10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 000-23486

 

NN, Inc.

(Exact name of registrant as specified in its charter)

Delaware	62-1096725
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6210 Ardrey Kell Road, Suite 600

Charlotte, North Carolina 28277

(Address of principal executive offices, including zip code)

(980) 264-4300

(Registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $0.01	NNBR	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act   ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of October 26, 2022, there were 43,869,135 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

NN, Inc.

INDEX

		Page
PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)	3
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
	Note 1. Interim Financial Statements	8
	Note 2. Segment Information	9
	Note 3. Inventories	10
	Note 4. Intangible Assets, Net	10
	Note 5. Investment in Joint Venture	10
	Note 6. Income Taxes	10
	Note 7. Debt	11
	Note 8. Leases	12
	Note 9. Commitments and Contingencies	12
	Note 10. Preferred Stock and Stockholders' Equity	13
	Note 11. Revenue from Contracts with Customers	13
	Note 12. Share-Based Compensation	16
	Note 13. Accumulated Other Comprehensive Income	18
	Note 14. Net Income (Loss) Per Common Share	19
	Note 15. Fair Value Measurements	20
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
PART II. OTHER INFORMATION		31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
SIGNATURES		33

2

PART I. FINANCIAL INFORMATION 

Item 1.     Financial Statements

NN, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2022		2021		2022		2021
Net sales	$	127,297	$	117,244	$	380,726	$	367,205
Cost of sales (exclusive of depreciation and amortization shown separately below)	108,033		98,642		316,500		298,127
Selling, general, and administrative expense	10,205		12,181		38,453		40,341
Depreciation and amortization	11,193		11,605		33,962		34,860
Other operating expense (income), net	(17)		(572)		1,862		(901)
Loss from operations	(2,117)		(4,612)		(10,051)		(5,222)
Interest expense	3,746		3,578		10,673		9,175
Loss on extinguishment of debt and write-off of debt issuance costs	—		—		—		2,390
Derivative payments on interest rate swap	—		—		—		1,717
Loss on interest rate swap	—		—		—		2,033
Other income, net	(1,156)		(4,346)		(4,219)		(2,788)
Loss before benefit (provision) for income taxes and share of net income from joint venture	(4,707)		(3,844)		(16,505)		(17,749)
Benefit (provision) for income taxes	1,068		(375)		(1,514)		612
Share of net income from joint venture	1,424		842		3,935		3,456
Net loss	$	(2,215)	$	(3,377)	$	(14,084)	$	(13,681)
Other comprehensive income (loss):
Foreign currency translation loss	$	(7,653)	$	(2,612)	$	(13,543)	$	(1,550)
Interest rate swap:
Change in fair value, net of tax	904		(176)		2,464		(176)
Reclassification adjustment for losses (gains) included in net loss, net of tax	(116)		22		(51)		2,873
Other comprehensive income (loss)	$	(6,865)	$	(2,766)	$	(11,130)	$	1,147
Comprehensive loss	$	(9,080)	$	(6,143)	$	(25,214)	$	(12,534)
Basic net loss per common share:
Net loss per common share	$	(0.11)	$	(0.13)	$	(0.49)	$	(0.75)
Weighted average common shares outstanding	44,711		44,455		44,670		43,862
Diluted net loss per common share:
Net loss per common share	$	(0.11)	$	(0.13)	$	(0.49)	$	(0.75)
Weighted average common shares outstanding	44,711		44,455		44,670		43,862

See notes to condensed consolidated financial statements (unaudited).

3

NN, Inc.

Condensed Consolidated Balance Sheets

(Unaudited) 

(in thousands, except per share data)	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	12,551	$	28,656
Accounts receivable, net of allowances of $1,476 and $1,352 at September 30, 2022 and December 31, 2021, respectively	83,496		71,419
Inventories	84,172		75,027
Income tax receivable	11,104		11,808
Other current assets	12,768		9,372
Total current assets	204,091		196,282
Property, plant and equipment, net of accumulated depreciation of $214,254 and $197,936 at September 30, 2022 and December 31, 2021, respectively	195,084		209,105
Operating lease right-of-use assets	46,164		46,443
Intangible assets, net	77,958		88,718
Investment in joint venture	28,193		34,045
Deferred tax assets	375		314
Other non-current assets	5,750		4,194
Total assets	$	557,615	$	579,101
Liabilities, Preferred Stock, and Stockholders’ Equity
Current liabilities:
Accounts payable	$	45,107	$	36,710
Accrued salaries, wages and benefits	13,024		17,739
Income tax payable	902		2,072
Current maturities of long-term debt	3,150		3,074
Current portion of operating lease liabilities	5,033		5,704
Other current liabilities	11,351		8,718
Total current liabilities	78,567		74,017
Deferred tax liabilities	6,408		7,456
Long-term debt, net of current portion	154,351		151,052
Operating lease liabilities, net of current portion	51,102		51,295
Other non-current liabilities	10,635		17,289
Total liabilities	301,063		301,109
Commitments and contingencies (Note 9)
Series D perpetual preferred stock - $0.01 par value per share, 65 shares authorized, issued and outstanding at September 30, 2022 and December 31, 2021, respectively	61,786		53,807
Stockholders' equity:
Common stock - $0.01 par value per share, 90,000 shares authorized, 43,882 and 43,027 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	439		430
Additional paid-in capital	470,543		474,757
Accumulated deficit	(233,184)		(219,100)
Accumulated other comprehensive loss	(43,032)		(31,902)
Total stockholders’ equity	194,766		224,185
Total liabilities, preferred stock, and stockholders’ equity	$	557,615	$	579,101

See notes to condensed consolidated financial statements (unaudited).

4

NN, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended September 30, 2022 and 2021

(Unaudited) 

	Common Stock					Accumulated deficit		Accumulated other comprehensive income (loss)
(in thousands)	Number of shares	Par value		Additional paid-in capital						Total
Balance as of June 30, 2022	43,884	$	439	$	473,019	$	(230,969)	$	(36,167)	$	206,322
Net loss	—	—		—		(2,215)		—		(2,215)
Dividends accrued for preferred stock	—	—		(2,783)		—		—		(2,783)
Share-based compensation expense	(2)	—		991		—		—		991
Change in estimate of share-based award vesting	—	—		(684)		—		—		(684)
Change in fair value of interest rate swap, net of tax of $241	—	—		—		—		904		904
Reclassification of interest rate swap settlement to net loss, net of tax of $(30)	—	—		—		—		(116)		(116)
Foreign currency translation loss	—	—		—		—		(7,653)		(7,653)
Balance as of September 30, 2022	43,882	$	439	$	470,543	$	(233,184)	$	(43,032)	$	194,766

	Common Stock					Accumulated deficit		Accumulated other comprehensive income (loss)
(in thousands)	Number of shares	Par value		Additional paid-in capital						Total
Balance as of June 30, 2021	43,034	$	430	$	477,923	$	(216,179)	$	(29,819)	$	232,355
Net loss	—	—		—		(3,377)		—		(3,377)
Dividends accrued for preferred stock	—	—		(2,314)		—		—		(2,314)
Share-based compensation expense	—	—		931		—		—		931
Change in fair value of interest rate swap, net of tax of $53	—	—		—		—		(176)		(176)
Reclassification of interest rate swap settlement to net loss, net of tax of $7	—	—		—		—		22		22
Foreign currency translation loss	—	—		—		—		(2,612)		(2,612)
Balance as of September 30, 2021	43,034	$	430	$	476,540	$	(219,556)	$	(32,585)	$	224,829

See notes to condensed consolidated financial statements (unaudited).

5

NN, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Nine Months Ended September 30, 2022 and 2021

(Unaudited) 

	Common Stock					Accumulated deficit		Accumulated other comprehensive income (loss)
(in thousands)	Number of shares	Par value		Additional paid-in capital						Total
Balance as of December 31, 2021	43,027	$	430	$	474,757	$	(219,100)	$	(31,902)	$	224,185
Net loss	—	—				(14,084)		—		(14,084)
Dividends accrued for preferred stock	—	—		(7,979)		—		—		(7,979)
Share-based compensation expense	886	9		4,537		—		—		4,546
Restricted shares forgiven for taxes	(31)	—		(88)		—		—		(88)
Change in estimate of share-based award vesting	—	—		(684)		—		—		(684)
Change in fair value of interest rate swap, net of tax of $655	—	—		—		—		2,464		2,464
Reclassification of interest rate swap settlement to net loss, net of tax of $(13)	—	—		—		—		(51)		(51)
Foreign currency translation loss	—	—		—		—		(13,543)		(13,543)
Balance as of September 30, 2022	43,882	$	439	$	470,543	$	(233,184)	$	(43,032)	$	194,766

	Common Stock					Accumulated deficit		Accumulated other comprehensive income (loss)
(in thousands)	Number of shares	Par value		Additional paid-in capital						Total
Balance as of December 31, 2020	42,686	$	427	$	493,332	$	(205,875)	$	(33,732)	$	254,152
Net loss	—	—		—		(13,681)		—		(13,681)
Dividends accrued for preferred stock	—	—		(19,054)		—		—		(19,054)
Shares issued for option exercises	6	—		48		—		—		48
Share-based compensation expense	394	4		2,913		—		—		2,917
Restricted shares forgiven for taxes	(52)	(1)		(362)		—		—		(363)
Change in estimate of share-based award vesting	—	—		(337)		—		—		(337)
Change in fair value of interest rate swap, net of tax of $53	—	—		—		—		(176)		(176)
Reclassification of interest rate swap settlement to net loss, net of tax of $868	—	—		—		—		2,873		2,873
Foreign currency translation loss	—	—		—		—		(1,550)		(1,550)
Balance as of September 30, 2021	43,034	$	430	$	476,540	$	(219,556)	$	(32,585)	$	224,829

See notes to condensed consolidated financial statements (unaudited).

6

NN, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
(in thousands)	2022		2021
Cash flows from operating activities
Net loss	$	(14,084)	$	(13,681)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	33,962		34,860
Amortization of debt issuance costs and discount	1,021		1,049
Loss on extinguishment of debt and write-off of debt issuance costs	—		2,390
Total derivative gain, net of cash settlements	(4,858)		(856)
Share of net income from joint venture, net of cash dividends received	2,310		(3,456)
Compensation expense from issuance of share-based awards	3,862		2,580
Deferred income taxes	(1,831)		(3,720)
Other	(3,096)		(1,834)
Changes in operating assets and liabilities:
Accounts receivable	(15,667)		136
Inventories	(11,314)		(13,252)
Accounts payable	9,827		7,982
Income taxes receivable and payable, net	(403)		(5,171)
Other	(2,400)		(1,336)
Net cash provided by (used in) operating activities	(2,671)		5,691
Cash flows from investing activities
Acquisition of property, plant and equipment	(14,011)		(14,556)
Proceeds from sale of property, plant, and equipment	460		1,177
Cash paid for post-closing adjustments on sale of business	—		(3,880)
Cash settlements of interest rate swap	—		(15,420)
Net cash used in investing activities	(13,551)		(32,679)
Cash flows from financing activities
Cash paid for debt issuance costs	(136)		(7,360)
Proceeds from issuance of preferred stock	—		61,793
Redemption of preferred stock	—		(122,434)
Proceeds from long-term debt	32,000		166,000
Repayments of long-term debt	(28,158)		(88,058)
Repayments of short-term debt, net	—		(1,563)
Other	(2,265)		(3,859)
Net cash provided by financing activities	1,441		4,519
Effect of exchange rate changes on cash flows	(1,324)		(1,058)
Net change in cash and cash equivalents	(16,105)		(23,527)
Cash and cash equivalents at beginning of period	28,656		48,138
Cash and cash equivalents at end of period	$	12,551	$	24,611

See notes to condensed consolidated financial statements (unaudited).

7

NN, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2022

(Unaudited)

Note 1. Interim Financial Statements

Nature of Business

NN, Inc. is a global diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies primarily for the automotive, general industrial, electrical, aerospace, defense, and medical markets. As used in this Quarterly Report on Form 10-Q (this “Quarterly Report”), the terms “NN,” the “Company,” “we,” “our,” or “us” refer to NN, Inc., and its subsidiaries.

Basis of Presentation

The accompanying condensed consolidated financial statements have not been audited. The Condensed Consolidated Balance Sheet as of December 31, 2021, was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”), which we filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 11, 2022. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to fairly state our results of operations for the three and nine months ended September 30, 2022 and 2021; financial position as of September 30, 2022 and December 31, 2021; and cash flows for the nine months ended September 30, 2022 and 2021, on a basis consistent with our audited consolidated financial statements. These adjustments are of a normal recurring nature and are, in the opinion of management, necessary to state fairly the Company’s financial position and operating results for the interim periods. Certain prior period amounts have been reclassified to conform to the current year’s presentation.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted from the unaudited condensed consolidated financial statements presented in this Quarterly Report. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the 2021 Annual Report. The results for the three and nine months ended September 30, 2022, are not necessarily indicative of results for the year ending December 31, 2022, or any other future periods.

Except for per share data or as otherwise indicated, all U.S. dollar amounts and share counts presented in the tables in these Notes to Condensed Consolidated Financial Statements are in thousands.

Accounting Standards Recently Adopted

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, ASU 2020-06 simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. In addition, ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. Further, for the diluted earnings-per-share calculation, the new guidance requires entities to use the if-converted method for all convertible instruments and generally requires entities to include the effect of share settlement for instruments that may be settled in cash or shares, among other things. The adoption of ASU 2020-06 effective January 1, 2022 did not have a material impact on our consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”), which clarifies the accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. Specifically, ASU 2021-04 requires the issuer to treat a modification of an equity-classified warrant as an exchange of the original warrant. The difference between the fair value of the modified warrant and the fair value of the warrant immediately before modification is then recognized as an issuance cost or discount of the related transaction. Since we do not have any equity-classified written call options that would be subject to this guidance, the adoption of ASU 2021-04 did not have any impact on our consolidated financial statements and related disclosures during the nine months ended September 30, 2022.

Accounting Standards Not Yet Adopted

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance (“ASU 2021-10”), which requires business entities to provide certain annual disclosures when

8

they have received government assistance and use a grant or contribution accounting model by analogy to other accounting guidance. Such disclosures include the nature of the transactions, significant terms and conditions, accounting policies, and affected financial statement line items. ASU 2021-10 may be applied either prospectively or retrospectively. We are in the process of assessing the impact ASU 2021-10 may have on our annual disclosures for the year ending December 31, 2022.

Note 2. Segment Information

Our business is aggregated into the following two reportable segments:

•Mobile Solutions, which is focused on growth in the automotive and general industrial end markets; and

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

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

The following tables present results of operations by reportable segment.

	Mobile Solutions		Power Solutions		Corporate and Consolidations			Total
Three Months Ended September 30, 2022
Net sales	$	76,122	$	51,124	$	51	(a)	$	127,297
Income (loss) from operations	(474)		2,582		(4,225)			(2,117)
Interest expense								(3,746)
Other								1,156
Loss from operations before income taxes and share of net income from joint venture								$	(4,707)
Three Months Ended September 30, 2021
Net sales	$	68,586	$	48,680	$	(22)	(a)	$	117,244
Income (loss) from operations	(257)		1,252		(5,607)			(4,612)
Interest expense								(3,578)
Other								4,346
Loss from operations before income taxes and share of net income from joint venture								$	(3,844)

	Mobile Solutions		Power Solutions		Corporate and Consolidations			Total
Nine Months Ended September 30, 2022
Net sales	$	225,542	$	155,184	$	—		$	380,726
Income (loss) from operations	3,224		4,376		(17,651)			(10,051)
Interest expense								(10,673)
Other								4,219
Loss from operations before income taxes and share of net income from joint venture								$	(16,505)
Nine Months Ended September 30, 2021
Net sales	$	220,248	$	147,026	$	(69)	(a)	$	367,205
Income (loss) from operations	8,342		6,559		(20,123)			(5,222)
Interest expense								(9,175)
Other								(3,352)
Loss from operations before income taxes and share of net income from joint venture								$	(17,749)

_______________________________

(a)Includes elimination of intersegment transactions occurring during the ordinary course of business.

9

Note 3. Inventories

Inventories are comprised of the following amounts:

	September 30, 2022		December 31, 2021
Raw materials	$	32,821	$	27,221
Work in process	29,349		24,960
Finished goods	22,002		22,846
Total inventories	$	84,172	$	75,027

Note 4. Intangible Assets, Net

The following table shows changes in the carrying amount of intangible assets, net, by reportable segment.

	Mobile Solutions		Power Solutions		Total
Balance as of December 31, 2021	$	25,709	$	63,009	$	88,718
Amortization	(2,515)		(8,245)		(10,760)
Balance as of September 30, 2022	$	23,194	$	54,764	$	77,958

Intangible assets are reviewed for impairment when changes in circumstances indicate the carrying value of those assets may not be recoverable. As of September 30, 2022, our market capitalization remained at a level that was less than the net book value of our stockholders’ equity. The decline in our market capitalization during the nine months ended September 30, 2022 was a triggering event that caused us to perform impairment analyses on our long-lived assets. Based on our analyses, the carrying values of the long-lived assets were recoverable and no impairment charge was recorded during the nine months ended September 30, 2022.

Note 5. Investment in Joint Venture

We own a 49% investment in Wuxi Weifu Autocam Precision Machinery Company, Ltd. (the “JV”), a joint venture located in Wuxi, China. The JV is jointly controlled and managed, and we account for it under the equity method.

The following table shows changes in our investment in the JV.

Balance as of December 31, 2021	$	34,045
Share of earnings	3,935
Dividends paid by joint venture	(6,245)
Foreign currency translation loss	(3,542)
Balance as of September 30, 2022	$	28,193

Note 6. Income Taxes

Our effective tax rate was 22.7% and (9.2)% for the three and nine months ended September 30, 2022, respectively, and (9.8)% and 3.5% for the three and nine months ended September 30, 2021, respectively. The effective tax rates for the three and nine months ended September 30, 2022 differ from the U.S. federal statutory tax rate of 21% primarily due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by 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. In addition, the effective tax rate was favorably impacted by the recording of interest income on the Company’s federal income tax refund requested as a result of the CARES act.

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Note 7. Debt

On March 22, 2021, we entered into a new $150.0 million term loan facility (the “Term Loan Facility”) and a new $50.0 million asset backed credit facility (the “ABL Facility”). The following table presents debt balances as of September 30, 2022 and December 31, 2021.

	September 30, 2022		December 31, 2021
Term Loan Facility	$	147,750	$	148,875
ABL Facility	6,000		—
International lines of credit and other loans	8,436		10,930
Total principal	162,186		159,805
Less-current maturities of long-term debt	3,150		3,074
Principal, net of current portion	159,036		156,731
Less-unamortized debt issuance costs and discount (1)	4,685		5,679
Long-term debt, net of current portion	$	154,351	$	151,052

_______________________________

(1) In addition to this amount, costs of $0.7 million and $0.7 million related to the ABL Facility were recorded in other non-current assets as of September 30, 2022 and December 31, 2021, respectively.

Term Loan Facility

Outstanding borrowings under the Term Loan Facility bear interest at either 1) one-month LIBOR (subject to a 1.000% floor) plus an applicable margin of 6.875% or 2) the greater of various benchmark rates plus an applicable margin of 5.875%. At September 30, 2022, the Term Loan Facility bore interest, based on one-month LIBOR, at 9.990%. We have an interest rate swap, which expires in July 2024, that changes the one-month LIBOR to a fixed rate of 1.291% on $60.0 million of the outstanding balance of the Term Loan 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. The Term Loan Facility is collateralized by all of our assets. The Term Loan Facility has a first lien on all assets other than accounts receivable and inventory and has a second lien on accounts receivable and inventory. On March 3, 2022, we amended our Term Loan Facility, which increased the quarterly maximum consolidated net leverage ratio. We were in compliance with all requirements under the Term Loan Facility as of September 30, 2022.

The Term Loan Facility was issued at a $3.8 million discount and we capitalized an additional $2.8 million in new debt issuance costs. These costs are recorded as a direct reduction to the carrying amount of the associated long-term debt and amortized over the term of the debt.

