repurchases, together with bolt-on acquisitions that enhance our capabilities, reach and customer value proposition.”
“We remain on-track to achieve our full-year 2024 financial guidance, which includes expectations for year-over-year growth in sales, margin realization and free cash flow,” continued Reddy. “While the near-term demand outlook remains mixed across our diverse end-markets, MEC continues to outpace the broader market through a combination of continued share gains, value-based pricing and ongoing productivity improvements. With a strong first quarter behind us, we’re well positioned to deliver on plan as we move through 2024.”
PERFORMANCE SUMMARY
Net sales increased by 13.1% on a year-over-year basis in the first quarter 2024, driven in part by the acquisition of Mid-States Aluminum (MSA) in the third quarter of 2023 and increased organic volumes most notably in our powersports end market, showcasing the ability to gain market share in a down market, and our construction & access end market, partially offset by softening demand in our legacy agriculture end market and the foreseen roll-off of certain military aftermarket programs at the end of 2023.
Manufacturing margin was $20.9 million in the first quarter of 2024, or 13.0% of net sales, as compared to $16.4 million, or 11.5% of net sales, in the prior year period. The year-over-year increase in manufacturing margin was driven by the increased organic sales volumes, the MSA acquisition, MBX initiatives and commercial pricing initiatives.
Other selling, general and administrative expenses were $7.8 million in the first quarter of 2024 as compared to $7.0 million for the same prior year period. The increase in these expenses during the first quarter primarily reflects the increase in legal costs associated with litigation against the former fitness customer, incremental costs related to the acquisition of MSA, higher costs related to compliance requirements and annual wage inflation.
Interest expense was $3.4 million in the first quarter of 2024, as compared to $1.7 million in the prior year period, due to higher interest rates and an increase in borrowings. The increase in borrowings relative to the prior year is due to the acquisition of MSA, which closed on July 1, 2023.
Net income for the first quarter of 2024 was $3.2 million, or $0.16 per diluted share, versus $2.6 million, or $0.12 per diluted share, in the prior-year period.
MEC reported Adjusted EBITDA of $18.5 million in the first quarter of 2024, or 11.5% of net sales, versus $13.8 million, or 9.7% of net sales, in the prior-year period. The increase in Adjusted EBITDA and Adjusted EBITDA margin, when compared to the prior year, reflects the benefit of the MSA acquisition, continued execution of the Company’s MBX strategic initiatives, improved commercial pricing and higher volumes, partially offset by higher SG&A expenses.
First quarter Adjusted net income was $4.6 million, or $0.22 per diluted share, versus $3.5 million, or $0.17 per diluted share, in the prior year period. The increase in adjusted net income reflects an increase in income from operations, which was partially offset by higher interest expense and a higher tax rate.
Free cash flow during the first quarter of 2024 was $7.9 million as compared to ($8.5) million in the prior year period. The increase in free cash flow was primarily attributable to a $16.7 million increase in net cash provided by operating activities because of improved working capital efficiency.
