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What changed in NN INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NN INC's 2024 and 2025 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 2025 report.

+308 added−210 removedSource: 10-K (2026-03-04) vs 10-K (2025-03-06)

Top changes in NN INC's 2025 10-K

308 paragraphs added · 210 removed · 172 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeSome material is purchased directly under contracts, some is consigned by the customer, and some is purchased directly from the steel mills. Power Solutions Power Solutions uses a wide variety of metals in various forms, including precious metals like gold, silver, palladium, and platinum, as well as copper, copper alloys, brass, brass alloys, and plastics.
Biggest changePower Solutions Power Solutions uses a wide variety of metals in various forms, including precious metals like gold, silver, palladium, and platinum, as well as copper, copper alloys, brass, brass alloys, inconel, steel alloys and plastics. Through our diverse network of suppliers, we minimize supplier concentration risk and provide a stable supply of raw materials at competitive pricing.
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. 6 Table of Contents Sales and Marketing A primary emphasis of our marketing strategy is to expand key customer relationships by offering high quality, high-precision, application-specific customer solutions with the value of a single supply chain partner for a wide variety of products and components.
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. 6 Sales and Marketing A primary emphasis of our marketing strategy is to expand key customer relationships by offering high quality, high-precision, application-specific customer solutions with the value of a single supply chain partner for a wide variety of products and components.
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. 8 Table of Contents Additionally, we rely on certain data and processes, including trade secrets and know-how, and the success of our business depends, to some extent, on such information remaining confidential.
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. 8 Additionally, we rely on certain data and processes, including trade secrets and know-how, and the success of our business depends, to some extent, on such information remaining confidential.
The high-precision capabilities are part of our zero-defect design process, which seeks to eliminate variability and manufacturing defects throughout the entire product lifecycle. We believe our production capabilities provide a competitive advantage as few other manufacturers are capable of meeting tolerance demands at any volume level requested by our customers.
The high-precision capabilities are part of our zero-defect design process, which seeks to eliminate variability and manufacturing defects throughout the entire product lifecycle. We believe our production capabilities provide a competitive advantage as few other manufacturers are capable of meeting tolerance demands the volume level requested by our customers.
We are included in customer designs and deployed in 5 Table of Contents 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.
We are included in customer designs and deployed in 5 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.
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 1.7 million square feet of manufacturing space.
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 1.5 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 26 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.
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, 2024, we had 26 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.
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, 2025, 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.
These activities form the basis for succession planning activities, up to and including the senior leadership level. 7 Table of Contents We also have apprenticeships, internships, and cooperative education programs in place at certain locations, which we intend to expand more broadly across the company.
These activities form the basis for succession planning activities, up to and including the senior leadership level. 7 We also have apprenticeships, internships, and cooperative education programs in place at certain locations, which we intend to expand more broadly across the company.
Our employees in the France, Brazil, and Mexico City plants are subject to labor council relationships that vary due to the diverse countries in which we operate. We believe we have a good working relationship with our employees and the labor council that represent them.
Our employees in the France, Brazil, and Mexico City plants are subject to labor council or union relationships that vary due to the diverse countries in which we operate. We believe we have a good working relationship with our employees and the labor council or unions that represent them.
Bevis has served the Company as President, Chief Executive Officer and Director since May 2023. Prior to joining the Company, Mr. Bevis served as President and Chief Executive Officer of Commercial Vehicle Group, Inc. (“CVGI”), from 9 Table of Contents March 2020 to May 2023, and as a Director from June 2014 to May 2023. Mr.
Bevis has served the Company as President, Chief Executive Officer and Director since May 2023. Prior to joining the Company, Mr. Bevis served as President and Chief Executive Officer of Commercial Vehicle Group, Inc. (“CVGI”), from March 2020 to May 2023, and as a Director from June 2014 to May 2023. Mr.
The information provided in our ESG Reports, as well as on our website, is not part of this Annual Report, and is therefore not incorporated by reference into this Annual Report or other filings with the SEC. Information about our Executive Officers The following table lists our executive officers as of February 14, 2025: Name Age Position Harold C.
The information provided in our ESG Reports, as well as on our website, is not part of this Annual Report, and is therefore not incorporated by reference into this Annual Report or other filings with the SEC. Information about our Executive Officers The following table lists our executive officers as of February 13, 2026: Name Age Position Harold C.
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 competitive but very fragmented supply chains.
KG; CIE Automotive, S.A.; IMS Gear SE & Co. KGaA; 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 competitive but very fragmented supply chains.
Headcount As of December 31, 2024, we employed approximately 2,600 full and part-time employees and 300 temporary workers, which includes approximately 1,000 employees in the U.S. and 1,900 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, 2025, we employed approximate ly 2,300 full and part-time employees and 250 temporary workers, which includes approximately 900 employees in the U.S. and 1,650 employees in other countries employed by our international subsidiaries. Of our total employment, approximately 12% are management/staff employees and 88% are production employees.
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.
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 one U.S. patent and numerous trademarks for various trade names throughout the world.
Customers Our products are supplied primarily to manufacturers for use in a broad range of industrial applications, including automotive; electrical; agricultural; construction; residential devices and equipment; aerospace and defense; medical; heating, ventilation, and air conditioning; and fluid power and diesel engines. Sales to each of our top ten customers are made to multiple customer locations and divisions throughout the world.
Customers Our products are supplied primarily to manufacturers for use in a broad range of industrial applications, including automotive; electrical; agricultural; construction; residential devices and equipment; aerospace and defense; medical; heating, ventilation, and air conditioning; and fluid power and diesel engines.
Bevis 65 President, Chief Executive Officer and Director Christopher H. Bohnert 58 Senior Vice President and Chief Financial Officer Timothy M. French 61 Senior Vice President and Chief Operating Officer D. Gail Nixon 54 Senior Vice President and Chief Human Resources Officer Jami A. Statham 44 Senior Vice President, General Counsel and Corporate Secretary Harold C.
Bevis 66 President, Chief Executive Officer and Director Christopher H. Bohnert 59 Senior Vice President and Chief Financial Officer Timothy M. French 62 Senior Vice President and Chief Operating Officer D. Gail Nixon 55 Senior Vice President and Chief Human Resources Officer Jami A. Statham 45 Senior Vice President, General Counsel and Corporate Secretary 9 Harold C.
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.
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. In addition, geopolitical conflicts, tariffs, inflation and other factors have made the price of metals more volatile.
We believe that our competitive strengths are product development, tool design, fabrication, tight tolerance processes, and customer solutions. With these strengths, we have built our reputation in the marketplace as a quality producer of technically difficult products.
We believe that competition within the electrical end market is based principally on quality, price, design capabilities, and speed of responsiveness and delivery. We believe that our competitive strengths are product development, tool design, fabrication, tight tolerance processes, and customer solutions. With these strengths, we have built our reputation in the marketplace as a quality producer of technically difficult products.
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 general, we pass through material cost fluctuations when incurred to our customers in the form of changes in selling prices.
Basic types include hot rolled steel, cold rolled steel (both carbon and alloy), stainless steel, steel alloys, copper alloys, extruded aluminum, die cast aluminum, aluminum alloy bar, gray and ductile iron castings, hot and cold forgings, titanium alloys, plastics, and mechanical tubing.
Basic types include hot rolled steel, cold rolled steel (both carbon and alloy), stainless steel, steel alloys, copper alloys, extruded aluminum, aluminum alloy bar, gray and ductile iron castings, hot and cold forgings, titanium alloys, plastics, and mechanical tubing. Material is purchased directly from the raw material suppliers, some of which may be directed by customers.
We must compete with numerous companies in each industry market segment. Our primary competitors are: Checon Corporation; Deringer-Ney, Inc.; Electrical Contacts, Ltd.; Interplex Industries, Inc.; J&J Machining, LLC; Norstan, Inc.; Owens Industries, Inc.; and Precinmac Precision Machining. We believe that competition within the electrical end market is based principally on quality, price, design capabilities, and speed of responsiveness and delivery.
We must compete with numerous companies in each industry market segment. Our primary competitors are: Checon Corporation; Deringer-Ney, Inc.; Electrical Contacts, Ltd.; Interplex Industries, Inc.; J&J Machining, LLC; Norstan, Inc.; Owens Industries, Inc.; Composidie, Inc., and Eaton Corporation.
Generally, we do not enter into long term supply contracts with our suppliers or commit to maintain minimum monthly purchases of materials.
This group also procures metal stampings from several domestic and foreign suppliers. Power Solutions bases purchase decisions on quality, service and price. Generally, we do not enter into long-term supply contracts with our suppliers or commit to maintain minimum monthly purchases of materials.
In 2024, our top ten customers accounted for approximately 51% of our net sales. In 2024, 64% of our products were sold to customers in North America, 17% to customers in Asia, 10% to customers in South America, and 9% to customers in Europe.
In 2025, 60% of our products were sold to customers in North America, 19% to customers in Asia, 10% to customers in South America, and 11% to customers in Europe. We sell our products to most of our largest customers under either sales contracts or agreed upon commercial terms.
Removed
Through our diverse network of suppliers, we minimize supplier concentration risk and provide a stable supply of raw materials at competitive pricing. This group also procures metal stampings from several domestic and foreign suppliers. Power Solutions bases purchase decisions on quality, service and price.
Added
Sales to each of our to p ten customers are made to multiple customer locations and divisions throughout the world. In 2025, our top ten customers accounted for approximately 49% of our net sales.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs 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; • compliance with respect to anti-bribery, competition, export and import, trade sanctions, data privacy, environmental, human rights and other laws; • 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.
