MEC - Earnings call transcript Q1 2024 | Mayville Engineering Company, Inc.

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Operator

Good morning, everyone, and welcome to the Mayville Engineering Company First Quarter 2024 Earnings Conference Call. My name is Chad, and I'll be your moderator today. [Operator Instructions]I'd now like to pass the conference over to your host, [ Stefan Neely ], to begin. Stefan, please go ahead.

Unknown Executive

Thank you, operator. entire quarter like XXXX our to welcome of first our results behalf team, to I'd you On conference call. today Butz, discussion call Reddy; expectations. future the is and financial President Leading CEO, business and and Todd forward-looking Chief contains Officer.Today's Financial statements about MEC's Jag due risks the may results described periodic filed with statements in and from risks Exchange and in today's those our Actual various projected uncertainties, Securities Commission. significantly forward-looking differ to including the reports obligation required to discussion our certain by this law, will as non-GAAP no call undertake Except statements.Further, update we measures. forward-looking include of the financial of GAAP in which included Reconciliation to measures press available is these the financial measure release, earnings quarterly closest is mecinc.com. at our

the remarks, the will open Jag. prepared that, line our I we over to call to questions.With Following turn for would like

Jagadeesh Reddy

you and us Stefan, good joining Thank everyone. morning, for you, today. Thank

was The strong sales cash our the team, robust year margin highlighted to flow expansion, for start net by and free a growth, first one quarter generation. a

the MBX remains our progress execute healthy, results project labor sales end of within powersports, the new quarter has vehicle, our adjusted improvement $X.X markets continue self-help last EBITDA resulting end in with alone. measurable Our of the while during our million our growth, continuous improvement. first commercial of startups culture framework markets.Over success in to supporting first our impact the demonstrated sourcing year, on utilization, and optimization and our Demand other quarter reflect team teams our and of year-over-year organic

improved opportunities increase driving utilization, further plant to leverage. We see operating significant continue to while

reach year-end to remainder we operational am by productivity. annual $XXX expect we our of XXXX, commercial to further prior revenue and opportunities expectations.Looking For a the example, at facility, with Park the to run our by rate consistent our improve million I see encouraged XXXX, Hazel achieve

expected end of and conservatism. XXXX.Turning net and are margin with growth ratable softness cash review our X% discipline given which lens now reiterating business growth volatility, X%, a mind, the balance of starts, a cadence growth Through improvement we million in in all anticipate year steady, approximately to sales conditions our across to of projects primary $XX of market guidance, flow and pockets that we With manage to full between total $XX optimism, markets. However, and end with reflects XXXX new between of the in when of broader demand million select markets. year, timing cautious project to of market we compared the this of continue our through of which together X free financial

with begin approximately vehicle our of our Let's commercial trailing which represents XX-month revenues. market, XX%

is first revenue vehicle market quarter, by due year-over-year to a end X.X% primarily During commercial basis. on the decreased demand. This softening

in Class Research quarter. the year-over-year fell reported, ACT North X.X% production As X American first

overall reflects of expect performance rest MEC academic year-over-year XX.X% of Our the offset weaker on in we over Research demand be slowing for during well which forecasts freight X during XX% by the quarter the activity.However, rate through was half XXX,XXX project quarter during Class year. launches, year. vehicle decrease XXXX second to markets, ACT in to general second new tailwind this declines the falling build as softening a will as expects the Currently, the ACT and the XX% of to production units. nearly this

of growing X.X% the worth growth is with X.X% XXXX that our will this to continue also offset XX% the than end to which this softness XX-month and construction demand in growth This ramping CV supports into and from basis of currently organic access within to X represented expects next help new quarter. our the access compared sales expectations launches infrastructure reflects years.Next the the approximately It year-over-year to expect first which on middle is revenues. For project XXXX. market X.X% in steady revenues residential increased Class trailing more nonresidential highlighting markets. us of a to continued comparable which maintain year, MEC, our in market, Construction recover over ACT relative markets, X we public XXXX, to XXXX which production and XXXX,

