Financial Performance - Net sales for Q4 2024 were $121.3 million, a decrease of 18.4% year-over-year, primarily due to reduced customer demand and inventory de-stocking[5]. - Net income for Q4 2024 was $16.0 million, or $0.76 per diluted share, compared to $2.2 million, or $0.11 per diluted share, in the prior-year period, reflecting a $25.5 million gain from a lawsuit settlement[9]. - Adjusted EBITDA for Q4 2024 was $9.2 million, representing a margin of 7.6% of net sales, down from $17.7 million and 11.9% in the prior-year period[10]. - Free cash flow for Q4 2024 was $35.6 million, significantly up from $19.9 million in the prior year, largely due to the settlement agreement[12]. - For the twelve months ended December 31, 2024, net sales were $581.6 million, a decrease of 1.4% from $588.4 million in 2023[41]. - The company reported a net income of $25.968 million for the twelve months ended December 31, 2024, compared to $7.844 million in 2023, representing a significant increase[41]. - EBITDA for the twelve months ended December 31, 2024, was not explicitly stated but can be inferred from the net income and adjustments, indicating improved operational performance[36]. - Net income for Q4 2024 was $15,971,000, a significant increase from $2,227,000 in Q4 2023, representing a growth of 619%[45]. - EBITDA for Q4 2024 reached $32,507,000, compared to $14,936,000 in Q4 2023, marking an increase of 117%[45]. - Net sales for the twelve months ended December 31, 2024, were $581,604,000, slightly down from $588,425,000 in 2023, a decrease of 1.4%[45]. - Adjusted EBITDA margin for Q4 2024 was 7.6%, down from 11.9% in Q4 2023, indicating a decline of 36%[45]. - Free cash flow for Q4 2024 was $35,614,000, an increase of 79% from $19,883,000 in Q4 2023[49]. - Interest expense for the twelve months ended December 31, 2024, was $10,989,000, a slight decrease from $11,092,000 in 2023[45]. Market Performance - Sales to the commercial vehicle market were $47.2 million in Q4 2024, a decrease of 10.5% year-over-year, reflecting lower customer demand[15]. - Sales to the agriculture market fell by 46.5% year-over-year to $7.7 million, driven by reduced demand and inventory de-stocking[21]. - Sales to other end markets increased by 11% year-over-year to $24.6 million, attributed to growth in aluminum extrusion products and new customer projects[24]. - In 2024, the company secured over $100 million in new business wins, a 12% increase from the previous year, indicating growth in emerging markets[4]. Financial Health - The company repaid over $31 million in debt during Q4 2024, reducing net leverage to 1.3x[26]. - Total current assets decreased to $112.944 million as of December 31, 2024, down from $134.623 million in 2023, reflecting a reduction in cash and inventories[39]. - The company’s total liabilities decreased to $193.817 million as of December 31, 2024, compared to $266.683 million in 2023, indicating improved financial health[39]. - Cash and cash equivalents at the end of the period were $206,000, down from $672,000 at the end of 2023, highlighting liquidity challenges[43]. - The company’s operating cash flow for the twelve months ended December 31, 2024, was $89.807 million, significantly higher than $40.363 million in 2023, indicating stronger cash generation[43]. Legal and Restructuring - The company experienced a gain on lawsuit settlement of $25.5 million in the three months ended December 31, 2024, contributing to the increase in net income[41]. - The company reported a lawsuit settlement gain of $(25,500,000) in Q4 2024, impacting net income negatively[47]. - The company incurred $492,000 in Wautoma restructuring charges in Q4 2024, with no charges reported in Q4 2023[45]. Compensation and Taxation - Stock-based compensation expense for the twelve months ended December 31, 2024, was $5,186,000, up from $4,485,000 in 2023, an increase of 15.6%[45]. - The provision for income taxes for Q4 2024 was $5,064,000, compared to a benefit of $(432,000) in Q4 2023[45]. Operational Capabilities - The company has 23 manufacturing facilities, with 22 currently in use, supporting its diverse end markets and operational capabilities[34].

