Mayville Engineering Company, Inc. · NYSE:MEC
Mayville Engineering — Q1 2023 Earnings Presentation
18 slides from Mayville Engineering's earnings presentation, May 3, 2023
Slide 1: 1Q23 Results Presentation
1Q23 Results Presentation May 3, 2023
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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
Slide 3: 1Q23 Financial Performance
1Q23 FINANCIAL PERFORMANCE New project volumes and strong demand across key end-markets support organic sales growth Demonstrated further execution on commercial growth and • Net sales +4.7% y/y, supported by strong demand and new project volumes, operational excellence partially offset by $9.9 mill
Slide 4: First Quarter Financial Performance
FIRST QUARTER FINANCIAL PERFORMANCE Net Sales Adj. EBITDA & Margin Diluted EPS ($MM) ($MM & % of Net Sales) ($/share) +17.5% +4.7% +5.6% -33.4% $0.22 $142.6 $15.6 $0.19 -6.3% $14.8 $0.12 $13.8 $136.3 10.9% 10.8% 9.7% 1Q22 1Q23 1Q23 ex. 1Q22 (2) 1Q23 1Q23 ex. 1Q22 1Q23 Hazel Park (1) Hazel Park (1) 1
Slide 5: End-Market Outlook
END-MARKET OUTLOOK 2023 End Market Demand Remains Generally Stable Despite Recessionary Concerns Commercial Construction Powersports Agriculture Military Other Vehicle & Access 2023E 2023E 2023E 2023E 2023E 2023E 37%-40% 18%-20% 17%-20% 8%-10% 5%-7% 7%-9% % of Sales 2022 2022 2022 2022 2022 2022 39%
Slide 6: Net Sales & Adjusted EBITDA Performance Highlights
NET SALES & ADJUSTED EBITDA PERFORMANCE HIGHLIGHTS Demonstrated sustained profitability despite transitory margin headwinds Strong Demand in Key End Markets 1Q Net Sales Reconciliation Commercial Vehicle, Powersports & Military net sales increased Y- ($s in Millions) o-Y by 16.3%, 6.7% and 66%, resp
Slide 7: MBX Execution
MBX Execution Key 1Q23 Progress Summary High Performance Culture Implementing key performance metric reviews and other daily lean management routines. Q1 2023 President’s Kaizens Operational Excellence 48% increase in 50% reduction in Implemented Identified / Strategic Daily Management Improved prod
Slide 8: Disciplined Capital Management
DISCIPLINED CAPITAL MANAGEMENT Low net leverage, ample liquidity to support growth Total Cash & $198 $196 Available Liquidity1 $150 ($MM) $84 Total Net Debt2 ($MM) $71 $75 Net Leverage Ratio3 2.4x 1.3x 1.4x $76 $91 Net Working $75 Capital4 2021 2022 1Q23 1) Assumes continued compliance with covenant
Slide 9: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Capital allocation priorities focused on maximizing cash flow and return on invested capital Balanced approach to capital allocation Capital Expenditures ($MM) Hazel Park CapEx All Other Bolt-on acquisitions in complementary vertical markets Targeting immediately accret
Slide 10: 2023 Financial Guidance
2023 FINANCIAL GUIDANCE As of May 3, 2023 Business Outlook Included Financial Assumptions • General stability in end-market • Improve upon existing relationships • Raw-material price pass-throughs • Hazel Park to have a dilutive impact of demand, but considers the potential while building new and ad
Slide 11: Investment Thesis
INVESTMENT THESIS Strategic evolution story supported by attractive re-shoring and outsourcing mega trends • Demand fundamentals remain strong across our end markets, supporting profitable growth • MBX value creation framework – expected to drive approximately a 40 - 70 basis Strategic point improve
Slide 12: Appendix
APPENDIX
Slide 13: Track-Record of Cyclical Durability
TRACK-RECORD OF CYCLICAL DURABILITY Diverse business mix and flexible business model limit MEC’s cyclical volatility Performance Through End Market Volatility Agility (% Y-o-Y Change in Sales) Our technology enabled manufacturing processes give us Class 4-7 Trucks Class 8 Trucks US Light Vehicle SAA
Slide 14: Sales by Customer
SALES BY CUSTOMER 2022 2021 2020 2019 John Deere John Deere John Deere John Deere 17% 17% 17% 17% Other Other Other Other 28% 28% 30% 31% Paccar Honda Volvo Paccar 14% 13% 13% 16% Navistar Navistar 4% Paccar Paccar 5% Harley 12% Naivstar Volvo 13% 5% 3% Harley Volvo Harley 11% 6% 12% 7% Navistar Har
Slide 15: Sales to Individual Customer
Sales to Individual Customer John Deere Paccar Volvo JLG Honda Harley Navistar $100 $90 $80 $70 $60 Millions $50 $40 $30 $20 $10 $0 2019 2020 2021 2022 15
Slide 16: Historical Revenue by End-Market
HISTORICAL REVENUE BY END-MARKET ($s in Millions) 1Q 2Q 3Q 4Q Full Year Commercial Vehicle $ 39.5 $ 42.8 $ 36.2 $ 38.1 $ 156.6 Construction & Access 20.0 24.1 25.3 22.9 92.3 2021 Powersports 25.1 22.9 20.4 21.8 90.2 Agriculture 11.8 12.9 12.5 12.6 49.8 Military 6.2 6.3 5.9 5.7 24.1 Other 10.0 11.2 8
Slide 17: Historical Material Price Pass-Through
HISTORICAL MATERIAL PRICE PASS-THROUGH Material Price Pass-Throughs (Y-o-Y Change in $MMs) 1Q 2Q 3Q 4Q Full Year 2021 $ — $ 2.8 $ 5.6 $ 15.0 $ 23.4 2022 $ 14.6 $ 10.4 $ 2.5 $ 0.5 $ 28.0 2023 $ (9.9) 17
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Q1 ($MM) 2023 2022 Net income (loss) and comprehensive income (loss) $ 2.6 $ 3.8 Interest expense 1.7 0.6 Provision (benefit) for income taxes 0.4 1.2 Depreciation and amortization 7.9 7.2 EBITDA $ 12.6 $ 12.8 Hazel Park transition and legal costs due to former fi
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