Mayville Engineering Company (NYSE: MEC) (the “Company” or
“MEC”), a leading value-added provider of design, prototyping and
manufacturing solutions serving diverse end markets, today
announced results for the three-months ended June 30, 2024.
SECOND QUARTER 2024 RESULTS
(All comparisons versus the prior-year period)
- Net sales of $163.6 million, or +17.7%, including organic
growth of 6.9%
- Net income of $3.8 million, or $0.18 per diluted share, an
increase of $2.2 million, or $0.10 per diluted share
- Non-GAAP Adjusted Diluted EPS of $0.26, an increase of
$0.06
- Adjusted EBITDA of $19.6 million, an increase of 28.4%
- Adjusted EBITDA margin of 12.0%, an increase of 100 bps
- Free Cash Flow of $19.2 million, an increase of $22.9
million
- Ratio of net debt to trailing twelve-month Adjusted EBITDA of
slightly below 1.7x as of June 30, 2024
- Full Year 2024 Free Cash Flow expected to be in a range of $45
million to $55 million
MANAGEMENT COMMENTARY
“We continued to demonstrate strong strategic execution during
the second quarter, as net sales, margin realization, and free cash
generation each increased significantly above prior-year levels,”
stated Jag Reddy, President and Chief Executive Officer. “Our
collective focus on higher-value, integrated solutions, increased
operational efficiency, and return-focused capital allocation
strategy has positioned MEC to outperform the broader market
through the current economic cycle.”
“Strong project volumes within our commercial vehicle,
powersports, agriculture, and construction & access markets
more than offset softness within our military vertical in the
period,” stated Reddy. “Going into the second half of 2024,
underlying demand is projected to soften in certain key end
markets, but we anticipate delivering continued above-market growth
across all of our end markets as a result of market share gains and
strong strategic execution.”
“Second quarter sales growth continues to reflect the
implementation of our value-added pricing model and the pricing
discipline our MEC Business Excellence (“MBX”) process drives,”
continued Reddy. “Operationally, we continued to implement MBX
which led to improvements across the organization that are expected
to result in additional cost savings, labor efficiency gains, and
working capital improvements. Our working capital improvements have
been particularly successful, as reflected by our
higher-than-expected free cash conversion through the first half of
2024. As a result, we are increasing our free cash flow guidance
for the full year 2024 to a range of between $45 million to $55
million.”
“Importantly, our MBX initiatives have driven ratable operating
leverage improvements across our manufacturing footprint, providing
for sustained margin expansion,” continued Reddy, “This progress,
together with improved utilization at our Hazel Park facility, have
put us on on-track to achieve meaningful margin expansion in 2024,
while remaining on-pace to realize an Adjusted EBITDA margin of
between 14% to 16% by year-end 2026.”
“Our strong free cash generation during the second quarter
allowed us to repay more than $17 million of debt during the
period, reducing our net leverage to slightly below 1.7x at the end
of the quarter, well within our target of between 1.5x and 2.0x by
year-end 2024. Additionally, during the second quarter, we
repurchased $1.0 million of common equity under our share
repurchase program, with $24.0 million remaining under the existing
authorization. As we further reduce our leverage, we intend to
prioritize strategic, bolt-on acquisitions that expand our
commercial reach and capabilities as well as a structured approach
to our share repurchase strategy. Our capital deployment priorities
will continue to be governed by our unwavering commitment to
maximize long-term shareholder value.”
PERFORMANCE SUMMARY
Net sales increased by 17.7% on a year-over-year basis in the
second quarter 2024, driven in part by the acquisition of
Mid-States Aluminum (MSA) in the third quarter of 2023 and
increased organic volumes in our powersports, commercial vehicle
and construction & access end markets because of new project
volumes resulting from the Company’s focus on growing its market
share with new and existing customers. The Company’s above-market
growth in its powersports, commercial vehicle and construction
& access markets was partly offset by softening demand in our
legacy agriculture end market and the foreseen roll-off of certain
military aftermarket programs at the end of 2023.
Manufacturing margin was $22.3 million in the second quarter of
2024, or 13.6% of net sales, as compared to $16.1 million, or 11.6%
of net sales, in the prior year period. The year-over-year increase
in manufacturing margin was driven by the increased organic sales
volumes, the MSA acquisition, MBX initiatives and commercial
pricing initiatives.
