97,904 93,497

Stockholders’ equity:

Common stock - $ 0.01 par value per share, 90,000 shares authorized, 49,950 and 47,269 shares issued and outstanding at September 30, 2024 and December 31, 2023

Common stock - $ 0.01 par value per share, 90,000 shares authorized, 50,526 and 49,908 shares issued and outstanding at March 31, 2025 and December 31, 2024

Additional paid-in capital 452,187 455,811

5 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

(in thousands) 2025 2024

1 unchanged sentence

Net loss $ ( 6,685 ) $ ( 12,537 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 8,774 12,547

1 unchanged sentence

Paid-in-kind interest 316 730

Total derivative loss, net of cash settlements 582 3,139

Share of net income from joint venture, net of cash dividends received ( 6,597 ) 851

Gain on sale of business ( 7,154 ) —

Total derivative loss (gain), net of cash settlements ( 1,762 ) 3,331

Share of net income from joint venture ( 2,439 ) ( 2,271 )

Share-based compensation expense 839 846

8 unchanged sentences

Other operating liabilities 3 5,744

Net cash provided by operating activities 4,389 23,890

Net cash provided by (used in) operating activities ( 3,345 ) 712

Cash flows from investing activities

1 unchanged sentence

Proceeds from sale of property, plant, and equipment 177 98

Proceeds received from sale of business 17,000 —

Net cash provided by (used in) investing activities 1,914 ( 13,416 )

Net cash used in investing activities ( 3,730 ) ( 5,362 )

Cash flows from financing activities

5 unchanged sentences

Repayments of financing obligations ( 297 ) ( 99 )

Proceeds from short-term debt — 3,648

Repayments of short-term debt ( 63 ) —

Other ( 1,031 ) ( 651 )

Net cash used in financing activities ( 15,633 ) ( 1,205 )

Net cash provided by financing activities 583 3,570

Effect of exchange rate changes on cash flows 103 ( 213 )

4 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended September 30, 2024 and 2023

Three Months Ended March 31, 2025 and 2024

Common Stock Additional

1 unchanged sentence

(in thousands) Number of shares Par

Balance as of June 30, 2024 50,032 $ 500 $ 462,410 $ ( 310,088 ) $ ( 44,386 ) $ 108,436

Balance as of December 31, 2024 49,908 $ 499 $ 455,811 $ ( 333,621 ) $ ( 48,167 ) $ 74,522

Net loss — — — ( 6,685 ) — ( 6,685 )

Dividends accrued for preferred stock — — ( 4,407 ) — — ( 4,407 )

Shares issued under stock incentive plans, net of forfeitures ( 82 ) ( 1 ) 1 — — —

Shares issued under stock incentive plans, net of forfeitures and tax withholdings 637 6 ( 7 ) — — ( 1 )

Share-based compensation expense — — 839 — — 839

Restricted shares surrendered for tax withholdings under stock incentive plans ( 19 ) — ( 49 ) — — ( 49 )

Other comprehensive income — — — — 3,125 3,125

Balance as of September 30, 2024 49,950 $ 499 $ 459,245 $ ( 312,645 ) $ ( 40,525 ) $ 106,574

Common Stock Additional

capital Accumulated deficit Accumulated other comprehensive loss Total

(in thousands) Number of shares Par

Balance as of June 30, 2023 47,019 $ 470 $ 462,525 $ ( 269,750 ) $ ( 38,801 ) $ 154,444

Net loss — — — ( 5,057 ) — ( 5,057 )

Dividends accrued for preferred stock — — ( 3,347 ) — — ( 3,347 )

Shares issued under stock incentive plans, net of forfeitures 292 3 ( 3 ) — — —

Share-based compensation expense — — 1,207 — — 1,207

Other comprehensive loss — — — — ( 3,521 ) ( 3,521 )

Balance as of September 30, 2023 47,311 $ 473 $ 460,382 $ ( 274,807 ) $ ( 42,322 ) $ 143,726

See notes to condensed consolidated financial statements (unaudited).

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Nine Months Ended September 30, 2024 and 2023

Balance as of March 31, 2025 50,526 $ 505 $ 452,187 $ ( 340,306 ) $ ( 45,042 ) $ 67,344

Common Stock Additional

9 unchanged sentences

Other comprehensive loss — — — — ( 2,795 ) ( 2,795 )

Balance as of September 30, 2024 49,950 $ 499 $ 459,245 $ ( 312,645 ) $ ( 40,525 ) $ 106,574

Common Stock Additional

capital Accumulated deficit Accumulated other comprehensive loss Total

(in thousands) Number of shares Par

Balance as of December 31, 2022 43,856 $ 439 $ 468,143 $ ( 245,198 ) $ ( 37,120 ) $ 186,264

Net loss — — — ( 29,609 ) — ( 29,609 )

Dividends accrued for preferred stock — — ( 9,594 ) — — ( 9,594 )

Shares issued under stock incentive plans, net of forfeitures and tax withholdings 3,598 36 ( 57 ) — — ( 21 )

Share-based compensation expense — — 2,058 — — 2,058

Restricted shares surrendered for tax withholdings under stock incentive plans ( 143 ) ( 2 ) ( 168 ) — — ( 170 )

Other comprehensive loss — — — — ( 5,202 ) ( 5,202 )

Balance as of September 30, 2023 47,311 $ 473 $ 460,382 $ ( 274,807 ) $ ( 42,322 ) $ 143,726

Balance as of March 31, 2024 49,520 $ 495 $ 464,081 $ ( 307,885 ) $ ( 40,550 ) $ 116,141

See notes to condensed consolidated financial statements (unaudited).

Notes to Condensed Consolidated Financial Statements

September 30, 2024

March 31, 2025

Interim Financial Statements

1 unchanged sentence

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 of September 30, 2024, we had 26 facilities in North America, Europe, South America, and Asia.

As of March 31, 2025, we had 24 facilities in North America, South America, Europe and China.

As used in this Quarterly Report on Form 10-Q (this “Quarterly Report”), the terms “NN,” the “Company,” “we,” “our,” or “us” refer to NN, Inc.

4 unchanged sentences

Securities and Exchange Commission (the “SEC”) on March 6, 2025.

