mec(MEC) - 2023 Q4 - Annual Results

Executive Summary & Highlights MEC achieved significant sales growth and improved profitability in Q4 2023 and FY 2023, with strong free cash flow generation and positive financial guidance for FY 2024 FOURTH QUARTER 2023 RESULTS MEC achieved significant sales growth and improved profitability in Q4 2023, with net sales up 15.6% and Adjusted EBITDA margin at 11.9%, alongside record free cash flow and effective net debt management Q4 2023 Performance Highlights | Metric | Q4 2023 | YoY Change | Notes | | :--- | :--- | :--- | :--- | | Net Sales (Million USD) | $148.6 | +15.6% | 6.1% Organic Growth | | Net Income (Million USD) | $2.2 | -7.9% | | | Diluted EPS (USD) | $0.11 | -8.3% | | | Non-GAAP Adjusted Diluted EPS (USD) | $0.21 | +40.0% | | | Adjusted EBITDA (Million USD) | $17.7 | +52.6% | Includes $1.3 Million negative impact from Hazel Park ramp-up | | Adjusted EBITDA Margin | 11.9% | +2.9 percentage points | Includes 85 basis points negative impact from Hazel Park ramp-up | | Free Cash Flow (Million USD) | $19.9 | +$20.6 Million | Record Quarter | | Net Debt to LTM Adjusted EBITDA Ratio | 2.1x | - | As of Dec 31, 2023 | - The UAW strike negatively impacted net sales by approximately $5.0 million and Adjusted EBITDA by approximately $1.6 million[3] FULL-YEAR 2023 RESULTS For FY 2023, MEC achieved solid growth in net sales and Adjusted EBITDA, with a substantial increase in free cash flow, demonstrating progress in business transformation and operational efficiency FY 2023 Performance Highlights | Metric | FY 2023 | YoY Change | | :--- | :--- | :--- | | Net Sales (Million USD) | $588.4 | +9.1% | | Net Income (Million USD) | $7.8 | -58.2% | | Diluted EPS (USD) | $0.38 | -58.7% | | Non-GAAP Adjusted Diluted EPS (USD) | $0.79 | -29.4% | | Adjusted EBITDA (Million USD) | $66.1 | +8.8% | | Adjusted EBITDA Margin | 11.2% | -0.1 percentage points | | Free Cash Flow (Million USD) | $23.8 | +$29.9 Million | - The Hazel Park facility's production ramp-up negatively impacted Adjusted EBITDA by $6.2 million and reduced Adjusted EBITDA margin by 105 basis points[3] FULL-YEAR 2024 FINANCIAL GUIDANCE MEC anticipates continued growth in FY 2024, with projected increases in net sales, Adjusted EBITDA, and free cash flow, reflecting confidence in market share gains, productivity, and strategic initiatives FY 2024 Financial Guidance | Metric | FY 2024 Guidance (Million USD) | | :--- | :--- | | Net Sales | $620 - $640 | | Adjusted EBITDA | $72 - $76 | | Free Cash Flow | $35 - $45 | MANAGEMENT COMMENTARY MEC management highlighted significant progress in business transformation, market expansion, and operational discipline in 2023, notably enhancing lightweight material manufacturing through the MSA acquisition, and projects profitable growth in 2024 while focusing on debt reduction and 2026 financial targets - In 2023, the company made significant progress in its multi-year business transformation, solidifying its position as a leading vertically integrated design, engineering, and manufacturing solutions provider in the U.S. market[4] - The acquisition of Mid-States Aluminum (MSA) enables MEC to capitalize on growing multi-industry demand for lightweight material manufacturing capabilities, projected to generate at least $20 million in annual synergies by the end of 2026[4] - The Hazel Park facility's annualized sales are expected to approach $100 million in 2024, with MBX-related and commercial pricing initiatives projected to contribute $3 million to $6 million in incremental Adjusted EBITDA benefits[5] - The 2024 capital allocation strategy will continue to prioritize debt reduction and return-oriented organic growth investments, aiming for a net leverage target of 1.5x to 2.0x by the end of 2024[5] PERFORMANCE SUMMARY MEC's Q4 2023 performance saw increased net sales and manufacturing margin, varied operating expenses, higher interest costs, a slight dip in net income, but strong growth in Adjusted EBITDA, adjusted net income, and free cash flow Net sales increase Q4 2023 net sales increased by 15.6% year-over-year, driven by the MSA acquisition and organic growth in construction, military, and powersports, partially offset by weak agriculture demand and UAW strike impacts Net Sales Performance | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $148.6 | $128.5 | +15.6% | | Organic Growth | - | - | +6.1% | | UAW Strike Impact | - | - | -$5.0 Million | | MSA Acquisition Impact | - | - | Positive Impact | Manufacturing margin Q4 2023 manufacturing margin increased to 12.3%, driven by organic sales volume, the MSA acquisition, and MBX initiatives, partially offset by under-absorbed fixed costs from new project launches, restructuring, and UAW strike effects Manufacturing Margin Performance | Metric | Q4 2023 | Q4 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Manufacturing Margin (Million USD) | $18.2 | $13.0 | +$5.2 Million | | As % of Net Sales | 12.3% | 10.1% | +2.2 percentage points | - The growth in manufacturing margin was