Mayville Engineering Company, Inc. · NYSE:MEC
Mayville Engineering — Q2 2023 Earnings Presentation
14 slides from Mayville Engineering's earnings presentation, Aug 2, 2023
Slide 1: 2Q23 Results Presentation
2Q23 Results Presentation August 2, 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: 2Q23 Financial Performance
2Q23 FINANCIAL PERFORMANCE New project volumes and stable demand across key end-markets support organic sales growth • Net sales +0.5% y/y, supported by stable demand and new project volumes, partially offset by $8.3 million y/y headwind from material price pass- through Continued to execute on (+6.
Slide 4: Second Quarter Financial Performance
SECOND QUARTER FINANCIAL PERFORMANCE Net Sales Adj. EBITDA & Margin Adjusted Diluted EPS ($MM) ($MM & % of Net Sales) ($/share) +0.5% (15.8%) (47.3%) $18.2 (8.1%) (26.3%) $139.0 $16.7 13.1% $138.3 $0.38 $15.3 $0.28 12.0% $0.20 11.0% 2Q22 2Q23 2Q22 2Q23 2Q23 ex. 2Q22 2Q23 2Q23 ex. (1) (1) Hazel Park
Slide 5: End-Market Outlook
END-MARKET OUTLOOK 2023 End Market Demand Remains Generally Stable Despite Recessionary Concerns Commercial Construction Powersports Agriculture Military Other Vehicle & Access 2023E 2023E 2023E 2023E 2023E 2023E 37%-40% 18%-20% 17%-20% 8%-10% 5%-7% 7%-9% Sales* % of 2022 2022 2022 2022 2022 2022 39
Slide 6: Net Sales & Adjusted EBITDA Performance Highlights
NET SALES & ADJUSTED EBITDA PERFORMANCE HIGHLIGHTS Stable demand and volume growth were offset by employee benefit costs and the impact of product launches Strong Demand in Key End Markets 2Q Net Sales Reconciliation Commercial Vehicle, Powersports & Military net sales increased Y- ($s in Millions)
Slide 7: 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) Bolt-on acquisitions in complementary vertical markets Hazel Park CapEx All Other Targeting immediately accret
Slide 8: Disciplined Capital Management
DISCIPLINED CAPITAL MANAGEMENT Low net leverage, ample liquidity to support growth Total Cash & $223 $198 Available Liquidity1 $150 ($MM) $90 $71 $75 Total Net Debt2 ($MM) Net Leverage Ratio3 2.4x 1.3x 1.6x $75 $76 $84 Net Working Capital4 20 21 20 22 2Q 23 1) Assumes continued compliance with coven
Slide 9: 2023 Financial Guidance
2023 FINANCIAL GUIDANCE As of August 2, 2023 Business Outlook Included Financial Assumptions • General stability in end-market • Improve upon existing relationships • Raw-material price pass-throughs • Scrap income to decrease $1 – demand, but considers the potential while building new and adjacent
Slide 10: 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 11: Appendix
APPENDIX
Slide 12: 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) $ (8.3) $ (18.2) 12
Slide 13: Non-GAAP Reconciliation of Adjusted EBITDA
Non-GAAP Reconciliation of Adjusted EBITDA Q2 ($MM) 2023 2022 Net income and comprehensive income $ 1.6 $ 5.9 Interest expense 2.0 0.8 Provision for income taxes 0.5 1.8 Depreciation and amortization 8.0 7.2 EBITDA $ 12.1 $ 15.7 Loss on extinguishment of debt 0.2 — MSA acquisition related costs 0.9
Slide 14: Non-GAAP Reconciliation of Adjusted Net Income & Diluted EPS
Non-GAAP Reconciliation of Adjusted Net Income & Diluted EPS Q2 ($MM, except share amounts and per share values) 2023 2022 Net income and comprehensive income $ 1.6 $ 5.9 Loss on extinguishment of debt 0.2 — MSA acquisition related costs 0.9 — Stock-based compensation expense 1.4 1.5 Field replaceme
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