In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to fairly state our results of operations for the three and nine months ended September 30, 2024 and 2023;

financial position as of September 30, 2024 and December 31, 2023;

and cash flows for the nine months ended September 30, 2024 and 2023, on a basis consistent with our audited consolidated financial statements.

These adjustments are of a normal recurring nature and are, in the opinion of management, necessary to state fairly the Company’s financial position and operating results for the interim periods.

financial position as of March 31, 2025 and December 31, 2024;

and cash flows for the three months ended March 31, 2025 and 2024, on a basis consistent with our audited consolidated financial statements.

These adjustments are of a normal recurring nature and are, in the opinion of management, necessary to state fairly the our financial position and operating results for the interim periods.

Certain prior period amounts have been reclassified to conform to the current year’s presentation.

2 unchanged sentences

These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the 2024 Annual Report.

The results for the three and nine months ended September 30, 2024, are not necessarily indicative of results for the year ending December 31, 2024, or any other future periods.

The results for the three months ended March 31, 2025, are not necessarily indicative of results for the year ending December 31, 2025, or any other future periods.

Except for per share data or as otherwise indicated, all U.S.

dollar amounts and share counts presented in the tables in these Notes to Condensed Consolidated Financial Statements are in thousands.

Accounting Standards Not Yet Adopted

Accounting Standards Recently Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07, Segment Reporting (Topic 832):

1 unchanged sentence

ASU 2023-07 also permits entities to disclose more than one measure of a segment’s profit or loss and requires quarterly disclosure of certain information that is now only required annually.

The new segment disclosures are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

We plan to adopt ASU 2023-07 in our Form 10-K for the year ended December 31, 2024 on a retrospective basis and are in the process of assessing the impact on our disclosures.

Accounts Receivable Sales Programs

We participate in programs established by our customers, which allows us to sell certain receivables from that customer on a non-recourse basis to a third-party financial institution.

During the nine months ended September 30, 2024 and 2023, we incurred fees of $ 0.9 million and $ 0.8 million, respectively, related to the sale of receivables, which is recorded in the Other expense (income), net line item on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

We adopted ASU 2023-07 for the year ended December 31, 2024 and have presented the required interim disclosures on a retrospective basis in this March 31, 2025 Form 10-Q.

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ” (“ASU 2023-09”), which requires additional annual income tax disclosures.

These include a tabular rate reconciliation comprised of eight specific categories, the disaggregation of income taxes paid between federal, state, and foreign jurisdictions, and to disaggregate income from continuing operations before income tax expense and income tax expense from continuing operations between domestic and foreign.

ASU 2023-09 eliminates the disclosure of the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made.

ASU 2023-09 is effective for fiscal years beginning on or after December 15, 2024, with early adoption permitted, and can be applied on a prospective or retrospective basis.

We plan to adopt ASU 2023-09 in our Form 10-K for the year ended December 31, 2025 and are in the process of assessing the impact on our disclosures.

In November 2024, the FASB issued ASU 2024-03, “ Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses ” (“ASU 2024-03”), which requires disaggregated disclosures of certain categories of expenses that are included in income statement line items.

ASU 2024-03 is effective for fiscal years beginning on or after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Companies may early adopt and can apply the guidance prospectively or retrospectively.

The Company has not yet determined the potential impact of adopting this standard.

Assets Held for Sale

During the quarter ended March 31, 2025, we ceased production activity at our Mobile Solutions plant in Dowagiac, Michigan.

The land and building, which we own, have been classified as held for sale as of March 31, 2025 as we are actively marketing the property for sale.

The net book value of $ 1.4 million is included in “Other current assets” on the Condensed Consolidated Balance Sheets as of March 31, 2025.

Segment Information

2 unchanged sentences

• Power Solutions, which is focused on growth in the electrical, general industrial, automotive, and medical end markets.

These components are operating segments as each engages in business activities for which it earns revenues and incurs expenses, discrete financial information is available for each, and this is the level at which the chief operating decision maker reviews discrete financial information for purposes of allocating resources and assessing performance.

The following table presents our financial performance by reportable segment.

Three Months Ended

September 30, Nine Months Ended

September 30,

These components are operating segments as each has engaged in business activities for which it earns revenues and incurs expenses, discrete financial information is available for each, and this is the level at which the chief operating decision maker (“CODM”) reviews discrete financial information for purposes of allocating resources and assessing performance.

The CODM, who is our President and Chief Executive Officer, uses segment income (loss) from operations to evaluate the performance of our segments each quarter and for annual forecasting purposes.

Income (loss) from operations is used to make key operating decisions, such as the amount and timing of capital expenditures, plant optimization actions, and allocation of management resources.

In addition to our two reportable segments, we report a Corporate category which includes corporate costs and unallocated expenses.

The following tables reconcile segment revenues to consolidated loss before provision for income taxes and share of net income from joint venture.

Three Months Ended March 31, 2025 Mobile

Solutions Power

Solutions Corporate and Eliminations Total

Sales $ 62,244 $ 43,508 ( 64 ) $ 105,688

Cost of sales 56,450 35,268 ( 72 ) 91,646

Selling, general, and administrative expense 3,538 2,682 4,950 11,170

Depreciation expense 4,209 780 380 5,369

Other segment items (1) 734 1,755 ( 197 ) 2,292

Segment income (loss) from operations $ ( 2,687 ) $ 3,023 $ ( 5,125 ) $ ( 4,789 )

Interest expense 5,194

Other income, net ( 2,169 )

Loss before provision for income taxes and share of net income from joint venture $ ( 7,814 )

Three Months Ended March 31, 2024 Mobile

Solutions Power

Solutions Corporate and Eliminations Total

Sales $ 73,060 $ 48,238 ( 100 ) $ 121,198

Cost of sales 63,087 38,110 ( 111 ) 101,086

Selling, general, and administrative expense 3,785 3,260 6,303 13,348

Depreciation expense 7,572 1,049 470 9,091

Other segment items (1) 759 1,840 ( 143 ) 2,456

Segment income (loss) from operations $ ( 2,143 ) $ 3,979 $ ( 6,619 ) $ ( 4,783 )

Interest expense 5,366

Other expense, net 4,153

Loss before provision for income taxes and share of net income from joint venture $ ( 14,302 )

_______________________________

(1) Other segment items includes amortization expense and other operating expenses and income.

