speaker
Operator
Conference Call Operator

Lee, with Alam advisors to begin, please go ahead.

speaker
Stefan Neely
Investor Relations

Thank you, operator. On behalf of our entire team, I'd like to welcome you to our fourth quarter and full year 2024 results conference call. Leading the call today is MEXT president and CEO, Jack Reddy, Todd Butts, chief financial officer and Rachelle Lair, our chief human resources officer. Today's discussion contains forward looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the securities and exchange commission. Except as required by law, we undertake no obligation to update our forward looking statements. Further, this call will include the discussion of certain non-GAAP financial measures. Reconciliation of these measures to the closest GAAP financial measure is included in our quarterly earnings press release, which is available at mechink.com. Following our prepared remarks, we will open the line for questions. With that, I would like to turn the call over to Jack.

speaker
Jack Reddy
President and Chief Executive Officer

Thank you, Stefan, and good morning, everyone. During a period of softer demand within our core vertical markets, our team maintained focused execution in 2024. We delivered consistent profitability, disciplined networking capital management, and significant year over year growth in free cash flow generation when compared to 2023. Similar to the third quarter, our fourth quarter performance was impacted by lower customer program activity as OEM customers continue to drive normalization in channel inventory. Lower demand contributed to an 18% year over year decline in revenue, which resulted in reduced overhead absorption and lower utilization. During the first half of 2025, we anticipate that the ongoing softness in demand will persist across most of our end markets consistent with what we have seen during the second half of 2024. Based on current customer discussions, together with new projects and backlogs, we expect demand conditions to gradually recover during the second half of 2025. Our business development team is actively engaged in discussions with both new and current customers within high value emerging end markets, and particularly those that capture multi-year investable teams. These new opportunities, which include exposure to industrial infrastructure investments, such as the ongoing domestic data center build out, have the potential to increase our revenue base across growing, left cyclical end markets. Our business continues to generate strong pre-cash flow, positioning us to execute on our capital allocation strategy that includes continued debt reduction along with opportunistic repurchases of our common stock. In 2024, we generated pre-cash flow of nearly 78 million, including 25.5 million from a recently announced legal settlement. Excluding the settlement, organic pre-cash flow more than doubled versus 2023 levels. During the fourth quarter, we repaid more than 31 million in debt, reducing our net leverage to 1.3 times at the year end. This is well below our stated targeted net leverage ratio range of between one and a half times and two times by the end of 2024. As we have continued to reduce our net leverage ratio, we have been increasingly committed to a systematic approach to share repurchases under our existing $25 million authorization. To that end, during the quarter, we repurchased nearly $4 million worth of company common stock. For the full year 2024, we repurchased $5.9 million of company common stock, partially offsetting the dilution from the shares awarded in 2024 relating to our stock-based compensation program. With $19 million remaining under the existing authorization, we will continue to repurchase shares on a regular basis going forward. With respect to commercial growth, our team remains actively engaged in efforts to expand our serviceable market across both new and existing vertical. In 2024, we booked more than 100 million in new business wins, an increase of 12% year over year and remain focused on driving continued order growth across a broad array of end markets over the coming year. Importantly, even as current demand conditions have evolved, we have had no unexpected customer contract cancellation, a testament to the durability of our customer relationships. Looking ahead, we continue to seek diversification across less cyclical, higher value opportunities through a combination of existing business development activities together with targeted inorganic growth. Todd will discuss the outlook in more detail shortly, but I would highlight that our assumption is that entering 2025, customer demand will remain muted as channel inventory destocking continues. While each customer and end market are slightly different, we broadly expect that the inventory destocking trend will be a headwind for a year over year growth and margin expansion in the first half of the year. Current expectations are that customer channel inventories will begin to normalize entering the third quarter. Consequently, we anticipate that we will begin to experience rateable demand improvement during the second half of 2025 relative to the first half. Turning now to a more detailed review of market conditions across our primary end markets. Let's begin with our commercial vehicle market, which represents approximately 38% of our trailing 12 month revenues. During the fourth quarter, commercial vehicle revenue decreased by .5% on a year over year basis. Our net sales to this end market were relatively comparable to the broader commercial vehicle market as evidenced by a reported .4% year over year decrease in North American class eight truck production according to ACT research. As we look forward into 2025, ACT research currently forecast that class eight vehicle production to decrease .8% year over year in 2025 to approximately 316,000 units. Strength in vocational truck demand and continued demand in truck orders suggests leads to preparing for 2027 EPA regulation. These factors are driving demand to modestly increase through most of 2025 prior to a recovery in 2026. The latest forecast shows ACT projecting 2026 full year demand to increase by .7% relative to 2025. The power sports market represented approximately 17% of our trailing 12 month revenues and decreased by .1% on a year over year basis in the fourth quarter. Performance during the quarter continues to be driven by customer