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Sep 30, 2024
MEC Q1 2025 Earnings Report
Mayville Engineering Company announced its first quarter 2025 results, reporting strong execution and operational discipline despite softer customer demand.
Key Takeaways
Mayville Engineering Company (MEC) reported strong first quarter 2025 results with $135.6 million in net sales, GAAP net income of $20 thousand, and non-GAAP adjusted net income of $1.0 million. The company achieved 12% sequential sales growth, margin expansion, and positive free cash flow, maintaining a lean balance sheet with a net debt to trailing twelve-month Adjusted EBITDA ratio of 1.4x.
Net sales for Q1 2025 were $135.6 million, a decrease of 15.9% year-over-year due to lower customer demand and inventory de-stocking.
GAAP Net income was $20 thousand, and Non-GAAP Adjusted Net Income was $1.0 million, with Non-GAAP Adjusted Diluted EPS of $0.04.
Adjusted EBITDA reached $12.2 million, representing a 9.0% margin, reflecting a 140 basis-point sequential improvement.
The company generated $5.4 million in Free Cash Flow during the quarter, driven by working capital efficiency.
MEC
MEC
MEC Revenue by Segment
Revenue by Segment
Commercial Vehicle Revenue
CapyFin.comConstruction & Access Revenue
CapyFin.comPowersports Revenue
CapyFin.comAgriculture Revenue
CapyFin.comMilitary Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
MEC maintained its full-year 2025 guidance, anticipating continued strong execution and robust demand in less cyclical Military and Other end markets, despite softness in Commercial Vehicle, Powersports, and Construction & Access. The company expects gradual demand improvement in the second half of 2025 due to strategic execution, strong demand in key markets, and inventory normalization.
Positive Outlook
- Strong execution and robust demand in less cyclical Military and Other end markets.
- Continued acceleration of onshoring of manufacturing.
- Active advancement of higher-value opportunities by the business development team.
- Strategic pricing, commercial growth, and capital efficiency initiatives through the MBX value creation framework.
- Continued working capital efficiencies supporting free cash flow generation.
Challenges Ahead
- Softness in Commercial Vehicle, Powersports, and Construction & Access end markets.
- Increasing macroeconomic uncertainty.
- Evolving regulatory dynamics potentially influencing customer demand in the second half of the year.
- Customers' continued efforts to de-stock channel inventories.
- Potential for lower income from operations, partially offset by lower interest expense.
Revenue & Expenses
Visualization of income flow from segment revenue to net income