primarily driven by increased organic sales volume, the MSA acquisition, and MBX initiatives[8] - Negative factors included under-absorbed fixed costs related to new project launches, operational restructuring expenses, and the UAW strike[8] Profit sharing, bonus and deferred compensation expense In Q4 2023, profit sharing, bonus, and deferred compensation expenses decreased, while other selling, general, and administrative expenses rose due to increased legal costs related to a former fitness client lawsuit Operating Expenses | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Profit Sharing, Bonus, and Deferred Compensation Expense | $3.6 | $4.1 | -$0.5 Million | | Other Selling, General, and Administrative Expenses | $7.2 | $6.0 | +$1.2 Million | - The increase in other selling, general, and administrative expenses primarily reflects higher legal costs associated with a lawsuit involving a former fitness client[9] Interest expense Q4 2023 interest expense significantly increased due to higher interest rates and increased borrowings from the MSA acquisition Interest Expense | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Interest Expense | $3.6 | $1.2 | +$2.4 Million | - The increase in interest expense was due to higher interest rates and increased borrowings resulting from the MSA acquisition completed on July 1, 2023[10] Net income for the fourth quarter Q4 2023 net income and diluted EPS slightly decreased, as increased operating income was partially offset by higher interest expense Net Income and Diluted EPS | Metric | Q4 2023 | Q4 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Net Income (Million USD) | $2.2 | $2.4 | -$0.2 Million | | Diluted EPS (USD) | $0.11 | $0.12 | -$0.01 | MEC reported Adjusted EBITDA Q4 2023 Adjusted EBITDA significantly grew, with margin improvement, despite negative impacts from the Hazel Park facility's production ramp-up and the UAW strike Adjusted EBITDA and Margin | Metric | Q4 2023 | Q4 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA (Million USD) | $17.7 | $11.6 | +$6.1 Million | | As % of Net Sales | 11.9% | 9.0% | +2.9 percentage points | - Q4 2023 Adjusted EBITDA reflects a $1.3 million loss from the Hazel Park facility's production ramp-up and approximately $1.6 million impact from the UAW strike[11] Fourth quarter Adjusted net income Q4 2023 adjusted net income and diluted EPS both increased, primarily due to higher operating income, partially offset by increased interest expense Adjusted Net Income and Diluted EPS | Metric | Q4 2023 | Q4 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Net Income (Million USD) | $4.4 | $3.1 | +$1.3 Million | | Adjusted Diluted EPS (USD) | $0.21 | $0.15 | +$0.06 | - The increase in adjusted net income reflects growth in operating income, partially offset by higher interest expense[12] Free cash flow during the fourth quarter Q4 2023 free cash flow significantly increased, attributed to higher net cash provided by operating activities and reduced capital expenditures after the Hazel Park facility's completion Free Cash Flow | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Free Cash Flow | $19.9 | ($0.7) | +$20.6 Million | - The increase in free cash flow was primarily due to a $7.6 million increase in net cash provided by operating activities and a $13.0 million reduction in capital expenditures following the completion of the Hazel Park facility[13] END MARKET UPDATE MEC's Q4 2023 end market performance showed mixed results, with strong growth in Powersports, Military, and Other markets (driven by MSA acquisition), while Commercial Vehicles saw a slight decline due to the UAW strike Commercial Vehicles Commercial Vehicles sales slightly decreased in Q4 2023, primarily due to the UAW strike, but would have shown significant growth excluding its impact Commercial Vehicles Net Sales | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $52.8 | $53.3 | -1.0% | | Growth Excluding UAW Strike Impact | - | - | +8.4% | - The sales decline was primarily due to an approximate $5.0 million impact from the UAW strike[16] - Excluding the strike impact, sales growth was driven by new program launches, strong order volumes, and the prior year's customer supply chain challenges[17] Construction & Access Construction & Access Equipment sales grew in Q4 2023, driven by increased demand from public infrastructure and non-residential construction Construction & Access Net Sales | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $25.9 | $25.5 | +1.7% | - Sales growth was primarily due to increased volumes from construction customers driven by public infrastructure and non-residential construction demand[19] Powersports Powersports sales significantly increased in Q4 2023, benefiting from new program wins, market share gains, and the impact of prior year customer supply chain challenges Powersports Net Sales | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $24.6 | $19.2 | +27.7% | - Sales growth resulted from increased volumes from new program wins, market share gains