Greetings and welcome to today's acquisition of Accu-Fab by Mayville Engineering Company. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. To ask a question, please press Star 1 on your telephone keypad. To withdraw your question, please press Star 2. Please note that this conference call is being recorded. At this time, I'd like to turn the conference call over to Stefan Neely of Balam Advisors. Mr. Neely, please proceed. Thank you, Operator, and good morning, everyone. Thank you for joining the call this morning to discuss Mayville Engineering Company's planned acquisition of Accu-Fab, which was announced in a press release earlier this morning. Leading our call today is MEC President and CEO, Jack Reddy, and Rachele Lehr, Chief Financial Officer. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements. Following our prepared remarks, we will open the line for questions. In supplement to today's discussion, we have also provided presentation materials, which can be found in the investor relations portion of our corporate website at ir.mecinc.com. With that, I would like to turn the call over to Jag. Thank you, Stefan, and welcome to those joining us on the call and webcast. Earlier this morning, we announced the acquisition of Accu-Fab from Strategic Holding Company TideRock for a total cash consideration of $140.5 million, plus ordinary and customary adjustments. Like MEC, Accu-Fab is a vertically integrated provider of value-added manufacturing solutions to leading OEMs within high-growth end markets, including critical power infrastructure, data center, and renewable energy. Accu-Fab operates at two locations: Wheeling, Illinois, and Raleigh, North Carolina, both strategically positioned near key customer operations along the East Coast and Midwest. These facilities enhance our geographic footprint and provide the opportunity to leverage MEC's existing scale to better serve Accu-Fab's customers across these growing end markets. Culturally, Accu-Fab is a technology-forward organization with a strong track record of innovation. Its domestic manufacturing base, attractive margin profile, long-standing customer relationships, and presence in more stable, adjacent end markets make it a highly complementary addition to our business. The proposed acquisition is expected to close during the third quarter of 2025, subject to the satisfaction of customary closing conditions. Importantly, at closing, the acquisition of Accu-Fab will be immediately accretive, excluding transaction costs to MEC's adjusted EBITDA margin and adjusted earnings per share. Following the close, we will begin integrating Accu-Fab's operations into our platform, adding a high-value presence in two key states and creating meaningful opportunities for both cost and revenue synergies. We anticipate the initial integration process will take approximately six months. I want to take a moment to discuss the strategic rationale for this acquisition and how it aligns with our broader MBX value creation framework. As a reminder, our MBX value creation framework is anchored by five core pillars: high-performance culture, operational excellence, commercial expansion, disciplined capital deployment, and human resource optimization. This framework has enabled us to drive margin expansion by entering higher-value markets, improving operational efficiency, and executing on accretive acquisitions that extend our reach into complementary growth verticals. Since launching this framework in 2022, we have made significant progress. We have enhanced operational performance, grown market share with both new and existing customers, and expanded our capabilities through the 2023 acquisition of MSA. As a reminder, the MSA acquisition added aluminum extrusion capabilities and opened new avenues for growth. I will also point out our successful integration of MSA and significant margin expansion since integration. Today's acquisition of Accu-Fab marks the next meaningful step in the journey for several key reasons. First, Accu-Fab provides MEC meaningful diversification into high-growth, less cyclical end markets where we previously had a limited presence. Our legacy customer base is heavily weighted toward manufacturers of wheeled mobility platforms. With Accu-Fab, we gain entry into infrastructure-oriented products and auxiliary components whose demand is driven by long-term macroeconomic catalysts rather than traditional industrial cycles. Second, as Rachele will discuss, Accu-Fab brings a high-margin book of business to our platform. Over the last three years, Accu-Fab generated an average Adjusted EBITDA margin of 20.2% compared to MEC's average of 11.2% over the same period. The higher margin profile is primarily attributable to a disciplined pricing model on the high-value nature of the end markets, which Accu-Fab serves. Going forward, we see a clear opportunity to further expand this margin profile through operational synergies and the implementation of our MBX lean manufacturing