Mayville Engineering Company (MEC) Q2 2024 earnings summary

Executive summary

• Net sales increased 17.7% year-over-year to $163.6 million in Q2 2024, driven by organic growth, new project wins, and the MSA acquisition.

• Adjusted EBITDA rose 28.4% to $19.6 million, with margin expanding to 12.0% from 11.0% last year.

• Net income more than doubled to $3.8 million, and Adjusted EPS increased to $0.26.

• Free cash flow reached $19.2 million, a $22.9 million improvement year-over-year, supported by MBX initiatives and operational excellence.

• Strategic execution, MBX Lean initiatives, and commercial pricing actions drove margin expansion and above-market growth.

Financial highlights

• Q2 2024 net sales: $163.6 million (+17.7% YoY); organic growth 6.9%.

• Adjusted EBITDA: $19.6 million (12.0% margin), up from $15.3 million (11.0%) last year.

• Net income: $3.8 million ($0.18/diluted share); Adjusted net income: $5.5 million ($0.26/diluted share).

• Free cash flow: $19.2 million, up from negative $3.7 million in Q2 2023.

• Net leverage ratio at quarter-end was slightly below 1.7x, with $125.1 million net debt.

Outlook and guidance

• FY 2024 net sales guidance reaffirmed at $620–$640 million; Adjusted EBITDA at $72–$76 million.

• FY 2024 free cash flow guidance raised to $45–$55 million, up from $35–$45 million.

• Projected full-year net sales growth of 5–9% and Adjusted EBITDA growth of 9–15%.

• MSA acquisition expected to contribute $20–$30 million in 2024 net sales and $4–$6 million Adjusted EBITDA.

• Long-term targets: $750–$850 million revenue, 14–16% Adjusted EBITDA margin, and $65–$75 million free cash flow by 2026.