What changed in NN INC's 2023 10-K compared to 2022?

Across the narrative sections we track, NN INC (NNBR) added 170 paragraphs, removed 183, and edited 130 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+59/−62), Item 1A. Risk Factors (+55/−55), Item 1. Business (+37/−44).

Did NN INC add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 55 new/edited paragraphs and 55 removed paragraphs versus the 2022 10-K.

What changed in NN INC's MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 59 new/edited paragraphs and 62 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this NNBR 10-K diff come from?

The source filings are NN INC's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in NN INC's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of NN INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+170 added−183 removedSource: 10-K (2024-03-12) vs 10-K (2023-03-10)

Top changes in NN INC's 2023 10-K

170 paragraphs added · 183 removed · 130 edited across 6 sections

Item 7. Management's Discussion & Analysis+59 / −62 · 44 edited
Item 1A. Risk Factors+55 / −55 · 41 edited
Item 1. Business+37 / −44 · 29 edited
Item 7A. Quantitative and Qualitative Disclosures About Market Risk+6 / −10 · 5 edited
Item 2. Properties+6 / −7 · 6 edited

Item 1. Business

Business — how the company describes what it does

29 edited+8 added−15 removed57 unchanged

2022 filing

2023 filing

Biggest changeFelcher 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.

Biggest changeFelcher 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. Previously, Mr.

KG; CIE Automotive, S.A.; IMS Companies; and MacLean-Fogg Component Solutions. We believe that we generally win new business on the basis of our technical competence, proven track record of successful product development and global platform, as well as on quality, price, and service. Power Solutions Power Solutions operates in intensely competitive but very fragmented supply chains.

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 Our engineering expertise and deep knowledge of precision manufacturing processes adds proprietary value throughout the complete lifecycle of our 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. Complete product lifecycle focus Our engineering expertise and deep knowledge of precision manufacturing processes adds proprietary value throughout the complete lifecycle of our products.

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.

Available Information - SEC Filings We make available free of charge, in the “Investor Relations” section of our website (www.nninc.com), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after electronically filing such material with, or furnishing it to, the SEC. 10 Table of Contents

Our global footprint provides flexibility to locally supply identical products for global customers, reducing shipping time and expense, allowing us to match costs to revenue and to capitalize on industry localization trends. In total, we operate more than 2.1 million square feet of manufacturing space.

The diverse nature, size, and reach of our customer base provides resistance to localized market and geographic fluctuations and helps stabilize overall product demand. Strategic global footprint Our 31 facilities, on four continents, are strategically located to serve our customer base and provide local service and expertise.

The diverse nature, size, and reach of our customer base provides resistance to localized market and geographic fluctuations and helps stabilize overall product demand. Strategic global footprint Our 27 facilities, on four continents, are strategically located to serve our customer base and provide local service and expertise.

Diversity, Equity, and Inclusion (“DE&I”) Diversity, equity, and inclusion are at the core of our values and strategic business priorities. Throughout our business, we champion equality, supporting parity for women and under-represented groups as we work to create ethical, safe, and supportive workplaces where our employees thrive.

Diversity, Equity, and Inclusion Diversity, equity, and inclusion are at the core of our values and strategic business priorities. Throughout our business, we champion equality, supporting parity for women and under-represented groups as we work to create ethical, safe, and supportive workplaces where our employees thrive.

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.

Further, annual goal-setting and development opportunities for employees and leaders helps our people align their professional experience with the Company’s business objectives and encourages them to take ownership of their development and career paths. We use regular talent management and performance evaluation processes to inform the Company’s internal development processes and to calibrate assessment of individual performance organizationally.

Further, annual goal-setting and development opportunities for employees and leaders helps our people align their professional experience with the Company’s business objectives and encourages them to take ownership of their development and career paths. 7 Table of Contents We use regular talent management and performance evaluation processes to inform the Company’s internal development processes and to calibrate assessment of individual performance organizationally.

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.

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.

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

Supply and Cost Pressures 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.

Relationships with our top ten 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.

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.

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. Patents, Trademarks and Licenses We have several U.S. patents, patent applications and trademarks for various trade names.

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 We have several U.S. patents, patent applications and trademarks for various trade names.

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.

Even if such 8 Table of Contents 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.

Item 1. Business Introduction NN, Inc. 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.

Item 1. Business Introduction 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.

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

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

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.

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

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

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.

Headcount As of December 31, 2022, we employed a total of 3,363 full and part-time employees and 298 temporary workers, which includes 1,335 employees in the U.S. and 2,326 employees in other countries employed by our international subsidiaries. Of our total employment, approximately 12% are management/staff employees and 88% are production employees.

Headcount As of December 31, 2023, we employed a total of 2,926 full and part-time employees and 234 temporary workers, which includes 1,177 employees in the U.S. and 1,983 employees in other countries employed by our international subsidiaries. Of our total employment, approximately 12% are management/staff employees and 88% are production employees.

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.

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. 9 Table of Contents Information about our Executive Officers Our executive officers are: Name Age Position Warren A.

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.

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.

We 6 Table of Contents 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.

Heiter served as the Executive Vice President, General Counsel, and Secretary of Internet Pictures Corporation, a publicly traded internet technology company. D. Gail Nixon joined us in 2007 and was appointed Senior Vice President and Chief Human Resources Officer in January 2018. Ms. Nixon previously served as our Vice President of Human Resources as well as Corporate Human Resources Manager.

Gail Nixon has served the Company as Senior Vice President and Chief Human Resources Officer since January 2018. Ms. Nixon joined the Company in 2007 and previously served as our Vice President of Human Resources as well as Corporate Human Resources Manager. Ms.

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.

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.

Business Segments and Products Mobile Solutions Mobile Solutions is focused on growth in the automotive and general industrial end markets. We have developed an expertise in manufacturing highly complex, tight tolerance, system critical components. Our technical capabilities can be utilized in numerous applications including for use in battery electric, hybrid electric, and internal combustion engine vehicles.

Our businesses are organized into the Mobile Solutions and Power Solutions groups and are based principally on the end markets they serve. Business Segments and Products Mobile Solutions 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.

Ms. 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. J.

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.

In 2022, 70% of our products were sold to customers in North America, 13% to customers in Asia, 10% to customers in South America, and 7% to customers in Europe. 6 Table of Contents We sell our products to most of our largest customers under either sales contracts or agreed upon commercial terms.

We sell our products to most of our largest customers under either sales contracts or agreed upon commercial terms. In general, we pass through material cost fluctuations when incurred to our customers in the form of changes in selling prices.

In 2022, our top ten customers accounted for approximately 48% of our net sales.

In 2023, our top ten customers accounted for approximately 47% of our net sales. In 2023, 67% of our products were sold to customers in North America, 14% to customers in Asia, 10% to customers in South America, and 9% to customers in Europe.

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Our enterprise and management structure is designed to accelerate growth and further balance our portfolio by aligning our strategic assets and businesses. Our businesses are organized into the Mobile Solutions and Power Solutions groups and are based principally on the end markets they serve.

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Our technical capabilities can be utilized in numerous applications including for use in battery electric, hybrid electric, and internal combustion engine vehicles.

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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.

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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.

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Throughout the COVID-19 pandemic, we increased communications, including the addition of virtual “town hall” style meetings at the 7 Table of Contents 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.

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Information about our Executive Officers The following table lists our executive officers as of February 28, 2024: Name Age Position Harold C. Bevis 64 President, Chief Executive Officer and Director Michael C. Felcher 51 Senior Vice President and Chief Financial Officer Timothy M. French 60 Senior Vice President and Chief Operating Officer D.

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

Added

Gail Nixon 53 Senior Vice President and Chief Human Resources Officer 9 Table of Contents Harold C. Bevis was appointed President, Chief Executive Officer and Director in May 2023. Prior to joining the Company, Mr.

Removed

Veltman 61 President and Chief Executive Officer Michael C. Felcher 50 Senior Vice President – Chief Financial Officer John R. Buchan 61 Executive Vice President – Mobile Solutions and Power Solutions Matthew S. Heiter 62 Senior Vice President, General Counsel and Secretary D. Gail Nixon 52 Senior Vice President and Chief Human Resources Officer J.

Added

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. Mr. 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.

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Andrew Wall 44 Senior Vice President and Chief Commercial Officer Warren A. Veltman was appointed President and Chief Executive Officer in September 2019, having previously served as Executive Vice President of Mobile Solutions since January 2018. Mr.

Added

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

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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.

Added

Felcher served in a variety of finance roles at United Technologies Corporation and Goodrich Corporation. Timothy M. French was appointed Senior Vice President and Chief Operating Officer in August 2023. Prior to joining the Company, Mr.

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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. Michael C. 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. Prior to joining the Company, Mr.

Added

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. D.

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Felcher served in a variety of finance roles at Goodrich. Mr. Felcher began his career at PricewaterhouseCoopers and is a licensed CPA. John R. 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.

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Mr. 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. Mr.

Removed

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. Matthew S.

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Heiter joined us as Senior Vice President, General Counsel and Secretary in July 2015. Prior to joining NN, Mr.

Removed

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.

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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. Mr.

Removed

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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

41 edited+14 added−14 removed85 unchanged

2022 filing

2023 filing

Biggest changeThe difficulties of combining the operations of acquired companies include, among others: • the diversion of management’s attention to integration matters; • difficulties in the integration of operations and systems, including, without limitation, the complexities associated with managing the expanded operations of a significantly larger and more complex company, addressing possible differences in corporate cultures and management philosophies and the challenge of integrating complex systems, technology, networks, and other assets of each of the acquired companies; • difficulties in achieving anticipated cost savings, synergies, business opportunities, and growth prospects from combining the acquired businesses with our own; • the inability to implement effective internal controls, procedures, and policies for acquired businesses as required by the Sarbanes-Oxley Act of 2002 within the time periods prescribed thereby; • the exposure to potential unknown liabilities and unforeseen increased expenses or delays associated with acquired businesses; • challenges in keeping existing customers and obtaining new customers; • challenges in attracting and retaining key personnel; and • the disruption of, or the loss of momentum in, ongoing operations or inconsistencies in standards, controls, procedures and policies.

