Good morning everyone, and welcome to NN Incorporated Third Quarter 2021 Conference Call. My name is Tom, and I will be your operator for today's call. All participants will be in a listen-only mode until we reach the question-and-answer session of the conference call. This call is being recorded at the request of NN. If anyone has any objections, you may disconnect at any time. I would now like to introduce Mr. Jeff Tryka, with Lambert IR, NN's Investor Relations firm. Mr. Tryka, you may proceed.

Thank you, Tom. Good morning everyone and thanks for joining us. I'm Jeff Tryka, Investor Relations contact for NN Inc., and I'd like to thank you for attending today's business update. Yesterday afternoon, we issued a press release announcing our financial results for the third quarter ended September 30, 2021, as well as a supplemental presentation, which have been posted on the Investor Relations section of our website. If anyone needs a copy of the press release or the supplemental presentation, you may contact Lambert & Company at 315-529-2348. Our presenters on the call this morning will be Warren Veltman, President and Chief Executive Officer, and Mike Felcher, Senior Vice President and Chief Financial Officer. Before we begin, I would ask you to take notice of the cautionary language regarding forward-looking statements contained in today's press release, supplemental presentation, and in the Risk Factors section in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and when filed, the Company’s quarterly report on Form 10-Q for the three months ended September 30, 2021. The same language applies to comments made on today's conference call, including the Q&A session as well as the live webcast. Our presentation today will contain forward-looking statements regarding sales, margins, foreign exchange rates, cash flow, tax rate, acquisitions, synergies, cash cost savings, future operating results, performance of our worldwide markets, and the impacts of the coronavirus or COVID-19 pandemic on the company’s financial condition and other topics. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside of the Company's control. The presentation also includes certain non-GAAP measures as defined by SEC rules. A reconciliation of such non-GAAP measures is contained in the tables in the final section of the press release and the supplemental presentation. Reviewing the agenda for today's call, Warren will provide a business update from the quarter. Then Mike Felcher will provide a detailed update of the financial results before turning the call back over to Warren to discuss our segment results and markets, as well as the outlook for the remainder of 2021. At the conclusion of the prepared remarks, there will be a Q&A session. At this time, I will turn the call over to Warren Veltman, President and CEO. Warren?

Thanks, Jeff, and good morning everyone. If you would turn to page five, we will review some of the highlights for the third quarter. While the third quarter proved to be a challenging one in a number of areas, we were able to continue our trend of year-over-year growth in revenue, as our markets continued to see pandemic recovery highlighted by a 25% year-over-year growth in our residential and commercial electric end market within our Power Solutions group. The strong growth in Power Solutions was partially offset by supply chain challenges, which were most acute in the automotive sector, where the ongoing semiconductor chip shortage affected production globally, as OEMs shut production lines, impacting suppliers. This had a particularly sizable impact on our Mobile Solutions business and its revenues, which fell 2.5% year-over-year in the third quarter. These increasing supply chain challenges within the quarter not only affected our customer operations but our operations as well. To address supply chain disruptions and constraints on materials, we remain flexible in our operations, responding quickly to changes in supply and demand. We also continue to work together with our customers and vendors to ensure we have adequate inventory to maintain production and meet their needs. Our profitability in the third quarter was also impacted by the reinstatement of several programs that were temporarily suspended in 2020 in response to COVID, including salary and benefit reductions, incentive compensation programs, and travel-related expenses. We also experienced material and labor inflation that we were not able to fully pass on to customers during the quarter. However, in response to these cost increases, we have initiated negotiations with most of our customers for price increases. We expect that our price increases will recover the vast majority of all material cost increases and increases associated with outsourced operations, freight charges, and certain increases associated with labor and other manufacturing costs. Where appropriate, we are pursuing increased pricing for underutilized manufacturing capacity. For example, we expect to conclude negotiations with a single customer during the fourth quarter, whereby we expect to receive $3 million in compensation for development costs and underutilized capacity for periods from 2019 to 2023, of which $1 million is expected to be paid in 2021. From a liquidity standpoint, we maintained solid leverage ratios to support our long-term growth. We believe that our successful refinancing earlier this year and our current balance sheet offers us the ability to pursue growth investments as opportunities arise. In the third quarter, we also entered into a three-year variable to fixed interest rate swap to hedge our interest expense and $60 million of our debt. We did this to reduce our exposure to higher interest rates. And when factoring in our fixed rate preferred stock, we achieve what we believe is the right balance between variable and fixed rate exposure. We also maintained our focus on working capital, though we saw turns decrease sequentially in the quarter due to higher inventory levels carried to address current supply chain concerns. Higher inventory and lower mobile solutions sales volumes due to the semiconductor shortage were significant contributors to free cash flow being $3.7 million used in cash during the third quarter. While our inventory levels impacted our free cash flow in 2021, they allow us to better insulate our customers from supply chain interruptions in the current environment and will also allow us to react more quickly when automotive volumes rebound in 2022, benefiting our free cash flow as we return inventory to more normalized levels. Now I’d like to turn it over to Mike Felcher, so he can provide a more in-depth review of our financial performance for the quarter. Mike?