Industry Overview - The uranium ore market is projected to grow from $1.11 billion in 2023 to $1.21 billion in 2024, reflecting a compound annual growth rate (CAGR) of 9.5% [1] - By 2028, the market size is expected to reach $1.81 billion, with a CAGR of 10.5% [1] - Growth drivers include government policies, carbon emission reduction efforts, geopolitical stability, new uranium discoveries, and advancements in nuclear technology [1] Market Trends - Key trends include advancements in nuclear technology, development of in-situ recovery (ISR) technology, and increased scrutiny on environmental impacts [1] - Rising electricity consumption is a significant factor driving the uranium ore market, as uranium is the primary fuel for nuclear power plants [2] Company Developments - Mustang Energy Corp. has entered into an option agreement to acquire a 75% interest in Skyharbour's 914W Uranium Project, enhancing its presence in the Athabasca Basin [2][3] - The 914W Project is strategically located and shows promising geological indicators, with much of the area remaining underexplored [5][6] - Denison Mines Corp. reported progress on its Phoenix In-Situ Recovery uranium mining operation, achieving 45% completion of total engineering by the end of Q3 2024 [6] - Uranium Energy Corp. announced an initial economic assessment for its Roughrider Project, estimating a post-tax net present value of $946 million [8] - ATHA Energy Corp. has executed option agreements with Terra Uranium Ltd. for joint ventures on uranium properties, indicating strategic partnerships in the sector [9][10] - Centrus Energy Corp. priced $350 million in convertible senior notes, indicating financial maneuvers to support growth initiatives [11][12]

Financial Data and Key Metrics Changes - Total sales for Q3 2024 decreased by 14.4% year-over-year to $135.4 million, reflecting softening customer demand across key end markets [30] - Manufacturing margin was $17.1 million, down from $19 million in the prior year, with a manufacturing margin rate of 12.6%, an increase of 60 basis points from 12% [31] - Adjusted EBITDA for Q3 was $17.1 million, compared to $19.2 million in the prior year, with an adjusted EBITDA margin increase of 50 basis points to 12.6% [34] - Free cash flow for Q3 was $15.1 million, down from $16.1 million in the prior year [36] Business Line Data and Key Metrics Changes - Commercial vehicle revenues decreased by 9.9% year-over-year, driven by an 11.1% decrease in North American Class 8 truck demand [15] - Construction and access revenues decreased by 23.5% year-over-year, reflecting softening demand across nonresidential and public infrastructure markets [17] - Powersports market revenues decreased by 14.1% year-over-year, impacted by customer inventory destocking and softening consumer demand [18] - Agricultural market revenues decreased by 31.1% year-over-year, reflecting softening demand across both large and small agricultural markets [20] Market Data and Key Metrics Changes - The commercial vehicle market represents approximately 38% of trailing 12-month revenues, with a forecasted decrease in Class 8 vehicle production by 7.1% in 2024 [15] - The construction and access market, representing about 15% of revenues, is expected to see demand softness through 2024 and into 2025 [17] - The powersports market, accounting for 16% of revenues, is anticipated to recover as interest rates decline [19] - The agricultural market, representing 8% of revenues, is expected to remain in a downturn due to higher interest rates and lower crop prices [20] Company Strategy and Development Direction - The company has implemented cost rationalization initiatives, including a 12% reduction in the labor force and the permanent closure of the Wautoma facility [7] - The company aims to achieve $750 million to $850 million in revenues and expand adjusted EBITDA margins to between 14% and 16% by the end of 2026 [12] - The MBX framework continues to drive strategic pricing improvements and overall cost discipline, positioning the company for long-term financial improvements [25] Management's Comments on Operating Environment and Future Outlook - Management noted a marked near-term deceleration in customer order activity due to destocking actions by customers [6] - The outlook for 2024 has been revised to reflect reduced order activity, with expectations for a normalization in customer order activity beginning in the first half of 2025 [11] - Management remains confident in achieving long-term targets despite near-term demand softness, emphasizing that market share has not changed [12][48] Other Important Information - The company has booked approximately $80 million in new project wins this year, with launches occurring over the next two years [14] - A legal settlement with former fitness customers will result in a gross cash settlement of $25.5 million, which will be used for debt repayment and share repurchases [26][27] Q&A Session Summary Question: Can you break down your expectations for manufacturing margin and SG&A sequentially in Q4? - Manufacturing margin is expected to be down slightly compared to Q3, with SG&A seeing a favorable impact due to cost reduction activities [41][42] Question: What is the expected revenue for Q4, and how does it align with customer orders? - The expected revenue midpoint for Q4 is around $125 million, based on firm orders and not backlog [47] Question: Can you clarify the organic net sales growth of 1.5% to 2.5% for 2024 despite revised guidance? - This growth reflects new wins and opportunities, separated from the impact of destocking [62] Question: What initiatives are being taken to gain market share in the powersports market? - The company has gained market share through new customer wins and expanded programs with existing customers [63] Question: What is driving the strong free cash flow generation? - The strong free cash flow is attributed to the MBX program, focusing on reducing working capital and improving inventory management [64]

