mec(MEC) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for the three months ended March 31, 2025, were $135,579, a decrease of$ 25,690 or 15.9% compared to $161,269 for the same period in 2024, driven by lower customer demand and inventory destocking [114]. - EBITDA for the three months ended March 31, 2025, was$ 11,060, a decrease of $5,825 or 34.5% compared to$ 16,885 in 2024 [114]. - Adjusted EBITDA for the same period was $12,161, down$ 6,360 or 34.3% from $18,521 in 2024 [114]. - Net income and comprehensive income for the three months ended March 31, 2025, was$ 20, a decrease of $3,221 or 99.4% compared to$ 3,241 in 2024 [114]. Margins and Expenses - Manufacturing margins decreased to $15,324 for the three months ended March 31, 2025, down$ 5,609 or 26.8% from $20,933 in 2024, primarily due to lower customer demand [115]. - Manufacturing margin percentage decreased to 11.3% for the three months ended March 31, 2025, down from 13.0% in 2024, reflecting reduced ability to absorb fixed costs [116]. - Other selling, general and administrative expenses increased to$ 8,689 for the three months ended March 31, 2025, an increase of $920 or 11.8% compared to$ 7,769 in 2024, mainly due to wage inflation and higher compliance costs [118]. - The provision for income taxes was ( $10) for the three months ended March 31, 2025, a decrease of$ 1,044 from $1,034 in 2024, primarily due to lower income before taxes [120]. Cash Flow and Investments - Free cash flow for the three months ended March 31, 2025, was$ 5,371, a decrease of $2,479 or 31.6% compared to$ 7,850 in 2024, primarily due to lower cash provided by operating activities [112]. - Net cash provided by operating activities decreased by 22% to $8,333 million for the three months ended March 31, 2025, compared to$ 10,625 million in the prior year [122]. - Cash used in investing activities increased by 11% to $2,959 million for the three months ended March 31, 2025, driven by higher capital expenditures [123]. - Cash used in financing activities decreased by 35% to$ 5,397 million for the three months ended March 31, 2025, primarily due to lower debt repayments [124]. - Capital expenditures for the three months ended March 31, 2025, were $2,962 million, a marginal increase of$ 187 million compared to $2,775 million in the prior year [132]. Debt and Credit - Interest expense decreased to$ 1,567 for the three months ended March 31, 2025, down $1,789 or 53.3% from$ 3,356 in 2024, attributed to reduced borrowings and lower interest rates [119]. - The interest coverage ratio was 4.93 to 1.00 as of March 31, 2025, exceeding the required minimum of 3.00 to 1.00 [129]. - The consolidated total leverage ratio was 1.39 to 1.00 as of March 31, 2025, below the maximum limit of 3.50 to 1.00 [129]. - The company had $172,521 million available under its revolving credit facility as of March 31, 2025 [127]. Future Outlook and Risks - The company expects full-year capital expenditures for 2025 to be between$ 13,000 million and $17,000 million [132]. - A hypothetical 100-basis-point increase in interest rates would result in an additional$ 0.2 million of interest expense based on variable rate debt as of March 31, 2025 [140]. - The company has no commodity hedging instruments in place as of March 31, 2025, exposing it to price fluctuations in raw materials [141].