In This Article:
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Revenue: Fourth quarter revenue decreased 18.4% year-over-year to $121.3 million.
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Free Cash Flow: Generated $78 million in 2024, including $25.5 million from a legal settlement; fourth quarter free cash flow was $35.6 million.
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Net Leverage Ratio: Reduced to 1.3 times at year-end 2024.
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Debt Repayment: Repaid over $31 million in debt during the fourth quarter.
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Adjusted EBITDA: Fourth quarter adjusted EBITDA was $9.2 million, with a margin of 7.6%.
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Manufacturing Margin: Fourth quarter manufacturing margin was $10.8 million, with a margin rate of 8.9%.
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SG&A Expenses: $7.9 million for the fourth quarter of 2024.
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Interest Expense: $2 million for the fourth quarter of 2024.
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Stock Repurchase: Repurchased nearly $4 million worth of common stock in the fourth quarter; $5.9 million for the full year 2024.
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2025 Guidance: Net sales expected between $560 million and $590 million; adjusted EBITDA between $60 million and $66 million; free cash flow between $43 million and $50 million.
Release Date: March 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Mayville Engineering Co Inc (NYSE:MEC) achieved significant year-over-year growth in free cash flow, generating nearly $78 million in 2024.
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The company successfully reduced its net leverage to 1.3 times by year-end, below the targeted range of 1.5 to 2 times.
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MEC repurchased $5.9 million of its common stock in 2024, with $19 million remaining under the existing authorization for future repurchases.
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The company secured over $100 million in new business wins in 2024, marking a 12% increase year-over-year.
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MEC's MBX framework led to operational efficiencies, including a 5% reduction in manufacturing space and a 12% reduction in headcount, contributing to robust free cash flow generation.
Negative Points
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MEC experienced an 18% year-over-year decline in revenue for the fourth quarter due to lower customer program activity and demand softness.
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The company's manufacturing margin rate decreased by 340 basis points in the fourth quarter compared to the prior year, reflecting lower fixed cost absorption.
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Adjusted EBITDA for the fourth quarter was $9.2 million, down from $17.7 million in the same period the previous year, with a margin decrease of 430 basis points.
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The agricultural market, representing 8% of MEC's revenues, saw a 46.5% year-over-year decline in the fourth quarter, with no recovery expected until 2026.
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MEC anticipates continued softness in demand across most end markets in the first half of 2025, impacting year-over-year growth and margin expansion.