Financial Performance - Net sales for the three months ended September 30, 2024, were $135,392, a decrease of $22,825 or 14.4% compared to $158,217 for the same period in 2023, driven by reduced demand and customer inventory de-stocking [121]. - Manufacturing margins decreased to $17,095 for the three months ended September 30, 2024, down $1,925 or 10.1% from $19,020 in the prior year, primarily due to lower end market demand [122]. - EBITDA for the three months ended September 30, 2024, was $15,209, a slight decrease of $292 or 1.9% from $15,501 in the same period of 2023 [121]. - Adjusted EBITDA for the three months ended September 30, 2024, was $17,062, down from $19,211 in the prior year, reflecting a decrease of $2,149 or 11.2% [119]. - Net sales for the nine months ended September 30, 2024, were $460,298, an increase of $20,455 or 4.7% compared to $439,843 for the same period in 2023 [131]. - Manufacturing margins increased to $60,305 for the nine months ended September 30, 2024, up $8,813 or 17.1% from $51,492 in the prior year [132]. - Net income and comprehensive income rose to $9,997 for the nine months ended September 30, 2024, reflecting an increase of $4,380 or 78.0% compared to $5,617 in 2023 [131]. - EBITDA for the nine months ended September 30, 2024, was $49,633, an increase of $9,514 or 23.7% from $40,119 in the previous year [139]. Expenses and Margins - EBITDA margin improved to 11.2% for the three months ended September 30, 2024, compared to 9.8% in the same period of 2023, an increase of 1.4 percentage points [121]. - Adjusted EBITDA margin was 12.6% for the three months ended September 30, 2024, compared to 12.1% in the prior year, reflecting a 0.5 percentage point increase [119]. - Interest expense decreased to $2,653 for the three months ended September 30, 2024, down $1,254 or 32.1% from $3,907 in the same period of 2023, due to lower borrowings and interest rates [128]. - Other selling, general, and administrative expenses were $7,559 for the three months ended September 30, 2024, a decrease of $1,049 or 12.2% from $8,608 in the prior year, primarily due to lower legal fees [126]. - Profit-sharing, bonuses, and deferred compensation expenses decreased to $2,076 for the three months ended September 30, 2024, down $270 or 11.5% from $2,346 in the same period of 2023 [125]. - Amortization of intangible assets decreased to $1,733 for the three months ended September 30, 2024, a decrease of $440 or 20.2% from $2,173 in the prior year, due to full amortization of certain assets [124]. - Interest expense increased to $8,977 for the nine months ended September 30, 2024, an increase of $1,444 or 19.2% compared to $7,533 in 2023 [137]. Cash Flow and Capital Management - Cash provided by operating activities was $51,847 for the nine months ended September 30, 2024, a significant increase of $38,151 or 279% compared to $13,696 in 2023 [140]. - Cash used in investing activities decreased to $9,645 for the nine months ended September 30, 2024, down $88,009 or 90% from $97,654 in the prior year [141]. - The company had a consolidated total leverage ratio of 1.59 to 1.00 as of September 30, 2024, well below the maximum limit of 3.50 to 1.00 [148]. - Capital expenditures for the full year 2024 are expected to be between $13,000 and $15,000 [151]. - The company had availability of $138,955 under the revolving credit facility at September 30, 2024 [146]. - The company expects to remain compliant with financial covenants through 2024 and the foreseeable future, ensuring access to capital under the Credit Agreement [152]. - Operating cash flow and available borrowings are deemed sufficient to fund operations for 2024 and beyond, although future cash flows are subject to various variables [153]. - Total contractual obligations as of September 30, 2024, amount to $130.4 million, including long-term debt principal payments of $111.9 million due by 2028 [154]. - The company has $111.0 million borrowed under the revolving credit facility with an interest rate of 7.22% as of September 30, 2024 [158]. - A hypothetical 100-basis-point increase in interest rates would result in an additional $1.0 million of interest expense based on variable rate debt [159]. Market Risks - The company is exposed to commodity price fluctuations for materials such as steel, aluminum, and copper, which could negatively impact results [160]. - The company does not currently have any commodity hedging instruments in place to mitigate price fluctuations [160]. - Customer order forecasts can fluctuate dramatically from quarter to quarter, impacting the use and consumption of the company's products and services [156]. - The company selectively uses financial instruments to manage market risks related to customer forecasts and interest rates [155]. - The company has SOFR-based floating rate borrowings, exposing it to variability in interest payments due to changes in interest rates [157].