ABL Facility

The ABL Facility provides for a senior secured revolving credit facility in the amount of $50.0 million, of which $30.0 million is available in the form of letters of credit and $5.0 million is available for the issuance of short-term swingline loans. The availability of credit under the ABL Facility is limited by a borrowing base calculation derived from accounts receivable and inventory held in the United States. Outstanding borrowings under the ABL Facility bear interest on a variable rate structure plus an interest rate spread that is based on the average amount of aggregate revolving commitment available. The variable borrowing rate is either 1) LIBOR plus an applicable margin of 1.75% or 2.00%, depending on availability, or 2) the greater of the federal funds rate or prime, plus an applicable margin of 0.75% or 1.00%, depending on availability. We may elect whether to use one-month, three-month, or six-month LIBOR, subject to a 0.50% floor. Interest payments are due monthly on borrowings that utilize one-month LIBOR and quarterly on borrowings that utilize three-month or six-month LIBOR. At September 30, 2022, using one-month LIBOR plus a 1.75% spread, the weighted average interest rate on outstanding borrowings under the ABL Facility was 4.56%. We pay a commitment fee of 0.375% for unused capacity under the ABL Facility and a 1.875% fee on the amount of letters of credit outstanding. The final maturity date of the ABL Facility is March 22, 2026.

As of September 30, 2022, we had $6.0 million of outstanding borrowings under the ABL Facility, $11.1 million of outstanding letters of credit, and $32.1 million available for future borrowings under the ABL Facility. The ABL Facility has a first lien on accounts receivable and inventory. We were in compliance with all requirements under the ABL Facility as of September 30, 2022.

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Note 8. Leases

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

	Nine Months Ended September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in finance leases	$	262	$	154
Operating cash flows used in operating leases	10,865		10,369
Financing cash flows used in finance leases	2,177		3,545
Right-of-use assets obtained in exchange for new finance lease liabilities	908		1,541
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	3,835		—

_______________________________

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

Note 9. Commitments and Contingencies

Brazil ICMS Tax Matter

Prior to the acquisition of Autocam Corporation (“Autocam”) in 2014, Autocam’s Brazilian subsidiary (“Autocam Brazil”) received notification from the Brazilian tax authority regarding ICMS (state value added tax) tax credits claimed on intermediary materials (e.g., tooling and perishable items) used in the manufacturing process. The Brazilian tax authority notification disallowed state ICMS tax credits claimed on intermediary materials based on the argument that these items are not intrinsically related to the manufacturing processes. Autocam Brazil filed an administrative defense with the Brazilian tax authority arguing, among other matters, that it should qualify for an ICMS tax credit, contending that the intermediary materials are directly related to the manufacturing process.

We believe that we have substantial legal and factual defenses, and we plan to defend our interests in this matter vigorously. The matter encompasses several lawsuits filed with the Brazilian courts requesting declaratory actions that no tax is due or seeking a stay of execution on the collection of the tax. In 2018, we obtained a favorable decision in one of the declaratory actions for which the period for appeal has expired. We have filed actions in each court requesting dismissal of the matter based on the earlier court action. In May 2020, we received an unfavorable decision in one of the lawsuits, and as a result have recorded a liability to the Brazilian tax authorities and a receivable from the former shareholders of Autocam for the same amount. Although we anticipate a favorable resolution to the remaining matters, we can provide no assurances that we will be successful in achieving dismissal of all pending cases. The U.S. dollar amount that would be owed in the event of an unfavorable decision is subject to interest, penalties, and currency impacts and therefore is dependent on the timing of the decision. For the remaining open lawsuits, we currently believe the cumulative potential liability in the event of unfavorable decisions on all matters will be less than $5.0 million, inclusive of interest and penalties.

We are entitled to indemnification from the former shareholders of Autocam, subject to the limitations and procedures set forth in the agreement and plan of merger relating to the Autocam acquisition. Management believes the indemnification would include amounts owed for the tax, interest, and penalties related to this matter. Accordingly, we do not expect to incur a loss related to this matter even in the event of an unfavorable decision and, therefore, have not accrued an amount for the remaining matters as of September 30, 2022.

Securities Offering Matter

On November 1, 2019, Erie County Employees’ Retirement System, on behalf of a purported class of plaintiffs, filed a complaint in the Supreme Court of the State of New York, County of New York against us, certain of our current and former officers and directors, and each of the underwriters involved in our public offering and sale of 14.4 million shares of our common stock pursuant to a preliminary prospectus supplement, dated September 10, 2018, a final prospectus supplement, dated September 13, 2018, and a base prospectus, dated April 19, 2017, relating to our effective shelf registration statement on Form S-3 (File No. 333-216737) (the “Offering”). The amended complaint alleges violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 in connection with the Offering.

On July 25, 2022, the parties filed a Stipulation of Settlement, which is subject to court approval, to settle the securities offering action. Under the terms of the Stipulation of Settlement, the Company and/or its insurance carrier will make a cash payment to the plaintiff in the amount of $9.5 million (the “Settlement Amount”), in exchange for which the Company and the other named defendants will be released from all claims related to the securities offering action. As of September 30, 2022, we have

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previously paid covered expenses totaling $1.0 million meeting our directors' and officers' retention requirement and therefore the Settlement Amount will be covered and paid by our directors' and officers' insurance carrier.

Other Legal Matters

On April 25, 2022, we reached an agreement to settle breach of contract claims brought by a former customer regarding the sale of products by us in 2016. Under the agreement, we are paying $1.8 million to the customer in specified installments through July 2023. The $1.8 million settlement is included in the Other operating expense (income), net line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

All other legal proceedings are of an ordinary and routine nature and are incidental to our operations. Management believes that such proceedings should not, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations, or cash flows. In making that determination, we analyze the facts and circumstances of each case at least quarterly in consultation with our attorneys and determine a range of reasonably possible outcomes.

Note 10. Preferred Stock and Stockholders' Equity

Series D Perpetual Preferred Stock

On March 22, 2021, we completed a private placement of 65 thousand shares of newly designated Series D Perpetual Preferred Stock, with a par value of $0.01 per share (the “Series D Preferred Stock”), at a price of $1,000 per share, together with detachable warrants (the “2021 Warrants”) to purchase up to 1.9 million shares of our common stock at an exercise price of $0.01 per share. The Series D Preferred Stock has an initial liquidation preference of $1,000 per share and is redeemable at our option in cash at a redemption price equal to the liquidation preference then in effect. Series D Preferred Stock shares earn cash dividends at a rate of 10.0% per year, payable quarterly in arrears, accruing whether or not earned or declared. If no cash dividend is paid, then the liquidation preference per share effective on the dividend date increases by 12.0% per year. Beginning March 22, 2026, the cash dividend rate and in-kind dividend rate increase by 2.5% per year. Cash dividends are required beginning on September 30, 2027.

The Series D Preferred Stock is classified as mezzanine equity, between liabilities and stockholders’ equity, because certain features of the Series D Preferred Stock could require redemption of the Series D Preferred Stock upon a change of control event that is considered not solely within our control. For initial recognition, the Series D Preferred Stock was recognized at a discounted value, net of issuance costs and allocation to warrants and a bifurcated embedded derivative. The aggregate discount is amortized as a deemed dividend through March 22, 2026, which is the date the dividend rate begins to increase by 2.5% per year. Deemed dividends adjust retained earnings (or in the absence of retained earnings, additional paid-in capital).

In accordance with ASC 815-15, Derivatives and Hedging - Embedded Derivatives, certain features of the Series D Preferred Stock were bifurcated and accounted for as derivatives separately. Note 15 discusses the accounting for these features.

As of September 30, 2022, the carrying value of the Series D Preferred Stock shares was $61.8 million, which included $15.1 million of accumulated unpaid and deemed dividends. The following table presents the change in the Series D Preferred Stock carrying value during the nine months ended September 30, 2022.

Balance as of December 31, 2021	$	53,807
Accrual of in-kind dividends	6,620
Amortization	1,359
Balance as of September 30, 2022	$	61,786

Note 11. Revenue from Contracts with Customers

Revenue is recognized when control of the good or service is transferred to the customer either at a point in time or, in limited circumstances, as our services are rendered over time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or services. During the nine months ended September 30, 2022, we received equipment from a customer as part of the selling price of goods transferred. This noncash consideration was recognized as revenue equal to the fair value of the equipment received.

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The following tables summarize revenue by customer geographical region.

Three Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	35,419	$	39,579	$	51	$	75,049
China	12,839		1,378		—		14,217
Brazil	14,109		137		—		14,246
Mexico	5,185		4,769		—		9,954
Germany	1,432		84		—		1,516
Poland	1,100		2		—		1,102
Other	6,038		5,175		—		11,213
Total net sales	$	76,122	$	51,124	$	51	$	127,297

Three Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	35,812	$	38,313	$	(22)	$	74,103
China	10,849		749		—		11,598
Brazil	8,951		192		—		9,143
Mexico	4,981		4,627		—		9,608
Germany	1,080		159		—		1,239
Poland	698		3		—		701
Other	6,215		4,637		—		10,852
Total net sales	$	68,586	$	48,680	$	(22)	$	117,244

Nine Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	109,183	$	120,442	$	—	$	229,625
China	34,155		3,855		—		38,010
Brazil	36,122		794		—		36,916
Mexico	18,336		13,868		—		32,204
Germany	3,836		219		—		4,055
Poland	3,598		7		—		3,605
Other	20,312		15,999		—		36,311
Total net sales	$	225,542	$	155,184	$	—	$	380,726

Nine Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	108,534	$	117,543	$	(69)	$	226,008
China	38,482		3,537		—		42,019
Brazil	28,604		727		—		29,331
Mexico	14,825		12,373		—		27,198
Germany	4,216		419		—		4,635
Poland	2,782		10		—		2,792
Other	22,805		12,417		—		35,222
Total net sales	$	220,248	$	147,026	$	(69)	$	367,205

The following tables summarize revenue by customer industry. Our products in the automotive industry include high-precision components and assemblies for electric power steering systems, electric braking, electric motors, fuel systems, emissions control, transmissions, moldings, stampings, sensors, and electrical contacts. Our products in the general industrial industry

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include high-precision metal and plastic components for a variety of industrial applications including diesel industrial motors, heating and cooling systems, fluid power systems, power tools, and more. While many of the industries we serve include electrical components, our products in the residential/commercial electrical industry category in the following tables include components used in smart meters, charging stations, circuit breakers, transformers, electrical contact assemblies, precision stampings, welded contact assemblies, and specification plating and surface finishing.

Three Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	51,388	$	10,822	$	—	$	62,210
General Industrial	19,546		14,751		—		34,297
Residential/Commercial Electrical	—		17,025		—		17,025
Other	5,188		8,526		51		13,765
Total net sales	$	76,122	$	51,124	$	51	$	127,297

Three Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	43,486	$	9,892	$	—	$	53,378
General Industrial	21,396		15,186		—		36,582
Residential/Commercial Electrical	—		16,078		—		16,078
Other	3,704		7,524		(22)		11,206
Total net sales	$	68,586	$	48,680	$	(22)	$	117,244

Nine Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	150,834	$	30,628	$	—	$	181,462
General Industrial	61,883		47,726		—		109,609
Residential/Commercial Electrical	—		52,981		—		52,981
Other	12,825		23,849		—		36,674
Total net sales	$	225,542	$	155,184	$	—	$	380,726

Nine Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	139,877	$	29,974	$	—	$	169,851
General Industrial	70,155		45,617		—		115,772
Residential/Commercial Electrical	—		47,651		—		47,651
Other	10,216		23,784		(69)		33,931
Total net sales	$	220,248	$	147,026	$	(69)	$	367,205

Deferred Revenue

Deferred revenue relates to payments received in advance of performance under the contract and recognized as revenue as (or when) we perform under the contract. The balance of deferred revenue was $0.6 million and $0.5 million as of September 30, 2022 and December 31, 2021, respectively. Revenue recognized for performance obligations satisfied or partially satisfied during the nine months ended September 30, 2022 included $0.5 million that was included in deferred revenue as of December 31, 2021.

Transaction Price Allocated to Future Performance Obligations

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 30, 2022, unless our contracts meet one of the practical expedients. Our contracts met the practical expedient for a performance obligation that is part of a contract that has an original expected duration of one year or less.

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Note 12. Share-Based Compensation

The following table lists the components of share-based compensation expense by type of award, which is recognized in the “Selling, general, and administrative expense” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Stock options	$	37	$	59	$	124	$	207
Restricted stock	471		521		3,233		1,660
Performance share units	483		351		1,189		1,050
Change in estimate of share-based award vesting (1)	(684)		—		(684)		(337)
Share-based compensation expense	$	307	$	931	$	3,862	$	2,580

_______________________________ 

(1)Amounts reflect the decrease in share-based compensation expense based on the change in estimate of the probability of vesting of share-based awards.

Stock Options

The following table presents stock option activity for the nine months ended September 30, 2022.

	Number of Options (in thousands)	Weighted- Average Exercise Price (per share)		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	621	$	12.24
Expired	(79)	9.71
Outstanding at September 30, 2022	542	$	12.61	3.6 years	$	—	(1)
Exercisable at September 30, 2022	515	$	12.77	3.4 years	$	—	(1)

_______________________________ 

(1)The aggregate intrinsic value is the sum of intrinsic values for each exercisable individual option grant. The intrinsic value is the amount by which the closing market price of our stock at September 30, 2022 was greater than the exercise price of any individual option grant.

Restricted Stock

During the nine months ended September 30, 2022, we granted 897 thousand shares of restricted stock to non-executive directors, officers and certain other key employees under the NN, Inc. 2019 Omnibus Incentive Plan (“2019 Omnibus Plan”). The shares of restricted stock granted during the nine months ended September 30, 2022, vest pro-rata generally over three years for employees and over one year for non-executive directors. We determined the fair value of the shares awarded by using the closing price of our common stock as of the date of grant. The weighted average grant date fair value of restricted stock granted in the nine months ended September 30, 2022, was $3.31 per share. Total grant date fair value of restricted stock that vested in the nine months ended September 30, 2022, was $2.1 million.

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The following table presents the status of unvested restricted stock awards as of September 30, 2022 and changes during the nine months then ended.

	Nonvested Restricted Shares (in thousands)	Weighted Average Grant-Date Fair Value (per share)
Unvested at January 1, 2022	469	$	7.28
Granted	897	3.31
Vested	(291)	7.05
Forfeited	(11)	4.37
Unvested at September 30, 2022	1,064	$	4.02

Performance Share Units

Performance Share Units (“PSUs”) are a form of long-term incentive compensation awarded to executive officers and certain other key employees designed to directly align the interests of employees to the interests of our stockholders, and to create long-term stockholder value. Some PSUs are based on total shareholder return (“TSR Awards”), and other PSUs are based on return on invested capital (“ROIC Awards”). TSR Awards granted in 2022 were made pursuant to the 2019 Omnibus Plan and a Performance Share Unit Agreement (the “2019 Omnibus Agreement”). ROIC Awards granted in 2022 were made pursuant to the NN, Inc. 2022 Omnibus Incentive Plan and a Performance Share Unit Agreement.

The TSR Awards vest, if at all, upon our achieving a specified relative total shareholder return, which will be measured against the total shareholder return of a specified index during specified performance periods as defined in the 2019 Omnibus Agreement. The ROIC Awards vest, if at all, upon our achieving a specified average return on invested capital during the performance periods. Each performance period generally begins on January 1 of the year of grant and ends 3 years later on December 31.

We recognize compensation expense over the performance period in which the performance and market conditions are measured. If the PSUs do not vest at the end of the performance periods, then the PSUs will expire automatically. Upon vesting, the PSUs will be settled by the issuance of shares of our common stock, subject to the award recipient’s continued employment. The actual number of shares of common stock to be issued to each award recipient at the end of the performance periods will be interpolated between a threshold and maximum payout amount based on actual performance results. No dividends will be paid on outstanding PSUs during the performance period; however, dividend equivalents will be paid based on dividends declared and the number of shares of common stock that are ultimately earned at the end of the performance periods.

The following table presents the goals with respect to PSUs granted in 2022.

	Threshold  Performance (25% of Shares)	Target Performance (100% of Shares)	Maximum Performance (150% of Shares)
TSR Awards	25th Percentile	55th Percentile	75th Percentile
	Threshold  Performance (50% of Shares)	Target Performance (100% of Shares)	Maximum Performance (150% of Shares)
ROIC Awards	6.4%	8.6%	10.0%

We estimate the grant date fair value of TSR Awards using the Monte Carlo simulation model, as the total shareholder return metric is considered a market condition under ASC Topic 718, Compensation – stock compensation. The grant date fair value of ROIC Awards is based on the closing price of a share of our common stock on the date of grant.

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The following table presents the status of unvested PSUs as of September 30, 2022 and changes during the nine months then ended.

	Nonvested TSR Awards			Nonvested ROIC Awards
	Shares (in thousands)	Weighted Average Grant-Date Fair Value (per share)		Shares (in thousands)	Weighted  Average Grant-Date Fair Value (per share)
Nonvested at January 1, 2022	194	$	9.59	228	$	8.14
Granted	382	2.53		408	2.62
Nonvested at September 30, 2022	576	$	4.90	636	$	4.60

Note 13. Accumulated Other Comprehensive Income

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

	Foreign Currency Translation		Interest rate swap		Income taxes (1)		Total
Balance as of June 30, 2022	$	(37,906)	$	2,207	$	(468)	$	(36,167)
Other comprehensive income (loss) before reclassifications	(7,653)		1,145		(241)		(6,749)
Amounts reclassified from AOCI to interest expense (2)	—		(146)		30		(116)
Net other comprehensive income (loss)	(7,653)		999		(211)		(6,865)
Balance as of September 30, 2022	$	(45,559)	$	3,206	$	(679)	$	(43,032)
Balance as of June 30, 2021	$	(29,819)	$	—	$	—	$	(29,819)
Other comprehensive income (loss) before reclassifications	(2,612)		(229)		53		(2,788)
Amounts reclassified from AOCI to interest expense (2)	—		29		(7)		22
Net other comprehensive income (loss)	(2,612)		(200)		46		(2,766)
Balance as of September 30, 2021	$	(32,431)	$	(200)	$	46	$	(32,585)

	Foreign Currency Translation		Interest rate swap		Income taxes (1)		Total
Balance as of December 31, 2021	$	(32,016)	$	151	$	(37)	$	(31,902)
Other comprehensive income (loss) before reclassifications	(13,543)		3,119		(655)		(11,079)
Amounts reclassified from AOCI to interest expense (2)	—		(64)		13		(51)
Net other comprehensive income (loss)	(13,543)		3,055		(642)		(11,130)
Balance as of September 30, 2022	$	(45,559)	$	3,206	$	(679)	$	(43,032)
Balance as of December 31, 2020	$	(30,881)	$	(3,712)	$	861	$	(33,732)
Other comprehensive income (loss) before reclassifications	(1,550)		(229)		53		(1,726)
Amounts reclassified from AOCI to interest expense (2)	—		29		(7)		22
Amounts reclassified from AOCI to loss on interest rate swap (3)	—		3,712		(861)		2,851
Net other comprehensive income (loss)	(1,550)		3,512		(815)		1,147
Balance as of September 30, 2021	$	(32,431)	$	(200)	$	46	$	(32,585)

______________________

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

(2) Represents interest rate swap settlements of effective hedge.

(3) Represents reclassification of derivative loss and settlements after discontinuation of hedge accounting.

Note 14. Net Income (Loss) Per Common Share

In accordance with ASC 260, Earnings Per Share, a company that has participating securities is required to utilize the two-class method for calculating earnings per share (“EPS”) unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings between the holders of common stock and a company’s participating securities. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding. To calculate diluted EPS, basic EPS is further adjusted to include the effect of potentially dilutive stock options, warrants, and convertible preferred stock. 

The following table summarizes the computation of basic and diluted net loss per common share.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator:
Net loss	$	(2,215)	$	(3,377)	$	(14,084)	$	(13,681)
Less: Preferred stock cumulative dividends and deemed dividends	(2,783)		(2,314)		(7,979)		(19,054)
Numerator for basic and diluted undistributed net loss per common share (1)	$	(4,998)	$	(5,691)	$	(22,063)	$	(32,735)
Denominator:
Weighted average common shares outstanding	43,884		43,034		43,695		42,980
Adjustment for unvested restricted common stock	(1,065)		(476)		(918)		(459)
Adjustment for 2021 Warrants outstanding (2)	1,892		1,897		1,893		1,341
Shares used to calculate net loss per share, basic and diluted	44,711		44,455		44,670		43,862
Per common share net loss:
Basic and diluted net loss per common share	$	(0.11)	$	(0.13)	$	(0.49)	$	(0.75)
Cash dividends declared per common share	$	—	$	—	$	—	$	—

_______________________________

(1) Preferred Stock does not participate in losses.