with new and existing customers, and the impact of prior year customer supply chain challenges[21] Agriculture Agriculture market sales grew in Q4 2023, driven by market share gains, though partially offset by softer demand in traditional business Agriculture Net Sales | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $14.3 | $12.4 | +15.2% | - Sales growth was primarily driven by market share gains, slightly offset by softer demand in traditional business[23] Military Military market sales increased in Q4 2023, benefiting from new programs, new model introductions, and demand related to the conflict in Ukraine Military Net Sales | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $8.9 | $7.9 | +12.9% | - Sales growth benefited from new programs, new model introductions, and demand related to the conflict in Ukraine[25] Other Other end market sales significantly increased in Q4 2023, primarily due to the MSA acquisition's contribution, with traditional business also growing from new customer program launches Other End Markets Net Sales | Metric | Q4 2023 (Million USD) | Q4 2022 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $22.2 | $10.3 | +116.5% | | Traditional Business Net Sales Growth | - | - | +20.8% | - Sales growth was primarily attributable to the contribution from the MSA acquisition completed on July 1, 2023[27] - Traditional business net sales growth was primarily due to new customer program launches[27] STRATEGIC UPDATE MEC's MBX program focuses on driving a high-performance culture, operational excellence, commercial expansion through integrated solutions and lightweight materials, and human resource optimization to support growth and achieve strategic objectives Drive a High-Performance Culture MEC is committed to cultural transformation across the organization by implementing performance-based metrics, daily lean management, and process-oriented strategies to build a high-performance culture that enhances efficiency, asset utilization, and cost optimization - The company is driving cultural change by implementing performance metrics, daily lean management, and process-oriented strategies to enhance performance, asset utilization, and cost optimization[28] - The company has updated its organizational mission statement to align with a culture of standardization and consistency: One MEC. One Mission[28] Drive Operational Excellence MEC aims to boost productivity and reduce costs through lean initiatives, supply chain optimization, and investments in advanced manufacturing and automation, projecting a 180 to 270 basis point improvement in Adjusted EBITDA margin by 2026 - The company enhances productivity and reduces costs through lean initiatives such as value stream mapping, Sales, Inventory, and Operations Planning (SIOP), and optimized supply chain and procurement strategies[28] - As of the end of Q4, the company has conducted over 125 MBX lean events, contributing to improved margins and inventory utilization[28] - Operational excellence initiatives are projected to deliver a 180 to 270 basis point improvement in Adjusted EBITDA margin by 2026[28] Drive Commercial Expansion MEC drives commercial growth by integrating solutions, expanding manufacturing capabilities (especially lightweight aluminum), diversifying into high-growth energy transition markets, and implementing value pricing, expecting revenue and cost synergies from the MSA acquisition starting in 2024 - The company drives commercial growth through integrated solutions, expanded manufacturing capabilities (beyond steel, focusing on lightweight aluminum, plastics, and composites), diversification into high-growth energy transition markets, and value pricing implementation[28] - The July 2023 acquisition of MSA enables MEC to leverage revenue synergies with its existing customer base and organically grow to meet demand for lightweight aluminum products in energy transition and fleet electrification applications[28] - The company expects to recognize revenue and cost synergies from the MSA acquisition starting in 2024[28] Drive Human Resource Optimization MEC focuses on recruiting and retaining skilled employees, supporting business growth with competitive performance incentives, high-potential talent development, and multi-level succession planning, having completed its corporate headquarters relocation to Milwaukee in Q1 2024 - The company is committed to recruiting and retaining skilled, experienced employees, supporting business growth through competitive performance incentives, high-potential talent development, and multi-level succession planning[28] - The company completed the process of relocating its corporate headquarters to Milwaukee in Q1 2024[28] BALANCE SHEET UPDATE As of December 31, 2023, MEC's net debt stood at $149.5 million, with $21.8 million in debt repaid using free cash flow, resulting in a net debt to LTM Adjusted EBITDA ratio of 2.1x Balance Sheet Highlights | Metric | As of Dec 31, 2023 | | :--- | :--- | | Net Debt (Million USD) | $149.5 | | Cash