MEC Q2 2024 Earnings Report
Key Takeaways
Mayville Engineering Company announced strong second-quarter results with a 17.7% increase in net sales, reaching $163.6 million, and a 28.4% increase in Adjusted EBITDA to $19.6 million. The company's performance was driven by strong project volumes in key markets, offsetting softness in the military sector. MEC also increased its full-year free cash flow guidance.
Net sales increased by 17.7% to $163.6 million, driven by organic growth and the acquisition of Mid-States Aluminum (MSA).
Adjusted EBITDA increased by 28.4% to $19.6 million, with an Adjusted EBITDA margin of 12.0%.
Free cash flow increased significantly to $19.2 million due to improved working capital efficiency.
The company is increasing its full-year 2024 free cash flow guidance to a range of $45 million to $55 million.
MEC
MEC
Forward Guidance
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.
Positive Outlook
- Continued ramp-up of new project work with both new and existing customers.
- Incremental contribution from the MSA acquisition.
- Incremental contributions from MBX and commercial pricing related initiatives.
- Strong cash flow generation in the first and second quarters of 2024 due to improved working capital utilization.
- Capital expenditures for the full year 2024 will be between $15 and $20 million.
Challenges Ahead
- Expected softening in commercial vehicle end market demand in the second half of the year as the result of various macroeconomic factors.
- Expected softening in powersports end market demand in the second half of the year as the result of various macroeconomic factors.
- Expected softening in agriculture end market demand in the second half of the year as the result of various macroeconomic factors.
- Macroeconomic conditions, including inflation and elevated interest rates, may negatively impact the business.
- Continuing supply chain constraints affecting some of our customers may negatively impact the business.