Other selling, general and administrative expenses were $8.3
million in the second quarter of 2024 as compared to $7.4 million
for the same prior year period. The increase in these expenses
during the second quarter primarily reflects the increase in legal
costs associated with litigation against the former fitness
customer, incremental expense associated with the MSA acquisition
and higher costs related to compliance requirements.
Interest expense was $3.0 million in the second quarter of 2024,
as compared to $2.0 million in the prior year period due to an
increase in borrowings. The increase in borrowings relative to the
prior year is due to the acquisition of MSA, which closed on July
1, 2023.
Net income for the second quarter of 2024 was $3.8 million, or
$0.18 per diluted share, versus $1.6 million, or $0.08 per diluted
share, in the prior-year period.
MEC reported Adjusted EBITDA of $19.6 million in the second
quarter of 2024, or 12.0% of net sales, versus $15.3 million, or
11.0% of net sales, in the prior-year period. The increase in
Adjusted EBITDA and Adjusted EBITDA margin, when compared to the
prior year, reflects the benefit of the MSA acquisition, continued
execution of the Company’s MBX strategic initiatives, improved
commercial pricing and higher volumes, partially offset by higher
SG&A expenses.
Second quarter Adjusted net income was $5.5 million, or $0.26
per diluted share, versus $4.1 million, or $0.20 per diluted share,
in the prior year period. The increase in adjusted net income
reflects an increase in income from operations, which was partially
offset by higher interest expense.
Free cash flow during the second quarter of 2024 was $19.2
million as compared to ($3.7) million in the prior year period. The
increase in free cash flow was primarily attributable to a $23.1
million increase in net cash provided by operating activities due
to improved working capital efficiency and the payout of deferred
compensation to a retired Company executive made in the prior year
period.
END MARKET UPDATE
Three Months Ended
June 30,
2024
2023
Commercial Vehicle
$
62,130
$
56,075
Construction & Access
27,230
26,522
Powersports
30,306
23,995
Agriculture
14,639
13,444
Military
6,579
8,910
Other
22,752
10,033
Net Sales
$
163,636
$
138,980
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 $62.1 million in
the second quarter of 2024, an increase of 10.8% versus the
prior-year period. The increase in net sales to this end market
during the quarter was attributable to organic volume growth from
new projects. The successful execution of the Company’s organic
growth strategy delivered above-market growth for this end-market
as overall commercial vehicle demand fell by 0.3%
year-over-year.
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 $27.2
million in the second quarter of 2024, an increase of 2.7% versus
the prior-year period. The increase in sales was primarily due to
increased demand and new project wins associated with strong
end-market demand from infrastructure-related projects.
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 $30.3 million in the
second quarter of 2024, an increase of 26.3% versus the prior-year
period. The increase in sales was the result of higher volumes from
new project wins and share gains from both new and existing
customers.
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 $14.6 million in the
second quarter of 2024, an increase of 8.9% versus the prior-year
period. The increase in sales was mostly driven by the MSA
acquisition, which was somewhat offset by expected demand softness
in our legacy large-ag market.
Military
MEC holds the International Traffic in Arms Regulations (ITAR)
certification and produces components for the United States
military. Products include exhaust, engine components, cooling,
fuel, suspension, structural systems, and chemical agent resistant
coating (CARC) painting capabilities.
Net sales to the military market were $6.6 million in the second
quarter of 2024, a decrease of 26.2% versus the prior-year period.
The decrease in net sales compared to the prior year was primarily
attributable to the expected roll-off of certain aftermarket
programs at the end of 2023.
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 second quarter of 2024
were $22.8 million, an increase of 126.8% year-over-year. The
increase is primarily attributable to MSA-related contributions,
which was acquired on July 1, 2023.
STRATEGIC UPDATE
During the second quarter, MEC continued the successful
execution of our MEC Business Excellence (MBX) initiative, a
value-creation framework designed to drive sustained operational
and commercial excellence execution across all aspects of the
organization. Over the next two years, MEC expects that this value
creation framework will drive total net sales to between $750 to
$850 million, Adjusted EBITDA margin expansion to between 14% to
16% and free cash flow to between $65 to $75 million by year-end
2026.