As a result of doing business internationally, we face risks associated with the following: • changes in tariff regulations, which may make our products more costly to export or import; • changes in monetary and fiscal policies, laws and regulations, and other activities of governments, agencies and similar organizations; • recessions or marked declines specific to a particular country or region; • the potential imposition of trade restrictions or prohibitions; • the potential imposition of import tariffs or other duties or taxes; 11 Table of Contents • difficulties establishing and maintaining relationships with local original equipment manufacturers, distributors and dealers; • difficulty in staffing and managing geographically diverse operations; • political uncertainty, instability, civil unrest, government controls over certain sectors and human rights concerns in countries, including but not limited to, China, in which our suppliers, manufacturing operations, and customers are located; and • changes in the geopolitical environment, wars, conflicts, or trade barriers or blockades in the European Union and Asia, which may adversely affect business activity and economic conditions globally and could continue to contribute to instability in global financial and foreign exchange markets, as well as disrupt the free movement of goods, services, and people between countries.

As a result of doing business internationally, we face risks associated with the following: • changes in tariff regulations, which may make our products more costly to export or import; • changes in monetary and fiscal policies, laws and regulations, and other activities of governments, agencies and similar organizations; • recessions or marked declines specific to a particular country or region; • the potential imposition of trade restrictions or prohibitions; • the potential imposition of import tariffs or other duties or taxes; • difficulties establishing and maintaining relationships with local original equipment manufacturers, distributors and dealers; • difficulty in staffing and managing geographically diverse operations; • political uncertainty, instability, civil unrest, government controls over certain sectors and human rights concerns in countries, including but not limited to, China, in which our suppliers, manufacturing operations, and customers are located; and • changes in the geopolitical environment, wars, conflicts, or trade barriers or blockades in the European Union and Asia, which may adversely affect business activity and economic conditions globally and could continue to contribute to instability in global financial and foreign exchange markets, as well as disrupt the free movement of goods, services, and people between countries.

Our debt obligations could have important consequences, including: • increasing our vulnerability to adverse economic, industry, or competitive developments; • requiring a substantial portion of our cash flows from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flows to fund operations, capital expenditures, and future business opportunities; • exposing us to the risk of increased interest rates, which could cause our debt service obligations to increase significantly; • making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under our debt agreements; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; 15 Table of Contents • limiting our ability to obtain additional financing for working capital, capital expenditures, product and service development, debt service requirements, acquisitions, and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage may prevent us from exploiting.

Our debt obligations could have important consequences, including: • increasing our vulnerability to adverse economic, industry, or competitive developments; • requiring a substantial portion of our cash flows from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flows to fund operations, capital expenditures, and future business opportunities; • exposing us to the risk of increased interest rates, which could cause our debt service obligations to increase significantly; • making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under our debt agreements; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, product and service development, debt service requirements, acquisitions, and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage may prevent us from exploiting.

Our participation in joint ventures is subject to risks that may not be present with other methods of ownership, including: • our joint venture partners could have investment and financing goals that are not consistent with our objectives, including the timing, terms, and strategies for any investments, and what levels of debt to incur or carry; • we could experience an impasse on certain decisions because we do not have sole decision-making authority, which could require us to expend additional resources on resolving such impasses or potential disputes, including litigation or arbitration; • our ability to transfer our interest in a joint venture to a third party may be restricted and the market for our interest may be limited; 18 Table of Contents • our joint venture partners might become bankrupt, fail to fund their share of required capital contributions or fail to fulfill their obligations as a joint venture partner, which may require us to infuse our own capital into the venture on behalf of the partner despite other competing uses for such capital; and • our joint venture partners may have competing interests in our markets that could create conflict of interest issues.

Our participation in joint ventures is subject to risks that may not be present with other methods of ownership, including: • our joint venture partners could have investment and financing goals that are not consistent with our objectives, including the timing, terms, and strategies for any investments, and what levels of debt to incur or carry; • we could experience an impasse on certain decisions because we do not have sole decision-making authority, which could require us to expend additional resources on resolving such impasses or potential disputes, including litigation or arbitration; • our ability to transfer our interest in a joint venture to a third party may be restricted and the market for our interest may be limited; • our joint venture partners might become bankrupt, fail to fund their share of required capital contributions or fail to fulfill their obligations as a joint venture partner, which may require us to infuse our own capital into the venture on behalf of the partner despite other competing uses for such capital; and • our joint venture partners may have competing interests in our markets that could create conflict of interest issues.

Item 1A. Risk Factors The following risks and uncertainties may have a material affect on our business, prospects, financial condition, results of operations, and cash flows, and should be considered in connection with the other information contained in this Annual Report on Form 10-K.

Item 1A. Risk Factors The following risks and uncertainties may have a material effect on our business, prospects, financial condition, results of operations, and cash flows, and should be considered in connection with the other information contained in this Annual Report on Form 10-K.

Approximately 25% of our revenues are denominated in foreign currencies, which may result in additional risk of fluctuating currency values and exchange rates and controls on currency exchange. Changes in the value of foreign currencies could increase our U.S. dollar costs for, or reduce our U.S. dollar revenues from, our foreign operations.

Approximately 29% of our revenues are denominated in foreign currencies, which may result in additional risk of fluctuating currency values and exchange rates and controls on currency exchange. Changes in the value of foreign currencies could increase our U.S. dollar costs for, or reduce our U.S. dollar revenues from, our foreign operations.

If that occurs, our customers’ confidence in us and long-term demand for our products could decline. Any of these events could materially and adversely affect our product sales, financial condition, and operating results. We operate in and sell products to customers outside the U.S. and are subject to several risks related to doing business internationally.

If that occurs, our customers’ confidence in us and long-term demand for our products could decline. Any of these events could materially and adversely affect our product sales, financial condition, and operating results. 10 Table of Contents We operate in and sell products to customers outside the U.S. and are subject to several risks related to doing business internationally.

In addition, due to the market capitalization of our stock, our stock tends to be more volatile than large capitalization stocks that comprise the Dow Jones Industrial Average or Standard and Poor’s 500 Index. Provisions in our charter documents and Delaware law may inhibit a takeover, which could adversely affect the value of our common stock.

In addition, due to the market capitalization of our stock, our stock tends to be more volatile than large capitalization stocks that comprise the Dow Jones Industrial Average or Standard and Poor’s 500 Index. 16 Table of Contents Provisions in our charter documents and Delaware law may inhibit a takeover, which could adversely affect the value of our common stock.

If such approval is obtained, it may: 14 Table of Contents • take a significant amount of time; • require the expenditure of substantial resources; • involve stringent clinical and pre-clinical testing, as well as increased post-market surveillance; • involve modifications, repairs or replacements of our products; and • result in limitations on the proposed uses of our products.

If such approval is obtained, it may: • take a significant amount of time; • require the expenditure of substantial resources; • involve stringent clinical and pre-clinical testing, as well as increased post-market surveillance; • involve modifications, repairs or replacements of our products; and • result in limitations on the proposed uses of our products.

Techniques used in cybersecurity attacks to obtain unauthorized access, disable or sabotage information technology systems change frequently, as data breaches and other cybersecurity events have become increasingly commonplace, including as a result of the intensification of state-sponsored cybersecurity attacks during periods of geopolitical conflict, such as the ongoing conflict in Ukraine.

Our participation in joint ventures could expose us to additional risks from time to time. We currently have a 49% investment in a Chinese joint venture and may participate in additional joint ventures from time to time.

Our participation in joint ventures could expose us to additional risks from time to time. We currently have a 49% investment in a Chinese joint venture (the “JV”) and may participate in additional joint ventures from time to time.

A successful product recall claim requiring that we bear a substantial part of the cost of correction or the loss of a key customer could have a material adverse effect on our business, prospects, financial condition, results of operations, or cash flows.

A successful product 11 Table of Contents recall claim requiring that we bear a substantial part of the cost of correction or the loss of a key customer could have a material adverse effect on our business, prospects, financial condition, results of operations, or cash flows.

We cannot assure you that we will be successful in identifying attractive acquisition candidates or completing acquisitions on favorable terms in the future. In addition, we may borrow funds or issue equity to acquire other businesses, increasing our interest expense and debt levels or diluting our existing stockholders’ 17 Table of Contents ownership interest in us.

Our ability to meet those financial ratios and tests will depend on our ongoing financial and operating performance, which, in turn, will be subject to economic conditions and to financial, market, and competitive factors, many of which are beyond our control.

We obtain a majority of our raw materials from overseas suppliers, actively participate in overseas manufacturing operations and sell to a large number of international customers. During the year ended December 31, 2022, sales to customers located outside of the U.S. accounted for 39% of our consolidated net sales.

We obtain a majority of our raw materials from overseas suppliers, actively participate in overseas manufacturing operations and sell to a large number of international customers. During the year ended December 31, 2023, sales to customers located outside of the U.S. accounted for 40% of our consolidated net sales.

Pandemics, epidemics or disease outbreaks in the U.S. or globally, including the COVID-19 pandemic, have disrupted, and may in the future disrupt, our business, which could materially affect our results of financial condition, results of operations and cash flows.

Pandemics, epidemics or disease outbreaks in the U.S. or globally have disrupted, and may in the future disrupt, our business, which could materially affect our results of financial condition, results of operations and cash flows.

These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. 16 Table of Contents We have international operations that are subject to foreign economic uncertainties and foreign currency fluctuation.

These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. We have international operations that are subject to foreign economic uncertainties and foreign currency fluctuation.

Any increased costs or reduced revenues as a result of foreign currency fluctuations could affect our profits. In 2022, the U.S. dollar strengthened against foreign currencies which unfavorably affected our revenue by $4.2 million. In contrast, a weakening of the U.S. dollar may beneficially affect our business, prospects, financial condition, results of operations, or cash flows.