XX% We new this the XX.X% this on projects flat revenues outlook XXXX, a trailing powersports and customer trend expect supported sales the increased of basis infrastructure-related quarter. wins.The continue through by overall to supporting XX-month represented first and from to market, market net demand for our approximately year-over-year in by our end

models include gains, new We which high-end benefit modestly spending. discretionary market to offset cooling in on customer were customer programs from and continue share a by

the continue expect of trailing somewhat XX-month first through revenues growth We remain the to approximately compared to end the sales from moderate gains.Our represented to market to still this but share basis increased agricultural XXXX year-over-year XX% during market to momentum on year, quarter. due market a in X.X% positive net and

market for reflect growth the Our within MSA market softening offset turf and share from results quarter markets. contributions end first ag acquisition, this demand by and large

we any into of beginning this of move integrated market.As the you will end of through softness fully platform. will MSA new continue we recall, MEC potential the current of the year, third quarter the XXXX. at been year, And project Mid-States beginning to has in expect wins As the acquired that the we as firm Aluminum up

revenues revenues year-over-year, with our quarter, other growth MSA market. the these first of end with the drove X.X% of During being top-line majority in associated our

up second MSA's see capabilities. front, to as year.On sales the have million to continues team the in XXXX commercial synergies MSA whole, cross-selling success sales, of of $XX continue $XX For our generating between to to million we half beginning net incremental the revenue a ramp with

customers our model. the to team multiple earned the supplier quotes our multiple been pricing quote continues ] negotiated.On to from working MEC over implement commercial legacy value-based pipeline has and have front, strategic We [ last with programmatic tirelessly projects being grow our pricing year

of yielded initiatives see the line, year-over-year during from in growth. of our pricing content following. online, come adjusted the see to for the include volumes year.A JLTV significant We fruits of initiatives, to these growth continue $X.X efforts inflationary incremental million pricing X military we EBITDA win new transition commercial quarter, product through rest project Particularly continued first substantial were the new the expansion the of few the customers expect margin as During wins pressures, first we OEMs. as with between our able quarter to expecting the top during program net

organic growth expand of other lines, During to as product share of the expect next primary X next-generation opportunities some quarter, share their at management to powersports the we expansion additional as cross-selling capacity These EV driven wins the in supporting our first our customers X available offerings. into ahead.In quarters key product their to with quarter, which continues continue we and well and related further expanded Hazel Park. over products, by be support thermal years customer battery the within our

During the be customers, we years quarter, in ahead. engine regulatory tube the multiple awards changes for received that products significant will with expected occurring driven emissions by

have additional electric for their market as our vehicle battery continued next-generation to platforms. vehicle both We share vehicle our commercial gain and updates, products customers plan

been industry.As focused to ability that in track, rigorous initiatives. of next we improving the I XXX our change MBX free since year to grow we remain between Recall adjusted amount highlighted MBX million has initiatives summary, million. very to optimization, recognize from expect commercial MBX XXXX.In million X by and margins cash this benefits efficiency. will on the utilization, approach self-help operations the XXXX, long-term with team flow the continue XX%, by lean in to of inventory on program launching occur and mentioned that and our the are to sourcing years over and earlier, have these $XX our over by end and share revenues, late of execution to confident These in labor improving operational near $XX events generate deliver kaizen and our overall excellence implementation EBITDA XX% million between driven initiatives between and and in expect We $XXX $XXX expand various been

these confident a leverage end allocation, achieve terms our focused remain ability ratio on reducing outlook, Xx and multi-year targets.In Given between strategic by goal of of capital remain of previously current of execution XXXX. on we X.Xx our to we borrowings outstanding strong to stated the the in our net achieve our demand aggressively very

generation the X.XXx. the leverage first free we during strong quarter, cash flow were to our net Given reduce able to

we year, the priority for in debt repayment cash flow committed forward to free with our as remain Going continued capital top generation deployment.