Thanks, Warren. Turning to Page 6. We have summarized some of the key items for the quarter. Our business continued to recover as we posted year-over-year growth in the quarter compared to the third quarter of 2020, which was not as significantly impacted by the COVID-19 pandemic. The improvement in sales was partially offset by the impact of the semiconductor shortage on mobile solution sales. Sales for the quarter were $117.2 million, up 3.1% from a year ago. Reported operating loss for the quarter was $4.6 million versus a loss from operations of $1.5 million one year ago. Non-GAAP adjusted EBITDA was $9.7 million or 8.3% of sales, down from $14.7 million a year ago when adjusted EBITDA was 12.9% of sales. Profitability was adversely impacted by the reintroduction of costs that were temporarily suspended in the prior year as well as the impact of material and labor cost inflation that has increased as the year has progressed. GAAP EPS from continuing operations was a loss of $0.13 per share versus a loss of $0.04 per share from a year ago. Our current period results reflect lower interest expense of $3.3 million and $4.8 million of income related to the revaluation of outstanding warrants, which were offset by a $9.1 million unfavorable comparison for income taxes, primarily attributable to the benefit recognized in the prior year related to the Cares Act. Our adjusted income from continuing operations was $0.01 per share versus $0.07 per share in the prior year. Let’s go to Slide 7. We saw a sequential decrease in working capital turns in the third quarter as inventory remained above normal levels as the current semiconductor shortages as well as other supply chain issues created increased lead times requiring added safety stock in our inventory levels. The carrying amount of our inventory has also been impacted by material inflation we have experienced. We will focus on returning to normal inventory levels as the supply chain stabilizes. Net working capital at the end of the third quarter was $115.3 million compared to $108.2 million in the prior year, an increase of $7.1 million. The increase was primarily due to an increase in inventory as part of our efforts to prevent supply disruption from impacting our customers. Working capital turns were 4.1 turns versus 4.2 turns in the prior year, as a result of the increase in sales from the prior year offset by the increase in working capital. Sequentially, working capital turns decreased from 4.5 turns in the second quarter. Turning to Slide 8. We highlight the disciplined approach we have taken to capital expenditures over the past year as we balance the need to prudently manage our cash in the current operating environment while continuing to fund investments in our growth. You can see on an absolute basis, we have increased CapEx compared to 2020 but we reduced expenditures when compared to the first two quarters of the year. For the first nine months of 2021 total capital expenditures were $14.6 million compared to $13.4 million a year ago. As a result, we are lowering our expected investment for the full year from the $22 million we communicated last quarter to $19 million. Slide 9 shows the chart of our free cash flow for the quarter. Free cash flow was a use of $3.7 million in the third quarter 2021 compared to a use of $1.4 million in the prior year. Our free cash flow was negatively impacted by lower operating cash flow resulting from the reduced margins generated during the quarter. In spite of supply chain and inflationary impacts on our operating results and the increased working capital needs, we remain close to breakeven levels on operating cash flow during the third quarter. Free cash flow on a year-to-date basis would have been a positive $0.3 million if not for the cash payments related to the sale of our Life Sciences group of $9.2 million during Q2, which were primarily for taxes and which we had previously anticipated would be offset by the receipt of our Cares Act tax refund this year. Unfortunately, we now believe the refund will not be received until 2022. Please turn to Slide 10. Net debt at the end of the third quarter was $132.8 million versus $772.9 million in the prior year, a decrease of $640.1 million. The year-over-year reduction was due to the $700 million debt pay down following the sale of Life Sciences, partially offset by our refinancing completed earlier in the year. Our net leverage ratio stood at 2.33 times at the end of the third quarter, down from 6.72 times a year ago. As we have mentioned on prior calls, maintaining a leverage ratio at or below 3 times is important for supporting our long-term growth initiatives as it alleviates concerns from customers and suppliers regarding our financial position. We had $61.1 million of liquidity including cash and availability on our revolver as of September 30. Compared to the second quarter, we saw a reduction in our cash balances due to the free cash outflow and pay down of principal on outstanding debt during the quarter, while our availability increased as a result of increases in our borrowing base on our asset-backed facility, which was undrawn at quarter end. With that I will turn it back to Warren.

