Mayville Engineering Company Inc
For the period ended Dec 31, 2024. Filed Mar 6, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 6, 2025
MEC$13.12+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-06.
0001558370-24-002598
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-06.
0001558370-25-002369
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 74 previous paragraphs and 76 current paragraphs.
40 unchanged; 23 reworded; 9 added; 9 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 18 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Free cash flow represents net cash provided by operating activities less cash flow used in the purchase of property, plant and equipment.
Current report
Free Cash Flows Analysis Twelve Months Ended December 31, 2024 Compared to Twelve Months Ended December 31, 2023
Current report
Free cash flow for the year ended December 31, 2024 was $77,709 as compared to $23,765 for the twelve months ended December 31, 2023, an increase of $53,944 or 227.0%. The increase in free cash flow was primarily due to an increase in cash provided by operating activities and a decrease in capital expenditures. Please see the “Liquidity and Capital Resources” section below for further information.
Current report
Free Cash Flows Analysis Twelve Months Ended December 31, 2023 Compared to Twelve Months Ended December 31, 2022
Current report
Net Sales. Net sales were $581,604 for the twelve months ended December 31, 2024 as compared to $588,425 for the twelve months ended December 31, 2023, a decrease of $6,821, or 1.2%. This decrease was primarily due to softening demand within the second half of the current year in all our key end markets, customer de-stocking channel inventory and the foreseen roll-off of certain military aftermarket programs at the end of 2023. These items were partially offset by incremental volumes from new program wins and the acquisition of MSA in the third quarter of the prior year.
Current report
Manufacturing Margins. Manufacturing margins were $71,097 for the twelve months ended December 31, 2024 as compared to $69,703 for the twelve months ended December 31, 2023, an increase of $1,394, or 2.0%. The increase was primarily driven by MBX initiatives, commercial pricing actions and cost reduction actions, most notably, a 12% reduction in the Company’s labor force which occurred in the third quarter of 2024.
Current report
Gain on Lawsuit Settlement. On October 28, 2024, the Company and a former fitness customer entered into a formal Settlement Agreement (the “Agreement”) resolving a previously disclosed lawsuit. Under the terms of the Agreement, the Company and the former fitness customer agreed to dismiss the lawsuit and exchange mutual releases, and MEC received a gross payment of $25,500 from the former fitness customer in the fourth quarter of the current year. See Note 9 within the Notes to Consolidated Financial Statements for additional information regarding the lawsuit.
Current report
Operating Activities. Cash provided by operating activities was $89,807 for the twelve months ended December 31, 2024 as compared to $40,363 for the twelve months ended December 31, 2023. Of the $49,444 increase in operating cash flows, $17,562 is due to a payout of deferred compensation to a retired Company executive made in the prior year period. The remaining increase of $31,882 was primarily due to the lawsuit settlement payment of $25,500 and changes in net working capital items. The primary increases associated with working capital changes include a decrease in accrued liabilities in the prior year as part of a 401(k) Plan amendment, the utilization of income tax net operating losses and tax credit carryforwards and a decrease in cash used for accounts payable due to the timing of supplier payments positively impacted cash provided by operating activities for the current year period.
Current report
Financing Activities. Cash used in financing activities was $78,561 for the twelve months ended December 31, 2024, as compared to cash provided by financing activities of $64,314 for the twelve months ended December 31, 2023. The change was primarily due to the debt repayments in excess of borrowings during the current year period and the withdrawal of funds used to
Removed paragraphs (9)
Previous report
Emerging Growth Company
Previous report
The JOBS Act permits an “emerging growth company” like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to use this provision and, as a result, we will comply with new or revised accounting standards as required for private companies.
Previous report
Internal Controls and Procedures
Previous report
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of our assets are made in accordance with management’s authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Furthermore, our controls and procedures can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control, and misstatements due to error or fraud may occur and not be detected on a timely basis.
Previous report
Net Sales. Net sales were $588,425 for the twelve months ended December 31, 2023 as compared to $539,392 for the twelve months ended December 31, 2022, an increase of $49,033, or 9.1%. This increase was primarily due to the acquisition of MSA, increased organic sales volumes within our commercial vehicle, powersports and military end markets and continued price discipline. These increases were slightly offset by softening demand in our construction and agriculture end markets, lower material price pass-throughs to customers and United Auto Workers labor union strikes impacting a few of our customers that occurred in the fourth quarter of the current period.