The following table presents capital expenditures and depreciation and amortization by reportable segment.

Three Months Ended

Capital expenditures:

Mobile Solutions $ 2,666 $ 3,828

Power Solutions 874 995

Intersegment sales eliminations ( 26 ) ( 2 ) ( 140 ) ( 13 )

Corporate 367 637

Total $ 3,907 $ 5,460

Income (loss) from operations:

Depreciation and amortization:

Mobile Solutions $ 5,047 $ 8,409

2 unchanged sentences

Total $ 8,774 $ 12,547

The following table summarizes total assets by reportable segment.

March 31, 2025 December 31, 2024

Mobile Solutions (1) $ 295,563 $ 294,204

Power Solutions 128,474 124,460

Corporate 36,687 38,229

Total $ 460,724 $ 456,893

_______________________________

(1) Total assets in Mobile Solutions includes $ 37.6 million and $ 35.0 million as of March 31, 2025 and December 31, 2024, respectively, related to our investment in a joint venture (see Note 7).

Revenue from Contracts with Customers

2 unchanged sentences

The following tables summarize revenue by customer industry.

Our products in the automotive industry include high-precision components and assemblies for electric power steering systems, electric braking, electric motors, fuel systems, emissions control, transmissions, moldings, stampings, sensors, and electrical contacts.

Our products in the general industrial industry include high-precision metal and plastic components for a variety of industrial applications including diesel industrial motors, heating and cooling systems, fluid power systems, power tools, and more.

Our products in the general industrial industry include high-precision metal components for a variety of industrial applications including diesel industrial motors, heating and cooling systems, fluid power systems, power tools, and more.

While many of the industries we serve include electrical components, our products in the residential/commercial electrical industry category in the following tables include components used in smart meters, charging stations, circuit breakers, transformers, electrical contact assemblies, precision stampings, welded contact assemblies, specification plating, and surface finishing.

The other category includes products sold in aerospace, defense, medical, and other industries.

Three Months Ended September 30, 2024 Mobile

Solutions Power

Solutions Intersegment

Eliminations Total

Automotive $ 48,062 $ 7,063 $ — $ 55,125

General Industrial 17,351 10,121 — 27,472

Residential/Commercial Electrical — 20,301 — 20,301

Other 5,265 5,450 ( 26 ) 10,689

Total net sales $ 70,678 $ 42,935 $ ( 26 ) $ 113,587

Three Months Ended September 30, 2023 Mobile

Solutions Power

Solutions Intersegment

Eliminations Total

Automotive $ 55,933 $ 8,641 $ — $ 64,574

General Industrial 17,284 12,351 — 29,635

Residential/Commercial Electrical — 17,802 — 17,802

Other 5,744 6,690 ( 2 ) 12,432

Total net sales $ 78,961 $ 45,484 $ ( 2 ) $ 124,443

Nine Months Ended September 30, 2024 Mobile

Three Months Ended March 31, 2025 Mobile

Solutions Power

6 unchanged sentences

Total net sales $ 62,244 $ 43,508 $ ( 64 ) $ 105,688

Nine Months Ended September 30, 2023 Mobile

Three Months Ended March 31, 2024 Mobile

Solutions Power

6 unchanged sentences

Total net sales $ 73,060 $ 48,238 $ ( 100 ) $ 121,198

Sales Concentration

During the three months ended March 31, 2025, a customer in our Mobile Solutions segment represented 13 % of consolidated revenue, and a customer from our Power Solutions segment represented 11 % of consolidated revenue.

Deferred Revenue

Deferred revenue relates to payments received in advance of performance under the contract and recognized as revenue as (or when) we perform under the contract.

The balance of deferred revenue was $ 0.2 million and $ 0.4 million as of September 30, 2024 and December 31, 2023, respectively.

Revenue recognized for performance obligations satisfied or partially satisfied during the nine months ended September 30, 2024 included $ 0.4 million that was included in deferred revenue as of December 31, 2023.

The balance of deferred revenue was $ 0.4 million and $ 0.2 million as of March 31, 2025 and December 31, 2024, respectively.

Revenue recognized for performance obligations satisfied or partially satisfied during the three months ended March 31, 2025 included $ 0.1 million that was included in deferred revenue as of December 31, 2024.

Transaction Price Allocated to Future Performance Obligations

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 30, 2024, unless our contracts meet one of the practical expedients.

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of March 31, 2025, unless our contracts meet one of the practical expedients.

Our contracts met the practical expedient for a performance obligation that is part of a contract that has an original expected duration of one year or less.

Accounts Receivable

We participate in programs established by our customers, which allows us to sell certain receivables from that customer on a non-recourse basis to a third-party financial institution.

During the three months ended March 31, 2025 and 2024, we incurred fees of $ 0.1 million and $ 0.3 million, respectively, related to the sale of receivables, which is recorded in the “Other expense (income), net” line item on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

As of March 31, 2025 and December 31, 2024, one customer represented 11 % of consolidated accounts receivable.

Amounts due from this customer are primarily related to Mobile Solutions.

Inventories are comprised of the following amounts:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Raw materials $ 21,765 $ 20,664

8 unchanged sentences

Amortization ( 838 ) ( 2,567 ) ( 3,405 )

Intangible assets sold (1)

— ( 591 ) ( 591 )

Balance as of September 30, 2024 $ 16,488 $ 31,328 $ 47,816

_______________________________

(1) Represents customer relationships associated with the Industrial Molding Corporation business, which was sold during the nine months ended September 30, 2024 (see Note 16).

Balance as of March 31, 2025 $ 14,811 $ 26,194 $ 41,005

Intangible assets are reviewed for impairment when changes in circumstances indicate the carrying value of those assets may not be recoverable.

There were no impairment charges for the nine months ended September 30, 2024 and 2023.

There were no impairment charges for the three months ended March 31, 2025 and 2024.

Investment in Joint Venture

6 unchanged sentences

Foreign currency translation gain 212

Balance as of September 30, 2024 $ 39,843

On March 22, 2021, we entered into a $ 150.0 million term loan facility (as amended from time to time, the “Term Loan Facility”) and a $ 50.0 million asset backed credit facility (as amended from time to time, the “ABL Facility”).