(2) Weighted average 2021 Warrants outstanding are included in shares outstanding for calculation of basic earnings per share because they are exercisable at an exercise price of $0.01 per share, subject to certain adjustments (see Note 15).

The following table presents securities that could be potentially dilutive in the future that were excluded from the calculation of diluted net loss per common share because they had an anti-dilutive effect.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Options	542	752	563	812
2019 Warrants	1,500	1,500	1,500	1,500
	2,042	2,252	2,063	2,312

We have elected to allocate undistributed income to participating securities based on year-to-date results. As there was no undistributed income for the nine months ended September 30, 2022, no such allocation was necessary. In addition, given the undistributed loss in the three and nine months ended September 30, 2022 and 2021, options and the 2019 Warrants are considered anti-dilutive and were excluded from the calculation of diluted net loss per share. Stock options excluded from the calculations of diluted net loss per share had a per share exercise price ranging from $7.93 to $25.16 for the three months ended

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September 30, 2022, and $7.93 to $25.16 for the three months ended September 30, 2021. Stock options excluded from the calculations of diluted net loss per share had a per share exercise price ranging from $7.93 to $25.16 for the nine months ended September 30, 2022, and $7.93 to $25.16 for nine months ended September 30, 2021. The 2019 Warrants excluded from the calculation of diluted net loss per share for the three and nine months ended September 30, 2022 and 2021, had a per share exercise price of $11.49.

Note 15. Fair Value Measurements

Fair value is an exit price representing the expected amount that an entity would receive to sell an asset or pay to transfer a liability in an orderly transaction with market participants at the measurement date. We followed consistent methods and assumptions to estimate fair values as more fully described in the 2021 Annual Report.

Fair value principles prioritize valuation inputs across three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the assumptions used to measure assets and liabilities at fair value. An asset or liability’s classification within the various levels is determined based on the lowest level input that is significant to the fair value measurement.

Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, derivatives, and long-term debt. As of September 30, 2022, the carrying values of these financial instruments approximated fair value.

Derivative Financial Instruments

Certain features were bifurcated and accounted for separately from the Series B Preferred Stock, which was redeemed in March 2021. The following feature was recorded as a derivative.

•Warrants. In conjunction with our placement of the Series B Preferred Stock in December 2019, we issued detachable warrants to purchase up to 1.5 million shares of our common stock (the “2019 Warrants”), which are exercisable, in full or in part, at any time prior to December 11, 2026, at an exercise price of $11.49 per share.

Certain features were bifurcated and accounted for separately from the Series D Preferred Stock that was issued on March 22, 2021. The following features were recorded as derivatives.

•Change-in-control put feature. The Series D Preferred Stock includes a put feature that allows the holder to redeem the Series D Preferred Stock upon a change in control at the greater of 1) the liquidation preference plus accrued dividends or 2) 140% of the liquidation preference. The put feature is considered a redemption right at a premium and is not clearly and closely related to the debt host.

•Warrants. In conjunction with our placement of the Series D Preferred Stock, we issued detachable warrants to purchase up to 1.9 million shares of our common stock. The 2021 Warrants are exercisable, in full or in part, at any time prior to March 22, 2027, at an exercise price of $0.01 per share, subject to anti-dilution adjustments in the event of certain future equity issuances, stock splits, stock dividends, combinations or similar events.

The following tables show the liabilities measured at fair value for the Preferred Stock derivatives as of September 30, 2022 and December 31, 2021.

	Fair Value Measurements as of September 30, 2022
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Derivative liability - other non-current liabilities	3,230	—	136

	Fair Value Measurements as of December 31, 2021
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Derivative liability - other non-current liabilities	7,771	—	453

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The following table presents the change in the Preferred Stock derivatives during the nine months ended September 30, 2022.

Balance as of December 31, 2021	$	8,224
Change in fair value (1)	(4,858)
Balance as of September 30, 2022	$	3,366

_______________________________

(1) Changes in the fair value are recognized in the “Other expense (income), net” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The fair value of the change-in-control put feature utilizes unobservable inputs based on the Company’s assessment of the probability of a change-in-control event occurring in a future period. The probability of a change-in-control event ranged from 3% to 10% as of September 30, 2022.

The fair value of the 2019 Warrants is determined using a valuation model that utilizes unobservable inputs to determine the probability that the 2019 Warrants will remain outstanding for future periods. The probabilities resulted in a weighted average term of 2.9 years as of September 30, 2022, and 3.6 years as of December 31, 2021.

The fair value of the 2021 Warrants is determined using the observable market price of a share of our common stock, less the $0.01 per share exercise price.

Interest Rate Swaps

We manage our exposure to fluctuations in interest rates using a mix of fixed and variable rate debt. We utilize fixed-rate interest rate swap agreements to change the variable interest rate to a fixed rate on a portion of our variable rate debt.

On July 22, 2021, we entered into a fixed-rate interest rate swap agreement to change the LIBOR-based component of the interest rate on a portion of our variable rate debt to a fixed rate of 1.291% (the “2021 Swap”). The 2021 Swap has a notional amount of $60.0 million and a maturity date of July 31, 2024. The objective of the 2021 Swap is to eliminate the variability of cash flows in interest payments on the first $60.0 million of variable rate debt attributable to changes in benchmark one-month LIBOR interest rates. The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark one-month LIBOR interest rates over the interest rate swap term. The changes in cash flows of the interest rate swap are expected to exactly offset changes in cash flows of the variable rate debt. We designated the 2021 Swap as a cash flow hedge at inception. Cash settlements of the 2021 Swap are recognized in interest expense.

On February 8, 2019, we entered into a $700.0 million fixed-rate interest rate swap agreement that changed the LIBOR-based portion of the interest rate on a portion of our variable rate debt to a fixed rate of 2.4575% (the “2019 Swap”). On March 22, 2021, we terminated the 2019 Swap with a $13.7 million cash payment in connection with the extinguishment of our previously outstanding long-term variable-rate debt. The 2019 Swap was designated as a cash flow hedge at inception. However, in the fourth quarter of 2020, the 2019 Swap no longer qualified as an effective hedge, and subsequent changes in fair value of the 2019 Swap were recognized in earnings. Amounts recognized in earnings related to the 2019 Swap are recorded in the “Loss on interest rate swap” line on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) except that cash settlements prior to termination are recognized in “Derivative payments on interest rate swap.” Cash settlements during 2021 are presented in investing activities on the Condensed Consolidated Statements of Cash Flows.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Interest expense (1)	$	(146)	$	29	$	(64)	$	29
Derivative payments on interest rate swap (2)	—		—		—		1,717
Loss on interest rate swap (2)	—		—		—		2,033

_______________________________

(1) Represents settlements on the interest rate swaps while the hedges are effective.

(2) Represents settlements and changes in fair value on the 2019 Swap.

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The following tables present the assets and liabilities measured at fair value on a recurring basis for the interest rate swaps as of September 30, 2022 and December 31, 2021.

	Fair Value Measurements as of September 30, 2022
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative asset - other current assets	$	—	$	1,783	$	—
Derivative asset - other non-current assets	—		1,427		—
Total	$	—	$	3,210	$	—

	Fair Value Measurements as of December 31, 2021
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative asset - other non-current assets	$	—	$	284	$	—
Derivative liability - other current liabilities	—		(129)		—
Total	$	—	$	155	$	—

The inputs for determining fair value of the interest rate swaps are classified as Level 2 inputs. Level 2 fair value is based on estimates using standard pricing models. These standard pricing models use inputs which are derived from or corroborated by observable market data such as interest rate yield curves, index forward curves, discount curves, and volatility surfaces. Counterparty to this derivative contract is a highly rated financial institution which we believe carries only a minimal risk of nonperformance.

Fixed Rate Debt

The fair value of our outstanding fixed-rate debt included in the “International lines of credit and other loans” line item within Note 7 to these Notes to Condensed Consolidated Financial Statements approximated carrying value as of September 30, 2022 and December 31, 2021, respectively. These fair values represent Level 2 under the three-tier hierarchy described above. The carrying value of this fixed-rate debt was $8.4 million and $10.9 million as of September 30, 2022 and December 31, 2021, respectively.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of NN, Inc. and its consolidated subsidiaries for the three and nine months ended September 30, 2022. The financial information as of September 30, 2022, should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021, contained in our Annual Report on Form 10-K for the year ended December 31, 2021, and the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Overview

NN, Inc. is a global diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies primarily for the electrical, automotive, general industrial, aerospace, defense, and medical markets. As used in this Quarterly Report, the terms “NN,” the “Company,” “we,” “our,” or “us” refer to NN, Inc. and its subsidiaries.

Forward-Looking Statements

This Quarterly Report contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to NN, Inc., based on current beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions. Forward-looking statements involve a number of risks and uncertainties that are outside of management’s control and that may cause actual results to be materially different from such forward-looking statements. Such factors include, among others, general economic conditions and economic conditions in the industrial sector; the impacts of the COVID-19 pandemic on our financial condition, business operations and liquidity; competitive influences; risks that current customers will commence or increase captive production; risks of capacity underutilization; quality issues; material changes in the costs and availability of raw materials; economic, social, political and geopolitical instability, currency fluctuation, and other risks of doing business outside of the United States; inflationary pressures and changes in the cost or availability of materials, supply chain shortages and disruptions, and the availability of labor; our dependence on certain major customers, some of whom are not parties to long-term agreements (and/or are terminable on short notice); the impact of acquisitions and divestitures; the level of our indebtedness; the restrictions contained in our debt agreements; our ability to obtain financing at favorable rates, if at all, and to refinance existing debt as it matures; unanticipated difficulties integrating acquisitions; new laws and governmental regulations; the impact of climate change on our operations; cyber liability or potential liability for breaches of our or our service providers’ information technology systems or business operations disruptions; and other risk factors and cautionary statements listed from time-to-time in our periodic reports filed with the Securities and Exchange Commission. We disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements included herein or therein to reflect future events or developments.

For additional information concerning such risk factors and cautionary statements, please see the sections titled “Item 1A. Risk Factors” in the 2021 Annual Report and this Quarterly Report.

Results of Operations

Factors That May Influence Results of Operations

The following paragraphs describe factors that have influenced results of operations for the nine months ended September 30, 2022, that management believes are important to provide an understanding of the business and results of operations or that may influence operations in the future.

Macroeconomic Conditions

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

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

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anticipate that supply chain constraints and the inflationary environment, as impacted by the COVID-19 pandemic, will continue through 2022 and beyond.

The Russia-Ukraine conflict also continues to create volatility in global financial and energy markets, creating energy and supply chain shortages, adding to the inflationary pressures in the global economy. We continue to actively work with our suppliers to minimize impacts of supply shortages on our manufacturing capabilities. Although our business has not been materially impacted by the ongoing Russia-Ukraine conflict as of the date of this filing, it is impossible to predict the extent to which our operations, or those of our customers or suppliers, will be impacted, or the ways in which the conflict may impact our business, financial condition, results of operations and cash flows.

The U.S. economy is experiencing broad and rapid inflation and rising interest rates, as well as supply issues in material, services and labor due to economic policy, the COVID-19 pandemic and, more recently, the Russia-Ukraine conflict. These impacts are likely to persist through 2022 and beyond. We cannot predict the impact on the Company’s end-markets or input costs nor the ability of the Company to recover cost increases through pricing.

Three Months Ended September 30, 2022 compared to the Three Months Ended September 30, 2021

Consolidated Results

	Three Months Ended September 30,
	2022		2021		$ Change
Net sales	$	127,297	$	117,244	$	10,053
Organic growth							$	12,226
Foreign exchange effects							$	(2,173)
Cost of sales (exclusive of depreciation and amortization shown separately below)	108,033		98,642		$	9,391
Selling, general, and administrative expense	10,205		12,181		(1,976)
Depreciation and amortization	11,193		11,605		(412)
Other operating income, net	(17)		(572)		555
Loss from operations	(2,117)		(4,612)		2,495
Interest expense	3,746		3,578		168
Other income, net	(1,156)		(4,346)		3,190
Loss before benefit (provision) for income taxes and share of net income from joint venture	(4,707)		(3,844)		(863)
Benefit (provision) for income taxes	1,068		(375)		1,443
Share of net income from joint venture	1,424		842		582
Net loss	$	(2,215)	$	(3,377)	$	1,162

Net Sales. Net sales increased by $10.1 million, or 8.6%, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to increased pricing and higher demand in Mobile Solutions, partially offset by unfavorable foreign exchange effects of $2.2 million.

Cost of Sales. Cost of sales increased by $9.4 million, or 9.5%, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to inflationary costs and unfavorable overhead absorption during the quarter, partially offset by favorable foreign exchange effects.

Selling, General, and Administrative Expense. Selling, general, and administrative expense decreased by $2.0 million during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to lower incentive and stock compensation expense.

Other Operating Income, Net. Other operating income, net changed unfavorably by $0.6 million during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to a gain on the sale of a facility in the third quarter of 2021.

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Interest Expense.  Interest expense increased by $0.2 million during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to higher interest rates, partially offset by favorable interest rate swap settlements and a higher amount of interest expense that was capitalized in the current quarter compared with the third quarter of 2021.

	Three Months Ended September 30,
	2022		2021
Interest on debt	$	3,639	$	3,146
Interest rate swap settlements	(146)		32
Amortization of debt issuance costs and discount	359		331
Capitalized interest	(272)		(89)
Other	166		158
Total interest expense	$	3,746	$	3,578

Other Income, Net. Other income, net changed unfavorably by $3.2 million during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, due to lower noncash derivative mark-to-market gains recognized during the current quarter compared with the third quarter of 2021.

Benefit (Provision) For Income Taxes. Our effective tax rate was 22.7% for the three months ended September 30, 2022, compared to (9.8)% for the three months ended September 30, 2021. The rate for the three months ended September 30, 2022 was unfavorably impacted due to 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. The effective tax rate was favorably impacted by the recording of interest income on the Company’s federal income tax refund requested as a result of the CARES act.

Share of Net Income from Joint Venture. Share of net income from the JV increased during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to higher sales partially offset by higher operating costs in the current quarter. The JV, in which we own a 49% investment, recognized net sales of $27.0 million and $22.8 million for the three months ended September 30, 2022 and 2021, respectively.

Results by Segment

MOBILE SOLUTIONS

	Three Months Ended September 30,
	2022		2021		$ Change
Net sales	$	76,122	$	68,586	$	7,536
Organic growth							$	9,573
Foreign exchange effects							(2,037)
Loss from operations	$	(474)	$	(257)	$	(217)

Net sales increased by $7.5 million, or 11.0%, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to increased pricing and a recovery of sales that were negatively impacted by the global semi-conductor shortage in 2021. These increases were partially offset by unfavorable foreign exchange effects of $2.0 million.

Loss from operations increased by $0.2 million during the three months ended September 30, 2022, compared to the same period in the prior year, primarily due to inflationary costs not fully recovered in customer pricing and unfavorable overhead absorption. These decreases were partially offset by higher sales volume and lower incentive compensation expense.

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POWER SOLUTIONS

	Three Months Ended September 30,
	2022		2021		$ Change
Net sales	$	51,124	$	48,680	$	2,444
Organic growth							$	2,580
Foreign exchange effects							(136)
Income from operations	$	2,582	$	1,252	$	1,330

Net sales increased by $2.4 million, or 5.0%, during the three months ended September 30, 2022 compared to the three months ended September 30, 2021. The increase in sales was primarily due to higher customer pricing and volume, partially offset by lower precious metals pass-through pricing and unfavorable foreign exchange effects.

Income from operations increased by $1.3 million during the three months ended September 30, 2022 compared to the same period in the prior year, primarily due to the increase in sales and lower incentive compensation expense and favorable mix, partially offset by a gain on the sale of a facility in the third quarter of 2021.

Nine Months Ended September 30, 2022, compared to the Nine Months Ended September 30, 2021

Consolidated Results

	Nine Months Ended September 30,
	2022		2021		$ Change
Net sales	$	380,726	$	367,205	$	13,521
Organic growth							$	16,030
Foreign exchange effects							$	(2,509)
Cost of sales (exclusive of depreciation and amortization shown separately below)	316,500		298,127		$	18,373
Selling, general, and administrative expense	38,453		40,341		(1,888)
Depreciation and amortization	33,962		34,860		(898)
Other operating expense (income), net	1,862		(901)		2,763
Loss from operations	(10,051)		(5,222)		(4,829)
Interest expense	10,673		9,175		1,498
Loss on extinguishment of debt and write-off of debt issuance costs	—		2,390		(2,390)
Derivative payments on interest rate swap	—		1,717		(1,717)
Loss on interest rate swap	—		2,033		(2,033)
Other income, net	(4,219)		(2,788)		(1,431)
Loss before benefit (provision) for income taxes and share of net income from joint venture	(16,505)		(17,749)		1,244
Benefit (provision) for income taxes	(1,514)		612		(2,126)
Share of net income from joint venture	3,935		3,456		479
Net loss	$	(14,084)	$	(13,681)	$	(403)

Net Sales. Net sales increased by $13.5 million, or 3.7%, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to increased pricing partially offset by lower volume and unfavorable foreign exchange effects $2.5 million.

Cost of Sales.  Cost of sales increased by $18.4 million, or 6.2%, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to inflationary costs and unfavorable overhead absorption, partially offset by lower sales volume and favorable foreign exchange effects.

Selling, General, and Administrative Expense.  Selling, general, and administrative expense decreased by $1.9 million during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to lower incentive compensation, severance and retention expense. These decreases were partially offset by higher stock compensation expense, higher professional fees and increased travel costs.

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Other Operating Expense (Income), Net. Other operating expense (income), net changed unfavorably by $2.8 million primarily due to a legal settlement reached during the first quarter of 2022 and the gain on the sale of a facility in the third quarter of 2021.

Interest Expense.  Interest expense increased by $1.5 million during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to higher interest rates and a larger average debt balance as a result of the credit facility and preferred stock refinance during the first quarter of 2021. These increases were partially offset by a higher amount of interest expense that was capitalized in 2022 compared with the prior year.

	Nine Months Ended September 30,
	2022		2021
Interest on debt	$	9,819	$	7,695
Interest rate swap settlements	(64)		32
Amortization of debt issuance costs and discount	1,021		1,049
Capitalized interest	(572)		(200)
Other	469		599
Total interest expense	$	10,673	$	9,175

Loss on Extinguishment of Debt and Write-off of Debt Issuance Costs. We recognized $2.4 million in the first quarter of 2021 for the write-off of unamortized debt issuance costs associated with the credit facility that was terminated in March 2021.

Derivative Payments on Interest Rate Swap. Derivative payments on interest rate swap represent cash settlements of an interest rate swap which was terminated in the first quarter of 2021. We entered into a new interest rate swap in the third quarter of 2021, which is designated as a cash flow hedge with the impact of settlements recognized in interest expense.

Loss on Interest Rate Swap. We recognized a $2.0 million loss in the first quarter of 2021 related to the termination of the previous interest rate swap in March 2021.

Other Income, Net. Other income, net changed favorably by $1.4 million during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to the impact of a litigation settlement reached during the second quarter of 2021.

Benefit (Provision) for Income Taxes. Our effective tax rate was (9.2)% for the nine months ended September 30, 2022, compared to 3.5% for the nine months ended September 30, 2021. The rate for the nine months ended September 30, 2022 was unfavorably impacted by the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by the limitation on the amount of tax benefit recorded for loss carryforwards in certain jurisdictions where we believe it is more likely than not that a portion of the future tax benefit may not be realized. The effective tax rate for the nine months ended September 30, 2022 was favorably impacted by the recording of interest income on the Company’s federal income tax refund requested as a result of the CARES act. The rate for the nine months ended September 30, 2021 was favorably impacted by the change in assertion and reduction in the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries.

Share of Net Income from Joint Venture. Share of net income from the JV increased during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to higher sales partially offset by higher operating costs in the current quarter. The JV, in which we own a 49% investment, recognized net sales of $76.4 million and $68.4 million for the nine months ended September 30, 2022 and 2021, respectively.