Previous report
Manufacturing Margins. Manufacturing margins were $69,703 for the twelve months ended December 31, 2023 as compared to $61,069 for the twelve months ended December 31, 2022, an increase of $8,634, or 14.1%. The increase was primarily driven by the above-mentioned organic volume growth, MSA acquisition and commercial price actions. These items were partially negated by unabsorbed fixed costs associated with new project launches, a one-time field replacement claim, higher employee healthcare expenses, the non-recurring inventory step-up expense associated with the MSA acquisition and restructuring costs related to the former COO.
Previous report
Impairment of Long-Lived Assets and Gain on Contracts. At December 31, 2021, there was uncertainty as to the level of demand from the former fitness customer. The Company received a notification from this customer in February 2022 resulting in a change in forecasted future cash flow, triggering an impairment assessment of assets purchased, and assets the Company committed to purchase, to meet obligations under the agreement with the former fitness customer as of December 31, 2021. The notification informed the Company that it did not forecast any demand for any products or parts that were the subject of the agreement between the Company and the customer for the remainder of the agreement’s term, which ends in March 2026. Given the circumstances, GAAP required the Company to assess whether the assets were impaired. As a result of this assessment, the Company recorded an impairment on the assets purchased and loss on contracts agreed upon specifically to meet obligations under the agreement with the former fitness customer. Consequently, the Company recorded an impairment of long-lived assets and loss on contracts of $16,151 in the fourth quarter of 2021.
Previous report
During the twelve months ended December 31, 2022, the Company was able to cancel $2,257 of purchase commitments for property, plant and equipment that had been recorded as an impairment of long-lived assets and loss on contracts at December 31, 2021, as previously described. The cancellation of purchase commitments resulted in the reversal of previously recorded impairment expense. Additionally, the Company was able to sell property, plant and equipment resulting in a gain of $2,089 that had previously been recorded as an impairment of long-lived assets and written down to fair value at December 31, 2021. There was no further gain on contracts attributable to the impairment recorded in 2021 during the twelve months ended December 31, 2023.
Previous report
Operating Activities. Cash provided by operating activities was $40,363 for the twelve months ended December 31, 2023 as compared to $52,426 for the twelve months ended December 31, 2022. Of the $12,063 decrease in operating cash flows, $17,562 was due to a payout of deferred compensation to a retired Company executive. The remaining difference of an increase in cash provided by operating activities of $5,499 as compared to the prior year period is largely driven by accounts receivable and inventory decreasing due to the Company’s ongoing collections efforts and initiatives to implement lean inventory management processes, respectively, partially offset by a decrease in accounts payable resulting from reduced capital expenditures. Additionally, cash provided by operating activities were negatively impacted by a reduction in accrued liabilities due to the Company implementing a match program in the 401(k) Plan requiring the employer contribution to be paid concurrently with payroll. In the prior year period, a discretionary employer contribution was accrued throughout the year and paid after the year ended December 31, 2022.
Reworded paragraphs (23)
Previous wording
The broader market dynamics over the past few years have resulted in impacts to the Company, including supply chain constraints affecting some of our customers, material cost inflation and inflationary pressures on wages and benefits due to labor availability. The Company expects some of these dynamics to continue in 2024 and could continue to have an impact on demand, material costs and labor.
Current wording
The broader market dynamics over the past few years have resulted in impacts to the Company, elevated interest rates, inconsistent customer demand, material cost inflation and labor availability. The Company expects some of these dynamics to continue in 2025 and could continue to have an impact on demand, material costs and labor.
Previous wording
Other Selling, General, and Administrative Expenses. Other selling, general and administrative expenses consist primarily of salaries and personnel costs for our sales and marketing, finance, human resources, information systems, administration and certain
Current wording
Other Selling, General, and Administrative Expenses. Other selling, general and administrative expenses consist primarily of salaries and personnel costs for our sales and marketing, finance, human resources, information systems, administration and certain other managerial employees and certain corporate level administrative expenses such as incentive compensation, audit, accounting, legal and other consulting and professional services, travel, and insurance.
Previous wording
EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin
Current wording
EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow
Previous wording
EBITDA represents net income (loss) before interest expense, provision (benefit) for income taxes, depreciation and amortization. EBITDA Margin represents EBITDA as a percentage of net sales for each period.
Current wording
EBITDA represents net income before interest expense, provision for income taxes, depreciation and amortization. EBITDA Margin represents EBITDA as a percentage of net sales for each period.
