Mayville Engineering Company, Inc.

Previous wording

MEC is a leading U.S.-based vertically-integrated, value-added manufacturing partner providing a full suite of manufacturing solutions from concept to production, including design, prototyping and tooling, fabrication, aluminum extrusion, coating, assembly and aftermarket components. Our customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, data center & critical power, agriculture, military and other end markets. We have developed long-standing relationships with our blue-chip customers based upon our commitment to “Unmatched Excellence”.

Current wording

MEC is a leading U.S.-based vertically-integrated, value-added manufacturing partner providing a full suite of manufacturing solutions from concept to production, including design, prototyping and tooling, fabrication, aluminum extrusion, coating, assembly and aftermarket components. Our customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, datacenter & critical power, agriculture, military and other end markets. We have developed long-standing relationships with our blue-chip customers based upon our commitment to “Unmatched Excellence”.

Previous wording

Our one operating segment focuses on producing metal components that are used in a broad range of heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, data center & critical power, agricultural, military and other products.

Current wording

Our one operating segment focuses on producing metal components that are used in a broad range of heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, datacenter & critical power, agricultural, military and other products.

Previous wording

Over the past few years, the broader market dynamics, combined with recent geopolitical and economic developments, including foreign trade relations and associated, threatened and implemented tariffs, have resulted in impacts to the Company. These influences have contributed to elevated interest rates, inconsistent customer demand, material cost inflation and labor availability. The Company expects some of these dynamics to continue through 2025 and could continue to have an impact on demand, material costs and labor.

Current wording

The broader market dynamics over the past few years have resulted in impacts to the Company including: inflation, elevated interest rates, labor availability, material cost pressures, trade policy uncertainty and inconsistent customer demand. The Company expects some of these dynamics to continue in 2026 and could continue to have an impact on demand, material costs and labor.

Previous wording

Other Selling, General, and Administrative Expenses (SG&A). Other selling, general and administrative expenses consist primarily of salaries and personnel costs for our sales and marketing, finance, human resources, information systems, administration and certain other managerial employees and certain corporate level administrative expenses such as audit, accounting, legal and other consulting and professional services, travel, and insurance.

Current wording

Other Selling, General and Administrative Expenses. Other selling, general and administrative expenses consist primarily of salaries and personnel costs for our sales and marketing, finance, human resources, information systems, administration and certain other managerial employees and certain corporate level administrative expenses such as audit, accounting, legal and other consulting and professional services, travel and insurance.

Previous wording

Adjusted EBITDA represents EBITDA before stock-based compensation expense, legal costs due to former fitness customer, Chief Financial Officer (CFO) transition costs, natural disaster costs, acquisition related costs, restructuring and costs recognized on step-up of Accu-Fab acquired inventory. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of net sales for each period.

Current wording

Adjusted EBITDA represents EBITDA before stock-based compensation expense, loss on extinguishment of debt and restructuring and impairment. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of net sales for each period.

Previous wording

The following table presents a reconciliation of net cash provided by operating activities, the most directly comparable measure calculated in accordance with GAAP, to free cash flow for each of the periods presented.

Current wording

The following table presents a reconciliation of net cash provided by (used in) operating activities, the most directly comparable measure calculated in accordance with GAAP, to free cash flow for each of the periods presented.

Previous wording

Free cash flow for the nine months ended September 30, 2025 was $16,751 as compared to $42,094 for the nine months ended September 30, 2024, a decrease of $25,343 or 60.2%. The decrease in free cash flow was due to a decrease in cash provided by operating activities, offset by lower capital expenditures. Please see the “Liquidity and Capital Resources” section below for further information.

Current wording

Free cash flow for the three months ended March 31, 2026 was ($6,940) as compared to $5,371 for the three months ended March 31, 2025, a decrease of $12,311 or 229.2%. The decrease in free cash flow was due to a decrease in cash provided by operating activities and higher capital expenditures. Please see the “Liquidity and Capital Resources” section below for further information.

Previous wording

Net Sales. Net sales were $144,310 for the three months ended September 30, 2025 as compared to $135,392 for the three months ended September 30, 2024, an increase of $8,918, or 6.6%. This increase was driven by the recent acquisition of Accu-Fab, which more than offset lower customer demand within the Commercial Vehicle, Agriculture and Other end markets.

