NN, Inc. Announces Closure of Manufacturing Facility in Taunton, Massachusetts
February 24 2022 - 6:45AM
NN, Inc. (NASDAQ: NNBR), a diversified industrial company,
today announced that it will close its manufacturing facility in
Taunton, Massachusetts. The decision to close this facility, which
is part of NN’s Power Solutions group, was made to optimize the
Company’s Aerospace, Defense and Medical (AD&M) manufacturing
footprint and as part of its ongoing efforts to improve
profitability and cash flow generation. When NN’s
Taunton facility opened, NN consolidated its Hingham and Franklin
operations into Taunton and closed those facilities. The intent of
the combined facility was to integrate acquired businesses that
would grow NN’s Aerospace and Defense business and improve overall
capacity utilization. As a result of NN’s evaluation of strategic
alternatives and de-leveraging initiative, culminating with the
sale of its Life Sciences business in October 2020, the Taunton
facility has been under-utilized. NN’s strategic focus has shifted
and is now primarily centered around organic growth opportunities
in the rapidly growing electric vehicle and electric infrastructure
end-markets."Consistent with our ongoing continuous improvement
initiatives to improve our overall cost structure through various
methods including facility rationalization, NN thoroughly evaluated
several alternatives to address the under-utilization of the
Taunton facility and the resulting impact on our profitability and
free cash flow. After careful deliberation, we have concluded that
this plan represents the quickest and lowest risk option to achieve
our long-term strategic objectives and expect to complete the
closure by the end of 2022." said Warren Veltman, President
and Chief Executive Officer of NN. Mike Felcher, NN Senior
Vice President and CFO, commented, “We remain committed to
improving NN’s profitability and driving strong free cash flow
generation while maintaining sufficient liquidity and flexibility
in our capital structure to invest in key strategic growth areas.
Through the first nine months of 2021, the under-utilization of the
Taunton facility resulted in an operating loss of $4.7 million
which included $1.0 million of depreciation. We believe that
rationalizing our AD&M manufacturing footprint will improve our
long-term financial results and better position NN to achieve its
strategic growth objectives.” The closure of the Taunton facility
will involve relocating customers that meet volume and
profitability requirements to other NN facilities. NN expects to
incur costs in the range of $1 to $1.5 million for employee
severance and equipment relocation. In addition, the Company
expects to sublease the facility upon exit which may result in
additional costs. The closure of the plant will affect
approximately 85 salaried and hourly employees. In instances where
employees are not offered employment at another NN manufacturing
facility, support will be provided in terms of transition and
employee assistance.
About NN, Inc.NN, Inc., a
diversified industrial company, combines advanced engineering and
production capabilities with in-depth materials science expertise
to design and manufacture high-precision components and assemblies
for a variety of markets on a global basis. Headquartered
in Charlotte, North Carolina, NN has 31 facilities
in North America, Europe, South America,
and Asia.Except for specific historical information, many of
the matters discussed in this press release may express or imply
projections of revenues or expenditures, statements of plans and
objectives or future operations or statements of future economic
performance. These, and similar statements, are forward-looking
statements concerning matters that involve risks, uncertainties and
other factors which may cause the actual performance of NN,
Inc. and its subsidiaries to differ materially from those
expressed or implied by this discussion. All forward-looking
information is provided by the Company pursuant to the safe harbor
established under the Private Securities Litigation Reform Act of
1995 and should be evaluated in the context of these factors.
Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "assumptions", "target",
"guidance", "outlook", "plans", "projection", "may", "will",
"would", "expect", "intend", "estimate", "anticipate", "believe",
"potential" or "continue" (or the negative or other derivatives of
each of these terms) or similar terminology. Factors which could
materially affect actual results include, but are not limited to:
general economic conditions and economic conditions in the
industrial sector, the impacts of the coronavirus (COVID-19)
pandemic on the Company's financial condition, business operations
and liquidity, inventory levels, regulatory compliance costs and
the Company's ability to manage these costs, start-up costs for new
operations, debt reduction, competitive influences, risks that
current customers will commence or increase captive production,
risks of capacity underutilization, quality issues, availability
and price of raw materials, currency and other risks associated
with international trade, the Company's dependence on certain major
customers, and the successful implementation of the global growth
plan including development of new products. Similarly, statements
made herein and elsewhere regarding pending and completed
transactions are also forward-looking statements, including
statements relating to the future performance and prospects of an
acquired business, the expected benefits of an acquisition on the
Company's future business and operations and the ability of the
Company to successfully integrate recently acquired businesses.For
additional information concerning such risk factors and cautionary
statements, please see the section titled "Risk Factors" in the
Company's periodic reports filed with the Securities and
Exchange Commission, including, but not limited to, the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 2020, the Company's Quarterly Report on Form 10-Q for the three
months ended September 30, 2021, and, when filed, the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2021. Except as required by law, we undertake no
obligation to update or revise any forward-looking statements we
make in our press releases, whether as a result of new information,
future events or otherwise.FOR FURTHER INFORMATION:Jeff Tryka,
CFAInvestor Relations Contactjtryka@lambert.com616-295-2509
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