Biggest changeRisks related to international operations that have adversely impacted and may continue to adversely impact our business, results of operations and reputation as well as our customers and suppliers include: • changes in tariff regulations and the imposition of trade restrictions or prohibitions, import tariffs or other duties or taxes, 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; • fluctuations in interest rates and currency exchange rates, including the relative strength or weakness of the U.S. dollar against foreign currencies that are important to our business; • recessions or marked declines specific to a particular country or region; • difficulties establishing and maintaining relationships with local original equipment manufacturers, distributors and dealers; • difficulty in staffing and managing geographically diverse operations; • differing labor regulations; • compliance with respect to anti-bribery, competition, export and import, trade sanctions, data privacy, environmental, human rights and other laws; • political uncertainty, instability, civil unrest, government controls over certain sectors and human rights and forced labor 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.
We may not realize all of the anticipated benefits from any future strategic portfolio acquisition, or those benefits may take longer to realize than expected. We either may not realize all of the anticipated benefits from any future strategic portfolio acquisition, or it may take longer to realize such benefits.
We may not realize all of the anticipated benefits from any future strategic acquisition, or those benefits may take longer to realize than expected. We either may not realize all of the anticipated benefits from any future strategic portfolio acquisition, or it may take longer to realize such benefits.
The 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.
The 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; 21 • 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.
Shifts in weather patterns caused by climate change could increase the frequency, severity, or duration of certain adverse weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures, or flooding, which could result in more significant business and supply chain interruptions, damage to our products and facilities as well as the infrastructure of our customers, reduced workforce availability, increased costs of raw materials and components, increased liabilities, and decreased revenues than what we have experienced in the past from such events.
Shifts in weather patterns caused by climate change could increase the frequency, severity, or duration of certain adverse 15 weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures, or flooding, which could result in more significant business and supply chain interruptions, damage to our products and facilities as well as the infrastructure of our customers, reduced workforce availability, increased costs of raw materials and components, increased liabilities, and decreased revenues than what we have experienced in the past from such events.
New laws and regulations, including those which may relate to emissions of greenhouse gases, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, prospects, financial condition, results of operations, or cash flows.
Additionally, new laws and regulations, including those which may relate to emissions of greenhouse gases, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, prospects, financial condition, results of operations, or cash flows.
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, liquidity and results of operations.
We anticipate that the provisions of Section 203 may encourage parties interested in acquiring us to negotiate in advance with our board of directors, because the stockholder approval requirement would be avoided if a majority of the directors then in office approve either the business combination or the transaction that results in the stockholder becoming an interested stockholder.
We anticipate that the provisions of Section 203 may encourage parties interested in acquiring us to negotiate in advance with the Board, because the stockholder approval requirement would be avoided if a majority of the directors then in office approve either the business combination or the transaction that results in the stockholder becoming an interested stockholder.
Disruptions in the supply of raw materials and components could temporarily impair our ability to manufacture our products for our customers or require us to pay higher prices to obtain these raw materials or components from other sources, which could have a material adverse effect on our business and our results of operations.
Disruptions in the supply of raw materials and components could temporarily impair our ability to manufacture our products for our customers or require us to pay higher prices to obtain these raw materials or components from other sources, which could have a material adverse effect on our business, liquidity and results of operations.
Our competitors are continuously exploring and implementing improvements in technology and manufacturing processes in order to improve product quality, and our ability to remain competitive will depend, among other things, on whether we are able to keep pace with such quality improvements in a cost-effective manner.
Our competitors are continuously exploring and implementing improvements in technology and manufacturing processes to improve product quality, and our ability to remain competitive will depend, among other things, on whether we are able to keep pace with such quality improvements in a cost-effective manner.
The consequences of damage to our reputation include, among other things, increasing the number of litigation claims and the size of damages asserted or subjecting us to enforcement actions, fines, and penalties, all of which would cause us to incur significant defense related costs and expenses.
The consequences of damage to our reputation include, among other things, increasing the number of 22 litigation claims and the size of damages asserted or subjecting us to enforcement actions, fines, and penalties, all of which would cause us to incur significant defense related costs and expenses.
No assurance can be given as to whether, when, or in what form changes to the applicable tax laws applicable to us may be enacted. Changes in tax laws, tax rulings, or interpretations of existing laws could materially affect our business, cash flow, results of operations, and financial condition.
No assurance can be given as to whether, when, or in what form changes to the applicable tax laws applicable to us may be enacted. Changes in tax laws or interpretations of existing tax laws could materially affect our business, cash flow, results of operations, and financial condition.
In particular, we have experienced, and could continue to experience, among other things: (1) global supply disruptions, especially in China; (2) labor disruptions; (3) an inability to manufacture; (4) an inability to sell and distribute our products to our customers; (5) a decline in customer demand during and following the pandemic, whether as a result of our inability to satisfy customer demand in a timely manner due to raw material shortages, supply chain disruptions, inflationary cost pressures, or work stoppages experienced by one or more of our customers; and (6) an impaired ability to access credit and the capital markets, especially in light of the rising interest rates.
In particular, we have experienced, and could continue to experience, among other things: (1) global supply disruptions, especially in China; (2) labor disruptions; (3) an inability to manufacture; (4) an inability to sell and distribute our products to our customers; (5) a decline in customer demand during and following the pandemic, whether as a result of our inability to satisfy customer demand in a timely manner due to raw material shortages, supply chain disruptions, inflationary cost pressures, or work stoppages experienced by one or more of our customers; and (6) an impaired ability to access credit and the capital markets, especially in light of the fluctuating interest rates.
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; 18 Table of Contents • 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.
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.
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.
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 compliance or remediation liabilities and costs.
If we cannot respond to disruptions in our operations, whether by finding alternative suppliers or replacing capacity at key manufacturing or distribution locations, or if we are unable to quickly repair damage to our information, production, or supply systems, we may be late in delivering, or be unable to deliver, products to our customers and may also be unable to track orders, inventory, receivables, and payables.
If we cannot respond to disruptions in our operations, whether by finding 10 alternative suppliers or replacing capacity at key manufacturing or distribution locations, or if we are unable to quickly repair any damage to our information, production, or supply systems, we may be late in delivering, or be unable to deliver, products to our customers and may also be unable to track orders, inventory, receivables, and payables.
We may not be able to generate sufficient cash to service all of our indebtedness, and we may not be able to refinance our debt obligations as they mature.
We may not be able to generate sufficient cash to service all of our indebtedness and other obligations, and we may not be able to refinance our debt obligations as they mature.
These provisions include, for example, the authorization of our board of directors to issue up to five million preferred shares without a stockholder vote and that stockholders may not call a special meeting. We are a Delaware corporation subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law.
These provisions include, for example, the authorization of the Board to issue up to five million preferred shares without a stockholder vote and that stockholders may not call a special meeting. We are a Delaware corporation subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law.
Physical effects of climate change or legal, regulatory or market measures intended to address climate change could materially adversely affect our business and operations. Risks associated with climate change are subject to increasing societal, regulatory and political focus in the U.S. and globally.
Physical effects of climate change or legal, regulatory or market measures intended to address climate change could materially adversely affect our business and operations. Risks associated with climate change are subject to ongoing societal, regulatory and political focus in the U.S. and globally.
These provisions apply even if the offer may be considered beneficial by some of our stockholders. If a change of control or change in management is delayed or prevented, the market price of our common stock could decline. 17 Table of Contents Risks Related to Acquisitions and Divestitures Acquisitions may constitute an important part of our future growth strategy.
These provisions apply even if the offer may be considered beneficial by some of our stockholders. If a change of control or change in management is delayed or prevented, the market price of our common stock could decline. Risks Related to Acquisitions and Divestitures Acquisitions may constitute an important part of our future growth strategy.
If we do not accurately align our manufacturing capabilities with demand it could have a material adverse effect on our results of operations, financial condition and cash flows. Our markets are highly competitive, and many of our competitors have significant advantages that could adversely affect our business.
If we do not accurately align our manufacturing capabilities and/or inventory levels with demand it could have a material adverse effect on our results of operations, financial condition and cash flows. Our markets are highly competitive, and many of our competitors have significant advantages that could adversely affect our business.
Among the factors that could affect our stock price are: • macro or micro-economic factors; • our operating and financial performance and prospects; • quarterly variations in the rate of growth of our financial indicators, such as earnings per share, net income and revenues; • changes in revenue or earnings estimates or publication of research reports by analysts; • loss of any member of our senior management team; • speculation in the press or investment community; • strategic actions by us or our competitors, such as acquisitions or restructuring; • sales of our common stock by stockholders; • general market conditions; • domestic and international economic, legal, and regulatory factors unrelated to our performance; • loss of a major customer; and • the declaration and payment of a dividend.
Among the factors that could affect our stock price are: • macro or micro-economic factors; • our operating and financial performance and prospects; • quarterly variations in the rate of growth of our financial indicators, such as earnings per share, net income and revenues; • changes in revenue or earnings estimates or publication of research reports by analysts; • loss of any member of our senior management team; • speculation in the press or investment community; • strategic actions by us or our competitors, such as acquisitions or restructuring; 20 • sales of our common stock by stockholders; • general market conditions; • domestic and international economic, legal, and regulatory factors unrelated to our performance; • loss of a major customer; • actions or requests by activist stockholders; • issuance of additional equity; and • the declaration and payment of a dividend.
