Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Mayville Engineering Company, Inc. | |
Entity Central Index Key | 0001766368 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | MEC | |
Security Exchange Name | NYSE | |
Entity File Number | 001-38894 | |
Entity Incorporation, State or Country Code | WI | |
Entity Tax Identification Number | 39-0944729 | |
Entity Address, Address Line One | 715 South Street | |
Entity Address, City or Town | Mayville | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53050 | |
City Area Code | 920 | |
Local Phone Number | 387-4500 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 20,532,691 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 105 | $ 118 |
Receivables, net of allowances for doubtful accounts of $799 at June 30, 2022 and $631 at December 31, 2021 | 71,223 | 55,417 |
Inventories, net | 74,103 | 70,157 |
Tooling in progress | 5,317 | 3,950 |
Prepaid expenses and other current assets | 4,580 | 2,924 |
Total current assets | 155,328 | 132,566 |
Property, plant and equipment, net | 129,509 | 120,746 |
Assets held for sale | 1,288 | |
Goodwill | 71,535 | 71,535 |
Intangible assets-net | 47,285 | 50,761 |
Operating lease assets | 37,842 | |
Other long-term assets | 3,497 | 3,865 |
Total assets | 446,284 | 379,473 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Accounts payable | 58,679 | 50,119 |
Current portion of operating lease obligation | 4,803 | |
Accrued liabilities: | ||
Salaries, wages, and payroll taxes | 9,670 | 8,684 |
Profit sharing and bonus | 6,329 | 5,289 |
Current portion of deferred compensation | 17,531 | 0 |
Other current liabilities | 13,495 | 13,280 |
Total current liabilities | 110,507 | 77,372 |
Bank revolving credit notes | 76,063 | 67,610 |
Operating lease obligation, less current maturities | 33,531 | |
Deferred compensation, less current portion | 2,949 | 25,117 |
Deferred income tax liability | 11,040 | 8,641 |
Other long-term liabilities | 1,725 | 2,462 |
Total liabilities | 235,815 | 181,202 |
Commitments and contingencies (see Note 8) | ||
Additional paid-in-capital | 199,899 | 197,186 |
Retained earnings | 17,298 | 7,547 |
Treasury shares at cost, 1,112,502 shares at June 30, 2022 and 1,050,448 at December 31, 2021 | (6,728) | (6,462) |
Total shareholders' equity | 210,469 | 198,271 |
Total | $ 446,284 | $ 379,473 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Statement Of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 799 | $ 631 |
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Common Stock, Shares, Issued | 21,645,193 | 21,386,382 |
Treasury stock at cost | 1,112,502 | 1,050,448 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net sales | $ 138,337 | $ 120,213 | $ 274,589 | $ 232,833 |
Cost of sales | 120,079 | 103,933 | 241,449 | 201,777 |
Amortization of intangible assets | 1,738 | 2,677 | 3,476 | 5,353 |
Profit sharing, bonuses, and deferred compensation | 1,208 | 3,210 | 3,755 | 6,074 |
Employee stock ownership plan expense | 1,330 | 228 | 1,820 | 701 |
Other selling, general and administrative expenses | 6,396 | 5,362 | 12,121 | 10,059 |
Impairment of long-lived assets and (gain) loss on contract | (906) | (2,089) | ||
Income from operations | 8,492 | 4,803 | 14,057 | 8,869 |
Interest expense | (765) | (504) | (1,332) | (1,036) |
Income before taxes | 7,727 | 4,299 | 12,725 | 7,833 |
Income tax expense | 1,798 | 1,007 | 2,974 | 1,996 |
Net income and comprehensive income | $ 5,929 | $ 3,292 | $ 9,751 | $ 5,837 |
Earnings per share: | ||||
Basic | $ 0.29 | $ 0.16 | $ 0.48 | $ 0.29 |
Diluted | $ 0.29 | $ 0.16 | $ 0.47 | $ 0.28 |
Weighted average shares outstanding: | ||||
Basic | 20,581,945 | 20,454,541 | 20,490,944 | 20,316,936 |
Diluted | 20,650,551 | 20,864,531 | 20,807,677 | 20,685,741 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net income | $ 9,751 | $ 5,837 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation | $ 5,507 | $ 5,161 | 10,975 | 10,236 | |
Amortization | 3,476 | 5,353 | |||
Allowance for doubtful accounts | 168 | 49 | |||
Inventory excess and obsolescence reserve | 87 | (589) | |||
Stock-based compensation expense | 2,714 | 2,588 | |||
Loss (gain) on disposal of property, plant and equipment | (520) | (625) | 66 | ||
Impairment of long-lived assets and (gain) loss on contract | (906) | (2,089) | |||
Deferred compensation | (4,637) | (170) | |||
Non-cash lease expense | 2,482 | ||||
Other non-cash adjustments | 176 | 151 | |||
Changes in operating assets and liabilities - net of effects of acquisition: | |||||
Accounts receivable | (15,973) | (16,331) | |||
Inventories | (4,033) | (8,984) | $ (39) | ||
Tooling in progress | (1,367) | 1,033 | |||
Prepaids and other current assets | (1,561) | (1,094) | |||
Accounts payable | 9,275 | 14,324 | |||
Deferred income taxes | 2,504 | 1,484 | |||
Operating lease obligations | (2,270) | ||||
Accrued liabilities | 6,631 | 4,277 | |||
Net cash provided by operating activities | 15,684 | 18,230 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Purchase of property, plant and equipment | (26,351) | (16,986) | |||
Proceeds from sale of property, plant and equipment | 5,228 | 414 | |||
Net cash used in investing activities | (21,123) | (16,572) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from bank revolving credit notes | 218,867 | 157,388 | |||
Payments on bank revolving credit notes | (210,414) | (158,791) | |||
Repayments of other long-term debt | (547) | ||||
Purchase of treasury stock | (2,323) | ||||
Payments on finance leases | (157) | (310) | |||
Proceeds from the exercise of stock options | 80 | ||||
Other financing activities | (27) | ||||
Net cash provided by (used in) financing activities | 5,426 | (1,660) | |||
Net decrease in cash and cash equivalents | (13) | (2) | |||
Cash and cash equivalents at beginning of period | 118 | 121 | 121 | ||
Cash and cash equivalents at end of period | $ 105 | $ 119 | 105 | 119 | $ 118 |
Supplemental disclosure of cash flow information: | |||||
Cash paid for interest | 999 | 1,077 | |||
Cash paid for taxes | 450 | 716 | |||
Non-cash construction in progress in accounts payable | $ 5,633 | $ 2,994 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Additional Paid-in-Capital [Member] | Treasury Shares [Member] | Retained Earnings [Member] | Total |
Beginning, Balance at Dec. 31, 2020 | $ 190,793 | $ (4,934) | $ 14,998 | $ 200,857 |
Net income | 2,545 | 2,545 | ||
401(k) plan contribution | 1,319 | 625 | 1,944 | |
Stock-based compensation | 1,200 | 1,200 | ||
Ending, Balance at Mar. 31, 2021 | 193,312 | (4,309) | 17,543 | 206,546 |
Beginning, Balance at Dec. 31, 2020 | 190,793 | (4,934) | 14,998 | 200,857 |
Net income | 5,837 | |||
Ending, Balance at Jun. 30, 2021 | 194,754 | (4,309) | 20,835 | 211,280 |
Beginning, Balance at Mar. 31, 2021 | 193,312 | (4,309) | 17,543 | 206,546 |
Net income | 3,292 | 3,292 | ||
Stock-based compensation | 1,388 | 1,388 | ||
Stock options exercised | 54 | 54 | ||
Ending, Balance at Jun. 30, 2021 | 194,754 | (4,309) | 20,835 | 211,280 |
Beginning, Balance at Dec. 31, 2021 | 197,186 | (6,462) | 7,547 | 198,271 |
Net income | 3,822 | 3,822 | ||
401(k) plan contribution | 2,057 | 2,057 | ||
Purchase of treasury stock | (2,323) | (2,323) | ||
Stock-based compensation | 1,257 | 1,257 | ||
Ending, Balance at Mar. 31, 2022 | 198,443 | (6,728) | 11,369 | 203,084 |
Beginning, Balance at Dec. 31, 2021 | 197,186 | (6,462) | 7,547 | 198,271 |
Net income | 9,751 | |||
Ending, Balance at Jun. 30, 2022 | 199,899 | (6,728) | 17,298 | 210,469 |
Beginning, Balance at Mar. 31, 2022 | 198,443 | (6,728) | 11,369 | 203,084 |