Results by Segment

MOBILE SOLUTIONS

	Nine Months Ended September 30,
	2022		2021		$ Change
Net sales	$	225,542	$	220,248	$	5,294
Organic growth							$	7,633
Foreign exchange effects							(2,339)
Income from operations	$	3,224	$	8,342	$	(5,118)

Net sales increased by $5.3 million, or 2.4%, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to increased pricing, partially offset by lower sales of diesel components due to lower European demand which was impacted by the war in Ukraine, COVID-19 interruptions in China, lost sales associated with certain fuel systems reaching end of production, and unfavorable foreign exchange effects of $2.3 million.

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Income from operations decreased by $5.1 million during the nine months ended September 30, 2022 compared to the same period in the prior year, primarily due to inflationary costs not fully recovered in customer pricing, unfavorable overhead absorption, and variable cost inefficiencies associated with supply chain interruptions, uneven customer ordering patterns, and labor constraints caused by pandemic interruptions. These decreases were partially offset by lower incentive compensation expense.

POWER SOLUTIONS

	Nine Months Ended September 30,
	2022		2021		$ Change
Net sales	$	155,184	$	147,026	$	8,158
Organic growth							$	8,328
Foreign exchange effects							(170)
Income from operations	$	4,376	$	6,559	$	(2,183)

Net sales increased by $8.2 million, or 5.5%, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to higher customer pricing partially offset by lower volume and unfavorable foreign exchange effects.

Income from operations decreased by $2.2 million during the nine months ended September 30, 2022 compared to the same period in the prior year, primarily due to a $1.8 million litigation settlement to settle claims from 2016 and the absence of a gain on the sale of a facility in the third quarter of 2021. These decreases were partially offset by the impact of higher sales and lower incentive compensation expense.

Changes in Financial Condition from December 31, 2021 to September 30, 2022

Overview

From December 31, 2021 to September 30, 2022, total assets decreased by $21.5 million primarily due to normal depreciation and amortization of fixed assets and intangible assets. These decreases were partially offset by increases in accounts receivable and inventories during the nine months ended September 30, 2022. The increase in accounts receivable is due to higher sales during the end of the current quarter compared with the end of the fourth quarter of 2021. The value of inventory increased due to higher material costs as well as higher quantities to maintain customer safety stock due to ongoing supply chain interruptions, especially in China.

There was no change in total liabilities from December 31, 2021 to September 30, 2022, as lower employee incentive compensation accruals and a decrease in the unrealized losses of certain derivatives were offset by an increase in accounts payable attributed to higher inventory balances at September 30, 2022 and higher borrowings on the ABL Facility.

Working capital, which consists of current assets less current liabilities, was $125.5 million as of September 30, 2022, compared to $122.3 million as of December 31, 2021. The increase in working capital was primarily due to increases in accounts receivable and inventory, partially offset by an increase in accounts payable.

Cash Flows

Cash used in operations was $2.7 million for the nine months ended September 30, 2022, compared with cash provided by operations of $5.7 million for the nine months ended September 30, 2021. The difference was primarily due to an increase in accounts receivable related to higher sales during the current quarter compared with the fourth quarter of 2021.

Cash used in investing activities was $13.6 million for the nine months ended September 30, 2022, compared with cash used in investing activities of $32.7 million for the nine months ended September 30, 2021. The difference was primarily due to cash paid to settle the interest rate swap in the first quarter of 2021.

Cash provided by financing activities was $1.4 million for the nine months ended September 30, 2022, compared with cash provided by financing activities of $4.5 million for the nine months ended September 30, 2021. The difference was primarily due to the debt and preferred stock refinancing in the first quarter of 2021.

Liquidity and Capital Resources

Credit Facilities

The principal amount outstanding under our Term Loan Facility as of September 30, 2022, was $147.8 million, without regard to unamortized debt issuance costs and discount. As of September 30, 2022, we had $32.1 million available for future borrowings under the ABL Facility. This amount of borrowing capacity is net of $6.0 million of outstanding borrowings and $11.1 million of outstanding letters of credit at September 30, 2022, which are considered as usage of the ABL Facility.

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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. Outstanding borrowings under the Term Loan Facility bear interest at either 1) one-month LIBOR (subject to a 1.000% floor) plus an applicable margin of 6.875% or 2) the greater of various benchmark rates plus an applicable margin of 5.875%. Based on the interest rate in effect at September 30, 2022, and the fixed rate on the 2021 interest rate swap, annual interest payments would be approximately $13.7 million.

The ABL Facility bears interest on a variable rate structure with borrowings bearing interest at one-month LIBOR plus an applicable margin of 1.75%. The interest rate in effect at September 30, 2022, was 4.56%. We pay a commitment fee of 0.375% for unused capacity under the ABL Facility.

We were in compliance with all requirements under our Term Loan Facility and ABL Facility as of September 30, 2022. Both credit facilities allow for optional expansion of available borrowings, subject to certain terms and conditions.

Accounts Receivable Sales Programs

We participate in programs established by our customers which allows us to sell certain receivables from that customer on a non-recourse basis to a third-party financial institution. In exchange, we receive payment on the receivables, less a discount, sooner than under the customary credit terms we have extended to that customer. These programs allow us to improve working capital and cash flows. Our access to these programs is dependent on our customers ongoing agreements with the third-parties. Our participation in these programs is based on our specific cash needs throughout the year, the discount charged to receive payment earlier, the length of the payment terms with our customers, as well being subject to limits in our ABL Facility and Term Loan Facility agreements.

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. For example, European sales are often weaker in the summer months as customers slow production and sales to original equipment manufacturers are often stronger immediately preceding and following the launch of new products. However, as a whole, we are not materially impacted by seasonality.

Critical Accounting Estimates

Our critical accounting policies, including the assumptions and judgments underlying them, are disclosed in the 2021 Annual Report, including those policies as discussed in Note 1 to the Notes to Consolidated Financial Statements included in the 2021 Annual Report. There have been no material changes to these policies during the nine months ended September 30, 2022.    

Item 3.Quantitative and Qualitative Disclosures About Market Risk

We are exposed to changes in financial market conditions in the normal course of business due to use of certain financial instruments as well as transacting business in various foreign currencies. To mitigate the exposure to these market risks, we have established policies, procedures, and internal processes governing the management of financial market risks. We are exposed to changes in interest rates primarily as a result of borrowing activities.

Interest Rate Risk

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

On July 22, 2021, we entered into a fixed-rate interest rate swap agreement to change the LIBOR-based component of the interest rate on a portion of our variable rate debt to a fixed rate of 1.291% (the “2021 Swap”). The 2021 Swap has a notional amount of $60.0 million and a maturity date of July 31, 2024. The objective of the 2021 Swap is to eliminate the variability of cash flows in interest payments on the first $60.0 million of variable rate debt attributable to changes in benchmark one-month LIBOR interest rates. The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark one-month LIBOR interest rates over the interest rate swap term. The changes in cash flows of the interest rate swap are expected to exactly offset changes in cash flows of the variable rate debt. We designated the 2021 Swap as a cash flow hedge at inception. Cash settlements of the 2021 Swap are recognized in interest expense.

Refer to Note 15 in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for further discussion about the interest rate swap.

At September 30, 2022, we had $147.8 million of principal outstanding under the Term Loan Facility without regard to capitalized debt issuance costs. A one-percent increase in one-month LIBOR would have resulted in a net increase in interest expense of $0.9 million on an annualized basis.

29

At September 30, 2022, using one-month LIBOR plus a 1.75% spread, the interest rate on the $6.0 million of outstanding borrowings under the ABL Facility was 4.56%.

Foreign Currency Risk

Translation of our operating cash flows denominated in foreign currencies is impacted by changes in foreign exchange rates. We participate in various third party and intercompany loans, payables, and receivables denominated in currencies other than the U.S. dollar. To help reduce exposure to foreign currency fluctuation, we have incurred debt in euros in the past. From time to time, we may use foreign currency derivatives to hedge currency exposures when these exposures meet certain discretionary levels. We did not hold a position in any foreign currency derivatives as of September 30, 2022.

Item 4.    Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2022, to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

As disclosed in Note 9 in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report, we are engaged in certain legal proceedings, and the disclosure set forth in Note 9 relating to legal proceedings is incorporated herein by reference.

Item 1A.    Risk Factors

Except as noted below, there have been no material changes to the risk factors disclosed in the 2021 Annual Report under Item 1A, “Risk Factors.”

Our international operations and business, financial condition, and prospects may be adversely affected by the current military conflict between Russia and Ukraine, other future social and geopolitical instability and resulting domestic and foreign economic instability.

We are exposed to the risk of changes in social, geopolitical, legal, and economic conditions. The global economy has been, and may continue to be, negatively impacted by Russia’s invasion of Ukraine. As a result of Russia’s invasion of Ukraine, the United States, the European Union, the United Kingdom, and other G7 countries, among other countries, have imposed substantial financial and economic sanctions on certain industry sectors and parties in Russia. Broad restrictions on exports to Russia have also been imposed. These measures include: (i) comprehensive financial sanctions against major Russian banks; (ii) additional designations of Russian individuals with significant business interests and government connections; (iii) designations of individuals and entities involved in Russian military activities; and (iv) enhanced export controls and trade sanctions limiting Russia’s ability to import various goods. The negative impacts arising from the conflict and these sanctions and export restrictions, including those imposed by Russia, may include reduced consumer demand, supply chain disruptions and increased costs for transportation, energy, and raw materials. Although none of our operations are physically located in Russia or Ukraine, further escalation of geopolitical tensions could have a broader impact that expands into other markets where we do business, which may adversely affect our business, financial condition, results of operations and prospects.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.    Defaults Upon Senior Securities

None. 

Item 4.    Mine Safety Disclosures

Not applicable. 

Item 5.    Other Information

None.

31

Item 6.    Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32.1	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Service
101.CAL	Taxonomy Calculation Linkbase
101.LAB	XBRL Taxonomy Label Linkbase
101.PRE	XBRL Presentation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

32

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NN, Inc.
	(Registrant)
Date: November 2, 2022	/s/ Warren A. Veltman
	Warren A. Veltman
	President, Chief Executive Officer and Director
	(Principal Executive Officer)
	(Duly Authorized Officer)
Date: November 2, 2022	/s/ Michael C. Felcher
	Michael C. Felcher
	Senior Vice President - Chief Financial Officer
	(Principal Financial and Accounting Officer)
	(Duly Authorized Officer)

33

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Warren A. Veltman, certify that:

1)I have reviewed this quarterly report on Form 10-Q of NN, Inc.;

2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2022	/s/ Warren A. Veltman
	Warren A. Veltman
	President, Chief Executive Officer and Director
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Michael C. Felcher, certify that:

1)I have reviewed this quarterly report on Form 10-Q of NN, Inc.;

2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2022	/s/ Michael C. Felcher
	Michael C. Felcher
	Senior Vice President – Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of NN, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and date indicated below, hereby certifies pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods indicated.

Date: November 2, 2022	/s/ Warren A. Veltman
	Warren A. Veltman
	President, Chief Executive Officer and Director
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of NN, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and date indicated below, hereby certifies pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods indicated.

Date: November 2, 2022	/s/ Michael C. Felcher
	Michael C. Felcher
	Senior Vice President – Chief Financial Officer
	(Principal Financial Officer)

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2022	Oct. 26, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	000-23486
Entity Registrant Name	NN, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	62-1096725
Entity Address, Address Line One	6210 Ardrey Kell Road, Suite 600
Entity Address, City or Town	Charlotte
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	28277
City Area Code	980
Local Phone Number	264-4300
Title of 12(b) Security	Common Stock, par value $0.01
Trading Symbol	NNBR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		43,869,135
Entity Central Index Key	0000918541
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Net sales	$ 127,297	$ 117,244	$ 380,726	$ 367,205
Cost of sales (exclusive of depreciation and amortization shown separately below)	108,033	98,642	316,500	298,127
Selling, general, and administrative expense	10,205	12,181	38,453	40,341
Depreciation and amortization	11,193	11,605	33,962	34,860
Other operating expense (income), net	(17)	(572)	1,862	(901)
Loss from operations	(2,117)	(4,612)	(10,051)	(5,222)
Interest expense	3,746	3,578	10,673	9,175
Loss on extinguishment of debt and write-off of debt issuance costs	0	0	0	2,390
Derivative payments on interest rate swap	0	0	0	1,717
Other expense (income), net	(1,156)	(4,346)	(4,219)	(2,788)
Loss before benefit (provision) for income taxes and share of net income from joint venture	(4,707)	(3,844)	(16,505)	(17,749)
Benefit (provision) for income taxes	1,068	(375)	(1,514)	612
Share of net income from joint venture	1,424	842	3,935	3,456
Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest, Total	(2,215)	(3,377)	(14,084)	(13,681)
Net loss	(2,215)	(3,377)	(14,084)	(13,681)
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(7,653)	(2,612)	(13,543)	(1,550)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax	904	(176)	2,464	(176)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax	(116)	22	(51)	2,873
Other Comprehensive Income (Loss), Net of Tax, Total	(6,865)	(2,766)	(11,130)	1,147
Comprehensive Income (Loss), Net of Tax, Attributable to Parent, Total	$ (9,080)	$ (6,143)	$ (25,214)	$ (12,534)
Earnings Per Share, Basic [Abstract]
Net loss per common share (in dollars per shares)	$ (0.11)	$ (0.13)	$ (0.49)	$ (0.75)
Weighted average common shares outstanding, basic (in shares)	44,711	44,455	44,670	43,862
Earnings Per Share, Diluted [Abstract]
Net loss per common share (in dollars per share)	$ (0.11)	$ (0.13)	$ (0.49)	$ (0.75)
Weighted average common shares outstanding, diluted (in shares)	44,711	44,455	44,670	43,862
Gain (Loss) on Derivative Instruments, Net, Pretax	$ 0	$ 0	$ 0	$ 2,033

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets, Current [Abstract]
Cash and cash equivalents	$ 12,551	$ 28,656
Accounts receivable, net of allowances of $1,476 and $1,352 at September 30, 2022 and December 31, 2021, respectively	83,496	71,419
Inventories	84,172	75,027
Income tax receivable	11,104	11,808
Other current assets	12,768	9,372
Total current assets	204,091	196,282
Property, plant and equipment, net of accumulated depreciation of $214,254 and $197,936 at September 30, 2022 and December 31, 2021, respectively	195,084	209,105
Operating lease right-of-use assets	46,164	46,443
Intangible assets, net	77,958	88,718
Investment in joint venture	28,193	34,045
Deferred tax assets	375	314
Other non-current assets	5,750	4,194
Total assets	557,615	579,101
Liabilities, Current [Abstract]
Accounts payable	45,107	36,710
Accrued salaries, wages and benefits	13,024	17,739
Income tax payable	902	2,072
Current maturities of long-term debt	3,150	3,074
Current portion of operating lease liabilities	5,033	5,704
Other current liabilities	11,351	8,718
Total current liabilities	78,567	74,017
Deferred tax liabilities	6,408	7,456
Long-term debt, net of current portion	154,351	151,052
Operating lease liabilities, net of current portion	51,102	51,295
Other non-current liabilities	10,635	17,289
Total liabilities	301,063	301,109
Commitments and contingencies (Note 9)
Common stock - $0.01 par value per share, 90,000 shares authorized, 43,882 and 43,027 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	439	430
Additional paid-in capital	470,543	474,757
Accumulated deficit	(233,184)	(219,100)
Accumulated other comprehensive loss	(43,032)	(31,902)
Total stockholders’ equity	194,766	224,185
Total liabilities, preferred stock, and stockholders’ equity	557,615	579,101
Series D Preferred Stock
Liabilities, Current [Abstract]
Series D perpetual preferred stock - $0.01 par value per share, 65 shares authorized, issued and outstanding at September 30, 2022 and December 31, 2021, respectively	$ 61,786	$ 53,807

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accounts Receivable, Allowance for Credit Loss, Current	$ 1,476	$ 1,352
Property, Plant, and Equipment, Accumulated Depreciation	$ 214,254	$ 197,936
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	90,000	90,000
Common stock, shares issued (in shares)	43,882	43,027
Common stock, shares outstanding (in shares)	43,882	43,027
Series D Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	65	65
Preferred stock, shares issued (in shares)	65	65
Preferred stock, shares outstanding (in shares)	65	65

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]
Beginning balance (in shares) at Dec. 31, 2020		42,686
Beginning balance at Dec. 31, 2020	$ 254,152	$ 427	$ 493,332	$ (205,875)	$ (33,732)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Net loss	(13,681)			(13,681)
Dividends, Preferred Stock, Paid-in-kind	(19,054)		(19,054)
Shares issues for option exercises (in shares)		6
Shares issued for option exercises	48		48
Share-based compensation expense (in shares)		394
Share-based compensation expense	2,917	$ 4	2,913
Restricted shares forgiven for taxes (in shares)		52
Restricted shares forgiven for taxes	(363)	$ (1)	(362)
Change in estimate of share-based award vesting	(337)		(337)
Change in fair value of interest rate swap, net of tax	(176)				(176)
Reclassification of interest rate swap settlement to net income (loss), net of tax	2,873				2,873
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(1,550)				(1,550)
Ending balance (in shares) at Sep. 30, 2021		43,034
Ending balance at Sep. 30, 2021	224,829	$ 430	476,540	(219,556)	(32,585)
Beginning balance (in shares) at Jun. 30, 2021		43,034
Beginning balance at Jun. 30, 2021	232,355	$ 430	477,923	(216,179)	(29,819)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Net loss	(3,377)			(3,377)
Dividends, Preferred Stock, Paid-in-kind	(2,314)		(2,314)
Share-based compensation expense (in shares)		0
Share-based compensation expense	931	$ 0	931
Change in fair value of interest rate swap, net of tax	(176)				(176)
Reclassification of interest rate swap settlement to net income (loss), net of tax	22				22
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(2,612)				(2,612)
Ending balance (in shares) at Sep. 30, 2021		43,034
Ending balance at Sep. 30, 2021	224,829	$ 430	476,540	(219,556)	(32,585)
Beginning balance (in shares) at Dec. 31, 2021		43,027
Beginning balance at Dec. 31, 2021	224,185	$ 430	474,757	(219,100)	(31,902)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Net loss	(14,084)			(14,084)
Dividends, Preferred Stock, Paid-in-kind	(7,979)		(7,979)
Share-based compensation expense (in shares)		886
Share-based compensation expense	4,546	$ 9	4,537
Restricted shares forgiven for taxes (in shares)		31
Restricted shares forgiven for taxes	(88)	$ 0	(88)
Change in estimate of share-based award vesting	(684)		(684)
Change in fair value of interest rate swap, net of tax	2,464				2,464
Reclassification of interest rate swap settlement to net income (loss), net of tax	(51)				(51)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(13,543)				(13,543)
Ending balance (in shares) at Sep. 30, 2022		43,882
Ending balance at Sep. 30, 2022	194,766	$ 439	470,543	(233,184)	(43,032)
Beginning balance (in shares) at Jun. 30, 2022		43,884
Beginning balance at Jun. 30, 2022	206,322	$ 439	473,019	(230,969)	(36,167)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Net loss	(2,215)			(2,215)
Dividends, Preferred Stock, Paid-in-kind	(2,783)		(2,783)
Share-based compensation expense (in shares)		(2)
Share-based compensation expense	991	$ 0	991
Adjustments To Additional Paid In Capital, Adjustments To Performance Shares Vesting Estimates	(684)		(684)
Change in fair value of interest rate swap, net of tax	904				904
Reclassification of interest rate swap settlement to net income (loss), net of tax	(116)				(116)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent	(7,653)				(7,653)
Ending balance (in shares) at Sep. 30, 2022		43,882
Ending balance at Sep. 30, 2022	$ 194,766	$ 439	$ 470,543	$ (233,184)	$ (43,032)

XML

Condensed Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Stockholders' Equity [Abstract]
Change in fair value of interest rate swap, tax	$ 241	$ 53	$ 655	$ 53
Reclassification of interest rate swap settlement, tax	$ (30)	$ 7	$ (13)	$ 868

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net loss	$ (14,084)	$ (13,681)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	33,962	34,860
Amortization of debt issuance costs and discount	1,021	1,049
Loss on extinguishment of debt and write-off of debt issuance costs	0	2,390
Total derivative gain, net of cash settlements	(4,858)	(856)
Share of net income from joint venture, net of cash dividends received	2,310	(3,456)
Share-based compensation expense	3,862	2,580
Deferred income taxes	(1,831)	(3,720)
Other	(3,096)	(1,834)
Changes in operating assets and liabilities:
Accounts receivable	(15,667)	136
Inventories	(11,314)	(13,252)
Accounts payable	9,827	7,982
Income taxes receivable and payable, net	(403)	(5,171)
Other	(2,400)	(1,336)
Net cash provided by (used in) operating activities	(2,671)	5,691
Cash flows from investing activities
Acquisition of property, plant and equipment	(14,011)	(14,556)
Proceeds from sale of property, plant, and equipment	460	1,177
Cash paid for post-closing adjustments on sale of business	0	(3,880)
Cash settlements of interest rate swap	0	(15,420)
Net cash used in investing activities	(13,551)	(32,679)
Cash flows from financing activities
Cash paid for debt issuance costs	(136)	(7,360)
Proceeds from issuance of preferred stock	0	61,793
Redemption of preferred stock	0	(122,434)
Proceeds from long-term debt	32,000	166,000
Repayments of long-term debt	(28,158)	(88,058)
Repayments of short-term debt, net	0	(1,563)
Other	(2,265)	(3,859)
Net cash provided by financing activities	1,441	4,519
Effect of exchange rate changes on cash flows	(1,324)	(1,058)
Net change in cash and cash equivalents	(16,105)	(23,527)
Cash and cash equivalents at beginning of period	28,656	48,138
Cash cash equivalents at end of period	$ 12,551	$ 24,611

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Interim Financial Statements

9 Months Ended

Sep. 30, 2022

Quarterly Financial Information Disclosure [Abstract]

Interim Financial Statements

Interim Financial Statements

Nature of Business

NN, Inc. is a global diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies primarily for the automotive, general industrial, electrical, aerospace, defense, and medical markets. As used in this Quarterly Report on Form 10-Q (this “Quarterly Report”), the terms “NN,” the “Company,” “we,” “our,” or “us” refer to NN, Inc., and its subsidiaries.

