mec(MEC) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales for Q3 2025 were $144.3 million, an increase of 6.6% year-over-year, primarily driven by the Accu-Fab acquisition, while organic net sales decreased by 9.1%[4] - GAAP net loss for Q3 2025 was $2.7 million, or ($0.13) per diluted share, compared to a net income of $3.0 million, or $0.14 per diluted share in the prior year[8] - Adjusted EBITDA for Q3 2025 was $14.1 million, representing an adjusted EBITDA margin of 9.8%, down from $17.1 million and 12.6% in the prior year[9] - Adjusted net income for Q3 2025 was $2.0 million, or $0.10 per diluted share, down from $5.8 million, or $0.27 per diluted share in the prior year[10] - Net loss for Q3 2025 was $2.68 million, compared to a net income of $2.97 million in Q3 2024, reflecting a significant decline in profitability[41] - The EBITDA margin for the three months ended September 30, 2025, was 7.7%, down from 11.2% in 2024, indicating a decline in profitability[44] - Adjusted EBITDA for the nine months ended September 30, 2025, was $40,747,000, down from $55,220,000 in 2024, reflecting a decrease of approximately 26.3%[44] - Free cash flow for Q3 2025 was ($1.1) million, a decrease from $15.1 million in the prior year, attributed to a $16.1 million decrease in net cash provided by operating activities[11] - Free cash flow for the nine months ended September 30, 2025, was $16,751,000, compared to $42,094,000 in 2024, representing a decrease of approximately 60.2%[47] Market Performance - The Data Center & Critical Power market saw net sales of $22.6 million, a significant increase from $4.7 million in the prior year, reflecting strong demand and contributions from the Accu-Fab acquisition[20] - Net sales to the Commercial Vehicle market decreased by 24.0% year-over-year to $39.2 million, primarily due to a 38.8% decline in North American Class 8 commercial vehicle production[14] - Net sales for Q3 2025 were $144.31 million, an increase of 6.7% from $135.39 million in Q3 2024[41] Financial Guidance and Expectations - The company maintained its full-year financial guidance for 2025, reflecting the impact of continued soft demand in legacy end markets[28] - The company expects revenue synergies from the Accu-Fab acquisition to range between $20 million and $30 million for 2026[2] Assets and Liabilities - Total assets increased to $585.58 million as of September 30, 2025, up from $445.57 million at the end of 2024, indicating strong growth in the company's asset base[39] - Total liabilities increased to $340.81 million as of September 30, 2025, compared to $193.82 million at the end of 2024, reflecting increased borrowing for operational and acquisition activities[39] - The company reported a significant increase in accounts payable, which rose to $53.07 million from $39.12 million, indicating higher operational activity or potential supply chain challenges[39] - The company’s retained earnings decreased to $56.33 million as of September 30, 2025, down from $60.09 million at the end of 2024, indicating challenges in maintaining profitability[39] Cash Flow and Expenditures - Free cash flow for the nine months ended September 30, 2025, was $25.18 million, down from $51.85 million in the same period of 2024, reflecting changes in operating cash flows[43] - The company incurred $140.06 million in cash outflows for acquisitions during the nine months ended September 30, 2025, indicating a strategic focus on growth through acquisitions[43] - Capital expenditures for the nine months ended September 30, 2025, totaled $8,430,000, down from $9,753,000 in 2024[47] Other Financial Metrics - The net leverage ratio as of September 30, 2025, was 3.5x, with net debt outstanding of $214.9 million[27] - The company reported interest expense of $3,430,000 for the three months ended September 30, 2025, compared to $2,653,000 in 2024, indicating an increase of approximately 29.2%[44] - The company recognized $591,000 in costs related to the step-up of Accu-Fab acquired inventory for the three months ended September 30, 2025[45] - The company incurred $3,125,000 in acquisition-related amortization of intangible assets for the three months ended September 30, 2025[45]