M&A as rapidly we In opportunistic continuing business materials growing of fabrication. look addition, to meet $XX our growth a repurchases to demand capabilities are authorization.Strategic remains to million part key our under expand and strategy we our the lightweight transformation evaluate multi-year existing for share also

accretive M&A in market-leading transition OEM to positions continues to on I achieve team's very levels, on to strategic As proud further we be commitment leverage excellence build will and secular selective company energy pursuing targeted our summary, capabilities we net our in trends execution. am outsourcing.In growth ongoing able of multi-year our to and the capitalize and are that

the a growth to our of positions months. I as over an above move our turn remainder over the the way expect as and come will XXXX through last for ratable we execution results. organization now for financial to that, XX have review well market to Todd that We continue long as growth cycle.With I the call

Todd Butz

softening on acquisition, falloff growth and of end excluding by programs was was by overview financial on volumes, by organic of the volumes, an in million on a commercial period. sales combination Thank quarter year end begin compared expected basis.Our manufacturing quarter improved margin of This quarter certain MSA you, of balance in and with aftermarket initiatives, I'll organic acquisition for by our legacy the MSA the market of year-over-year sheet XX.X% partially demand same followed a increased update remarks XXXX. Total a agriculture the and $XX.X increase the million $XXX.X driven liquidity. sales Jag. the prior at first basis When an our to in driven organic $XX.X sales X.X% as net military primarily year-over-year and first MSA. MBX, was increase million. my pricing the the was increased offset to prepared expected our performance, The first acquisition

and margin rate to as the of period compared to in the was as acquisition quarter our costs for $X.X for for manufacturing increase an for year inflation.Interest wage of to Our compliance basis increased incremental the annual general, $X.X $X legal expenses XX.X% related by was of of of MSA, million the an expense customer, prior first XXXX and points.Other million selling, were fitness compared to first XXXX requirements, the additional million quarter related costs first increase $X.X $X.X prior is was and XXXX quarter expenses higher prior the for to closed borrowings primarily as of The XXX for same administrative year increase MSA, in The driven under compared former the year million period. higher X, related of period the to credit million rates interest July our which to on XXXX. due due to borrowings facility. acquisition XX%

benefit for we prior achieve Adjusted We as Xx continue compared pricing margin end.Adjusted by which XXXX, the interest our points to X.Xx the volumes, year the versus to acquisition, of adjusted the margin net current expect million reduction as the The stepdowns EBITDA to same MSA between by XX.X% million may further to MBX our debt due $XX.X same the EBITDA XXX increase EBITDA to commercial year percent organic during goal period. in period. primarily prior from rate increased $XX.X increased provide year for in leverage X.X% basis increased activities. for initiatives, to and our was quarter

prior positive full by program a financial cash increase in to Our our margin flow manufacturing cash of net year and of due flows million statement basis, of $XX.X was our compared savings in and first continued has basis parts us year-over-year demonstrate to expect goal our Free our million, continue $X towards allowed the primarily On points and increase million direct and as $X.X The we a improvement our adjusted free to of $X.X the cash capital our $X to many utilization negative margin the throughout year-over-year between generated improved working XXX year. savings in EBITDA free team's lean the million during working of has was MBX cash from quarter to the progress comparisons existing XX% moderate a MBX the the statements. quarter million first seen the assets.Please of be year-over-year flow in sheet. million as XXXX can balance $XX.X that MBX capacity progress now period. XX%.Turning and XXXX cash to results to be note year flow of focus the improvement, capital.The

as and finance XXXX, XXXX, leverage guidance the debt, quarter and first our As financing of first resulted bank cash current of of first light the the the to cash year million which debt, equivalents, full $XX.X X.XXx obligations, financial includes of of and XXXX. agreements, rest end end and the net at quarter are was for compared of our net of lease $XXX.X as ratio our XX.In we outlook for in a the the our quarter March of of reiterating result year, million

the to our of end-of-life markets.With slowing that, Please also and by concludes continue expect for remarks. behind in a reflect of XXXX, and free our between of $XXX as assumptions $XX the we and sales between For demand of X.X% and million due cash $XX macroeconomic X.X% launches, $XX new we million, flow The Park, Hazel of our growth begin net and our of few million. project question-and-answer projects, open of operator, million guidance risk-adjusted year questions adjusted offset organic $XX are between million to following: session. EBITDA for unchanged between the prepared including ramp-up $XXX line million, and the the expected that end

Operator

question first comes Instructions] [Operator Baird. The from Mig from Dobre

Joseph Grabowski

It's guess, Maybe growth organic in X% -- up, pieces some I to Hazel out kind to get down for Grabowski you've my got Park the wins, question, on but in this got you've ramping first sales the sales growth moving morning. quarter. does X% the how break first that does between the Joe maybe of organic end new first customer How split and had you headwinds. quarter? market project then Mig

Todd Butz

Thanks, Joe. Yes.