- 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 second quarter, the Company continued the implementation
and alignment of processes and best practices across the enterprise
to drive strategic execution. Additionally, the Company launched an
employee recognition program aimed at further fostering our
high-performance culture. This peer recognition initiative allows
employees to nominate peers who consistently embody the Company
values and uphold the Company culture through their daily
interactions and exceptional performance.
- 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 second quarter of
2024, the Company had held over 65 MBX kaizen events in 2024 which
contributed to improved margins and inventory optimization.
Year-over-year, the Company recognized $0.9 million of savings
related to sourcing optimization and improved labor utilization.
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 $0.6 million, net of inflation, in year-over-year
pricing improvements as a result of its on-going commercial pricing
initiatives.
- 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 2023, the Company closed the acquisition of MSA,
which positions MEC to capitalize on revenue synergies within its
existing legacy customer base and is now positioned to grow
organically by pursuing demand for light-weight aluminum products
in high-growth energy transition and fleet electrification
applications. During the second 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 military, commercial vehicle, powersports and
other end-markets. Going forward, the Company will continue to
evaluate opportunistic acquisition opportunities to further expand
its differentiated suite of capabilities.
- 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 second quarter,
the Company re-aligned its commercial team, further enhancing
customer experience, aligning technical aspects and standardizing
processes.
BALANCE SHEET UPDATE
As of June 30, 2024, MEC had net debt outstanding of $125.1
million and total cash and availability on its senior secured
revolving credit facility of $250.01 million. During the second
quarter of 2024, the Company repaid $17.8 million of debt incurred
in conjunction with the MSA acquisition. At the end of the second
quarter, the ratio of net debt to trailing twelve-month Adjusted
EBITDA was slightly below 1.7x, resulting in a 30 bps rate
reduction in the third quarter.
______________________
1 This amount is reduced to approximately
$127.9 million after taking into account the $122.1 million of
outstanding borrowings under the credit facility as of June 30,
2024.
FINANCIAL GUIDANCE
Today, the Company reaffirmed its financial guidance for Net
Sales and Adjusted EBITDA for the full year 2024 but increased its
guidance for full year Free Cash Flow. All guidance is current as
of the time provided and is subject to change.
FY 2023
FY 2024 Forecast
Prior FY 2024 Forecast
(in Millions)
Actual
Low
Mid
High
Low
Mid
High
Net Sales
$
588.4
$
620
$
630
$
640
$
620
$
630
$
640
Adjusted EBITDA
$
66.1
$
72
$
74
$
76
$
72
$
74
$
76
Free Cash Flow
$
23.8
$
45
$
50
$
55
$
35
$
40
$
45
The Company’s 2024 guidance reflects the expected softening in
commercial vehicle, powersports and agriculture end market demand
in the second half of the year as the result of various
macroeconomic factors, which the Company expects will be offset by
the continued ramp-up of new project work with both new and
existing customers. The Company’s 2024 financial guidance also
reflects incremental contribution from the MSA acquisition,
including $20 to $30 million of incremental net sales and $4 to $6
million of incremental Adjusted EBITDA.
The Company’s 2024 financial guidance also reflects incremental
contributions from MBX and commercial pricing related initiatives
of between $3 to $6 million. The impact of these initiatives is net
of normal annual cost inflation, representing the Company’s ability
to improve efficiency and manage price, given higher labor and
input costs.
The Company’s updated 2024 Free Cash Flow guidance demonstrates
strong cash flow generation in the first and second quarters of
2024 due to improved working capital utilization related to its MBX
initiatives. The Company also continues to expect that its capital
expenditures for the full year 2024 will be between $15 and $20
million.
SECOND QUARTER 2024 RESULTS CONFERENCE CALL
The Company will host a conference call on Wednesday, August 7,
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 the United States, or call (833) 950-0062 within Canada and
please use the Access Code: 300362.
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 continuing supply chain
constraints affecting some of our customers, 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 U.S.-based,
vertically-integrated, value-added manufacturing partner providing
a full suite of manufacturing solutions from concept to production,
including design, prototyping and tooling, fabrication, aluminum
extrusion, coating, assembly and aftermarket components. Our
customers operate in diverse end markets, including heavy- and
medium-duty commercial vehicles, construction & access
equipment, powersports, agriculture, military and other end
markets. Along with process engineering and development services,
MEC maintains an extensive manufacturing infrastructure with 23
facilities across seven states. These facilities make it possible
to offer conventional and CNC (computer numerical control)
stamping, shearing, fiber laser cutting, forming, drilling,
tapping, grinding, tube bending, machining, welding, assembly, and
logistic services. MEC also possesses a broad range of finishing
capabilities including shot blasting, e-coating, powder coating,
wet spray and military grade chemical agent resistant coating
(CARC) painting. For more information, please visit
www.mecinc.com.