Thank you, Mike. On Page 12, we broadly outline our view of current market conditions within each of our operating groups. Within Mobile Solutions, we have seen a significant impact from the semiconductor chip shortage on global auto and light truck production resulting in a sizable pullback in expectations for the industry. These supply chain issues directly contributed to a 17.6% decrease in production volumes in the third quarter of 2021 compared to the third quarter of 2020. Furthermore, the IHS global production outlook for 2020 was reduced from approximately $80.8 million to the current expectations of $75.8 million, up just 2% from the pandemic year volume of $74.5 million in 2020. The outlook for 2022 was reduced by 8.45 million units or 9.3% to approximately 82.6 million units. For the fourth quarter, IHS is projecting global production of 19.4 million units down 17.8% from $23.6 million in the prior year but up 14.8% sequentially from the third quarter. Inventory levels remain at their lowest since 2009, currently less than one million units or a 30-day supply. The transition to electric vehicles is backed by significant OEM investment. As an example, in aggregate, GM, Ford, and Stellantis will invest approximately $100 billion through 2025 in new electric vehicle technologies, vehicles, and battery development. We are well positioned to supply products through both our mobile and Power Solutions groups. Within Power Solutions, we see long-term demand drivers as public and private grid operators are pushing to address aging infrastructure to prepare for the new technologies needed under the Smart grid. We see increasing demand for power transmission and storage infrastructure, particularly with increased adoption of electric vehicles for private and commercial use, which we believe will benefit our Power Solutions business. While the current administration and Congress continue to negotiate the details for final passage of the infrastructure bill, we know that the bill includes a significant investment in technology and power infrastructure, along with the incentives to adopt more green technology that will benefit both sides of our business over the long term. While the pace of conversion may be uncertain, green energy will increase significantly as a share of power generation driven by billions in infrastructure spending. Ultimately the market and policy direction is aligned with our 2025 transformational growth initiatives. We have presented additional information for each of our operating groups, starting with Mobile Solutions on page 13. Mobile Solutions sales fell 2.5% in the third quarter from one year ago, as the ongoing semiconductor chip shortage in the automotive industry caused a loss of 3.3 million production units in the third quarter versus 2.2 million units in the second quarter. GAAP operating loss for the third quarter was $0.3 million compared to operating income of $5 million in the prior year. Adjusted operating profit decreased to $1 million from $6.3 million last year. Adjusted EBITDA decreased to $8.2 million or 11.9% of sales from $13.7 million or 19.5% of sales in the third quarter of 2020. The lower profitability was driven by reduced sales volumes, the reimplementation of certain costs suspended in the prior year and operating efficiencies caused by labor availability and ever-changing customer production requirements. Looking forward, we expect fourth quarter customer demand to remain softer year-over-year due to the semiconductor shortage impacting the automotive industry. With regard to current inflationary pressures, we are in active discussions with our customers to finalize price adjustments to recover these cost increases. Finally, as a result of our recent investments in customer development, sales engineers, and coordination of selling activities between our operating groups, we are making progress towards our 2025 growth objectives. During 2021, the Mobile Solutions group has been awarded $24 million in annualized new business wins, with start of production dates beginning in 2022 and running through 2023. This level of new business wins is consistent with our expectations when establishing our longer-term objectives. On page 14, our Power Solutions group experienced a 12.1% year-over-year increase in sales in the third quarter, which was driven by a strong recovery in demand to pre-pandemic levels in the electrical market, along with an increase in precious metals pricing due to the continued rise in commodity costs since 2020. GAAP income from operations for the third quarter was $1.3 million, compared to $1.1 million in the prior year. Adjusted operating profit decreased to $4 million or 8.2% of sales from $5.4 million or 12.5% of sales in the third quarter of 2020. Adjusted EBITDA decreased to $5.4 million or 11% of sales from $6.6 million or 15.2% of sales in the prior year. Profitability in Power Solutions was