framework. Third, the combination of our expanded scale and multi-state footprint positions us to unlock meaningful revenue synergies. We believe we can capture unmet demand across Accu-Fab's customer base and extend those relationships into adjacent high-growth markets. In total, we estimate these opportunities represent approximately an additional $3 million-$5 million in potential revenue synergies over the next 24 months, with further upside as we deepen engagement with Accu-Fab's customers. Fourth, we expect that through the implementation of our MBX framework, we will be able to create further operational efficiencies through lean manufacturing and improved utilization. We estimate that through the adoption of the MBX framework across Accu-Fab's facilities, we can generate approximately $1 million in annual cost synergies and improved utilization by 2026. In summary, this transaction fits squarely within our value creation playbook. Importantly, Accu-Fab is currently operating at between 50% and 60% capacity, giving us a near-term opportunity to drive incremental volume and growth. The acquisition of Accu-Fab represents a transformative step for MEC as we continue to evolve and diversify our business. It enhances our ability to support OEM onshoring efforts, strengthens our leadership in domestic manufacturing, and reinforces our position as the largest domestic metal fabricator in the country. In partnership with the Accu-Fab team, we look forward to delivering long-term value to our customers and shareholders. With that, I will turn the call over to Rachele. Thank you, Jag, and thank you, everyone, for joining us today. As Jag mentioned, Accu-Fab is a leading provider of metal fabrication solutions to high-growth, high-value end markets. Importantly, Accu-Fab has a strong track record of consistent and quality execution, which has supported their strong growth and attractive financial profile. We are acquiring Accu-Fab for $140.5 million cash, plus ordinary and customary adjustments. On a post-synergy basis, we estimate this acquisition will deliver an Internal Rate of Return of approximately 15%. During fiscal year 2024, Accu-Fab delivered approximately $61 million of revenue and $14 million of adjusted EBITDA, resulting in adjusted EBITDA margins of more than 23%. Accu-Fab has historically required less than $3 million in annual capital investment. When combined with its efficient working capital profile, this has resulted in an average Free Cash Flow conversion of more than 55% of adjusted EBITDA. As such, we expect that the transaction will be immediately accretive to net income, excluding transaction costs, and will contribute between $28-$32 million of revenues and between $6-$8 million of adjusted EBITDA in the second half of 2025. We intend to fund the transaction through our cash and availability on our existing $250 million credit facility. Additionally, our current lenders have committed to providing an additional $50 million to support the ongoing needs of the business through increasing available borrowings of our Revolving Credit Facility, pursuant to an amendment to the existing Credit Agreement under the accordion feature. Pro forma for the acquisition, our net leverage, defined as Net Debt divided by Pro Torma trailing 12-Month Adjusted EBITDA, will be approximately three times. We will prioritize Free Cash Flow generation of the combined company to repay the borrowings under our Revolving Credit Facility. At this time, we expect to reduce net leverage to 1.5 to2 times within the first 18 months after the closing of the transaction. Operationally, this transaction will bring our total number of facilities to 25, with the addition of Accu-Fab's approximately 200,000 sq ft of manufacturing space. The total number of employees will increase from approximately 2,200 to approximately 2,450, all of which will be non-union. With that, Operator, we would like to open the call up for questions. Thank you. If you would like to ask a question, please press Star 1 on your telephone keypad. To withdraw your question, please press Star 2. First question on the line is from Ross Sparenblek from William Blair. Please go ahead. Hey, good morning, guys. Morning, Ross. Morning. Hey, just starting off at a high level, can you maybe give us a sense on how the acquisition came into fold and anything you can provide on why the former owners were looking to exit? Yeah, good question, Ross. As we have publicly communicated over the last couple of quarters, as we saw a lens sight to debt reduction in the past year, we activated our M&A pipeline and have been in conversations with a significant number of targets. As we laid out in our M&A strategy, we had three main goals. Number one, diversify out of our existing legacy end markets and enter highly profitable end markets. And last but not least, enter end markets where we can continue to grow in the long term that have secular growth drivers. Given those three categories, we looked at a number