Current wording

Net Sales. Net sales were $144,780 for the three months ended March 31, 2026 as compared to $135,579 for the three months ended March 31, 2025, an increase of $9,201, or 6.8%. This increase was driven by the recent acquisition of Accu-Fab and organic growth within the Datacenter & Critical Power, Construction & Access and Powersports end markets. This was partially offset by lower customer demand within the Commercial Vehicle and Military end markets.

Previous wording

Manufacturing Margins. Manufacturing margins were $15,939 for the three months ended September 30, 2025 as compared to $17,095 for the three months ended September 30, 2024, a decrease of $1,156, or 6.8%. The decrease was primarily driven by non-recurring restructuring costs, inventory step-up expense associated with the Accu-Fab acquisition and lower legacy customer sales, partially offset by higher-margin net sales contribution from the Accu-Fab acquisition.

Current wording

Manufacturing Margins. Manufacturing margins were $10,961 for the three months ended March 31, 2026 as compared to $15,324 for the three months ended March 31, 2025, a decrease of $4,363, or 28.5%. The decrease was primarily driven by non-recurring restructuring costs, project launch costs related to the Datacenter & Critical Power end market and lower capacity utilization due to softer demand primarily within the Commercial Vehicle end market, partially offset by higher-margin net sales contribution from the Accu-Fab acquisition.

Previous wording

Manufacturing margin percentages were 11.0% for the three months ended September 30, 2025, as compared to 12.6% for the three months ended September 30, 2024, a decrease of 160 basis points. The decrease was attributable to the items discussed in the preceding paragraph.

Current wording

Manufacturing margin percentages were 7.6% for the three months ended March 31, 2026, as compared to 11.3% for the three months ended March 31, 2025, a decrease of 370 basis points. The decrease was attributable to the items discussed in the preceding paragraph.

Previous wording

Amortization of Intangibles Assets. Amortization of intangible assets were $3,125 for the three months ended September 30, 2025, as compared to $1,733 for the three months ended September 30, 2024, an increase of $1,392 or 80.3%. The increase was due to amortization expense associated with identifiable intangible assets from the Accu-Fab acquisition. Refer to Note 2 – Acquisition for additional information related to these identifiable intangible assets.

Current wording

Amortization of Intangibles Assets. Amortization of intangible assets were $3,130 for the three months ended March 31, 2026, as compared to $1,733 for the three months ended March 31, 2025, an increase of $1,397 or 80.6%. The increase was due to amortization expense associated with identifiable intangible assets from the Accu-Fab acquisition. Refer to Note 2 – Acquisition, for additional information related to these identifiable intangible assets.

Previous wording

Bonuses and Deferred Compensation Expenses. Bonuses and deferred compensation expenses were $2,221 for the three months ended September 30, 2025, as compared to $2,076 for the three months ended September 30, 2024, an increase of $145, or 7.0%. The increase was primarily driven by higher 401(k) match expense and the addition of plan participants as a result of the Accu-Fab acquisition, partially offset by lower stock-based compensation expense.

Current wording

Bonuses and Deferred Compensation Expenses. Bonuses and deferred compensation expenses were $4,804 for the three months ended March 31, 2026 as compared to $3,325 for the three months ended March 31, 2025, an increase of $1,479, or 44.5%. The increase was driven by higher bonus expense, primarily from a one-time cash bonus in connection with the successful completion of the acquisition of Accu-Fab in July 2025. This was partially offset by lower stock-based compensation expense compared to the prior-year period.

Previous wording

Other Selling, General and Administrative Expenses. Other SG&A expenses were $10,545 for the three months ended September 30, 2025 as compared to $7,559 for the three months ended September 30, 2024, an increase of $2,986, or 39.5%. The increase was primarily attributable to non-recurring costs and incremental SG&A expense, each associated with the Accu-Fab acquisition.

Current wording

Other Selling, General and Administrative Expenses. Other SG&A expenses were $9,171 for the three months ended March 31, 2026 as compared to $8,689 for the three months ended March 31, 2025, an increase of $482, or 5.5%. The increase was primarily attributable to incremental SG&A expenses associated with the acquisition of Accu-Fab.

Previous wording

Interest Expense. Interest expense was $3,430 for the three months ended September 30, 2025 as compared to $2,653 for the three months ended September 30, 2024, an increase of $777, or 29.3%. The increase was due to an increase in borrowings associated with the Accu-Fab acquisition, partially offset by lower interest rates relative to the prior year period.