NON-GAAP FINANCIAL MEASURES
This press release contains financial information calculated in
a manner other than in accordance with U.S. generally accepted
accounting principles (“GAAP”).
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 and legal costs due to the former
fitness customer. 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.
Consolidated Balance
Sheet
(in thousands, except share
amounts)
June 30,
December 31,
2024
2023
ASSETS
Cash and cash equivalents
$
314
$
672
Receivables, net of allowances for
doubtful accounts of $697 at June 30, 2024 and $685 at December 31,
2023
67,853
57,445
Inventories, net
60,816
67,782
Tooling in progress
6,074
5,457
Prepaid expenses and other current
assets
5,155
3,267
Total current assets
140,212
134,623
Property, plant and equipment, net
168,757
175,745
Goodwill
92,650
92,650
Intangible assets, net
55,201
58,667
Operating lease assets
29,868
32,233
Other long-term assets
1,463
2,743
Total assets
$
488,151
$
496,661
LIABILITIES AND SHAREHOLDERS’
EQUITY
Accounts payable
$
53,963
$
46,526
Current portion of operating lease
obligation
4,856
5,064
Accrued liabilities:
Salaries, wages, and payroll taxes
7,211
6,368
Profit sharing and bonus
3,275
3,107
Other current liabilities
12,523
10,644
Total current liabilities
81,828
71,709
Bank revolving credit notes
122,063
147,493
Operating lease obligation, less current
maturities
26,616
28,606
Deferred compensation, less current
portion
4,315
3,816
Deferred income tax liability
12,847
12,606
Other long-term liabilities
2,398
2,453
Total liabilities
$
250,067
$
266,683
Commitments and contingencies
Common shares, no par value, 75,000,000
authorized, 22,077,389 shares issued at June 30, 2024 and
21,853,477 at December 31, 2023
—
—
Additional paid-in-capital
207,454
205,373
Retained earnings
41,141
34,118
Treasury shares at cost, 1,604,090 shares
at June 30, 2024 and 1,542,893 at December 31, 2023
(10,511
)
(9,513
)
Total shareholders’ equity
238,084
229,978
Total
$
488,151
$
496,661
Mayville Engineering Company,
Inc.
Consolidated Statement of Net
Income
(in thousands, except share
amounts and per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Net sales
$
163,636
$
138,980
$
324,905
$
281,626
Cost of sales
141,359
122,885
281,696
249,154
Amortization of intangible assets
1,733
1,738
3,466
3,476
Profit sharing, bonuses, and deferred
compensation
4,133
2,688
7,933
5,690
Other selling, general and administrative
expenses
8,261
7,396
16,030
14,363
Income from operations
8,150
4,273
15,780
8,943
Interest expense
(2,969
)
(1,968
)
(6,324
)
(3,626
)
Loss on extinguishment of debt
—
(216
)
—
(216
)
Income before taxes
5,181
2,089
9,456
5,101
Income tax expense
1,399
475
2,433
916
Net income and comprehensive
income
$
3,782
$
1,614
$
7,023
$
4,185
Earnings per share:
Basic
$
0.18
$
0.08
$
0.34
$
0.21
Diluted
$
0.18
$
0.08
$
0.34
$
0.20
Weighted average shares
outstanding:
Basic
20,602,650
20,494,437
20,544,292
20,405,383
Diluted
21,034,780
20,827,728
20,914,499
20,789,175
Mayville Engineering Company,
Inc.
