Sign in

    Natalia Bak • Citigroup Inc.

    Natalia Bak's questions to Mayville Engineering Company Inc (MEC) leadership

    Natalia Bak's questions to Mayville Engineering Company Inc (MEC) leadership • Q2 2025

    Question

    Natalia Bak of Citigroup inquired about the impact of reshoring on the business, asking about any upcoming contracts or OEM relationships shifting from competitors. She also asked about the long-term strategy for diversifying into new verticals like data centers and defense, and sought details on the sustainability of the military backlog, specifically the mix between recurring and new programs.

    Answer

    President, CEO & Director Jag Reddy confirmed that MEC is seeing significant reshoring activity, particularly in aluminum fabrications, which is driving new business wins. He noted that while steel fabrication inquiries are high, decisions are slower due to tariff uncertainty. He highlighted the AccuFab acquisition as key to the data center diversification strategy and mentioned a legacy business pipeline of over $280 million. For military, he explained the backlog is mostly recurring revenue from stable, long-term platforms like JLTV and Humvee, which are expected to continue.

    Ask Fintool Equity Research AI

    Natalia Bak's questions to Mayville Engineering Company Inc (MEC) leadership • Q1 2025

    Question

    Natalia Bak from Citigroup Inc. asked about the current tone of customer conversations compared to recent months. She also inquired about the revenue mix between long-term and short-cycle projects and its effect on forward visibility, as well as the expected timing for a recovery in the Agriculture market.

    Answer

    Executive Jagadeesh Reddy characterized conversations in the Ag and Powersports markets as 'slightly muted' due to ongoing destocking, but noted the company is ahead of schedule on its $100 million new business win target, with many wins starting in 2026 and 2027. He explained that while most new business has a longer lead time, tariff-related reshoring opportunities could start up in the second half of the year. For the Ag market, he stated the current assumption is for a gradual recovery in 2026. Executive Rachele Lehr added that new wins are incorporating the company's value-based pricing model, which will benefit future margins.

    Ask Fintool Equity Research AI