channel inventory destocking, soft consumer demand due to elevated financing rates and production cuts. This was partially offset by the impact of incremental volumes from new project startups. Given the current market conditions, we anticipate elevated rates will continue to weigh on demand. However, new product launches should provide incremental improvements to our performance. Next is the construction and access market, which represented approximately 16% of our trailing 12 month revenues. Construction and access revenues decreased .5% on a year over year basis in the fourth quarter. This reflects continued soft demand across both non-residential and public infrastructure markets. We expect demand to remain soft through the first half of 2025. Entering the second half of 2025, we anticipate demand to increase based upon increased activity in public infrastructure and non-residential construction. Our agricultural market represented approximately 8% of trailing 12 month revenues and decreased by .5% on a year over year basis during the fourth quarter. Our results reflect weakness in both large and small agricultural markets. The outlook remains uncertain due to interest rates, continued inventory destocking and crop prices. Due to these factors, we are not anticipating a recovery until 2026. Turning now to an overview of substantial new business wins during the fourth quarter. We have continued to expand our share with our commercial vehicle customers as they launch their next generation models leading into the EPA regulation changes. Many of these products support future growth launching in 2026 and 2027. We are continuing to see growth in our thermal management market share, picking up additional new products during the quarter as our customer continues to grow their market share. We remain focused on diversifying our end markets by targeting content related to power generation, supporting the rapid expansion of data centers. In the quarter, we secure a new aluminum extrusion program with one of our large PowerSports customers. This program leveraged existing relationships at MEC and will lead to future growth over the coming years. We have continued to gain additional market share with our access customer as they evaluate their global supply base. Our US manufacturing plants located in close proximity to customer facilities continue to provide the best value in their supply chain as they look to increase their volumes. Our sales team is continuing to prioritize the diversification of our end market exposure and customer base. As we have mentioned before, we are in active discussions with new and existing customers to support potential programs in the data center space, including but not limited to cooling, electrical infrastructure, and standby power applications, which could come into fruition in the next 12 to 18 months. As before, our MVX framework continues to guide our value creation priorities. Even as demand conditions remain soft, we continue to deploy targeted initiatives around strategic pricing, commercial growth, and capital efficiency that over time have positioned MEC to outperform the broader market. Since September, 2022, our team has completed over 275 MVX Kaizen events. As a result of these events, the company was able to reduce its legacy manufacturing square footage space by 5% and headcount by 12% along with removing over $5 million in other costs. Additionally, the success of our MVX efforts were evident in our robust free cashflow generation. During the fourth quarter, our free cashflow was over 35 million. Even when excluding the recent 25.5 million settlement with a former fitness customer, our free cashflow conversion for the quarter exceeded 100% of our -be-done. The strength in our free cash conversion is owed to improving efficiency and networking capital management. This execution positions us for long-term improvement in our financial profile to drive sustainable shareholder value throughout the cycle. We are positioning ourselves to become a leaner, more efficient organization equipped to capitalize on a future demand recovery. Our healthy financial position enables our team to focus on executing our long-term strategy. We will remain disciplined in our capital allocation, prioritizing debt repayment, opportunistic share repurchases, and the creative strategic acquisitions. M&A remains a key part of our long-term strategy as we look to accelerate our expansion into high-growth adjacent end markets. Our team has built a pipeline of acquisition targets that meet our criteria. While we plan to pursue M&A, building on our market-leading capabilities, we will remain disciplined and ensure that we are positioned to capitalize on multi-year secular growth trends in front of us. Finally, I would like to briefly comment on our longer-term outlook. As we first highlighted at our 2023 -A-Day, MEC has been on a multi-year value creation journey, one that prioritizes a combination of commercial growth, operational discipline, and high-return capital deployment. Since that time, we have demonstrated the organic growth potential of the business, realized sustained operational efficiencies, and continue to deploy capital through a combination of reinvestment in the business and share repurchases. While our team has successfully executed on our strategic plan, demand conditions within our core markets have been challenged and remain in flux. While a recovery in the second half of 2025 is likely, given what we see from our customers today, the pace of a full demand influxion could take longer. We remain committed to the targets introduced back in 2023. However, the precise timing of achieving those targets remains subject to how demand conditions shape or determine quarters. Our 2025 guidance reflects our customer conversation and the MBX-related efficiencies that we continue to realize across the organization. I am confident that the actions we have taken to reposition the business during a transitional period have created a foundation for growth that will deliver value to our shareholders over the long term. Before I turn the call over to Todd, I want to thank him for his hard work and dedication in leading and building a strong finance organization. Todd's leadership has been instrumental in MEXT growth for the past 17 years, and we wish him well in his next chapter. With that, I will now turn the call over to Todd to review our financial results.

