Mayville Engineering Company, Inc. (MEC) has entered into a definitive agreement to acquire Accu-Fab, LLC from the strategic holding company, Tide Rock.Expected to close during the third quarter of 2025, upon the satisfaction of customary closing conditions, the total value of the buyout stands at $140.5 million.MEC stock grew 5.2% during yesterday’s trading hours after the acquisition announcement.How Will the Accu-Fab Acquisition Benefit Mayville?Accu-Fab is a vertically integrated contract manufacturer t ...

Summary of Mayville Engineering Company (MEC) Acquisition Call Company and Industry - **Company**: Mayville Engineering Company (MEC) - **Acquired Company**: AccuFab LLC - **Industry**: Metal fabrication solutions, focusing on high growth end markets such as critical power infrastructure, data centers, and renewable energy Key Points and Arguments 1. **Acquisition Details**: MEC announced the acquisition of AccuFab for a total cash consideration of $140.5 million, with customary adjustments expected to close in Q3 2025 [4][5][13] 2. **Strategic Fit**: AccuFab is a vertically integrated provider, enhancing MEC's geographic footprint and allowing for better service to customers in high growth markets [4][5] 3. **Cultural Alignment**: AccuFab's technology-forward approach and strong innovation track record complement MEC's operations [5] 4. **Financial Impact**: The acquisition is expected to be immediately accretive to adjusted EBITDA, margin, and earnings per share, with projected revenues of $28 million to $32 million and adjusted EBITDA of $6 million to $8 million in the second half of 2025 [14][15] 5. **Operational Synergies**: MEC anticipates generating approximately $1 million in annual cost synergies by 2026 through the implementation of its MBX Lean manufacturing framework [10][11] 6. **Market Diversification**: The acquisition allows MEC to diversify into less cyclical, high-growth markets, moving away from its legacy focus on wheeled mobility platforms [8][9] 7. **Revenue Synergies**: MEC estimates potential revenue synergies of $3 million to $5 million over the next 24 months, with further upside as customer relationships deepen [10] 8. **Capacity Utilization**: AccuFab is currently operating at 50-60% capacity, providing an opportunity for MEC to drive incremental volume and growth [11][61] 9. **Customer Base**: AccuFab's top 10 customers account for approximately 75% of its revenue, with limited overlap with MEC's existing customer base [33] 10. **Debt Management**: MEC plans to prioritize free cash flow generation to reduce net leverage from approximately three times to 1.5-2 times within 18 months post-acquisition [15][39] Additional Important Information - **Integration Timeline**: The initial integration process is expected to take about six months [6] - **Management Retention**: The current management team at AccuFab will remain post-acquisition, facilitating a smoother integration process [50] - **CapEx Requirements**: Expected annual capital investment for AccuFab is projected to be between $2 million and $3 million, aligning with MEC's previous guidance [39] - **Market Growth**: The data center and critical power markets are projected to grow by 20% from 2023 to 2024, making them attractive for MEC's expansion [25] - **Competitive Landscape**: AccuFab operates in a competitive environment with significant players, but its 95% sole-source revenue indicates strong customer reliance [71] This summary encapsulates the key aspects of the acquisition call, highlighting the strategic rationale, financial implications, and operational plans associated with the acquisition of AccuFab by Mayville Engineering Company.

MEC ACQUISITION OF ACCU-FAB MAY 27, 2025 SAFE HARBOR STATEMENT Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: This presentation contains statements that are forward-looking in nature which express the beliefs and expectations of management including statements regarding the Company's expected results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Mayville Engineering (MEC) as a strong stock opportunity based on various valuation metrics. Group 1: Value Investing - Value investing is a preferred strategy for identifying strong stocks, utilizing fundamental analysis and traditional valuation metrics to find undervalued stocks [2] - The Zacks Rank and Style Scores system can help investors identify stocks with specific traits, particularly in the "Value" category [3] Group 2: Mayville Engineering (MEC) Valuation Metrics - MEC has a Zacks Rank of 2 (Buy) and an A for Value, with a Forward P/E ratio of 13.31, significantly lower than the industry average of 19.17 [4] - The P/B ratio for MEC is 1.24, compared to the industry's average of 3.49, indicating a solid valuation [5] - MEC's P/S ratio stands at 0.56, well below the industry's average of 1.37, suggesting strong revenue performance [6] - The P/CF ratio for MEC is 5.20, much lower than the industry's average of 14.45, indicating an attractive valuation based on cash flow [7] - These metrics collectively suggest that MEC is likely undervalued, supported by a strong earnings outlook [8]

