0001104659-26-023496
SEC filingFY25 revenue declined 6.0% due to soft demand, while Adjusted EBITDA fell 26.9% on margin compression from restructuring and acquisition costs.
Mayville Engineering Company, Inc. (MEC) describes itself as a leading U.S.-based, vertically integrated, value-added manufacturing partner. The company provides a full suite of manufacturing solutions from concept to production, including design, prototyping and tooling, fabrication, aluminum extrusion, coating, assembly, and aftermarket components. Founded in 1945 and headquartered in Milwaukee, Wisconsin, MEC serves diverse end markets such as heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, data center & critical power, agriculture, military, and others. The company has been ranked by The Fabricator magazine as the largest fabricator in the United States for 15 consecutive years (2011–2025).
The Business section does not disclose formal reporting segments. The company operates as a single integrated entity focused on value-added manufacturing services across multiple end markets and geographic locations.
MEC offers a broad portfolio of manufacturing capabilities and components, including metal fabrication, metal stamping, aluminum extrusion and fabrication, tube bending and forming, robotic part forming and welding, resistance welding, five-axis tube and fiber laser cutting, and custom coatings such as high heat and chemical agent resistant coating (CARC) painting. The company provides a one-source solution covering the entire product lifecycle, with capabilities in program management, engineering, tool design and build, laser cutting, brake press, stamping, machining, aluminum extrusion, tube bending, welding, coatings, assembly, and logistics. MEC also emphasizes lean and continuous improvement through its MBX system and holds ISO 14001:2015 certification for environmental sustainability.
MEC markets its services directly to OEM customers through a sales team of approximately 50 experienced professionals aligned by market segment and customer. The sales process is highly technical and collaborative, involving upfront design and prototyping engagement, and typically takes 3 to 18 months to convert into long-term purchase orders. The customer base is diversified: top customer PACCAR Inc. accounted for 13.6% of 2025 net sales, John Deere accounted for 10.0%, and the top ten customers together represented 62.3% of net sales. The company has long-standing relationships, some spanning decades, with high switching costs due to embedded collaboration.
The market for contract manufacturers is highly fragmented, with most competitors being small local players limited in scale and capabilities. MEC competes on the basis of its scale, breadth of manufacturing capabilities, engineering expertise, customer service, and regional geographic focus. The company believes no single manufacturer directly competes with its full offering and end market applications. Key competitive strengths include low-volume production capability, customized solutions, and the ability to act as a single point of contact.
MEC’s value-creation framework, MEC Business Excellence (MBX), focuses on five pillars: (1) High-Performance Culture—implementing performance-based metrics and lean management; (2) Operational Excellence—leveraging automation and lean initiatives such as value stream mapping and SIOP; (3) Commercial Excellence—driving growth through integrated solutions, value-based pricing, and expansion into data center & critical power end markets; (4) Disciplined Capital Deployment—allocating capital strategically, pursuing acquisitions, and returning capital to shareholders; and (5) Human Resource Optimization—investing in workforce recruiting, retention, and development. The company aims to capitalize on reshoring and outsourcing trends among OEMs.
As of December 31, 2025, MEC had approximately 2,400 full-time employees, of which about 1,900 were production employees. None of the employees are unionized, and the average tenure is approximately nine years. The company invests in training and development through on-the-job training, certification programs, and tuition reimbursement. Compensation includes competitive benefits such as a 401(k) match, health insurance, and stock-based incentives. Safety is emphasized through the "Work MEC Safe" program, and ethics are governed by a Code of Conduct Policy with an anonymous integrity hotline.
For the twelve months ended December 31, 2025, Mayville Engineering Company reported net sales of $546.5 million, a decrease of 6.0% compared to $581.6 million in the prior year. The decline was driven by reduced customer demand across nearly all end markets and customer de-stocking of channel inventory, partially offset by increased after-market demand in the Military end market and incremental volumes from the Accu-Fab acquisition in the Data Center & Critical Power market.
Manufacturing margins fell 24.0% to $54.0 million (9.9% of sales vs. 12.2% in FY24). The margin compression was attributed to softening customer demand, non-recurring restructuring costs, inventory step-up expense from the Accu-Fab acquisition, and temporal launch-phase dynamics in Data Center & Critical Power and Commercial Vehicle projects. These headwinds were partially offset by cost reduction actions and higher-margin sales from Accu-Fab.
Operating income swung to a loss of $3.8 million (negative 0.7% margin) from income of $44.6 million (7.7% margin) in FY24, largely due to the absence of the $25.5 million lawsuit settlement gain recorded in FY24. Net loss was $8.1 million compared to net income of $25.9 million in the prior year. Adjusted EBITDA declined 26.9% to $47.1 million (8.6% margin vs. 11.1% in FY24), reflecting the operational challenges and non-recurring costs.
Free cash flow decreased 65.4% to $26.9 million, primarily due to the $25.5 million lawsuit settlement received in FY4 and lower operating cash flow from reduced net income and higher working capital needs.
The company operates as a single reporting segment. Revenue decline was broad-based across end markets, with the most significant headwinds from commercial vehicle and construction & access equipment. The Accu-Fab acquisition, completed July 1, 2025, contributed positively to Data Center & Critical Power volumes but added $3.4 million in acquisition-related costs and $0.6 million in inventory step-up expense, pressuring margins. Military aftermarket demand provided a partial offset.