Consolidated Statement of Cash
Flows
(in thousands)
Six Months Ended
June 30,
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income
$
7,023
$
4,185
Adjustments to reconcile net income to net
cash provided (used in) by operating activities:
Depreciation
15,179
12,415
Amortization
3,466
3,476
Allowance for doubtful accounts
12
6
Inventory excess and obsolescence
reserve
(164
)
41
Stock-based compensation expense
2,495
2,420
Loss (gain) on disposal of property, plant
and equipment
2
(135
)
Deferred compensation
451
(17,475
)
Loss on extinguishment of debt
—
216
Non-cash lease expense
2,702
2,144
Other non-cash adjustments
143
184
Changes in operating assets and
liabilities:
Accounts receivable
(10,420
)
(11,071
)
Inventories
7,130
4,839
Tooling in progress
(617
)
111
Prepaids and other current assets
(1,951
)
(897
)
Accounts payable
6,391
(3,061
)
Deferred income taxes
1,764
638
Operating lease obligations
(2,535
)
(1,986
)
Accrued liabilities
2,829
(1,915
)
Net cash provided by (used in) operating
activities
33,900
(5,865
)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant and
equipment
(6,874
)
(6,320
)
Proceeds from sale of property, plant and
equipment
107
153
Net cash used in investing activities
(6,767
)
(6,167
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from bank revolving credit
notes
273,536
347,324
Payments on bank revolving credit
notes
(298,967
)
(241,618
)
Repayments of other long-term debt
(306
)
(575
)
Payments of financing costs
—
(1,248
)
Shares withheld for employees' taxes
(758
)
—
Purchase of treasury stock
(998
)
(1,661
)
Payments on finance leases
(343
)
(192
)
Proceeds from the exercise of stock
options
345
—
Net cash provided by (used in) financing
activities
(27,491
)
102,030
Net increase (decrease) in cash and cash
equivalents
(358
)
89,998
Cash and cash equivalents at beginning of
period
672
127
Cash and cash equivalents at end
of period
$
314
$
90,125
Mayville Engineering Company,
Inc.
Reconciliation of Net Income
to EBITDA and Adjusted EBITDA
(in thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Net income and comprehensive income
$
3,782
$
1,614
$
7,023
$
4,185
Interest expense
2,969
1,968
6,324
3,626
Provision for income taxes
1,399
475
2,433
916
Depreciation and amortization
9,391
8,011
18,645
15,891
EBITDA
17,541
12,068
34,425
24,618
Loss on extinguishment of debt
—
216
—
216
MSA acquisition related costs
—
899
—
899
Stock-based compensation expense
1,338
1,354
2,495
2,420
Field replacement claim
—
490
—
490
Legal costs due to former fitness
customer
760
272
1,239
495
Adjusted EBITDA
$
19,639
$
15,299
$
38,159
$
29,138
Net sales
$
163,636
$
138,980
$
324,905
$
281,626
EBITDA Margin
10.7
%
8.7
%
10.6
%
8.7
%
Adjusted EBITDA Margin
12.0
%
11.0
%
11.7
%
10.3
%
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
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Earnings
Diluted EPS
Earnings
Diluted EPS
Earnings
Diluted EPS
Earnings
Diluted EPS
Net income and comprehensive income
$
3,782
$
0.18
$
1,614
$
0.08
$
7,023
$
0.34
$
4,185
$
0.20
Loss on extinguishment of debt
—
—
216
0.01
—
—
216
0.01
MSA acquisition related costs
—
—
899
0.04
—
—
899
0.04
Stock-based compensation expense
1,338
0.06
1,354
0.07
2,495
0.12
2,420
0.12
Field replacement claim
—
—
490
0.02
—
—
490
0.02
Legal costs due to former fitness
customer
760
0.04
272
0.01
1,239
0.06
495
0.02
Tax effect of above adjustments
(383)
(0.02)
(783)
(0.04)
(654)
(0.04)
(1,095)
(0.05)
Adjusted net income and comprehensive
income
$
5,497
$
0.26
$
4,062
$
0.20
$
10,103
$
0.48
$
7,610
$
0.37
Mayville Engineering Company,
Inc.
Reconciliation of Free Cash
Flow
(in thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Net cash provided by (used in) operating
activities
$
23,275
$
178
$
33,900
$
(5,865
)
Less: Capital expenditures
4,099
3,912
6,874
6,320
Free cash flow
$
19,176
$
(3,734
)
$
27,026
$
(12,185
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806890570/en/
INVESTOR CONTACT Stefan Neely or Noel Ryan (615) 844-6248
MEC@val-adv.com
Mayville Engineering (NYSE:MEC)
Historical Stock Chart
From Nov 2024 to Dec 2024
Mayville Engineering (NYSE:MEC)
Historical Stock Chart
From Dec 2023 to Dec 2024