Previous wording
Adjusted EBITDA represents EBITDA before CEO transition costs, stock-based compensation expense, Mid-States Aluminum (MSA) acquisition related costs, loss on extinguishment of debt, field replacement claim, Hazel Park transition and legal costs due to the former fitness customer, costs recognized on step-up of MSA acquired inventory, impairment charges on long-lived assets and inventory and gain on contracts specifically purchased to meet obligations under the agreement with our former fitness customer and Chief Operating Officer (COO) restructuring costs. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of net sales for each period. These metrics are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. These measures should not be considered as an alternative to net income (loss) or any other performance measure derived in accordance with GAAP as an indicator of our operating performance. We present EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin as management uses these measures as key performance indicators, and we believe they are measures frequently used by securities analysts, investors and other parties to evaluate companies in our industry. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP.
Current wording
These metrics are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. These measures should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP as an indicator of our operating performance. We present EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow as management uses these measures as key performance indicators, and we believe they are measures frequently used by securities analysts, investors and other parties to evaluate companies in our industry. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP.
Previous wording
Our calculation of EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to the similarly named measures reported by other companies. Potential differences between our measures of EBITDA and Adjusted EBITDA compared to other similar companies’ measures of EBITDA and Adjusted EBITDA may include differences in capital structure and tax positions.
Current wording
Our calculation of EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow may not be comparable to the similarly named measures reported by other companies. Potential differences between our measures of EBITDA and Adjusted EBITDA compared to other similar companies’ measures of EBITDA and Adjusted EBITDA may include differences in capital structure and tax positions.
Previous wording
The following table presents a reconciliation of net income (loss) and comprehensive income (loss), the most directly comparable measure calculated in accordance with GAAP, to EBITDA and Adjusted EBITDA, and the calculation of EBITDA Margin and Adjusted EBITDA Margin for each of the periods presented.
Current wording
The following table presents a reconciliation of net income and comprehensive income, the most directly comparable measure calculated in accordance with GAAP, to EBITDA and Adjusted EBITDA, and the calculation of EBITDA Margin and Adjusted EBITDA Margin for each of the periods presented.
Previous wording
Investing Activities. Cash used in investing activities was $104,132 for the twelve months ended December 31, 2023, as compared to $50,668 for the twelve months ended December 31, 2022. The $53,464 increase in cash used in investing activities was mainly due to the acquisition of MSA, which was completed on July 1, 2023, partially offset by less capital investments in the current year period due to the completion of the capital investment in the Company’s Hazel Park, MI facility at the end of 2022.
Current wording
Free cash flow for the year ended December 31, 2023 was $23,765 as compared to ($6,184) for the twelve months ended December 31, 2022, an increase of $29,949. The increase in free cash flow was primarily due to less capital investments in 2023 due to the completion of the capital investment in the Company’s Hazel Park, MI facility at the end of 2022, partially offset by a decrease in operating activities, mainly due to a payout of deferred compensation to a retired Company executive in 2023.
Previous wording
Manufacturing margin percentages were 11.8% for the twelve months ended December 31, 2023 as compared to 11.3% for the twelve months ended December 31, 2022, an increase of 0.5%. The increase was attributable to the items discussed in the preceding paragraph.
Current wording
Manufacturing margin percentages were 12.2% for the twelve months ended December 31, 2024 as compared to 11.8% for the twelve months ended December 31, 2023, an increase of 0.4%. The increase was attributable to the items discussed in the preceding paragraph.
Previous wording
Amortization of Intangible Assets. Amortization of intangible assets were $7,742 for the twelve months ended December 31, 2023 as compared to $6,952 for the twelve months ended December 31, 2022, an increase of $790, or 11.4%. This increase was solely due to the amortization expense associated with the identifiable intangible assets from the MSA acquisition. Refer to Note 2 – Acquisitions within the Notes to Consolidated Financial Statements for additional information related to these identifiable intangible assets.
Current wording
Amortization of Intangible Assets. Amortization of intangible assets were $6,933 for the twelve months ended December 31, 2024 as compared to $7,742 for the twelve months ended December 31, 2023, a decrease of $809, or 10.4%. The decrease was due to the full amortization of certain intangible assets in prior periods, slightly offset by the full year of amortization expense in 2024 associated with the identifiable intangible assets from the MSA acquisition.