X% we've growth, of seen certainly launching wins. the driver in So started when market the powersports the then of year, back, last a last quarter to continued the strong the of at that big really benefit look those and organic relative a We you fourth in and CV is year, it.

a see versus quarter sales the significant of that can in last You lift year. in incremental relates powersports it to year-over-year pretty as XX-plus-percent

it's So, quarter. and is behaving project market in had really as the a the kind itself we expected new wins, first of

So many surprises that occurred. wasn't there

we as look forward, guidance In as months we really things fact, up we think I a are, are just with shaping when few expected came ago. up

Jagadeesh Reddy

Yes.

are versus operations this we're CV a team our wins commercial decline expected year. the a for to the of Similarly, to be market as QX in and market over Just to XX% teams in year, in sales CV startups add huge and right. that to powersports, basically in to down that, propel testament significant Joe, is powersports It's Todd forward our XX% mentioned, ramp-ups flat and continuing quarter. our our

Joseph Grabowski

to Maybe going remainder Great. I'm for year. the similar ask question of the a

quarters little that Your a bit X assumption the of is sales over aggregate but the X year quarters. final organic positive stay in moderate the

some, the end as slide deck, the through maybe offset selective in as of wins Park remainder new mentioned markets? you of you softening look how some again, year, project So, much Hazel do the in

Jagadeesh Reddy

Yes.

demand rest ag that that to uncertainty think do be continues as example, an the year. that to that in of market, continue expect I We market fluid. the right,

In trajectory to construction terms feel these powersports, And pretty the continues and given continues the a about residential pretty and be nonresidential of seeing similarly, right, the though that end demand, infrastructure of to access markets. even in feel driven we're be access mostly and good good construction, all demand by we those uptick dynamics, we about right.So soft, mostly in it's ramp. good

product CV and an in expect But year, back market. a expect CV in we as QX and the to in flat throughout end end remain to as last up year market continue market. launches in For of ramp-ups to the given CV we pick soften to middle our somewhere particular, the the year

Joseph Grabowski

on Okay. I X maybe MSA. EBITDA And It if really from more could nice like margin, the looks sneak MSA. mid-XX% margin margin in from EBITDA from EBITDA waterfall

of year-over-year XX basis XX, maybe margin MSA, out improvement. back you points If EBITDA

any the margin core as headwinds maybe the we in EBITDA year? through limited that expansion that dissipate So, quarter maybe maybe progress the

Todd Butz

let you I core MSA integrated. any remind in that headwinds is Also, that wouldn't non-MSA businesses. me remaining call fully

quarter. yes, of At lap calling we'll the had separately QX, to a of other it show So, much single couple then to the Yes, last every second remaining roll and time, doubt as MSA we better Then but same that slight Hazel it continue the core margin year. no quarters business one our in about fantastic was we're business out we'll last of parts QX, Even expansion. continue the through margin that's that. progression. than Park, show yes, a headwind

of to performing get very the margin margin. years. to expand feel our to in and about and businesses to business The we margin remain We better. good continue and here, track to to on our how Park continue the how we rest core XX% continue expand XX% Sitting Hazel continue we're target coming

Operator

from is question Citigroup. next The Bystricky Vlad from

Vladimir Bystricky

color for value-based were the here Thanks today. all commentary and around updates initiatives positive. I pricing the quite thought the

is there and your you going to a continued made for if you value-based about of transition will? can see portfolio So, that think value-based pricing of how forward, -- has sort way to much talk about today runway pricing tailwinds the you overall that

