On August 6, 2024, Mayville Engineering Co Inc (MEC, Financial) released its 8-K filing announcing its second quarter 2024 results. Mayville Engineering Co Inc is a manufacturing partner that provides a broad range of prototyping and tooling, production fabrication, coating, assembly, and aftermarket components. Its customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction, power sports, agriculture, military, and other end markets. Its services comprise stamping, shearing, fiber laser cutting, forming, drilling, tapping, grinding, tube bending, machining, welding, assembly, and logistic services.
Performance Summary
Mayville Engineering Co Inc (MEC, Financial) reported net sales of $163.6 million for the second quarter of 2024, a 17.7% increase compared to the same period last year. This growth was driven by the acquisition of Mid-States Aluminum (MSA) and increased organic volumes in the powersports, commercial vehicle, and construction & access end markets. The company achieved a net income of $3.8 million, or $0.18 per diluted share, surpassing the analyst estimate of $0.17 per share.
Key Financial Achievements
Manufacturing margin for the quarter was $22.3 million, or 13.6% of net sales, up from $16.1 million, or 11.6% of net sales, in the prior year period. This improvement was attributed to increased organic sales volumes, the MSA acquisition, and the implementation of the MEC Business Excellence (MBX) initiatives.
Adjusted EBITDA for the quarter was $19.6 million, or 12.0% of net sales, compared to $15.3 million, or 11.0% of net sales, in the prior year period. Free cash flow was $19.2 million, a significant improvement from the negative $3.7 million in the same period last year.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $163.6 million | $139.0 million |
| Net Income | $3.8 million | $1.6 million |
| Adjusted EBITDA | $19.6 million | $15.3 million |
| Free Cash Flow | $19.2 million | ($3.7) million |
End Market Performance
Net sales to the commercial vehicle market increased by 10.8% to $62.1 million, driven by organic volume growth from new projects. The construction & access market saw a 2.7% increase in net sales to $27.2 million, while the powersports market experienced a 26.3% increase to $30.3 million. The agriculture market grew by 8.9% to $14.6 million, primarily due to the MSA acquisition. However, the military market saw a 26.2% decline in net sales to $6.6 million, attributed to the expected roll-off of certain aftermarket programs.
Strategic and Financial Outlook
Mayville Engineering Co Inc (MEC, Financial) continues to execute its MBX initiative, aiming for sustained operational and commercial excellence. The company has increased its free cash flow guidance for the full year 2024 to a range of $45 million to $55 million. The company also repaid $17.8 million of debt during the quarter, reducing its net leverage to slightly below 1.7x.
Balance Sheet Overview
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. The company’s balance sheet remains strong, with total assets of $488.2 million and total liabilities of $250.1 million.
Conclusion
Mayville Engineering Co Inc (MEC, Financial) has demonstrated strong strategic execution and market share gains, leading to significant financial improvements in the second quarter of 2024. The company's focus on higher-value, integrated solutions and operational efficiency has positioned it well for continued growth. For more detailed insights, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Mayville Engineering Co Inc for further details.
