Mayville Engineering Co Inc (MEC, Financial) announced its Q3 2023 results on October 31, 2023. The company reported a 16.1% year-over-year increase in net sales, driven in part by the recent acquisition of Mid-States Aluminum (MSA) and increased organic volumes in its commercial vehicle, military, and powersports end markets.
Management Commentary
President and CEO Jag Reddy stated,
We delivered significant year-over-year growth in revenue, Adjusted EBITDA and free cash flow in the third quarter, while continuing to demonstrate focused execution under our MBX value creation framework."He also mentioned that the company generated organic sales growth across its commercial vehicle, powersports, and military markets during the third quarter.
Financial Highlights
MEC's manufacturing margin was $19.0 million in Q3 2023, or 12.0% of net sales, versus $15.5 million, or 11.3% of net sales, in the prior year period. The company reported Adjusted EBITDA of $19.2 million in Q3 2023, or 12.1% of net sales, versus $16.1 million, or 11.8% of net sales, in the prior-year period. Net income for Q3 2023 was $1.4 million, or $0.07 per diluted share, versus $6.6 million, or $0.32 per diluted share, in the prior-year period.
End-Market Update
MEC reported increased net sales in the commercial vehicle, powersports, agriculture, military, and other end markets. However, net sales to the construction & access market decreased by 2.3% versus the prior-year period due to lower residential construction demand.
Strategic Update and Balance Sheet
During Q3 2023, MEC continued the rigorous implementation of its MEC Business Excellence (MBX) initiative, a value-creation framework designed to drive sustained operational and commercial excellence execution across all aspects of the organization. As of September 30, 2023, MEC had net debt outstanding of $169.6 million and total cash and availability on its senior secured revolving credit facility of $250.01 million.
Financial Guidance
MEC reaffirmed its financial guidance for the full year 2023, with net sales expected to be between $580 million and $610 million, and Adjusted EBITDA between $66 million and $71 million.
Explore the complete 8-K earnings release (here) from Mayville Engineering Co Inc for further details.