and Availability under Senior Secured Revolving Credit Facility (Million USD) | $250.01 | | Net Debt to LTM Adjusted EBITDA Ratio | 2.1x | - In Q4 2023, the company utilized free cash flow to repay $21.8 million of debt related to the MSA acquisition[29] FINANCIAL GUIDANCE MEC issued its FY 2024 financial guidance, projecting growth in net sales, Adjusted EBITDA, and free cash flow, reflecting incremental contributions from new programs, the MSA acquisition, and MBX initiatives, while considering potential macroeconomic slowdowns FY 2024 Financial Guidance | Metric | FY 2023 Actual (Million USD) | FY 2024 Forecast (Million USD) | | :--- | :--- | :--- | | Net Sales | $588.4 | $620 - $640 | | Adjusted EBITDA | $66.1 | $72 - $76 | | Free Cash Flow | $23.8 | $35 - $45 | - The 2024 guidance reflects a potential slowdown in end market demand, expected to be offset by new program work, the MSA acquisition ($20 million to $30 million incremental net sales, $4 million to $6 million incremental Adjusted EBITDA), and MBX-related initiatives ($3 million to $6 million incremental contribution)[31][32] - The FY 2024 free cash flow guidance reflects improved working capital utilization compared to 2023 and $15 million to $20 million in capital expenditures[32] Company Information & Disclosures This section provides details on MEC's Q4 2023 earnings call, outlines forward-looking statements and associated risks, introduces Mayville Engineering Company, and clarifies the use of non-GAAP financial measures FOURTH QUARTER 2023 RESULTS CONFERENCE CALL MEC will host a conference call on March 6, 2024, to discuss Q4 2023 results, with investors able to participate via webcast or phone - The conference call will be held on March 6, 2024, at 10:00 AM ET (9:00 AM CT)[33] - Investors can access the webcast and presentation via the investor page at www.mecinc.com or by dialing (833) 470-1428 (U.S.) or (833) 950-0062 (Canada), using access code 431724[33][34] FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements reflecting plans, estimates, and beliefs, where actual results may differ materially due to various factors including macroeconomic conditions, supply chain constraints, labor availability, raw material cost fluctuations, and acquisition integration risks - Forward-looking statements involve risks and uncertainties, and actual results may differ materially from expectations[35] - Key risk factors include macroeconomic conditions (inflation, high interest rates, recession concerns), supply chain constraints, labor availability, raw material cost pressures, customer industry developments, production scheduling, market competition, talent retention, acquisition integration capabilities, information technology system risks, geopolitical issues, and legal disputes[36] ABOUT MAYVILLE ENGINEERING COMPANY Founded in 1945, Mayville Engineering Company (MEC) is a leading vertically integrated manufacturing partner in the U.S., offering comprehensive solutions from concept to production for diverse end markets including commercial vehicles, construction, powersports, agriculture, and military - Founded in 1945, MEC is a leading vertically integrated, value-added manufacturing partner in the U.S., offering comprehensive manufacturing solutions from design and prototyping to tooling, fabrication, aluminum extrusion, coating, assembly, and aftermarket components[37] - Customers span heavy and medium-duty commercial vehicles, construction and access equipment, powersports, agriculture, military, and other end markets[37] - The company boasts an extensive manufacturing infrastructure with 23 facilities across seven states, offering a wide range of fabrication and finishing capabilities[37] NON-GAAP FINANCIAL MEASURES This press release utilizes non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow, which management uses as key performance indicators and are considered useful for investors, but should not replace GAAP metrics - Non-GAAP metrics include EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Diluted EPS, and Free Cash Flow[38] - These metrics are used by management as key performance indicators and are utilized by securities analysts, investors, and other parties to evaluate the company, but should not be considered substitutes for net income or cash flow from operating activities under GAAP[40] - EBITDA represents net income plus interest expense, provision for income taxes, depreciation, and amortization. Adjusted EBITDA further excludes non-core operating items such as CEO transition costs, share-based compensation expense, MSA acquisition-related costs, loss on debt extinguishment, Hazel Park transition, and legal costs[39][40] Consolidated Financial Statements MEC's consolidated financial statements show increased total assets and bank borrowings, mixed net income performance with higher net sales but lower profitability, and a shift in cash flow dynamics driven by the MSA acquisition Consolidated Balance Sheet As of December 31, 2023, MEC's total assets increased to $496.7 million, primarily driven by increases in property, plant, and equipment, as well as goodwill and intangible assets, alongside a significant rise in bank revolving credit notes Consolidated Balance Sheet | Metric (Thousand USD) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | ASSETS | | | | Cash and Cash Equivalents | $672 | $127 | | Accounts Receivable, Net | $57,445 | $58,001 | | Inventories, Net | $67,782 | $71,708 | | Total Current Assets | $134,623 | $141,303 | | Property, Plant and Equipment, Net | $175,745 | $145,771 | | Goodwill | $92,650 | $71,535 | | Intangible Assets, Net | $58,667 | $43,809 | | Total Assets | $496,661 | $440,581 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts Payable | $46,526 | $53,735 | | Total Current Liabilities | $71,709 | $102,448 | | Bank Revolving Credit Notes | $147,493 | $72,236 | | Total Liabilities | $266,683 | $222,714 | | Total Stockholders' Equity | $229,978 | $217,867 | | Total Liabilities and Stockholders' Equity | $496,661 | $440,581 | Consolidated Statement of Net Income In Q4 2023, MEC's net sales grew year-over-year, but net income and diluted EPS slightly decreased due to higher interest expense; for the full year, net sales increased, but net income and EPS significantly declined Consolidated Statement of Net Income | Metric (Thousand USD) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $148,582 | $128,527 | $588,425 | $539,392 | | Cost of Sales | $130,371 | $115,542 | $518,722 | $478,323 | | Operating Income | $5,354 | $2,801 | $20,191 | $25,774 | | Interest Expense | ($3,559) | ($1,217) | ($11,092) | ($3,380) | | Net Income | $2,227 | $2,381 | $7,844 | $18,727 | | Diluted EPS (USD) | $0.11 | $0.12 | $0.38 | $0.91 | Consolidated Statement of Cash Flows For FY 2023, MEC's cash flow from operating activities decreased, while cash outflow from investing activities significantly increased due to the MSA acquisition, leading to a positive shift in financing cash flow and a notable increase in period-end cash and cash equivalents Consolidated Statement of Cash Flows | Metric (Thousand USD) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $40,363 | $52,426 | | Net Cash Used in Investing Activities | ($104,132) | ($50,668) | | Net Cash Provided by/(Used in) Financing Activities | $64,314 | ($1,749) | | Net Increase in Cash and Cash Equivalents | $545 | $9 | | Cash and Cash Equivalents, End of Period | $672 | $127 | - Net cash used in investing activities significantly increased, primarily due to $88.6 million in payments for acquisitions (net of cash acquired)[47] Non-GAAP Reconciliations This section provides reconciliations for MEC's non-GAAP financial measures, demonstrating improved operational performance in Q4 2023 and FY 2023, particularly in Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow, after accounting for specific non-recurring items Reconciliation of Net Income to EBITDA and Adjusted EBITDA In Q4 2023, MEC's EBITDA and Adjusted EBITDA both significantly increased, with Adjusted EBITDA margin improving to 11.9%, reflecting enhanced operational performance after excluding specific non-recurring items Net Income to EBITDA and Adjusted EBITDA Reconciliation | Metric (Thousand USD) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $2,227 | $2,381 | $7,844 | $18,727 | | EBITDA | $14,936 | $10,556 | $55,055 | $55,085 | | Adjusted EBITDA | $17,703 | $11,552 | $66,053 | $60,778 | | EBITDA Margin | 10.1% | 8.2% | 9.4% | 10.2% | | Adjusted EBITDA Margin | 11.9% | 9.0% | 11.2% | 11.3% | - Adjustments to Adjusted EBITDA include MSA acquisition-related costs, share-based compensation expense, Hazel Park transition and legal costs, and COO restructuring costs, among others[49] Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Diluted EPS In Q4 2023, MEC's adjusted net income and adjusted diluted EPS both increased, indicating improved profitability after excluding specific non-recurring items Net Income and Diluted EPS to Adjusted Net Income and Diluted EPS Reconciliation | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Thousand USD) | $2,227 | $2,381 | $7,844 | $18,727 | | Diluted EPS (USD) | $0.11 | $0.12 | $0.38 | $0.91 | | Adjusted Net Income (Thousand USD) | $4,439 | $3,141 | $16,293 | $23,100 | | Adjusted Diluted EPS (USD) | $0.21 | $0.15 | $0.79 | $1.12 | - Adjustments include MSA acquisition-related costs, share-based compensation expense, Hazel Park transition and legal costs, and COO restructuring costs, among others, with corresponding tax impacts considered[51] Reconciliation of Free Cash Flow In Q4 2023, MEC's free cash flow shifted from negative to positive, with full-year free cash flow also significantly increasing, primarily due to changes in operating cash flow and capital expenditures Free Cash Flow Reconciliation | Metric (Thousand USD) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $26,667 | $19,112 | $40,363 | $52,426 | | Less: Capital Expenditures | $6,784 | $19,802 | $16,598 | $58,610 | | Free Cash Flow | $19,883 | ($690) | $23,765 | ($6,184) |