Any increased costs or reduced revenues as a result of foreign currency fluctuations could affect our profits. In 2023, the U.S. dollar strengthened against foreign currencies which unfavorably affected our revenue by $0.6 million. In contrast, a weakening of the U.S. dollar may beneficially affect our business, prospects, financial condition, results of operations, or cash flows.

We depend heavily on a relatively limited number of customers, and the loss of any major customer would have a material adverse effect on our business. During 2022, sales to various U.S. and foreign divisions of our ten largest customers accounted for approximately 48% of our consolidated net sales.

Risks Related to Our Operations We depend heavily on a relatively limited number of customers, and the loss of any major customer would have a material adverse effect on our business. During 2023, sales to various U.S. and foreign divisions of our ten largest customers accounted for approximately 47% of our consolidated net sales.

Although we currently do not source raw materials directly from Russia or Ukraine, if we are unable to source our products from the countries where we wish to purchase them, either because of the occurrence or threat of wars or other conflicts, regulatory changes or for any other reason, or if the cost of doing so increases, it could have a material adverse effect on our business, financial condition and results of operations.

If we are unable to source our products from the countries where we wish to purchase them, either because of the occurrence or threat of wars or other conflicts, regulatory changes or for any other reason, or if the cost of doing so increases, it could have a material adverse effect on our business, financial condition and results of operations.

Our medical devices are subject to regulation by numerous government agencies, including the Food and Drug Administration (“FDA”) and comparable agencies outside the U.S. To varying degrees, each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing and distribution of our medical devices.

Some of the medical devices that we produce may be subject to regulation by numerous government agencies, including the Food and Drug Administration (“FDA”) and comparable agencies outside the U.S. To varying degrees, each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing and distribution of medical devices.

Factors that are hard to predict or beyond our control, such as supply chain disruptions, weather, raw material shortages, natural disasters, fires or explosions, political unrest, terrorism, generalized labor unrest, or public health crises, such as the COVID-19 pandemic, could damage or disrupt our operations or our customers’, suppliers’, co-manufacturers’ or distributors’ operations.

Factors that are hard to predict or beyond our control, such as supply chain disruptions, weather, raw material shortages, natural disasters, fires or explosions, political unrest, terrorism, generalized labor unrest, including strikes at our suppliers, customers or end-users or public health crises could damage or disrupt our operations or our customers’, suppliers’, co-manufacturers’ or distributors’ operations.

The risks of substantial costs, liabilities, and limitations on our operations related to compliance with these laws and regulations are an inherent part of our business, and future conditions may develop, arise or be discovered that create substantial environmental compliance or remediation liabilities and costs. 13 Table of Contents Our business activities are subject to various laws and regulations relating to pollution control and protection of the environment.

In addition, we engage third-party service providers that may collect and hold personally identifiable information of our employees in connection with providing business services to us, including web hosting, accounting, payroll and benefit services. The protection of the information technology systems on which we rely is critically important to us.

We also collect and hold personally identifiable information of our employees in connection with their employment. In addition, we engage third-party service providers that may collect and hold personally identifiable information of our employees in connection with providing business services to us, including web hosting, accounting, payroll and benefit services.

The current military conflict between Russia and Ukraine, and related sanctions, export controls or other actions that may be initiated by nations could adversely affect our business and our supply chain or our business partners or customers in other countries.

The military conflicts (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, and the Houthi movement in Yemen and the surrounding Red Sea region), and related sanctions, export controls or other actions that may be initiated by nations could adversely affect our business and our supply chain or our business partners or customers in other countries.

Compliance with environmental, health, and safety legislation and regulatory requirements may prove to be more limiting and costly than we anticipate. To date, we have committed significant expenditures in our efforts to achieve and maintain compliance with these requirements at our facilities, and we expect that we will continue to make significant expenditures related to such compliance in the future.

To date, we have committed significant expenditures in our efforts to achieve and maintain compliance with these requirements at our facilities, and we expect that we will continue to make significant expenditures related to such compliance in the future.

Although impacts of past events have been immaterial, the impacts of such events in the future may materially and adversely affect our business, financial condition, or results of operations.

Although impacts of past events have been immaterial, the impacts of such events in the future may materially and adversely affect our business, financial condition, or results of operations. Pandemics, epidemics, disease outbreaks and other public health crises could materially adversely impact our business, financial condition, results of operations and cash flows.

Certain of the acquisition agreements from past acquisitions require the former owners to indemnify us against certain liabilities related to the operation of each of their companies before we acquired it.

The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and may result in unexpected liabilities. Certain of the acquisition agreements from past acquisitions require the former owners to indemnify us against certain liabilities related to the operation of each of their companies before we acquired it.

In addition, our customers may choose to purchase products from one of our competitors rather than pay the prices we seek for our products, which could adversely affect our business, prospects, financial condition, results of operations, or cash flows. 12 Table of Contents Any loss of key personnel and the inability to attract and retain qualified employees could have a material adverse impact on our operations.

Under some environmental laws and regulations, we could also be held responsible for all the costs relating to any contamination at our past or present facilities and at third-party waste disposal sites. We maintain a compliance program to assist in preventing and, if necessary, correcting environmental problems.

If we violate or fail to comply with these laws, regulations, or permits, we could be fined or otherwise sanctioned by regulators. Under some environmental laws and regulations, we could also be held responsible for all the costs relating to any contamination at our past or present facilities and at third-party waste disposal sites.

A data security incident could compromise our or our service providers’ information technology systems, and the information stored by us or our service providers, including personally identifiable information of employees, could be accessed, misused, publicly disclosed, corrupted, lost, or stolen.

Further, we may be required to expend significant additional resources to continue to enhance information security measures and internal processes and procedures or to investigate and remediate any information security vulnerabilities. 12 Table of Contents A data security incident could compromise our or our service providers’ information technology systems, and the information stored by us or our service providers, including personally identifiable information of employees, could be accessed, misused, publicly disclosed, corrupted, lost, or stolen.

Further, there can be no assurance that our commitments will be successful, that our products will be accepted by the market, that proposed regulation or deregulation will not have a negative competitive impact or that economic returns will reflect our investments in new product development. 14 Table of Contents The standards by which ESG efforts and related matters are measured are developing and evolving, and we could be criticized for the scope of our initiatives and goals, or lack thereof.

Our business activities are subject to various laws and regulations relating to pollution control and protection of the environment. These laws and regulations govern, among other things, discharges to air or water, the generation, storage, handling, and use of automotive hazardous materials, and the handling and disposal of hazardous waste generated at our facilities.

These laws and regulations govern, among other things, discharges to air or water, the generation, storage, handling, and use of automotive hazardous materials, and the handling and disposal of hazardous waste generated at our facilities. Under such laws and regulations, we are required to obtain permits from governmental authorities for some of our operations.

Such developments could result in increased compliance costs and adverse impacts on raw material sourcing, manufacturing operations, and the distribution of our products, which could adversely affect our business and operations. If we are unable to secure and maintain patent or other intellectual property protection for our intellectual property, our ability to compete will be harmed.

Accordingly, we and our service providers may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures. Further, we may be required to expend significant additional resources to continue to enhance information security measures and internal processes and procedures or to investigate and remediate any information security vulnerabilities.

Accordingly, we and our service providers may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures.

We are dependent on the continued services of key executives and personnel. The departure of our key personnel without adequate replacement could severely disrupt our business operations. Additionally, we need qualified managers and skilled employees with technical and manufacturing industry experience to operate our businesses successfully.

The loss of key personnel and the inability to attract and retain qualified employees could have a material adverse impact on our operations. We are dependent on the continued services of key executives and personnel. The departure of our key personnel without adequate replacement could severely disrupt our business operations.

The results of these inspections can include inspectional observations on FDA’s Form-483, warning letters, or other forms of enforcement. Since 2009, the FDA has significantly increased its oversight of companies subject to its regulations, including medical device companies, by hiring new investigators and stepping up inspections of manufacturing facilities.

We are subject to periodic inspections by the FDA to determine compliance with the FDA’s requirements, including primarily the quality system regulations and medical device reporting regulations. The results of these inspections can include inspectional observations on FDA’s Form-483, warning letters, or other forms of enforcement.

No assurance can be given as to whether, when, or in what form changes to the U.S. tax laws applicable to us may be enacted. Changes in U.S. tax laws, tax rulings, or interpretations of existing laws could materially affect our business, cash flow, results of operations, and financial condition. Item 1B. Unresolved Staff Comments None.

No assurance can be given as to whether, when, or in what form changes to the U.S. tax laws applicable to us may be enacted.

Any security breach or disruption to our information technology systems could materially adversely affect our business, financial condition, results of operations, and reputation. We rely on proprietary and third-party information technology systems to process, transmit and store information and to manage or support our business processes.

We rely on proprietary and third-party information technology systems to process, transmit and store information and to manage or support our business processes. We store and maintain confidential financial and business information regarding us and persons with whom we do business on our information technology systems.

From time to time, there may be shortages of skilled labor, which may make it more difficult and expensive for us to attract and retain qualified employees. If we are unable to attract and retain qualified individuals or our costs to do so increase significantly, our operations would be materially adversely affected.

Additionally, we need qualified managers and skilled employees with technical and manufacturing industry experience to operate our businesses successfully. From time to time, there may be shortages of skilled labor, which may make it more difficult and expensive for us to attract and retain qualified employees.

Risks Related to Our Capitalization Our indebtedness could adversely affect our business, prospects, financial condition, results of operations, or cash flows. As of December 31, 2022, we had $157.1 million of indebtedness outstanding and $35.3 million available for future borrowings under our asset backed credit facility (the “ABL Facility”).

Risks Related to Our Capitalization Our indebtedness could adversely affect our business, prospects, financial condition, results of operations, or cash flows.