Group 1 - The core viewpoint is that Mayville Engineering (MEC) is showing solid improvement in earnings estimates, which may lead to continued stock price momentum [1][2] - The rising trend in estimate revisions reflects growing analyst optimism regarding the company's earnings prospects, which is expected to influence its stock price positively [2][3] - The Zacks Rank system indicates that Mayville Engineering has a favorable ranking of 2 (Buy), suggesting strong potential for outperformance compared to the S&P 500 [8] Group 2 - For the current quarter, Mayville Engineering is expected to earn $0.10 per share, a decrease of 44.44% from the previous year, but the Zacks Consensus Estimate has increased by 300% due to positive revisions [6] - For the full year, the expected earnings are $0.72 per share, representing a decline of 41.94% from the prior year, yet there has been a positive trend in estimate revisions [7] - Over the past four weeks, Mayville Engineering shares have increased by 23.9%, indicating investor confidence in the company's earnings growth prospects [9]

Financial Performance - Net sales for the three months ended March 31, 2025, were $135,579, a decrease of $25,690 or 15.9% compared to $161,269 for the same period in 2024, driven by lower customer demand and inventory destocking [114]. - EBITDA for the three months ended March 31, 2025, was $11,060, a decrease of $5,825 or 34.5% compared to $16,885 in 2024 [114]. - Adjusted EBITDA for the same period was $12,161, down $6,360 or 34.3% from $18,521 in 2024 [114]. - Net income and comprehensive income for the three months ended March 31, 2025, was $20, a decrease of $3,221 or 99.4% compared to $3,241 in 2024 [114]. Margins and Expenses - Manufacturing margins decreased to $15,324 for the three months ended March 31, 2025, down $5,609 or 26.8% from $20,933 in 2024, primarily due to lower customer demand [115]. - Manufacturing margin percentage decreased to 11.3% for the three months ended March 31, 2025, down from 13.0% in 2024, reflecting reduced ability to absorb fixed costs [116]. - Other selling, general and administrative expenses increased to $8,689 for the three months ended March 31, 2025, an increase of $920 or 11.8% compared to $7,769 in 2024, mainly due to wage inflation and higher compliance costs [118]. - The provision for income taxes was ($10) for the three months ended March 31, 2025, a decrease of $1,044 from $1,034 in 2024, primarily due to lower income before taxes [120]. Cash Flow and Investments - Free cash flow for the three months ended March 31, 2025, was $5,371, a decrease of $2,479 or 31.6% compared to $7,850 in 2024, primarily due to lower cash provided by operating activities [112]. - Net cash provided by operating activities decreased by 22% to $8,333 million for the three months ended March 31, 2025, compared to $10,625 million in the prior year [122]. - Cash used in investing activities increased by 11% to $2,959 million for the three months ended March 31, 2025, driven by higher capital expenditures [123]. - Cash used in financing activities decreased by 35% to $5,397 million for the three months ended March 31, 2025, primarily due to lower debt repayments [124]. - Capital expenditures for the three months ended March 31, 2025, were $2,962 million, a marginal increase of $187 million compared to $2,775 million in the prior year [132]. Debt and Credit - Interest expense decreased to $1,567 for the three months ended March 31, 2025, down $1,789 or 53.3% from $3,356 in 2024, attributed to reduced borrowings and lower interest rates [119]. - The interest coverage ratio was 4.93 to 1.00 as of March 31, 2025, exceeding the required minimum of 3.00 to 1.00 [129]. - The consolidated total leverage ratio was 1.39 to 1.00 as of March 31, 2025, below the maximum limit of 3.50 to 1.00 [129]. - The company had $172,521 million available under its revolving credit facility as of March 31, 2025 [127]. Future Outlook and Risks - The company expects full-year capital expenditures for 2025 to be between $13,000 million and $17,000 million [132]. - A hypothetical 100-basis-point increase in interest rates would result in an additional $0.2 million of interest expense based on variable rate debt as of March 31, 2025 [140]. - The company has no commodity hedging instruments in place as of March 31, 2025, exposing it to price fluctuations in raw materials [141].