In addition, we could be adversely affected by violations of the Foreign Corrupt Practices Act (the “FCPA”) and similar worldwide anti-bribery laws, as well as export controls, which may include International Traffic in Arms Regulation and Export Administration Regulations, and economic sanction laws.
In addition, we could be adversely affected by violations of the Foreign Corrupt Practices Act (the “FCPA”) and similar worldwide anti-bribery laws, as well as export controls, which may include International Traffic in Arms Regulation and Export Administration Regulations, and economic sanction laws (collectively, “Trade Laws”).
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 12 Table of Contents employees.
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 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 2024, sales to various U.S. and foreign divisions of our ten largest customers accounted for approximately 51% 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 2025, sales to various U.S. and foreign divisions of our ten largest customers accounted for approximately 49% of our consolidated net sales.
The military conflicts (including the ongoing war between Russia and Ukraine and conflict in the Middle East), 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 11 Table of Contents partners or customers in other countries.
The military conflicts (including the ongoing war between Russia and Ukraine and conflict in the Middle East), 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.
In addition, the covenants in our debt agreements require us to meet specified financial ratios and satisfy other financial condition tests.
Further, the covenants in our debt agreements require us to meet specified financial ratios and satisfy other financial condition tests.
If we are found to be liable for FCPA, export control or sanction violations, we could suffer from criminal or civil penalties or other sanctions, including loss of export privileges or authorization needed to conduct aspects of our international business, which could have a material adverse effect on our business, prospects, financial condition, results of operations, or cash flows.
If we are found to be liable for violations of Trade Laws, we could suffer from criminal or civil penalties or other sanctions, including loss of export privileges or authorization needed to conduct aspects of our international business, which could have a material adverse effect on our business, prospects, financial condition, results of operations, or cash flows.
We obtain a substantial portion 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, 2024, sales to customers located outside of the U.S. accounted for 43% of our consolidated net sales.
We obtain a portion 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, 2025, sales to customers located outside of the U.S. accounted for 46% of our consolidated net sales.
These incurrence covenants will limit our ability to, among other things: • incur additional indebtedness or issue certain preferred equity; • pay dividends on, repurchase, or make distributions in respect of our capital stock, prepay, redeem, or repurchase certain debt or make other restricted payments; • make certain investments and acquisitions; • create certain liens; • enter into agreements restricting our subsidiaries’ ability to pay dividends to us; • consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets; • alter our existing businesses; and • enter into certain transactions with our affiliates.
The agreements governing our indebtedness include covenants which limit our ability to, among other things: • incur additional indebtedness or issue certain preferred equity; • pay dividends on, repurchase, or make distributions in respect of our capital stock, prepay, redeem, or repurchase certain debt or make other restricted payments; 19 • make certain investments and acquisitions; • create certain liens; • enter into agreements restricting our subsidiaries’ ability to pay dividends to us; • consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets; • alter our existing businesses; and • enter into certain transactions with our affiliates.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control.
Our ability to make scheduled payments on or to refinance our debt obligations and outstanding Series D Preferred Stock depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control.
Furthermore, if we were unable to repay the amounts due and payable under our secured debt agreements, our secured lenders could proceed against the collateral granted to them to secure our borrowings. Such actions by the lenders could also cause cross defaults under our other debt agreements.
Furthermore, if we were unable to repay the amounts due and payable under our secured debt agreements, including the Term Loan Facility and the ABL Facility, the lenders thereunder could proceed against the collateral granted to them to secure our borrowings. Such actions by the lenders could also cause cross defaults under our other debt agreements.
As our debt obligations mature or if our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital, or restructure or refinance our indebtedness.
As our debt obligations mature or if our cash flows and capital resources are insufficient to fund our debt service or cash dividend obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital, or restructure or refinance our indebtedness or redeem our Series D Preferred Stock.
Any failure to prevent a data breach or a security failure of our or our service providers’ information technology systems could interrupt our operations, result in downtime, divert our planned efforts and resources from other projects, damage our reputation and brand, damage our competitive position, subject us to liability claims or regulatory penalties under laws protecting the privacy of personal information.
Any data breach or a security failure of our or our service providers’ information technology systems could interrupt our operations, result in downtime, divert our planned efforts and resources from other projects, damage our reputation and brand, damage our competitive position or subject us to liability claims or regulatory penalties under applicable law.
If that occurs, our customers’ confidence in us and long-term demand for our products 10 Table of Contents 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. We purchase raw materials from suppliers and sell products to customers outside the U.S. and are subject to several risks related to doing business internationally.
From time to time, we may be subject to legal proceedings brought by private parties or governmental authorities with respect to environmental matters, including matters involving alleged noncompliance with or liability under environmental, health and safety laws, property damage or personal injury.
From time to time, we may be subject to legal proceedings or investigations brought by private parties or governmental authorities with respect to environmental, occupational health and safety matters, including matters involving alleged noncompliance with or liability under environmental, health and safety laws, such as Occupational and Safety Health Authority standards, property damage or personal injury or fatality.
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.
Pandemics, epidemics, disease outbreaks and other public health crises could materially adversely impact our business, 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.
In connection therewith, we may seek to refinance or retire existing indebtedness, incur new or additional indebtedness or issue equity or equity-linked securities, in each case, depending on market and other conditions.
In connection therewith, we may seek to refinance or retire existing indebtedness or redeem the Series D Preferred Stock, incur new or additional indebtedness or issue equity or equity-linked securities, in each case, depending on market and other conditions.
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.
Factors that are hard to predict or are beyond our control, such as supply chain disruptions, raw material shortages, natural disasters, including hurricanes, tornadoes, and other adverse weather, other catastrophic events, such as disasters occurring at our customers’, suppliers’, co-manufacturers’ or our manufacturing facilities, 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.
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; 15 Table of Contents • 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 debt and Series D Preferred Stock 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 and, in the future, if permitted under then effective credit agreements and applicable law, dividends on our Series D Preferred Stock that are currently accrued but unpaid, 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; • any failure to comply with the obligations of any of our agreements, including restrictive and financial covenants 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 and capital structure may prevent us from exploring.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although our debt agreements contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial.
Although the agreements governing our existing indebtedness contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial.
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.
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.
If any one of these events were to occur, our business, prospects, financial condition, results of operations, or cash flows could be materially and adversely affected.
If any one of these events were to occur, our business, prospects, financial condition, results of operations, or cash flows could be materially and adversely affected. For more information regarding our indebtedness, please see “Item 7.
For more information regarding our indebtedness, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.” Despite our indebtedness level, we may still be able to incur substantial additional amounts of debt, which could further exacerbate the risks associated with our substantial indebtedness.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.” Despite our indebtedness level, we may still be able to incur substantial additional amounts of debt or issue additional shares of preferred stock, which could further exacerbate the risks associated with our substantial indebtedness.
A failure of our components could lead to a product recall. If a recall were to happen as a result of our components failing, we could bear a substantial part of the cost of correction.
The majority of our products are components of our customers’ products that are used in critical industrial applications. A failure of our components could lead to a product recall. If a recall were to happen as a result of our components failing, we could bear a substantial part of the cost of correction.
Any new pandemic or other public health crises, or future public health crises, could have a material impact on our business, financial condition, results of 13 Table of Contents operations and cash flows going forward.
Any new pandemic or other public health crises, or future public health crises, could have a material impact on our business, financial condition, results of operations and cash flows going forward and may also have the effect of heightening other risks and uncertainties disclosed below.
More recently, the closures of Silicon Valley Bank and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation (“FDIC”) created bank-specific and broader financial institution liquidity risk and concerns.
In addition, in 2023 the closures of financial institutions and their placement into receivership with the Federal Deposit Insurance Corporation, created bank-specific and broader financial institution liquidity risk and concerns.
Our inability to effectively manage the timing, quality and costs of these new program launches could adversely affect our financial condition, operating results and cash flows. We face the challenge of accurately aligning our capacity with our demand. We face periods when demand fluctuates significantly higher or lower than our normal operating levels, including variability driven by supply chain inconsistency.
Our inability to effectively manage the timing, quality and costs of these new program launches could adversely affect our financial condition, operating results and cash flows. 12 We face the challenge of accurately aligning our capacity and/or inventory levels with our demand.
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, but not limited to, web hosting, accounting, payroll and benefit services.
In addition, we engage third-party service providers that may collect and hold personal data of our employees in connection with providing business services to us, including, but not limited to, web hosting, accounting, payroll and benefit services. The protection of the information technology systems on which we rely is critically important to us.
We cannot predict whether, and to what extent, there may be changes to international trade agreements or whether quotas, duties, tariffs, exchange controls or other restrictions on our products will be changed or imposed. In addition, an open conflict or war across any region could affect our ability to obtain raw materials.
We cannot predict whether, and to what extent, there may be changes to international trade agreements or whether quotas, duties, tariffs, exchange controls or other restrictions on our products will be changed or imposed.
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.
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. 16 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.
In the event our products and solutions fail to meet these standards, our reputation could be harmed, which could damage our competitive advantage, causing us to lose customers and resulting in lower revenues. The majority of our products are components of our customers’ products that are used in critical industrial applications.
Quality is important to us and our customers, and our products and solutions are held to high quality and performance standards. In the event our products and solutions fail to meet these standards, our reputation could be harmed, which could damage our competitive advantage, causing us to lose customers and resulting in lower revenues.
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.
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.
The terms of our existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness.
In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.
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.