of targets that fit that criteria. Power infrastructure, predominantly driven by data center growth, became a really good attractive end market for us. We looked at multiple targets in this end market and then eventually settled on Accu-Fab given their customer reach, given their performance, and given the opportunity to continue to take Accu-Fab's customers into MEC's existing footprint. Okay. I mean, that makes sense. Probably a nice segue. When we think about the 2029 synergy targets, $6 to $8 million, I could definitely appreciate under-promising, but it feels pretty light considering that we are adding two key manufacturing capabilities, like you noted, secular growing end markets. So can you maybe just break out the split of sales and costs and kind of what is underwriting the presumed caution there in the synergy targets? Yeah. Look, we learned through our MSA acquisition that bringing on brand new customers into a new acquisition takes time. I would say that's predominantly a reason why we are maybe a bit conservative on our revenue synergies. Of course, right? We will aggressively drive those revenue synergies. I think we want to close the transaction, get in, and then meet our new customers. By the way, none of these customers, or at least most of the major customers of Accu-Fab, are not current MEC customers. That is the real reason why we're being a little conservative and then really sit down with them and figure out how MEC's extensive footprint across Midwest, South, and the East Coast could help these customers. That's really the caution here. Okay. Maybe one more for me, if I can, and I'll jump back in the queue. Just thinking about the strong sales growth for Accu-Fab in 2024, can you maybe help break out the historical growth profile and then your outlook for the four end markets, even delineating between data centers and critical power would be helpful? Yeah. We look at the data centers and critical power in conjunction. We really saw from 2023 to 2024, really a 20% increase in growth in that category. That was what was very highly attractive to us. As you look at, Jag mentioned that the end markets are highly attractive from a margin profile. That was a big piece of why we were interested in this one. On the industrial and electronics, they have a ratable growth, nothing more than I would say inflationary, but the real interest is the critical power. You see what percentage of their business that is. That is why we were really interested in this acquisition. Okay. And then, I mean, within the industrial bucket, is this, I assume, more off-wheel, and there's probably some inherent cyclicality with electronics, or is that not the case? I would say that they have very limited wheeled platform exposure, Ross. I think the industrial and electronics is just generally cyclical over the last couple of years. I would say this is a GDP-plus kind of growth in that sector. You can see when we look over to our other end markets, the industrial and electronics actually kind of ended up it did not change any of our existing markets. It really went into other. We will continue to evaluate, as we've discussed, what is in other, and as it hits a certain scale, break it out. It did not hit any of our wheeled categories. Awesome. That's great to hear. All right. Thank you, guys. I'll jump back in the queue. All right. Thanks, Ross. Next question is from Vlad Bistricki from Citi. Please go ahead. Morning, Vlad. Morning, Jag and Rachele. Morning. Morning. Thanks for taking my call. Can you talk about, I know you mentioned the end markets, can you talk a little about who Accu-Fab's large customers are and whether there is any customer concentration here? Yes. The top 10 customers approximately account for 75% of revenue, similar to MEC, I would say, Vlad, for Accu-Fab. As I said, out of the top 10 customers, I could only name one customer that is common to MEC in the AG market without naming who they are. Even that is a really small revenue base for Accu-Fab. The rest of the customers are in both standby power and the general power infrastructure. I would say the top three would be, again, without naming the exact customers here, a large US-based electrical and infrastructure manufacturer. The second one would be a large French-based manufacturer. The third one would be a large Swiss-based electrical products manufacturer, right? Those are the top three customers, I would say. They do have other customers. Again, we're focused on where the power infrastructure and data center growth is, and these customers happen to be in their top 10. Great. That's helpful, Jag. Appreciate it. Just in terms of how you're thinking about that profile going forward and deleveraging post-close, any thoughts on sort of timetable and what this particular deal means in terms of incremental capital deployment over the next year or so? Absolutely. Let me start, and then I'll pass on to Rachele here. Similar to what we did with MSA acquisition, right, we are and we will be intensely focused on debt reduction as we continue to work on our working capital reduction and cash flow generation. Our intent here is to reduce our debt in the next 18 months to a 1.5-2x leverage. Yeah. I would add that their free cash flow conversion is at 55%. When you take that plus ours with the combined company, we will really be able to continue generating cash and reduce that debt over that time. We showed that we could do that with Mid-States, and we feel like we're going to use the same exact playbook to do that here with Accu-Fab. From that standpoint, we will. From that standpoint. Yeah. I'm sorry. From that standpoint too, we will continue to look to return value to our shareholders through opportunistic share buybacks. We will also be looking at what other opportunities are out there. Yes, this takes us to a high leverage right now, but we will continue to look at what opportunities come along and opportunities to continue to diversify our organization and end markets. Just to add to that, Vlad, we expect the CapEx requirements for Accu-Fab to be in the $2-$3 million range, which is very similar to the 2-2.5% of revenue guidance we provided for MEC in the past. Also, we expect the leverage at the time of closing to hit three times. As Rachele mentioned, we will work to quickly reduce that leverage down to one and a half to two times over the next 18 months. Appreciate the color. Thanks. Thank you. The next question is from Ted Jackson at Northland Securities. Please go ahead. Thanks. Good morning. Congratulations on what looks like a fabulous acquisition. Morning, Ted. Thank you. A few questions. The first one, when you look at the closing of this business, given that the guidance was around $30 million, I assume you're expecting this to close very early in the third quarter. Basically, we'll be seeing revenue come in a substantial amount in the third quarter and then obviously full for the fourth quarter. Is that the way to look at it, given the guidance? Yeah. Yeah. That's a fair assumption. Obviously, we got to go through the customer closing conditions, but we do expect to close the transaction sometime early Q3. Is there any seasonality within the business that we would have to think about in terms of how we start layering this, say, $60 million of revenue into the fiscal year? Just using that as a conversational number, but how would the revenue flow fiscal year for? Yeah. It's a good question. I think in the power infrastructure and data center end market, we don't expect a seasonality, but perhaps there might be some small portion of the revenue might have some seasonality in the industrial and electronics end market, but not something that we can call out at this point. In terms of the go-forward with regards to your structure, to make sure I understand this, the power and data center business is going to be broken out, and the industrial side will fall into other, or is it all going to be just in one new line? Yeah. Great question. Great question, Ted. I know this is an early morning call. I recognize that we did post a PowerPoint deck to our website, IR website, where we have broken out critical power and data center as a separate end market that we will track on an ongoing basis. So that today, at MEC, we have zero in that end market, but then with the acquisition, it'll become approximately 10% of our overall sales. And then, as you said, the industrial and electronics piece of Accu-Fab's revenue will go into the other end markets. Okay. I didn't want to assume. With regards to who's running the company, is there any kind of management that's going to stick around, that's going to be part of the organization going forward? How that transition? Yeah. The current management team at Accu-Fab and all the employees, for that matter, right, will remain with Accu-Fab post-close. As we begin integration, we will integrate similar to our MSA integration, we will integrate Accu-Fab into MEC. Everyone will functionally sort of report into the functional leadership within MEC. My last question is on the value-added capabilities. It is a great slide deck. Honestly, every time you guys put out a slide deck, they are really good. Just as good as all your others. On the value-added capabilities that you list in the deck with regards to things like metal enclosures, rack components, maybe even finishing, is there anything within those capabilities that come into the organization that are truly distinctive, that you can do something like bring something to MEC that was not there before? Yeah. It's a really good question. I think what Accu-Fab brings to us is light-gauge sheet metal fabrication. That is a new process that MEC currently does not have a lot of expertise or a lot of capabilities in. This is a different type of manufacturing than thicker metal and what we do for our existing customer base. This is certainly an addition of capabilities to MEC, Ted. At the same time, precision manufacturing for electronics and data centers, racking, cabinets, electrical cabinets, cable trays, all of these new products, we currently don't have those capabilities, and Accu-Fab is going to bring all of those capabilities to MEC. Okay. All right, Jag. Thanks very much. Thank you, Ted. As a reminder, for any further questions, please press star one on your telephone keypad. Next question is a follow-up from Ross Sparenblek at William Blair. Please go ahead. Hey, guys. Thanks for taking the follow-up. I'm just kind of thinking through the EBITDA margins and the kind of growth profile of the last couple of years of data centers. Can you give us a sense of where these margins were three to five years ago and also where the business stands in capacity today, if there's ability to leverage your larger installed base? Yeah. On the margin, I would say that the Accu-Fab team has done a nice job of improving their margins over the last couple of years. The current holding company implemented good standard processes that helped improve their margins. That's number one. Number two, in terms of—sorry, what was the second question, Ross? Your ability to kind of leverage their new manufacturing within your. Oh, yeah. Sorry, capacity, right? Yeah. Is this like a year one? Is this a year three? Yeah. I would say that within the first 12 months is what we want to drive these synergies within Accu-Fab. Your question around capacity, Accu-Fab is currently 50%-60% utilized. There is quite a bit of capacity left in their plants to take on additional volumes. I think we're going to bring in our expertise on product launches, our expertise in standardization, driving lean, getting the plants to be more efficient so that we can drive additional growth, number one, within Accu-Fab's facilities. Number two, as customers demand, access to MEC's facilities will then be helpful as some of these components or cabinets are large in volume and size and not easy to transport across the country. Given our MEC footprint, we think that we can help these large customers access our footprint and then be able to manufacture them, whether it's in our Bedford, Pennsylvania plant, or Heber Springs, Arkansas plant, or any of our other Midwest plants. This will be really helpful to continue to drive growth for Accu-Fab and for MEC. Okay. So I mean, just back on the margins, when you did your due diligence, you would equate the margin expansion recent years more to more standard processes rather than volume? Correct. I think it's standard processes. Also, in the last couple of years, they've had significant growth in the power infrastructure and the data center market, right? That's a different end market dynamics compared to even MEC's legacy end markets where the willingness to pay, the opportunity for growth, the capacity constraints that customers are facing, all of those lead to a higher margin profile in that end market. Okay. And then just thinking through kind of the strategic rationales, the why, low-hanging fruit on sales synergies or opportunity would be existing customers enabled by your geographic scope or reach and over time driving. Absolutely. Yep. Yep. Absolutely. Yep. Yep. Absolutely. Yep. Yep. Okay. And then maybe just one quick last one here. With 95% sole source revenue, can you give us a sense of the competitive landscape? I mean, I noticed this wasn't on the Fab 40 list, but maybe there's also a reason why what they're. Yeah. I think some of them, the number two on the Fab 40 is a competitor. I think number 12 on the Fab 40 is a competitor. A couple of other PE-owned. Number 26 on the Fab 40 is a competitor. A couple of other smaller PE-backed metal fabricators are in the competitive space. Okay. So it's just given the size, that's where they're at, but there's some healthy competition. Just trying to, I guess, understand the 95% sole source. I mean, that's a pretty impressive metric. There has to be some type of R&D, especially within your data centers. There's been a lot of innovation, and that's supposed to accelerate going forward. It feels like there's a competitive note there. Yeah. Yeah. For sure. At the same time, right, this is an end market right now. It's continued to struggle to build out their data center expansion. This is really where MEC can come in and then actually help Accu-Fab continue to grow and help Accu-Fab's customers continue to take advantage of our expertise and our expanded footprint. Perfect. Very helpful. Congratulations, guys. All right. Thank you, Ross. Thank you. We have no further questions on the call at this time. Let me hand the floor back to Jag Reddy for any closing comments. Once again, thank you for joining our call. We believe this is a very exciting moment for all MEC stakeholders, and we look forward to providing an update on our entire business on our second quarter earnings call. Should you have any questions, please contact Noel Ryan or Stefan Neely at Valem, our investor relations counsel. This concludes our call today. You may now disconnect.