Net income | 5,929 | 5,929 | ||
Stock-based compensation | 1,456 | 1,456 | ||
Ending, Balance at Jun. 30, 2022 | $ 199,899 | $ (6,728) | $ 17,298 | $ 210,469 |
Basis of presentation
Basis of presentation | 6 Months Ended |
Jun. 30, 2022 | |
Basis Of Presentation [Abstract] | |
Basis of presentation | Note 1. Basis of presentation The interim unaudited condensed consolidated financial statements of Mayville Engineering Company, Inc. and subsidiaries (MEC, the Company, we, our, us or similar terms) presented here have been prepared in accordance with the accounting principles generally accepted in the United States of America (GAAP) and with instructions to Form 10-Q and Article 10 of Regulation S-X. They reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations and financial position for the interim unaudited periods presented. All intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These interim unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K. A summary of the Company’s significant accounting policies is included in the Company’s 2021 financial statements in the Annual Report on Form 10-K. The Company followed these policies in preparation of the interim unaudited Condensed Consolidated Financial Statements except for new accounting pronouncements adopted as described below. Nature of Operations MEC is a leading U.S.-based value-added manufacturing partner that provides a broad range of prototyping and tooling, production fabrication, coating, assembly and aftermarket components. Our customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, agriculture, military and other end markets. Founded in 1945 and headquartered in Mayville, Wisconsin, we are a leading Tier I U.S. supplier of highly engineered components to original equipment manufacturers (OEM) customers with leading positions in their respective markets. The Company operates 20 facilities, of which 19 are in operation, located in Arkansas, Michigan, Mississippi, Ohio, Pennsylvania, Virginia, and Wisconsin. Our engineering expertise and technical know-how allow us to add value through every product redevelopment cycle (generally every three to five years for our customers). Our one operating segment focuses on producing metal components that are used in a broad range of heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, agricultural, military and other products. The COVID-19 pandemic has had and will continue to have a negative impact on our business, financial condition, cash flows, results of operations, supply chain, and raw material availability, although the full extent is still uncertain. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases annual reporting guidance as of January 1, 2022 using the effective date approach. The Company early adopted the interim reporting guidance during the period ended March 31, 2022. The new guidance provides a number of optional practical expedients in transition. The Company elected the "package of practical expedients", which allows it to not reassess under the new guidance its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight practical expedient. In addition, the new guidance provides accounting policy elections for an entity’s ongoing lessee accounting. The Company has elected to not separate lease and non-lease components for certain of its real estate leases. The Company has elected the short-term lease recognition exemption for all leases that qualify which means that it will not recognize ROU assets or lease liabilities for those leases with a term of 12 months or less. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments Financial Instruments – Credit Losses In December 2019, the FASB issued ASU 2019-12, Income Taxes A summary of the Company’s evaluation of other recent accounting pronouncements is included in the Company’s 2021 financial statements in its Annual Report on Form 10-K for the year ended December 31, 2021. |
Select balance sheet data
Select balance sheet data | 6 Months Ended |
Jun. 30, 2022 | |
Select Balance Sheet Data [Abstract] | |
Select balance sheet data | Note 2. Select balance sheet data Inventory Inventories are stated at the lower of cost, determined on the first-in, first-out method and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Work-in-process and finished goods are valued at production costs consisting of material, labor, and overhead. Inventories as of June 30, 2022 and December 31, 2021 consist of: June 30, December 31, 2022 2021 Finished goods and purchased parts $ 42,828 $ 41,041 Raw materials 19,500 18,905 Work-in-process 11,775 10,211 Total $ 74,103 $ 70,157 At December 31, 2021, there was uncertainty as to the level of demand from the former fitness customer. The Company received a notification from this customer in February 2022 resulting in a change in forecasted future cash flow, triggering an impairment assessment of assets purchased, and assets the Company had committed to purchase, to meet obligations under the agreement with the former fitness customer as of December 31, 2021. As a result, at December 31, 2021, the Company recorded an inventory impairment of $700, of which $661 was due to loss contacts recorded in other current liabilities and a $39 decrease to inventories. As of June 30, 2022, there was a balance of Property, plant and equipment Property, plant and equipment as of June 30, 2022 and December 31, 2021 consist of: Useful Lives June 30, December 31, Years 2022 2021 Land Indefinite $ 1,033 $ 1,033 Land improvements 15-39 3,169 3,169 Building and building improvements 15-39 57,971 56,243 Machinery, equipment and tooling 3-10 230,803 222,202 Vehicles 5 3,947 3,943 Office furniture and fixtures 3-7 18,785 17,960 Construction in progress N/A 22,919 15,443 Total property, plant and equipment, gross 338,627 319,993 Less accumulated depreciation 209,118 199,247 Total property, plant and equipment, net $ 129,509 $ 120,746 Depreciation expense was $5,507 and $5,161 for the three months ended June 30, 2022 and 2021, respectively, and $10,975 and $10,236 for the six months ended June 30, 2022 and 2021, respectively. At December 31, 2021, there was uncertainty as to the level of demand from the former fitness customer. The Company received a notification from the former fitness customer in February 2022 resulting in a change in forecasted future cash flow, triggering an impairment assessment of assets purchased, and assets the Company had committed to purchase, to meet obligations under the agreement with the former fitness customer as of December 31, 2021. As a result, at December 31, 2021, the Company recorded a long-lived asset impairment $12,875. During the three and six months ended June 30, 2022, the Company was able to cancel $906 and $2,089, respectively, of purchase commitments for property, plant and equipment relating to the former fitness customer that had previously been recorded in the Condensed Consolidated Statements of Comprehensive Income as an impairment of long-lived assets and loss on contracts as of December 31, 2021. The cancellation of loss contracts has resulted in the reversal of this amount from other current liabilities in the Condensed Consolidated Balance Sheets and recorded in the Condensed Consolidated Statements of Comprehensive Income as an impairment of long-lived assets and gain on contracts for the current period. Throughout the three months ended June 30, 2022, the Company sold $4,971 of machinery and equipment originally intended to support production for the former fitness customer, resulting in a gain