also impacted by the resumption of certain costs suspended in the prior year, including salary and benefits, incentive compensation, and travel. In addition, profitability was adversely impacted by inefficiencies associated with unfavorable mix shifts and planned inventory reductions. Looking forward, we see improving demand trends in Power Solutions with an expectation of an approximate 3% increase in customer demand in the fourth quarter year-over-year. We have been successful in passing through inflationary cost impacts to customers, which will be reflected in our results beginning in Q4 2021. We will remain protective of cash flow in this segment through prudent working capital and CapEx management. Longer term, we are encouraged by the continuing shift in the power generation side toward renewable energy resources. With solid industry demand, we have been awarded $15 million in new annualized new business wins, with the start of production dates beginning throughout 2022. Turning to page 15 for some specific guidance regarding our outlook for 2021. From a cash flow perspective in the fourth quarter, we expect to receive a $3.6 million dividend from our China joint venture reflecting our share of the income from the prior year. We anticipate making additional tax payments amounting to $2.3 million relating to the Life Sciences sale. Regarding our expectation of a $10 million refund relating to the Cares Act, we now expect the timing of that to be pushed out to 2022. Regarding our full year outlook, as Mike discussed, we now expect CapEx of approximately $19 million, as we make necessary investments to support our long-term growth balanced with our desire to maintain cash flow. In addition, our financial drivers are consistent with our previous estimates, as we expect cash interest to be approximately $12 million, full year depreciation of approximately $33 million, and full year amortization of approximately $14 million. Finally, our full year free cash flow will include approximately $9.7 million in tax payments solely related to the sale of the Life Sciences group in 2020. Turning to page 16. We highlight some activities associated with the building blocks necessary for us to achieve our 2025 sales goal of $600 million annually. We have restructured our sales and business development teams by changing the Power Solutions leadership, adding industry-specific customer development engineers, and aligning and cross-training both groups to target opportunities consistent with our strategy. The results of these efforts have been a 69% expansion of our pipeline of targeted sales opportunities with a significant mix shift toward our targeted product applications such as electric vehicles and components agnostic to a specific propulsion technology. Sales opportunities for electric vehicles have increased from 1% of the pipeline a year ago to 14% at the end of the third quarter of 2021. Additionally, opportunities for ICE-independent programs such as steering, braking, and electric motors increased from 36% to 44%, while ICE-dependent programs, primarily components for gasoline fuel systems decreased from 36% to 24%. We believe that the expansion of our pipeline and the mix shift to strategic product applications is a leading indicator of our process -- our progress toward our 2025 sales goal. Lastly, we are in the final stages of recruiting a Chief Commercial Officer with relevant electric grid sales experience and hope to have an update on that process in the current quarter. As I conclude my remarks on page 17, we share our longer-term outlook with the continued uncertainty surrounding the supply chain and inflationary pressures, we are still not in a position to resume formal revenue or earnings guidance at this time, but we expect to provide a 2022 detailed outlook with our year-end update. For now, we expect the sales environment to be driven by the resolution of the current semiconductor shortages, along with the continuing trends towards adoption of electric vehicles and the transformation of the electrical grid. We will closely monitor industry and supply chain conditions and remain flexible in our response to evolving changes, particularly with regards to the semiconductor issues facing the automotive market. Our focus on generating free cash flow dictates that we pursue pricing adjustments with customers to recover material and other cost inflation, make operational improvements to improve margins, and control capital expenditures and working capital while maintaining an appropriate capital structure. In summary, we are successfully navigating a challenging environment with the flexibility and responsiveness to maintain our operations and meet the current and future needs of our customers, giving us the foundation for improved performance in the future. That concludes our prepared remarks and I will now turn the call back to the operator for questions.

