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- **Data Center Breakthrough**: $30M Q3 wins, $100M+ pipeline, targeting 20-25% of revenue by 2026 with 10+ pt margin premium.
- **Legacy Market Volatility**: CV down 24% YoY, ACT 2026 forecast 205k units vs. OEM 245k; agriculture -21.8% YoY.
- **Financial Discipline**: Q3 adj EBITDA 9.8%, free cash flow guidance $25-31M; net debt $214.9M (3.5x leverage).
- **Operational Flexibility**: 8-12 week data center project ramp vs. 12-24 months legacy; reallocating CV plant capacity.
- **2026 Outlook**: Data center margin expansion, CV recovery upside, and 20%+ EBITDA growth potential.

**【CEO Summary Section】**
- **Accu-Fab Integration Success**: $30 million in new data center and critical power awards in Q3, with a pipeline exceeding $100 million. Cross-selling wins include $25 million in legacy MEC plant utilization.
- **Data Center Growth**: Target for data center/critical power to represent 20-25% of total revenue by 2026, with gross margins 10+ percentage points above historical average (15-20%).
- **Legacy Market Challenges**: Commercial vehicle (CV) demand down 24% YoY, with ACT projecting 28% decline in 2025 Class 8 production. Agriculture sales declined 21.8% due to macroeconomic factors.
- **Operational Flexibility**: Rapid 8-12 week ramp-up for data center projects vs. 12-24 months for legacy programs; reallocating capacity from underutilized CV plants.
- **Free Cash Flow Management**: Q3 negative $1.1 million due to $3.5 million non-recurring costs; reaffirmed full-year free cash flow guidance of $25-31 million.

**【CFO Financial Commentary】**
- **Q3 Financials**: Total sales $144.3 million (+6.6% YoY), adjusted EBITDA margin 9.8% (vs. 12.6% YoY). Manufacturing margin rate 11% (12.6% YoY), impacted by $1.2 million restructuring costs.
- **Legacy Market Drag**: Organic net sales declined 9.1% YoY, driven by CV and agriculture softness. SG&A expenses up 25% YoY due to Accu-Fab-related costs.
- **Debt Position**: Net debt $214.9 million (3.5x leverage), targeting 3.0x or below by end-2026. Free cash flow expected positive in Q4, with debt reduction priority.

**【Q&A Highlights】**
- **Productivity Initiatives**: 2025 MBX programs reduced CV plant costs; anticipate margin expansion in 2026 as volumes recover.
- **Data Center Momentum**: 2026 pipeline includes $100+ million in qualified opportunities, with 1/3 new customer logos. Busway components and extrusion panels to be produced in legacy plants.
- **Legacy Market Outlook**: Conservative 2026 CV forecast (ACT 205k units vs. OEM 245-250k), but potential upside if demand exceeds expectations. Agriculture expects low single-digit decline.
- **CapEx Allocation**: 2026 CapEx $15-20 million, focused on data center program equipment. Minimal incremental capital needed beyond existing assets.
- **Margin Expectations**: Data center programs yield 30+ % gross margins; overall 2026 margin improvement contingent on CV recovery and data center ramp.

Mayville Engineering Company, Inc. (MEC) Q3 2025 Earnings Call Transcript

- **Strategic Acquisition**: Accu-Fab adds $8B TAM, with $5-10M revenue synergies in 2026 and $10-20M by 2028. 
- **Financial Update**: 2025 Sales $528-562M (-19.1% YoY), EBITDA $49-55M, Free Cash Flow $25-31M. 
- **Cost Management**: 130bps EBITDA margin expansion, $2M annual savings from facility consolidation. 
- **End Market Risks**: Commercial vehicle demand down 24%, no 2025/2026 pre-buy expected. 
- **Growth Drivers**: $60M of $100M new business wins, cross-selling into high-growth markets. 
- **Debt Repayment**: Target <2x leverage by end-2026, with $5-6M annual buybacks. 