speaker
Todd Butts
Chief Financial Officer

Thank you, Jag. I'll begin my prepared remarks with an overview of our fourth quarter in four-year financial performance, followed by an update on our balance sheet and liquidity, and I will conclude with a discussion of our 2025 guidance. Total sales for the fourth quarter decreased .4% on a -over-year basis to $121.3 million. The decline in net sales is driven by customer de-stocking activities and weaker end-user demand, which was partially offset by new project launches. Our manufacturing margin was $10.8 million in the fourth quarter, as compared to $18.2 million in the same prior year period. The decrease was primarily driven by the corresponding decline in net sales. Our manufacturing margin rate was .9% for the fourth quarter of 2024, as compared to .3% for the prior year period, or a decrease of 340 basis points. The decrease in our manufacturing margin rate reflects the impact of lower fixed cost absorption from lower customer sales, fewer working days in the quarter, and the completion of cost reduction activities that will yield due to our margin benefit. Other selling, general, and administrative expenses were $7.9 million for the fourth quarter of 2024, as compared to $7.2 million in the same prior year period. The increase was primarily driven by higher costs related to compliance requirements and annual wage inflation, partially offset by a reduction in legal expenses relating to our former fitness customers. Insurance expense was $2 million for the fourth quarter of 2024, as compared to $3.6 million in the prior year period due to a reduction in borrowings relative to the fourth quarter of last year. The decrease of $67.9 million in borrowings over the past year reflects our continued strong pre-cash flow generation. Adjusted EBITDA for the fourth quarter was $9.2 million versus $17.7 million for the same prior year period. Adjusted EBITDA margin decreased by 430 basis points to .6% in the current quarter, as compared to .9% in the same prior year period. Our fourth quarter adjusted EBITDA margin was a low point in the cycle and should begin to improve sequentially as we enter 2025. Now I'd like to provide a brief summary of our full year 2024 year's results. Net sales for the full year were $581.6 million, a decrease of .2% as compared to the prior year. Our 2024 manufacturing margin was $71.1 million, as compared to 69.7 million in 2023. This reflects a manufacturing margin rate of .2% or an increase of 40 basis points as compared to .8% in 2023. 2024 adjusted EBITDA was $64.4 million, as compared to 66.1 million in 2023, which resulted in adjusted EBITDA margin for 2024 of .1% as compared to .2% in 2023. Turning now to our statement of cash flows and balance sheet. Pre-cash flow during the full quarter of 2024 was $35.6 million, as compared to $19.9 million in the prior year period. The increase in pre-cash flow as compared to the prior year reflects the $25.5 million received from the recently announced legal settlement and our continued focus on networking capital efficiency. As of the end of the fourth quarter of 2024, our debt, which includes bank debt, financing agreements, and finance lease obligations was $82.3 million, as compared to $150.2 million at the end of the fourth quarter of 2024, resulting in a net leverage ratio of just under 1.3 times at year end. Now turning to a review of our 2025 financial guidance. For 2025, we now