Mayville Engineering Company (MEC) Q1 2025 Earnings Call May 07, 2025 10:00 AM ET Company Participants Stefan Neely - PartnerJag Reddy - President, CEO & DirectorRachele Lehr - CFONatalia Bak - Equity Research Senior Associate Conference Call Participants Ross Sparenblek - Equity Research AnalystEdward Jackson - MD & Senior Research Analyst Operator Hello, everyone, and thank you for joining the Mayville Engineering Company First Quarter twenty twenty five Earnings Call. My name is Sami, and I'll be coordin ...

Financial Data and Key Metrics Changes - Total sales for Q1 2025 decreased by 15.9% year over year to $135.6 million, attributed to softer customer demand and inventory destocking [21][22] - Adjusted EBITDA for Q1 was $12.2 million, down from $18.5 million in the prior year, with an adjusted EBITDA margin of 9% compared to 11.5% [23][24] - Free cash flow for the quarter was $5.4 million, down from $7.9 million in the prior year [24] Business Line Data and Key Metrics Changes - Net sales to the commercial vehicle market decreased by 13.7% year over year to $50.9 million, outperforming the broader market by 300 basis points [7] - Powersports market revenue decreased by 26.5% year over year, driven by inventory destocking and soft demand [9] - Construction and access market revenue decreased by 31.4% year over year, reflecting weak demand across non-residential and public infrastructure markets [10] - Agricultural market revenue decreased by 26.9% year over year, with uncertainty in demand due to interest rates and inventory destocking [11] Market Data and Key Metrics Changes - The commercial vehicle market is expected to see a decrease of 22.9% in production in 2025, with a potential recovery in 2026 [7][8] - The military market is projected to increase by mid-teens, while other end markets are expected to see high-teens growth [27] - The agriculture market is anticipated to decline by mid-twenties percentage in 2025, with a gradual recovery expected in 2026 [27][66] Company Strategy and Development Direction - The company is maintaining its full-year guidance, driven by strong execution and demand in less cyclical military and other end markets [5] - The focus remains on operational efficiency and cost discipline through the MBX framework, which has contributed to margin improvements [4][14] - M&A activity is a cornerstone of the company's strategy to diversify its customer base and expand into high-growth adjacent markets [17][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to expand market share despite a dynamic macroeconomic environment [19] - The company is closely monitoring regulatory and macroeconomic developments that could impact demand in the second half of the year [5][27] - A contingency plan has been developed to manage potential demand shifts and maintain profitability [19][28] Other Important Information - The company repurchased $1.7 million of common stock during the quarter, with a commitment to return capital to shareholders [16] - The company expects to be below one times net debt leverage by the end of 2025, excluding M&A activity [15][29] Q&A Session Summary Question: What is the outlook for end markets in the second half? - Management indicated a slight uptick in the commercial vehicle market in the second half, driven by potential regulation changes and pre-buys [31][32] Question: Are there opportunities related to tariffs and reshoring? - Management noted ongoing discussions with customers regarding tariffs and reshoring, with a strong domestic sourcing position [33][36] Question: What is the expected recovery for agriculture and powersports? - Agriculture is expected to decline mid-twenties, while powersports is forecasted to decrease mid-single to mid-teens [41][66] Question: How is the company progressing towards the $100 million new business target? - The company is ahead of schedule, with $35 to $40 million booked by April, primarily from existing customers [71][74] Question: What are the priorities for M&A activity? - The top priority is diversification of end markets, followed by maintaining an accretive margin profile [82]

1Q25 Results Presentation May 7, 2025 SAFE HARBOR STATEMENT Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: This presentation contains statements that are forward -looking in nature which express the beliefs and expectations of management including statements regarding the Company's expected results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and f ...

Group 1 - Mayville Engineering (MEC) reported quarterly earnings of $0.04 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, but down from $0.16 per share a year ago, representing an earnings surprise of 300% [1] - The company posted revenues of $135.58 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.38%, but down from $161.27 million year-over-year [2] - Over the last four quarters, Mayville Engineering has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2 - The stock has underperformed, losing about 16% since the beginning of the year compared to the S&P 500's decline of 3.9% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the coming quarter is $0.05 on revenues of $136.55 million, and for the current fiscal year, it is $0.65 on revenues of $571.1 million [7] Group 3 - The Zacks Industry Rank indicates that the Engineering - R and D Services sector is currently in the top 13% of over 250 Zacks industries, suggesting strong potential for outperformance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]