Removed

Risks Related to Our Operations Pandemics, epidemics, disease outbreaks and other public health crises, such as the COVID-19 pandemic, could materially adversely impact our business, financial condition, results of operations and cash flows.

Added

If we are unable to attract and retain qualified individuals or our costs to do so increase significantly, our operations would be materially adversely affected. A security breach or disruption to our information technology systems could materially adversely affect our business, financial condition, results of operations, and reputation.

Removed

We store and maintain confidential financial and business information regarding us and persons with whom we do business on our information technology systems. We also collect and hold personally identifiable information of our employees in connection with their employment.

Added

The protection of the information technology systems on which we rely is critically important to us.

Removed

Our international operations and business, financial condition, and prospects may be adversely affected by the current military conflict between Russia and Ukraine, other future social and geopolitical instability and resulting domestic and foreign economic instability. We are exposed to the risk of changes in social, geopolitical, legal, and economic conditions.

Added

We rely upon patents, copyrights, trademarks, and trade secret laws to establish and maintain its proprietary rights for various trade names . There can be no assurance that any of our patents, trademarks or other intellectual property rights will not be challenged, invalidated, or circumvented, or that any rights granted thereunder will provide competitive advantages to us.

Removed

The global economy has been, and may continue to be, negatively impacted by Russia’s invasion of Ukraine. As a result of Russia’s invasion of Ukraine, the 13 Table of Contents United States, the European Union, the United Kingdom, and other G7 countries, among other countries, have imposed substantial financial and economic sanctions on certain industry sectors and parties in Russia.

Added

In addition, there can be no assurance that patents will be issued from pending patent applications filed by us or that claims allowed on any future patents will be sufficiently broad to protect us from infringement.

Removed

Broad restrictions on exports to Russia have also been imposed. These measures include: (i) comprehensive financial sanctions against major Russian banks; (ii) additional designations of Russian individuals with significant business interests and government connections; (iii) designations of individuals and entities involved in Russian military activities; and (iv) enhanced export controls and trade sanctions limiting Russia’s ability to import various goods.

Added

Further, the laws of some foreign countries may not permit the protection of our proprietary rights to the same extent as do the laws of the U.S.

Removed

The negative impacts arising from the conflict and these sanctions and export restrictions, including those imposed by Russia, may include reduced consumer demand, supply chain disruptions and increased costs for transportation, energy, and raw materials.

Added

We maintain a compliance program to assist in preventing and, if necessary, correcting environmental problems. Compliance with environmental, health, and safety legislation and regulatory requirements may prove to be more limiting and costly than we anticipate.

Removed

Although none of our operations are physically located in Russia or Ukraine, further escalation of geopolitical tensions could have a broader impact that expands into other markets where we do business, which may adversely affect our business, financial condition, results of operations and prospects.

Added

The principal amount outstanding under our term loan facility (the “Term Loan Facility”) as of December 31, 2023, was $148.1 million, and based on the interest rate then in effect, annual cash interest payments would be approximately $18.3 million, with an additional $2.9 million accrued as paid-in-kind interest.

Removed

Under such laws and regulations, we are required to obtain permits from governmental authorities for some of our operations. If we violate or fail to comply with these laws, regulations, or permits, we could be fined or otherwise sanctioned by regulators.

Added

In addition, we have $26.4 million available for future borrowings under our asset backed credit facility (the “ABL Facility”).

Removed

Both before and after a product is commercially released, we have ongoing responsibilities under FDA regulations. We are also subject to periodic inspections by the FDA to determine compliance with the FDA’s requirements, including primarily the quality system regulations and medical device reporting regulations.

Added

Changes in U.S. tax laws, tax rulings, or interpretations of existing laws could materially affect our business, cash flow, results of operations, and financial condition. 18 Table of Contents We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation (“FDIC”), and the loss of such assets could have a severe negative affect on our operations and liquidity.

Removed

The FDA has also significantly increased the number of warning letters issued to companies.

Added

On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership.

Removed

The standards by which ESG efforts and related matters are measured are developing and evolving, and we could be criticized for the scope of our initiatives and goals, or lack thereof.

Added

A statement by the Department of the Treasury, the Federal Reserve and the FDIC stated that all depositors of SVB would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts.

Removed

Many of these factors will be outside of our control and any one of them could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy, which could materially impact our business, prospects, financial condition, results of operations, or cash flows.

Added

Although we do not have any funds deposited with SVB or Signature Bank, we currently have our cash and cash equivalents held in deposit in accounts at certain FDIC-insured financial institutions, some of which include amounts in excess of the insurance coverage offered by the FDIC.

Removed

Additionally, we incurred a significant amount of debt in connection with our acquisitions in the past few years. Finally, in relation to such acquisitions, we have significantly higher amounts of intangible assets.

Added

In the future, we may maintain our cash and cash equivalents at financial institutions in the United States in amounts that may be in excess of the FDIC insurance limit of $250,000.

Removed

These intangible assets will be subject to impairment testing, and we could incur a significant impact to our financial statements in the form of an impairment if assumptions and expectations related to our acquisitions are not realized. The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and may result in unexpected liabilities.

Added

Though to date, we have experienced no loss or lack of access to cash in our operating accounts, in the event of a failure of any of these financial institutions where we maintain our deposits or other assets, we may incur a loss to the extent such loss exceeds the FDIC insurance limitation, which could have a material adverse effect upon our liquidity, financial condition and our results of operations.

Item 2. Properties

Properties — owned and leased real estate

6 edited+0 added−1 removed0 unchanged

2022 filing

2023 filing

Biggest changeThe following table lists the current locations of our facilities by segment. 19 Table of Contents Mobile Solutions Group Location General Character Country Owned or Leased Boituva, Brazil (1) Plant Brazil Leased Campinas, Brazil Office Brazil Leased Dowagiac, Michigan Plant U.S.A. Owned Juarez, Mexico Plant Mexico Leased Kamienna Gora, Poland Plant Poland Owned Kentwood, Michigan Plant 1 U.S.A.

Biggest changeThese plants are generally well maintained, in good operating condition, and suitable and adequate for their use. The following table lists the current locations of our facilities by segment. Mobile Solutions Group Location General Character Country Owned or Leased Campinas, Brazil Office Brazil Leased Dowagiac, Michigan Plant U.S.A.

Leased Sao Joao da Boa Vista, Brazil Plant 1 Brazil Leased Sao Joao da Boa Vista, Brazil Plant 2 Brazil Leased Wellington, Ohio Plant 1 U.S.A. Leased Wellington, Ohio (1) Plant 2 U.S.A. Leased Wuxi, China Plant China Leased Power Solutions Group Location General Character Country Owned or Leased Algonquin, Illinois Plant U.S.A. Owned Attleboro, Massachusetts Plant 1 U.S.A.

Leased Sao Joao da Boa Vista, Brazil Plant 1 Brazil Leased Sao Joao da Boa Vista, Brazil Plant 2 Brazil Leased Sao Joao da Boa Vista, Brazil Plant 3 Brazil Leased Wellington, Ohio Plant 1 U.S.A. Leased Wuxi, China Plant China Leased Power Solutions Group Location General Character Country Owned or Leased Algonquin, Illinois Plant U.S.A.

Owned Attleboro, Massachusetts Plant 2 U.S.A. Leased Attleboro, Massachusetts Plant 3 U.S.A. Owned Attleboro, Massachusetts Office, Warehouse U.S.A. Owned Foshan City, China Plant China Leased Irvine, California (1) Plant U.S.A. Leased Lubbock, Texas Plant U.S.A. Owned Mexico City, Mexico Plant Mexico Owned North Attleboro, Massachusetts Plant U.S.A. Owned Palmer, Massachusetts Plant U.S.A. Leased Taunton, Massachusetts (1) Plant U.S.A.

Owned Attleboro, Massachusetts Plant 1 U.S.A. Owned Attleboro, Massachusetts Plant 2 U.S.A. Leased Attleboro, Massachusetts Plant 3 U.S.A. Owned Attleboro, Massachusetts Office, Warehouse U.S.A. Owned Foshan City, China Plant China Leased Lubbock, Texas Plant U.S.A. Owned Mexico City, Mexico Plant Mexico Owned North Attleboro, Massachusetts Plant U.S.A. Owned Palmer, Massachusetts Plant U.S.A.

Leased Kentwood, Michigan Plant 2 U.S.A. Leased Kentwood, Michigan Plant 3, Warehouse U.S.A. Leased Kentwood, Michigan Office U.S.A. Owned Marnaz, France Plant France Owned Marshall, Michigan Plant 1 U.S.A. Leased Marshall, Michigan (1) Plant 2 U.S.A.

Owned Juarez, Mexico Plant Mexico Leased Kamienna Gora, Poland Plant Poland Owned Kentwood, Michigan Plant 1 U.S.A. Leased Kentwood, Michigan Plant 2 U.S.A. Leased Kentwood, Michigan Plant 3, Warehouse U.S.A. Leased Kentwood, Michigan Office U.S.A. Owned Marnaz, France Plant France Owned Marshall, Michigan Plant 1 U.S.A.

Item 2. Properties As of December 31, 2022, we owned or leased 31 facilities in a total of six countries, which includes a 49% equity interest in a manufacturing joint venture in China. Utilization of these sites may vary with product mix and economic, seasonal, and other business conditions.

Item 2. Properties As of December 31, 2023, we owned or leased 27 facilities in a total of six countries, which includes a manufacturing facility owned by the JV in China. Utilization of these sites may vary with product mix and economic, seasonal, and other business conditions. Our plants generally have sufficient capacity for existing needs and expected near-term growth.

Leased Joint Venture Location General Character Country Owned or Leased Wuxi, China Plant China Leased _______________________________ (1) Facilities that we plan to close during 2023. In addition to these manufacturing plants, we lease office space in Charlotte, North Carolina, which serves as our corporate headquarters.