expect the following. Net sales are between $560 million and $590 million. Adjusted EBITDA are between $60 million and $66 million. And pre-cash flow is between $43 million and $50 million. Please note that our midpoints assume demand conditions gradually recovered during the second half of 2025 as customer destocking activities and consumer demand normalize. Additionally, embedded in this guidance is the following view of our current end market as compared to 2024. Commercial vehicle, flat to slightly down. Construction and access, flat to a low single digit increase. Power sports, low single digit decrease. Agriculture, low to mid 20th percentile decline. Military, comparable to the prior year. And other end markets, low to mid single digit increase. Due to its high interest rate sensitivity and current channel inventory levels, we believe our power sports market bears the most uncertainty. If our end markets were performed below these expectations, we would push our guidance to the lower end of the range. Conversely, the second half market conditions improve at a faster pace than expected. We would anticipate to be near the higher end of our guidance. But given the uncertainty of the current demand cycle, we will continue to monitor and report throughout the year any material changes to this outlook. Furthermore, embedded within our 2025 Adjusted EBITDA guidance is $1 to $3 million of cost improvement driven by our MBX operational excellence and strategic value-based pricing initiative, Net of Inflationary Pressure. As it relates to pre-cash flow guidance, we expect that our capital expenditures for the year will be in a range of between $13 million and $17 million. And we'll continue to focus on high return, capital-led automation advancement with payback periods of less than 18 months. Further supporting our planned growth and increasing efficiency. Based on our pre-cash flow guidance and excluding any M&A activity, we expect to be below one-times net debt leverage by year-end. Lastly, I would like to reiterate that our financial position enables the team to focus on executing our long-term strategy. We will remain disciplined in our capital allocation prioritizing debt repayment, opportunistic share repurchase, and a creative strategic acquisition, positioning the company to capitalize in the multi-year secular growth trend ahead of us. With that, operator, that concludes our prepared remarks. Please open the line for questions as we begin our question and answer session.

speaker
Operator
Conference Call Operator

Thank you. If you wish to ask a question, please press style followed by one on your telephone keypad now. If for any reason you want to remove your question from the queue, please press style followed by two. When preparing to ask a question, please ensure your device is unmuted locally. Our first question comes from Ross Sparrenbleck from William Blair. Your line is now open. Please go ahead.

speaker
Sam Carlovon
Analyst, William Blair

Hey, good morning. This is Sam Carlovon for Ross. Thanks for taking my questions. Morning, Sam. I want to touch on your margin guidance for 2025. I know you'd plan to use your plant shutdowns in the fourth quarter as an opportunity to execute on some additional MBX initiatives. I was wondering if you could update us on the progress that you've made and then give us a sense of how much of this progress is contemplated in your 2025 margin guidance.