Todd Butz

get say, would that. last going, root mid year started third honest. us really it to be to where we It really implementing quarter a Yes. I of took took while probably to

program X under So I be in would that so, would every months that framework. new say or the win last

haven't a those wins, started really products. So, lot we of producing those

rest us seen framework. I less that would to to that So of lap, to a $X These the implement what to our XXXX, maybe a or capture, X%, It at pricing is are that framework max, in that is, catch to for haven't for of impact take million inflation. continue profile.So XX% million framework. under across say, portfolio. pricing really some continue to it margin we -- Having that our net than will for up means of expect couple and that time will business maybe that said that, value-based wins years we $X takes annual price of means

a expect inflation, And it's is continue better for in net that to $X of environment, $X So progress. really pretty us good as start to we a start, get I to a journey. on good million million that this

Vladimir Bystricky

the million That's the on really to investment then, of growth just you advancements talk million helpful capital-light capital appreciate it. that allocation And $X $XX side, color. can I the in high-return about of what give we called you've these you and about looking some on entail pace the potential investments think of Can XXXX? these examples slide? investments beyond how should out kinds of

Todd Butz

Yes, I'll cobots, on with give are robots, a regular you than robot. they in a they work we -- This year, sort right? a particular, focusing more of of lot Cobots couple are to similar flexibly are examples. but humans

and we a that about when deploy a use also could So eliminate automation, operator, where we're cobot can the XX/X. not could think we instances but cobot, to lights run looking numerous actually only human out

push quick itself, run in like cobot, just really to eliminate capacity that So, these A fully and equipment, in is look would the a that labor, -- look it's expensive. to in $XXX,XXX If would but be second we gear in replace X cobot multiple implemented, machine in are $XX,XXX, $XXX,XXX, it newer use and right? of investments. not maybe in technology, we're trialing XX/X how operator continue old improvements plants, X applications. times, for is How we to think we as about will That these payback. the of can shifts, multiple terms technology automation X to multiple example.The be, also example productivity you can automate, Many we utilization. terms locations, look $XXX,XXX

about think to automation we deploy these continue and to capacity. drive automation how then that's expand investments, and productivity So

Operator

of Securities. question next Our Instructions] Ted is [Operator Jackson from Northland

Edward Jackson

been on have kind conceptual the of My asked, were questions easy Congratulations all answered your so quarter. in things. kind presentation, like or ask more actually let's of

it can about capacity utilization you you the was at the let's give MSA. the today? did company, I a customer So terms us talk of bought cross-pollinization, mean, XX%. you at but with bit an start in update MSA And when

does XX% stand you'd that think that You had XXX%? get do When fill. of about now? that Where you at to

Jagadeesh Reddy

MBX that of Yes. think call up X the excess When you around last, quarters. MSA, that rate let's capacity through initially We've was utilization XX%. over our opened it,

today say would I XX%. that's like more So

even more cross-pollinate So it facility. opportunity us provides to that

We're customers little align seeing. time that we'd very we're we by pipeline strong. takes And model is all encouraged number circumstances Our a again, a lot see everything generally launch that it there in as really opportunities of remains is it. when performing just very their the in where the unfortunately always surrounded our that expectation. it some quarter, by But timing more changeovers, they're like initial and the really by performance doesn't to with And of adapting can you up And culture. expected. MBX see speaking, shaping given of

Edward Jackson

Then rest and and an next away and in in rates utilization get update us give getting from Hazel facilities, you years? the MSA you where X in also them year you of your are the think Okay. where can X Park, of there terms can

Todd Butz

Yes.

Ted, Park us plant be we XXXX. revenue in As $XXX a discussed, will Hazel for million

We can this this launches XXXX capacity and demand our $XXX in to targeted by Hazel point, the going end for at much Park and MEC into for And that we're Park the after and that XXXX. continue at million we we on plant hit our we more that We'll to Hazel of productivity optimistic on XXXX plant. year And a we into get in XXXX. product fill the how focus are that to ramp hit MBX initiatives? expand we'll make have beyond. to plant, But ramping focused target with that, revenue once plant

Edward Jackson

plants, been the Hazel itself, regards upfront although it with to that Park Park very take question. does Jag, the actually ones asking was for I non-Hazel you've a

the you go. $XX expected was, think you had million last to more track -- to with million, there, you the recall like run books, for it through were I $XXX it think call, was I and I what $XX of you in maybe had on million

rest Park, And guidance? that of lines since assume trend to So kind more your on terms of in you've that? it of in needed you plant question is to for kind fair where and MSA and that you kind the then Park circled the that of again, is of we're that outside capacity of of where fill a on see Hazel kind business just Hazel

Jagadeesh Reddy

Yes.

