MEC Q4 2024 Earnings Report
Key Takeaways
Mayville Engineering Company (MEC) reported Q4 2024 revenue of $121.3 million, an 18.4% decline from the prior year due to lower customer demand across key end markets. Despite this, net income surged to $16.0 million, up from $2.2 million in Q4 2023, largely due to a $25.5 million lawsuit settlement gain. Adjusted EBITDA fell to $9.2 million from $17.7 million in the prior year, reflecting lower sales and cost absorption challenges. Free cash flow increased to $35.6 million, bolstered by the settlement proceeds.
Q4 2024 revenue declined 18.4% year-over-year to $121.3 million.
Net income increased significantly to $16.0 million, largely due to a $25.5 million lawsuit settlement gain.
Adjusted EBITDA fell to $9.2 million from $17.7 million in Q4 2023 due to lower sales and cost absorption issues.
Free cash flow rose to $35.6 million, benefiting from the settlement proceeds.
MEC
MEC
Forward Guidance
MEC anticipates muted demand in the first half of 2025, with gradual improvement expected in the second half as customer orders recover. The company remains focused on cost efficiencies and strategic end-market diversification.
Positive Outlook
- Projected 2025 revenue between $560 million and $590 million.
- Adjusted EBITDA expected in the range of $60 million to $66 million.
- Continued business development efforts in high-value, emerging growth markets.
- Strategic cost-saving initiatives improving operational efficiency.
- Ongoing debt reduction and opportunistic share repurchases.
Challenges Ahead
- Muted demand conditions expected in the first half of 2025.
- Customer inventory de-stocking continues to impact sales.
- Lower fixed cost absorption due to reduced demand.
- Interest rate environment remains challenging.
- Geopolitical and macroeconomic uncertainties pose risks to recovery.