NN, Inc. (NASDAQ:NNBR) Q4 2022 Earnings Call Transcript

Warren Veltman: Look, I would tell you that in some of our — in some of the businesses that I talked about that are profitable, can we get back to those types of margins? I think definitely with some of the pricing actions that we’ve taken. It’s the 2 facilities — talking about Mobile, it’s the 2 facilities that I outlined where we’re having these product launches that are going to be, in the case of the Juarez facility, a little bit longer term in nature from a corrective action standpoint that it will have a more of an adverse impact on our margins. I don’t want to get too into the weeds on some of that stuff, but maybe that’s something that we could think about breaking out in the future, just so you can understand that it’s not the whole business that is suffering from a margin standpoint. We do have some high-performing facilities within the group.

Michael Felcher: Yes. And I would say the other aspect that puts some pressure on it from a margin standpoint, Steve, is the material pass-through is all one to one, right? So in an inflationary environment, you’re maintaining your EBITDA dollars or your operating profit dollars but at a lower margin. And hopefully, as inflation stabilizes, we can start to correct some of that via additional pricing and maybe see some deflation that will benefit the margins.

Operator: And ladies and gentlemen, with that, we’re going to conclude today’s question-and-answer session. I’d like to turn the floor back over to the management team for any closing remarks.

Warren Veltman: Yes. Thank you, operator. I want to thank our analysts for participating in the call today. Especially in concluding, I want to thank, again, the NN greater team, this potentially could be my last earnings call. So I’d like to thank them for the support and the dedication that they’ve given to this company certainly over the last 3.5 years that I’ve been the Chief Executive Officer. Also like to in parting thank John Buchan for the service that he’s had over the past 20-plus years to the company and wish him well in his retirement. Thank you very much for your time today.

Operator: Ladies and gentlemen, with that, we’ll conclude today’s conference call and presentation. We thank you for joining. You may now disconnect your lines.