Leased Joint Venture Location General Character Country Owned or Leased Wuxi, China Plant China Leased Corporate Location General Character Country Owned or Leased Charlotte, North Carolina Office U.S.A Leased

Removed

Our plants generally have sufficient capacity for existing needs and expected near-term growth. These plants are generally well maintained, in good operating condition, and suitable and adequate for their use. Due to a strategic shift to focus on growth opportunities and ongoing efforts to optimize the Company’s manufacturing footprint, we plan to cease manufacturing operations at several facilities during 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−0 removed1 unchanged

2022 filing

2023 filing

Biggest changeSee Part III, Item 12 – “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report for information required by Item 201 (d) of Regulation S-K. 21 Table of Contents Issuer Purchases of Equity Securities The following table provides information about purchases we made during the quarter ended December 31, 2023.

The following graph and table assume that a $100 investment was made at the close of trading on December 31, 2017. We cannot assure you that the performance of our common stock will continue in the future with the same or similar trend depicted on the graph.

The following graph and table assume that a $100 investment was made at the close of trading on December 31, 2018. We cannot assure you that the performance of our common stock will continue in the future with the same or similar trend depicted on the graph.

The following graph and table compare the cumulative total shareholder return on our common stock with the cumulative total shareholder return of: (i) the Russell 2000 ® Index, which is a broad equity market index, and (ii) the S&P SmallCap 600 ® Industrials Index, which is a published industry index, for the period from December 31, 2017, to December 31, 2022.

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is traded on Nasdaq under the trading symbol “NNBR.” As of February 24, 2023, there were 3,878 beneficial owners of record of our common stock.

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is traded on Nasdaq under the trading symbol “NNBR.” As of February 21, 2024, there were 3,767 beneficial owners of record of our common stock.

Comparison of Five-Year Cumulative Total Return (Performance results through December 31, 2022) 2017 2018 2019 2020 2021 2022 NN, Inc. $ 100.00 $ 24.78 $ 35.02 $ 24.87 $ 15.52 $ 5.68 Russell 2000 $ 100.00 $ 88.99 $ 111.70 $ 134.00 $ 153.85 $ 122.41 S&P SmallCap 600 Industrials $ 100.00 $ 87.85 $ 113.89 $ 127.53 $ 160.56 $ 145.46 Source: Zachs Investment Research, Inc.

Comparison of Five-Year Cumulative Total Return (Performance results through December 31, 2023) 2018 2019 2020 2021 2022 2023 NN, Inc. $ 100.00 $ 141.31 $ 100.36 $ 62.62 $ 22.91 $ 61.08 Russell 2000 $ 100.00 $ 125.52 $ 150.58 $ 172.90 $ 137.56 $ 160.85 S&P SmallCap 600 Industrials $ 100.00 $ 129.64 $ 145.17 $ 182.76 $ 165.58 $ 218.30 Source: Zachs Investment Research, Inc.

Added

Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan or Programs (1) October 2023 2,016 $ 1.76 — — November 2023 2,488 2.00 — — December 2023 — — — — Total 4,504 $ 1.89 — — _______________________________ (1) Shares were withheld to pay for tax obligations due upon the vesting of share-based awards held by employees granted under the NN, Inc. 2022 Omnibus Incentive Plan and prior plans (collectively the “Incentive Plans”).

Added

The Incentive Plans provides for the withholding of shares or units to satisfy income tax obligations. It does not specify a maximum number of shares or units that can be withheld for this purpose. These shares may be deemed to be “issuer purchases” of shares that are required to be disclosed pursuant to this Item. Item 6.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

44 edited+15 added−18 removed16 unchanged

2022 filing

2023 filing

Biggest changeYears Ended December 31, 2022 2021 2020 Net sales 100.0 % 100.0 % 100.0 % Cost of sales (exclusive of depreciation and amortization shown separately below) 84.4 % 81.7 % 80.4 % Selling, general, and administrative expense 10.0 % 10.8 % 13.6 % Depreciation and amortization 9.5 % 9.7 % 10.7 % Goodwill impairment — % — % 21.7 % Other operating expense (income), net 0.4 % (0.2) % 1.1 % Loss from operations (4.2) % (1.9) % (27.5) % Interest expense 3.0 % 2.7 % 4.4 % Loss on extinguishment of debt and write-off of debt issuance costs — % 0.5 % — % Derivative payments on interest rate swap — % 0.4 % 1.0 % Loss on interest rate swap — % 0.4 % 2.7 % Other income, net (1.0) % (1.1) % — % Loss from continuing operations before benefit (provision) for income taxes and share of net income from joint venture (6.2) % (4.7) % (35.6) % Benefit (provision) for income taxes (0.3) % 0.4 % 2.1 % Share of net income from joint venture 1.3 % 1.3 % 0.8 % Loss from continuing operations (5.2) % (3.0) % (32.6) % Income from discontinued operations, net of tax — % 0.3 % 9.1 % Net loss (5.2) % (2.8) % (23.5) % 24 Table of Contents Year Ended December 31, 2022 compared to the Year Ended December 31, 2021 Years Ended December 31, 2022 2021 $ Change Net sales $ 498,738 $ 477,584 $ 21,154 Cost of sales (exclusive of depreciation and amortization shown separately below) 421,105 389,995 $ 31,110 Selling, general, and administrative expense 49,635 51,489 (1,854) Depreciation and amortization 47,231 46,195 1,036 Other operating expense (income), net 1,859 (1,091) 2,950 Loss from operations (21,092) (9,004) (12,088) Interest expense 15,041 12,664 2,377 Loss on extinguishment of debt and write-off of debt issuance costs — 2,390 (2,390) Derivative payments on interest rate swap — 1,717 (1,717) Loss on interest rate swap — 2,033 (2,033) Other income, net (5,064) (5,366) 302 Loss from continuing operations before benefit (provision) for income taxes and share of net income from joint venture (31,069) (22,442) (8,627) Benefit (provision) for income taxes (1,621) 1,756 (3,377) Share of net income from joint venture 6,592 6,261 331 Loss from continuing operations (26,098) (14,425) (11,673) Income from discontinued operations, net of tax — 1,200 (1,200) Net loss $ (26,098) $ (13,225) $ (12,873) Net Sales .

Biggest changeYears Ended December 31, 2023 2022 2021 Net sales 100.0 % 100.0 % 100.0 % Cost of sales (exclusive of depreciation and amortization shown separately below) 85.7 % 84.4 % 81.7 % Selling, general, and administrative expense 9.7 % 10.0 % 10.8 % Depreciation and amortization 9.4 % 9.5 % 9.7 % Other operating expense (income), net (0.3) % 0.4 % (0.2) % Loss from operations (4.5) % (4.2) % (1.9) % Interest expense 4.3 % 3.0 % 2.7 % Loss on extinguishment of debt and write-off of debt issuance costs — % — % 0.5 % Derivative payments on interest rate swap — % — % 0.4 % Loss on interest rate swap — % — % 0.4 % Other expense (income), net 2.2 % (1.0) % (1.1) % Loss from continuing operations before provision for income taxes and share of net income from joint venture (11.0) % (6.2) % (4.7) % Provision for income taxes (0.5) % (0.3) % 0.4 % Share of net income from joint venture 1.2 % 1.3 % 1.3 % Loss from continuing operations (10.2) % (5.2) % (3.0) % Income from discontinued operations, net of tax — % — % 0.3 % Net loss (10.2) % (5.2) % (2.8) % 24 Table of Contents Year Ended December 31, 2023 compared to the Year Ended December 31, 2022 Years Ended December 31, 2023 2022 $ Change Net sales $ 489,270 $ 498,738 $ (9,468) Cost of sales (exclusive of depreciation and amortization shown separately below) 419,175 421,105 $ (1,930) Selling, general, and administrative expense 47,436 49,635 (2,199) Depreciation and amortization 46,120 47,231 (1,111) Other operating expense (income), net (1,657) 1,859 (3,516) Loss from operations (21,804) (21,092) (712) Interest expense 21,137 15,041 6,096 Other expense (income), net 10,730 (5,064) 15,794 Loss from continuing operations before provision for income taxes and share of net income from joint venture (53,671) (31,069) (22,602) Provision for income taxes (2,285) (1,621) (664) Share of net income from joint venture 5,806 6,592 (786) Net loss $ (50,150) $ (26,098) $ (24,052) Net Sales .

Our effective tax rate for the year ended December 31, 2021 was favorably impacted by the change in assertion and reduction in the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and unfavorably impacted by the limitation on the amount of tax benefit recorded for loss carryforwards in certain jurisdictions where we believe it is more likely than not that a portion of the future tax benefit may not be realized.

Our effective tax rate for the year ended December 31, 2022 was favorably impacted by the change in assertion and reduction in the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and unfavorably impacted by the limitation on the amount of tax benefit recorded for loss carryforwards in certain jurisdictions where we believe it is more likely than not that a portion of the future tax benefit may not be realized.

Specifically, the realization of deferred tax assets and the certainty of tax positions taken are largely dependent upon management weighting the current positive and negative evidence for recording tax benefits and expenses. A significant piece of objective negative evidence evaluated is cumulative losses incurred over the three-year period ended December 31, 2022.

The effective tax rate for the year ended December 31, 2022 was favorably impacted by the recording of interest income on the Company’s federal income tax refund requested as a result of the Coronavirus Aid, Relief, and Economic Security Act, as well as the recording of a benefit of a pending state refund claim.

The effective tax rate for the year ended December 31, 2023 was favorably impacted by the recording of interest income on the Company’s federal income tax refund requested as a result of the Coronavirus Aid, Relief, and Economic Security Act, as well as the recording of a benefit of a pending state refund claim.

A detailed discussion of our results of operations and liquidity and capital resources for the year ended December 31, 2021 compared to the year ended December 31, 2020 are not included herein and can be found in Item 7.

A detailed discussion of our results of operations and liquidity and capital resources for the year ended December 31, 2022 compared to the year ended December 31, 2021 are not included herein and can be found in Item 7.