speaker
Todd Butts
Chief Financial Officer

Yeah, as it relates to Q4, certainly we had a lot of activity. We closed a facility. And like we indicated on our remarks, that is the low point. When you look at 2025, we anticipate one to three million of improvement driven by MBX as well as pricing. And that is net of inflation. So you got to keep that in mind. The gross number is a bit higher. But that impact is somewhat muted, meaning that our volume in the first half continues to be in a depressed situation, our low point. And so the pull through when you think about all these MBX and cost savings initiatives, it's a little bit muted. And so as we begin in the second half and even into 25, all these cost initiatives that we've done, we'll really, we'll see the benefit of that. And that pull through in a much more substantial manner as we enter 20, the back half of 25 and into 26.

speaker
Jack Reddy
President and Chief Executive Officer

Just to add to that, Sam, we conduct a significant number of MBX Kaizen's in Q4, as we indicated in our prepared remarks. We also started Q1 with significant activity in many of our plans. We continue to drive cost reduction, productivity improvement projects across our plant network. We have not put out the gas pedal, I guess. We continue to drive additional productivity measures across the enterprise.

speaker
Sam Carlovon
Analyst, William Blair

Got it, that's super helpful. And then given your 2025 guidance does not reflect any impact from tariffs, can you help us frame where the company's most exposed to potential tariffs from an end market perspective? And then I know the situation is still fluid, but maybe help us frame the sensitivities, what the sensitivities could look like if the proposed tariffs remained in place for an extended period of time.

speaker
Jack Reddy
President and Chief Executive Officer

Absolutely, first I wanna remind everyone that we are as pure play domestic manufacturer as it can get. All of our manufacturing footprint is US based. 95% of our inputs are domestically sourced. Less than 5% of our inputs, i.e. hardware, some casting, some forgings, aluminum, et cetera, are subject to any potential tariffs. So if you think about that, within that 5% or less, majority of that is really the aluminum we get from Canada. And all of our steel and aluminum costs are passed through to our customers. So we're pretty confident that the current tariff regime, at least what was announced yesterday, will have limited impact on MEC as a whole. Of course, we will continue to try to mitigate any impact on our customers by finding additional sources, alternative sources to reduce any tariff impact, but on the steel and aluminum as a whole, it is a pass through expense for us. So we don't expect any dollar margin impact from these tariffs, but obviously if the steel prices go up, aluminum prices go up, that'll have a impact on our margin percentage rather than dollar impact.

speaker
Sam Carlovon
Analyst, William Blair

Got it, that's helpful. I'll leave it there, thanks guys. Thanks, Anne.

speaker
Operator
Conference Call Operator

Thank you. Our next question is from Ted Jackson from Northland Capital Markets. Your line is now open, please go ahead.

speaker
Ted Jackson
Analyst, Northland Capital Markets

Thanks very much. Hey, Todd, first of all, I wanna tell you that I'm sad that you're leaving. I've really enjoyed working with you and I look forward to hopefully keeping in touch and the great things that you're gonna do with the rest of your life. Thanks, Ted, I appreciate that. The question, I have a couple of questions. So one of them is, you talk fast and I write slow, can you provide the guidance you gave for Power Sports and Ag again,

speaker
Todd Butts
Chief Financial Officer

please? Power Sports, we had the market declining more single digits, and then Ag, we had in the 20th percentile decline, meaning 20 to 25% view over a year. Does that clarify

speaker
Ted Jackson
Analyst, Northland Capital Markets

your point or questions? That is it, that is it. Then jumping over to tariffs, is there a case to be made that over the longer term that the change in tariff structures could be good for you? And where I'm going with that is as many of your customers might be forced to bring some of the manufacturing that they do overseas back into this country that they're gonna need partners like Mayville to make that kind of stuff. And does that resonate with you? Have you had any kind of dialogue with any of your customers or any potential customers as they start rethinking their supply chains and how they might be able to reconfigure them to meet this kind of new dynamic that Trump is bringing into force?