Previous wording
Profit Sharing, Bonuses and Deferred Compensation Expenses. Profit sharing, bonuses and deferred compensation expenses were $11,588 for the twelve months ended December 31, 2023 as compared to $7,997 for the twelve months ended December 31, 2022, an increase of $3,591, or 44.9%. The increase was primarily due to deferred compensation expense during the current year period versus a credit during the prior year period due to fluctuations within the financial markets, the Company’s contributions to the 401(k) match being higher than the prior year period discretionary 401(k) accrual and less stock-based compensation expense in the prior year period due to increased forfeitures of unvested awards, slightly offset by lower bonus expense.
Current wording
Profit Sharing, Bonuses and Deferred Compensation Expenses. Profit sharing, bonuses and deferred compensation expenses were $13,593 for the twelve months ended December 31, 2024 as compared to $11,588 for the twelve months ended December 31, 2023, an increase of $2,005, or 17.3%. The increase was primarily driven by higher bonus accruals aligning with the Company’s attainment of certain financial performance targets for the current year period and higher stock-based compensation expense due to higher forfeitures of unvested awards in the prior year period.
Previous wording
Other Selling, General and Administrative (SG&A) Expenses. Other selling, general and administrative expenses were $30,182 for the twelve months ended December 31, 2023 as compared to $24,692 for the twelve months ended December 31, 2022, an increase of $5,490, or 22.2%. The increase was predominantly attributable to the incremental SG&A and transactions costs related to the acquisition of MSA, increased salaries, wages and benefits, recruiting fees and higher professional fees related to the Company preparing to be Sarbanes-Oxley Act Section 404(b) compliant for 2024 and higher legal fees associated with the on-going litigation with our former fitness customer, partially offset by CEO transition costs incurred during the prior year period.
Current wording
Other Selling, General and Administrative Expenses. Other selling, general and administrative expenses were $31,518 for the twelve months ended December 31, 2024 as compared to $30,182 for the twelve months ended December 31, 2023, an increase of $1,336, or 4.4%. The increase was predominantly attributable to higher costs related to compliance requirements and annual wage inflation, partially offset by lower legal fees associated with the litigation against the former fitness customer and non-recurring professional fees related to the MSA acquisition during the prior year period.
Previous wording
Interest Expense. Interest expense was $11,092 for the twelve months ended December 31, 2023 as compared to $3,380 for the twelve months ended December 31, 2022, an increase of $7,712, or 228.2%. The change is due to higher borrowing levels to finance the acquisition of MSA, which closed on July 1, 2023, and increased interest rates as compared to the prior year period.
Current wording
Interest Expense. Interest expense was $10,989 for the twelve months ended December 31, 2024 as compared to $11,092 for the twelve months ended December 31, 2023, a decrease of $103, or 0.9%. The decrease is due to lower average debt levels on our revolver as compared to the prior year period.
Previous wording
Provision for Income Taxes. Income tax expense was $1,039 for the twelve months ended December 31, 2023 as compared to $3,667 for the twelve months ended December 31, 2022. The decrease of $2,628 is primarily due to higher net income and comprehensive income in the prior year period. Please reference Note 8 – Income Taxes in the Notes to Consolidated Financial Statements for further details.
Current wording
Provision for Income Taxes. Income tax expense was $7,596 for the twelve months ended December 31, 2024 as compared to $1,039 for the twelve months ended December 31, 2023, an increase of $6,557 or 631.1%. The increase is primarily due to the gain on lawsuit settlement in the current year period, partially offset by an increased tax benefit associated with stock-based compensation option exercises. See Note 8 of the Consolidated Financial Statements for further details.
Previous wording
Due to the factors described in the preceding paragraphs, Adjusted EBITDA increased, while net income, comprehensive income, EBITDA, EBITDA Margin and Adjusted EBITDA Margin decreased during 2023.
Current wording
Due to the factors described in the preceding paragraphs, net income and comprehensive income, EBITDA, and EBITDA Margin increased while Adjusted EBITDA and Adjusted EBITDA Margin decreased during 2024.
Previous wording
Financing Activities. Cash provided by financing activities was $63,314 for the twelve months ended December 31, 2023, as compared to cash used in financing activities of $1,749 for the twelve months ended December 31, 2022. The $66,063 increase was primarily due to the use of funds to purchase MSA, partially offset by higher debt repayments that were able to be made as a result of our decreased level of capital investment. Under our share repurchase program, the Company purchased $2,661 of common stock in 2023 as compared to $4,947 of its common stock in 2022. The Company’s decision to repurchase additional shares in 2024 will depend on business conditions, free cash flow generation, other cash requirements and stock price. See Part II, Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities for additional information regarding share repurchases.