Basis of Presentation

The accompanying condensed consolidated financial statements have not been audited. The Condensed Consolidated Balance Sheet as of December 31, 2021, was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”), which we filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 11, 2022. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to fairly state our results of operations for the three and nine months ended September 30, 2022 and 2021; financial position as of September 30, 2022 and December 31, 2021; and cash flows for the nine months ended September 30, 2022 and 2021, on a basis consistent with our audited consolidated financial statements. These adjustments are of a normal recurring nature and are, in the opinion of management, necessary to state fairly the Company’s financial position and operating results for the interim periods. Certain prior period amounts have been reclassified to conform to the current year’s presentation.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted from the unaudited condensed consolidated financial statements presented in this Quarterly Report. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the 2021 Annual Report. The results for the three and nine months ended September 30, 2022, are not necessarily indicative of results for the year ending December 31, 2022, or any other future periods.

Except for per share data or as otherwise indicated, all U.S. dollar amounts and share counts presented in the tables in these Notes to Condensed Consolidated Financial Statements are in thousands.

Accounting Standards Recently Adopted

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, ASU 2020-06 simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. In addition, ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. Further, for the diluted earnings-per-share calculation, the new guidance requires entities to use the if-converted method for all convertible instruments and generally requires entities to include the effect of share settlement for instruments that may be settled in cash or shares, among other things. The adoption of ASU 2020-06 effective January 1, 2022 did not have a material impact on our consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”), which clarifies the accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. Specifically, ASU 2021-04 requires the issuer to treat a modification of an equity-classified warrant as an exchange of the original warrant. The difference between the fair value of the modified warrant and the fair value of the warrant immediately before modification is then recognized as an issuance cost or discount of the related transaction. Since we do not have any equity-classified written call options that would be subject to this guidance, the adoption of ASU 2021-04 did not have any impact on our consolidated financial statements and related disclosures during the nine months ended September 30, 2022.

Accounting Standards Not Yet Adopted

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance (“ASU 2021-10”), which requires business entities to provide certain annual disclosures when

they have received government assistance and use a grant or contribution accounting model by analogy to other accounting guidance. Such disclosures include the nature of the transactions, significant terms and conditions, accounting policies, and affected financial statement line items. ASU 2021-10 may be applied either prospectively or retrospectively. We are in the process of assessing the impact ASU 2021-10 may have on our annual disclosures for the year ending December 31, 2022.

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Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

Our business is aggregated into the following two reportable segments:

•Mobile Solutions, which is focused on growth in the automotive and general industrial end markets; and

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

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

The following tables present results of operations by reportable segment.

	Mobile Solutions		Power Solutions		Corporate and Consolidations			Total
Three Months Ended September 30, 2022
Net sales	$	76,122	$	51,124	$	51	(a)	$	127,297
Income (loss) from operations	(474)		2,582		(4,225)			(2,117)
Interest expense								(3,746)
Other								1,156
Loss from operations before income taxes and share of net income from joint venture								$	(4,707)
Three Months Ended September 30, 2021
Net sales	$	68,586	$	48,680	$	(22)	(a)	$	117,244
Income (loss) from operations	(257)		1,252		(5,607)			(4,612)
Interest expense								(3,578)
Other								4,346
Loss from operations before income taxes and share of net income from joint venture								$	(3,844)

	Mobile Solutions		Power Solutions		Corporate and Consolidations			Total
Nine Months Ended September 30, 2022
Net sales	$	225,542	$	155,184	$	—		$	380,726
Income (loss) from operations	3,224		4,376		(17,651)			(10,051)
Interest expense								(10,673)
Other								4,219
Loss from operations before income taxes and share of net income from joint venture								$	(16,505)
Nine Months Ended September 30, 2021
Net sales	$	220,248	$	147,026	$	(69)	(a)	$	367,205
Income (loss) from operations	8,342		6,559		(20,123)			(5,222)
Interest expense								(9,175)
Other								(3,352)
Loss from operations before income taxes and share of net income from joint venture								$	(17,749)

_______________________________

(a)Includes elimination of intersegment transactions occurring during the ordinary course of business.

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Inventories

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories are comprised of the following amounts:

	September 30, 2022		December 31, 2021
Raw materials	$	32,821	$	27,221
Work in process	29,349		24,960
Finished goods	22,002		22,846
Total inventories	$	84,172	$	75,027

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Intangible Assets, Net

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

Intangible Assets, Net

The following table shows changes in the carrying amount of intangible assets, net, by reportable segment.

	Mobile Solutions		Power Solutions		Total
Balance as of December 31, 2021	$	25,709	$	63,009	$	88,718
Amortization	(2,515)		(8,245)		(10,760)
Balance as of September 30, 2022	$	23,194	$	54,764	$	77,958

Intangible assets are reviewed for impairment when changes in circumstances indicate the carrying value of those assets may not be recoverable. As of September 30, 2022, our market capitalization remained at a level that was less than the net book value of our stockholders’ equity. The decline in our market capitalization during the nine months ended September 30, 2022 was a triggering event that caused us to perform impairment analyses on our long-lived assets. Based on our analyses, the carrying values of the long-lived assets were recoverable and no impairment charge was recorded during the nine months ended September 30, 2022.

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Investment in Joint Venture

9 Months Ended

Sep. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investment in Joint Venture

Investment in Joint Venture

We own a 49% investment in Wuxi Weifu Autocam Precision Machinery Company, Ltd. (the “JV”), a joint venture located in Wuxi, China. The JV is jointly controlled and managed, and we account for it under the equity method.

The following table shows changes in our investment in the JV.

Balance as of December 31, 2021	$	34,045
Share of earnings	3,935
Dividends paid by joint venture	(6,245)
Foreign currency translation loss	(3,542)
Balance as of September 30, 2022	$	28,193

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Income Taxes	9 Months Ended
	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesOur effective tax rate was 22.7% and (9.2)% for the three and nine months ended September 30, 2022, respectively, and (9.8)% and 3.5% for the three and nine months ended September 30, 2021, respectively. The effective tax rates for the three and nine months ended September 30, 2022 differ from the U.S. federal statutory tax rate of 21% primarily due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by 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. In addition, the effective tax rate was favorably impacted by the recording of interest income on the Company’s federal income tax refund requested as a result of the CARES act.

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Debt

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt

Debt

On March 22, 2021, we entered into a new $150.0 million term loan facility (the “Term Loan Facility”) and a new $50.0 million asset backed credit facility (the “ABL Facility”). The following table presents debt balances as of September 30, 2022 and December 31, 2021.

	September 30, 2022		December 31, 2021
Term Loan Facility	$	147,750	$	148,875
ABL Facility	6,000		—
International lines of credit and other loans	8,436		10,930
Total principal	162,186		159,805
Less-current maturities of long-term debt	3,150		3,074
Principal, net of current portion	159,036		156,731
Less-unamortized debt issuance costs and discount (1)	4,685		5,679
Long-term debt, net of current portion	$	154,351	$	151,052

_______________________________

(1) In addition to this amount, costs of $0.7 million and $0.7 million related to the ABL Facility were recorded in other non-current assets as of September 30, 2022 and December 31, 2021, respectively.

Term Loan Facility

Outstanding borrowings under the Term Loan Facility bear interest at either 1) one-month LIBOR (subject to a 1.000% floor) plus an applicable margin of 6.875% or 2) the greater of various benchmark rates plus an applicable margin of 5.875%. At September 30, 2022, the Term Loan Facility bore interest, based on one-month LIBOR, at 9.990%. We have an interest rate swap, which expires in July 2024, that changes the one-month LIBOR to a fixed rate of 1.291% on $60.0 million of the outstanding balance of the Term Loan 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. The Term Loan Facility is collateralized by all of our assets. The Term Loan Facility has a first lien on all assets other than accounts receivable and inventory and has a second lien on accounts receivable and inventory. On March 3, 2022, we amended our Term Loan Facility, which increased the quarterly maximum consolidated net leverage ratio. We were in compliance with all requirements under the Term Loan Facility as of September 30, 2022.

The Term Loan Facility was issued at a $3.8 million discount and we capitalized an additional $2.8 million in new debt issuance costs. These costs are recorded as a direct reduction to the carrying amount of the associated long-term debt and amortized over the term of the debt.

ABL Facility

The ABL Facility provides for a senior secured revolving credit facility in the amount of $50.0 million, of which $30.0 million is available in the form of letters of credit and $5.0 million is available for the issuance of short-term swingline loans. The availability of credit under the ABL Facility is limited by a borrowing base calculation derived from accounts receivable and inventory held in the United States. Outstanding borrowings under the ABL Facility bear interest on a variable rate structure plus an interest rate spread that is based on the average amount of aggregate revolving commitment available. The variable borrowing rate is either 1) LIBOR plus an applicable margin of 1.75% or 2.00%, depending on availability, or 2) the greater of the federal funds rate or prime, plus an applicable margin of 0.75% or 1.00%, depending on availability. We may elect whether to use one-month, three-month, or six-month LIBOR, subject to a 0.50% floor. Interest payments are due monthly on borrowings that utilize one-month LIBOR and quarterly on borrowings that utilize three-month or six-month LIBOR. At September 30, 2022, using one-month LIBOR plus a 1.75% spread, the weighted average interest rate on outstanding borrowings under the ABL Facility was 4.56%. We pay a commitment fee of 0.375% for unused capacity under the ABL Facility and a 1.875% fee on the amount of letters of credit outstanding. The final maturity date of the ABL Facility is March 22, 2026.

As of September 30, 2022, we had $6.0 million of outstanding borrowings under the ABL Facility, $11.1 million of outstanding letters of credit, and $32.1 million available for future borrowings under the ABL Facility. The ABL Facility has a first lien on accounts receivable and inventory. We were in compliance with all requirements under the ABL Facility as of September 30, 2022.

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Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

Leases

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

	Nine Months Ended September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in finance leases	$	262	$	154
Operating cash flows used in operating leases	10,865		10,369
Financing cash flows used in finance leases	2,177		3,545
Right-of-use assets obtained in exchange for new finance lease liabilities	908		1,541
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	3,835		—

_______________________________

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

Leases

Leases

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

	Nine Months Ended September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in finance leases	$	262	$	154
Operating cash flows used in operating leases	10,865		10,369
Financing cash flows used in finance leases	2,177		3,545
Right-of-use assets obtained in exchange for new finance lease liabilities	908		1,541
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	3,835		—

_______________________________

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

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Brazil ICMS Tax Matter

Prior to the acquisition of Autocam Corporation (“Autocam”) in 2014, Autocam’s Brazilian subsidiary (“Autocam Brazil”) received notification from the Brazilian tax authority regarding ICMS (state value added tax) tax credits claimed on intermediary materials (e.g., tooling and perishable items) used in the manufacturing process. The Brazilian tax authority notification disallowed state ICMS tax credits claimed on intermediary materials based on the argument that these items are not intrinsically related to the manufacturing processes. Autocam Brazil filed an administrative defense with the Brazilian tax authority arguing, among other matters, that it should qualify for an ICMS tax credit, contending that the intermediary materials are directly related to the manufacturing process.

We believe that we have substantial legal and factual defenses, and we plan to defend our interests in this matter vigorously. The matter encompasses several lawsuits filed with the Brazilian courts requesting declaratory actions that no tax is due or seeking a stay of execution on the collection of the tax. In 2018, we obtained a favorable decision in one of the declaratory actions for which the period for appeal has expired. We have filed actions in each court requesting dismissal of the matter based on the earlier court action. In May 2020, we received an unfavorable decision in one of the lawsuits, and as a result have recorded a liability to the Brazilian tax authorities and a receivable from the former shareholders of Autocam for the same amount. Although we anticipate a favorable resolution to the remaining matters, we can provide no assurances that we will be successful in achieving dismissal of all pending cases. The U.S. dollar amount that would be owed in the event of an unfavorable decision is subject to interest, penalties, and currency impacts and therefore is dependent on the timing of the decision. For the remaining open lawsuits, we currently believe the cumulative potential liability in the event of unfavorable decisions on all matters will be less than $5.0 million, inclusive of interest and penalties.

We are entitled to indemnification from the former shareholders of Autocam, subject to the limitations and procedures set forth in the agreement and plan of merger relating to the Autocam acquisition. Management believes the indemnification would include amounts owed for the tax, interest, and penalties related to this matter. Accordingly, we do not expect to incur a loss related to this matter even in the event of an unfavorable decision and, therefore, have not accrued an amount for the remaining matters as of September 30, 2022.

Securities Offering Matter

On November 1, 2019, Erie County Employees’ Retirement System, on behalf of a purported class of plaintiffs, filed a complaint in the Supreme Court of the State of New York, County of New York against us, certain of our current and former officers and directors, and each of the underwriters involved in our public offering and sale of 14.4 million shares of our common stock pursuant to a preliminary prospectus supplement, dated September 10, 2018, a final prospectus supplement, dated September 13, 2018, and a base prospectus, dated April 19, 2017, relating to our effective shelf registration statement on Form S-3 (File No. 333-216737) (the “Offering”). The amended complaint alleges violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 in connection with the Offering.

On July 25, 2022, the parties filed a Stipulation of Settlement, which is subject to court approval, to settle the securities offering action. Under the terms of the Stipulation of Settlement, the Company and/or its insurance carrier will make a cash payment to the plaintiff in the amount of $9.5 million (the “Settlement Amount”), in exchange for which the Company and the other named defendants will be released from all claims related to the securities offering action. As of September 30, 2022, we have

previously paid covered expenses totaling $1.0 million meeting our directors' and officers' retention requirement and therefore the Settlement Amount will be covered and paid by our directors' and officers' insurance carrier.

Other Legal Matters

On April 25, 2022, we reached an agreement to settle breach of contract claims brought by a former customer regarding the sale of products by us in 2016. Under the agreement, we are paying $1.8 million to the customer in specified installments through July 2023. The $1.8 million settlement is included in the Other operating expense (income), net line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

All other legal proceedings are of an ordinary and routine nature and are incidental to our operations. Management believes that such proceedings should not, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations, or cash flows. In making that determination, we analyze the facts and circumstances of each case at least quarterly in consultation with our attorneys and determine a range of reasonably possible outcomes.

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Preferred Stock and Stockholders' Equity

9 Months Ended

Sep. 30, 2022

Temporary Equity Disclosure [Abstract]

Preferred Stock and Stockholders' Equity

Preferred Stock and Stockholders' Equity

Series D Perpetual Preferred Stock

On March 22, 2021, we completed a private placement of 65 thousand shares of newly designated Series D Perpetual Preferred Stock, with a par value of $0.01 per share (the “Series D Preferred Stock”), at a price of $1,000 per share, together with detachable warrants (the “2021 Warrants”) to purchase up to 1.9 million shares of our common stock at an exercise price of $0.01 per share. The Series D Preferred Stock has an initial liquidation preference of $1,000 per share and is redeemable at our option in cash at a redemption price equal to the liquidation preference then in effect. Series D Preferred Stock shares earn cash dividends at a rate of 10.0% per year, payable quarterly in arrears, accruing whether or not earned or declared. If no cash dividend is paid, then the liquidation preference per share effective on the dividend date increases by 12.0% per year. Beginning March 22, 2026, the cash dividend rate and in-kind dividend rate increase by 2.5% per year. Cash dividends are required beginning on September 30, 2027.

The Series D Preferred Stock is classified as mezzanine equity, between liabilities and stockholders’ equity, because certain features of the Series D Preferred Stock could require redemption of the Series D Preferred Stock upon a change of control event that is considered not solely within our control. For initial recognition, the Series D Preferred Stock was recognized at a discounted value, net of issuance costs and allocation to warrants and a bifurcated embedded derivative. The aggregate discount is amortized as a deemed dividend through March 22, 2026, which is the date the dividend rate begins to increase by 2.5% per year. Deemed dividends adjust retained earnings (or in the absence of retained earnings, additional paid-in capital).

In accordance with ASC 815-15, Derivatives and Hedging - Embedded Derivatives, certain features of the Series D Preferred Stock were bifurcated and accounted for as derivatives separately. Note 15 discusses the accounting for these features.

As of September 30, 2022, the carrying value of the Series D Preferred Stock shares was $61.8 million, which included $15.1 million of accumulated unpaid and deemed dividends. The following table presents the change in the Series D Preferred Stock carrying value during the nine months ended September 30, 2022.

Balance as of December 31, 2021	$	53,807
Accrual of in-kind dividends	6,620
Amortization	1,359
Balance as of September 30, 2022	$	61,786

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Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with CustomersRevenue is recognized when control of the good or service is transferred to the customer either at a point in time or, in limited circumstances, as our services are rendered over time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or services. During the nine months ended September 30, 2022, we received equipment from a customer as part of the selling price of goods transferred. This noncash consideration was recognized as revenue equal to the fair value of the equipment received.

The following tables summarize revenue by customer geographical region.

Three Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	35,419	$	39,579	$	51	$	75,049
China	12,839		1,378		—		14,217
Brazil	14,109		137		—		14,246
Mexico	5,185		4,769		—		9,954
Germany	1,432		84		—		1,516
Poland	1,100		2		—		1,102
Other	6,038		5,175		—		11,213
Total net sales	$	76,122	$	51,124	$	51	$	127,297

Three Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	35,812	$	38,313	$	(22)	$	74,103
China	10,849		749		—		11,598
Brazil	8,951		192		—		9,143
Mexico	4,981		4,627		—		9,608
Germany	1,080		159		—		1,239
Poland	698		3		—		701
Other	6,215		4,637		—		10,852
Total net sales	$	68,586	$	48,680	$	(22)	$	117,244

Nine Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	109,183	$	120,442	$	—	$	229,625
China	34,155		3,855		—		38,010
Brazil	36,122		794		—		36,916
Mexico	18,336		13,868		—		32,204
Germany	3,836		219		—		4,055
Poland	3,598		7		—		3,605
Other	20,312		15,999		—		36,311
Total net sales	$	225,542	$	155,184	$	—	$	380,726

Nine Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	108,534	$	117,543	$	(69)	$	226,008
China	38,482		3,537		—		42,019
Brazil	28,604		727		—		29,331
Mexico	14,825		12,373		—		27,198
Germany	4,216		419		—		4,635
Poland	2,782		10		—		2,792
Other	22,805		12,417		—		35,222
Total net sales	$	220,248	$	147,026	$	(69)	$	367,205

The following tables summarize revenue by customer industry. Our products in the automotive industry include high-precision components and assemblies for electric power steering systems, electric braking, electric motors, fuel systems, emissions control, transmissions, moldings, stampings, sensors, and electrical contacts. Our products in the general industrial industry

include high-precision metal and plastic components for a variety of industrial applications including diesel industrial motors, heating and cooling systems, fluid power systems, power tools, and more. While many of the industries we serve include electrical components, our products in the residential/commercial electrical industry category in the following tables include components used in smart meters, charging stations, circuit breakers, transformers, electrical contact assemblies, precision stampings, welded contact assemblies, and specification plating and surface finishing.

