Mayville Engineering Company, Inc. (NYSE: MEC), a prominent provider of value-added design, prototyping, and manufacturing solutions across a variety of end markets, announced its financial results for the second quarter ended June 30, 2025. Despite a challenging economic backdrop and ongoing demand softness across key sectors, the company demonstrated disciplined execution, improved operational efficiency, and strategic momentum through its recent acquisition of Accu-Fab.
Second Quarter 2025 Financial Highlights
- Net Sales: $132.3 million, reflecting a 19.1% year-over-year decline
- GAAP Net Loss: $1.1 million, or ($0.05) per diluted share
- Non-GAAP Adjusted Net Income: $2.1 million, or $0.10 per diluted share
- Adjusted EBITDA: $13.7 million
- Adjusted EBITDA Margin: 10.3%
- Free Cash Flow: $12.5 million
- Net Debt to TTM Adjusted EBITDA: 1.4x
Executive Commentary
Jag Reddy, President and CEO of Mayville Engineering Company, expressed confidence in the company’s operational discipline during the second quarter, noting that the team delivered higher Adjusted EBITDA margins relative to the first quarter despite the soft demand environment. “Our MBX framework—focused on manufacturing excellence, business development, and execution—continues to serve as the cornerstone of our strategy. It has allowed us to generate solid free cash flow and maintain strong cost control, even as customer order activity slowed.”
Reddy acknowledged that market uncertainty remains prevalent, particularly across Commercial Vehicle, Powersports, and Agriculture sectors. Inventory destocking efforts are ongoing, and customers’ visibility into the second half of the year remains limited. However, MEC has remained agile by optimizing its cost structure and manufacturing footprint while securing new project wins that will contribute to future growth.
“We are pleased to report that as of the end of Q2, we are ahead of pace to meet our full-year goal for new customer program wins,” said Reddy. “At the same time, we’ve initiated further efforts to reduce fixed costs and better align our manufacturing assets with market realities. These actions are designed to enhance our flexibility and improve operating leverage when demand returns.”
The acquisition of Accu-Fab, completed shortly after quarter-end, marks a pivotal move in MEC’s strategic roadmap. “Accu-Fab adds important capabilities and customers, especially in the high-growth critical power infrastructure and data center markets,” Reddy noted. “Integration efforts are progressing well, and we remain confident in achieving a full integration by year-end. While we have not factored material revenue synergies into our 2025 outlook, we already see strong potential for long-term growth through cross-selling opportunities and operational alignment.”
Given the dynamic macroeconomic landscape, MEC has withdrawn its previously issued 2026 financial targets outlined during its 2023 Investor Day. Instead, the company is prioritizing short-term execution with a focus on integration, operational excellence, debt reduction, and shareholder returns.
“Our long-term vision is intact,” Reddy emphasized. “We are committed to building MEC into a scaled, diversified domestic fabricator capable of achieving $1 billion in revenue through a combination of organic growth, disciplined M&A, and consistent operational execution.”
Detailed Financial and Operational Review
Revenue and Margin Analysis
Net sales for the second quarter totaled $132.3 million, representing a 19.1% decrease compared to the same quarter in 2024. The decline was largely driven by soft customer demand across most major end markets and the effects of channel inventory destocking. This was partially mitigated by new project volume in the “Other” segment and higher aftermarket activity in the Military sector.
Manufacturing margin for the quarter was $13.6 million, down from $22.3 million a year earlier, with a margin of 10.3% versus 13.6% previously. The contraction was primarily due to reduced volumes, though cost optimization efforts provided some relief.
Expense and Profitability Metrics
Selling, general, and administrative (SG&A) expenses came in at $10.3 million, up from $8.3 million in the prior-year period, due to one-time acquisition-related costs and a CFO transition. Bonus and deferred compensation expense was significantly lower year-over-year at $1.5 million compared to $4.1 million.
Interest expense decreased to $1.4 million from $3.0 million, thanks to reduced borrowing levels and lower average interest rates.
The company reported a GAAP net loss of $1.1 million, or ($0.05) per diluted share, compared to net income of $3.8 million, or $0.18 per diluted share, a year ago. Adjusted EBITDA fell to $13.7 million from $19.6 million, while Adjusted Net Income dropped to $2.1 million from $5.5 million.
Free Cash Flow for the quarter was $12.5 million, down from $19.2 million, driven by reduced cash from operating activities and slightly lower capital expenditures.
Performance by End Market
- Commercial Vehicles: Net sales totaled $49.1 million, a 20.9% decline year-over-year, driven by order reductions and regulatory uncertainty impacting OEMs.
- Construction & Access: Sales fell 25.9% to $20.2 million, due to weak demand and inventory corrections.
- Powersports: Revenue decreased 35.2% to $19.6 million, reflecting soft consumer demand, rationalized product lines, and dealer inventory reductions.
- Agriculture: Sales dropped 36.9% to $9.2 million, reflecting broad-based inventory destocking and sluggish OEM demand across both large- and small-ag sectors.
- Military: A standout performer this quarter, Military segment revenue grew 26.8% to $8.3 million, boosted by higher aftermarket and service demand.
- Other Markets: This segment delivered $25.8 million in sales, a 13.5% increase driven by new customer programs in industrial equipment, power generation, and automotive aluminum components.
Balance Sheet and Capital Allocation
As of June 30, 2025, MEC had $72.0 million in total debt and $185.21 million in total liquidity, including cash and availability on its senior secured revolving credit facility. During the quarter, the company repaid $8.7 million in debt and executed $2.9 million in share repurchases using free cash flow. The net debt-to-Adjusted EBITDA ratio stood at a healthy 1.4x, providing ample flexibility for future investments and strategic initiatives.
Outlook and Strategic Priorities
While MEC refrained from issuing 2026 financial targets due to ongoing demand uncertainty, management remains focused on several critical near-term goals:
- Seamless integration of Accu-Fab
- Continued cost structure optimization
- Pursuit of new project wins
- Targeted debt reduction
- Opportunistic share repurchases
Looking ahead, MEC aims to evolve into a more diversified and resilient manufacturing platform. With the infrastructure and vision in place, leadership remains confident in positioning the company for long-term success as a leading U.S.-based fabricator serving high-growth and mission-critical industries.