On March 3, 2023, we amended the Term Loan Facility and ABL Facility to adjust certain covenants under the agreements, as well as to replace references to LIBOR with Secured Overnight Financing Rate (“SOFR”) for interest rate calculations.

The following table presents the outstanding debt balances.

September 30, 2024 December 31, 2023

Balance as of March 31, 2025 $ 37,622

The following table presents amounts outstanding on our debt facilities .

March 31, 2025 December 31, 2024

Term Loan Facility $ 114,308 $ 114,397

ABL Facility 8,000 5,400

Financing obligations from sale-leaseback transactions 24,229 24,496

3 unchanged sentences

_______________________________

(1) In addition to this amount, costs of $ 0.3 million and $ 0.5 million related to the ABL Facility were recorded in other non-current assets as of September 30, 2024 and December 31, 2023, respectively.

We capitalized interest costs of $ 1.0 million and $ 1.1 million in the nine months ended September 30, 2024 and 2023, respectively, related to construction in progress.

(1) In addition to this amount, costs of $ 1.0 million and $ 1.2 million related to the ABL Facility were recorded in other non-current assets as of March 31, 2025 and December 31, 2024, respectively.

We capitalized interest costs of $ 0.2 million and $ 0.5 million in the three months ended March 31, 2025 and 2024, respectively, related to construction in progress.

Term Loan Facility

Outstanding borrowings under the Term Loan Facility bear interest at either:

1) one-month, three-month, or six-month term SOFR with a duration adjustment (“Adjusted Term SOFR”), subject to a 1.00 % floor, plus an applicable margin of 6.875 %;

or 2) the greater of various benchmark rates plus an applicable margin of 5.875 %.

On March 22, 2021, we entered into a $ 150.0 million term loan facility (as amended from time to time, the “2021 Term Loan Facility”), on which outstanding borrowings bear interest at either:

1) one-month, three-month, or six-month term secured overnight finance rate (“SOFR”) with a duration adjustment (“Adjusted Term SOFR”), subject to a 1.000 % floor, plus an applicable margin of 6.875 %, or 2) the greater of various benchmark rates plus an applicable margin of 5.875 %.

Beginning in the second quarter of 2023, interest was increased on a paid-in-kind basis at a rate between 1.00 % and 2.00 % (“PIK interest”), dependent on our net leverage ratio for the most recently reported fiscal quarter and subject to reduction upon the occurrence of certain conditions as set forth in the credit agreement governing the 2021 Term Loan Facility.

The PIK interest is payable on the loan maturity date of September 22, 2026.

At September 30, 2024, the Term Loan Facility bore interest, including PIK interest, based on one-month Adjusted Term SOFR, at 13.820 %.

At March 31, 2025, the 2021 Term Loan Facility bore interest, including PIK interest, based on one-month Adjusted Term SOFR, at 12.300 %.

The 2021 Term Loan Facility requires quarterly principal payments of $ 0.4 million with the remaining unpaid principal amount due at the loan maturity date.

2 unchanged sentences

The 2021 Term Loan Facility has a first lien on all domestic assets, other than accounts receivable and inventory and has a second lien on domestic accounts receivable and inventory.

We were in compliance with all requirements under the Term Loan Facility as of September 30, 2024.

We were in compliance with all requirements under the 2021 Term Loan Facility as of March 31, 2025.

The 2021 Term Loan Facility was issued at a $ 3.8 million discount and we have capitalized an additional $ 5.5 million in debt issuance costs.

These costs are recorded as a direct reduction to the carrying amount of the associated long-term debt and amortized over the term of the debt.

We had an interest rate swap that changed the one-month LIBOR to a fixed rate of 1.291 % on $ 60.0 million of the outstanding balance of the Term Loan Facility.

During the first quarter of 2023, we terminated the interest rate swap and received cash proceeds of $ 2.5 million, which was equal to its then fair value.

The ABL Facility provides for a senior secured revolving credit facility, with an original commitment amount of $ 50.0 million, of which a maximum of $ 30.0 million is available in the form of letters of credit and a maximum of $ 5.0 million is available for

the issuance of short-term swingline loans.

On April 16, 2025, we repaid all of our outstanding obligations under the 2021 Term Loan Facility with the proceeds from a new term loan arrangement that has an initial principal balance of $ 118.0 million.

On December 30, 2024, we entered into a new asset backed credit facility (the “ABL Facility”) which provides for a senior secured revolving credit facility in the amount of $ 50.0 million, of which $ 15.0 million is available in the form of letters of credit and $ 5.0 million is available for the issuance of short-term swingline loans.

The availability of credit under the ABL Facility is limited by a borrowing base calculation derived from accounts receivable and inventory held in the United States.

The maximum commitment amount may be increased or decreased from time to time based on the terms of conditions of the ABL Facility.

Outstanding borrowings under the ABL Facility bear interest on a variable rate structure plus an interest rate spread that is based on the average amount of aggregate revolving commitment available.

The variable borrowing rate is either:

1) Adjusted Term SOFR plus an applicable margin of 1.75 % or 2.00 %, depending on availability;

or 2) the greater of the federal funds rate or prime, plus an applicable margin of 0.75 % or 1.00 %, depending on availability.

We may elect whether to use one-month, three-month, or six-month Adjusted Term SOFR.

At September 30, 2024, using one-month Adjusted Term SOFR plus a 2.00 % margin, the interest rate on outstanding borrowings under the ABL Facility would have been 7.197 %.

We pay a commitment fee of 0.375 % for unused capacity under the ABL Facility and a 2.125 % fee on the amount of letters of credit outstanding.

The final maturity date of the ABL Facility is March 22, 2026.

As of September 30, 2024, we had no outstanding borrowings under the ABL Facility, $ 9.9 million of outstanding letters of credit, and $ 21.9 million available for future borrowings under the ABL Facility.

The ABL Facility has a first lien on domestic accounts receivable and inventory.

We were in compliance with all requirements under the ABL Facility as of September 30, 2024.

