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Dec 31, 2023
MEC Q4 2023 Earnings Report
MEC's Q4 2023 earnings were announced, showcasing revenue growth and improved profitability despite challenges.
Key Takeaways
Mayville Engineering Company reported a 15.6% increase in net sales to $148.6 million for Q4 2023, driven by organic growth and the acquisition of MSA. Net income was $2.2 million, or $0.11 per diluted share, with an adjusted EBITDA of $17.7 million. The company experienced a negative impact from UAW labor strikes but achieved a record quarterly free cash flow of $19.9 million.
Net sales increased by 15.6% year-over-year, reaching $148.6 million.
Net income reached $2.2 million, with adjusted diluted EPS at $0.21.
Adjusted EBITDA was $17.7 million, impacted by the Hazel Park facility ramp-up and UAW strikes.
Record quarterly free cash flow of $19.9 million was achieved.
MEC
MEC
MEC Revenue by Segment
Revenue by Segment
Commercial Vehicle Revenue
CapyFin.comConstruction & Access Revenue
CapyFin.comPowersports Revenue
CapyFin.comAgriculture Revenue
CapyFin.comMilitary Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
MEC anticipates mid-to-high single-digit organic net sales growth and between 40 to 80 basis points of Adjusted EBITDA margin expansion for the full-year 2024. They expect their Hazel Park facility to approach $100 million of annualized sales during the fourth quarter 2024.
Positive Outlook
- Expect mid-to-high single digit organic net sales growth.
- Expect between 40 to 80 basis points of Adjusted EBITDA margin expansion.
- Expect significant year-over-year growth in free cash flow generation.
- MBX-related and commercial pricing initiatives are expected to deliver between $3 to $6 million of incremental Adjusted EBITDA benefit this year, net of inflationary pressures.
- Hazel Park facility is expected to approach $100 million of annualized sales during the fourth quarter 2024.
Challenges Ahead
- Contemplates a potential softening in macroeconomic conditions.
- 2024 guidance reflects the expected softening in end market demand as the result of various macroeconomic factors.
- 2024 guidance 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.
- 2024 financial guidance reflects incremental contributions from MBX related initiatives of $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 pricing, given higher labor and input costs.
Revenue & Expenses
Visualization of income flow from segment revenue to net income