Current wording

Interest Expense. Interest expense was $3,661 for the three months ended March 31, 2026 as compared to $1,567 for the three months ended March 31, 2025, an increase of $2,094, or 133.6%. The increase was due to an increase in borrowings associated with the Accu-Fab acquisition.

Previous wording

Provision (Benefit) for Income Taxes. Income tax benefit was $941 for the nine months ended September 30, 2025 as compared to income tax expense of $2,532 for the nine months ended September 30, 2024. The decrease of $3,473 is primarily due to a pre-tax loss in the current year period compared to pre-tax income in the prior year period. The effective tax rate for the current period also reflects discrete tax benefits recognized during the nine months ended September 30, 2025. Refer to Note 8 – Income Taxes of the Condensed Consolidated Financial Statements for further details.

Current wording

Provision (Benefit) for Income Taxes. Income tax expense (benefit) was ($3,308) for the three months ended March 31, 2026 as compared to ($10) for the three months ended March 31, 2025. The increase in benefit of $3,298 is primarily due to a pre-tax loss in the current year period compared to pre-tax income in the prior year period. Refer to Note 8 – Income Taxes of the Condensed Consolidated Financial Statements for further details.

Previous wording

Operating Activities. Cash provided by operating activities was $25,181 for the nine months ended September 30, 2025, as compared to $51,847 for the nine months ended September 30, 2024. The decrease of $26,666 in cash provided by operating activities was primarily due to lower net income (loss) adjusted for reconciling items and a higher use of cash driven by an increase in accounts receivable due to timing of collections and stabilized inventory levels in the current year as compared to inventory reductions in the prior-year period. This was partially offset by an increase in accounts payable due to the timing of supplier payments.

Current wording

Operating Activities. Cash used in operating activities was $2,756 for the three months ended March 31, 2026, as compared to cash provided by operating activities of $8,333 for the three months ended March 31, 2025. The decrease of $11,089 in cash provided by (used in) operating activities was primarily due to lower net income (loss) adjusted for reconciling items and a higher use of cash driven by an increase in inventory and accounts receivable to support higher sales volumes. This was partially offset by higher accrued liabilities.

Previous wording

Financing Activities. Cash provided by financing activities was $124,300 for the nine months ended September 30, 2025, as compared to cash used of $42,696 for the nine months ended September 30, 2024. The $166,996 increase in cash provided by financing activities was mainly due to borrowings in excess of debt repayments during the current year period on the Company’s revolving credit facility. Additionally, under the share repurchase plan, the Company purchased $4,607 of common stock in the first nine months of 2025 as compared to $1,996 in the prior year period. The Company’s decision to repurchase additional shares in 2025 will depend on business conditions, free cash flow generation, other cash requirements and stock price. Refer to Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds for additional information regarding share repurchases.

Current wording

Financing Activities. Cash provided by financing activities was $7,499 for the three months ended March 31, 2026, as compared to cash used in financing activities of $5,397 for the three months ended March 31, 2025. The $12,896 increase in cash provided by financing activities was mainly due to borrowings in excess of debt repayments during the current year period on the Company’s revolving credit facility. Additionally, under the share repurchase plan, the Company purchased $1,747 of common stock in the first three months of 2025 and did not purchase any common stock during the first three months of 2026.

Previous wording

On June 28, 2023, and as last amended on June 26, 2025, we entered into an amended and restated credit agreement (the Credit Agreement) with certain lenders and Wells Fargo Bank, National Association, as administrative agent (the Agent). The Credit Agreement provides for a $350,000 revolving credit facility, with a letter of credit sub-facility, and a swingline facility in an aggregate amount of $25,000. All amounts borrowed under the credit agreement mature on June 28, 2028.

Current wording

On June 28, 2023, we entered into an amended and restated credit agreement (the Credit Agreement) with certain lenders and Wells Fargo Bank, National Association, as administrative agent (the Agent).

Previous wording

Borrowings under the Credit Agreement bear interest at a fluctuating secured overnight financing rate (SOFR) plus an applicable margin based on the current consolidated total leverage ratio (which may be adjusted for certain reserve requirements), plus 1.25% to 2.75% depending on the current Consolidated Total Leverage Ratio (as defined in the Credit Agreement). Under certain circumstances, we may not be able to pay interest based on SOFR. If that happens, we will be required to pay interest at the Base Rate, which is the sum of the higher of (i) the Prime Rate (as publicly announced by the Agent from time to time), (ii) the Federal Funds Rate plus 0.50%, and (iii) Adjusted Term SOFR for a one-month tenor in effect on such day plus 1.00%.