on sale of the assets of $520, which is classified in cost of sales on the Condensed Consolidated Statements of Comprehensive Income as of June 30, 2022. As a result of the previously mentioned impairment, these assets had been written down to fair value as of December 31, 2021. As of June 30, 2022, $1,288 of property, plant and equipment has been reclassified within the Condensed Consolidated Balance Sheets as assets held for sale. The Company adopted ASC 842 on January 1, 2022, classifying finance leases of $981 in property, plant and equipment on the Condensed Consolidated Balance Sheets as of June 30, 2022. Please refer to Note 4 – Leases for additional information. Due to the adoption, the Company reclassified net capital leases of $1,136 to property, plant and equipment on the Condensed Consolidated Balance Sheets as of December 31, 2021. Goodwill Changes in goodwill between December 31, 2021 and June 30, 2022 consist of: Balance as of December 31, 2021 $ 71,535 Impairment — Balance as of June 30, 2022 $ 71,535 Intangible Assets The following is a listing of intangible assets, the useful lives in years (amortization period) and accumulated amortization as of June 30, 2022 and December 31, 2021: Useful Lives June 30, December 31, Years 2022 2021 Amortizable intangible assets: Customer relationships and contracts 9-12 $ 78,340 $ 78,340 Trade name 10 14,780 14,780 Non-compete agreements 5 8,800 8,800 Patents 19 24 24 Accumulated amortization (58,470) (54,994) Total amortizable intangible assets, net 43,474 46,950 Non-amortizable brand name 3,811 3,811 Total intangible assets, net $ 47,285 $ 50,761 Non-amortizable brand name is tested annually during the fourth quarter for impairment, or more frequently if triggering events occur indicating there may be impairment. Changes in intangible assets between December 31, 2021 and June 30, 2022 consist of: Balance as of December 31, 2021 $ 50,761 Amortization expense (3,476) Balance as of June 30, 2022 $ 47,285 Amortization expense was $1,738 and $2,677 for the three months ended June 30, 2022 and 2021, respectively, and $3,476 and $5,353 for the six months ended June 30, 2022 and 2021, respectively. Future amortization expense is expected to be as followed: Year ending December 31, 2022 (remainder) $ 3,476 2023 $ 6,866 2024 $ 5,192 2025 $ 5,192 2026 $ 5,192 Thereafter $ 17,556 |
Bank revolving credit notes
Bank revolving credit notes | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Bank revolving credit notes | Note 3. Bank revolving credit notes On September 26, 2019, and as last amended on March 31, 2022, we entered into an amended and restated credit agreement (Credit Agreement) with certain lenders and Wells Fargo Bank, National Association, as administrative agent (the Agent). The Credit Agreement provides for a $200,000 revolving credit facility (the Revolving Loan), with a letter of credit sub-facility in an aggregate amount not to exceed $5,000, and a swingline facility in an aggregate amount of $20,000. The Credit Agreement also provides for an additional $100,000 of debt capacity through an accordion feature. All amounts borrowed under the Credit Agreement mature on September 26, 2024. The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on our ability to, subject to certain exceptions, create, incur or assume indebtedness, create or incur liens, make certain investments, merge or consolidate with another entity, make certain asset dispositions, pay dividends or other distributions to shareholders, enter into transactions with affiliates, enter into sale leaseback transactions or make capital expenditures. The Credit Agreement also requires us to satisfy certain financial covenants, including a minimum interest coverage ratio of 3.00 to 1.00 as well as a consolidated total leverage ratio not to exceed 3.25 to 1.00, although such leverage ratio can be increased in connection with certain acquisitions. In order to provide a means of insurance against future macroeconomic events, we entered into an amendment (Second Amendment) to the Credit Agreement on June 30, 2020. The Second Amendment provided the Company with temporary changes to the total leverage ratio covenant for the period from June 30, 2020, through December 31, 2021, or such earlier date as the Company may elect (Covenant Relief Period), in return for certain increases in interest rates, fees and restrictions on certain activities of the Company, including capital expenditures, acquisitions, dividends and share repurchases. New pricing, which took effect for the quarters ending on and after September 30, 2020, includes interest at a fluctuating London Interbank Offered Rate (LIBOR) (at a floor of 75 basis points), plus 1.00% to 2.75%, along with the commitment fee ranging from 20 to 50 basis points. During the Covenant Relief Period, the required ceiling on the Company’s total leverage ratio was 4.25 to 1.00 for quarters ending June 30, 2020 through and including December 31, 2020, and declined in quarterly increments to 3.25 to 1.00 through the quarter ending December 31, 2021. We entered into an amendment (Third Amendment) to the Credit Agreement on March 31, 2021 which allowed the Company to incur up to $70,000 of capital expenditures in 2021, as opposed to $35,000. We entered into an amendment (Fourth Amendment) to the Credit Agreement on March 31, 2022 which allows the Company to incur up to $65,000 of capital expenditures in 2022, as opposed to $35,000, and revises the definition of Consolidated EBITDA to include certain restructuring and impairment charges. At June 30, 2022, our consolidated total leverage ratio was 1.52 to 1.00 as compared to a covenant maximum of 3.25 to 1.00 in accordance with the Credit Agreement. At June 30, 2022, our interest coverage ratio was 18.34 to 1.00 as compared to a covenant minimum of 3.00 to 1.00 under the Credit Agreement. Under the Credit Agreement, interest is payable quarterly at the adjusted LIBOR plus an applicable margin based on the current funded indebtedness to adjusted EBITDA ratio. The interest rate was 2.06% and 1.75% as of June 30, 2022 and December 31, 2021, respectively. Additionally, the agreement has a fee on the average daily unused portion of the aggregate unused revolving commitments. This fee was 0.20% as of June 30, 2022 and December 31, 2021. The Company was in compliance with all financial covenants of its credit agreements as of June 30, 2022 and December 31, 2021. The amount borrowed on the revolving credit notes was $76,063 and $67,610 as of June 30, 2022 and December 31, 2021, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | Note 4. Leases In February 2016, the FASB issued ASU 2019-02, Leases reporting guidance as of January 1, 2022 using the effective date approach. The Company early adopted the interim reporting guidance during the period ended March 31, 2022. The most significant judgements and impacts related to the application of the new guidance include the following: ● In evaluating contracts to determine if they qualify as a lease, the Company considers factors such as if the Company has obtained or transferred substantially all of the rights to the underlying asset through exclusivity, if the Company can transfer or has transferred the ability to direct the use of the asset by making decisions about how and for what purpose the asset will be used and if the lessor has substantive substitution rights. ● The Company made judgements regarding lease terms for certain of its leases that were in month-to-month status or that contained auto-renewal clauses. The