Mayville Engineering Company Announces Third Quarter 2024 Results
Mayville Engineering Company (NYSE: MEC) reported Q3 2024 results with net sales of $135.4 million, down 14.4% year-over-year. Net income increased to $3.0 million ($0.14 per diluted share), up $1.6 million from prior year. The company faced softening demand and customer de-stocking, leading to implementation of cost rationalization initiatives including 12% workforce reduction and facility closure. Adjusted EBITDA was $17.1 million (12.6% margin), down 11.2%. MEC received a $25.5 million settlement from a former fitness customer. The company reduced its 2024 guidance, now expecting net sales of $580-590 million and Adjusted EBITDA of $63-66 million.
Mayville Engineering Company (NYSE: MEC) ha riportato i risultati del terzo trimestre 2024 con vendite nette di 135,4 milioni di dollari, in calo del 14,4% rispetto all'anno precedente. L'utile netto è aumentato a 3,0 milioni di dollari (0,14 dollari per azione diluita), in crescita di 1,6 milioni di dollari rispetto all'anno scorso. L'azienda ha affrontato una domanda in calo e un de-stocking da parte dei clienti, portando all'implementazione di iniziative di razionalizzazione dei costi, tra cui una riduzione della forza lavoro del 12% e la chiusura di strutture. Adjusted EBITDA è stato di 17,1 milioni di dollari (margine del 12,6%), in calo dell'11,2%. MEC ha ricevuto un risarcimento di 25,5 milioni di dollari da un ex cliente del settore fitness. L'azienda ha ridotto le previsioni per il 2024, ora aspettandosi vendite nette di 580-590 milioni di dollari e un Adjusted EBITDA di 63-66 milioni di dollari.
Mayville Engineering Company (NYSE: MEC) reportó los resultados del tercer trimestre de 2024 con ventas netas de 135,4 millones de dólares, una disminución del 14,4% interanual. El ingreso neto aumentó a 3,0 millones de dólares (0,14 dólares por acción diluida), un incremento de 1,6 millones de dólares en comparación con el año anterior. La compañía enfrentó una disminución en la demanda y desabastecimiento por parte de los clientes, lo que llevó a implementar iniciativas de racionalización de costos, incluyendo una reducción del 12% en la fuerza laboral y el cierre de instalaciones. Adjusted EBITDA fue de 17,1 millones de dólares (margen del 12,6%), una disminución del 11,2%. MEC recibió un acuerdo de 25,5 millones de dólares de un antiguo cliente del sector fitness. La empresa redujo su pronóstico para 2024, ahora espera ventas netas de 580 a 590 millones de dólares y un Adjusted EBITDA de 63 a 66 millones de dólares.
메이빌 엔지니어링 컴퍼니 (NYSE: MEC)는 2024년 3분기 실적을 발표하며 순매출 1억 3,540만 달러를 기록하였으며, 이는 전년 대비 14.4% 감소한 수치입니다. 순이익은 300만 달러(희석주당 0.14달러)로 증가하였으며, 이전 년도보다 160만 달러 늘어난 수치입니다. 회사는 수요 감소와 고객 재고 감소에 직면하여 12%의 인력 감축 및 시설 폐쇄를 포함한 비용 절감 전략을 시행하였습니다. 조정 EBITDA는 1,710만 달러(12.6%의 마진)로, 11.2% 감소하였습니다. MEC는 이전 피트니스 고객으로부터 2,550만 달러의 합의금을 받았습니다. 회사는 2024년 가이던스를 하향 조정하며 순매출이 5억 8,000만에서 5억 9,000만 달러, 조정 EBITDA가 6천만에서 6천6백만 달러에 이를 것으로 예상하고 있습니다.
Mayville Engineering Company (NYSE: MEC) a publié ses résultats pour le troisième trimestre 2024 avec des ventes nettes de 135,4 millions de dollars, en baisse de 14,4 % par rapport à l'année précédente. Le bénéfice net a augmenté pour atteindre 3,0 millions de dollars (0,14 dollar par action diluée), soit une hausse de 1,6 million de dollars par rapport à l'année précédente. L'entreprise a été confrontée à une demande en baisse et à une diminution des stocks des clients, ce qui a conduit à la mise en œuvre d'initiatives de rationalisation des coûts, y compris une réduction de la main-d'œuvre de 12 % et la fermeture d'installations. Adjusted EBITDA s'élevait à 17,1 millions de dollars (marge de 12,6 %), en baisse de 11,2 %. MEC a reçu un règlement de 25,5 millions de dollars de la part d'un ancien client du secteur du fitness. L'entreprise a revu à la baisse ses prévisions pour 2024, s'attendant désormais à des ventes nettes de 580 à 590 millions de dollars et un Adjusted EBITDA de 63 à 66 millions de dollars.