speaker
Jack Reddy
President and Chief Executive Officer

Yeah, Ted, great question. We've said this before, there are parts of our end markets and customers that have the flexibility to outsource to low-cost countries and regions. And primarily those components are in the Power Sports market. We've seen some of our customers go to Asia, as an example, or Mexico to manufacture some of these components. So we do anticipate if these tariffs stick, we don't know, right? It changes day to day, hour to hour. But if these tariffs stick, we do expect some level of return to the US. So we will be a beneficiary of that trend if the tariffs remain. At the same time, we have seen a reasonable amount of interest from many of our existing customers to start thinking about completely changing, or at least dual sourcing, their components to US manufacturers like Mac. We have seen increased activity on our coding team, and we anticipate that we'll be, in the long run, a tailwind for Mac.

speaker
Ted Jackson
Analyst, Northland Capital Markets

Yeah, that's how I would think about it myself. I understand those disruptions, but I think over the longer term, anything is probably a positive for the company. Third question, just kind of, when you gave the three cashflow guides, 425, it's a, honestly, it's a robust number. I wonder if you could kind of walk through some of the mechanics to how that you're getting there. I assume a lot of it's working capital oriented. How are you driving that free cashflow guidance? And then I have one more follow up after that, I believe.

speaker
Jack Reddy
President and Chief Executive Officer

Yeah, I'll start and then pass it on to Todd. In end of 2022, Ted, we had 6.2 turns of inventory performance. We ended 2024 at 9.1 turns of inventory. That just shows you the power of MBX, and then how we are driving down our working process, inventories, and our planning of our raw material purchases, et cetera. So net working capital reduction has been a huge lever for us, in addition to working with our customers and our suppliers to change payment terms. So those are some of the actions that we have taken over the last couple of years to drive this level of performance. And we continue to drive similar activities going into, are coming into 2025.

speaker
Todd Butts
Chief Financial Officer

And as Jake mentioned, I mean, certainly working capital is a big driver, and that really is the result of MBX initiative. But not only inventory, but as Jake mentioned, our terms with suppliers, we've changed things with our customers to collect quicker. In addition to that, we've also, we're reducing a bit on our capital expenditure, 13 to 17 million versus last year. So all those factors are playing into why we expect to be at that 72 to 76% conversion rate as it relates to 2025. Certainly, the first quarter will probably be a bit muted, but you'll see, as we historically have done, you'll see quarters two, three, and four, we'll see that nice pre-cash flow generation.

speaker
Ted Jackson
Analyst, Northland Capital Markets

Okay, and then my last question, just on the M&A side, I know it's something, you talk about it a lot, it's nice to know that you have a good pipeline in place. The balance sheet is as strong as it's been in years, you're below target in terms of your leverage. I have to imagine that some of the market dynamics that are impacting the top line are hopefully impacting some of the evaluation metrics for the targets that you have on that list. Can you talk a little bit about the areas that, kind of when you look at that list, like I guess I go to the areas that are kind of the higher on the list in terms of the possibilities, the likelihood we see something in 25, and what you're seeing in terms of kind of target values for the kind of acquisitions that you're looking at. How about that, and size maybe, thanks. That's my last one.

speaker
Jack Reddy
President and Chief Executive Officer

Yeah, as we laid out last quarter, I believe, our targeted range would be somewhere between 50 and 150 million dollars in revenues, and we want these acquisitions to be margin-accretive on day one and provide market diversification for us. As we have mentioned, many of our end markets are highly cyclical, so we're looking for a more secular growth end markets. So some of them we'll include, and we're actively pursuing them, are in the power infrastructure, standby power, related to new investments in data centers, and similarly, long-term, highly profitable, and growth-oriented end markets. So having said that, we can never predict the timing of any of these transactions. Our M&A team continues to be very active, engaging with potential targets, working with investment banks, and continuing to generate our list of relevant targets based on our framework. At the same time, we have not seen any changes to the multiples. I would say that the multiples have been stable. Part of the reason is the interest rate regime, which remains high, helps us in terms of multiples, even though our interest expense might be higher, but certainly, our purchase price will be slightly lower given the current interest rate regime we're having to deal with.