Management expects some macroeconomic dynamics—elevated interest rates, inconsistent customer demand, material cost inflation, and labor availability—to continue into 2026. Capital expenditures for FY26 are guided between $15 million and $20 million, up from $11.6 million in FY25, reflecting a focus on leveraging recent investments. The company amended its credit agreement on February 25, 2026, reducing the revolving facility to $275 million and adjusting financial covenants to provide greater flexibility. Management believes operating cash flow and available borrowings are sufficient to fund operations through 2026 and beyond, though future cash flows remain subject to variable conditions.
Cash and equivalents stood at $1.5M as of December 31, 2025, up from $0.2M a year earlier. Total debt increased sharply to $203.9M from $81.6M, driven by $139.95M in net cash paid for the Accu-Fab acquisition. The bank revolver balance rose to $202.5M, and the company remained in compliance with its leverage and interest coverage covenants (3.68x vs. 4.00x max, 5.47x vs. 3.00x min). Deferred financing costs of $0.8M were capitalized.
The notes disclose no purchase commitments for raw materials or capacity beyond lease obligations. Operating lease liabilities total $32.3M ($35.5M nominal payments), and finance lease liabilities total $2.9M. The only contingent liability disclosed is the Peloton lawsuit settlement (received $25.5M gross in 2024).
Share repurchases continued at $4.6M (304,136 shares) in 2025, bringing cumulative buybacks to $13.2M over three years. No dividends are paid. Capital expenditures totaled $11.6M (2.1% of sales), down from $12.1M in 2024 and $16.6M in 2023. Debt reduction is not a near-term priority given the acquisition, though the net debt increase of $122.3M was funded entirely through the revolver.
The company operates a single reporting segment but provides disaggregated revenue by end market. Data center & critical power revenue surged to $52.1M (9.5% of net sales) from $17.5M in 2024, reflecting the Accu-Fab acquisition. All other core end markets (commercial vehicle, construction & access, powersports, agriculture) experienced double-digit declines, consistent with end-market softness. The 'Other' category grew 10.3%, partially offsetting weakness. No operating income by segment is disclosed.
The Risk Factors section highlights significant macroeconomic headwinds, including inflation, elevated interest rates, and labor availability challenges that negatively impacted 2025 results and are expected to persist into 2026. Tariff and trade policy uncertainty, particularly the implementation and expansion of U.S. tariffs on imported goods and materials, has increased input costs, disrupted supply chains, and created pricing volatility. The recent U.S. Supreme Court decision striking down certain tariffs under the International Emergency Economic Powers Act adds further uncertainty. Geopolitical events, including conflicts in Ukraine and the Middle East, exacerbate raw material and energy cost volatility.
The company faces concentration risk with its two largest customers, PACCAR (13.6% of net sales) and John Deere (10.0%). The loss of either could materially reduce cash flows and limit the ability to spread fixed costs. Most customers do not commit to long-term production schedules, making capacity planning difficult. The recent Accu-Fab acquisition significantly increased exposure to the data center & critical power end market, which is subject to evolving government regulation, macroeconomic developments, and project delays.
The company's credit agreement contains financial covenants, including a maximum leverage ratio. As of December 31, 2025, $202.5 million was outstanding under the revolving credit facility, and the company is approaching the maximum permitted leverage ratio. Non-compliance could result in an event of default, acceleration of indebtedness, and termination of the credit facility. The February 2026 amendment lowered total available borrowings to $275 million and amended financial covenants.
Raw material and energy price volatility, combined with a limited supplier base for certain materials, poses a risk to profitability. The company may not be able to pass through cost increases to customers. Cybersecurity risks are managed through a NIST-aligned program, but a breach could disrupt operations or result in financial loss. Manufacturing disruptions due to technical problems, natural disasters, or other interruptions could delay production and lead to customer cancellations.
The company operates in highly competitive markets where competitors may have lower cost structures, greater scale, or better access to new technologies. Failure to maintain manufacturing, engineering, and technological expertise could result in loss of market share. The company must continue to invest in research and development to keep processes current and meet customer needs.
Employees and former employees, through the ESOP and 401(k) plan, beneficially own approximately 22% of common stock. Their interests may differ from other shareholders. Wisconsin law and the company's articles of incorporation contain anti-takeover provisions that could discourage or delay a change in control.
In FY2025, Mayville Engineering Company reported net loss of $(8.1) million, yet generated $38.6 million in operating cash flow. The divergence is primarily due to non-cash charges: depreciation ($31.6M), amortization ($9.7M), stock-based compensation ($3.3M), and non-cash lease expense ($6.1M). Working capital was a net source of cash, with accounts receivable decreasing $6.0M and accounts payable increasing $8.4M, partially offset by a $5.5M deferred tax outflow and a $7.8M decline in accrued liabilities.
Capital expenditures of $11.6 million were modest relative to depreciation, but the $140.0 million acquisition (net of cash acquired) drove total investing cash outflow to $151.5 million. Free cash flow (operating cash flow minus capex) was $27.0 million, but after the acquisition, the company was a net cash user. Financing activities provided $114.3 million, largely from net bank borrowings ($122.8M net), offset by $4.6M in share repurchases and $1.6M in employee tax withholdings.
Compared to FY2024, operating cash flow dropped sharply from $89.8 million, reflecting the swing to a net loss and a $5.5M deferred tax payment. The company's cash balance ended at $1.5 million, up from $0.2 million at the start of the year.