Mayville Engineering Company, Inc. Q4 FY2024 earnings call

• Team maintained focused execution in 2024 despite softer demand, delivering consistent profitability, disciplined net working capital management, and significant year-over-year growth in free cash flow. • Fourth quarter performance impacted by lower customer program activity; soft demand expected to persist in first half of 2025, with gradual recovery in second half. • Business development team engaged in high-value emerging end markets, including data centers. • Generated ~$78M free cash flow in 2024, including $25.5M from a legal settlement; repaid over $31M debt in Q4 2024, reducing net leverage to 1.3 times. • Booked over $100M in new business wins in 2024, focusing on diversifying end markets. • Completed over 275 MBX Kaizen events since Sep 2022, reducing legacy manufacturing space, headcount, and costs.

Commercial vehicle: Represented approximately 38% of trailing twelve-month revenues, decreased by 10.5% year-over-year in the fourth quarter. Powersports: Represented approximately 17% of trailing twelve-month revenues, decreased by 29.1% year-over-year in the fourth quarter. Construction and access: Represented approximately 16% of trailing twelve-month revenues, decreased by 34.5% year-over-year in the fourth quarter. Agricultural: Represented approximately 8% of trailing twelve-month revenues, decreased by 46.5% year-over-year in the fourth quarter.

• 2025 net sales expected between $560M and $590M, adjusted EBITDA between $60M and $66M, free cash flow between $43M and $50M. • End market expectations: commercial vehicle flat to slightly down; construction and access flat to low single-digit increase; powersports low single-digit decrease; agriculture low to mid-twenty percent decline; military comparable to prior year; other end markets low to mid-single-digit increase. • MBX initiatives expected to drive $1M to $3M in cost improvement in 2025 adjusted EBITDA.

• Soft demand in core vertical markets continuing into first half of 2025. • Uncertainty in agricultural market due to interest rates, inventory destocking, and crop prices. • Powersports market highly sensitive to interest rates and current channel inventory levels. • Tariff impacts on less than 5% of inputs, but could affect margin percentage if input costs rise.

Q: Ross Sparenbleck asked about margin guidance, tariffs, and MBX progress.

A: Todd and Jag discussed margin improvement, limited tariff impact, and ongoing MBX initiatives.

Q: Ted Jackson asked about powersports guidance, tariffs, free cash flow, and M&A.

A: Todd and Jag provided details on powersports decline, potential tariff benefits, free cash flow drivers, and M&A pipeline.

Q: Andy Kapolewitz asked about EBITDA margin targets and Hazel Park ramp.

A: Jag and Todd discussed timeline for achieving Investor Day targets and Hazel Park progress.