Current wording

Borrowings under the Credit Agreement bear interest at a fluctuating SOFR plus an applicable margin based on the current consolidated total leverage ratio (which may be adjusted for certain reserve requirements), plus 1.25% to 2.75% depending on the current Consolidated Total Leverage Ratio (as defined in the Credit Agreement). Under certain circumstances, we may not be able to pay interest based on SOFR. If that happens, we will be required to pay interest at the Base Rate, which is the sum of the higher of (i) the Prime Rate (as publicly announced by the Agent from time to time), (ii) the Federal Funds Rate plus 0.50% and (iii) Adjusted Term SOFR for a one-month tenor in effect on such day plus 1.00%.

Previous wording

At September 30, 2025, the interest rate on outstanding borrowings under the Revolving Loan was 5.39%. We had availability of $35,658 under the revolving credit facility at September 30, 2025.

Current wording

At March 31, 2026, the interest rate on outstanding borrowings under the Revolving Loan was 6.42%. After accounting for our debt covenants, we had availability of $42,191 under the revolving credit facility at March 31, 2026.

Previous wording

We must pay a commitment fee of 0.20% to 0.35% per annum on the average daily unused portion of the aggregate unused revolving commitments under the Credit Agreement. At September 30, 2025, this fee was 0.30%. We must also pay fees as specified in the Fee Letter (as defined in the Credit Agreement) and with respect to any letters of credit issued under the Credit Agreement.

Current wording

We must pay a commitment fee of 0.20% to 0.35% per annum on the average daily unused portion of the aggregate unused revolving commitments under the Credit Agreement. At March 31, 2026, this fee was 0.35%. We must also pay fees as specified in the Fee Letter (as defined in the Credit Agreement) and with respect to any letters of credit issued under the Credit Agreement.

Previous wording

The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on our ability to, subject to certain exceptions, create, incur or assume indebtedness; create, incur, assume or suffer to exist liens; make certain investments; allow our subsidiaries to merge or consolidate with another entity; make certain asset dispositions; pay certain dividends or other distributions to shareholders; enter into transactions with affiliates; enter into sale leaseback transactions; and exceed the limits on annual capital expenditures. The Credit Agreement also requires us to satisfy certain financial covenants, including a minimum interest coverage ratio of 3.00 to 1.00. At September 30, 2025, our interest coverage ratio was 6.23 to 1.00. The Credit Agreement also requires us to maintain a consolidated total leverage ratio not to exceed 4.00 to 1.00. As of September 30, 2025, our consolidated total leverage ratio was 3.47 to 1.00 (which was modified as of July 1, 2025, from 3.50 to 1.00 in connection with the acquisition of Accu-Fab).

Current wording

The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on our ability to, subject to certain exceptions, create, incur or assume indebtedness; create, incur, assume or suffer to exist liens; make certain investments; allow our subsidiaries to merge or consolidate with another entity; make certain asset dispositions; pay certain dividends or other distributions to shareholders; enter into transactions with affiliates; enter into sale leaseback transactions; and exceed the limits on annual capital expenditures. The Credit Agreement also requires us to satisfy certain financial covenants, including a minimum consolidated interest coverage ratio of 2.75 to 1.00, as well as a consolidated total leverage ratio not to exceed 5.25 to 1.00. As of March 31, 2026, under the terms of the Credit Agreement, our interest coverage ratio was 4.27 to 1.00 and our consolidated total leverage ratio was 4.40 to 1.00.

Previous wording

The Credit Agreement includes customary events of default, including, among other things, payment default, covenant default, breach of representation or warranty, bankruptcy, cross-default, material ERISA events, material money judgments, and failure to maintain subsidiary guarantees. If an event of default occurs, the Agent will be entitled to take various actions, including the acceleration of amounts due under the Credit Agreement, termination of the credit facility, and all other actions permitted to be taken by a secured creditor.