**【CEO Summary Section】**
- **Accu-Fab Acquisition**: Completed in July, expanding serviceable addressable market to $8 billion. Expected $5-10 million revenue synergies in 2026, accelerating to $10-20 million by 2028. 
- **EBITDA Margin Expansion**: Sequential 130bps improvement to 10.3%, driven by cost management and lean initiatives. 
- **New Business Wins**: $60 million of $100 million annual target achieved, including cross-selling into data center and critical power markets. 
- **2025 Guidance Update**: Sales $528-562 million (down 19.1% YoY), Adjusted EBITDA $49-55 million, Free Cash Flow $25-31 million. 
- **Fixed Cost Reduction**: Consolidating 4 facilities to save $2 million annually, with $5-7 million one-time costs. 

**【CFO Financial Commentary】**
- **Q2 Results**: Net Sales $132.3 million (-19.1% YoY), Adjusted EBITDA $13.7 million (10.3% margin). Free Cash Flow $12.5 million (92% of EBITDA). 
- **Debt Position**: Pro forma net leverage 3.1x post-Accu-Fab, targeting <2x by end-2026. 
- **Cost Control**: $1 million-2 million annual savings from MBX initiatives, offsetting inflation. 
- **Capital Allocation**: $2.9 million share buybacks Q2, $4.6 million YTD, with $5-6 million annual target. 

**【Q&A Highlights】**
- **Accu-Fab Integration**: 30/60/180-day plan on track; $100 million+ revenue target by 2028. Cross-selling wins in data center and critical power. 
- **Commercial Vehicle Outlook**: ACT forecast 252k units (-24% YoY), no 2025/2026 pre-buy expected. Customers reducing capacity by 25-35%. 
- **End Market Trends**: Powersports inventory aligned, Construction/Ag stable, Military backlog sustainable. 
- **Margin Cadence**: 35%+ decremental in H2 due to volume decline, improving as demand recovers. 
- **Reshoring**: 92% domestic sourcing; tariffs driving $8.4 million MSA growth YTD. Steel fabrication pipeline >$280 million. 


Mayville Engineering (MEC)-6 Aug 25-2025 Q2 Earnings call transcript

- **Resilient Execution**: 12% sequential sales growth and 140bps margin expansion despite 15.9% YoY revenue decline.
- **Cash Flow Strength**: $5.4M free cash flow (44% conversion) and net leverage of 1.4x.
- **Guidance Confidence**: Maintaining FY2025 targets with $100M+ new business pipeline and Military/Other end market growth.
- **Risk Management**: Playbook for recession/EPA rule changes, with 95% domestic production shielding from tariffs.
- **Growth Catalysts**: Military (+mid-teens), Other (+high-teens), and $1-3M cost savings from MBX initiatives.
- **Shareholder Returns**: $1.7M Q1 buybacks, $17M remaining authorization for offsetting dilution.

**【CEO Business Overview】**
- Q1 2025 net sales decreased 15.9% YoY to $135.6M, driven by softer demand across key end markets (Commercial Vehicle -13.7%, Powersports -26.5%, Construction & Access -31.4%, Agricultural -26.9%).
- Despite macro challenges, achieved 12% sequential sales growth and 140bps margin expansion to 11.3% adjusted EBITDA margin.
- Generated $5.4M free cash flow (44% of EBITDA) and reduced net leverage to 1.4x.
- Maintaining FY2025 guidance of $560-590M net sales, $60-66M EBITDA, and $43-50M free cash flow.
- Key tailwinds: Military market growth (+mid-teens), Other end markets (+high-teens), and $100M+ new business pipeline (currently $35-40M booked).
- Risks: Regulatory uncertainty (EPA emissions rules), macroeconomic weakness, and inventory destocking.

**【CFO Financial Highlights】**
- Q1 2025 financials:
  - Total sales: $135.6M (-15.9% YoY)
  - Adjusted EBITDA: $12.2M (9% margin vs. 11.5% YoY)
  - Free cash flow: $5.4M
  - Debt: $80.6M (down from $143.1M YoY)
- FY2025 guidance includes $1-3M cost savings from MBX initiatives.
- Share buybacks: $1.7M in Q1, $9.6M total over 2 years, with $17M remaining authorization.