Additionally, 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.
Risks Related to Our Capitalization Our indebtedness could adversely affect our business, prospects, financial condition, results of operations, or cash flows.
Risks Related to Our Capital Structure Our indebtedness and Series D Perpetual Preferred Stock (the “Series D Preferred Stock”) could adversely affect our business, prospects, financial condition, results of operations, or cash flows.
Changes in U.S. or foreign tax laws could have a material adverse effect on our business, cash flow, results of operations, and financial condition. The U.S. and foreign tax laws and regulations, as well as the administrative interpretations of those laws and regulations, are constantly under review and may be changed at any time, possibly with retroactive effect.
Significant delays in receiving our tax refund could adversely impact us. The U.S. and foreign tax laws and regulations, as well as the administrative interpretations of those laws and regulations, are constantly under review and may be changed at any time, possibly with retroactive effect.
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.
Various events described above have occurred in the past and may occur 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.
Any increased costs or reduced revenues as a result of foreign currency fluctuations could affect our profits. In 2024, the U.S. dollar strengthened against foreign currencies which unfavorably affected our revenue by $3.5 million. In contrast, a weakening of the U.S. dollar may beneficially affect our business, prospects, financial condition, results of operations, or cash flows.
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. Any increased costs or reduced revenues as a result of foreign currency fluctuations could affect our profits. In 2025, the U.S. dollar weakened against foreign currencies which unfavorably affected our revenue by $0.6 million.
Changes in U.S. administrative policy may lead to significant increases in tariffs for imported goods among other possible changes, which could strain international trade relations and increase the risk that foreign governments implement retaliatory tariffs on goods imported from the United States.
Changes in U.S. administrative policy have led, and may continue to lead, to significant increases in tariffs for imported goods among other possible changes, which has and may continue to result in foreign governments proposing or implementing their own retaliatory tariffs on goods imported from the U.S.
In periods of weak demand, we may face under-utilized capacity and un-recovered overhead costs, while in periods of strong demand we may experience unplanned costs and could fail to meet customer demand. We cannot guarantee that we will be able to adequately adjust our manufacturing capacity in response to significant changes in customer demand, which could harm our business.
We cannot guarantee that we will be able to adequately adjust our manufacturing capacity and/or inventory levels in response to significant changes in customer demand, which could harm our business.
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.
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. Our business depends upon good relations with our employees.
We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. We regularly review our capital structure, various financing alternatives and conditions in the debt and equity markets in order to opportunistically enhance our capital structure.
We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness or make dividend payments with respect to the Series D Preferred Stock.
The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these laws.
The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from offering, providing, or authorizing the provision of anything of value directly or indirectly to government officials and other persons for the purpose of obtaining or retaining business.
Although the Department of the Treasury, the Federal Reserve and the FDIC jointly confirmed that depositors at Silicon Valley Bank and Signature Bank would continue to have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty.
Future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty.
Any widespread imposition of new or increased tariffs could increase the cost of, and reduce the demand for, our products, as well as result in increased inflationary pressure, any of which could have a material adverse effect on our business, prospects, financial condition, results of operations, or cash flows.
Any reduction in customer demand for our components as a result of such tariffs, taxes, customs duties and/or other trade regulations, could have a material adverse effect on our business, prospects, financial condition, results of operations, cash flows or liquidity.
Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher 16 Table of Contents interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
Any refinancing of our debt or financings related to the redemption of our Series D Preferred Stock could be at higher cost and may require us to comply with more onerous covenants, which could further restrict our business operations.
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.
A security breach or disruption to our information technology systems, or those of the third parties with whom we work, 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 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.
The results of these inspections can include inspectional observations on FDA’s Form-483, warning letters, or other forms of enforcement.
The principal amount outstanding under our term loan facility (the “Term Loan Facility”) as of December 31, 2024, was $114.4 million, and based on the interest rate then in effect, annual cash interest payments would be approximately $13.0 million, with an additional $1.1 million accrued as paid-in-kind interest.
Based on interest rates in effect as of December 31, 2025, annual cash interest payments on the Term Loans would be approximately $10.9 million, annual paid-in-kind interest payments on the Term Loans would be approximately $5.4 million, and annual cash interest payments on the Revolving Loans, assuming no change in the amount outstanding, would be $0.3 million.
Approximately 31% 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.
We have international operations that are subject to foreign economic uncertainties and foreign currency fluctuation. Appro ximately 46% 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.
Our third-party service providers could also be the source of a cybersecurity attack on, or breach of, our information technology systems.
Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program. Our third-party service providers could also be the source of a cybersecurity attack on, or breach of, our information technology systems.
To varying degrees, each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing and 14 Table of Contents distribution of medical devices. We cannot guarantee that we will be able to obtain marketing clearance for our new products or enhancements or modifications to existing products.
We cannot guarantee that we will be able to obtain marketing clearance for our new products or enhancements or modifications to existing products.
Accurately forecasting our expected volumes and appropriately adjusting our capacity are important factors in determining our results of operations and cash flows. We manage our capacity by adjusting our manufacturing workforce, capital expenditures and purchases from suppliers.
We face periods when demand fluctuates significantly higher or lower than our normal operating levels, including variability driven by supply chain inconsistency. Accurately forecasting our expected volumes and appropriately adjusting our capacity and/or inventory levels are important factors in determining our results of operations and cash flows.
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.
To date, we have committed, and expect to continue to make, significant expenditures in our efforts to achieve and maintain compliance with these requirements at our facilities. If we violate or fail to comply with these laws, regulations or permits, we could be fined or otherwise sanctioned by regulators.
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.
Compliance with environmental, health and safety legislation and regulatory requirements may prove to be more limiting and costly than we anticipate. We maintain a compliance program to assist in preventing and, if necessary, correcting environmental problems.
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, air emissions, wastewater discharges, the generation, storage, handling and disposal of hazardous waste generated at our facilities, the investigation and remediation of contamination and maintaining a safe work-place environment. Under such laws and regulations, we are required to obtain permits from governmental authorities for some of our operations.
Quality problems with our products could harm our reputation, erode our competitive advantage and could result in a product recall. Quality is important to us and our customers, and our products and solutions are held to high quality and performance standards.
Shortages or other disruptions in the supply of these commodities or precious metals could also delay sales or increase costs. Quality problems with our products could harm our reputation, erode our competitive advantage and could result in a product recall.
Despite our security measures and business continuity plans, we face risks associated with security breaches or disruptions to the information technology systems on which we rely, which could result from, among other incidents, attacks by hackers, computer viruses, malware (including “ransomware”), phishing attacks or breaches due to errors or malfeasance by employees, contractors, and others who have access to these systems.
Despite our security measures and business continuity plans, we face risks associated with security breaches or disruptions to the information technology systems on which we rely, which could result from, among other incidents social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, malicious code (such as computer viruses and worms), ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, personnel misconduct or error, attacks enhanced or facilitated by AI, and other similar threats.
If new debt is added to our and our subsidiaries’ debt levels, the related risks that we now face could increase. Our debt agreements contain restrictions that will limit our flexibility in operating our business. Our debt agreements contain various incurrence covenants that limit our ability to engage in specified types of transactions.
If new indebtedness is added to our and our subsidiaries’ debt levels, the related risks that we now face could increase. In addition, we can issue shares of our preferred stock in one or more series and can set the terms of the preferred stock without seeking any further approval from our common stockholders.
We are subject to extensive federal, state, local, and foreign environmental, health, and safety laws and regulations concerning matters such as air emissions, wastewater discharges, solid and hazardous waste handling, and disposal and the investigation and remediation of contamination.
Our business activities are subject to extensive federal, state, local, and foreign laws and regulations relating to pollution control, protection of the environment and occupational safety and health.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changePenetration testing is conducted by an outside party on a continual basis, resulting in rapid discovery and remediation of potential weaknesses. To ensure employee compliance with our processes, we require yearly cybersecurity training and conduct phish testing, including simulated phishing attempts, multiple times per month.
Biggest changeWe use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats. For example, penetration testing is conducted by an outside party on a periodic basis, resulting in rapid discovery and remediation of potential 23 weaknesses.
The IT Team utilizes third party security experts to provide continuous external penetration testing, conduct security reviews, and to provide a managed security operations center that does 24/7 monitoring as well as provide additional resources for threat and incident response activities. Cybersecurity Risk Management and Strategy We employ a multi-layered approach to protect our information systems from cybersecurity threats.
The IT Team utilizes third party security experts to provide continuous external penetration testing, conduct security reviews, and to provide a managed security operations center that does regular monitoring as well as provide additional resources for threat and incident response activities. Cybersecurity Risk Management and Strategy We employ a multi-layered approach to protect our information systems from cybersecurity threats.
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.
We also collect and hold personal data of our employees in connection with their employment. In addition, we engage third-party service providers that may collect and hold personal data of our employees in connection with providing business services to us, including web hosting, accounting, payroll and benefit services.
We have around the clock security operations center coverage that uses an industry leading security information and event management tool to aggregate and analyze data and provide immediate alerts of potential breaches. All hardware within our information systems run an industry-standard anti-virus solution, and we have an established patching program in place to keep security updates current.
We have security operations center coverage that uses an industry standard security information and event management tool to aggregate and analyze data and provide alerts of potential breaches. Hardware within our information systems run an industry-standard anti-virus solution, and we have a patching program in place to keep security updates current.
Additional training is assigned to employees as deemed necessary to reduce the risk of cybersecurity threats. In case of a cybersecurity incident, we maintain a cybersecurity insurance policy to reduce any direct costs that could be incurred.