Company estimated a lease end date based on the required length of usage of the property and calculated a ROU asset and lease liability based on the resulting estimated lease term. ● The Company has recognized ROU assets and lease liabilities for operating leases that have not previously been recorded. The lease liability for operating leases is based on the net present value of future minimum lease payments. ● The ROU asset for operating leases is based on the initial calculated lease liability as adjusted for the reclassification of certain balance sheet amounts such as deferred rent. ● In determining the discount rate used to measure the ROU assets and lease liabilities, the Company uses the rate implicit in the lease, or if not readily available, the Company uses the Company’s incremental borrowing rate. The base rate used to establish the Company’s incremental borrowing rate is based on a Prime Rate (or LIBOR fallback option) plus fixed basis points methodology pursuant to the Company’s revolving credit facility (as amended from time to time). Certain required adjustments were then made to this base rate to arrive at an estimated incremental borrowing rate. ● The Company’s real property leases vary in terms of up to ten years , including options for renewal periods that are considered reasonably certain to be exercised. The Company’s personal property leases vary in terms of up to seven years , including options for renewal periods that are considered reasonably certain to be exercised. ● Upon adoption of the new guidance at January 1, 2022, the Company established a ROU asset of $37,908 and a lease liability of $38,185 related to its real property operating leases and established a ROU asset of $2,415 and a lease liability of $2,418 related to its personal property operating leases. Additionally, the impact on retained earnings was immaterial. The January 1, 2022, balances associated with the Company’s personal property finance leases will be reclassified in the financial statements from capital lease, net to property, plant and equipment, net, from current portion of capital lease obligation to other current liabilities, and from capital lease obligation, less current maturities to other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has real property operating leases for office and light manufacturing space. Operating leases for the Company’s personal property consist of leases for office equipment, vehicles, forklifts and storage tanks for bulk gases. The Company recognizes a ROU asset and a lease liability for operating leases based on the net present value of future minimum lease payments. Lease expense for the Company’s operating leases is recognized on a straight-line basis over the lease term, including renewal periods that are considered reasonably certain. The Company has finance leases for two laser cutting systems and a vehicle. The Company recognizes a ROU asset and a lease liability for finance leases based on the net present value of future minimum lease payments. Lease expense for the Company’s finance leases is comprised of the amortization of the ROU asset and interest expense recognized based on the effective interest method. Variable lease expense is related to certain of the Company’s real property leases and personal property leases, and it generally consists of property tax and insurance components that are for the benefit of the lessor (real property leases) and variable overage fees (personal property leases) that are remitted as part of the Company’s lease payments. The components of lease expense were as follows: Three Months Ended Six Months Ended June 30, 2022 June 30, 2022 Finance lease cost: Amortization of finance lease assets $ 78 $ 157 Interest on finance lease liabilities 11 22 Total finance lease expense 89 179 Operating lease expense 1,512 3,034 Short-term lease expense 139 318 Variable lease expense 61 108 Sublease income (1) (146) (146) Total lease expense $ 1,655 $ 3,493 (1) The Company subleased a portion of its Hazel Park, MI facility starting in June 2022. Total rent expense for the three and six months ended June 30, 2021 was $1,081 and $2,165, respectively. Supplemental information related to leases was as follows: Balance Sheet Classification June 30, 2022 Assets: Finance lease assets Property, plant and equipment, net $ 981 Operating lease assets Operating lease assets 37,842 Total lease assets $ 38,823 Current liabilities: Current finance lease liabilities Other current liabilities $ 323 Current operating lease liabilities Current portion of operating lease obligation 4,803 Noncurrent liabilities: Long-term finance lease liabilities Other long-term liabilities 730 Long-term operating lease liabilities Operating lease obligation, less current maturities 33,531 Total lease liabilities $ 39,387 June 30, 2022 Weighted average remaining lease term (in years) Finance leases 3.1 Operating leases 8.0 Weighted average discount rate Finance leases 4.00 % Operating leases 2.46 % The table below represents ROU asset balances by type of lease: June 30, 2022 Real estate leases $ 35,706 Equipment leases 2,874 Vehicle leases 243 Total lease assets $ 38,823 Maturities of lease liabilities at June 30, 2022 and minimum lease payments under ASC 842 having initial or remaining non-cancellable terms in excess of one year were as follows: Operating Finance Year ending December 31, Leases Leases Total 2022 (remainder) $ 2,837 $ 179 $ 3,016 2023 5,704 359 6,063 2024 5,667 357 6,024 2025 4,837 223 5,060 2026 4,656 — 4,656 Thereafter 18,771 — 18,771 Total lease payments 42,472 1,118 43,590 Less: lease modification not yet commenced — — — Less: imputed interest (4,138) (65) (4,203) Total lease obligations $ 38,334 $ 1,053 $ 39,387 At June 30, 2021, future minimum lease payments under ASC 840 were as follows: Operating Finance Year ending December 31, Leases Leases Total 2021 (remainder) $ 2,647 $ 367 $ 3,014 2022 5,528 734 6,262 2023 5,521 734 6,255 2024 4,786 514 5,300 2025 4,282 226 4,508 Thereafter 21,912 — 21,912 Total minimum lease payments $ 44,676 $ 2,575 $ 47,251 Lease related supplemental cash flow information: Six Months Ended June 30, 2022 Cash paid for amounts included in the measurement of lease liabilities for finance leases: Operating cash flows $ 22 Financing cash flows $ 157 Cash paid for amounts included in the measurement of lease liabilities for operating leases: Operating cash flows $ 2,837 Right-of-use assets obtained in exchange for recorded lease obligations: Operating leases $ 106 Finance leases $ — ROU assets are assessed for impairment in accordance with the Company’s long-lived asset policy. The Company reassesses lease classification and remeasures ROU assets and lease liabilities when a lease is modified, and that modification is not accounted for as a separate new lease or upon certain other events that require reassessment in accordance with ASC 842. |
Employee stock ownership plan
Employee stock ownership plan | 6 Months Ended |
Jun. 30, 2022 | |
Employee Stock Ownership Plan E S O P Shares In E S O P [Abstract] | |