**【Q&A Key Takeaways】**
1. **Tariff & Reshoring Strategy**:
 - 95% of production and 92% of sourcing domestic, well-positioned for U.S. reshoring trends.
 - Potential 3-4 month timeline for new programs if structural tariffs emerge.
2. **Market Outlook**:
 - Commercial Vehicle: Flat-to-down low-single digits in 2025, with 2026 recovery driven by EPA 2027 compliance.
 - Agriculture: Down mid-20s in 2025, gradual recovery expected in 2026.
 - Powersports: Down mid-single to low-double digits, interest rate-dependent.
3. **M&A & Growth**:
 - Prioritizing end market diversification (e.g., Data Center, Electrical Infrastructure) and accretive acquisitions.
 - FY2025 M&A pipeline active, but disciplined on valuation.
4. **Contingency Planning**:
 - Playbook for recession and EPA rule changes, including flexible production scheduling and cost reductions.
- 2025 net leverage expected <1x if no M&A activity.


Mayville Engineering (MEC)-7 May 25-2025 Q1 Earnings call transcript

- **Revenue under pressure**: Q4 2024 revenue down 18.4% YoY due to channel destocking, with powersports (-29.1%) and agriculture (-46.5%) lagging.
- **Cash flow resilience**: Generated $78M free cash flow in 2024, reducing net debt to 1.3x and repurchasing $5.9M in shares.
- **2025 outlook**: H1 demand muted, H2 recovery expected. Guidance: $560M-$590M net sales, $60M-$66M adjusted EBITDA.
- **Tariff resilience**: <5% of inputs subject to tariffs, costs passed through to customers with no margin impact.
- **M&A focus**: Pursuing $50M-$150M deals in secular growth markets like data center infrastructure.
- **Profitability path**: 2026 EBITDA margin target of 14%-16% achievable via commercial vehicle recovery and operational efficiency.

**【CEO Summary Section】**
- **Revenue decline**: Q4 2024 revenue decreased 18.4% YoY to $121.3M due to channel inventory destocking and weaker demand across core markets (e.g., commercial vehicle -10.5%, powersports -29.1%).
- **Free cash flow strength**: Generated $78M in 2024 free cash flow (excluding $25.5M legal settlement), with $35.6M in Q4 alone. Reduced net leverage to 1.3x, below target range of 1.5x-2x.
- **Debt reduction & buybacks**: Repaid $31M in Q4, bringing total 2024 debt reduction to $67.9M. Repurchased $5.9M of shares, with $19M remaining under $25M authorization.
- **New business growth**: Booked $100M+ in new wins (+12% YoY), targeting less cyclical markets like industrial infrastructure and data centers.
- **2025 outlook**: Anticipate muted demand in H1 (channel destocking) with gradual recovery in H2. Full-year net sales guidance: $560M-$590M; adjusted EBITDA: $60M-$66M.

**【CFO Financial Commentary】**
- **Q4 financials**: Adjusted EBITDA of $9.2M (7.6% margin), down 430bps YoY due to lower sales and fixed cost absorption. Full-year 2024 adjusted EBITDA: $64.4M (11.1% margin).
- **2025 guidance**: Free cash flow of $43M-$50M driven by net working capital improvements. Capital expenditures: $13M-$17M for automation projects with <18-month payback.
- **Market-specific outlook**: Powersports (-low single digits), agriculture (-20-25%), construction & access (flat to low-single digits), commercial vehicle (flat to down).
- **Cost initiatives**: $1M-$3M of margin improvement from MBX efficiency programs and strategic pricing, net of inflation.

**【Q&A Key Takeaways】**
- **Tariff impact**: <5% of inputs subject to tariffs, primarily Canadian aluminum. Costs passed through to customers, no margin impact expected.
- **M&A strategy**: Targeting $50M-$150M revenue companies in secular growth markets (e.g., data center infrastructure). Pipeline active, but timing uncertain.
- **Profitability path**: 2026 EBITDA margin target of 14%-16% achievable via CV market recovery (38% of revenue) and operational efficiency gains. H2 2025 demand normalization key to margin expansion.
- **Free cash flow drivers**: Inventory turns improved to 9.1x (from 6.2x in 2022), supplier payment terms, and reduced capex.


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