Mayville Engineering Company (NYSE: MEC) hat die Ergebnisse des dritten Quartals 2024 mit einem Nettoumsatz von 135,4 Millionen Dollar gemeldet, was einem Rückgang von 14,4 % im Vergleich zum Vorjahr entspricht. Der Nettogewinn stieg auf 3,0 Millionen Dollar (0,14 Dollar je verwässerter Aktie) und damit um 1,6 Millionen Dollar im Vergleich zum Vorjahr. Das Unternehmen sah sich mit einer nachlassenden Nachfrage und einem Lagerabbau durch die Kunden konfrontiert, was zur Umsetzung von Kostenrationalisierungsinitiativen führte, darunter eine Reduzierung der Belegschaft um 12 % und die Schließung von Einrichtungen. Adjusted EBITDA betrug 17,1 Millionen Dollar (12,6 % Marge), was einem Rückgang von 11,2 % entspricht. MEC erhielt eine Vergleichszahlung von 25,5 Millionen Dollar von einem ehemaligen Fitnesskunden. Das Unternehmen hat seine Prognose für 2024 gesenkt und rechnet nun mit Nettoumsätzen von 580 bis 590 Millionen Dollar und einem Adjusted EBITDA von 63 bis 66 Millionen Dollar.
- Net income increased by $1.6 million to $3.0 million
- Adjusted EBITDA margin improved by 50 basis points to 12.6%
- Received $25.5 million settlement payment
- Strong free cash flow generation of $15.1 million
- Low leverage ratio at 1.6x debt to trailing twelve-month Adjusted EBITDA
- Net sales declined 14.4% to $135.4 million
- Adjusted EBITDA decreased 11.2% to $17.1 million
- Reduced 2024 guidance for net sales by 7% and Adjusted EBITDA by 13%
- Implemented 12% workforce reduction
- Declining sales across most end markets, particularly Agriculture (-31.1%) and Military (-36.4%)
Insights
The Q3 results reveal significant headwinds with
Key positives include strong free cash flow of
However, reduced guidance and broad end-market weakness signal near-term challenges, though management expects recovery by H1 2025. The
The industrial sector weakness is evident across MEC's major segments, with notable declines in Agriculture (
The
THIRD QUARTER 2024 RESULTS
(All comparisons versus the prior-year period)
-
Net sales of
, a decrease of$135.4 million 14.4% -
Net income of
, or$3.0 million per diluted share, an increase of$0.14 , or$1.6 million per diluted share$0.07 -
Non-GAAP Adjusted Diluted EPS of
, flat to the prior-year period$0.21 -
Adjusted EBITDA of
, a decrease of$17.1 million 11.2% -
Adjusted EBITDA margin of
12.6% , an increase of 50 bps -
Free Cash Flow of
, a decrease of$15.1 million $1.0 million - Ratio of debt to trailing twelve-month Adjusted EBITDA of 1.6x as of September 30, 2024
-
Announced the permanent closure of the
Wautoma, WI facility -
MEC received a gross payment of
from the former fitness customer in the fourth quarter resolving lawsuit$25.5 million
MANAGEMENT COMMENTARY
“During the third quarter, we took decisive action to successfully navigate a soft near-term demand environment, while continuing to deliver strong execution on our strategic priorities, as outlined within our MBX framework,” stated Jag Reddy, President and Chief Executive Officer. “Order activity troughed during the third quarter, as customers took corrective action to de-stock channel inventories amid a period of lower consumption. In response, we deployed a series of cost rationalization initiatives that, in combination, positioned us to deliver a solid Adjusted EBITDA margin performance and continued free cash flow generation during the period.”
