Mayville Engineering Company (MEC) Q4 2024 earnings summary

Executive summary

• Net sales declined 18.4% year-over-year in Q4 2024 due to broad-based demand softness and customer inventory de-stocking, partially offset by new project ramp-ups.

• Adjusted EBITDA for Q4 was $9.2 million (7.6% margin), down from $17.7 million (11.9%) in the prior year, reflecting reduced capacity utilization.

• Free cash flow for Q4 was $35.6 million, supported by strong working capital management and a $25.5 million legal settlement; full-year free cash flow was $77.7 million.

• Debt repayment of over $31 million in Q4 reduced net leverage to 1.3x, below the targeted range.

• No unexpected customer contract cancellations, highlighting durable customer relationships.

Financial highlights

• Q4 net sales were $121.3 million, down 18.4% year-over-year; full-year 2024 net sales were $581.6 million, down 1.2% from 2023.

• Q4 manufacturing margin was $10.8 million (8.9%), down from $18.2 million (12.3%) year-over-year.

• Full-year adjusted EBITDA was $64.4 million (11.1% margin), compared to $66.1 million (11.2%) in 2023.

• Full-year adjusted diluted EPS was $0.62, down from $0.79 in 2023.

• Free cash flow for 2024 was $77.7 million, including $25.5 million from a legal settlement; organic free cash flow more than doubled year-over-year.

Outlook and guidance

• 2025 guidance: net sales of $560–$590 million, adjusted EBITDA of $60–$66 million, free cash flow of $43–$50 million.

• H1 2025 expected to remain soft due to ongoing inventory normalization; gradual recovery anticipated in H2 as demand improves.

• End market outlook for 2025: commercial vehicle flat to slightly down, construction and access flat to low single-digit, powersports low single-digit decrease, agriculture down 20–25%, military flat, other markets up low to mid-single digits.

• 2025 adjusted EBITDA guidance includes $1–$3 million of cost improvement from MBX and pricing initiatives, net of inflation.

• Capital expenditures for 2025 expected at $13–$17 million, focused on automation and high-return projects.