Current wording
purchase MSA in the prior year period. Additionally, under the share repurchase plan, the Company purchased $5,896 of common stock in 2024 as compared to $2,661 of its common stock in 2023. The Company’s decision to repurchase additional shares in 2025 will depend on business conditions, free cash flow generation, other cash requirements and stock price. See Part II, Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities for additional information regarding share repurchases.
Previous wording
At December 31, 2023, the interest rate on outstanding borrowings under our revolving credit facility was 7.71%. We had availability of $102,507 under the revolving credit facility at December 31, 2023.
Current wording
At December 31, 2024, the interest rate on outstanding borrowings under our revolving credit facility was 6.55%. We had availability of $170,275 under the revolving credit facility at December 31, 2024.
Previous wording
The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on our ability to, subject to certain exceptions, create, incur or assume indebtedness; create, incur, assume or suffer to exist liens; make certain investments; allow our subsidiaries to merge or consolidate with another entity; make certain asset dispositions; pay certain dividends or other distributions to shareholders; enter into transactions with affiliates; enter into sale leaseback transactions; and exceed the limits on annual capital expenditures. The Credit Agreement also requires us to satisfy certain financial covenants, including a minimum interest coverage ratio of 3.00 to 1.00. At December 31, 2023, our interest coverage ratio was 5.49 to 1.00. The Credit Agreement also requires us to maintain a consolidated total leverage ratio not to exceed 4.00 to 1.00 (which was increased as of July 1, 2023 from 3.50 to 1.00 in connection with the acquisition of MSA). As of December 31, 2023, our consolidated total leverage ratio was 2.14 to 1.00.
Current wording
The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on our ability to, subject to certain exceptions, create, incur or assume indebtedness; create, incur, assume or suffer to exist liens; make certain investments; allow our subsidiaries to merge or consolidate with another entity; make certain asset dispositions; pay certain dividends or other distributions to shareholders; enter into transactions with affiliates; enter into sale leaseback transactions; and exceed the limits on annual capital expenditures. The Credit Agreement also requires us to satisfy certain financial covenants, including a minimum interest coverage ratio of 3.00 to 1.00. At December 31, 2024, our interest coverage ratio was 4.62 to 1.00. The Credit Agreement also requires us to maintain a consolidated total leverage ratio not to exceed 3.50 to 1.00. As of December 31, 2024, our consolidated total leverage ratio was 1.28 to 1.00.
Previous wording
With the consummation of the MSA acquisition, the Company assumed a Fond du Lac County and Fond du Lac Economic Development Corporation term note (Fond du Lac Term Note) in the amount of $2,875. The Fond du Lac Term Note is secured by a security agreement, payable in annual installments of $500 plus interest at 2.00% and is due in full in December 2028. The short-term and long-term balance of $500 and $1,875, respectively, are recorded in other current liabilities and other long-term liabilities in the Consolidated Balance Sheets.
Current wording
Additionally, the Company has a Fond du Lac County and Fond du Lac Economic Development Corporation term note (Fond du Lac Term Note). The Fond du Lac Term Note is secured by a security agreement, payable in annual installments of $500 plus interest at 2.00% and is due in full in December 2028. The balance outstanding as of December 31, 2024 was $1,875, with the short-term and long-term balance of $500 and $1,375, respectively, recorded in other current liabilities and other long-term liabilities in the Consolidated Balance Sheets.
Previous wording
During the twelve months ended December 31, 2023 and 2022, our capital expenditures were $16,598 and $58,610, respectively. The decrease of $42,012 was driven by the completion of the capital investment in the Company’s Hazel Park, MI facility at the end of the prior year. Capital expenditures for the full year 2024 are expected to be between $15,000 and $20,000.
Current wording
During the twelve months ended December 31, 2024 and 2023, our capital expenditures were $12,098 and $16,598, respectively. The decrease of $4,500 was driven by the Company controlling its spend due to the end market demand softening. Capital expenditures for the full year 2025 are expected to be between $13,000 and $17,000.
Previous wording
We have historically relied upon cash available through credit facilities, in addition to cash from operations, to finance our working capital requirements and to support our growth. At December 31, 2023, we had immediate availability of $102,507 through our revolving credit facility and the availability of incremental facilities to the greater of $100,000 and 125% of the Company’s twelve month trailing Consolidated EBITDA through an accordion feature under our Credit Agreement, subject to the covenants under the Credit Agreement. We regularly monitor potential capital sources, including equity and debt financings, in an effort to meet our planned capital expenditures and liquidity requirements. Our future success will be highly dependent on our ability to access outside sources of capital. We will continue to have access to the availability currently provided under the Credit Agreement as long as we remain compliant with the financial covenants. Based on our estimates at this time, we expect to be in compliance with these financial covenants through 2024 and the foreseeable future.