“Customer order activity decelerated meaningfully beginning in August, and has since stabilized during the fourth quarter, albeit at a lower level than we anticipated entering 2024,” continued Reddy. “In response to the current demand environment, we introduced a series of cost rationalization initiatives halfway through the third quarter, including the reduction of production days, an approximate
“Given third quarter softness in customer demand, we have reduced our full year 2024 net sales and Adjusted EBITDA guidance by
“While our third quarter performance was below expectations, we continue to advance initiatives to grow market share across our key vertical markets, while deploying operational rigor across the organization, consistent with the strategy outlined at our Investor Day,” continued Reddy. “These actions, together with realized synergies from our MSA acquisition, position us to achieve our 2026 financial targets of
“As previously announced, we settled an ongoing legal dispute with one of our former customers, which resulted in MEC receiving a gross cash settlement of
“Our strong, consistent free cash flow generation continues to provide us with significant balance sheet optionality,” continued Reddy. “Exiting the third quarter, our net leverage stood at 1.6x, well within our targeted range of 1.5 to 2.0x, while total cash and availability on our credit facility was more than
PERFORMANCE SUMMARY
Net sales decreased by
Manufacturing margin was
Other selling, general and administrative expenses were
Interest expense was
Net income for the third quarter of 2024 was
MEC reported Adjusted EBITDA of
Third quarter Adjusted net income was
Free cash flow during the third quarter of 2024 was
END MARKET UPDATE |
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Three Months Ended |
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September 30, |
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2024 |
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2023 |
||
Commercial Vehicle |
|
$ |
51,612 |
|
$ |
57,264 |
Construction & Access |
|
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20,110 |
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26,296 |
Powersports |
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21,605 |
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25,143 |
Agriculture |
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10,358 |
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15,029 |
Military |
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6,968 |
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10,960 |
Other |
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24,739 |
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23,525 |
Net Sales |
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$ |
135,392 |
|
$ |
158,217 |
Commercial Vehicles
MEC is a Tier 1 supplier to many of the country’s top original equipment manufacturers (OEM) of commercial vehicles providing exhaust & aftertreatment, engine components, cooling, fuel and structural systems for both heavy- and medium-duty commercial vehicles.
Net sales to the commercial vehicle market were
Construction & Access
MEC manufactures components and sub-assemblies for OEMs within the construction & access market including fenders, hoods, supports, frames, platforms, frame structures, doors and tubular products such as exhaust & aftertreatment, engine components, cooling system components, handrails and full electro-mechanical assemblies.
Net sales to the construction & access market were
Powersports
MEC manufactures stampings and complex metal assemblies and coatings for OEMs within marine propulsion, all-terrain vehicles (ATV), multi-utility vehicles (MUV) and motorcycle markets. MEC’s powersports expertise includes axle housings, steering columns, swing arms, fenders, suspension components, ATV/MUV racks, cowl assemblies and vehicle frames.
Net sales to the powersports market were
Agriculture
MEC is an integral partner in the supply chain of the world’s leading agriculture OEMs manufacturing components and sub-assemblies including fenders, hoods, supports, frames, platforms, frame structures, doors, and tubular products such as exhaust, engine components, cooling system components, handrails and full electro-mechanical assemblies.
Net sales to the agriculture market were
Military
MEC holds the International Traffic in Arms Regulations (ITAR) certification and produces components for
Net sales to the military market were
Other
MEC also produces a wide variety of components and assemblies for customers in the power generation, industrial equipment & fixtures, consumer tools, mining, forestry, automotive, and medical markets.
Net sales to other end markets for the third quarter of 2024 were
STRATEGIC UPDATE
During the third quarter, MEC continued the successful execution of its MEC Business Excellence (MBX) initiative, a value-creation framework designed to drive sustained operational and commercial excellence across all aspects of the organization. MEC expects that this value creation framework will drive total net sales to between
- Drive a High-Performance Culture. The Company is focused on effectuating cultural change across the organization by implementing performance-based metrics, lean daily management and other process-oriented strategies. Through these efforts, the Company is building a high-performance culture capable of driving improved performance, asset utilization and cost optimization. During the third quarter, the Company continued the implementation and alignment of processes and best practices across the enterprise to drive strategic execution. Additionally, the Company conducted an anonymous culture survey to gather employee feedback to assist with building an action plan to further ingrain the Company’s values and continue to improve the organization and culture.