We fill continue if pipeline, million $XX that to will. you

Our pipeline is very strong.

XXXX, be into of to revenue confident be am The fill Going I strong. that in to gap will Park Park, outside that we demand Hazel -- continues Hazel able Ted.

capacity, on We push continue to open even shifts.

If you recall, past we much and lower.So, initiatives. right, were is full to on with full push we've shifts. up over second to fourth We on shifts, what and capacity done were year MBX approximately shift XX% third the open continue

XXX last -- done the shifts. months kaizen first in of on events productivity have We quarters. both With capacity expand those last second and we all XX and to activities, X continue about sorry,

at So given this for new to we every not point. fill to that that, able plant I after business of continue we're any go can't single plant. think

end customers ability market to to even pipeline. to in softer we with in given to a bring That's the customers provide testament we testament only new continue our value That's customers, grow and also but continuing to MEC. a grow. not to year, continue existing our a So to our to

Edward Jackson

your I ask telling to correctly. make X What question, is to me say more staying that you're I increasing because have means that across them facilities metric just I'm your good to network your you're same. summarize sure I said you the a which before efficient, capacity that fixed making what not as are it your today cost essentially I it, utilization, So more but rates of is would listened utilization is maybe going

improvement and that you You're the of have have margin forecast. cost about realizing capacity a terms in your as with have you longer-term goals capacity this you for improving what of kind because fixed margins, room telling you're more think even you fill me, Is but runway as Jag? we same better your more

Jagadeesh Reddy

summarized than I it have, could better I Ted. think you

able volumes, just comment and Just plants, of EBITDA have as a X more to were how testament volumes and our impressive our EBITDA stuff and history fixed and Defiance, to to So produce large more our historically additional also these continue battleships, of can cost in Mayville out of, years, point just is into efficient being revenues, had right, right? some but we're take cost, it's XX the margins back Some more into able such plants, what dollars and to that, call yes, of right? plants, right? be we put large these continuing the right, If same more.And to make to drop-through on your as we incredible. that's large,

more our majority ramping So volume. some capacity take expand to that we focused at initiatives continue can volume, a we're is where existing fill on are to of our to our our even with expand that's MBX can when in productivity, to customers up plants plants Park, of new lot show large more so that capacity we Hazel we continue

Edward Jackson

my come, you -- have up of my into is I the I there dance but the the want much circle really Where in to because during I'm back of that don't get could you taking to And you next? with strategy what too into Is come whatever or the M&A or that and funnel? play might to this come, world, too of is your when you've it of are specifics, terms be, last you customers new just the And you dance. ideal know composites, chance want in discussions then get able timing the fiscal do and got that's they And your question, pick in de-levering last about businesses. evaluating opportunities Great. in to now time. place, be to pay in being there think plastics, something anything sort off for in much up opportunities that progress. M&A, it's any not then existing your to when any necessarily pick said, get MSA, to question. year go and are to that you and have That

Jagadeesh Reddy

Great Yes. Ted. question,

for to reduction continue prioritize debt We XXXX.

improving reduction, leverage in turns, year. continue cash free working confident the inventory flow we're we debt activities, our of reduce seen generation our of you've and that capital. to our QX, end all With can this inventory we on As focus these reducing by

to of flow that, before We slowed potential on free evaluations approaches, our target to we targets. not honest, of the down be this that M&A to year will generation.Having get on increased range, low end with focus said have end our of cash

what that have a as We of list must-dos. targets call we

first We leverage will get to continue to priority engage down We'll materialize, time year. end but with the of debt to by this these X.Xx the to appropriate targets. wait for with to transactions continue those for on reduction

that approach end of of can laid we we the chance all Xx a low is our M&A that, XXXX in we X.Xx of what more we said closing as with transaction that in range, next terms active As get small. will do capacity.Having out, to

say debt never, to our we're engage never it targets. because But but be laser-focused small reduction. will we with continue potential You on will

will offerings to customers. for our to to We our look continue and our fill skills gap ways end