The local currency of each foreign facility is also its functional currency. Seasonality and Fluctuation in Quarterly Results General economic conditions impact our business and financial results, and certain businesses experience seasonal and other trends related to the industries and end markets that they serve.

The local currency of each foreign facility is also its functional currency. 27 Table of Contents Seasonality and Fluctuation in Quarterly Results General economic conditions impact our business and financial results, and certain businesses experience seasonal and other trends related to the industries and end markets that they serve.

Historical 21 Table of Contents operating results and percentage relationships among any amounts included in the Consolidated Financial Statements are not necessarily indicative of trends in operating results for any future period. Unless otherwise noted herein, all amounts are in thousands, except per share numbers.

Historical operating results and percentage relationships among any amounts included in the Consolidated Financial Statements are not necessarily indicative of trends in operating results for any future period. Unless otherwise noted herein, all amounts are in thousands, except per share numbers.

Our effective tax rate for the year ended December 31, 2022 was unfavorably impacted by the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by the limitation on the amount of tax benefit recorded for loss carryforwards in certain jurisdictions where we believe it is more likely than not that a portion of the future tax benefit may not be realized.

Our effective tax rate for the year ended December 31, 2023 was unfavorably impacted by the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by the limitation on the amount of tax benefit recorded for loss carryforwards in certain jurisdictions where we believe it is more likely than not that a 25 Table of Contents portion of the future tax benefit may not be realized.

Future adverse changes in market conditions or adverse operating results of the underlying assets could result in having to record additional impairment charges not previously recognized.

Future adverse changes in market conditions or adverse operating results of the underlying assets could result in having to record additional impairment charges not previously recognized. 28 Table of Contents

Outstanding borrowings under the Term Loan Facility bear interest at either 1) one-month LIBOR (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%.

Outstanding borrowings under the Term Loan Facility bear interest at either 1) one-month, three-month, or six-month Adjusted 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%.

Liquidity and Capital Resources Credit Facility The principal amount outstanding under our term loan facility (the “Term Loan Facility”) as of December 31, 2022, was $147.4 million, without regard to unamortized debt issuance costs and discount. As of December 31, 2022, we had $35.3 million available for future borrowings under the ABL Facility.

Liquidity and Capital Resources Credit Facility The principal amount outstanding under our term loan facility (the “Term Loan Facility”) as of December 31, 2023, was $148.1 million, without regard to unamortized debt issuance costs and discount. As of December 31, 2023, we had $26.4 million available for future borrowings under the ABL Facility.

Although our business has not been materially impacted by the ongoing Russia-Ukraine conflict we cannot predict the extent to which our operations, or those of our customers or suppliers, will be impacted in the future, or the ways in which the conflict may impact our business, financial condition, results of operations and cash flows.

Although our business has not been materially impacted by these ongoing global conflicts as of the date of this filing, we cannot reasonably predict the extent to which our operations, or those of our customers or suppliers, will be impacted in the future, or the ways in which the conflicts may impact our business, financial condition, results of operations and cash flows.

Cash Flows Cash provided by operations was $7.7 million for the year ended December 31, 2022, compared with cash provided by operations of $15.6 million for the year ended December 31, 2021.

Cash Flows Cash provided by operations was $29.3 million for the year ended December 31, 2023, compared with cash provided by operations of $7.7 million for the year ended December 31, 2022.

Our participation in these programs is based on our specific cash needs throughout the year, the discount charged to receive payment earlier, the length of the payment terms with our customers, as well being subject to limits in our ABL Facility and Term Loan Facility agreements. Functional Currencies We currently have foreign operations in Brazil, China, France, Mexico, and Poland.

Our effective tax rate was (5.2)% for the year ended December 31, 2022, compared to 7.8% for the year ended December 31, 2021.

Our effective tax rate was (4.3)% for the year ended December 31, 2023, compared to (5.2)% for the year ended December 31, 2022.

Selling, general, and administrative expense decreased by $1.9 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to lower incentive compensation, severance and retention expense. These decreases were partially offset by higher stock compensation expense, higher professional fees and increased travel costs. Other Operating Expense (Income), Net.

Selling, general, and administrative expense decreased by $2.2 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to lower stock compensation expense and lower professional fees, partially offset by higher incentive compensation expense. Other Operating Expense (Income), Net.

Overview and Management Focus Our strategy and management focus are based upon the following long-term objectives • Organic growth within our segments; • Improved operating margins; • Cost reduction; • optimization of manufacturing footprint; • Efficient capital deployment; • Debt leverage ratio improvement; • Capital management initiatives; and • Employee health, safety, and satisfaction; Management generally focuses on these trends and relevant market indicators • Trends related to the geographic migration of competitive manufacturing, electric vehicles, and electrification; • Costs subject to regional and global inflationary environments, including, but not limited to: • Raw materials; • Wages and benefits, including health care costs; • Regulatory compliance; and • Energy; • Global automotive production rates; • Global industrial growth and economics; • Residential and non-residential construction rates; • Regulatory environment for United States public companies and manufacturing companies; • Currency and exchange rate movements and trends; • Interest rate levels and expectations; and • Changes in tariff regulations.

Management generally focuses on these trends and relevant market indicators: • Trends related to the geographic migration of competitive manufacturing, electric vehicles, and electrification; • Costs subject to regional and global inflationary environments, including, but not limited to: • Raw materials; • Wages and benefits, including health care costs; • Regulatory compliance; and • Energy; • Global automotive production rates; • Global industrial growth and economics; • Residential and non-residential construction rates; • Regulatory environment for United States public companies and manufacturing companies; • Currency and exchange rate movements and trends; • Interest rate levels and expectations; and • Changes in tariff regulations.

Working capital, which consists of current assets less current liabilities, was $112.9 million as of December 31, 2022, compared to $122.3 million as of December 31, 2021. The decrease was primarily due to increases in accounts payable and other current liabilities, partially offset by increases in accounts receivable and inventory.

Working capital, which consists of current assets less current liabilities, was $100.9 million as of December 31, 2023, compared to $112.9 million as of December 31, 2022. The decrease in working capital was primarily due to a decrease in accounts receivable and inventory and increases in accrued salaries, wages and benefits.

Share of Net Income from Joint Venture. Share of net income from the JV increased by $0.3 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to higher sales partially offset by higher operating costs in the current year.

Share of Net Income from Joint Venture. Share of net income from the joint venture decreased by $0.8 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to higher fixed costs and increased depreciation and interest expense, partially offset by higher revenue.

The Term Loan Facility requires quarterly principal payments of $0.4 million with the remaining unpaid principal amount due on the final maturity date of September 22, 2026. We may be required to make additional principal payments annually that are calculated as a percentage of our excess cash flow, as defined by the lender, based on our net leverage ratio.

We may be required to make additional principal payments annually that are calculated as a percentage of our excess cash flow, as defined by the lender, based on our net leverage ratio.

See Note 11 of the Notes to Consolidated Financial Statements. 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.

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. In exchange, we receive payment on the receivables, less a discount, sooner than under the customary credit terms we have extended to that customer.

The JV, in which we own a 49% investment, recognized net sales of $101.6 million and $94.8 million for the years ended December 31, 2022 and 2021, respectively. Income from Discontinued Operations, Net of Tax .

The joint venture, in which we own a 49% investment, recognized net sales of $109.6 million and $101.6 million for the year ended December 31, 2023 and 2022, respectively.

Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 11, 2022.

Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 10, 2023. Overview and Management Focus During 2023, the Company initiated an enterprise transformation plan to grow sales, profits, free cash flow and shareholder value.

The interest rate in effect at December 31, 2022, was 6.00%. We pay a commitment fee of 0.375% for unused capacity under the ABL Facility. We were in compliance with all requirements under our Term Loan Facility and ABL Facility as of December 31, 2022.

We pay a commitment fee of 0.375% for unused capacity under the ABL Facility. We were in compliance with all requirements under our Term Loan Facility and ABL Facility as of December 31, 2023. Both credit facilities allow for optional expansion of available borrowings, subject to certain terms and conditions.

In addition, borrowings on the ABL Facility during the year ended December 31, 2022 contributed to higher interest expense. These increases were partially offset by a 25 Table of Contents higher amount of interest expense that was capitalized in 2022 compared with the prior year and the positive impact of the interest rate swap.

These increases were partially offset by the recognition of gains from the interest rate swap and a higher amount of interest expense that was capitalized in the current year compared with 2022.

Years Ended December 31, 2022 2021 Interest on debt $ 14,071 $ 10,800 Interest rate swap settlements (428) 77 Amortization of debt issuance costs and discount 1,361 1,381 Capitalized interest (610) (300) Other 647 706 Total interest expense $ 15,041 $ 12,664 Loss on Extinguishment of Debt and Write-off of Debt Issuance Costs.

Years Ended December 31, 2023 2022 Interest on debt $ 21,638 $ 14,071 Gain recognized on interest rate swap (1,815) (428) Amortization of debt issuance costs and discount 1,941 1,361 Capitalized interest (1,330) (610) Other 703 647 Total interest expense $ 21,137 $ 15,041 Other Expense (Income), Net.

Financial Data as a Percentage of Net Sales The following table presents the percentage of our net sales represented by statement of operations line item.

Sales Concentration During the years ended December 31, 2023, 2022 and 2021, no single customer accounted for 10% or more of consolidated net sales. Financial Data as a Percentage of Net Sales The following table presents the percentage of our net sales represented by statement of operations line item.

Net sales increased by $21.2 million, or 4.4%, during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to increased pricing partially offset by lower volume and unfavorable foreign exchange effects of $4.2 million. Cost of Sales.

Net sales decreased by $9.5 million, or 1.9%, during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to reduced volume, including the impact from the closure of the Taunton and Irvine facilities, lower customer settlements and unfavorable foreign exchange effects of $0.6 million. These decreases were partially offset by higher customer pricing.