Company Performance - Mayville Engineering (MEC) reported quarterly earnings of $0.14 per share, missing the Zacks Consensus Estimate of $0.19 per share, and down from $0.21 per share a year ago, representing an earnings surprise of -26.32% [1] - The company posted revenues of $135.39 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 13.88%, compared to year-ago revenues of $158.22 million [2] - Over the last four quarters, Mayville Engineering has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Performance - Mayville Engineering shares have increased approximately 45.3% since the beginning of the year, outperforming the S&P 500's gain of 19.8% [3] - The current consensus EPS estimate for the coming quarter is $0.16 on revenues of $147.43 million, and for the current fiscal year, it is $0.68 on revenues of $629.55 million [7] Industry Outlook - The Engineering - R and D Services industry, to which Mayville Engineering belongs, is currently in the bottom 35% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Financial Performance - Net sales for Q3 2024 were $135.4 million, a decrease of 14.4% year-over-year[2]. - Net income for Q3 2024 was $3.0 million, or $0.14 per diluted share, an increase of $1.6 million compared to the prior year[2][8]. - Adjusted EBITDA was $17.1 million, a decrease of 11.2% year-over-year, with an adjusted EBITDA margin of 12.6%, an increase of 50 basis points[2][9]. - Free cash flow for Q3 2024 was $15.1 million, down from $16.1 million in the prior year[11]. - Net sales for the three months ended September 30, 2024, were $135,392 thousand, a decrease of 14.5% compared to $158,217 thousand for the same period in 2023[42]. - Net income for the nine months ended September 30, 2024, was $9,997 thousand, representing a 77.5% increase from $5,617 thousand for the same period in 2023[42]. - EBITDA for the nine months ended September 30, 2024, was $49,633 thousand, up 23.6% from $40,119 thousand for the same period in 2023[44]. - Adjusted EBITDA margin for the three months ended September 30, 2024, was 12.6%, compared to 12.1% for the same period in 2023[44]. - Free cash flow for the nine months ended September 30, 2024, was $42,094 thousand, compared to $3,882 thousand for the same period in 2023[46]. - The company reported a basic earnings per share of $0.49 for the nine months ended September 30, 2024, an increase from $0.28 for the same period in 2023[42]. Guidance and Projections - Full year 2024 net sales and Adjusted EBITDA guidance were reduced by 7% and 13%, respectively, at the midpoint of the range[3]. - The Company reiterated its guidance for FY 2024 Net Sales, forecasting a range of $620 million to $640 million, with a midpoint of $630 million[31]. - Adjusted EBITDA for FY 2024 is projected to be between $72 million and $76 million, with a midpoint of $74 million[31]. - Free Cash Flow for FY 2024 is expected to be between $45 million and $55 million[31]. - Capital expenditures for FY 2024 are now estimated to be between $13 million and $15 million, down from a previous estimate of $15 million to $20 million[32]. Cash and Debt Management - The company received a gross cash settlement of $25.5 million from a former customer, which will be used for debt repayment and share repurchases[4]. - As of September 30, 2024, the ratio of debt to trailing twelve-month Adjusted EBITDA was 1.6x, with total cash and availability exceeding $135 million[30]. - The company experienced a reduction in cash and cash equivalents from $672,000 at December 31, 2023, to $178,000 at September 30, 2024[41]. - The company had a net cash increase of $178 thousand at the end of the period, compared to $2,305 thousand at the end of the previous period[43]. - Interest expense decreased to $8,977 thousand for the nine months ended September 30, 2024, from $7,533 thousand for the same period in 2023[42]. Operational Changes - The company announced a permanent closure of the Wautoma, WI facility, with an estimated $1.0 to $3.0 million in annualized cost savings expected[2][3]. - MEC has booked approximately $80 million in new project wins, with launches occurring over the next two years[28]. - The Company reported actual Net Sales of $588.4 million for FY 2023[31]. - The Company maintains an extensive manufacturing infrastructure with 23 facilities across seven states[37]. Asset and Liability Overview - Total assets decreased from $496.7 million at December 31, 2023, to $466.0 million at September 30, 2024[41]. - Total liabilities decreased from $266.7 million at December 31, 2023, to $227.6 million at September 30, 2024[41]. - Retained earnings increased from $34.1 million at December 31, 2023, to $44.1 million at September 30, 2024[41].