To ensure employee compliance with our processes, we require yearly cybersecurity training and conduct phish testing, including regular simulated phishing attempts. Additional training is assigned to employees as deemed necessary to reduce the risk of cybersecurity threats. In case of a cybersecurity incident, we maintain a cybersecurity insurance policy to reduce any direct costs that could be incurred.
Although impacts of past cybersecurity incidents have been immaterial to date, 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 cybersecurity incidents have been immaterial to date, the impacts of such events in the future may materially and adversely affect our business, financial condition, or results of operations. For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1.
Added
We use third-party service providers to perform a variety of functions throughout our business, such as application providers and hosting companies. We have a vendor management process to manage cybersecurity risks associated with our use of these providers.
Added
Depending on the nature of the services provided, the sensitivity of the information systems and data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider.
Added
Item 1A. Risk Factors in this Annual Report, including “ A security breach or disruption to our information technology systems, or those of the third parties with whom we work, could materially adversely affect our business, financial condition, results of operations and reputation .”

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLeased 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.
Biggest changeLeased Wuxi, China Plant China Leased 24 Power Solutions Group Location General Character Country Owned or Leased Algonquin, Illinois Plant U.S.A. Leased Attleboro, Massachusetts Plant 1 U.S.A. Leased Attleboro, Massachusetts Plant 2 U.S.A. Leased Attleboro, Massachusetts Plant 3 U.S.A. Leased Attleboro, Massachusetts Plant 4 U.S.A Leased Attleboro, Massachusetts Office U.S.A.
Item 2. Properties As of December 31, 2024, we owned or leased 26 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.
Item 2. Properties As of December 31, 2025, we owned or lease d 27 facilities in a total of six c ountries, 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.
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 (1) Facilities that we plan to close during 2025.
Leased Foshan City, China Plant China Leased Mexico City, Mexico Plant Mexico Owned North Attleboro, Massachusetts Plant U.S.A. Owned Palmer, Massachusetts Plant U.S.A. Leased Joint Venture Location General Character Country Owned or Leased Wuxi, China Plant 1 China Leased Wuxi, China Plant 2 China Leased Corporate Location General Character Country Owned or Leased Charlotte, North Carolina Office U.S.A Leased
Owned Juarez, Mexico (1) 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.
Mobile Solutions Group Location General Character Country Owned or Leased Campinas, Brazil Office Brazil Leased Kamienna Gora, Poland Plant 1 Poland Owned Kamienna Gora, Poland Plant 2 Poland Owned Kentwood, Michigan Plant 1 U.S.A. Leased Kentwood, Michigan Plant 2 U.S.A. Leased Kentwood, Michigan Plant 3 U.S.A. Leased Kentwood, Michigan Office U.S.A.
These plants are 20 Table of Contents 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 (1) Plant U.S.A.
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. The following table lists the current locations of our facilities by segment.
Removed
Owned Attleboro, Massachusetts Plant 1 U.S.A. Leased Attleboro, Massachusetts Plant 2 U.S.A. Leased Attleboro, Massachusetts Plant 3 U.S.A. Leased Attleboro, Massachusetts Office, Warehouse U.S.A. Leased Foshan City, China Plant China Leased Mexico City, Mexico Plant Mexico Owned North Attleboro, Massachusetts Plant U.S.A. Owned Palmer, Massachusetts Plant U.S.A.
Added
Owned Marnaz, France Plant France Owned Marshall, 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 Sao Joao da Boa Vista, Brazil Plant 3 Brazil Leased Wellington, Ohio Plant U.S.A.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings As disclosed in Note 12 of the Notes to Consolidated Financial Statements included elsewhere in this Annual Report, we are engaged in certain legal proceedings, and the disclosure set forth in Note 12 relating to certain commitments and contingencies is incorporated herein by reference. Item 4.
Biggest changeItem 3. Legal Proceedings As disclosed in Note 12 of the Notes to Consolidated Financial Statements included elsewhere in this Annual Report, we are engaged in certain legal proceedings, and the disclosure set forth in Note 12 relating to certain commitments and contingencies is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 25 PART II
Removed
Mine Safety Disclosures Not applicable. 21 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe declaration and payment of dividends are subject to the sole discretion of our Board of Directors and depend upon our profitability, financial condition, capital needs, credit agreement restrictions, future prospects, and other factors deemed relevant by the Board of Directors.
Biggest changeThe declaration and payment of dividends are subject to the sole discretion of the Board and depend upon our profitability, financial condition, capital needs, credit agreement restrictions, future prospects, and other factors deemed relevant by the Board. 26 Issuer Purchases of Equity Securities The following table provides information about purchases we made during the quarter ended December 31, 2025.
The following graph and table assume that a $100 investment was made at the close of trading on December 31, 2019. 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, 2020. 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, 2019, to December 31, 2024.
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, 2020, to December 31, 2025.
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 11, 2025, there were 4,040 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 23, 2026 , there were 4,196 beneficial owners of record of our common stock.
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 2024 3,689 $ 3.74 — — November 2024 — — — — December 2024 1,396 3.27 — — Total 5,085 $ 3.61 — — _______________________________ (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.
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 2025 — $ — — — November 2025 — — — — December 2025 — — — — Total — $ — — — _______________________________ (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.
These shares may be deemed to be “issuer purchases” of shares that are required to be disclosed pursuant to this Item. Item 6. Reserved 23 Table of Contents
These shares may be deemed to be “issuer purchases” of shares that are required to be disclosed pursuant to this Item. Item 6. Reserved 27
Comparison of Five-Year Cumulative Total Return (Performance results through December 31, 2024) 2019 2020 2021 2022 2023 2024 NN, Inc. $ 100.00 $ 71.02 $ 44.31 $ 16.21 $ 43.22 $ 35.33 Russell 2000 $ 100.00 $ 119.96 $ 137.74 $ 109.59 $ 128.14 $ 142.93 S&P SmallCap 600 Industrials $ 100.00 $ 111.97 $ 140.98 $ 127.72 $ 168.39 $ 197.28 Source: Zachs Investment Research, Inc.
Comparison of Five-Year Cumulative Total Return (Performance results through December 31, 2025) 2020 2021 2022 2023 2024 2025 NN, Inc. $ 100.00 $ 62.40 $ 22.83 $ 60.86 $ 49.75 $ 19.47 Russell 2000 $ 100.00 $ 114.82 $ 91.35 $ 106.82 $ 119.14 $ 134.40 S&P SmallCap 600 Industrials $ 100.00 $ 125.90 $ 114.06 $ 150.38 $ 176.18 $ 200.49 Source: Zachs Investment Research, Inc.
Removed
See 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. 22 Table of Contents Issuer Purchases of Equity Securities The following table provides information about purchases we made during the quarter ended December 31, 2024.

Item 7. Management's Discussion & Analysis

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

45 edited+41 added−14 removed17 unchanged
Biggest changeYears Ended December 31, 2024 2023 2022 Net sales 100.0 % 100.0 % 100.0 % Cost of sales (exclusive of depreciation and amortization shown separately below) 85.0 % 85.7 % 84.4 % Selling, general, and administrative expense 10.7 % 9.7 % 10.0 % Depreciation and amortization 9.8 % 9.4 % 9.5 % Other operating expense (income), net 0.5 % (0.3) % 0.4 % Loss from operations (5.9) % (4.5) % (4.2) % Interest expense 4.8 % 4.3 % 3.0 % Loss on extinguishment of debt 0.1 % — % — % Other expense (income), net (1.0) % 2.2 % (1.0) % Loss before provision for income taxes and share of net income from joint venture (9.8) % (11.0) % (6.2) % Provision for income taxes (0.5) % (0.5) % (0.3) % Share of net income from joint venture 2.1 % 1.2 % 1.3 % Net loss (8.2) % (10.2) % (5.2) % 25 Table of Contents Year Ended December 31, 2024 compared to the Year Ended December 31, 2023 Years Ended December 31, 2024 2023 $ Change Net sales $ 464,290 $ 489,270 $ (24,980) Cost of sales (exclusive of depreciation and amortization shown separately below) 394,812 419,175 (24,363) Selling, general, and administrative expense 49,481 47,436 2,045 Depreciation and amortization 45,302 46,120 (818) Other operating expense (income), net 2,243 (1,657) 3,900 Loss from operations (27,548) (21,804) (5,744) Interest expense 22,095 21,137 958 Loss on extinguishment of debt 349 — 349 Other expense (income), net (4,558) 10,730 (15,288) Loss before provision for income taxes and share of net income from joint venture (45,434) (53,671) 8,237 Provision for income taxes (2,410) (2,285) (125) Share of net income from joint venture 9,571 5,806 3,765 Net loss $ (38,273) $ (50,150) $ 11,877 Net Sales .