We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from Rob Brown with Lake Street Capital Markets. Please go ahead.

Good morning.

Good morning, Rob.

Just want to ramp up a little bit on the discussion around the ability to negotiate new pricing. Could you just give us a sense of how much flexibility you have there? Are these long-term contracts you're back to talk about pricing, or are these pricing redo times that you can get pricing as part of a future negotiation? Just help me understand the pricing ability here.

Sure. So most of our -- if you break it down – break our business down into two groups, right? If you talk about Power Solutions first, from a material standpoint, most of that pricing is reflected on the precious metal side on the date of shipment. So we have been adjusting prices within power for material throughout the increase in the precious metals that we've seen over the last year. As it relates to inflationary related costs, we implemented an increase for resin out of our plastic injection molding group right near the beginning of this quarter that was an across-the-board approximate 6% increase to our customers to reflect the material cost and some of the other inflationary pressures in that business. So that's done. As it relates to other customers from an inflation standpoint, we're re-having conversations with them right now for cost increases outside of the material, and we expect to be successful doing that going forward. On the mobile side where we tend to have more long-term contracts, most of our contracts allow for opportunities to re-price in the event that the volumes under the contract fall outside of a 15% window. So we've used that as an opportunity to go back to our customers. And look, our customers understand what's going on in the industry, right? They understand the pressures that are going on, and they would like to have successful and stable suppliers. So I would tell you that those conversations have gone reasonably well. When we look at it on an overall basis for the mobile solutions group, we're looking at a price increase for cost increases in the range of 2% to 3% annually. And breaking that down about half of that, maybe a little bit less than half of that truly relates to just material and outsource-related price increases that we've seen in our business. The rest is inflationary pressure that we've seen associated with freight and real costs. Okay, but it’s freight, it’s manufacturing supplies, that type of thing. So we’re talking to all of our customers currently about all that. My expectation is that the material piece of it will be the easiest piece to resolve with them, and we expect to have most of that done by the end of this year. And when pricing becomes effective on January 1, we’re hoping to have some of the other pieces completed as well.

Okay, great. Thanks for that comprehensive overview. And then on your sales pipeline, maybe they dig a little bit into the increase in the EV activity. Is this really pipeline kind of opportunities developing, or are these design wins you’ve won and now you're executing that will turn into revenue by a year or two out?

Yes. So Rob, these are opportunities that we have in the business that we've targeted. It would be business that we've identified. It's at various stages. It's business that we've identified or, in a lot of cases, business that we're actively quoting with customers today that have not been awarded to us. And that's why we talk about it in terms of opportunities. But for me, the key is the large expansion that we've seen. We've brought in new customer development engineers over the last six to nine months that have allowed us to expand our reach outside of our existing customer base, substantially bringing many more opportunities to us to quote. And it's extremely encouraging when you see the shift from, as I indicated, away from ICE-dependent type of applications into applications that are going to provide growth opportunities for us over the long-term.

Okay. Thank you.

The next question comes from Steve Barger with KeyBanc. Please go ahead.

Good morning.

Morning Steve.

Warren. Yeah, really great to see and getting more proactive in recovering costs and getting appropriately compensated for capacity. Can you tell us what the margin impact from negative price/cost was in the quarter? And will the actions you’ve taken get you to price cost-neutral or better in 4Q?