-
Drive Operational Excellence. The Company is focused on leveraging technologies and capabilities to increase productivity and reduce costs across the value chain. The Company intends to achieve this objective through the implementation of lean initiatives such as value stream mapping, sales, inventory, and operations planning (SIOP), and further optimization of its supply chain and procurement strategies. The Company’s operational excellence initiatives also focus on improving fixed cost absorption, labor productivity and inventory efficiency by leveraging its recent investments in advanced manufacturing capabilities and automation. As of the end of the third quarter of 2024, the Company has held 100 MBX kaizen events which contributed to improved margins and inventory optimization. The Company also realized a significant year-over-year improvement in working capital efficiencies due to improvements in days sales outstanding and inventory days-on-hand. Additionally, the Company recognized
, net of inflation, in year-over-year pricing improvements as a result of its on-going commercial pricing initiatives.$1.5 million -
Drive Commercial Expansion. The Company is focused on driving commercial growth through an integrated, solutions-oriented approach that leverages its full suite of design, prototyping, and aftermarket services; an expansion of its fabrication capabilities beyond steel, with an emphasis on lightweight aluminum, plastics and composites; diversification within high-growth energy transition markets; further market penetration within existing end markets; and the implementation of value-based pricing. During the third quarter of 2024, MEC made substantial progress in growing its share of wallet with existing customers with multiple multi-year contract wins with major customers in the commercial vehicle, powersports and other end-markets. As of the end of the third quarter, the Company has booked approximately
in new project wins, inclusive of replacement products for end-of-life programs with launches occurring over the next two years. The Company continues to evaluate opportunistic acquisition opportunities to further expand its differentiated suite of capabilities and diversify into high-growth end-markets, including data center and energy transition.$80 million - Drive Human Resource Optimization. The Company remains focused on the recruitment and retention of skilled, experienced employees to support the growth of its business. This component of the MBX value creation framework is designed to provide competitive, performance-based incentives; develop high-potential candidates for internal development and advancement; ensure business continuity through multi-tiered succession planning; and to ensure a stable recruiting pipeline. During the third quarter, the Company implemented a new tuition reimbursement program.
BALANCE SHEET UPDATE
As of September 30, 2024, MEC had debt outstanding of
______________________ |
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1 |
This amount is reduced to approximately |
FINANCIAL GUIDANCE
Today, the Company reiterated its guidance for full year 2024 Free Cash Flow and updated its financial guidance for full year Net Sales and Adjusted EBITDA. All guidance is current as of the time provided and is subject to change.
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FY 2023 |
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FY 2024 Forecast |
|
Prior FY 2024 Forecast |
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(in Millions) |
|
Actual |
|
Low |
|
Mid |
|
High |
|
Low |
|
Mid |
|
High |
|||||||
Net Sales |
|
$ |
588.4 |
|
$ |
580 |
|
$ |
585 |
|
$ |
590 |
|
$ |
620 |
|
$ |
630 |
|
$ |
640 |
Adjusted EBITDA |
|
$ |
66.1 |
|
$ |
63 |
|
$ |
64.5 |
|
$ |
66 |
|
$ |
72 |
|
$ |
74 |
|
$ |
76 |
Free Cash Flow |
|
$ |
23.8 |
|
$ |
45 |
|
$ |
50 |
|
$ |
55 |
|
$ |
45 |
|
$ |
50 |
|
$ |
55 |
The Company’s 2024 guidance reflects the impact of softening customer demand, channel de-stocking and production cuts during the second half of the year across most of its end markets, continued fixed cost discipline and operational excellence amid reduced end-market demand and excludes any impact from the lawsuit settlement with the former fitness customer.
Additionally, the Company is now expecting its capital expenditures for the full year 2024 will be between
THIRD QUARTER 2024 RESULTS CONFERENCE CALL
The Company will host a conference call on Wednesday, November 6, 2024 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).
For a live webcast of the conference call and to access the accompanying investor presentation, please visit www.mecinc.com and click on the link to the live webcast on the Investors page.