Three Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	51,388	$	10,822	$	—	$	62,210
General Industrial	19,546		14,751		—		34,297
Residential/Commercial Electrical	—		17,025		—		17,025
Other	5,188		8,526		51		13,765
Total net sales	$	76,122	$	51,124	$	51	$	127,297

Three Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	43,486	$	9,892	$	—	$	53,378
General Industrial	21,396		15,186		—		36,582
Residential/Commercial Electrical	—		16,078		—		16,078
Other	3,704		7,524		(22)		11,206
Total net sales	$	68,586	$	48,680	$	(22)	$	117,244

Nine Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	150,834	$	30,628	$	—	$	181,462
General Industrial	61,883		47,726		—		109,609
Residential/Commercial Electrical	—		52,981		—		52,981
Other	12,825		23,849		—		36,674
Total net sales	$	225,542	$	155,184	$	—	$	380,726

Nine Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	139,877	$	29,974	$	—	$	169,851
General Industrial	70,155		45,617		—		115,772
Residential/Commercial Electrical	—		47,651		—		47,651
Other	10,216		23,784		(69)		33,931
Total net sales	$	220,248	$	147,026	$	(69)	$	367,205

Deferred Revenue

Deferred revenue relates to payments received in advance of performance under the contract and recognized as revenue as (or when) we perform under the contract. The balance of deferred revenue was $0.6 million and $0.5 million as of September 30, 2022 and December 31, 2021, respectively. Revenue recognized for performance obligations satisfied or partially satisfied during the nine months ended September 30, 2022 included $0.5 million that was included in deferred revenue as of December 31, 2021.

Transaction Price Allocated to Future Performance Obligations

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 30, 2022, unless our contracts meet one of the practical expedients. Our contracts met the practical expedient for a performance obligation that is part of a contract that has an original expected duration of one year or less.

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Shared-Based Compensation

9 Months Ended

Sep. 30, 2022

Share-based Payment Arrangement [Abstract]

Shared-Based Compensation

Share-Based Compensation

The following table lists the components of share-based compensation expense by type of award, which is recognized in the “Selling, general, and administrative expense” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Stock options	$	37	$	59	$	124	$	207
Restricted stock	471		521		3,233		1,660
Performance share units	483		351		1,189		1,050
Change in estimate of share-based award vesting (1)	(684)		—		(684)		(337)
Share-based compensation expense	$	307	$	931	$	3,862	$	2,580

_______________________________ 

(1)Amounts reflect the decrease in share-based compensation expense based on the change in estimate of the probability of vesting of share-based awards.

Stock Options

The following table presents stock option activity for the nine months ended September 30, 2022.

	Number of Options (in thousands)	Weighted- Average Exercise Price (per share)		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	621	$	12.24
Expired	(79)	9.71
Outstanding at September 30, 2022	542	$	12.61	3.6 years	$	—	(1)
Exercisable at September 30, 2022	515	$	12.77	3.4 years	$	—	(1)

_______________________________ 

(1)The aggregate intrinsic value is the sum of intrinsic values for each exercisable individual option grant. The intrinsic value is the amount by which the closing market price of our stock at September 30, 2022 was greater than the exercise price of any individual option grant.

Restricted Stock

During the nine months ended September 30, 2022, we granted 897 thousand shares of restricted stock to non-executive directors, officers and certain other key employees under the NN, Inc. 2019 Omnibus Incentive Plan (“2019 Omnibus Plan”). The shares of restricted stock granted during the nine months ended September 30, 2022, vest pro-rata generally over three years for employees and over one year for non-executive directors. We determined the fair value of the shares awarded by using the closing price of our common stock as of the date of grant. The weighted average grant date fair value of restricted stock granted in the nine months ended September 30, 2022, was $3.31 per share. Total grant date fair value of restricted stock that vested in the nine months ended September 30, 2022, was $2.1 million.

The following table presents the status of unvested restricted stock awards as of September 30, 2022 and changes during the nine months then ended.

	Nonvested Restricted Shares (in thousands)	Weighted Average Grant-Date Fair Value (per share)
Unvested at January 1, 2022	469	$	7.28
Granted	897	3.31
Vested	(291)	7.05
Forfeited	(11)	4.37
Unvested at September 30, 2022	1,064	$	4.02

Performance Share Units

Performance Share Units (“PSUs”) are a form of long-term incentive compensation awarded to executive officers and certain other key employees designed to directly align the interests of employees to the interests of our stockholders, and to create long-term stockholder value. Some PSUs are based on total shareholder return (“TSR Awards”), and other PSUs are based on return on invested capital (“ROIC Awards”). TSR Awards granted in 2022 were made pursuant to the 2019 Omnibus Plan and a Performance Share Unit Agreement (the “2019 Omnibus Agreement”). ROIC Awards granted in 2022 were made pursuant to the NN, Inc. 2022 Omnibus Incentive Plan and a Performance Share Unit Agreement.

The TSR Awards vest, if at all, upon our achieving a specified relative total shareholder return, which will be measured against the total shareholder return of a specified index during specified performance periods as defined in the 2019 Omnibus Agreement. The ROIC Awards vest, if at all, upon our achieving a specified average return on invested capital during the performance periods. Each performance period generally begins on January 1 of the year of grant and ends 3 years later on December 31.

We recognize compensation expense over the performance period in which the performance and market conditions are measured. If the PSUs do not vest at the end of the performance periods, then the PSUs will expire automatically. Upon vesting, the PSUs will be settled by the issuance of shares of our common stock, subject to the award recipient’s continued employment. The actual number of shares of common stock to be issued to each award recipient at the end of the performance periods will be interpolated between a threshold and maximum payout amount based on actual performance results. No dividends will be paid on outstanding PSUs during the performance period; however, dividend equivalents will be paid based on dividends declared and the number of shares of common stock that are ultimately earned at the end of the performance periods.

The following table presents the goals with respect to PSUs granted in 2022.

	Threshold  Performance (25% of Shares)	Target Performance (100% of Shares)	Maximum Performance (150% of Shares)
TSR Awards	25th Percentile	55th Percentile	75th Percentile
	Threshold  Performance (50% of Shares)	Target Performance (100% of Shares)	Maximum Performance (150% of Shares)
ROIC Awards	6.4%	8.6%	10.0%

We estimate the grant date fair value of TSR Awards using the Monte Carlo simulation model, as the total shareholder return metric is considered a market condition under ASC Topic 718, Compensation – stock compensation. The grant date fair value of ROIC Awards is based on the closing price of a share of our common stock on the date of grant.

The following table presents the status of unvested PSUs as of September 30, 2022 and changes during the nine months then ended.

	Nonvested TSR Awards			Nonvested ROIC Awards
	Shares (in thousands)	Weighted Average Grant-Date Fair Value (per share)		Shares (in thousands)	Weighted  Average Grant-Date Fair Value (per share)
Nonvested at January 1, 2022	194	$	9.59	228	$	8.14
Granted	382	2.53		408	2.62
Nonvested at September 30, 2022	576	$	4.90	636	$	4.60

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

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

	Foreign Currency Translation		Interest rate swap		Income taxes (1)		Total
Balance as of June 30, 2022	$	(37,906)	$	2,207	$	(468)	$	(36,167)
Other comprehensive income (loss) before reclassifications	(7,653)		1,145		(241)		(6,749)
Amounts reclassified from AOCI to interest expense (2)	—		(146)		30		(116)
Net other comprehensive income (loss)	(7,653)		999		(211)		(6,865)
Balance as of September 30, 2022	$	(45,559)	$	3,206	$	(679)	$	(43,032)
Balance as of June 30, 2021	$	(29,819)	$	—	$	—	$	(29,819)
Other comprehensive income (loss) before reclassifications	(2,612)		(229)		53		(2,788)
Amounts reclassified from AOCI to interest expense (2)	—		29		(7)		22
Net other comprehensive income (loss)	(2,612)		(200)		46		(2,766)
Balance as of September 30, 2021	$	(32,431)	$	(200)	$	46	$	(32,585)

	Foreign Currency Translation		Interest rate swap		Income taxes (1)		Total
Balance as of December 31, 2021	$	(32,016)	$	151	$	(37)	$	(31,902)
Other comprehensive income (loss) before reclassifications	(13,543)		3,119		(655)		(11,079)
Amounts reclassified from AOCI to interest expense (2)	—		(64)		13		(51)
Net other comprehensive income (loss)	(13,543)		3,055		(642)		(11,130)
Balance as of September 30, 2022	$	(45,559)	$	3,206	$	(679)	$	(43,032)
Balance as of December 31, 2020	$	(30,881)	$	(3,712)	$	861	$	(33,732)
Other comprehensive income (loss) before reclassifications	(1,550)		(229)		53		(1,726)
Amounts reclassified from AOCI to interest expense (2)	—		29		(7)		22
Amounts reclassified from AOCI to loss on interest rate swap (3)	—		3,712		(861)		2,851
Net other comprehensive income (loss)	(1,550)		3,512		(815)		1,147
Balance as of September 30, 2021	$	(32,431)	$	(200)	$	46	$	(32,585)

______________________

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

(2) Represents interest rate swap settlements of effective hedge.

(3) Represents reclassification of derivative loss and settlements after discontinuation of hedge accounting.

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Net Income (Loss) Per Common Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Income (Loss) Per Common Share

Net Income (Loss) Per Common Share

In accordance with ASC 260, Earnings Per Share, a company that has participating securities is required to utilize the two-class method for calculating earnings per share (“EPS”) unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings between the holders of common stock and a company’s participating securities. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding. To calculate diluted EPS, basic EPS is further adjusted to include the effect of potentially dilutive stock options, warrants, and convertible preferred stock. 

The following table summarizes the computation of basic and diluted net loss per common share.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator:
Net loss	$	(2,215)	$	(3,377)	$	(14,084)	$	(13,681)
Less: Preferred stock cumulative dividends and deemed dividends	(2,783)		(2,314)		(7,979)		(19,054)
Numerator for basic and diluted undistributed net loss per common share (1)	$	(4,998)	$	(5,691)	$	(22,063)	$	(32,735)
Denominator:
Weighted average common shares outstanding	43,884		43,034		43,695		42,980
Adjustment for unvested restricted common stock	(1,065)		(476)		(918)		(459)
Adjustment for 2021 Warrants outstanding (2)	1,892		1,897		1,893		1,341
Shares used to calculate net loss per share, basic and diluted	44,711		44,455		44,670		43,862
Per common share net loss:
Basic and diluted net loss per common share	$	(0.11)	$	(0.13)	$	(0.49)	$	(0.75)
Cash dividends declared per common share	$	—	$	—	$	—	$	—

_______________________________

(1) Preferred Stock does not participate in losses.

(2) Weighted average 2021 Warrants outstanding are included in shares outstanding for calculation of basic earnings per share because they are exercisable at an exercise price of $0.01 per share, subject to certain adjustments (see Note 15).

The following table presents securities that could be potentially dilutive in the future that were excluded from the calculation of diluted net loss per common share because they had an anti-dilutive effect.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Options	542	752	563	812
2019 Warrants	1,500	1,500	1,500	1,500
	2,042	2,252	2,063	2,312

We have elected to allocate undistributed income to participating securities based on year-to-date results. As there was no undistributed income for the nine months ended September 30, 2022, no such allocation was necessary. In addition, given the undistributed loss in the three and nine months ended September 30, 2022 and 2021, options and the 2019 Warrants are considered anti-dilutive and were excluded from the calculation of diluted net loss per share. Stock options excluded from the calculations of diluted net loss per share had a per share exercise price ranging from $7.93 to $25.16 for the three months ended

September 30, 2022, and $7.93 to $25.16 for the three months ended September 30, 2021. Stock options excluded from the calculations of diluted net loss per share had a per share exercise price ranging from $7.93 to $25.16 for the nine months ended September 30, 2022, and $7.93 to $25.16 for nine months ended September 30, 2021. The 2019 Warrants excluded from the calculation of diluted net loss per share for the three and nine months ended September 30, 2022 and 2021, had a per share exercise price of $11.49.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is an exit price representing the expected amount that an entity would receive to sell an asset or pay to transfer a liability in an orderly transaction with market participants at the measurement date. We followed consistent methods and assumptions to estimate fair values as more fully described in the 2021 Annual Report.

Fair value principles prioritize valuation inputs across three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the assumptions used to measure assets and liabilities at fair value. An asset or liability’s classification within the various levels is determined based on the lowest level input that is significant to the fair value measurement.

Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, derivatives, and long-term debt. As of September 30, 2022, the carrying values of these financial instruments approximated fair value.

Derivative Financial Instruments

Certain features were bifurcated and accounted for separately from the Series B Preferred Stock, which was redeemed in March 2021. The following feature was recorded as a derivative.

•Warrants. In conjunction with our placement of the Series B Preferred Stock in December 2019, we issued detachable warrants to purchase up to 1.5 million shares of our common stock (the “2019 Warrants”), which are exercisable, in full or in part, at any time prior to December 11, 2026, at an exercise price of $11.49 per share.

Certain features were bifurcated and accounted for separately from the Series D Preferred Stock that was issued on March 22, 2021. The following features were recorded as derivatives.

•Change-in-control put feature. The Series D Preferred Stock includes a put feature that allows the holder to redeem the Series D Preferred Stock upon a change in control at the greater of 1) the liquidation preference plus accrued dividends or 2) 140% of the liquidation preference. The put feature is considered a redemption right at a premium and is not clearly and closely related to the debt host.

•Warrants. In conjunction with our placement of the Series D Preferred Stock, we issued detachable warrants to purchase up to 1.9 million shares of our common stock. The 2021 Warrants are exercisable, in full or in part, at any time prior to March 22, 2027, at an exercise price of $0.01 per share, subject to anti-dilution adjustments in the event of certain future equity issuances, stock splits, stock dividends, combinations or similar events.

The following tables show the liabilities measured at fair value for the Preferred Stock derivatives as of September 30, 2022 and December 31, 2021.

	Fair Value Measurements as of September 30, 2022
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Derivative liability - other non-current liabilities	3,230	—	136

	Fair Value Measurements as of December 31, 2021
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Derivative liability - other non-current liabilities	7,771	—	453

The following table presents the change in the Preferred Stock derivatives during the nine months ended September 30, 2022.

Balance as of December 31, 2021	$	8,224
Change in fair value (1)	(4,858)
Balance as of September 30, 2022	$	3,366

_______________________________

(1) Changes in the fair value are recognized in the “Other expense (income), net” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The fair value of the change-in-control put feature utilizes unobservable inputs based on the Company’s assessment of the probability of a change-in-control event occurring in a future period. The probability of a change-in-control event ranged from 3% to 10% as of September 30, 2022.

The fair value of the 2019 Warrants is determined using a valuation model that utilizes unobservable inputs to determine the probability that the 2019 Warrants will remain outstanding for future periods. The probabilities resulted in a weighted average term of 2.9 years as of September 30, 2022, and 3.6 years as of December 31, 2021.

The fair value of the 2021 Warrants is determined using the observable market price of a share of our common stock, less the $0.01 per share exercise price.

Interest Rate Swaps

We manage our exposure to fluctuations in interest rates using a mix of fixed and variable rate debt. We utilize fixed-rate interest rate swap agreements to change the variable interest rate to a fixed rate on a portion of our variable rate debt.

On July 22, 2021, we entered into a fixed-rate interest rate swap agreement to change the LIBOR-based component of the interest rate on a portion of our variable rate debt to a fixed rate of 1.291% (the “2021 Swap”). The 2021 Swap has a notional amount of $60.0 million and a maturity date of July 31, 2024. The objective of the 2021 Swap is to eliminate the variability of cash flows in interest payments on the first $60.0 million of variable rate debt attributable to changes in benchmark one-month LIBOR interest rates. The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark one-month LIBOR interest rates over the interest rate swap term. The changes in cash flows of the interest rate swap are expected to exactly offset changes in cash flows of the variable rate debt. We designated the 2021 Swap as a cash flow hedge at inception. Cash settlements of the 2021 Swap are recognized in interest expense.

On February 8, 2019, we entered into a $700.0 million fixed-rate interest rate swap agreement that changed the LIBOR-based portion of the interest rate on a portion of our variable rate debt to a fixed rate of 2.4575% (the “2019 Swap”). On March 22, 2021, we terminated the 2019 Swap with a $13.7 million cash payment in connection with the extinguishment of our previously outstanding long-term variable-rate debt. The 2019 Swap was designated as a cash flow hedge at inception. However, in the fourth quarter of 2020, the 2019 Swap no longer qualified as an effective hedge, and subsequent changes in fair value of the 2019 Swap were recognized in earnings. Amounts recognized in earnings related to the 2019 Swap are recorded in the “Loss on interest rate swap” line on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) except that cash settlements prior to termination are recognized in “Derivative payments on interest rate swap.” Cash settlements during 2021 are presented in investing activities on the Condensed Consolidated Statements of Cash Flows.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Interest expense (1)	$	(146)	$	29	$	(64)	$	29
Derivative payments on interest rate swap (2)	—		—		—		1,717
Loss on interest rate swap (2)	—		—		—		2,033

_______________________________

(1) Represents settlements on the interest rate swaps while the hedges are effective.

(2) Represents settlements and changes in fair value on the 2019 Swap.

The following tables present the assets and liabilities measured at fair value on a recurring basis for the interest rate swaps as of September 30, 2022 and December 31, 2021.

	Fair Value Measurements as of September 30, 2022
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative asset - other current assets	$	—	$	1,783	$	—
Derivative asset - other non-current assets	—		1,427		—
Total	$	—	$	3,210	$	—

	Fair Value Measurements as of December 31, 2021
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative asset - other non-current assets	$	—	$	284	$	—
Derivative liability - other current liabilities	—		(129)		—
Total	$	—	$	155	$	—

The inputs for determining fair value of the interest rate swaps are classified as Level 2 inputs. Level 2 fair value is based on estimates using standard pricing models. These standard pricing models use inputs which are derived from or corroborated by observable market data such as interest rate yield curves, index forward curves, discount curves, and volatility surfaces. Counterparty to this derivative contract is a highly rated financial institution which we believe carries only a minimal risk of nonperformance.

Fixed Rate Debt

The fair value of our outstanding fixed-rate debt included in the “International lines of credit and other loans” line item within Note 7 to these Notes to Condensed Consolidated Financial Statements approximated carrying value as of September 30, 2022 and December 31, 2021, respectively. These fair values represent Level 2 under the three-tier hierarchy described above. The carrying value of this fixed-rate debt was $8.4 million and $10.9 million as of September 30, 2022 and December 31, 2021, respectively.

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Interim Financial Statements (Policies)

9 Months Ended

Sep. 30, 2022

Quarterly Financial Information Disclosure [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements have not been audited. The Condensed Consolidated Balance Sheet as of December 31, 2021, was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”), which we filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 11, 2022. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to fairly state our results of operations for the three and nine months ended September 30, 2022 and 2021; financial position as of September 30, 2022 and December 31, 2021; and cash flows for the nine months ended September 30, 2022 and 2021, on a basis consistent with our audited consolidated financial statements. These adjustments are of a normal recurring nature and are, in the opinion of management, necessary to state fairly the Company’s financial position and operating results for the interim periods. Certain prior period amounts have been reclassified to conform to the current year’s presentation.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted from the unaudited condensed consolidated financial statements presented in this Quarterly Report. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the 2021 Annual Report. The results for the three and nine months ended September 30, 2022, are not necessarily indicative of results for the year ending December 31, 2022, or any other future periods.