Cash used in financing activities was $5.2 million for the year ended December 31, 2022, compared with cash provided by financing activities of $2.6 million for the year ended December 31, 2021. The difference was primarily due to the debt and preferred stock refinancing in the first quarter of 2021.

Cash used in financing activities was $2.9 million for the year ended December 31, 2023, compared with $5.2 million for the year ended December 31, 2022. The decrease was primarily due to an increase in international loans during 2023.

Other operating expense (income), net changed unfavorably by $3.0 million primarily due to a legal settlement reached during the first quarter of 2022 and the gain on the sale of a facility that was recognized in the third quarter of 2021. Interest Expense.

Other operating expense (income), net changed favorably by $3.5 million primarily due to sublease income recognized in 2023 and a legal settlement recorded in 2022. Interest Expense.

These decreases were partially offset by the impact of higher customer pricing. Changes in Financial Condition from December 31, 2021 to December 31, 2022 Overview From December 31, 2021 to December 31, 2022, total assets decreased by $33.0 million primarily due to normal depreciation and amortization of fixed assets and intangible assets.

These increases were partially offset by lower sales volume. Changes in Financial Condition from December 31, 2022 to December 31, 2023 Overview From December 31, 2022 to December 31, 2023, total assets decreased by $35.2 million primarily due to decreases in accounts receivable, inventory, property, plant and equipment and intangible assets.

Other income, net changed unfavorably by $0.3 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to lower derivative mark-to-market gains recognized in 2022, partially offset by the impact of a litigation settlement in 2021 and more favorable foreign exchange effects associated with intercompany borrowings. Benefit (Provision) for Income Taxes.

Other expense (income), net changed unfavorably by $15.8 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to noncash derivative mark-to-market losses recognized during 2023 compared to gains recognized during 2022. Provision for Income Taxes.

In exchange, we receive payment on the receivables, less a discount, sooner than under the customary credit terms we have extended to that customer. These programs allow us to improve working capital and cash flows at the same or lower interest rates as available on our ABL Facility.

These programs allow us to improve working capital and cash flows at the same or lower interest rates as available on our ABL Facility. Our access to these programs is dependent on our customers ongoing agreements with the third-parties.

Interest expense increased by $2.4 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to higher interest rates and a larger average debt balance as a result of the credit facility and preferred stock refinance that occurred during the first quarter of 2021.

Interest expense increased by $6.1 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to higher interest rates and the addition of a 2.00% paid-in-kind interest component on the Term Loan subsequent to the amendment in the first quarter of 2023.

POWER SOLUTIONS Year Ended December 31, 2022 2021 $ Change Net sales $ 205,204 $ 191,800 $ 13,404 Income from operations $ 3,536 $ 6,493 $ (2,957) Net sales increased by $13.4 million, or 7.0%, during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to higher customer pricing.

POWER SOLUTIONS Year Ended December 31, 2023 2022 $ Change Net sales $ 185,948 $ 205,204 $ (19,256) Income from operations $ 11,096 $ 3,536 $ 7,560 Net sales decreased by $19.3 million, or 9.4%, during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to lower volumes, including the impact from the closure of the Taunton and Irvine facilities.

We anticipate that supply chain constraints and the inflationary environment, as impacted by the COVID-19 pandemic, will continue into 2023. The Russia-Ukraine conflict also continues to create volatility in global financial and energy markets, creating energy and supply chain shortages, which has added to the inflationary pressures experienced by the global economy.

The ongoing global conflicts continue to create volatility in global financial and energy markets, creating energy and supply chain shortages, which has added to the inflationary pressures experienced by the global economy. We continue to actively work with our suppliers to minimize impacts of supply shortages on our manufacturing capabilities.

Cost of sales increased by $31.1 million, or 8.0%, during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to inflationary costs and unfavorable overhead absorption, partially offset by lower sales volume and favorable foreign exchange effects. Selling, General, and Administrative Expense.

Cost of Sales. Cost of sales decreased by $1.9 million, or 0.5%, during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to lower sales volume associated with facility closures.

An asset or liability’s classification within the various levels is determined based on the lowest level input that is significant to the fair value measurement. 23 Table of Contents Results of Operations Factors That May Influence Results of Operations The following paragraphs describe factors that have influenced results of operations for the year ended December 31, 2022, that management believes are important to provide an understanding of the business and results of operations or that may influence operations in the future.

Results of Operations Factors That May Influence Results of Operations The following paragraphs describe factors that have influenced results of operations for the year ended December 31, 2023, that management believes are important to provide an understanding of the business and results of operations or that may influence operations in the future. 23 Table of Contents Macroeconomic Conditions We continue to monitor the ongoing impacts of current macroeconomic and geopolitical events, including changing conditions from ongoing global conflicts, inflationary cost pressures, elevated interest rates, supply chain disruptions, and labor shortages and disruptions.

Results by Segment MOBILE SOLUTIONS Year Ended December 31, 2022 2021 $ Change Net sales $ 293,536 $ 285,863 $ 7,673 Income (loss) from operations $ (2,165) $ 9,039 $ (11,204) Net sales increased by $7.7 million, or 2.7%, during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to increased pricing, partially offset by lower sales of diesel components due to lower European demand which was impacted by the war in Ukraine, COVID-19 interruptions in China, lost sales associated with certain fuel systems reaching end of production, and unfavorable foreign exchange effects of $4.1 million.

Results by Segment MOBILE SOLUTIONS Year Ended December 31, 2023 2022 $ Change Net sales $ 303,335 $ 293,536 $ 9,799 Loss from operations $ (11,749) $ (2,165) $ (9,584) Net sales increased by $9.8 million, or 3.3%, during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to higher customer pricing, partially offset by lower volume, and lower customer settlements.

This amount of borrowing capacity is net of $1.0 million of outstanding borrowings and $11.0 million of outstanding letters of credit at December 31, 2022, which are considered as usage of the ABL Facility.

This amount of borrowing capacity is net of $10.9 million of outstanding letters of credit at December 31, 2023, which are considered as usage of the ABL Facility. The Term Loan Facility requires quarterly principal payments of $0.4 million with the remaining unpaid principal amount, including accrued paid-in-kind interest, due on the final maturity date of September 22, 2026.

Income from operations decreased by $3.0 million during the year ended December 31, 2022 compared to the same period in the prior year, primarily due to a $1.8 million litigation settlement to resolve a claim from 2016, an increase in amortization expense, and the absence of a gain on the sale of a facility in the third quarter of 2021.

Income from operations increased by $7.6 million during the year ended December 31, 2023 compared to the same period in the prior year, primarily due to lower costs associated with the facilities that closed in the second quarter of 2023, premium pricing on a certain customer project in the first quarter of 2023, a legal settlement reached during the first quarter of 2022, and sublease income earned on closed facilities.

These decreases were partially offset by increases in accounts receivable and inventories during the year ended December 31, 2022. The increase in accounts receivable is due to higher sales during the end of the current year compared with the end of 2021.

The difference was primarily due to decreases in accounts 26 Table of Contents receivable and inventory during the year ended 2023 compared to increases in these balance during the corresponding period of 2022.

The U.S. economy is experiencing broad and rapid inflation and rising interest rates, as well as supply issues in materials, services, and labor due to economic policy, the COVID-19 pandemic and, more recently, the Russia-Ukraine conflict. These impacts are likely to persist into 2023 and beyond.

The U.S. economy has experienced inflationary increases and elevated interest rates, as well as supply issues in materials, services, and labor due to economic policy, the COVID-19 pandemic and global conflicts. While these impacts stabilized during 2023, we cannot predict the future impact on our end-markets or input costs nor our ability to recover cost increases through pricing.

Income (loss) from operations decreased by $11.2 million during the year ended December 31, 2022 compared to the prior year, primarily due to inflationary costs not fully recovered in customer pricing, unfavorable overhead absorption, start-up costs associated with Mexico new business launches, and variable cost inefficiencies associated with supply chain interruptions, 26 Table of Contents uneven customer ordering patterns, and labor constraints caused by pandemic interruptions.

Loss from operations changed unfavorably by $9.6 million during the year ended December 31, 2023 compared to the prior year, primarily due to higher material and labor costs, lower sales volume, lower customer settlement and unfavorable foreign exchange effects. In addition, costs increased due to production challenges associated with new business launches.

Removed

Management generally focuses on the following key indicators of operating performance • Sales growth; • Cost of sales; • Gross margin; • Selling, general and administrative expense; • Earnings before interest, taxes, depreciation and amortization; • Return on invested capital; • Income from operations; • Net income; • Leverage ratio • Cash flow from operations and capital spending; • Certain non-GAAP measures as defined in our quarterly earnings releases and investor presentations; • Customer service reliability; • External and internal quality indicators; and • Employee development. 22 Table of Contents Critical Accounting Estimates Our significant accounting policies, including the assumptions and judgment underlying them, are disclosed in Note 1 of the Notes to Consolidated Financial Statements.

Added

The main tenets of the Company’s transformation plan are: • Empowered leadership team that is accountable to outcomes; • Supplementing the team with added talent and experienced professionals; • Investing $100 million of capex over a five year period with strategic intentions; • Strategic footprint overlay to blend down the Company’s cost structure to lower total-cost product offerings; • Building and converting upon a high-probability pipeline of new business opportunities that fit the Company’s capacity and forward direction; • Deliver excellent customer service and quality in a safe and sustainable manner; • Expand margins through a variety of contemporary approaches, but especially continuous improvement algorithms; • Annually generate free cash flow; • Face reality and address underperforming areas of the Company; and • Recruit, retain and incent the best possible team of employees globally.

Removed

Fair Value Measurements Fair value is an exit price representing the expected amount that an entity would receive to sell an asset or pay to transfer a liability in an orderly transaction with market participants at the measurement date. Fair value principles prioritize valuation inputs across three broad levels.