Steve, I think that on the power side it's going to come quicker. The negotiations on the auto side tend to be a little bit more lengthy. I would say that our expectation is that in the first quarter of next year is where we’ll be more neutral from a cost standpoint. We will hopefully see some of it on the mobile side in the fourth quarter. Like I said, we implemented a 6% across-the-board increase in power at the beginning of the fourth quarter. So we’ll see some benefit there. That was -- excuse me that wasn’t across the board. It was across the board for our plastic injection molding business. The rest of it has been implemented and will be implemented throughout the quarter.

Got it. Given how you see volume and mix and pricing, how should we think about gross margin for 4Q? Is it going to look more like 3Q, or can that get a little better sequentially?

Look, I would tell you the difficulty for us right now is we’re still seeing a tremendous amount of movement as it relates to volumes as our customers are planning their production levels during the holidays. We’ve seen significant shifts week-to-week on what our customers are expecting. So at this point in time, I would tell you if you looked at – it’s safer for me to say if you looked at the third quarter volumes on a pro forma basis what would be the impact. I would tell you we would expect that it would be somewhere -- once these price increases are implemented would be somewhere in the range of 1.5% to 2% improvement in margins.

Got you.

Ultimately, volume is going to dictate what happens in Q4.

Right, right, right. Well to that point slide 5 says you expect to achieve normalized margins when things stabilize.

Yes.

Haven’t seen stable for a while, right? So can you just level set expectations on where you think segment margins will trend when that happens?

Yes. I think that if you looked at where we were in 2019 from a margin standpoint, our expectation is that we’re going to be moving down a path towards our goal that we established which was on an overall basis of 16% to 18% EBITDA margins in 2025. So if you take where we’ve been, our expectation is we’re going to see improvement toward that. Maybe -- well my view is that once the volumes rebound, I mean if you look at it, they’re up 20% year-over-year from a production standpoint. We’re still expecting the fourth quarter volumes to be down significantly. So your question as it relates to fourth quarter volumes is difficult to answer as it relates to production volumes when production volumes on a global basis jump back up into the high 80s. That’s when I would expect that some of the margins that we’re talking about will start to be seen.

Got it. For the $24 million in new business wins year-to-date, what’s the net number? Meaning did you have any business roll-off?

Yes. So when we -- Steve, when we put our goals together for 2025 obviously we expected that there would be some end of production as is normal in our business right programs to run off. So when my comment was that we landed $24 million in new business wins, it was consistent with our expectations. That was the level that we had targeted for this year to offset any expected runoff that we have for next year.

Okay. Great. And upfront tooling spend for that $24 million? I think a lot more -- more of it was skewed to power. Does that have better dynamics?

Yes. So we had $24 million in mobile and $15 million in power, right? So, yes. So from a CapEx standpoint we look at some of the business that we’ve had. We’ve been talking about the fact that we have excess capacity in the business both from a shift standpoint and from a pure hour standpoint on the existing machine tools that we have. So our expectation is that there will be some growth CapEx associated with that. It's really program-by-program. There are some programs where we may have to buy, as an example, we reviewed a program the other day that had a higher CapEx profile to it because there was some center list grinders and some other specific capacity that we needed that we didn't have currently. But I would tell you that by and large we expect that $24 million to be launched with a CapEx profile that is much less than what we've seen historically. So, we're still looking at maintaining an annual cash CapEx amount which is consistent with what we've been running. Okay? And we revised our estimates down for this year to $19 million, but that $22 million to $24 million level is where we expect to be going forward as we continue to grow the business.

Got it. I have some more, but I'll jump out of line to let anybody else take a shot.

Sure.

This concludes our question-and-answer session. I will now turn the conference back over to Mr. Warren Veltman for any closing remarks.

Well, first, Steve said he had a couple more questions, and he was going to get back in line. I just want to make sure that if he does have a question, we address it.

All right. I have Steve's line open again.

Yes, great. Thank you.

Yes. Sorry about that Steve.

No, that’s okay. I just wanted to see if anybody else is there. The -- it's encouraging to see recruiting a Chief Commercial Officer. I think you said he was grid focused. Like where are you recruiting them from? And are the interviews already taking place? Do you have candidates?