Employee stock ownership plan | Note 5. Employee stock ownership plan Under the Mayville Engineering Company, Inc. Employee Stock Ownership Plan (the ESOP), the Company can make annual discretionary contributions to the trust for the benefit of eligible employees in the form of cash or shares of common stock of the Company subject to the Board of Directors’ approval. For the three months ended June 30, 2022 and 2021, the Company’s estimated ESOP expense was $1,330 and $228, respectively. For the six months ended June 30, 2022 and 2021, the Company’s estimated ESOP expense amounted to $1,820 and $701, respectively. At various times following death, disability, retirement or termination of employment, an ESOP participant is entitled to receive their ESOP account balance in accordance with various distribution methods as permitted under the policies adopted by the ESOP. As of June 30, 2022, and December 31, 2021, the ESOP shares, excluding safe harbor shares held in the Company’s 401(k) Plan, consisted of 5,684,879 and 7,292,392 in allocated shares, respectively. |
Retirement plans
Retirement plans | 6 Months Ended |
Jun. 30, 2022 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | Note 6. Retirement plans The Mayville Engineering Company Inc. 401(k) Plan (the 401(k) Plan) covers substantially all employees meeting certain eligibility requirements. The 401(k) Plan is a defined contribution plan and is intended for eligible employees to defer tax-free contributions to save for retirement. Employees may contribute up to 50% of their eligible compensation to the 401(k) Plan, subject to the limits of Section 401(k) of the Internal Revenue Code. The 401(k) Plan also provides for employer discretionary profit-sharing contributions and the Board of Directors may authorize discretionary profit-sharing contributions (which are usually approved at the end of each calendar year). |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 7. Income taxes On a quarterly basis, the Company estimates its effective tax rate for the full fiscal year and records a quarterly income tax provision based on the anticipated rate. As the year progresses, the Company will refine its estimate based on facts and circumstances by each tax jurisdiction. Income tax expense was $1,798 and $2,974, and the effective tax rate (ETR) was 23.27% and 23.37% for the three and six months ended June 30, 2022, respectively. Our ETR is different from the expected tax rate due to state taxes, non-deductible items, research and development credits and benefit from excess tax deductions related to share based compensation items. For the three and six months ended June 30, 2021, income tax expense was estimated at $1,007 and $1,996 and the ETR was 23.43% and 25.48%, respectively. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in these jurisdictions. ASC 740, Income Taxes The Company’s policy for recording interest and penalties associated with potential income tax audits is to record such expense as a component of income tax expense. There were no amounts for penalties or interest recorded as of June 30, 2022. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its positions. Uncertain Tax Positions Based on the Company’s evaluation, it has been concluded that there is one tax position related to the research and development tax credit requiring recognition in the Company’s financial statements as of June 30, 2022. The Company does not anticipate that there will be a material change in the balance of the unrecognized tax benefits in the next 12 months. Any interest and penalties related to uncertain tax positions are recorded in income tax expense. No amounts have been recorded as tax expense for interest and penalties for the three and six months ended June 30, 2022, as the amount for the utilized portion for the research and development credit on the Wisconsin return is considered to be immaterial. At June 30, 2022 and December 31, 2021, a total of $394 and $314, respectively, of unrecognized tax benefits would, if recognized, impact the Company’s ETR. The Company files income tax returns in the United States federal jurisdiction and in various state and local jurisdictions. Federal tax returns for tax years beginning January 1, 2018, and state tax returns beginning January 1, 2017, are open for examination. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | Note 8. Contingencies From time to time, the Company may be involved in various claims and lawsuits, both for and against the Company, arising in the normal course of business. Although the results of litigation and claims cannot be predicted with certainty, in management’s opinion, either the likelihood of loss is remote, or any reasonably possible loss associated with the resolution of such proceedings is not expected to have a material adverse impact on the consolidated financial statements. |
Deferred compensation
Deferred compensation | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Compensation Liability [Abstract] | |
Deferred compensation | Note 9. Deferred compensation The Mayville Engineering Deferred Compensation Plan is available for certain employees designated to be eligible to participate by the Company and approved by the Board of Directors. Eligible employees may elect to defer a portion of his or her compensation for any plan year and the deferral cannot exceed 50% of the participant’s base salary and may include the participant’s annual short-term cash incentive up to 100%. The participant’s election must be made prior to the first day of the plan year. An employer contribution will be made for each participant to reflect the amount of any reduced allocations to the ESOP and/or 401(k) employer contributions due solely to the participant’s deferral amounts, as applicable. In addition, a discretionary amount may be awarded to a participant by the Company. Deferrals are assumed to be invested in an investment vehicle based on the options made available to the participant (which does not include Company stock). The deferred compensation plan provides benefits payable upon separation of service or death. Payments are to be made 30 days after date of separation from service, either in a lump-sum payment or up to five annual installments as elected by the participant when the participant first elects to defer compensation. The deferred compensation plan is non-funded, and all future contributions are unsecured in that the employees have the status of a general unsecured creditor of the Company and the agreements constitute a promise by the Company to make benefit payments in the future. During the three and six months ended June 30, 2022 and 2021, eligible employees elected to defer compensation of $0. As of June 30, 2022 and December 31, 2021, the short-term portion accrued for all benefit years less than 12 months under this plan was $17,531 and $0, respectively. As of June 30, 2022 and December 31, 2021, the long-term portion accrued for all benefit years greater than 12 months under this plan was $2,949 and $25,117. These amounts include the initial deferral of compensation as adjusted for (a) subsequent changes in the share value of the Company stock or (b) in the investment options chosen by the participants. Total expense (credit) for the deferred compensation plan for the three months ended June 30, 2022 and 2021 was $(2,461) and $575, respectively. Total expense (credit) for the deferred compensation plan for the six months ended June 30, 2022 and 2021 amounted to $(3,589) and $405, respectively. These expenses (credits) are included in profit sharing, bonuses and deferred compensation on the Condensed Consolidated Statements of Comprehensive Income. Additionally, the Company made distributions of $1,048 and $575 for the six months ended June 30, 2022 and 2021, respectively. |
Self-Funded insurance
Self-Funded insurance | 6 Months Ended |
Jun. 30, 2022 | |
Insurance [Abstract] | |