Outstanding borrowings under the ABL Facility bear interest at either:

1) the one, three or six month SOFR plus 1.50%, plus an

adjustment of 0.10 % (“Term SOFR Rate”);

or 2) the highest of the base commercial lending rate of the lender or various benchmark rates plus an applicable margin of 0.50 % or 1.00 %, depending on the benchmark (“Alternative Base Rate”).

At March 31, 2025, based on a one-month Term SOFR Rate, the interest rate on outstanding borrowings under the ABL Facility was 5.922 %.

We incur a commitment fee of 0.25 % for unused capacity under the ABL Facility and a 1.85 % fee on the amount of letters of credit outstanding.

The final maturity date of the ABL Facility is the earlier of:

1) December 30, 2029;

or 2) 91 days prior to the loan maturity date of the 2021 Term Loan Facility.

We capitalized a total of $1.2 million in new debt issuance costs related to the ABL Facility.

As of March 31, 2025, we had $ 8.0 million outstanding borrowings under the ABL Facility, $ 10.4 million of outstanding letters of credit, and $ 18.3 million available for future borrowings under the ABL Facility.

The ABL Facility is secured by a perfected lien over substantially all of the Company’s assets.

We were in compliance with all requirements under the ABL Facility as of March 31, 2025.

Sale-Leaseback Transactions

15 unchanged sentences

The monthly lease payments are being amortized as principal payments and interest expense on a weighted average effective interest rate of 10.540 %.

International Loans

We have fixed rate debt with various financial institutions in France, Poland and China, with maturity dates between 2025 and 2033.

These loans, which were obtained to fund working capital and equipment purchases, had a weighted average interest rate of 2.335 % at March 31, 2025.

Preferred Stock

Series D Perpetual Preferred Stock

On March 22, 2021, we completed a private placement of 65,000 shares of newly designated Series D Perpetual Preferred Stock, with a par value of $ 0.01 per share (the “Series D Preferred Stock”), at a price of $ 1,000 per share, together with detachable warrants (the “2021 Warrants”) to purchase up to 1.9 million shares of our common stock at an exercise price of $ 0.01 per share.

The Series D Preferred Stock has an initial liquidation preference of $ 1,000 per share and is redeemable at our option in cash at a redemption price equal to the liquidation preference then in effect.

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If no cash dividend is paid, then the liquidation preference per share effective on the dividend date increases by 12.0 % per year.

Beginning March 22, 2026, the cash dividend rate and in-kind dividend rate increase by 2.5 % per year.

Cash dividends are required beginning on September 30, 2027.

On March 22, 2026, the cash dividend rate and in-kind dividend rate increase by 2.5 % per year.

Cash dividends are required beginning on September 30, 2027 and are limited based on terms and conditions of the 2021 Term Loan Agreement.

The Series D Preferred Stock is classified as mezzanine equity, between liabilities and stockholders’ equity, because certain features of the Series D Preferred Stock could require redemption of the Series D Preferred Stock upon a change of control event that is considered not solely within our control.

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Note 16 discusses the accounting for these features.

As of September 30, 2024, the carrying value of the Series D Preferred Stock shares was $ 89.3 million, which included $ 42.6 million of accumulated unpaid and deemed dividends.

The following table presents the change in the Series D Preferred Stock carrying value during the nine months ended September 30, 2024.

As of March 31, 2025, the carrying value of the Series D Preferred Stock shares was $ 97.9 million, which included $ 51.2 million of accumulated unpaid and deemed dividends.

The following table presents the change in the Series D Preferred Stock carrying value during the three months ended March 31, 2025.

Balance as of December 31, 2024 $ 93,497

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Amortization 1,353

Balance as of September 30, 2024 $ 89,289

Balance as of March 31, 2025 $ 97,904

The following table contains supplemental cash flow information related to leases.

Nine Months Ended

September 30,

Three Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

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Financing cash flows used in finance leases 981 559

Right-of-use assets obtained in exchange for new operating lease liabilities (1) 692 477

Right-of-use assets obtained in exchange for new finance lease liabilities 276 —

_______________________________

(1) Includes new leases, renewals, and modifications.

We recognized sublease income of $ 2.9 million and $ 1.4 million in the nine months ended September 30, 2024 and 2023, respectively, which is recognized in the “Other operating income, net” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

We recognized sublease income of $ 1.0 million and $ 0.9 million in the three months ended March 31, 2025 and 2024, respectively, which is recognized in the “Other operating income, net” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The following table presents finance lease-related assets and liabilities recorded on the balance sheet.

Financial Statement Line Item September 30, 2024 December 31, 2023

Financial Statement Line Item March 31, 2025 December 31, 2024

Finance lease assets Property, plant and equipment, net 16,885 16,579

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The matter encompasses several lawsuits filed with the Brazilian courts requesting declaratory actions that no tax is due or seeking a stay of execution on the collection of the tax.

In 2018, we obtained a favorable decision in one of the declaratory actions for which the period for appeal has expired.

We have filed actions in each court requesting dismissal of the matter based on the earlier court action.

In May 2020, we received an unfavorable decision in one of the lawsuits, and as a result have recorded a liability to the Brazilian tax authorities and a receivable from the former shareholders of Autocam for the same amount.

We have obtained multiple favorable decisions and one unfavorable decision.

Although we anticipate a favorable resolution to the remaining matters, we can provide no assurances that we will be successful in achieving dismissal of all pending cases.

dollar amount that would be owed in the event of an unfavorable decision is subject to interest, penalties, and currency impacts and, therefore, is dependent on the timing of the

dollar amount that would be owed in the event of an unfavorable decision is subject to interest, penalties, and currency impacts and therefore is dependent on the timing of the decision.

For the remaining open lawsuits, we currently believe the cumulative potential liability in the event of unfavorable decisions on all matters will be less than $ 2.0 million, inclusive of interest and penalties.

We are entitled to indemnification from the former shareholders of Autocam, subject to the limitations and procedures set forth in the agreement and plan of merger relating to the Autocam acquisition.

Management believes the indemnification would include amounts owed for the tax, interest, and penalties related to this matter.

Accordingly, we do not expect to incur a loss related to this matter even in the event of an unfavorable decision and, therefore, have not accrued an amount for the remaining matters as of September 30, 2024.