speaker
Ted Jackson
Analyst, Northland Capital Markets

Okay, all right, well, thanks for the time. Talk to you soon.

speaker
Jack Reddy
President and Chief Executive Officer

Thanks, John.

speaker
Operator
Conference Call Operator

Thank you. As a reminder to ask a question, is that a star followed by one on your telephone keypad? Our next question is from Andy Kaplewitz from Citi. The line is now open. Please go ahead.

speaker
Jose (on behalf of Andy Kaplewitz)
Citi Analyst

Hey, good morning, guys. This is actually Jose on for Andy.

speaker
Jack Reddy
President and Chief Executive Officer

Hi, good morning. Morning,

speaker
Jose (on behalf of Andy Kaplewitz)
Citi Analyst

Luis. Both on your release and during the call, you've mentioned the muted demand conditions and the expectation for the first half to be weaker and for gradual improvements in the second half. Would you comment though on how you're seeing the path to the 14 to 16% EBITDA margin targets you had set at your investor day when your 25 guidance at the midpoint looks to be around 11% and obviously with the understanding that revenues haven't really grown at the levels you had initially expected back then?

speaker
Jack Reddy
President and Chief Executive Officer

That's a great question. As we mentioned in our prepared remarks, we continue to see the 2023 investor date targets for 2026 as achievable. At the same time, the current base business needs to come back to a normalized level. So those targets are based on those assumptions. Given the current market conditions, we are expecting the timeline of achievement of those targets will take a little longer. At the same time, we continue to drive significant productivity within our manufacturing network. And 2026, the CV and market will be much higher than 2025. That's a significant volume, given it is 38% of our overall sales. Higher volumes will help us absorb better and volume leverage will help us get into that range in 2026.

speaker
Todd Butts
Chief Financial Officer

And the other comment I would make was as you look at our annual 2025 guidance, not to look at it in a silo, meaning we talked about first half, second half, and this really is a first half versus second half story. We expect volumes to be down in the first half as we stated, and that's gonna have an impact on our margin rate. So we look at first half, we're probably in that eight to 10% range, but second half, we're going to that 11, 13% range. And so when you think about how that margin cadence and buildup as we enter 2026, we still see a very solid pathway to achieving that 14 to 16%. It's really just a market volume dependent timing situation.

speaker
Jose (on behalf of Andy Kaplewitz)
Citi Analyst

I appreciate the color, guys. And then just as a follow-up, I did want to touch on Hazel Park and see if you could provide us an update on how that ramp has been progressing for you guys. Sort of exit run rate that you closed 2024 with and how should you be thinking about revenues in 2025 versus 2024?

speaker
Jack Reddy
President and Chief Executive Officer

Yeah, nothing has changed with our expectations of Hazel Park. Certainly current end market demand has impacted top line sales, but we remain on track with our new product launches and that we're well positioned to meaningful bottom line improvements as markets recover.

speaker
Jose (on behalf of Andy Kaplewitz)
Citi Analyst

Got it. Thanks for the time, everyone.

speaker
Jack Reddy
President and Chief Executive Officer

Thank

speaker
Jose (on behalf of Andy Kaplewitz)
Citi Analyst

you.

speaker
Operator
Conference Call Operator

Thank you. Thank you. We currently have no further questions. I'll hand back to Jack Ready for closing remarks.

speaker
Jack Reddy
President and Chief Executive Officer

Once again, thank you for joining our call. We appreciate your continued support of MEC and we look forward to updating you on our progress next quarter. Should you have any questions, please contact Noel Ryan or Stefan Neely at Valum, our Investors Relations Council. This concludes our call. You may now disconnect.

speaker
Operator
Conference Call Operator

Thank you for joining. You may now disconnect your lines.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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