Self-Funded insurance | Note 10. Self-Funded insurance The Company is self-funded for the medical benefits provided to its employees and their dependents. Healthcare costs are expensed as incurred and are based upon actual claims paid, reinsurance premiums, administration fees, and estimated unpaid claims. Since March 31, 2020, the Company has an aggregate stop loss limit to mitigate risk. Expense related to this is approximately $3,388 and $3,290 for the three months ended June 30, 2022 and 2021, respectively, and $8,148 and $7,011 for the six months ended June 30, 2022 and 2021, respectively. An estimated accrued liability of approximately $1,421 and $1,471 was recorded as of June 30, 2022 and December 31, 2021, respectively, for estimated unpaid claims and is included within other current liabilities on the Condensed Consolidated Balance Sheets. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segments | Note 11. Segments The Company applies the provisions of ASC 280, Segment Reporting |
Fair value of financial instrum
Fair value of financial instruments | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | Note 12. Fair value of financial instruments Fair value provides information on what the Company may realize if certain assets were sold or might pay to transfer certain liabilities based upon an exit price. Financial assets and liabilities that are measured and reported at fair value are classified into a three-level hierarchy that prioritizes the inputs used in the valuation process. A financial instrument’s categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs as follows: ● Level 1 – Quoted prices in active markets for identical assets or liabilities. ● Level 2 – Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data. Long-term debt is classified as a Level 2 fair value input. ● Level 3 – Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company’s own data and judgements about assumptions that market participants would use in pricing the asset or liability. The following table lists the Company’s financial assets and liabilities accounted for at fair value by the fair value hierarchy: Balance at Fair Value Measurements at June 30, Report Date Using 2022 (Level 1) (Level 2) (Level 3) Deferred compensation liability $ 20,480 $ 20,480 $ — $ — Total $ 20,480 $ 20,480 $ — $ — Balance at Fair Value Measurements at December 31, Report Date Using 2021 (Level 1) (Level 2) (Level 3) Deferred compensation liability $ 25,117 $ 22,272 $ 2,845 $ — Total $ 25,117 $ 22,272 $ 2,845 $ — Fair value measurements for the Company’s cash and cash equivalents are classified based upon Level 1 measurements because such measurements are based upon quoted market prices in active markets for identical assets. Accounts receivable, accounts payable, long-term debt and accrued liabilities are recorded in the Condensed Consolidated Balance Sheets at cost and approximate fair value. Deferred compensation liabilities are recorded at amounts due to participants at the time of deferral. Deferrals are invested in an investment vehicle based on the options made available to the participant, considered to be Level 1 and Level 2 on the fair value hierarchy, with the current balance as Level 1. The change in fair value is recorded in the profit sharing, bonuses, and deferred compensation line item on the Condensed Consolidated Statements of Comprehensive Income. The short-term and long-term balances due to participants are reflected on the current portion of deferred compensation and deferred compensation, less current portion, line items, respectively, on the Condensed Consolidated Balance Sheets. The Company’s non-financial assets such as goodwill, intangible assets and property, plant, and equipment are re-measured at fair value when there is an indication of impairment and adjusted only when an impairment charge is recognized. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | Note 13. Earnings Per Share The Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share A reconciliation of basic and diluted net income per share attributable to the Company were as follows: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income attributable to MEC $ 5,929 $ 3,292 $ 9,751 $ 5,837 Average shares outstanding 20,581,945 20,454,541 20,490,944 20,316,936 Basic per share $ 0.29 $ 0.16 $ 0.48 $ 0.29 Average shares outstanding 20,581,945 20,454,541 20,490,944 20,316,936 Effect of dilutive share-based compensation 68,606 409,990 316,733 368,805 Total potential shares outstanding 20,650,551 20,864,531 20,807,677 20,685,741 Diluted per share $ 0.29 $ 0.16 $ 0.47 $ 0.28 Options in the money that were not included in the computation of diluted earnings per share because they would have had an anti-dilutive impact on earnings per share were as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Stock options — 300,510 — 300,510 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | Note 14. Revenue Recognition Contract Assets and Contract Liabilities The Company has contract assets and contract liabilities, which are included in tooling in progress and other current liabilities on the Condensed Consolidated Balance Sheets, respectively. Contract assets include products where the Company has satisfied its performance obligation, but receipt of payment is contingent upon delivery. Contract liabilities include deferred tooling revenue, where the performance obligation was not met. The performance obligation is satisfied when the tooling is completed and the customer signs off through the Product Part Approval Process (PPAP). Cost of goods sold is recognized and released from the balance sheet when control of the tooling promised under contract is transferred to the customer. The Company’s contracts with customers are short-term in nature; therefore, revenue is typically recognized, billed and collected within a 12-month period. The following table reflects the changes in our contract assets and liabilities during the six months ended June 30, 2022: Contract Contract Assets Liabilities As of December 31, 2021 $ 3,950 $ 2,718 Net activity 1,367 2,598 As of June 30, 2022 $ 5,317 $ 5,316 Disaggregated Revenue The following table represents a disaggregation of revenue by product category: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Outdoor sports $ 2,522 $ 3,006 $ 5,049 $ 5,677 Fabrication 83,038 78,318 165,271 147,689 Performance structures 28,197 18,753 57,157 39,208 Tube 19,488 15,760 37,796 30,647 Tank 8,915 5,622 17,464 12,413 Total 142,160 121,459 282,737 235,634 Intercompany sales elimination (3,823) (1,246) (8,148) (2,801) Total, net sales $ 138,337 $ 120,213 $ 274,589 $ 232,833 |
Concentration of major customer
Concentration of major customers | 6 Months Ended |
Jun. 30, 2022 | |
Risks And Uncertainties [Abstract] | |
Concentration of major customers | Note 15. Concentration of major customers The following customers accounted for 10% or greater of the Company’s recorded net sales or net trade receivables: Net Sales Accounts Receivable Three Months Ended Six Months Ended As of As of June 30, June 30, June 30, December 31, 2022 2021 2022 2021 2022 2021 Customer A 18.3 % 16.7 % 18.2 % 16.2 % 15.1 % 10.2 % B 11.9 % 10.3 % 11.5 % 11.1 % <10 % <10 % C <10 % <10 % <10 % 10.8 % <10 % <10 % D 16.1 % 15.2 % 15.9 % 14.3 % 10.2 % <10 % E <10 % <10 % <10 % <10 % 12.7 % 11.2 % |
Stock based compensation