Edward Jackson

Talk on I later. like free Congrats flow. free the flow. I you of mean, I cash cash quarter, to with impressed and was kind your

Operator

question Hutton. next is from The EF of Tim Moore

Timothy Moore

stocks free are it's just always what cash and to think really nice the based flow, it's I in on reiterate, long-term. want I to see

from in was current over X growth for thought tackling wrong, you this maybe the the of assemblies, when nice the work are down remind doing more wins sales organic of written but like might I we have complex if wondering be I -- processes I or from steps X%. where ago It's customers give year higher margin. that if you X year So, which still XX% some steps X see great up what's -- maybe painting, only value-added me of last you're processes think and more coding, there. is done were case? I of met incremental maybe of at lunch, Do work examples so the for kind a the Is Jag, Powersports your very or maybe to of yourPlans. plan impressive. being like value-added to maybe the can And an that? or

Jagadeesh Reddy

the for question, Thanks Tim.

more to look customers. do where complex can fabrications for for continue We we opportunities our

aftermarket. finishings, more, whether is to We continue can for where we logistics, it do look sub-assemblies,

at processes the approaches. something our forefront is activities those of all and of So, commercial

in but for, every So metal in number remarks we much finishing we the not I multiple would one a cetera. about all et fabrication, our also of of more say that and importantly, would quarter, them say have single and I offerings, talked where wins sub-assemblies, look quite prepared pretty just opportunity that

for to every show to lot can we're have opportunity markets. a preferred will we supplier customers So, look value our our end the that's addition, that continue we and to how of

Timothy Moore

a noticeable just major of a kaizens, year. Maybe they That's I'm ago extra could to you maybe capacity like some which and in it tour optimization stops weren't. continuous but improvement got -- switching the maybe met unlocking wondering just to thinking definition, that never were shift but amount imagine capacity, they to capacity. of managers we uncovered past year and those -- at worker supervisors a plants I've about you for were if full incremental talk helpful. or here seems have all the margins

Jagadeesh Reddy

talked every we and opportunities just continue an single example, our great in to labor I increase about, As our find Mayville capacity, content, to grow reduce plant. continue to and Defiance as

team, lean kaizen. was plant the moved to that from management, operator steps, all run on on all the shoes whether plant take weeks running the workflow, X spent week jeans operators.I have ago the lot We were and in cost working We're needed in studies. consolidate that and plant is our and have standardize, focused we we we mean, really shift in it's a we efficiently, the So, Me than of we X that we to of a efforts only can end, plant still able toe the whether X shift more managers discipline, floor. and daily focus with pre-kaizen ops pre-kaizen, it supervisors every safety is to operations cell more steel glasses where machines a level X week driving comes operators discipline. and and cell. full able in each every throughput we And and my did post-kaizen. I kaizen leadership good that needed out were managers each and the the time around, out, and eliminate relaid the to

able did what sustain I key were during numbers, we did you not for key that those X Wisconsin. savings the know. savings to won't but is time, the year the Tim, in week The So, that to But amount during give we at of that then kaizens as significant of a beyond. we rest unlock. week, is same you the the and

is in strong, a basis. then back day-to-day, If plant that's continue our continue of across company. effort if MBX we're have really when our leadership also able And our monthly I'm more monitor. to who to program, out to to So, improvements, I'm put not importantly, proud energized day-to-day reading by and savings online.So, me remain entire where focused we they they driving countermeasures team are driving we floor, a processes those we'll savings the fall proud And just the the it's team. and MBX MEC back, get team very the in have of monitor but results. disciplined on but pretty really on those

Timothy Moore

helpful. really final you. save offline an That's for thank in going questions when Jag. Great, to talk we I'm my but hour, X

Operator

We have to no hand for closing I'd questions. remarks. further Jag to back Reddy like

Jagadeesh Reddy

you to you thank call our and we continued MEC, support concludes please joining This call. quarter. Relations of again, next our Ryan you at today. Vallum, Council. our look Stefan contact our for or updating any progress your forward appreciate Should on Investor Noel have questions, We Once Neely

now disconnect. may You

Operator

you Thank call. today's concludes joining. This for

now You lines. may your disconnect

Mayville Engineering (MEC) 8 May 242024 Q1 Earnings call transcript