For telephone access to the conference, call (833) 470-1428 within
FORWARD-LOOKING STATEMENTS
This press-release includes forward-looking statements that reflect plans, estimates and beliefs. Such statements involve risk and uncertainties. Actual results may differ materially from those contemplated by these forward-looking statements as a result of various factors. Important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements include, but are not limited to: macroeconomic conditions, including inflation, elevated interest rates and recessionary concerns, as well as labor availability and material cost pressures, have had, and may continue to have, a negative impact on our business, financial condition, cash flows and results of operations (including future uncertain impacts); risks relating to developments in the industries in which our customers operate; risks related to scheduling production accurately and maximizing efficiency; our ability to realize net sales represented by our awarded business; failure to compete successfully in our markets; our ability to maintain our manufacturing, engineering and technological expertise; the loss of any of our large customers or the loss of their respective market shares; risks related to entering new markets; our ability to recruit and retain our key executive officers, managers and trade-skilled personnel; volatility in the prices or availability of raw materials critical to our business; manufacturing risks, including delays and technical problems, issues with third-party suppliers, environmental risks and applicable statutory and regulatory requirements; our ability to successfully identify or integrate acquisitions; our ability to develop new and innovative processes and gain customer acceptance of such processes; risks related to our information technology systems and infrastructure, including cybersecurity risks and data leakage risks; geopolitical and economic developments, including foreign trade relations and associated tariffs; results of legal disputes, including product liability, intellectual property infringement and other claims; risks associated with our capital-intensive industry; risks related to our treatment as an S Corporation prior to the consummation of our initial public offering; risks related to our employee stock ownership plan’s treatment as a tax-qualified retirement plan; and other factors described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, as such may be amended or supplemented in our subsequently filed Quarterly Reports on Form 10-Q. This discussion should be read in conjunction with our audited consolidated financial statements included in the Company’s previously filed Annual Report on Form 10-K for the year ended December 31, 2023. We undertake no obligation to update or revise any forward-looking statements after the date on which any such statement is made, whether as a result of new information, future events or otherwise, except as required by federal securities laws.
ABOUT MAYVILLE ENGINEERING COMPANY
Founded in 1945, MEC is a leading
NON-GAAP FINANCIAL MEASURES
This press release contains financial information calculated in a manner other than in accordance with
The non-GAAP measures used in this press release are EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Diluted EPS, and Free Cash Flow.
EBITDA represents net income before interest expense, provision for income taxes, depreciation, and amortization. EBITDA Margin represents EBITDA as a percentage of net sales for each period. Adjusted EBITDA represents EBITDA before stock-based compensation expense, loss on extinguishment of debt, MSA acquisition related costs, field replacement claim, legal costs due to the former fitness customer and costs recognized on step-up of MSA acquired inventory. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of net sales for each period. Adjusted Net Income and Diluted EPS represent net income before the aforementioned Adjusted EBITDA addback items which do not reflect our core operating performance. Free Cash Flow represents net cash provided by, or used in, operating activities, less cash flows used in the purchase of property, plant and equipment. We present Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Diluted EPS, and Free Cash Flow as management uses these measures as key performance indicators, and we believe they are measures frequently used by securities analysts, investors and other parties to evaluate companies in our industry. These metrics are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. These measures should not be considered as an alternative to net income or cash flow provided by, or used in, operating activities, or any other performance measure derived in accordance with GAAP as an indicator of our operating performance. These measures may not be comparable to the similarly named measures reported by other companies and have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP.
Please reference our reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to EBITDA, Adjusted EBITDA, Adjusted Net Income and Diluted EPS, Free Cash Flow and the calculation of EBITDA Margin and Adjusted EBITDA Margin included in this press release.