Accordingly, we do not expect such losses, if any, to have a material impact on our business, operations or financial results.

Other Legal Matters

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In making that determination, we analyze the facts and circumstances of each case at least quarterly in consultation with our attorneys and determine a range of reasonably possible outcomes.

Our effective tax rate was ( 23.5 )% and ( 5.3 )% for the three and nine months ended September 30, 2024, respectively, and 3.5 % and ( 4.4 )% for the three and nine months ended September 30, 2023, respectively.

The effective tax rates for the three and nine months ended September 30, 2024 differ from the U.S.

federal statutory tax rate of 21 % primarily due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries, favorable return to provision and amended return adjustments in certain foreign and state jurisdictions and by limitation on the amount of tax benefit recorded for losses in certain jurisdictions where we believe it is more likely than not that a future tax benefit may not be realized.

Our effective tax rate was ( 16.8 )% and ( 3.5 )% for the three months ended March 31, 2025 and 2024, respectively.

The effective tax rate for the three months ended March 31, 2025 differs from the U.S.

federal statutory tax rate of 21 % primarily due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by limitation of the amount of tax benefit recorded for losses in certain jurisdictions where we believe it is more likely than not that a future tax benefit may not be realized.

Net Loss Per Common Share

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net loss $ ( 6,685 ) $ ( 12,537 )

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Basic and diluted net loss per common share $ ( 0.23 ) $ ( 0.34 )

Cash dividends declared per common share $ — $ — $ — $ —

_______________________________

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Stock options 168 257

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Total antidilutive securities 2,488 2,025

Stock options excluded from the calculations of diluted net loss per share have a per share exercise price ranging from $ 7.93 to $ 25.16 for the three and nine months ended September 30, 2024.

Stock options excluded from the calculations of diluted net loss per share have a per share exercise price ranging from $ 7.93 to $ 25.16 for the three months ended March 31, 2025.

Warrants excluded from the calculation of diluted net loss per share have a per share exercise price of $ 11.03 (see Note 16).

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Restricted stock $ 550 $ 587

Performance share units 289 259

Stock options — — — 14

Share-based compensation expense $ 839 $ 846

Restricted Stock

The following table presents the status of unvested restricted stock awards as of September 30, 2024, and activity during the nine months then ended.

The following table presents the status of unvested restricted stock awards as of March 31, 2025, and activity during the three months then ended.

Shares Weighted Average Grant-Date

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Forfeited ( 37 ) 2.94

Unvested at September 30, 2024 2,385 $ 2.18

During the nine months ended September 30, 2024, we granted 390,000 shares of restricted stock to non-executive directors, officers and certain other employees.

Unvested at March 31, 2025 2,704 $ 2.02

During the three months ended March 31, 2025, we granted 664,000 shares of restricted stock to non-executive directors, officers and certain other employees.

The shares of these restricted stock awards vest pro-rata generally over three years for employees and over one year for non-executive directors.

During the nine months ended September 30, 2024, we granted 270,000 shares of restricted stock to new executive officers as inducement awards, which vest pro-rata over five years.

Total grant date fair value of restricted stock that vested in the nine months ended September 30, 2024, was $ 1.9 million.

Total grant date fair value of restricted stock that vested in the three months ended March 31, 2025, was $ 1.2 million.

Performance Share Units

Performance Share Units (“PSUs”) are a form of long-term incentive compensation awarded to executive officers and certain other key employees designed to directly align the interests of employees to the interests of our stockholders, and to create long-term stockholder value.

The following table presents the status of unvested PSUs as of September 30, 2024, and activity during the nine months then ended.

The following table presents the status of unvested PSUs as of March 31, 2025, and activity during the three months then ended.

Nonvested PSU Awards Weighted Average Grant-Date

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Granted 231 2.24

Forfeited ( 413 ) 2.26

Nonvested at September 30, 2024 3,966 $ 1.55

During the nine months ended September 30, 2024, we granted 175,000 PSUs to certain executive officers, which vest, if at all, upon our achieving a specified relative total shareholder return, which will be measured against the total shareholder return of a specified index during the three-year performance period that ends December 31, 2026.

During the nine months ended September 30, 2024, we granted 415,000 PSUs to new executive officers as inducement awards.

These inducement awards cliff-vest after five years and are contingent on the Company’s stock price meeting specified thresholds.

Nonvested at March 31, 2025 3,902 $ 1.50

During the three months ended March 31, 2025, we granted 231,000 PSUs to certain executive officers, which vest, if at all, upon our achieving a specified relative total shareholder return, which will be measured against the total shareholder return of a specified index during the three-year performance period that ends December 31, 2027.

We estimated the grant date fair value of the PSU awards using the Monte Carlo simulation model, as the total shareholder return metric and changes in stock price are considered market conditions under ASC Topic 718, Compensation – stock compensation .

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The following tables present the components of accumulated other comprehensive income (loss) (“AOCI”).

Foreign Currency Translation Interest rate swap Income taxes (1) Total

Balance as of June 30, 2024 $ ( 44,495 ) $ 109 $ — $ ( 44,386 )

Other comprehensive income (loss) before reclassifications 3,970 — — 3,970

Amounts reclassified from AOCI to interest expense (2) — ( 109 ) — ( 109 )

Net other comprehensive income (loss) 3,970 ( 109 ) — 3,861

Balance as of September 30, 2024 $ ( 40,525 ) $ — $ — $ ( 40,525 )

Balance as of June 30, 2023 $ ( 40,706 ) $ 1,905 $ — $ ( 38,801 )

Other comprehensive income (loss) before reclassifications ( 3,072 ) — — ( 3,072 )

Amounts reclassified from AOCI to interest expense (2) — ( 449 ) — ( 449 )

Net other comprehensive income (loss) ( 3,072 ) ( 449 ) — ( 3,521 )

Balance as of September 30, 2023 $ ( 43,778 ) $ 1,456 $ — $ ( 42,322 )

Foreign Currency Translation Interest rate swap Income taxes (1) Total

Foreign Currency Translation Interest rate swap Total

Balance as of December 31, 2024 $ ( 48,167 ) $ — $ ( 48,167 )

Other comprehensive income (loss) before reclassifications 3,125 — 3,125

Amounts reclassified from AOCI to interest expense (2) — ( 1,007 ) — ( 1,007 )

Net other comprehensive income (loss) 3,125 — 3,125

Balance as of September 30, 2024 $ ( 40,525 ) $ — $ — $ ( 40,525 )

Balance as of March 31, 2025 $ ( 45,042 ) $ — $ ( 45,042 )

Balance as of December 31, 2023 $ ( 38,762 ) $ 1,007 $ ( 37,755 )

2 unchanged sentences

Net other comprehensive income (loss) ( 2,346 ) ( 449 ) ( 2,795 )

Balance as of September 30, 2023 $ ( 43,778 ) $ 1,456 $ — $ ( 42,322 )

Balance as of March 31, 2024 $ ( 41,108 ) $ 558 $ ( 40,550 )

______________________

(1) Income tax effect of changes in interest rate swap.

