Natalya Boff's questions to Mayville Engineering Company Inc (MEC) leadership • Q3 2024
Question
Natalya Boff, on behalf of Andy Kaplowitz, asked for clarification on why the company maintained its organic net sales growth guidance despite cutting its overall 2024 outlook. She also requested details on market share gains in the powersports segment and inquired about the key drivers behind the company's strong free cash flow generation.
Answer
Executive Todd Butz explained that the organic growth guidance was intended to isolate new business wins from the broader market impact of customer destocking. Executive Jagadeesh Reddy attributed the powersports market share gain to a new customer program that launched earlier in the year and new programs with existing customers. Reddy credited the strong free cash flow to the MBX program's intense focus on working capital, highlighting the improvement in inventory turns from 6.2 in 2022 to 9.0 in the latest quarter.