Biggest changeYears Ended December 31, 2025 2024 2023 Net sales 100.0 % 100.0 % 100.0 % Cost of sales (exclusive of depreciation and amortization shown separately below) 85.9 % 85.0 % 85.7 % Selling, general, and administrative expense 10.9 % 10.7 % 9.7 % Depreciation and amortization 8.5 % 9.8 % 9.4 % Other operating expense (income), net (0.9) % 0.5 % (0.3) % Loss from operations (4.5) % (5.9) % (4.5) % Interest expense 5.3 % 4.8 % 4.3 % Loss on extinguishment of debt 0.7 % 0.1 % — % Other expense (income), net (1.1) % (1.0) % 2.2 % Loss before provision for income taxes and share of net income from joint venture (9.4) % (9.8) % (11.0) % Provision for income taxes (0.7) % (0.5) % (0.5) % Share of net income from joint venture 2.1 % 2.1 % 1.2 % Net loss (8.1) % (8.2) % (10.2) % 29 Consolidated Results Years Ended December 31, 2025 2024 $ Change Net sales $ 422,207 $ 464,290 $ (42,083) Cost of sales (exclusive of depreciation and amortization shown separately below) 362,848 394,812 (31,964) Selling, general, and administrative expense 46,171 49,481 (3,310) Depreciation and amortization 35,923 45,302 (9,379) Other operating expense (income), net (3,820) 2,243 (6,063) Loss from operations (18,915) (27,548) 8,633 Interest expense 22,367 22,095 272 Loss on extinguishment of debt 3,007 349 2,658 Other income, net (4,568) (4,558) (10) Loss before provision for income taxes and share of net income from joint venture (39,721) (45,434) 5,713 Provision for income taxes (3,153) (2,410) (743) Share of net income from joint venture 8,870 9,571 (701) Net loss $ (34,004) $ (38,273) $ 4,269 Net Sales .
Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future earnings growth. We have recorded a U.S. deferred tax liability for foreign earnings which are not indefinitely reinvested.
Such objective evidence limits the ability to consider other subjective 34 evidence, such as our projections for future earnings growth. We have recorded a U.S. deferred tax liability for foreign earnings which are not indefinitely reinvested.
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, 2024.
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, 2025.
Our effective tax rate for the years ended December 31, 2024 and 2023 were 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 years ended December 31, 2025 and 2024 were unfavorably 30 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.
A detailed discussion of our results of operations and liquidity and capital resources for the year ended December 31, 2023 compared to the year ended December 31, 2022 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, 2024 compared to the year ended December 31, 2023 are not included herein and can be found in Item 7.
Additionally, accounts receivable, inventory and property, plant and equipment decreased due to the sale of our Lubbock operations during the year. These decreases were partially offset by increases in our investment in a joint venture.
Additionally, accounts receivable and property, plant and equipment decreased due to the sale of our Lubbock operations during the year. These decreases were partially offset by increases in our investment in a joint venture and increases in inventories.
The joint venture, in which we own a 49% investment, recognized net sales of $130.8 million and $109.6 million for the years ended December 31, 2024 and 2023, respectively.
The joint venture, in which we own a 49% investment, recognized net sales of $133.6 million and $130.8 million for the years ended December 31, 2025 and 2024, respectively.
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. 29 Table of Contents
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. 35
Share of Net Income from Joint Venture. Share of net income from the joint venture increased by $3.8 million during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to higher sales and increased margin partially offset by higher fixed costs, depreciation and income taxes.
Share of Net Income from Joint Venture. Share of net income from the joint venture decreased by $0.7 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to higher fixed costs, depreciation and income taxes partially offset by higher sales and increased margin.
The effective tax rate for the years ended December 31, 2024 and 26 Table of Contents 2023 were 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 state refund claim.
The effective tax rate for the years ended December 31, 2025 and 2024 were favorably impacted by the recording of interest income on our federal income tax refund requested as a result of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), as well as the recording of a benefit of a state refund claim in 2024.
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.
We are a strategic partner to a diversified and global customer base wit h long standing business relationships and long-running business streams. We participate in growing and attractive end markets, including grid a nd electrical distribution, defense and electronics, high-value global automotive parts and passenger vehicles, commercial vehicle and medical components.
Interest expense increased by $1.0 million during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a decrease in the gain recognized on interest rate swap and an increase in the amortization of debt issuance costs. These were partially offset by lower interest rates and lower outstanding balances.
Interest expense increased by $0.3 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a decrease in the gain recognized on interest rate swap in 2024 The change is partially offset by a decrease in the amortization of debt issuance costs, lower average debt balances and lower interest rates.
The ABL Facility bears interest on a variable borrowing rate based on either: 1) the one, three or six month SOFR plus 1.50%, plus an adjustment of 0.10% (“Term SOFR Rate”); or 2) the highest of the base commercial lending rate of the lender or various benchmark rates plus an applicable margin of 0.50% or 1.0%, depending on the benchmark.
Under the ABL Facility, Revolving Loans bear interest as either 1) one, three or six month SOFR plus 1.50%, plus an adjustment of 0.10% (“Term SOFR Rate”); or 2) the highest of the base commercial lending rate of the lender or various benchmark rates plus an applicable margin of 0.50% or 1.00%, depending on the benchmark (“Alternative Base Rate”).
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 U.S. 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, electrification, electrical distribution and infrastructure, and defense technologies; • Costs subject to regional and global inflationary environments, including, but not limited to: • Raw materials including precious metals; • 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 U.S. public companies and manufacturing companies; • Currency and exchange rate movements and trends; • Electric grid and data center investment trends; • Automation and processing speed trends for the type of equipment needed to manufacture the Company’s products; • Global prices for the types of metals and precious metals the Company uses in its products; • Interest rate levels and expectations; and • Changes in tariff regulations.
The calculation of tax assets, liabilities, and expenses under U.S. GAAP is largely dependent on management judgment of the current and future deductibility and utilization of taxable expenses and benefits using a more likely than not threshold.
The calculation of tax assets, liabilities, and expenses under accounting principles generally accepted in the United States (“U.S. GAAP”) is largely dependent on management judgment of the current and future deductibility and utilization of taxable expenses and benefits using a more likely than not threshold.
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, 2024, that management believes are important to provide an understanding of the business and results of operations or that may influence operations in the future. 24 Table of Contents Macroeconomic Conditions We continue to monitor the ongoing impacts of current macroeconomic and geopolitical events, including changing conditions from ongoing military conflicts, inflationary cost pressures, elevated interest rates, supply chain disruptions, and labor shortages and disruptions.
Factors That May Influence Results of Operations The following paragraphs describe several important factors that have influenced, and we expect will continue to influence our results of operations for the year ended December 31, 2025, that management believes are important to provide an understanding of the business and results of operations or that may influence operations in the future. 28 Macroeconomic Conditions We continue to monitor the ongoing impacts of current macroeconomic and geopolitical events, including changing conditions from global trade negotiations and tariffs, inflationary cost pressures on metal, raw materials, and other manufacturing inputs, elevated interest rates, supply chain disruptions, and ongoing military conflicts.
The favorable change is primarily due to the $17.0 million received for the sale of the Lubbock operations during 2024.
The un favorable change is primarily due to the $17.0 million received for the sale of the Lubbock operations during 2024 partially offset by the reduction in capital expenditures.
Provision for Income Taxes. Our effective tax rate was (5.3)% for the year ended December 31, 2024, compared to (4.3)% for the year ended December 31, 2023.
Our effective tax rate was (7.9)% for the year ended December 31, 2025, compared to (5.3)% for the year ended December 31, 2024.
Years Ended December 31, 2024 2023 Interest on debt $ 21,320 $ 21,638 Gain recognized on interest rate swap (1,048) (1,815) Amortization of debt issuance costs and discount 2,288 1,941 Capitalized interest (1,191) (1,330) Other 726 703 Total interest expense $ 22,095 $ 21,137 Other Expense (Income), Net.
Years Ended December 31, 2025 2024 Interest on debt $ 20,412 $ 21,320 Gain recognized on interest rate swap — (1,048) Amortization of debt issuance costs and discount 1,494 2,288 Capitalized interest (728) (1,191) Other 1,189 726 Total interest expense $ 22,367 $ 22,095 Loss on Extinguishment of Debt.
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 $12.3 million tax refund receivable at December 31, 2024, which is in the process of IRS review.
Other Receivables In 2021, we filed a refund claim with the IRS as a result of the CARES Act. Including interest accrued on the initial refund amount, we have a $12.9 million t ax refund receivable at December 31, 2025, which is being processed for refund at the IRS service center.
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.
Functional Currencies We currently have foreign operations in Brazil, China, France, Mexico, and Poland. 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.
POWER SOLUTIONS Year Ended December 31, 2024 2023 $ Change Net sales $ 180,545 $ 185,948 $ (5,403) Income from operations $ 13,111 $ 11,096 $ 2,015 Net sales decreased by $5.4 million, or 2.9%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the sale of our Lubbock operations, premium pricing received on a certain customer project during the first quarter of 2023 and unfavorable foreign exchange effects of $0.2 million.
POWER SOLUTIONS Year Ended December 31, 2025 2024 $ Change Net sales $ 178,626 $ 180,545 $ (1,919) Income from operations $ 10,321 $ 13,111 $ (2,790) Net sales decreased by $1.9 million, or 1.1% , during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the sale of our Lubbock operations, lower volumes, and unfavorable foreign exchange effects of $0.8 million.
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.
Net sales decreased by $25.0 million, or 5.1%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the sale of our Lubbock operations, customer settlements received in 2023, rationalized volume at plants undergoing turnarounds and unfavorable foreign exchange effects of $3.5 million.
Net sales decreased by $42.1 million, or 9.1% , during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the rationalization of underperforming business and plants, the sale of our Lubbock operations, lower volumes an d unfavorable foreign exchange effects of $0.6 million.
Other operating expense (income), net changed unfavorably by $3.9 million primarily due to the impairment of machinery and equipment at a plant that will close in 2025, partially offset by increased sublease income earned on closed facilities and gains on sale of property, plant and equipment. Interest Expense.
