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 moderator for today’s call. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions]

I would now like to pass the conference over to your host, Stefan Neely with Vallum Advisors. You may proceed.

Stefan Neely

Thank you, Operator. On behalf of our entire team, I’d like to welcome you to the Mayville Engineering second 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 uncertainty, 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. Reconciliations 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 Reddy

Thank you, Stefan, and good morning, everyone. Thank you for joining us today. During the second quarter, we continued to demonstrate strong strategic execution, which drove robust net sales growth, margin expansion and free cash flow conversion. During the quarter, our team successfully executed on new project startups in our commercial vehicle and powersports end markets. These new projects drove nearly 7% year-over-year organic sales growth, well above the growth trends in our end markets.

Our team’s continued focus on implementing our MBX lean initiatives drove $0.9 million of year-over-year self-help adjusted EBITDA improvements during the second quarter. Since the beginning of the year, our structured approach to operational excellence and lean manufacturing has resulted in approximately $2.5 million of sustainable year-over-year margin improvement. As we move into the second half of the year, our team’s continued successful execution on key commercial growth and operational excellence initiatives combined with improving utilization at our Hazel Park facility will be important catalysts for outperforming our end markets.