Investment Thesis
NN INC exhibits severe financial distress with unprofitable operations, negative cash flow, and extreme leverage (6.39x debt-to-equity). The company is burning cash with operating cash flow of -8.6M while carrying 166.9M in long-term debt against only 26.1M in equity. Declining revenue (-9.1% YoY) and negative interest coverage (-0.4x) create imminent refinancing and insolvency risk.
Strengths
- Current ratio of 1.87x provides modest short-term liquidity buffer
- Quick ratio of 1.16x indicates ability to meet near-term obligations
- Still generating 118.5M in annual revenue base
Risks
- Extreme leverage (6.39x debt-to-equity) with negative interest coverage creates default risk
- Negative operating cash flow (-8.6M) and free cash flow (-11.9M) indicate cash burn unsustainable with 8.5M cash position
- Unprofitable with negative operating margin (-1.7%), negative net margin (-5.8%), and declining revenue trajectory
- High risk of covenant violations and refinancing failure given negative profitability and operating cash flow
Key Metrics to Watch
- Operating cash flow trend (must achieve positive to avoid liquidity crisis)
- Debt restructuring/refinancing status (critical given leverage and negative coverage)
- Revenue stabilization (must reverse 9.1% YoY decline)
- Time to liquidity depletion at current burn rate
Financial Metrics
Revenue
118.5M
Net Income
-6.8M
EPS (Diluted)
$-0.25
Free Cash Flow
-11.9M
Total Assets
453.4M
Cash
8.5M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-1.7%
Net Margin
-5.8%
ROE
-26.2%
ROA
-1.5%
FCF Margin
-10.1%
Balance Sheet & Liquidity
Current Ratio
1.87x
Quick Ratio
1.16x
Debt/Equity
6.39x
Debt/Assets
68.3%
Interest Coverage
-0.36x
Long-term Debt
166.9M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T11:34:39.945336 |
Data as of: 2026-03-31 |
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