Mayville Engineering Company, Inc. |
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Consolidated Balance Sheet |
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(in thousands, except share amounts) |
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September 30, |
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December 31, |
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2024 |
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2023 |
||
ASSETS |
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Cash and cash equivalents |
|
$ |
178 |
|
$ |
672 |
Receivables, net of allowances for doubtful accounts of |
|
|
54,345 |
|
|
57,445 |
Inventories, net |
|
|
61,173 |
|
|
67,782 |
Tooling in progress |
|
|
5,626 |
|
|
5,457 |
Prepaid expenses and other current assets |
|
|
4,932 |
|
|
3,267 |
Total current assets |
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|
126,254 |
|
|
134,623 |
Property, plant and equipment, net |
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|
163,713 |
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|
175,745 |
Goodwill |
|
|
92,650 |
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|
92,650 |
Intangible assets, net |
|
|
53,467 |
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|
58,667 |
Operating lease assets |
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|
28,536 |
|
|
32,233 |
Other long-term assets |
|
|
1,382 |
|
|
2,743 |
Total assets |
|
$ |
466,002 |
|
$ |
496,661 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
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|
|
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|
|
Accounts payable |
|
$ |
47,990 |
|
$ |
46,526 |
Current portion of operating lease obligation |
|
|
4,646 |
|
|
5,064 |
Accrued liabilities: |
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|
|
|
|
|
Salaries, wages, and payroll taxes |
|
|
6,042 |
|
|
6,368 |
Profit sharing and bonus |
|
|
3,182 |
|
|
3,107 |
Other current liabilities |
|
|
9,517 |
|
|
10,644 |
Total current liabilities |
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|
71,377 |
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|
71,709 |
Bank revolving credit notes |
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|
111,045 |
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147,493 |
Operating lease obligation, less current maturities |
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25,570 |
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|
28,606 |
Deferred compensation, less current portion |
|
|
4,603 |
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|
3,816 |
Deferred income tax liability |
|
|
12,847 |
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|
12,606 |
Other long-term liabilities |
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|
2,204 |
|
|
2,453 |
Total liabilities |
|
$ |
227,646 |
|
$ |
266,683 |
Commitments and contingencies |
|
|
|
|
|
|
Common shares, no par value, 75,000,000 authorized, 22,302,151 shares issued at September 30, 2024 and 21,853,477 at December 31, 2023 |
|
|
— |
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|
— |
Additional paid-in-capital |
|
|
205,750 |
|
|
205,373 |
Retained earnings |
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|
44,115 |
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|
34,118 |
Treasury shares at cost, 1,657,818 shares at September 30, 2024 and 1,542,893 at December 31, 2023 |
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(11,509) |
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|
(9,513) |
Total shareholders’ equity |
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|
238,356 |
|
|
229,978 |
Total |
|
$ |
466,002 |
$ |
496,661 |
Mayville Engineering Company, Inc. |
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Consolidated Statement of Net Income |
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(in thousands, except share amounts and per share data) |