Except for per share data or as otherwise indicated, all U.S. dollar amounts and share counts presented in the tables in these Notes to Condensed Consolidated Financial Statements are in thousands.

Accounting Standards Recently Adopted and Not Yet Adopted

Accounting Standards Recently Adopted

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, ASU 2020-06 simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. In addition, ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. Further, for the diluted earnings-per-share calculation, the new guidance requires entities to use the if-converted method for all convertible instruments and generally requires entities to include the effect of share settlement for instruments that may be settled in cash or shares, among other things. The adoption of ASU 2020-06 effective January 1, 2022 did not have a material impact on our consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”), which clarifies the accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. Specifically, ASU 2021-04 requires the issuer to treat a modification of an equity-classified warrant as an exchange of the original warrant. The difference between the fair value of the modified warrant and the fair value of the warrant immediately before modification is then recognized as an issuance cost or discount of the related transaction. Since we do not have any equity-classified written call options that would be subject to this guidance, the adoption of ASU 2021-04 did not have any impact on our consolidated financial statements and related disclosures during the nine months ended September 30, 2022.

Accounting Standards Not Yet Adopted

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance (“ASU 2021-10”), which requires business entities to provide certain annual disclosures when

they have received government assistance and use a grant or contribution accounting model by analogy to other accounting guidance. Such disclosures include the nature of the transactions, significant terms and conditions, accounting policies, and affected financial statement line items. ASU 2021-10 may be applied either prospectively or retrospectively. We are in the process of assessing the impact ASU 2021-10 may have on our annual disclosures for the year ending December 31, 2022.

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

The following tables present results of operations by reportable segment.

	Mobile Solutions		Power Solutions		Corporate and Consolidations			Total
Three Months Ended September 30, 2022
Net sales	$	76,122	$	51,124	$	51	(a)	$	127,297
Income (loss) from operations	(474)		2,582		(4,225)			(2,117)
Interest expense								(3,746)
Other								1,156
Loss from operations before income taxes and share of net income from joint venture								$	(4,707)
Three Months Ended September 30, 2021
Net sales	$	68,586	$	48,680	$	(22)	(a)	$	117,244
Income (loss) from operations	(257)		1,252		(5,607)			(4,612)
Interest expense								(3,578)
Other								4,346
Loss from operations before income taxes and share of net income from joint venture								$	(3,844)

	Mobile Solutions		Power Solutions		Corporate and Consolidations			Total
Nine Months Ended September 30, 2022
Net sales	$	225,542	$	155,184	$	—		$	380,726
Income (loss) from operations	3,224		4,376		(17,651)			(10,051)
Interest expense								(10,673)
Other								4,219
Loss from operations before income taxes and share of net income from joint venture								$	(16,505)
Nine Months Ended September 30, 2021
Net sales	$	220,248	$	147,026	$	(69)	(a)	$	367,205
Income (loss) from operations	8,342		6,559		(20,123)			(5,222)
Interest expense								(9,175)
Other								(3,352)
Loss from operations before income taxes and share of net income from joint venture								$	(17,749)

_______________________________

(a)Includes elimination of intersegment transactions occurring during the ordinary course of business.

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Inventories (Tables)

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories are comprised of the following amounts:

	September 30, 2022		December 31, 2021
Raw materials	$	32,821	$	27,221
Work in process	29,349		24,960
Finished goods	22,002		22,846
Total inventories	$	84,172	$	75,027

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Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Carrying Amount of Intangible Assets Net

The following table shows changes in the carrying amount of intangible assets, net, by reportable segment.

	Mobile Solutions		Power Solutions		Total
Balance as of December 31, 2021	$	25,709	$	63,009	$	88,718
Amortization	(2,515)		(8,245)		(10,760)
Balance as of September 30, 2022	$	23,194	$	54,764	$	77,958

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Investment in Joint Venture (Tables)

9 Months Ended

Sep. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Summarized Activity Related to Investment in Joint Venture

The following table shows changes in our investment in the JV.

Balance as of December 31, 2021	$	34,045
Share of earnings	3,935
Dividends paid by joint venture	(6,245)
Foreign currency translation loss	(3,542)
Balance as of September 30, 2022	$	28,193

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Debt (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Summary of Debt

The following table presents debt balances as of September 30, 2022 and December 31, 2021.

	September 30, 2022		December 31, 2021
Term Loan Facility	$	147,750	$	148,875
ABL Facility	6,000		—
International lines of credit and other loans	8,436		10,930
Total principal	162,186		159,805
Less-current maturities of long-term debt	3,150		3,074
Principal, net of current portion	159,036		156,731
Less-unamortized debt issuance costs and discount (1)	4,685		5,679
Long-term debt, net of current portion	$	154,351	$	151,052

_______________________________

(1) In addition to this amount, costs of $0.7 million and $0.7 million related to the ABL Facility were recorded in other non-current assets as of September 30, 2022 and December 31, 2021, respectively.

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Preferred Stock and Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2022

Temporary Equity Disclosure [Abstract]

Temporary Equity

The following table presents the change in the Series D Preferred Stock carrying value during the nine months ended September 30, 2022.

Balance as of December 31, 2021	$	53,807
Accrual of in-kind dividends	6,620
Amortization	1,359
Balance as of September 30, 2022	$	61,786

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Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Summary of Revenue from Contracts with Customers

Three Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	35,419	$	39,579	$	51	$	75,049
China	12,839		1,378		—		14,217
Brazil	14,109		137		—		14,246
Mexico	5,185		4,769		—		9,954
Germany	1,432		84		—		1,516
Poland	1,100		2		—		1,102
Other	6,038		5,175		—		11,213
Total net sales	$	76,122	$	51,124	$	51	$	127,297

Three Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	35,812	$	38,313	$	(22)	$	74,103
China	10,849		749		—		11,598
Brazil	8,951		192		—		9,143
Mexico	4,981		4,627		—		9,608
Germany	1,080		159		—		1,239
Poland	698		3		—		701
Other	6,215		4,637		—		10,852
Total net sales	$	68,586	$	48,680	$	(22)	$	117,244

Nine Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	109,183	$	120,442	$	—	$	229,625
China	34,155		3,855		—		38,010
Brazil	36,122		794		—		36,916
Mexico	18,336		13,868		—		32,204
Germany	3,836		219		—		4,055
Poland	3,598		7		—		3,605
Other	20,312		15,999		—		36,311
Total net sales	$	225,542	$	155,184	$	—	$	380,726

Nine Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
United States and Puerto Rico	$	108,534	$	117,543	$	(69)	$	226,008
China	38,482		3,537		—		42,019
Brazil	28,604		727		—		29,331
Mexico	14,825		12,373		—		27,198
Germany	4,216		419		—		4,635
Poland	2,782		10		—		2,792
Other	22,805		12,417		—		35,222
Total net sales	$	220,248	$	147,026	$	(69)	$	367,205

The following tables summarize revenue by customer industry. Our products in the automotive industry include high-precision components and assemblies for electric power steering systems, electric braking, electric motors, fuel systems, emissions control, transmissions, moldings, stampings, sensors, and electrical contacts. Our products in the general industrial industry

include high-precision metal and plastic components for a variety of industrial applications including diesel industrial motors, heating and cooling systems, fluid power systems, power tools, and more. While many of the industries we serve include electrical components, our products in the residential/commercial electrical industry category in the following tables include components used in smart meters, charging stations, circuit breakers, transformers, electrical contact assemblies, precision stampings, welded contact assemblies, and specification plating and surface finishing.

Three Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	51,388	$	10,822	$	—	$	62,210
General Industrial	19,546		14,751		—		34,297
Residential/Commercial Electrical	—		17,025		—		17,025
Other	5,188		8,526		51		13,765
Total net sales	$	76,122	$	51,124	$	51	$	127,297

Three Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	43,486	$	9,892	$	—	$	53,378
General Industrial	21,396		15,186		—		36,582
Residential/Commercial Electrical	—		16,078		—		16,078
Other	3,704		7,524		(22)		11,206
Total net sales	$	68,586	$	48,680	$	(22)	$	117,244

Nine Months Ended September 30, 2022	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	150,834	$	30,628	$	—	$	181,462
General Industrial	61,883		47,726		—		109,609
Residential/Commercial Electrical	—		52,981		—		52,981
Other	12,825		23,849		—		36,674
Total net sales	$	225,542	$	155,184	$	—	$	380,726

Nine Months Ended September 30, 2021	Mobile Solutions		Power Solutions		Intersegment Sales Eliminations		Total
Automotive	$	139,877	$	29,974	$	—	$	169,851
General Industrial	70,155		45,617		—		115,772
Residential/Commercial Electrical	—		47,651		—		47,651
Other	10,216		23,784		(69)		33,931
Total net sales	$	220,248	$	147,026	$	(69)	$	367,205

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Shared-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-based Payment Arrangement [Abstract]

Components of Share-Based Compensation Expense by Type of Award

The following table lists the components of share-based compensation expense by type of award, which is recognized in the “Selling, general, and administrative expense” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Stock options	$	37	$	59	$	124	$	207
Restricted stock	471		521		3,233		1,660
Performance share units	483		351		1,189		1,050
Change in estimate of share-based award vesting (1)	(684)		—		(684)		(337)
Share-based compensation expense	$	307	$	931	$	3,862	$	2,580

_______________________________ 

(1)Amounts reflect the decrease in share-based compensation expense based on the change in estimate of the probability of vesting of share-based awards.

S

Reconciliation of Option Activity

The following table presents stock option activity for the nine months ended September 30, 2022.

	Number of Options (in thousands)	Weighted- Average Exercise Price (per share)		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	621	$	12.24
Expired	(79)	9.71
Outstanding at September 30, 2022	542	$	12.61	3.6 years	$	—	(1)
Exercisable at September 30, 2022	515	$	12.77	3.4 years	$	—	(1)

_______________________________ 

(1)The aggregate intrinsic value is the sum of intrinsic values for each exercisable individual option grant. The intrinsic value is the amount by which the closing market price of our stock at September 30, 2022 was greater than the exercise price of any individual option grant.

Reconciliation of Restricted Stock Option Activity

The following table presents the status of unvested restricted stock awards as of September 30, 2022 and changes during the nine months then ended.

	Nonvested Restricted Shares (in thousands)	Weighted Average Grant-Date Fair Value (per share)
Unvested at January 1, 2022	469	$	7.28
Granted	897	3.31
Vested	(291)	7.05
Forfeited	(11)	4.37
Unvested at September 30, 2022	1,064	$	4.02

Schedule of Performance Based Awards Goals with Respect to TSR and ROIC

The following table presents the goals with respect to PSUs granted in 2022.

	Threshold  Performance (25% of Shares)	Target Performance (100% of Shares)	Maximum Performance (150% of Shares)
TSR Awards	25th Percentile	55th Percentile	75th Percentile
	Threshold  Performance (50% of Shares)	Target Performance (100% of Shares)	Maximum Performance (150% of Shares)
ROIC Awards	6.4%	8.6%	10.0%

Summary of Status of Unvested PSU Awards

The following table presents the status of unvested PSUs as of September 30, 2022 and changes during the nine months then ended.

	Nonvested TSR Awards			Nonvested ROIC Awards
	Shares (in thousands)	Weighted Average Grant-Date Fair Value (per share)		Shares (in thousands)	Weighted  Average Grant-Date Fair Value (per share)
Nonvested at January 1, 2022	194	$	9.59	228	$	8.14
Granted	382	2.53		408	2.62
Nonvested at September 30, 2022	576	$	4.90	636	$	4.60

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income

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

	Foreign Currency Translation		Interest rate swap		Income taxes (1)		Total
Balance as of June 30, 2022	$	(37,906)	$	2,207	$	(468)	$	(36,167)
Other comprehensive income (loss) before reclassifications	(7,653)		1,145		(241)		(6,749)
Amounts reclassified from AOCI to interest expense (2)	—		(146)		30		(116)
Net other comprehensive income (loss)	(7,653)		999		(211)		(6,865)
Balance as of September 30, 2022	$	(45,559)	$	3,206	$	(679)	$	(43,032)
Balance as of June 30, 2021	$	(29,819)	$	—	$	—	$	(29,819)
Other comprehensive income (loss) before reclassifications	(2,612)		(229)		53		(2,788)
Amounts reclassified from AOCI to interest expense (2)	—		29		(7)		22
Net other comprehensive income (loss)	(2,612)		(200)		46		(2,766)
Balance as of September 30, 2021	$	(32,431)	$	(200)	$	46	$	(32,585)

	Foreign Currency Translation		Interest rate swap		Income taxes (1)		Total
Balance as of December 31, 2021	$	(32,016)	$	151	$	(37)	$	(31,902)
Other comprehensive income (loss) before reclassifications	(13,543)		3,119		(655)		(11,079)
Amounts reclassified from AOCI to interest expense (2)	—		(64)		13		(51)
Net other comprehensive income (loss)	(13,543)		3,055		(642)		(11,130)
Balance as of September 30, 2022	$	(45,559)	$	3,206	$	(679)	$	(43,032)
Balance as of December 31, 2020	$	(30,881)	$	(3,712)	$	861	$	(33,732)
Other comprehensive income (loss) before reclassifications	(1,550)		(229)		53		(1,726)
Amounts reclassified from AOCI to interest expense (2)	—		29		(7)		22
Amounts reclassified from AOCI to loss on interest rate swap (3)	—		3,712		(861)		2,851
Net other comprehensive income (loss)	(1,550)		3,512		(815)		1,147
Balance as of September 30, 2021	$	(32,431)	$	(200)	$	46	$	(32,585)

______________________

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

(2) Represents interest rate swap settlements of effective hedge.

(3) Represents reclassification of derivative loss and settlements after discontinuation of hedge accounting.

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Net Income (Loss) Per Common Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method

The following table summarizes the computation of basic and diluted net loss per common share.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator:
Net loss	$	(2,215)	$	(3,377)	$	(14,084)	$	(13,681)
Less: Preferred stock cumulative dividends and deemed dividends	(2,783)		(2,314)		(7,979)		(19,054)
Numerator for basic and diluted undistributed net loss per common share (1)	$	(4,998)	$	(5,691)	$	(22,063)	$	(32,735)
Denominator:
Weighted average common shares outstanding	43,884		43,034		43,695		42,980
Adjustment for unvested restricted common stock	(1,065)		(476)		(918)		(459)
Adjustment for 2021 Warrants outstanding (2)	1,892		1,897		1,893		1,341
Shares used to calculate net loss per share, basic and diluted	44,711		44,455		44,670		43,862
Per common share net loss:
Basic and diluted net loss per common share	$	(0.11)	$	(0.13)	$	(0.49)	$	(0.75)
Cash dividends declared per common share	$	—	$	—	$	—	$	—

_______________________________

(1) Preferred Stock does not participate in losses.

(2) Weighted average 2021 Warrants outstanding are included in shares outstanding for calculation of basic earnings per share because they are exercisable at an exercise price of $0.01 per share, subject to certain adjustments (see Note 15).

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following table presents securities that could be potentially dilutive in the future that were excluded from the calculation of diluted net loss per common share because they had an anti-dilutive effect.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Options	542	752	563	812
2019 Warrants	1,500	1,500	1,500	1,500
	2,042	2,252	2,063	2,312

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Derivative Instruments

The following tables show the liabilities measured at fair value for the Preferred Stock derivatives as of September 30, 2022 and December 31, 2021.

	Fair Value Measurements as of September 30, 2022
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Derivative liability - other non-current liabilities	3,230	—	136

	Fair Value Measurements as of December 31, 2021
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Derivative liability - other non-current liabilities	7,771	—	453

The following table presents the change in the Preferred Stock derivatives during the nine months ended September 30, 2022.

Balance as of December 31, 2021	$	8,224
Change in fair value (1)	(4,858)
Balance as of September 30, 2022	$	3,366

_______________________________

(1) Changes in the fair value are recognized in the “Other expense (income), net” line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Schedule of Interest Rate Derivatives

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Interest expense (1)	$	(146)	$	29	$	(64)	$	29
Derivative payments on interest rate swap (2)	—		—		—		1,717
Loss on interest rate swap (2)	—		—		—		2,033

_______________________________

(1) Represents settlements on the interest rate swaps while the hedges are effective.

(2) Represents settlements and changes in fair value on the 2019 Swap.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present the assets and liabilities measured at fair value on a recurring basis for the interest rate swaps as of September 30, 2022 and December 31, 2021.

	Fair Value Measurements as of September 30, 2022
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative asset - other current assets	$	—	$	1,783	$	—
Derivative asset - other non-current assets	—		1,427		—
Total	$	—	$	3,210	$	—

	Fair Value Measurements as of December 31, 2021
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative asset - other non-current assets	$	—	$	284	$	—
Derivative liability - other current liabilities	—		(129)		—
Total	$	—	$	155	$	—

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Segment Information - Continuing Operations by Reportable Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Net sales	$ 127,297	$ 117,244	$ 380,726	$ 367,205
Income (loss) from operations	(2,117)	(4,612)	(10,051)	(5,222)
Interest Expense	(3,746)	(3,578)	(10,673)	(9,175)
Gain (Loss) on Derivatives and Other Non-operating Income (Expense) Net	1,156	4,346	4,219	(3,352)
Income (Loss) from operations before income taxes and share of income from joint venture	(4,707)	(3,844)	(16,505)	(17,749)
United States and Puerto Rico
Segment Reporting Information [Line Items]
Net sales	75,049	74,103	229,625	226,008
Operating Segments | Mobile Solutions
Segment Reporting Information [Line Items]
Net sales	76,122	68,586	225,542	220,248
Income (loss) from operations	(474)	(257)	3,224	8,342
Operating Segments | Mobile Solutions | United States and Puerto Rico
Segment Reporting Information [Line Items]
Net sales	35,419	35,812	109,183	108,534
Operating Segments | Power Solutions
Segment Reporting Information [Line Items]
Net sales	51,124	48,680	155,184	147,026
Income (loss) from operations	2,582	1,252	4,376	6,559
Operating Segments | Power Solutions | United States and Puerto Rico
Segment Reporting Information [Line Items]
Net sales	39,579	38,313	120,442	117,543
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	51	(22)	0	(69)
Income (loss) from operations	(4,225)	(5,607)	$ (17,651)	$ (20,123)
Intersegment Eliminations [Member] | United States and Puerto Rico
Segment Reporting Information [Line Items]
Net sales	$ 51	$ (22)

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Segment Information - Additional Information (Details)	9 Months Ended
	Sep. 30, 2022 segment
Revenue, Major Customer [Line Items]
Number of reportable segments	2
Number of operating segments	2

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Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 32,821	$ 27,221
Work in process	29,349	24,960
Finished goods	22,002	22,846
Total inventories	$ 84,172	$ 75,027

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Intangible Assets, Net - Summary of Carrying Amount of Intangible Assets by Segment (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Finite-lived Intangible Assets [Roll Forward]
Beginning Balance	$ 88,718
Amortization	(10,760)
Ending balance	77,958
Mobile Solutions
Finite-lived Intangible Assets [Roll Forward]
Beginning Balance	25,709
Amortization	(2,515)
Ending balance	23,194
Power Solutions
Finite-lived Intangible Assets [Roll Forward]
Beginning Balance	63,009
Amortization	(8,245)
Ending balance	$ 54,764

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Investment in Joint Venture - Additional Information (Detail)	Sep. 30, 2022
Wuxi Weifu Autocam Precision Machinery Company, Ltd.
Schedule of Equity Method Investments [Line Items]
Investment in joint venture	49.00%

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Investment in Joint Venture - Summarized Activity Related to Investment in Joint Venture (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Equity Method Investments [Roll Forward]
Beginning Balance			$ 34,045
Share of earnings	$ 1,424	$ 842	3,935	$ 3,456
Ending Balance	28,193		28,193
Joint Venture
Equity Method Investments [Roll Forward]
Beginning Balance			34,045
Share of earnings			3,935
Proceeds from Equity Method Investment, Distribution			(6,245)
Foreign currency translation loss			(3,542)
Ending Balance	$ 28,193		$ 28,193

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Income Taxes - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Effective tax rate from continuing operations	22.70%	(9.80%)	(9.20%)	3.50%
Effective income tax rate reconciliation, at federal statutory income tax rate, percent			21.00%