Other operating expense (income), net changed favorably by $6.1 million primarily due to the impairment of machinery and equipment recorded in 2024 at a plant that closed in 2025. Interest Expense.
Sales Concentration During the years ended December 31, 2024, 2023 and 2022, 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.
During the years ended December 31, 2024 and 2023, no single customer accounted for 10% or more of consolidated net sales.
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, 2023, filed with the SEC on March 12, 2024. Overview and Management Focus During 2024, the Company continued its enterprise transformation plan to grow sales, profits, free cash flow and shareholder value.
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, 2024, filed with the SEC on March 6, 2025.
Changes in Financial Condition from December 31, 2023 to December 31, 2024 Overview From December 31, 2023 to December 31, 2024, total assets decreased by $54.0 million primarily due to decreases in property, plant and equipment and intangible assets due to depreciation and amortization as well as the impairment of machinery and equipment at a plant that will close in 2025.
Changes in Financial Condition from December 31, 2024 to December 31, 2025 Overview From December 31, 2024 to December 31, 2025, total asset s decreased by $16.1 million primarily due to decreases in cash and decreases in property, plant and equipment and intangible assets.
These decreases were partially offset by an increase in accrued salaries, wages and benefits. Working capital, which consists of current assets less current liabilities, was $83.7 million as of December 31, 2024, compared to $100.9 million as of December 31, 2023.
Working capital, which consists of current assets less current liabilities, was $74.2 million as of December 31, 2025, compared to $83.7 million as of December 31, 2024. The decrease in working capital was primarily due to decreases in cash and accounts receivable along with a decrease in accrued salaries, wages and benefits.
Selling, General, and Administrative Expense. Selling, general, and administrative expense increased by $2.0 million during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to higher travel, stock compensation and severance expense, partially offset by lower salaries due to a reduction in headcount. Other Operating Expense (Income), Net.
Selling, general, and administrative expense decreased by $3.3 million, or 6.7%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to lower compensation expense due to a reduction in headcount. Depreciation and Amortization .
These decreases were partially offset by higher precious metals pass-through pricing. Income from operations increased by $2.0 million during the year ended December 31, 2024 compared to the same period in the prior year, primarily due to an increase in sublease income earned on closed facilities and lower depreciation and amortization expense due to sold or fully utilized assets.
These decreases were partially offset by higher precious metals pass-through pricing. Income from operations decreased by $2.8 million during the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to the sale of our Lubbock operations and lower volumes.
These declines were partially offset by a larger dividend received from the JV in 2024. Cash used in investing activities was $1.0 million for the year ended December 31, 2024, compared with cash used in investing activities of $17.6 million for the year ended December 31, 2023.
Cash used in investing activities was $11.0 million f or the year ended December 31, 2025, compared with cash used in investing activities of $1.0 million for the year ended December 31, 2024.
We continue to execute our transformation plan through: • Obtaining new business wins in targeted growth areas; • Cost improvement plans and the rationalizing of our footprint; • Improving underperforming plants; • Achieving net cost-down through our continuous improvement program; • Reduced leverage through improved operating performance and a strategic divestiture; and • Lowering our cost of capital and improving our capital structure.
Overview and Management Focus During 2025, the Company continued to execute on its enterprise transformation plan through: • Obtaining new business wins in targeted growth areas; • Intentionally shifting the business portfolio by expanding in targeted growth markets; • Expanding margins through improved sales mix; • Cost improvement plans and streamlining headcount; • Improving underperforming plants and strategically rationalizing our footprint; • Achieving net cost-down through our continuous improvement program; • Improved operating performance; and • Refinancing of our term loan.
Loss from operations changed unfavorably by $6.3 million during the year ended December 31, 2024 compared to the prior year, primarily due to the impairment of machinery and equipment at a plant that will close in 2025. The change was also impacted by higher depreciation expense and selling, general and administrative costs.
Loss from operations change d favorably by $10.1 million during the year ended December 31, 2025 compared to the prior year, primarily due to impairment of machinery and equipment recorded in 2024 related to a plant that closed in 2025 and lower depreciation expense due to the impact of historical purchase accounting step-up basis becoming fully depreciated in the second half of 2024.
The decrease in working capital was primarily due to decreases in accounts receivable and inventory, and an increase in accrued salaries, wages and benefits. These were partially offset by a decrease in accounts payable.
From December 31, 2024 to December 31, 2025, total liabilities increased by $5.5 million , primarily due to an increase in accounts payable and long-term debt. These increases were partially offset by a decrease in accrued salaries, wages and benefits and reduction in net lease liabilities.
Cash Flows Cash provided by operations was $11.1 million for the year ended December 31, 2024, compared with $29.3 million for the year ended December 31, 2023. The decline was due to decreases in accounts receivable and inventory during 2023 compared 27 Table of Contents with a decrease in accounts payable during 2024.
These were partially offset by an increase in accounts payable. 31 Cash Flows Cash provided by operations was $5.7 million for the year ended December 31, 2025, compared with $11.1 million for the year ended December 31, 2024.
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. During the second half of 2024, we identified two manufacturing facilities to close due to volume rationalization which will reduce costs and improve operational efficiency.
Footprint Optimization During the second half of 2024, we identified two manufacturing facilities to close due to volume rationalization which will reduce costs and improve operational efficiency. During the first quarter of 2025, we ceased production activities at our Mobile Solutions plants in Juarez, Mexico and Dowagiac, Michigan.
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.
Subject to certain exceptions, we are required to make principal payments (i) annually that are calculated as a percentage, based on our Consolidated Net Leverage Ratio, of our Excess Cash Flow (as defined in the Term Loan Credit Agreement), (ii) Net Cash Proceeds (as defined in the Term Loan Credit Agreement) of certain non-ordinary course Dispositions (as defined in the Term Loan Credit Agreement) within 10 business days of receipt thereof, and (iii) Net Cash Proceeds from certain insurance events.
These decreases were partially offset by the net impact of contractual pass-through material pricing provisions. Cost of Sales. Cost of sales decreased by $24.4 million, or 5.8%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to lower sales volume and lower labor costs associated with facility closures.
These decreases were partially offset by contribution of new business launches and higher precious metals pass-through pricing. Cost of Sales. Cost of sale s decreased by $32.0 million, or 8.1% , during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the decrease in sales. Selling, General, and Administrative Expense.
In January 2025, we ceased production activities at our Mobile Solutions plant in Juarez, Mexico. We plan to stop production activity at our Mobile Solutions plant in Dowagiac, Michigan by the end of the first quarter of 2025. Additionally, we continue to evaluate our global footprint, which may result in further consolidation actions to further improve our overall cost structure.
Additionally, we continue to evaluate our global footprint, which may result in further consolidation actions to further improve our overall cost structure. Sales Concentration During the year ended December 31, 2025, a customer in our Mobile Solutions segment represented 11% of consolidated net sales.
In addition, we received $8.3 million from the sale and leaseback of equipment, with $3.4 million of the net proceeds used to repay a portion of the outstanding borrowings under the Term Loan Facility and the balance used for ongoing operational investments 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 and financial institutions which allow us to sell certain receivables from customers 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 customer.
Results by Segment MOBILE SOLUTIONS Year Ended December 31, 2024 2023 $ Change Net sales $ 283,944 $ 303,335 $ (19,391) Loss from operations $ (18,078) $ (11,749) $ (6,329) Net sales decreased by $19.4 million, or 6.4%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due rationalized volume at plants undergoing turnarounds, contractual reduction in customer pass-through material pricing, a customer settlement received in 2023 and unfavorable foreign exchange effects of $3.3 million.
Results by Segment MOBILE SOLUTIONS Year Ended December 31, 2025 2024 $ Change Net sales $ 244,016 $ 283,944 $ (39,928) Loss from operations $ (8,021) $ (18,078) $ 10,057 Net sale s decreased by $39.9 million, or 14.1% , during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to rationalization of underperforming business and plants, lower volume in North America partially offset by favorable foreign exchange effects of $0.2 million .
Cash used in financing activities increased by $10.4 million during the year ended December 31, 2024 compared to the same period in 2023, primarily due to higher repayments of long-term debt and debt issuance costs in 2024, partially offset by proceeds from the sale-leaseback transactions in 2024 and proceeds from international loans in 2023.
Cash used in financing activities was $2.5 million d uring the year ended December 31, 2025 compared with $13.2 million for the year ended December 31, 2024, primarily due to higher net borrowings partially offset by the reduction in proceeds from sale leasebacks.
Outstanding borrowings under the Term Loan Facility bear interest at either: 1) one-month, three-month, or six-month Adjusted Term SOFR, subject to a 1.00% floor, plus an applicable margin of 6.875%; or 2) the greater of various benchmark rates plus an applicable margin of 5.875%.
The Term Loans currently bear interest at either: 1) one-month, three-month, or six-month term secured overnight finance rate (“SOFR”) with a credit spread adjustment, subject to a 2.00% floor, plus an applicable margin ranging from 8.75% to 9.75% based on our Consolidated Net Leverage Ratio (as defined therein) (“Adjusted Term SOFR Rate Loans”); or 2) the greater of various benchmark rates, with certain adjustments, plus an applicable margin ranging from 7.75% to 8.75% based on our Consolidated Net Leverage Ratio (“Base Rate Loans”).
Liquidity and Capital Resources Credit Facilities The principal amount outstanding under our Term Loan Facility as of December 31, 2024, was $114.4 million, without regard to unamortized debt issuance costs and discount. As of December 31, 2024, we had $5.4 million outstanding borrowings under the ABL Facility and $15.0 million available for future borrowings under the ABL Facility.