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Net sales |
|
$ |
135,392 |
|
$ |
158,217 |
|
$ |
460,298 |
|
$ |
439,843 |
Cost of sales |
|
|
118,297 |
|
|
139,197 |
|
|
399,993 |
|
|
388,351 |
Amortization of intangible assets |
|
|
1,733 |
|
|
2,173 |
|
|
5,200 |
|
|
5,649 |
Profit sharing, bonuses, and deferred compensation |
|
|
2,076 |
|
|
2,346 |
|
|
10,010 |
|
|
8,037 |
Other selling, general and administrative expenses |
|
|
7,559 |
|
|
8,608 |
|
|
23,589 |
|
|
22,969 |
Income from operations |
|
|
5,727 |
|
|
5,893 |
|
|
21,506 |
|
|
14,837 |
Interest expense |
|
|
(2,653) |
|
|
(3,907) |
|
|
(8,977) |
|
|
(7,533) |
Loss on extinguishment of debt |
|
|
— |
|
|
— |
|
|
— |
|
|
(216) |
Income before taxes |
|
|
3,074 |
|
|
1,986 |
|
|
12,529 |
|
|
7,088 |
Income tax expense |
|
|
100 |
|
|
554 |
|
|
2,532 |
|
|
1,471 |
Net income and comprehensive income |
|
$ |
2,974 |
|
$ |
1,432 |
|
$ |
9,997 |
|
$ |
5,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.14 |
|
$ |
0.07 |
|
$ |
0.49 |
|
$ |
0.28 |
Diluted |
|
$ |
0.14 |
|
$ |
0.07 |
|
$ |
0.48 |
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
20,715,275 |
|
|
20,439,602 |
|
|
20,601,702 |
|
|
20,416,914 |
Diluted |
|
|
21,123,494 |
|
|
20,622,864 |
|
|
20,893,316 |
|
|
20,644,915 |
Mayville Engineering Company, Inc. |
||||||
Consolidated Statement of Cash Flows |
||||||
(in thousands) |
||||||
|
|
Nine Months Ended |
||||
|
|
September 30, |
||||
|
|
2024 |
|
2023 |
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
Net income |
|
$ |
9,997 |
|
$ |
5,617 |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
22,927 |
|
|
19,849 |
Amortization |
|
|
5,200 |
|
|
5,649 |
Allowance for doubtful accounts |
|
|
(255) |
|
|
127 |
Inventory excess and obsolescence reserve |
|
|
(30) |
|
|
277 |
Stock-based compensation expense |
|
|
3,847 |
|
|
3,755 |
Gain on disposal of property, plant and equipment |
|
|
(177) |
|
|
(342) |
Deferred compensation |
|
|
752 |
|
|
(17,433) |
Loss on extinguishment of debt |
|
|
— |
|
|
216 |
Non-cash lease expense |
|
|
4,034 |
|
|
3,348 |
Other non-cash adjustments |
|
|
447 |
|
|
202 |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
3,355 |
|
|
(6,819) |
Inventories |
|
|
6,639 |
|
|
7,818 |
Tooling in progress |
|
|
(169) |
|
|
2,348 |
Prepaids and other current assets |
|
|
(1,694) |
|
|
(769) |
Accounts payable |
|
|
534 |
|
|
(4,134) |
Deferred income taxes |
|
|
1,454 |
|
|
1,017 |
Operating lease obligations |
|
|
(3,792) |
|
|
(3,119) |
Accrued liabilities |
|
|
(1,222) |
|
|
(3,911) |
Net cash provided by operating activities |
|
|
51,847 |
|
|
13,696 |
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(9,753) |
|
|
(9,814) |
Proceeds from sale of property, plant and equipment |
|
|
108 |
|
|
753 |
Payment for acquisition, net of cash acquired |
|
|
— |
|
|
(88,593) |
Net cash used in investing activities |
|
|
(9,645) |
|
|
(97,654) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
Proceeds from bank revolving credit notes |
|
|
514,466 |
|
|
454,587 |
Payments on bank revolving credit notes |
|
|
(550,914) |
|
|
(358,411) |
Repayments of other long-term debt |
|
|
(306) |
|
|
(5,877) |
Payments of financing costs |
|
|
— |
|
|
(1,206) |
Shares withheld for employees' taxes |
|
|
(3,816) |
|
|
— |
Purchase of treasury stock |
|
|
(1,996) |
|
|
(2,661) |
Payments on finance leases |
|
|
(475) |
|
|
(296) |
Proceeds from the exercise of stock options |
|
|
345 |
|
|
— |
Net cash provided by (used in) financing activities |
|
|
(42,696) |
|
|
86,136 |
Net increase (decrease) in cash and cash equivalents |
|
|
(494) |
|
|
2,178 |
Cash and cash equivalents at beginning of period |
|
|
672 |
|
|
127 |
Cash and cash equivalents at end of period |
|
$ |
178 |
|
$ |
2,305 |
Mayville Engineering Company, Inc. |
|||||||||||||
Reconciliation of Net Income to EBITDA and Adjusted EBITDA |
|||||||||||||