Stock based compensation | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock based compensation | Note 16. Stock based compensation The Mayville Engineering Company, Inc. 2019 Omnibus Incentive Plan provides the Company the ability to grant monetary payments based on the value of its common stock, up to 2,000,000 shares. On April 20, 2021, shareholders of the Company approved an amendment to the 2019 Omnibus Incentive Plan increasing the number of shares of common stock authorized for issuance by 2,500,000 shares. The Company recognizes stock-based compensation using the fair value provisions prescribed by ASC 718, Compensation – Stock Compensation Cancellations and forfeitures are accounted for as incurred. Stock awards were granted on April 19, 2022, February 28, 2022, June 3, 2021, May 12, 2021, April 20, 2021, February 28, 2021, May 12, 2020, February 27, 2020 and May 8, 2019. There were no stock awards granted prior to this. During the six months ended June 30, 2022, 271,992 units vested. For the same period, 512,927 options vested with a weighted average strike price of $9.18. During the six months ended June 30, 2021, 314,902 units vested. For the same period, 484,661 options vested with a strike price of $11.23. As of June 30, 2022, 1,107,714 options remained outstanding with a weighted average strike price of $10.31 and a weighted average contractual life of 7.73 years remaining. The Company’s stock-based compensation expense by award type is summarized as follows: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Unit awards $ 874 $ 849 $ 1,626 $ 1,568 Option awards 582 539 1,088 1,020 Stock based compensation expense, net of tax $ 1,456 $ 1,388 $ 2,714 $ 2,588 A roll-forward of unrecognized stock-based compensation expense is displayed in the table below. Unrecognized stock-based compensation expense as of June 30, 2022 will be expensed over the remaining requisite service period from which individual award values relate, up to April 19, 2023. Units Options Total Balance as of December 31, 2021 $ 1,676 $ 1,537 $ 3,213 Grants 3,007 2,573 5,580 Forfeitures (39) — (39) Expense (751) (506) (1,257) Balance as of March 31, 2022 $ 3,893 $ 3,604 $ 7,497 Grants 750 — 750 Forfeitures — — — Expense (874) (582) (1,456) Balance as of June 30, 2022 $ 3,769 $ 3,022 $ 6,791 |
Subsequent events
Subsequent events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 17. Subsequent events The Company has evaluated subsequent events since June 30, 2022, the date of these financial statements. There were no material events or transactions discovered during this evaluation that requires recognition or disclosure in the financial statements. |
Basis of presentation (Policies
Basis of presentation (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations MEC is a leading U.S.-based value-added manufacturing partner that provides a broad range of prototyping and tooling, production fabrication, coating, assembly and aftermarket components. Our customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, agriculture, military and other end markets. Founded in 1945 and headquartered in Mayville, Wisconsin, we are a leading Tier I U.S. supplier of highly engineered components to original equipment manufacturers (OEM) customers with leading positions in their respective markets. The Company operates 20 facilities, of which 19 are in operation, located in Arkansas, Michigan, Mississippi, Ohio, Pennsylvania, Virginia, and Wisconsin. Our engineering expertise and technical know-how allow us to add value through every product redevelopment cycle (generally every three to five years for our customers). Our one operating segment focuses on producing metal components that are used in a broad range of heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, agricultural, military and other products. The COVID-19 pandemic has had and will continue to have a negative impact on our business, financial condition, cash flows, results of operations, supply chain, and raw material availability, although the full extent is still uncertain. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases annual reporting guidance as of January 1, 2022 using the effective date approach. The Company early adopted the interim reporting guidance during the period ended March 31, 2022. The new guidance provides a number of optional practical expedients in transition. The Company elected the "package of practical expedients", which allows it to not reassess under the new guidance its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight practical expedient. In addition, the new guidance provides accounting policy elections for an entity’s ongoing lessee accounting. The Company has elected to not separate lease and non-lease components for certain of its real estate leases. The Company has elected the short-term lease recognition exemption for all leases that qualify which means that it will not recognize ROU assets or lease liabilities for those leases with a term of 12 months or less. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments Financial Instruments – Credit Losses In December 2019, the FASB issued ASU 2019-12, Income Taxes A summary of the Company’s evaluation of other recent accounting pronouncements is included in the Company’s 2021 financial statements in its Annual Report on Form 10-K for the year ended December 31, 2021. |
Select balance sheet data (Tabl
Select balance sheet data (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Select Balance Sheet Data [Abstract] | |
Schedule of Inventories | June 30, December 31, 2022 2021 Finished goods and purchased parts $ 42,828 $ 41,041 Raw materials 19,500 18,905 Work-in-process 11,775 10,211 Total $ 74,103 $ 70,157 |
Schedule of Property, Plant and Equipment | Useful Lives June 30, December 31, Years 2022 2021 Land Indefinite $ 1,033 $ 1,033 Land improvements 15-39 3,169 3,169 Building and building improvements 15-39 57,971 56,243 Machinery, equipment and tooling 3-10 230,803 222,202 Vehicles 5 3,947 3,943 Office furniture and fixtures 3-7 18,785 17,960 Construction in progress N/A 22,919 15,443 Total property, plant and equipment, gross 338,627 319,993 Less accumulated depreciation 209,118 199,247 Total property, plant and equipment, net $ 129,509 $ 120,746 |
Schedule of Changes In Goodwill | Balance as of December 31, 2021 $ 71,535 Impairment — Balance as of June 30, 2022 $ 71,535 |
Schedule of Listing of Intangible Assets | Useful Lives June 30, December 31, Years 2022 2021 Amortizable intangible assets: Customer relationships and contracts 9-12 $ 78,340 $ 78,340 Trade name 10 14,780 14,780 Non-compete agreements 5 8,800 8,800 Patents 19 24 24 Accumulated amortization (58,470) (54,994) Total amortizable intangible assets, net 43,474 46,950 Non-amortizable brand name 3,811 3,811 Total intangible assets, net $ 47,285 $ 50,761 |
Schedule of Changes In Intangible Assets | Balance as of December 31, 2021 $ 50,761 Amortization expense (3,476) Balance as of June 30, 2022 $ 47,285 |
Schedule of Future Amortization Expense | Year ending December 31, 2022 (remainder) $ 3,476 2023 $ 6,866 2024 $ 5,192 2025 $ 5,192 2026 $ 5,192 Thereafter $ 17,556 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Summary of components of lease expense | Three Months Ended Six Months Ended June 30, 2022 June 30, 2022 Finance lease cost: Amortization of finance lease assets $ 78 $ 157 Interest on finance lease liabilities 11 22 Total finance lease expense 89 179 Operating lease expense 1,512 3,034 Short-term lease expense 139 318 Variable lease expense 61 108 Sublease income (1) (146) (146) Total lease expense $ 1,655 $ 3,493 |