(1) Represents gain recognized in interest expense on effective interest rate swap.

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The 2023 Warrants include anti-dilution adjustments in the event of certain future equity issuances, stock splits, stock dividends, combinations or similar events.

During the nine months ended September 30, 2024, 500,000 of the 2023 Warrants were exercised on a cashless basis, resulting in the issuance of 499,000 shares.

In conjunction with our placement of the Series D Preferred Stock, we issued the 2021 Warrants to purchase up to 1.9 million shares of our common stock.

As of March 31, 2025, 1.5 million of the 2023 Warrants remain outstanding.

In conjunction with our placement of the Series D Preferred Stock in 2021, we issued warrants to purchase up to 1.9 million shares of our common stock (the “2021 Warrants”).

The 2021 Warrants were exercisable, in full or in part, at an exercise price of $ 0.01 per share, subject to anti-dilution adjustments in the event of certain future equity issuances, stock splits, stock dividends, combinations or similar events.

During the nine months ended September 30, 2024, all of the 2021 Warrants were exercised on a cashless basis, resulting in the issuance of 1,896,000 shares.

During the three months ended March 31, 2024, all of the 2021 Warrants were exercised on a cashless basis, resulting in the issuance of 1,896,000 shares.

In conjunction with our placement of Series B Preferred Stock in 2019, we issued detachable warrants to purchase up to 1.5 million shares of our common stock (the “2019 Warrants”).

The 2019 Warrants, are exercisable, in full or in part, at any time prior to December 11, 2026, at an exercise price of $ 11.03 per share, and are subject to anti-dilution adjustments in the event of future below market issuances, stock splits, stock dividends, combinations or similar events.

The following table presents the change in the liability balance of the embedded derivatives during the nine months ended September 30, 2024.

The following table presents the change in the liability balance of the embedded derivatives during the three months ended March 31, 2025.

Balance as of December 31, 2024 $ 5,192

Change in fair value (1) ( 1,762 )

Settlements ( 11,376 )

Balance as of September 30, 2024 $ 6,810

Balance as of March 31, 2025 $ 3,430

_______________________________

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The following tables show the fair values of the embedded derivatives within the fair value hierarchy.

September 30, 2024 Quoted Prices in Active Markets for Identical Assets

March 31, 2025 Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

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The fair value of the 2019 Warrants is determined using a valuation model that utilizes unobservable inputs to determine the probability that the 2019 Warrants will remain outstanding for future periods (Level 3).

The probabilities resulted in a weighted average term of 2.9 years as of September 30, 2024 and December 31, 2023.

The probabilities resulted in a weighted average term of 2.0 years as of March 31, 2025 and December 31, 2024.

Interest Rate Swap

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Since the 2021 Swap was an effective cash flow hedge and the forecasted interest payments remain probable of occurring, the gain was recognized as a reduction to interest expense through the original maturity date of July 31, 2024.

The following table presents the effects of the interest rate swap on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Interest benefit (1) $ ( 150 ) $ ( 449 ) $ ( 1,048 ) $ ( 1,366 )

_______________________________

(1) Represents gain recognized in interest expense on effective interest rate swap.

During the three months ended March 31, 2024, we recognized an interest benefit of $ 0.4 million, from gains recognized in interest expense on the effective interest rate swap in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Fair Value Disclosures

Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, and debt.

As of September 30, 2024 and December 31, 2023, the carrying values of these financial instruments, except for debt, approximated fair value.

The fair value of our debt was $ 145.4 million and $ 162.2 million, with a carrying amount of $ 143.6 million and $ 153.3 million, as of September 30, 2024 and December 31, 2023, respectively.

As of March 31, 2025 and December 31, 2024, the carrying values of these financial instruments, except for debt, approximated fair value.

The fair value of our debt was $ 152.4 million and $ 147.8 million, with a carrying amount of $ 151.3 million and $ 148.6 million, as of March 31, 2025 and December 31, 2024, respectively.

The fair value of debt was calculated by discounting the future cash flows to its present value using prevailing market interest rates for debt with similar creditworthiness, terms and maturities (Level 3).

On July 2, 2024, we completed the sale of our Lubbock operations, known as Industrial Molding Corporation (“IMC”), for $ 17.0 million in cash, subject to customary purchase price adjustments.

We received net proceeds of $ 15.4 million after paying certain transaction costs, which was used to repay a portion of the outstanding borrowings under the Term Loan Facility.

We determined that the sale of IMC did not represent a strategic shift that will have a major effect on the consolidated results of operations, therefore the results of this business will continue to be reported within our Power Solutions segment.

The gain on sale of business is recognized in the “Other expense (income), net” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The following is a summary of the net gain recognized in connection with the divestiture:

Net proceeds $ 17,000

Net assets disposed 8,281

Direct costs to sell 1,565

Gain on sale of business $ 7,154

Plant Optimization Activities

During the third quarter of 2024, we took specific steps to consolidate our footprint by identifying a manufacturing facility to close to reduce costs and improve operational efficiency.

During the second half of 2024, we took specific steps to consolidate our footprint by identifying two manufacturing facilities to close due to volume rationalization which will reduce costs and improve operational efficiency.

In January 2025, we ceased production activities at our Mobile Solutions plant in Juarez, Mexico, and in March 2025 we ended production activity at our Mobile Solutions plant in Dowagiac, Michigan.