(in thousands) |
|||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||
|
|
September 30, |
|
September 30, |
|||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
||||
Net income and comprehensive income |
|
$ |
2,974 |
|
$ |
1,432 |
|
$ |
9,997 |
|
$ |
5,617 |
|
Interest expense |
|
|
2,653 |
|
|
3,907 |
|
|
8,977 |
|
|
7,533 |
|
Provision for income taxes |
|
|
100 |
|
|
554 |
|
|
2,532 |
|
|
1,471 |
|
Depreciation and amortization |
|
|
9,482 |
|
|
9,608 |
|
|
28,127 |
|
|
25,498 |
|
EBITDA |
|
|
15,209 |
|
|
15,501 |
|
|
49,633 |
|
|
40,119 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
— |
|
|
— |
|
|
216 |
|
MSA acquisition related costs |
|
|
— |
|
|
499 |
|
|
— |
|
|
1,398 |
|
Stock-based compensation expense |
|
|
1,352 |
|
|
1,336 |
|
|
3,847 |
|
|
3,756 |
|
Field replacement claim |
|
|
— |
|
|
— |
|
|
— |
|
|
490 |
|
Legal costs due to former fitness customer |
|
|
501 |
|
|
984 |
|
|
1,740 |
|
|
1,479 |
|
Costs recognized on step-up of MSA acquired inventory |
|
|
— |
|
|
891 |
|
|
— |
|
|
891 |
|
Adjusted EBITDA |
|
$ |
17,062 |
|
$ |
19,211 |
|
$ |
55,220 |
|
$ |
48,349 |
|
Net sales |
|
$ |
135,392 |
|
$ |
158,217 |
|
$ |
460,298 |
|
$ |
439,843 |
|
EBITDA Margin |
|
|
11.2 |
% |
|
9.8 |
% |
|
10.8 |
% |
|
9.1 |
% |
Adjusted EBITDA Margin |
|
|
12.6 |
% |
|
12.1 |
% |
|
12.0 |
% |
|
11.0 |
% |
Mayville Engineering Company, Inc. |
||||||||||||||||||||||||||
Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Diluted EPS |
||||||||||||||||||||||||||
(in thousands, except share amounts and per share data) |
||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||
|
|
September 30, |
|
September 30, |
||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
2024 |
|
|
2023 |
||||||||||||||||
|
|
Earnings |
|
Diluted
|
|
|
Earnings |
|
Diluted
|
|
Earnings |
|
Diluted
|
|
|
Earnings |
|
Diluted
|
||||||||
Net income and comprehensive income |
|
$ |
2,974 |
|
$ |
0.14 |
|
|
$ |
1,432 |
|
$ |
0.07 |
|
$ |
9,997 |
|
$ |
0.48 |
|
|
$ |
5,617 |
|
$ |
0.27 |
Loss on extinguishment of debt |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
216 |
|
|
0.01 |
MSA acquisition related costs |
|
|
— |
|
|
— |
|
|
|
499 |
|
|
0.02 |
|
|
— |
|
|
— |
|
|
|
1,398 |
|
|
0.07 |
Stock-based compensation expense |
|
|
1,352 |
|
|
0.06 |
|
|
|
1,336 |
|
|
0.06 |
|
|
3,847 |
|
|
0.18 |
|
|
|
3,756 |
|
|
0.18 |
Field replacement claim |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
490 |
|
|
0.02 |
Legal costs due to former fitness customer |
|
|
501 |
|
|
0.02 |
|
|
|
984 |
|
|
0.05 |
|
|
1,740 |
|
|
0.08 |
|
|
|
1,479 |
|
|
0.07 |
Costs recognized on step-up of MSA acquired inventory |
|
|
— |
|
|
— |
|
|
|
891 |
|
|
0.04 |
|
|
— |
|
|
— |
|
|
|
891 |
|
|
0.04 |
Tax effect of above adjustments |
|
|
(324) |
|
|
(0.02) |
|
|
|
(899) |
|
|
(0.04) |
|
|
(977) |
|
|
(0.06) |
|
|
|
(1,993) |
|
|
(0.10) |
Adjusted net income and comprehensive income |
|
$ |
4,503 |
|
$ |
0.21 |
|
|
$ |
4,243 |
|
$ |
0.21 |
|
$ |
14,607 |
|
$ |
0.69 |
|
|
$ |
11,854 |
|
$ |
0.57 |
Mayville Engineering Company, Inc. |
||||||||||||||
Reconciliation of Free Cash Flow |
||||||||||||||
(in thousands) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|||||||||
|
|
September 30, |
|
|
September 30, |
|||||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
|
2023 |
||||
Net cash provided by operating activities |
|
$ |
17,947 |
|
$ |
19,562 |
|
|
$ |
51,847 |
|
|
$ |
13,696 |
Less: Capital expenditures |
|
|
2,879 |
|
|
3,494 |
|
|
|
9,753 |
|
|
|
9,814 |
Free cash flow |
|
$ |
15,068 |
|
$ |
16,068 |
|
|
$ |
42,094 |
|
|
$ |
3,882 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105483436/en/
INVESTOR CONTACT
Stefan Neely or Noel Ryan
(615) 844-6248
MEC@val-adv.com
Source: Mayville Engineering Company
FAQ
What were MEC's Q3 2024 earnings per share?
How much was the settlement MEC received in Q4 2024?
What cost-cutting measures did MEC implement in Q3 2024?