As of December 31, 2025, we had $4.7 million outstanding borrowings under the ABL Facility, $11.4 million o f outstanding letters of credit, and $26.7 million available for future borrowings under the ABL Facility.
Removed
The main tenets of the Company’s transformation plan are: • Strengthening our team with new executive and functional leadership; • Fixing unprofitable areas of the business; • Advancing and strengthening profitability; • Improving our balance sheet; and • Accelerating sales growth.
Added
Global trade negotiations continue to create volatility in the marketplace. New trade restrictions and/or increases in tariffs could have a material impact on our business, financial condition, or results of operations by increasing our input costs and decreasing demand, although the nature of those trade restrictions and tariffs remains unclear.
Removed
Ongoing military 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.
Added
Additionally, tariffs may increase the risk for elevated inflation more generally, which may drive an increase in other input costs and have made it more difficult to procure precious metals. In particular, prices for commodities and certain metals, including, but not limited to, gold, silver and copper, have recently shown increased volatility.
Removed
Although our business has not been materially impacted by these ongoing military 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.
Added
Significant price increases for these commodities and precious metals have, and could continue to have, an adverse effect on our liquidity and operating profits if we cannot timely mitigate the price increases by successfully sourcing lower cost commodities or precious metals or by passing the increased costs on to customers. See “Item 1A.
Removed
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 and military conflicts. We cannot predict the future impact on our end-markets or input costs nor our ability to recover cost increases through pricing.
Added
Risk Factors— Increased prices or significant shortages of the commodities that we use in our businesses have had, and could continue to have, a material adverse effect on our business, prospects, financial condition, liquidity, results of operations or cash flows. ” We cannot predict the future impact on our end-markets or input costs, including tariffs and their potential implications and ramifications, nor our ability to recover all cost increases, including the cost of raw materials, through pricing or the timing of such recoveries.
Removed
Other expense (income), net changed favorably by $15.3 million during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the $7.2 million gain on sale of the Lubbock operations and a $10.8 million decrease in noncash derivative mark-to-market losses, partially offset by unfavorable foreign exchange effects associated with intercompany borrowings.
Added
Results of Operations Year Ended December 31, 2025 compared to the Year Ended December 31, 2024 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.
Removed
From December 31, 2023 to December 31, 2024, total liabilities decreased by $19.2 million, primarily due to a decrease in accounts payable, a decrease in other non-current liabilities due to the exercise of warrants in 2024 and a reduction in long-term debt due to the partial pay down of the outstanding balance with proceeds from the sale of our Lubbock operations.
Added
Depreciation and amortization decreased by $9.4 million or 20.7% during the year ended December 31, 2025, compared to the year ended December 31, 2024 primarily due to the impact of historical purchase accounting step-up basis becoming fully depreciated in the second half of 2024. Other Operating Expense (Income), Net.
Removed
This amount of borrowing capacity is net of $10.4 million of outstanding letters of credit at December 31, 2024, 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 due on the final maturity date of September 22, 2026.
Added
Loss on extinguishment of debt was $3.0 million during the year ended December 31, 2025 due to the termination of the 2021 Term Loan Facility, see Note 9 to the Consolidated Financial Statements. Other Income, Net. Other income, net remained consistent during the year ended December 31, 2025, compared to the year ended December 31, 2024. Provision for Income Taxes.
Removed
Beginning with the second quarter of 2023, interest was increased on a paid-in-kind basis at a rate between 1.00% and 2.00%, dependent on our net leverage ratio, for the most recently reported fiscal quarter and subject to reduction upon the occurrence of certain conditions as set forth in the credit agreement governing the Term Loan Facility.
Added
The changes are also impacted by lower gross profits.
Removed
Based on the interest rate in effect at December 31, 2024, annual cash interest payments would be approximately $13.0 million, with an additional $1.1 million accrued as paid-in-kind interest.
Added
The decrease is partially offset by lower administrative costs and lower depreciation and amortization expense due to sold or fully utilized assets.
Removed
We pay a commitment fee of 0.25% 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, 2024. Both credit facilities allow for optional expansion of available borrowings, subject to certain terms and conditions.
Added
The decline was due to a decrease in other operating liabilities, an increase in inventory and timing of dividend received from the joint venture. This decrease was partially offset by lower accounts receivable and higher accounts payable.
Removed
Sale Leaseback Transactions During the year ended December 31, 2024, we entered into several sale-leaseback transactions. We received $16.9 million from the sale and leaseback of three properties, with the net proceeds used to repay a portion of the outstanding borrowings under the Term Loan Facility.
Added
Liquidity and Capital Resources Credit Facilities Term Loan Facility On April 16, 2025 (the “Closing Date”), we entered into a Term Loan Credit Agreement by and among the Company, the lenders from time to time party thereto (collectively, the “Lenders”) and Alter Domus (US) LLC, as administrative agent (the “Term Loan Agent”) for the Lenders (the “Term Loan Credit Agreement”).
Removed
The effective interest rate of 9.715% on this transaction, which terminates in 2044, was lower than the borrowings on the Term Loan Facility.
Added
The Term Loan Credit Agreement establishes a new $128.0 million senior secured Term Loan Facility (the “Term Loan Facility”) consisting of (i) a $118.0 million of term loan funded in full on the Closing Date (the “Closing Date Term Loans”) and (ii) $10.0 million of delayed draw term loan commitments (any delayed draw term loans funded thereunder, the “Delayed Draw Term Loans”, and together, with the Closing Date Term Loans, the “Term Loans”).
Removed
Our access to these programs is dependent on our customers ongoing agreements with the third-parties.
Added
As of December 31, 2025, we had $11.4 million of outstanding letters of credit issued under the ABL Facility and $26.7 million in undrawn commitments, as well as $10.0 million in delayed draw term loan commitments, which was fully drawn in January 2026. The Term Loans mature on April 16, 2030.
Removed
The timing of the receipt of the refund is expected in the first half of 2025. 28 Table of Contents Functional Currencies We currently have foreign operations in Brazil, China, France, Mexico, and Poland. The local currency of each foreign facility is also its functional currency.
Added
We used the proceeds from the Closing Date Term Loan to repay all of our outstanding obligations under our outstanding term loan facility (see Note 9 to the Consolidated Financial Statements).
Added
Under the Term Loan Credit Agreement, interest rates on the Term Loans are determined based on the type of Term Loan, the length of the interest period, and our Consolidated Net Leverage Ratio (as defined in the Term Loan Credit Agreement).
Added
For interest payments due before April 16, 2027, we may elect to pay a portion of interest in-kind (“PIK Election”), subject to a minimum cash interest of 5.25% for Adjusted Term SOFR Rate Loans and 4.25% for Base Rate Loans. The applicable margin increases by 0.50% on borrowings to which the PIK Election is made.
Added
At December 31, 2025, the Term Loans bore interest, including amounts we have elected to pay as PIK interest, based on one-month Adjusted Term SOFR, at 13.57%. On January 29, 2026, we borrowed $10.0 million on the Delayed Draw Term Loans.
Added
As a result of borrowing the Delayed Draw Term Loans, the applicable margin for all Term Loans increased by 0.50%. Through January 29, 2026, we incurred a 1.00% commitment fee on undrawn amounts under the Delayed Draw, payable quarterly in arrears.
Added
We may voluntarily prepay the Term Loans, in whole or part without premium or penalty following April 16, 2027.
Added
If we voluntarily prepay borrowings prior to April 16, 2026, we are subject to a prepayment premium equal to the present value at the prepayment date of (i) 2.00% of the outstanding principal amount of the Term Loans to be prepaid, plus (ii) all remaining scheduled interest payments due on such Term Loans through April 16, 2026 (excluding accrued but unpaid interest to, but not including, the prepayment date), computed using a discount rate equal to the Treasury Rate (determined as of the Business Day prior to such date of prepayment) plus 50 basis points.
Added
If we voluntarily prepay borrowings following April 16, 2026 and prior to April 16, 2027, we are subject to a prepayment premium equal to 2.00% of the principal amount prepaid.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign 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.
Biggest changeA one-percent increase in one-month SOFR Rate would have resulted in a net increase in interest expense of $0.05 million on an annualized basis. 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.
To manage interest rate risk, we have used, and may in the future use, interest rate swap agreements. At December 31, 2024, we had $114.4 million of principal outstanding under the Term Loan Facility without regard to capitalized debt issuance costs.
To manage interest rate risk, we have used, and may in the future use, interest rate swap agreements. At December 31, 2025, we ha d $120.3 million of principal outstanding under the Term Loan Facility without regard to capitalized debt issuance costs.
A one-percent increase in one-month SOFR would have resulted in a net increase in interest expense of $1.1 million on an annualized basis. At December 31, 2024, based on a one-month Term SOFR Rate, the interest rate on outstanding borrowings under the ABL Facility was 5.94%.
A one-percent increase in one-month SOFR Rate would have resulted in a net increase in interest expense of $1.2 million on an annualized basis.
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, 2024. 30 Table of Contents
Additionally, we are party to third party and intercompany loans, payables, and receivables denominated in currencies other than the U.S. dollar. 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, 2025. 36
Added
At December 31, 2025, based on the Alternative Base Rate, the average interest rate on outstanding borrowings under the ABL Facility w as 7.25%, an increase from a one-month SOFR of 5.94% at December 31, 2024 .

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