Yes. Look, I would characterize it as we are in the final stages of that at this point in time Steve. And where are we recruiting them from? Obviously, we're focused on the electrical side of the business. That's where we think we need some additional resources to help us with our -- expand our reach there. So we have been interviewing Executives from that industry. Obviously, some from what are our end customers within the Power Solutions group.

And that in conjunction with the industry-specific customer and development engineers that's a pretty descriptive name, but can you just talk about how more about how that works?

Yes, sure. So we brought in four or five new sales engineers. That might be a terminology that's more widely accepted, right? So, we brought four or five new sales engineers into that group. We have added leadership -- specific leadership, moved over a new Vice President out of our mobile group. And although he didn't have electrical experience, he had tremendous general industrial experience and strong experience from a closing sales standpoint. So, really solid guy that has been with the company for a long period of time. But those four or five customer development engineers that we brought in have a specific focus where they've had experience selling into the electrical side of the business either there or direct experience on the auto side with electric vehicles. And that has opened some doors for us with potential new customers where we've had an opportunity to introduce NN and actually are quoting -- have quoted new programs with some of these customers as well.

That's great. And so the Commercial Officer will essentially take control of this group of people and direct the efforts towards new product development or new programs?

Right. It's the next step and this person will sit above our wholesale group, okay including the auto side of our business. And obviously that's an area where they'll have to step up a little bit. But our view was that given the opportunity that we see with battery electric vehicles and the grid side that it was most important for us to get somebody that had experience in that side of the business because we believe that on the auto side we have a strong sales group there that has been pushing the envelope from a growth standpoint and that we needed electrical expertise.

Is it – you probably haven't seen your 2025 targets but is it your expectation that over the next three or four years as you trend towards that that the mix shifts more towards Power Solutions? Can that ultimately be a bigger business in mobile?

I think that we have some pretty good growth in mobile. I think in a three or four-year period, it will be difficult for power to overtake them from a size standpoint. But from a percentage growth standpoint, our view is that there's significant opportunity within power. So we would expect that side of our business maybe to grow faster. When you look at everything that we've seen on the electric vehicle side, Steve, with the bus bars and the connectors, and we've quoted programs that are bus bars that are plastic over molded. A lot of that plays to the technologies that we have within the Power Solutions side of the business. So our expectation is that they're going to take advantage of that.

And I think you threw out a $100 billion number for the spend in coming years for electrification. What's NN's addressable market in that?

Well, we've looked at it. As it relates to the addressable market and the OEM spend that's them building out their infrastructure, right, and battery plants and et cetera. But just showing you how serious they are, those three OEMs, and obviously it's across the board. But our view continues to be that on a content per vehicle, which is a better way for us to talk about it frankly, and to look at it internally, that when you look at the opportunities that exist with some of the items that I just mentioned as it relates to electrical flow, storage, and connection points within an electric vehicle, there's actually an increase in content per vehicle opportunity for us in electric vehicles over what we have today in an internal combustion engine.

Understood. And last one, there's a lot of new faces on the board. It seems like maybe some of the things you're talking about now are a reflection of them. What are the board's priorities going into 2022 beyond what we've talked about here today?

Yeah. Look, the Board and the management team are aligned in the strategic direction of this organization. And what we're working on is consistent with the strategy, the board is supportive of the strategy that our management team has laid out to them. So our objective of growing in the electrical grid space, and with battery electric vehicles is very much supported by our board. And as it relates to the expertise that we've added, you can tell that we have purposely added directors that are geared towards our ability to better understand that space, and have additional connection points to that space that will allow us to grow. And that's what we're focused on.

Perfect. Thanks.

Thank you.

At this time, we have no further questions. I would now like to turn the call back over to Mr. Warren Veltman for any closing remarks.

Yeah, operator, thank you for everybody on the call today. We certainly appreciate your interest in our organization. And like I said in my conclusion, obviously, it was a challenging quarter. It's a challenging environment for all of us. We're very confident in the way that we're going about dealing with some of the difficult issues presented to us and are very optimistic about our future. Thank you very much for your time today.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.