Current wording
We have historically relied upon cash available through credit facilities, in addition to cash from operations, to finance our working capital requirements and to support our growth. At December 31, 2024, we had immediate availability of $170,275 through our revolving credit facility and the availability of incremental facilities to the greater of $100,000 and 125% of the Company’s twelve month trailing Consolidated EBITDA through an accordion feature under our Credit Agreement, subject to the covenants under the Credit Agreement. We regularly monitor potential capital sources, including equity and debt financings, in an effort to meet our planned capital expenditures and liquidity requirements. Our future success will be highly dependent on our ability to access outside sources of capital. We will continue to have access to the availability currently provided under the Credit Agreement as long as we remain compliant with the financial covenants. Based on our estimates at this time, we expect to be in compliance with these financial covenants through 2025 and the foreseeable future.
Previous wording
We believe that our operating cash flow and available borrowings under the Credit Agreement are sufficient to fund our operations for 2024 and beyond. However, future cash flows are subject to a number of variables, and additional capital expenditures will be required to conduct our operations. There can be no assurance that operations and other capital resources will provide cash in sufficient amounts to maintain planned or future levels of capital expenditures. In the event we make one or more acquisitions and the amount of capital required is greater than the amount we have available for acquisitions at that time, we could be required to reduce the expected level of capital expenditures and/or seek additional capital. If we seek additional capital, we may do so through borrowings under the Credit Agreement, joint ventures, asset sales, offerings of debt or equity securities or other means. We cannot
Current wording
We believe that our operating cash flow and available borrowings under the Credit Agreement are sufficient to fund our operations for 2025 and beyond. However, future cash flows are subject to a number of variables, and additional capital expenditures will be required to conduct our operations. There can be no assurance that operations and other capital resources will provide cash in sufficient amounts to maintain planned or future levels of capital expenditures. In the event we make one or more acquisitions and the amount of capital required is greater than the amount we have available for acquisitions at that time, we could be required to reduce the expected level of capital expenditures and/or seek additional capital. If we seek additional capital, we may do so through borrowings under the Credit Agreement, joint ventures, asset sales, offerings of debt or equity securities or other means. We cannot guarantee that this additional capital will be available on acceptable terms or at all. If we are unable to obtain the funds we need, we may not be able to complete acquisitions that may be favorable to us or finance the capital expenditures necessary to conduct our operations.
Previous wording
Capital expenditures for the full year 2024 are expected to be in-line with 2023 levels, between $15,000 and $20,000.
Current wording
Capital expenditures for the full year 2025 are expected to be between $13,000 and $17,000.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Current report — wording carried from elsewhere
Adjusted EBITDA represents EBITDA before CEO transition costs, loss on extinguishment of debt, Mid-States Aluminum (MSA) acquisition related costs, stock-based compensation expense, field replacement claim, legal costs due to former fitness customer, costs recognized on step-up of MSA acquired inventory, impairment of long-lived assets and gain on contracts specifically purchased to meet obligations under the agreement with our former fitness customer, Wautoma restructuring charges, Chief Operating Officer (COO) restructuring costs and gain on lawsuit settlement. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of net sales for each period.
Current report — wording carried from elsewhere
The following table presents a reconciliation of net cash provided by operating activities, the most directly comparable measure calculated in accordance with GAAP, to free cash flow for each of the periods presented.
Current report — wording carried from elsewhere
Investing Activities. Cash used in investing activities was $11,712 for the twelve months ended December 31, 2024, as compared to $104,132 for the twelve months ended December 31, 2023. The $92,420 decrease in cash used in investing activities was mainly due to the acquisition of MSA that used cash of $88,593 and was completed on July 1, 2023, along with a decrease in capital expenditures.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
other managerial employees and certain corporate level administrative expenses such as incentive compensation, audit, accounting, legal and other consulting and professional services, travel, and insurance.
Previous report — wording carried elsewhere
guarantee that this additional capital will be available on acceptable terms or at all. If we are unable to obtain the funds we need, we may not be able to complete acquisitions that may be favorable to us or finance the capital expenditures necessary to conduct our operations.