Mayville Engineering reports Q3 EPS 21c, consensus 21c

Reports Q3 revenue $135.4M, consensus $157.6M “During the third quarter, we took decisive action to successfully navigate a soft near-term demand environment, while continuing to deliver strong execution on our strategic priorities, as outlined within our MBX framework,” stated Jag Reddy, CEO. “Order activity troughed during the third quarter, as customers took corrective action to de-stock channel inventories amid a period of lower consumption. In response, we deployed a series of cost rationalization initiatives that, in combination, positioned us to deliver a solid Adjusted EBITDA margin performance and continued free cash flow generation during the period. Customer order activity decelerated meaningfully beginning in August, and has since stabilized during the fourth quarter, albeit at a lower level than we anticipated entering 2024. In response to the current demand environment, we introduced a series of cost rationalization initiatives halfway through the third quarter, including the reduction of production days, an approximate 12% reduction in our labor force, the permanent closure of our Wautoma manufacturing facility planned for the fourth quarter and other cost reduction actions, the combination of which is expected to result in an estimated $0.6 million of restructuring expense in the fourth quarter and $1.0 to $3.0 million in annualized cost savings.”