Added

We are a strategic partner to a diversified and global customer base with long standing business relationships and long-running business streams. We participate in growing and attractive end markets, including global automotive parts and passenger vehicles, commercial vehicles, grid and electrical investment, and medical components.

Removed

Macroeconomic Conditions We continue to monitor the ongoing impacts of current macroeconomic and geopolitical events, including changing conditions from the COVID-19 pandemic, the ongoing Russia-Ukraine conflict, inflationary cost pressures, rising interest rates, supply chain disruptions, and labor shortages.

Added

Footprint Optimization We have taken specific steps to consolidate our footprint by identifying less profitable end markets and focusing our strategic growth initiatives in markets where we believe we will be able to maximize profitability.

Removed

The COVID-19 pandemic and governmental responses thereto, including COVID-19 lockdowns in China, continue to impact our business operations and our customers' and suppliers' ability to operate at normal levels. Disruptions in normal operating levels continue to create supply chain disruptions and inflationary cost pressures within our end-markets.

Added

During the first half of 2023, we closed our Taunton and Irvine sites in the Power Solutions group and three underutilized Mobile Solutions sites to reduce operating costs. Additionally, we continue to evaluate our global footprint, which may result in further consolidation or expansion actions to further improve our overall cost structure.

Removed

We continue to actively work with our suppliers to minimize impacts of supply shortages on our manufacturing capabilities.

Added

These decreases were partially offset by higher material and labor costs, increased costs due to inefficient manufacturing processes associated with product launches, and unfavorable foreign exchange effects. Selling, General, and Administrative Expense.

Removed

We cannot predict the impact on the Company’s end-markets or input costs nor the ability of the Company to recover cost increases through pricing. Sales Concentration During the years ended December 31, 2022, 2021 and 2020, no single customer accounted for 10% or more of consolidated net sales.

Added

These decreases were partially offset by higher customer pricing and premium pricing on a certain customer project.

Removed

We recognized $2.4 million in the first quarter of 2021 for the write-off of unamortized debt issuance costs associated with the credit facility that was terminated in March 2021. Derivative Payments on Interest Rate Swap. Derivative payments on interest rate swap represent cash settlements of an interest rate swap which was terminated in the first quarter of 2021.

Added

The closure of two Power Solutions facilities contributed to the decrease in inventory and property, plant and equipment, and the decline in intangible assets is due to amortization. From December 31, 2022 to December 31, 2023, total liabilities increased by $12.9 million, primarily due to an increase in other non-current liabilities due to fair value adjustments of outstanding warrants.

Removed

We entered into a new interest rate swap in the third quarter of 2021, which is designated as a cash flow hedge with the impact of settlements recognized in interest expense. Loss on Interest Rate Swap .

Added

Cash used in investing activities during the year ended December 31, 2023 changed minimally from the prior year as higher expenditures for property, plant and equipment was partially offset by the proceeds from the sale of equipment at the Taunton and Irvine facilities in the first half of 2023.

Removed

We recognized a $2.0 million loss in the first quarter of 2021 related to the termination of the previous interest rate swap in March 2021. Other Income, Net.

Added

Beginning in the second quarter of 2023, interest expense was increased on a paid-in-kind basis at a rate between 1.00% and 2.00%, dependent on the Company’s leverage ratio. Based on the interest rate in effect at December 31, 2023, annual cash interest payments would be approximately $18.3 million, with an additional $2.9 million accrued as paid-in-kind interest.

Removed

We recognized a gain of $1.2 million during the year ended December 31, 2021, due to the favorable resolution of a tax indemnity that resulted from the sale of our Life Sciences business in 2020.

Added

On March 5, 2024, we entered into a Purchase and Sale and Escrow Agreement to sell and leaseback three of our properties (the “Properties”). The sale is expected to close on or around March 15, 2024, with the buyer’s obligation to close subject to inspection, due diligence and other customary closing conditions.

Removed

These decreases were partially offset by lower incentive compensation expense.

Added

The aggregate purchase price for the Properties is $16.8 million, the net proceeds from which will be used to repay a portion of the outstanding borrowings under the Term Loan Facility.

Removed

The value of inventory increased due to higher material and labor costs as well as higher quantities to maintain customer safety stock due to ongoing supply chain interruptions, especially in China.

Added

The ABL Facility bears interest on a variable borrowing rate based on either 1) Adjusted 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.

Removed

From December 31, 2021 to December 31, 2022, total liabilities decreased by $5.9 million, primarily due to lower employee incentive compensation accruals and a decrease in the valuation of certain derivatives. These decreases were offset by an increase in accounts payable attributed to higher inventory balances at December 31, 2022.

Added

Other Receivables In 2021, we filed a refund claim with the IRS as a result of the Coronavirus Aid, Relief, and Economic Security Act. Including interest accrued on the initial refund amount, we have a $11.6 million tax refund receivable at December 31, 2023, which is in the process of IRS review and approval.

Removed

The decrease was primarily due to an increase in net loss and increases in accounts receivable and inventory, partially offset by dividends received from our unconsolidated joint venture and lower income tax payments in 2022.

Added

The timing of the receipt of the refund remains uncertain. Functional Currencies We currently have foreign operations in Brazil, China, France, Mexico, and Poland.

Removed

Cash used in investing activities was $17.5 million for the year ended December 31, 2022, compared with cash used in investing activities of $36.1 million for the year ended December 31, 2021. The decrease was primarily due to cash paid to settle the interest rate swap in the first quarter of 2021.

Added

Critical Accounting Estimates Our significant accounting policies, including the assumptions and judgment underlying them, are disclosed in Note 1 of the Notes to Consolidated Financial Statements.

Removed

Based on the 27 Table of Contents interest rate in effect at December 31, 2022, and the fixed rate on the 2021 interest rate swap, annual interest payments would be approximately $14.7 million. The ABL Facility bears interest on a variable rate structure with borrowings bearing interest at one-month LIBOR plus an applicable margin of 1.75%.

Removed

Both credit facilities allow for optional expansion of available borrowings, subject to certain terms and conditions. On March 3, 2023, we amended our Term Loan Facility and ABL Facility to adjust certain covenants under the agreements, as well as to change the applicable base rate on which interest expense is determined.

Removed

Our access to these programs is dependent on our customers ongoing agreements with the third-parties.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+1 added−5 removed1 unchanged

2022 filing

2023 filing

Biggest changeAt December 31, 2022, we had $147.4 million of principal outstanding under the Term Loan Facility without regard to capitalized debt issuance costs. A one-percent increase in one-month LIBOR would have resulted in a net increase in interest expense of $0.9 million on an annualized basis.

Biggest changeTo manage interest rate risk, we have used, and may in the future use, interest rate swap agreements. At December 31, 2023, we had $148.1 million of principal outstanding under the Term Loan Facility without regard to capitalized debt issuance costs.

Various strategies to manage this risk are available to management, including producing and selling in local currencies and hedging programs. We did not hold a position in any foreign currency derivatives as of December 31, 2022. 29 Table of Contents

To help reduce exposure to foreign currency fluctuation, we have incurred debt in euros in the past. Various strategies to manage this risk are available to management, including producing and selling in local currencies and hedging programs. We did not hold a position in any foreign currency derivatives as of December 31, 2023. 29 Table of Contents

To mitigate the exposure to these market risks, we have established policies, procedures, and internal processes governing the management of financial market risks. We are exposed to changes in interest rates primarily as a result of borrowing activities. Interest Rate Risk Our policy is to manage interest expense using a mixture of fixed and variable rate debt.

We invoice and receive payment from many of our customers in various other currencies. Additionally, we are party to third party and intercompany loans, payables, and receivables denominated in currencies other than the U.S. dollar. To help reduce exposure to foreign currency fluctuation, we have incurred debt in euros in the past.

Foreign Currency Risk Translation of our operating cash flows denominated in foreign currencies is impacted by changes in foreign exchange rates. We invoice and receive payment from many of our customers in various other currencies. Additionally, we are party to third party and intercompany loans, payables, and receivables denominated in currencies other than the U.S. dollar.

To manage this mixture of fixed and variable rate debt effectively and mitigate interest rate risk, we may use interest rate swap agreements. The nature and amount of borrowings may vary as a result of future business requirements, market conditions, and other factors.

Interest Rate Risk We are subject to interest rate risk due to our variable rate debt, which comprises a majority of our outstanding indebtedness. The nature and amount of borrowings may vary as a result of future business requirements, market conditions, and other factors.

Removed

On July 22, 2021, we entered into a fixed-rate interest rate swap agreement to change the LIBOR-based component of the interest rate on a portion of our variable rate debt to a fixed rate of 1.291% (the “2021 Swap”). The 2021 Swap has a notional amount of $60.0 million and a maturity date of July 31, 2024.

Added

A one-percent increase in one-month SOFR would have resulted in a net increase in interest expense of $1.5 million on an annualized basis. At December 31, 2023, using Adjusted SOFR plus a 2.00% spread, any borrowings under the ABL Facility would have been at a 7.445% interest rate.

Removed

The objective of the 2021 Swap is to eliminate the variability of cash flows in interest payments on the first $60.0 million of variable rate debt attributable to changes in benchmark one-month LIBOR interest rates.

Removed

The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark one-month LIBOR interest rates over the interest rate swap term. The changes in cash flows of the interest rate swap are expected to exactly offset changes in cash flows of the variable rate debt.

Removed

We designated the 2021 Swap as a cash flow hedge at inception. Cash settlements of the 2021 Swap are recognized in interest expense. Refer to Note 19 in the Notes to Consolidated Financial Statements included in this Annual Report for further discussion about the interest rate swap.

Removed

At December 31, 2022, using one-month LIBOR plus a 1.75% spread, the interest rate on the $1.0 million of outstanding borrowings under the ABL Facility was 6.00%. 28 Table of Contents Foreign Currency Risk Translation of our operating cash flows denominated in foreign currencies is impacted by changes in foreign exchange rates.

Top changes in NN INC's 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other NNBR 10-K year-over-year comparisons