Mayville Engineering Company, Inc. · NYSE:MEC
Mayville Engineering — Q4 2022 Earnings Presentation
16 slides from Mayville Engineering's earnings presentation, Mar 1, 2023
Slide 1: 4Q 2022 Earnings Call
4Q 2022 Earnings Call March 1, 2023 mecinc.com
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of
Slide 3: Key Performance Highlights
Key Performance Highlights Fourth Quarter Going 2022with to align Highlights final message • Net sales of $128.5 million, increased 13.8% compared to 4Q21 due to an increase in commercial sales volume and continued price discipline, partially offset by supply chain disruptions affecting some of our
Slide 4: Fourth Quarter and Full Year Financial Performance
Fourth Quarter and Full Year Financial Performance Net Sales ($MM) Adj. EBITDA ($MM) Diluted EPS ($/share) +18.6% +31.5% $0.91 $60.8 $539.4 $454.8 $46.2 9.0% 8.1% 11.3% $0.12 10.2% +13.8% +26.2% $128.5 $11.6 $(0.36) $113.0 $9.2 9.0% $(0.65) 8.1% 4Q21 4Q22 FY2021 FY2022 4Q21 4Q22 FY2021 FY2022 4Q21 4
Slide 5: End Market Outlook
End Market Outlook Commercial Construction & Powersports Agriculture Military Other Vehicle Access 2023E 37% - 40% 2023E 18% - 20% 2023E 19% - 22% 2023E 8% - 10% 2023E 4% - 6% 2023E 6% - 8% % of Sales* 2022 39% 2022 21% 2022 16% 2022 11% 2022 5% 2022 8% 2021 34% 2021 20% 2021 20% 2021 11% 2021 5% 20
Slide 6: MBX Execution – Q4 President's Kaizen Results
MBX Execution – Q4 President’s Kaizen Results MEC 2023 Strategy Deployment X-Matrix Welding Kaizen • Generates approximately $105K in annual savings • 48% increase in parts per machine hour (PPMH) • Decreased WIP inventory from 131 pieces to 38 pieces Coil Fed Press SMED Kaizen • Generates approxima
Slide 7: Net Sales Performance Highlights
Net Sales Performance Highlights • Commercial Vehicle demand was strong in 4Q and FY22 due to freight strength and fleets upgrading vehicles, 4Q Net Sales Reconciliation tempered by ongoing customer supply chain challenges. $s in Millions • Construction & Access sales increased modestly due to fleet
Slide 8: Adjusted EBITDA Performance Highlights
Adjusted EBITDA Performance Highlights 4Q Adjusted EBITDA Reconciliation $s in Millions • Volume growth was the primary driving factor for the increase in Adjusted EBITDA for both 4Q and the full year. • Material price pass-throughs have a net neutral impact due to the contractual ability MEC posses
Slide 9: Disciplined Capital Management
Disciplined Capital Management Total Cash & Available Liquidity1 ($MM) Total Net Debt2 ($MM) $71 $75 $198 $150 $48 $140 2020 2021 2022 2020 2021 2022 Net Leverage Ratio3 Net Working Capital4 2.5x $75 $76 $50 2.4x 1.5x 1.3x 2020 2021 2022 2020 2021 2022 Net Leverage Ratio 1 Assumes continued complian
Slide 10: Capital Allocation Priorities
Capital Allocation Priorities Balanced approach to capital allocation Capital Expenditures ($MM) • Bolt-on acquisitions in complementary vertical markets $58.6 • Targeting immediately accretive opportunities in complementary markets such as aluminum, plastics, composites fabrications capabilities, a
Slide 11: 2023 Financial Guidance
2023 Financial Guidance As of March 1, 2023 Business Outlook • General stability in end-market demand, but considers the potential for some macro-economic softening as the year progresses • Supply chain constraints and disruptions continue to impact some YoY Change customers but expect continued imp
Slide 12: Investment Thesis – Business Transformation to Drive Margin Expansion & Profitable Growth
Investment Thesis – Business Transformation to Drive Margin Expansion & Profitable Growth Strategic Business Transformation • During a period of market volatility, underlying demand fundamentals remain strong across most of our end-markets, supporting profitable growth • Intensely focused on targete
Slide 13: Appendix
Appendix Supplemental Materials
Slide 14: P&L Performance
P&L Performance Q4 Full-Year ($MM except for share data) 2022 2021 2022 2021 Net sales $ 128.5 $ 113.0 $ 539.4 $ 454.8 Cost of sales 115.5 103.6 478.3 403.5 Amortization of intangible assets 1.7 2.7 7.0 10.7 Profit sharing, bonuses, and deferred compensation 4.1 3.5 8.0 11.5 Employee stock ownership
Slide 15: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation Q4 Full-Year ($MM) 2022 2021 2022 2021 Net income (loss) and comprehensive income (loss) $ 2.4 $ (13.6) $ 18.7 $ (7.5) Interest expense 1.2 0.4 3.4 2.0 Provision (benefit) for income taxes (0.8) (4.0) 3.7 (1.9) Deprecation and amortization 7.8 8.2 29.3 31.8
Slide 16: Thank You
THANK YOU Q4 2022 Earnings Call
Mayville Engineering Company — Q4 2022 Earnings Presentation on 6ix