Current wording

The Credit Agreement includes customary events of default, including, among other things, payment default, covenant default, breach of representation or warranty, bankruptcy, cross-default, material ERISA events, material money judgment, and failure to maintain subsidiary guarantees. If an event of default occurs, the Agent will be entitled to take various actions, including the acceleration of amounts due under the Credit Agreement, termination of the credit facility, and all other actions permitted to be taken by a secured creditor.

Previous wording

Additionally, the Company has a Fond du Lac County and Fond du Lac Economic Development Corporation term note (Fond du Lac Term Note). The Fond du Lac Term Note is secured by a security agreement, payable in annual installments of $500 plus interest at 2.00% and is due in full in December 2028. The balance outstanding as of September 30, 2025 was $1,875, with the short-term and long-term balance of $500 and $1,375, respectively, recorded in other current liabilities and other long-term liabilities in the Condensed Consolidated Balance Sheets.

Current wording

Additionally, the Company has a Fond du Lac County and Fond du Lac Economic Development Corporation term note (Fond du Lac Term Note). The Fond du Lac Term Note is secured by a security agreement, payable in annual installments of $500 plus interest at 2.00% and is due in full in December 2028. The balance outstanding as of March 31, 2026 and December 31, 2026 was $1,375. As of March 31, 2026, the short-term and long-term balance of $500 and $875, respectively. These balances are recorded in other current liabilities and other long-term liabilities in the Condensed Consolidated Balance Sheets.

Previous wording

During the nine months ended September 30, 2025 and 2024, our capital expenditures were $8,430 and $9,753 respectively. The decrease of $1,323 was driven by the Company’s focus on leveraging recent investments and controlling spend during 2025. Capital expenditures for the full year 2025 are expected to be between $13,000 and $17,000.

Current wording

During the three months ended March 31, 2026 and 2025, our capital expenditures were $4,184 and $2,962 respectively. The increase of $1,222 was driven by an increase in capital investments needed to support rapidly accelerating demand in the Datacenter & Critical Power end market. Capital expenditures for the full year 2026 are expected to be between $15,000 and $20,000.

Previous wording

We have historically relied upon cash available through credit facilities, in addition to cash from operations, to finance our working capital requirements and to support our growth. At September 30, 2025, we had availability of $35,658 through our revolving credit facility. We regularly monitor potential capital sources, including equity and debt financings, in an effort to meet our planned capital expenditures and liquidity requirements. Our future success will be highly dependent on our ability to access outside sources of capital. We will continue to have access to the availability currently provided under the Credit Agreement as long as we remain compliant with the financial covenants. Based on our estimates at this time, we expect to be in compliance with these financial covenants through 2025 and the foreseeable future.

Current wording

dependent on our ability to access outside sources of capital. We will continue to have access to the availability currently provided under the Credit Agreement as long as we remain compliant with the financial covenants. Based on our estimates at this time, we expect to be in compliance with these financial covenants through 2026 and the foreseeable future.

Previous wording

will be required to conduct our operations. There can be no assurance that operations and other capital resources will provide cash in sufficient amounts to maintain planned or future levels of capital expenditures. In the event we make one or more acquisitions and the amount of capital required is greater than the amount we have available for acquisitions at that time, we could be required to reduce the expected level of capital expenditures and/or seek additional capital. If we seek additional capital, we may do so through borrowings under the Credit Agreement, joint ventures, asset sales, offerings of debt or equity securities or other means. We cannot guarantee that this additional capital will be available on acceptable terms or at all. If we are unable to obtain the funds we need, we may not be able to complete acquisitions that may be favorable to us or finance the capital expenditures necessary to conduct our operations.

Current wording

We believe that our operating cash flow and available borrowings under the Credit Agreement are sufficient to fund our operations for 2026 and beyond. However, future cash flows are subject to a number of variables, and additional capital expenditures will be required to conduct our operations. There can be no assurance that operations and other capital resources will provide cash in sufficient amounts to maintain planned or future levels of capital expenditures. In the event we make one or more acquisitions and the amount of capital required is greater than the amount we have available for acquisitions at that time, we could be required to reduce the expected level of capital expenditures and/or seek additional capital. If we seek additional capital, we may do so through borrowings under the Credit Agreement, joint ventures, asset sales, offerings of debt or equity securities or other means. We cannot guarantee that this additional capital will be available on acceptable terms or at all. If we are unable to obtain the funds we need, we may not be able to complete acquisitions that may be favorable to us or finance the capital expenditures necessary to conduct our operations.