Mayville Engineering Company, Inc. (NYSE:MEC) Q1 2024 Earnings Conference Call May 8, 2024 10:00 AM ET

Company Participants

Stefan Neely - Vallum Advisors, IR
Jag A. Reddy - President and CEO
Todd M. Butz - CFO

Conference Call Participants

Joseph Grabowski - Robert W. Baird
Vladimir Bystricky - Citigroup Inc.
Edward Jackson - Northland Capital Markets
Timothy Moore - EF Hutton LLC

Operator

Good morning, everyone and welcome to the Mayville Engineering Company First Quarter 2024 Earnings Conference Call. My name is Tash, and I'll be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for question-and-answers at the end. I'd now like to pass the conference over to your host, Stefan Neely, to begin. Stefan, please go ahead.

Stefan Neely

Thank you, operator. On behalf of our entire team, I'd like to welcome you to our first quarter 2024 results conference call. Leading the call today is MEC's President and CEO, Jag Reddy; and Todd Butz, Chief Financial Officer.

Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements.

Further, this call will include the discussion of certain non-GAAP financial measures. Reconciliation of these measures to the closest GAAP financial measure is included in our quarterly earnings press release, which is available at mecinc.com. Following our prepared remarks, we will open the line for questions. With that, I would like to turn the call over to Jag.

Jag A. Reddy

Thank you, Stefan, and good morning, everyone. Thank you for joining us today. The first quarter was a strong start to the year for our team, one highlighted by a robust net sales growth, margin expansion, and free cash flow generation. Our first quarter results continue to reflect the success of our MBX framework and the impact of our culture of continuous improvement. Demand within our end markets remains healthy, supporting organic sales growth, while our teams execute on new project startups in our commercial vehicle, Powersports, and other end markets.

Over the last year, our team has demonstrated measurable progress with sourcing optimization and our labor utilization, resulting in $1.6 million of year-over-year self-help adjusted EBITDA improvement during the first quarter alone. We continue to see significant opportunities to further increase plant utilization, while driving improved operating leverage. For example, at our Hazel Park facility, we expect to achieve a $100 million annual revenue run rate by year-end 2024, consistent with our prior expectations.