In addition, we implemented operational and cost optimization actions to reduce indirect and overhead costs.

We expect the facility closure and organizational changes to be completed in the first half of 2025.

We estimate incurring $ 1.9 million in charges which will be recognized in 2024 and 2025.

Once fully implemented, we expect to recognize annual benefits of approximately $ 2.8 million.

All costs incurred have been recognized in Mobile Solutions segment.

The following is a summary of costs incurred and amounts accrued during the three months ended September 30, 2024.

Severance and employee related Costs associated with exit or disposal activities Total

We expect the facility closures and organizational changes to be completed in the first half of 2025.

We estimate incurring $ 13.6 million in charges and once fully implemented, we expect to recognize annual benefits of approximately $ 5.4 million.

We have recognized cumulative costs of $ 13.3 million, with $ 5.5 million recognized in the “Cost of sales” line, $ 1.3 million in the “Selling, general, and administrative expense” line, and $ 6.5 million in the “Other expense (income), net” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

All costs incurred have been recognized in the Mobile Solutions segment.

The following is a summary of costs incurred and amounts accrued during the three months ended March 31, 2025.

Severance and employee related Impairment of property and equipment Costs associated with exit or disposal activities Total

Balance as of December 31, 2023 $ — $ — $ — $ —

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Amounts paid ( 581 ) — ( 257 ) ( 838 )

Balance as of September 30, 2024 $ 505 $ 10 $ 515

Of the $ 1.0 million incurred during the nine months ended September 30, 2024, $ 0.6 million and are recognized in the “Cost of sales” line and $ 0.3 million in the “Selling, general, and administrative expense” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Subsequent to September 30, 2024, we began identifying certain manufacturing equipment that we plan to discontinue use of and may sell in 2025 as part of our plant optimization activities.

The equipment, which is currently being used in production activities, has a net book value of approximately $ 11.0 million as of September 30, 2024.

The expected proceeds from any planned sales may be significantly lower than the carrying value of the equipment, which would cause us to recognize an impairment in the fourth quarter of 2024.

Charges against assets — ( 6,546 ) ( 2,530 ) ( 9,076 )

Balance as of December 31, 2024 $ 2,686 $ — $ — $ 2,686

Restructuring costs 275 — 401 676

Amounts paid ( 1,774 ) — ( 401 ) ( 2,175 )

Balance as of March 31, 2025 $ 1,187 $ — $ — $ 1,187

Voluntary Early Retirement Program

During the three months ended March 31, 2025, we recognized $ 0.2 million related to an early retirement incentive program (“ERIP”) that was open to certain U.S.

employees that met specified age and service requirements, and who terminated employment in 2025.

The estimated total cost of the ERIP, including costs recognized in 2024, is $ 1.6 million with all benefit payments expected to be made in 2025.

Subsequent Event

On April 16, 2025 , we entered into a Term Loan Credit Agreement by and among the Company, the lenders from time to time party thereto (collectively, the “Lenders”) and Alter Domus (US) LLC, as administrative agent for the Lenders (the “2025 Term Loan Credit Agreement”).

The 2025 Term Loan Credit Agreement establishes a new senior secured Term Loan Facility (the “2025 Term Loan Facility”) consisting of (i) $ 118.0 million of term loans (the “Closing Date Term Loans”) and (ii) $10.0 million of Delayed Draw Term Loans (together, with the Closing Date Term Loans, the “2025 Term Loans”) for an aggregate amount of $128.0 million maturing on April 16, 2030 .

We used the proceeds from the 2025 Term Loan Credit Agreement to repay all of our outstanding obligations under our previous 2021 Term Loan Facility.

Under the 2025 Term Loan Credit Agreement, interest rates on the 2025 Term Loans are determined based on the type of Term Loan, certain time periods, our Consolidated Net Leverage Ratio and whether the Delayed Draw Funding Date (as defined in the 2025 Term Loan Credit Agreement) has occurred.

Outstanding borrowings under the 2025 Term Loan Facility currently bear interest at either:

1) one-month, three-month, or six-month term secured overnight finance rate (“SOFR”) with a duration adjustment, subject to a 2.00% floor, plus an applicable margin of 9.25% (“Adjusted Term SOFR Rate Loans”);

or 2) the greater of various benchmark rates, with certain adjustments, plus an applicable margin of 8.25% (“Base Rate Loans”).

For interest payments due before April 16, 2027, we may elect to pay a portion of interest in-kind (“PIK Election”), subject to a minimum cash interest of 5.25% for Adjusted Term SOFR Rate Loans and 4.25% for Base Rate Loans.

The applicable margin increases by 0.50% on borrowings to which the PIK Election is made.

Through October 16, 2026, we can elect to borrow up to an additional $10.0 million (“Delayed Draw”) under the 2025 Term Loan Facility, subject to satisfying certain conditions.

If we borrow under the Delayed Draw, the applicable margin for all outstanding borrowings increases by 0.50%.

Through October 16, 2026, we incur a 1.00% commitment fee on undrawn amounts under the Delayed Draw.

We may voluntarily prepay outstanding amounts under the 2025 Term Loan Facility, in whole or part without premium or penalty following April 16, 2027.

If we voluntarily prepay borrowings prior to April 16, 2026, we are subject to a prepayment premium equal to the present value at the prepayment date of (i) 2.00% of the outstanding principal amount of the 2025 Term Loans to be prepaid, plus (ii) all remaining scheduled interest payments due on such 2025 Term Loans through April 16, 2026 (excluding accrued but unpaid interest to, but not including, the prepayment date), computed using a discount rate equal to the Treasury Rate (determined as of the Business Day prior to such date of prepayment) plus 50 basis points.

If we voluntarily prepay borrowings prior to April 16, 2027, we are subject to a prepayment premium equal to 2.00% of the principal amount prepaid.

The 2025 Term Loan Facility is collateralized by all of our assets.

The 2025 Term Loan Facility has a first lien on all domestic assets, other than accounts receivable and inventory and has a second lien on domestic accounts receivable and inventory.

In connection with the repayment and termination of the 2021 Term Loan Facility, we expect to recognize a loss on extinguishment of debt of approximately $ 3.0 million in the second quarter of 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements