Mayville Engineering is a century-old domestic metal fabricator trying to convert a cyclical truck-and-equipment book into a higher-margin data-center and power-infrastructure supplier. The Accu-Fab purchase last July bought that entry, and the second-quarter print is the first clean look at whether the mix shift is real enough to justify last May's equity raise. Sales rose more than twenty percent, but the company still posted a GAAP loss because launch costs, outsourcing, and interest sat in front of the new work. The investment debate is whether those costs are temporary scaffolding or the permanent price of chasing a crowded buildout.
Datacenter and power work already contributes about $29 million of quarterly sales. The year-ago base in that book was only $5 million. Organic growth in that book ran well above one hundred percent even after stripping Accu-Fab. Manufacturing margin ticked up on mix and better plant loading. Adjusted EBITDA margin still compressed because project launch costs of $2 million and extra gain-sharing ate the lift. Commercial vehicle sales finally turned positive after a long slide, which is the second engine the raise-the-guide story needs. The market is being asked to pay a growth multiple for a still-dilutive, still-cash-using fabricator.
Management raised full-year sales guidance by about five percent and left adjusted EBITDA unchanged, which is the tell. Incremental revenue is arriving with enough launch and outsourcing drag that earnings power is not yet scaling with the top line. Free cash flow flipped to a use as working capital and equipment spending funded the ramp. Net leverage sits just under three times after the equity proceeds paid down the revolver. The next several quarters resolve whether DCP mix can expand toward one-fifth of sales with fading launch costs, or whether another capital call is the real residual claim.