Group 1: Mayville Engineering (MEC) - Mayville Engineering shares increased by 6% to close at $21.46, supported by higher trading volume compared to normal sessions [1] - The stock has gained 4.3% over the past four weeks, driven by positive housing prospects and improvements in office rent in key markets [1] - The consensus EPS estimate for the upcoming quarterly report is $0.19, reflecting a year-over-year decline of 9.5%, with expected revenues of $157.22 million, down 0.6% from the previous year [2] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that the stock's price may not continue to rise without earnings estimate revisions [3] Group 2: Fluor (FLR) - Fluor's consensus EPS estimate for the upcoming report is $0.78, representing a 23.5% decrease from the previous year's report [4] - Fluor also holds a Zacks Rank of 3 (Hold), similar to Mayville Engineering [4]

Core Viewpoint - Mayville Engineering Company has shown significant financial improvement, leading to a strong buy rating due to its undervalued shares and positive growth trajectory [1][8]. Financial Performance - Revenue for the first half of 2024 reached $324.9 million, a 15.4% increase from $281.6 million in the same period last year, driven by organic sales and an acquisition [2]. - Net income nearly doubled from $4.2 million to $7 million, with adjusted net profits growing from $7.6 million to $10.1 million [3]. - Operating cash flow improved from negative $5.9 million to positive $33.9 million, and EBITDA rose from $29.1 million to $38.2 million [3]. Quarterly Insights - In the second quarter of 2024, revenue increased by 17.7% year-over-year to $163.6 million, with net income growing from $1.6 million to $3.8 million [3]. - Adjusted operating cash flow soared from $0.2 million to $23.3 million, and EBITDA expanded from $15.3 million to $19.6 million [3]. Future Projections - Management anticipates full-year 2024 revenue between $620 million and $640 million, representing a 7.1% increase from 2023 [4]. - Expected EBITDA for 2024 is projected between $72 million and $76 million, with adjusted operating cash flow anticipated at $38.5 million [4]. Valuation Metrics - Mayville Engineering Company is valued attractively compared to peers, with a price to operating cash flow of 10.3 and an EV to EBITDA of 7.0, lower than five comparable firms [6]. - Future market capitalization could reach $642.7 million, suggesting an annualized return of 21.4% over the next two and a half years [7]. Management Outlook - Management forecasts annualized revenue of $750 million to $850 million for the 2026 fiscal year, with EBITDA expected between $105 million and $135 million [5].

2Q24 Results Presentation August 7, 2024 SAFE HARBOR STATEMENT 2 Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: This presentation contains statements that are forward-looking in nature which express the beliefs and expectations of management including statements regarding the Company's expected results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results a ...

Mayville Engineering Company, Inc. (NYSE:MEC) Q2 2024 Earnings Conference Call August 7, 2024 10:00 AM ET Company Participants Stefan Neely - Vallum Advisors, IR Jag Reddy - President and CEO Todd Butz - Chief Financial Officer Conference Call Participants Mig Dobre - Baird Ted Jackson - Northland Securities Ross Sparenbleck - William Blair Operator Good morning. Thank you for attending today???s Mayville Engineering Company Second Quarter 2024 Earnings Conference Call. My name is Tamiya, and I will be your ...