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Debt - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021	Mar. 22, 2021
Debt Instrument [Line Items]
Debt issuance costs, line of credit arrangements, net	$ 700	$ 700
Interest Rate Swap | July 22 2021
Debt Instrument [Line Items]
Derivative, fixed interest rate	1.291%
Derivative, notional amount	$ 60,000
Interest Rate Swap | February 8, 2019
Debt Instrument [Line Items]
Derivative, fixed interest rate			2.4575%
Derivative, notional amount			$ 700,000
Term Loan Facility Member
Debt Instrument [Line Items]
Borrowings	$ 150,000
Interest rate during period	9.99%
Principal payment amount	$ 400
Issuance discount			3,800
Debt issuance costs			$ 2,800
Outstanding borrowings	$ 147,750	148,875
Term Loan Facility Member | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Applicable margin	6.875%
Term Loan Facility Member | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Applicable margin	1.00%
Term Loan Facility Member | Various Benchmark Rates Member
Debt Instrument [Line Items]
Applicable margin	5.875%
Asset Backed Credit Facility Member [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 50,000
Applicable margin	1.75%
Interest rate during period	4.56%
Debt instrument, LIBOR floor rate	0.50%
Unused capacity, commitment fee percentage	0.375%
Outstanding borrowings	$ 6,000
Available capacity	32,100
Letters of Credit Outstanding, Amount	$ 11,100
Asset Backed Credit Facility Member [Member] | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Applicable margin	1.75%
Asset Backed Credit Facility Member [Member] | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Applicable margin	2.00%
Asset Backed Credit Facility Member [Member] | Federal Funds Or Prime Rate Member | Minimum
Debt Instrument [Line Items]
Applicable margin	0.75%
Asset Backed Credit Facility Member [Member] | Federal Funds Or Prime Rate Member | Maximum
Debt Instrument [Line Items]
Applicable margin	1.00%
Senior Secured Revolver
Debt Instrument [Line Items]
Outstanding borrowings		$ 0
Letters of credit
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 30,000
Unused capacity, commitment fee percentage	1.875%
Swingline loans
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 5,000

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Debt - Summary of Debt (Detail) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Total principal	$ 162,186	$ 159,805
Less-current maturities of long-term debt	3,150	3,074
Principal, net of current portion	159,036	156,731
Less-unamortized debt issuance costs	4,685	5,679
Long-term debt, net of current portion	154,351	151,052
Debt issuance costs, line of credit arrangements, net	700	700
Term Loan Facility Member
Debt Instrument [Line Items]
Term loans	147,750	148,875
Foreign Line of Credit
Debt Instrument [Line Items]
International lines of credit and other loans	$ 8,436	$ 10,930

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in finance leases	$ 262	$ 154
Operating cash flows used in operating leases	10,865	10,369
Financing cash flows used in finance leases	2,177	3,545
Right-of-use assets obtained in exchange for new finance lease liabilities	908	1,541
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	$ 3,835	$ 0

XML

Commitments and Contingencies - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions		9 Months Ended
	Nov. 01, 2019	Sep. 30, 2022
Loss Contingencies [Line Items]
Stock issued during period, shares, new issues (in shares)	14.4
Securities Offering Matter
Loss Contingencies [Line Items]
Litigation Settlement, Amount Awarded to Other Party		$ 9.5
Litigation Settlement, Expense		1.0
Contract Claims
Loss Contingencies [Line Items]
Litigation Settlement, Amount Awarded to Other Party		1.8
Maximum
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss		$ 5.0

XML

Preferred Stock and Stockholders' Equity - Additional Information (Details) - Series D Preferred Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Temporary Equity [Line Items]
Sale of stock, number of shares issued in transaction (in shares)		65
Temporary equity, par value (in dollars per share)	$ 0.01
Sale of stock, price per share (in dollars per share)	$ 1,000
Class of warrant or right, number of securities called by warrants or rights (in shares)	1,900
Class of warrant or right, exercise price of warrants or rights (in dollars per share)	$ 0.01
Temporary equity, liquidation preference per share (in dollars per share)	$ 1,000
Temporary equity, dividend rate, percentage	10.00%
Increase in dividend rate if no cash dividends paid	12.00%
Annual increase in dividend rate	2.50%
Carrying value	$ 61,786		$ 53,807
Accrual of in-kind dividends	6,620
Temporary Equity Dividends Unpaid Deemed	$ 15,100

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Preferred Stock and Stockholders' Equity - Carrying Value Roll Forward (Details) - Series D Preferred Stock $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance as of December 31, 2021	$ 53,807
Accrual of in-kind dividends	6,620
Amortization	1,359
Balance as of September 30, 2022	$ 61,786

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Revenue from Contracts with Customers - Summary of Revenue from Contracts with Customers (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue, Major Customer [Line Items]
Net sales	$ 127,297	$ 117,244	$ 380,726	$ 367,205
Automotive
Revenue, Major Customer [Line Items]
Net sales	62,210	53,378	181,462	169,851
General Industrial
Revenue, Major Customer [Line Items]
Net sales	34,297	36,582	109,609	115,772
Residential/Commercial Electrical
Revenue, Major Customer [Line Items]
Net sales	17,025	16,078	52,981	47,651
Other End Market Member
Revenue, Major Customer [Line Items]
Net sales	13,765	11,206	36,674	33,931
United States and Puerto Rico
Revenue, Major Customer [Line Items]
Net sales	75,049	74,103	229,625	226,008
China
Revenue, Major Customer [Line Items]
Net sales	14,217	11,598	38,010	42,019
Brazil
Revenue, Major Customer [Line Items]
Net sales	14,246	9,143	36,916	29,331
Mexico
Revenue, Major Customer [Line Items]
Net sales	9,954	9,608	32,204	27,198
Germany
Revenue, Major Customer [Line Items]
Net sales	1,516	1,239	4,055	4,635
Poland
Revenue, Major Customer [Line Items]
Net sales	1,102	701	3,605	2,792
Other
Revenue, Major Customer [Line Items]
Net sales	11,213	10,852	36,311	35,222
Operating Segments | Mobile Solutions
Revenue, Major Customer [Line Items]
Net sales	76,122	68,586	225,542	220,248
Operating Segments | Mobile Solutions | Automotive
Revenue, Major Customer [Line Items]
Net sales	51,388	43,486	150,834	139,877
Operating Segments | Mobile Solutions | General Industrial
Revenue, Major Customer [Line Items]
Net sales	19,546	21,396	61,883	70,155
Operating Segments | Mobile Solutions | Residential/Commercial Electrical
Revenue, Major Customer [Line Items]
Net sales	0	0	0	0
Operating Segments | Mobile Solutions | Other End Market Member
Revenue, Major Customer [Line Items]
Net sales	5,188	3,704	12,825	10,216
Operating Segments | Mobile Solutions | United States and Puerto Rico
Revenue, Major Customer [Line Items]
Net sales	35,419	35,812	109,183	108,534
Operating Segments | Mobile Solutions | China
Revenue, Major Customer [Line Items]
Net sales	12,839	10,849	34,155	38,482
Operating Segments | Mobile Solutions | Brazil
Revenue, Major Customer [Line Items]
Net sales	14,109	8,951	36,122	28,604
Operating Segments | Mobile Solutions | Mexico
Revenue, Major Customer [Line Items]
Net sales	5,185	4,981	18,336	14,825
Operating Segments | Mobile Solutions | Germany
Revenue, Major Customer [Line Items]
Net sales	1,432	1,080	3,836	4,216
Operating Segments | Mobile Solutions | Poland
Revenue, Major Customer [Line Items]
Net sales	1,100	698	3,598	2,782
Operating Segments | Mobile Solutions | Other
Revenue, Major Customer [Line Items]
Net sales	6,038	6,215	20,312	22,805
Operating Segments | Power Solutions
Revenue, Major Customer [Line Items]
Net sales	51,124	48,680	155,184	147,026
Operating Segments | Power Solutions | Automotive
Revenue, Major Customer [Line Items]
Net sales	10,822	9,892	30,628	29,974
Operating Segments | Power Solutions | General Industrial
Revenue, Major Customer [Line Items]
Net sales	14,751	15,186	47,726	45,617
Operating Segments | Power Solutions | Residential/Commercial Electrical
Revenue, Major Customer [Line Items]
Net sales	17,025	16,078	52,981	47,651
Operating Segments | Power Solutions | Other End Market Member
Revenue, Major Customer [Line Items]
Net sales	8,526	7,524	23,849	23,784
Operating Segments | Power Solutions | United States and Puerto Rico
Revenue, Major Customer [Line Items]
Net sales	39,579	38,313	120,442	117,543
Operating Segments | Power Solutions | China
Revenue, Major Customer [Line Items]
Net sales	1,378	749	3,855	3,537
Operating Segments | Power Solutions | Brazil
Revenue, Major Customer [Line Items]
Net sales	137	192	794	727
Operating Segments | Power Solutions | Mexico
Revenue, Major Customer [Line Items]
Net sales	4,769	4,627	13,868	12,373
Operating Segments | Power Solutions | Germany
Revenue, Major Customer [Line Items]
Net sales	84	159	219	419
Operating Segments | Power Solutions | Poland
Revenue, Major Customer [Line Items]
Net sales	2	3	7	10
Operating Segments | Power Solutions | Other
Revenue, Major Customer [Line Items]
Net sales	5,175	4,637	15,999	12,417
Intersegment Eliminations [Member]
Revenue, Major Customer [Line Items]
Net sales	51	(22)	0	(69)
Intersegment Eliminations [Member] | Other End Market Member
Revenue, Major Customer [Line Items]
Net sales	51	(22)	$ 0	$ (69)
Intersegment Eliminations [Member] | United States and Puerto Rico
Revenue, Major Customer [Line Items]
Net sales	$ 51	$ (22)

XML

Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue, Major Customer [Line Items]
Net sales	$ 127,297	$ 117,244	$ 380,726	$ 367,205

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Revenue from Contracts with Customers - Summary of Contract Liabilities from Contracts with Customers (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Contract with Customer, Liability [Abstract]
Deferred revenue	$ 600	$ 500
Amounts included in deferred revenue for performance obligations satisfied or partially satisfied	$ 500

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Shared-Based Compensation - Additional Information (Detail) shares in Thousands, $ in Millions	9 Months Ended
	Sep. 30, 2022 USD ($) shares
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units issued (in shares)	897
Total grant-date fair value of restricted stock, vested | $	$ 2.1
Performance Shares TSR Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units issued (in shares)	382
Award performance period	3 years
Performance Shares ROIC Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units issued (in shares)	408
Employees | Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock awards granted vesting period	3 years
Non-executive Directors | Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock awards granted vesting period	1 year

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Shared-Based Compensation - Components of Share-Based Compensation Expense by Type of Award (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 307	$ 931	$ 3,862	$ 2,580
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	37	59	124	207
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	471	521	3,233	1,660
Performance share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	483	351	1,189	1,050
Change in Estimate of Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ (684)	$ 0	$ (684)	$ (337)

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Shared-Based Compensation - Reconciliation of Option Activity (Detail) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) $ / shares shares
Number of Options (in thousands)
Beginning balance (in shares) | shares	621
Expired | shares	(79)
Ending balance (in shares) | shares	542
Options exercisable (in shares) | shares	515
Weighted- Average Exercise Price (per share)
Beginning balance (in dollars per share) | $ / shares	$ 12.24
Expired (in dollars per share) | $ / shares	9.71
Ending balance (in dollars per share) | $ / shares	12.61
Options exercisable (in dollars per share) | $ / shares	$ 12.77
Weighted- Average Remaining Contractual Term
Outstanding	3 years 7 months 6 days
Options exercisable	3 years 4 months 24 days
Aggregate Intrinsic Value
Outstanding | $	$ 0
Options exercisable | $	$ 0

XML

Shared-Based Compensation - Reconciliation of Restricted Stock Option Activity (Detail) shares in Thousands	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Restricted stock
Nonvested Shares (in thousands)
Nonvested restricted shares, beginning balance (in shares) | shares	469
Nonvested restricted shares, granted (in shares) | shares	897
Nonvested restricted shares, vested (in shares) | shares	(291)
Nonvested restricted shares, forfeited (in shares) | shares	(11)
Nonvested restricted shares, ending balance (in shares) | shares	1,064
Weighted Average Grant-Date Fair Value (per share)
Beginning balance (in dollars per share) | $ / shares	$ 7.28
Granted (in dollars per share) | $ / shares	3.31
Vested (in dollars per share) | $ / shares	7.05
Forfeited (in dollars per share) | $ / shares	4.37
Ending balance (in dollars per share) | $ / shares	$ 4.02
Performance Shares TSR Awards [Member]
Nonvested Shares (in thousands)
Nonvested restricted shares, beginning balance (in shares) | shares	194
Nonvested restricted shares, granted (in shares) | shares	382
Nonvested restricted shares, ending balance (in shares) | shares	576
Weighted Average Grant-Date Fair Value (per share)
Beginning balance (in dollars per share) | $ / shares	$ 9.59
Granted (in dollars per share) | $ / shares	2.53
Ending balance (in dollars per share) | $ / shares	$ 4.90
Performance Shares ROIC Award [Member]
Nonvested Shares (in thousands)
Nonvested restricted shares, beginning balance (in shares) | shares	228
Nonvested restricted shares, granted (in shares) | shares	408
Nonvested restricted shares, ending balance (in shares) | shares	636
Weighted Average Grant-Date Fair Value (per share)
Beginning balance (in dollars per share) | $ / shares	$ 8.14
Granted (in dollars per share) | $ / shares	2.62
Ending balance (in dollars per share) | $ / shares	$ 4.60

XML

Shared-Based Compensation - Schedule of Performance Based Awards Goals with Respect to TSR and ROIC (Detail)	9 Months Ended
	Sep. 30, 2022
Performance Shares TSR Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Threshold performance, percentage	25.00%
Target performance, percentage	55.00%
Maximum performance, percentage	75.00%
Performance Shares ROIC Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Threshold performance, percentage	6.40%
Target performance, percentage	8.60%
Maximum performance, percentage	10.00%

XML

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 206,322	$ 232,355	$ 224,185	$ 254,152
OCI before reclassifications and tax			(11,079)	(1,726)
OCI before reclassifications, net of tax	(6,749)	(2,788)
Net other comprehensive income (loss), net of tax	(6,865)	(2,766)	(11,130)	1,147
Ending balance	194,766	224,829	194,766	224,829
Loss on Interest Rate Swap
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Amounts reclassified from AOCI, before tax				2,851
Interest Expense
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Amounts reclassified from AOCI, net of tax	(116)	22
Amounts reclassified from AOCI, before tax			(51)	22
AOCI Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(36,167)	(29,819)	(31,902)	(33,732)
Ending balance	(43,032)	(32,585)	(43,032)	(32,585)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(37,906)	(29,819)	(32,016)	(30,881)
OCI before reclassifications and tax	(7,653)	(2,612)	(13,543)	(1,550)
Net other comprehensive income (loss), before tax	(7,653)	(2,612)
Net other comprehensive income (loss), net of tax			(13,543)	(1,550)
Ending balance	(45,559)	(32,431)	(45,559)	(32,431)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | Loss on Interest Rate Swap
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Amounts reclassified from AOCI, before tax				0
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | Interest Expense
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Amounts reclassified from AOCI, before tax	0	0
Amounts reclassified from AOCI, before tax			0	0
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	2,207	0	151	(3,712)
OCI before reclassifications and tax	1,145	(229)	3,119	(229)
Net other comprehensive income (loss), before tax	999	(200)
Ending balance	3,206	(200)	3,206	(200)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Interest Rate Swap
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Net other comprehensive income (loss), net of tax			3,055	3,512
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Loss on Interest Rate Swap
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Amounts reclassified from AOCI, before tax				3,712
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Interest Expense
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Amounts reclassified from AOCI, before tax	(146)	29	(64)	29
Income taxes
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(468)	0	(37)	861
OCI before reclassifications, tax	(241)	53	(655)	53
Net other comprehensive income (loss), tax	(211)	46
Net other comprehensive income (loss), net of tax			(642)	(815)
Ending balance	(679)	46	(679)	46
Income taxes | Loss on Interest Rate Swap
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Amounts reclassified from AOCI, tax				(861)
Income taxes | Interest Expense
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Amounts reclassified from AOCI, tax	$ 30	$ (7)	$ 13	$ (7)

XML

Net Income (Loss) Per Common Share - Summary of Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net loss	$ (2,215)	$ (3,377)	$ (14,084)	$ (13,681)
Less: Preferred stock cumulative dividends and deemed dividends	(2,783)	(2,314)	(7,979)	(19,054)
Numerator for basic undistributed net loss per common share	(4,998)	(5,691)	(22,063)	(32,735)
Numerator for diluted undistributed net loss per common share	$ (4,998)	$ (5,691)	$ (22,063)	$ (32,735)
Weighted Average Number of Shares Issued, Basic	43,884	43,034	43,695	42,980
Weighted Average Number of Shares, Restricted Stock	(1,065)	(476)	(918)	(459)
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants	1,892	1,897	1,893	1,341
Weighted average common shares outstanding, diluted (in shares)	44,711	44,455	44,670	43,862
Weighted Average Number of Shares Outstanding, Basic and Diluted	44,711	44,455	44,670	43,862
Basic net loss per share (in dollars per share)	$ (0.11)	$ (0.13)	$ (0.49)	$ (0.75)
Diluted net loss per share (in dollars per share)	(0.11)	(0.13)	(0.49)	(0.75)
Basic and diluted net loss per common share	(0.11)	(0.13)	(0.49)	(0.75)
Cash dividends declared per share (in dollars per share)	$ 0	$ 0	$ 0	$ 0

XML

Net Income (Loss) Per Common Share - Antidilutive Securities Excluded from Computation (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	2,042	2,252	2,063	2,312
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	542	752	563	812
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	1,500	1,500	1,500	1,500

XML

Net Income (Loss) Per Common Share - Additional Information (Detail) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share, minimum price range (in dollars per share)	$ 7.93	$ 7.93	$ 7.93	$ 7.93
Anti dilutive securities excluded from computation of earnings per share, maximum price range (in dollars per share)	$ 25.16	$ 25.16	$ 25.16	$ 25.16

XML

Fair Value Measurements - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		9 Months Ended
	Mar. 22, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrants term		2 years 10 months 24 days		3 years 7 months 6 days
Cash settlements for interest rate swaps	$ 13,700	$ 0	$ 15,420
Foreign Line of Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
International lines of credit and other loans		8,436		$ 10,930
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt, fair value		$ 8,400		$ 10,900
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Change-in-control put feature		3.00%
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Change-in-control put feature		10.00%
Series D Preferred Stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Class of warrant or right, exercise price of warrants or rights (in dollars per share)		$ 0.01
Liquidation preference		140.00%
Class of warrant or right, number of securities called by warrants or rights (in shares)		1,900
Series B Convertible Preferred Stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Adjusted exercise price of warrants or rights (in dollars per share)		$ 11.49
Class of warrant or right, number of securities called by warrants or rights (in shares)		1,500

XML

Fair Value Measurements - Liabilities Measure at Fair Value Preferred Stock (Details) - Other Noncurrent Liabilities - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability, fair value, gross liability	$ 3,230	$ 7,771
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability, fair value, gross liability	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability, fair value, gross liability	$ 136	$ 453

XML

Fair Value Measurements - Roll Forward of Preferred Stock Derivative (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 8,224
Change in fair value	(4,858)
Ending balance	$ 3,366

XML

Fair Value Measurements - Effect of Interest Rate Swap (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Mar. 22, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivative [Line Items]
Interest expense		$ 3,746	$ 3,578	$ 10,673	$ 9,175
Derivative payments on interest rate swap		0	0	0	1,717
Loss on interest rate swap (2)		0	0	0	2,033
Cash settlements for interest rate swaps	$ 13,700			0	15,420
Interest Rate Swap
Derivative [Line Items]
Interest expense		$ (146)	$ 29	$ (64)	$ 29

XML

Fair Value Measurements - Interest Rate Swap (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset - other current assets	$ 0
Derivative asset - other non-current assets	0	$ 0
Derivative liability - other current liabilities		0
Total	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset - other current assets	1,783
Derivative asset - other non-current assets	1,427	284
Derivative liability - other current liabilities		(129)
Total	3,210	155
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset - other current assets	0
Derivative asset - other non-current assets	0	0
Derivative liability - other current liabilities		0
Total	$ 0	$ 0