Schedule of supplemental balance sheet information | Balance Sheet Classification June 30, 2022 Assets: Finance lease assets Property, plant and equipment, net $ 981 Operating lease assets Operating lease assets 37,842 Total lease assets $ 38,823 Current liabilities: Current finance lease liabilities Other current liabilities $ 323 Current operating lease liabilities Current portion of operating lease obligation 4,803 Noncurrent liabilities: Long-term finance lease liabilities Other long-term liabilities 730 Long-term operating lease liabilities Operating lease obligation, less current maturities 33,531 Total lease liabilities $ 39,387 June 30, 2022 Weighted average remaining lease term (in years) Finance leases 3.1 Operating leases 8.0 Weighted average discount rate Finance leases 4.00 % Operating leases 2.46 % |
Schedule of ROU asset balances | June 30, 2022 Real estate leases $ 35,706 Equipment leases 2,874 Vehicle leases 243 Total lease assets $ 38,823 |
Future Minimum Lease Payments Under Leases | Operating Finance Year ending December 31, Leases Leases Total 2022 (remainder) $ 2,837 $ 179 $ 3,016 2023 5,704 359 6,063 2024 5,667 357 6,024 2025 4,837 223 5,060 2026 4,656 — 4,656 Thereafter 18,771 — 18,771 Total lease payments 42,472 1,118 43,590 Less: lease modification not yet commenced — — — Less: imputed interest (4,138) (65) (4,203) Total lease obligations $ 38,334 $ 1,053 $ 39,387 |
Schedule of minimum lease payments under ASC 842- Finance leases | Operating Finance Year ending December 31, Leases Leases Total 2022 (remainder) $ 2,837 $ 179 $ 3,016 2023 5,704 359 6,063 2024 5,667 357 6,024 2025 4,837 223 5,060 2026 4,656 — 4,656 Thereafter 18,771 — 18,771 Total lease payments 42,472 1,118 43,590 Less: lease modification not yet commenced — — — Less: imputed interest (4,138) (65) (4,203) Total lease obligations $ 38,334 $ 1,053 $ 39,387 |
Schedule of minimum lease payments under ASC 840- Operating leases | Operating Finance Year ending December 31, Leases Leases Total 2021 (remainder) $ 2,647 $ 367 $ 3,014 2022 5,528 734 6,262 2023 5,521 734 6,255 2024 4,786 514 5,300 2025 4,282 226 4,508 Thereafter 21,912 — 21,912 Total minimum lease payments $ 44,676 $ 2,575 $ 47,251 |
Schedule of Future Minimum Lease Payments Required Under The Lease | Operating Finance Year ending December 31, Leases Leases Total 2021 (remainder) $ 2,647 $ 367 $ 3,014 2022 5,528 734 6,262 2023 5,521 734 6,255 2024 4,786 514 5,300 2025 4,282 226 4,508 Thereafter 21,912 — 21,912 Total minimum lease payments $ 44,676 $ 2,575 $ 47,251 |
Schedule of Supplemental cash flow information | Six Months Ended June 30, 2022 Cash paid for amounts included in the measurement of lease liabilities for finance leases: Operating cash flows $ 22 Financing cash flows $ 157 Cash paid for amounts included in the measurement of lease liabilities for operating leases: Operating cash flows $ 2,837 Right-of-use assets obtained in exchange for recorded lease obligations: Operating leases $ 106 Finance leases $ — |
Fair value of financial instr_2
Fair value of financial instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Accounted for at Fair Value by Fair Value Hierarchy | The following table lists the Company’s financial assets and liabilities accounted for at fair value by the fair value hierarchy: Balance at Fair Value Measurements at June 30, Report Date Using 2022 (Level 1) (Level 2) (Level 3) Deferred compensation liability $ 20,480 $ 20,480 $ — $ — Total $ 20,480 $ 20,480 $ — $ — Balance at Fair Value Measurements at December 31, Report Date Using 2021 (Level 1) (Level 2) (Level 3) Deferred compensation liability $ 25,117 $ 22,272 $ 2,845 $ — Total $ 25,117 $ 22,272 $ 2,845 $ — |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income attributable to MEC $ 5,929 $ 3,292 $ 9,751 $ 5,837 Average shares outstanding 20,581,945 20,454,541 20,490,944 20,316,936 Basic per share $ 0.29 $ 0.16 $ 0.48 $ 0.29 Average shares outstanding 20,581,945 20,454,541 20,490,944 20,316,936 Effect of dilutive share-based compensation 68,606 409,990 316,733 368,805 Total potential shares outstanding 20,650,551 20,864,531 20,807,677 20,685,741 Diluted per share $ 0.29 $ 0.16 $ 0.47 $ 0.28 |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share | Options in the money that were not included in the computation of diluted earnings per share because they would have had an anti-dilutive impact on earnings per share were as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Stock options — 300,510 — 300,510 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Changes in Contract Assets and Liabilities | Contract Contract Assets Liabilities As of December 31, 2021 $ 3,950 $ 2,718 Net activity 1,367 2,598 As of June 30, 2022 $ 5,317 $ 5,316 |
Schedule of Disaggregation of Revenue by Product Category | The following table represents a disaggregation of revenue by product category: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Outdoor sports $ 2,522 $ 3,006 $ 5,049 $ 5,677 Fabrication 83,038 78,318 165,271 147,689 Performance structures 28,197 18,753 57,157 39,208 Tube 19,488 15,760 37,796 30,647 Tank 8,915 5,622 17,464 12,413 Total 142,160 121,459 282,737 235,634 Intercompany sales elimination (3,823) (1,246) (8,148) (2,801) Total, net sales $ 138,337 $ 120,213 $ 274,589 $ 232,833 |
Concentration of major custom_2
Concentration of major customers (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Risks And Uncertainties [Abstract] | |
Schedules of Major Customer Concentrations | The following customers accounted for 10% or greater of the Company’s recorded net sales or net trade receivables: Net Sales Accounts Receivable Three Months Ended Six Months Ended As of As of June 30, June 30, June 30, December 31, 2022 2021 2022 2021 2022 2021 Customer A 18.3 % 16.7 % 18.2 % 16.2 % 15.1 % 10.2 % B 11.9 % 10.3 % 11.5 % 11.1 % <10 % <10 % C <10 % <10 % <10 % 10.8 % <10 % <10 % D 16.1 % 15.2 % 15.9 % 14.3 % 10.2 % <10 % E <10 % <10 % <10 % <10 % 12.7 % 11.2 % |
Stock based compensation (Table
Stock based compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock-based Compensation Expenses | The Company’s stock-based compensation expense by award type is summarized as follows: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Unit awards $ 874 $ 849 $ 1,626 $ 1,568 Option awards 582 539 1,088 1,020 Stock based compensation expense, net of tax $ 1,456 $ 1,388 $ 2,714 $ 2,588 |
Schedule of Unrecognized Stock-based Compensation Expense | Units Options Total Balance as of December 31, 2021 $ 1,676 $ 1,537 $ 3,213 Grants 3,007 2,573 5,580 Forfeitures (39) — (39) Expense (751) (506) (1,257) Balance as of March 31, 2022 $ 3,893 $ 3,604 $ 7,497 Grants 750 — 750 Forfeitures — — — Expense (874) (582) (1,456) Balance as of June 30, 2022 $ 3,769 $ 3,022 $ 6,791 |
Basis of presentation - Additio
Basis of presentation - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2022 facility segment | |
Basis Of Presentation [Line Items] | |
Number of facilities operated | 20 |
Number of facilities in operation | 19 |
Number of operating segments | segment | 1 |
Accounting Standards Update 2016-02 [Member] | |
Basis Of Presentation [Line Items] | |
Change in accounting principle, accounting standards update, early adoption | true |
ASU 2019-12 [Member] | |
Basis Of Presentation [Line Items] | |
Change in accounting principle, accounting standards update, adoption date | Mar. 31, 2021 |
Change in accounting principle, accounting standards update, immaterial effect | true |
Select balance sheet data - Sch
Select balance sheet data - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Select Balance Sheet Data [Abstract] | ||
Finished goods and purchased parts | $ 42,828 | $ 41,041 |
Raw materials | 19,500 | 18,905 |
Work-in-process | 11,775 | 10,211 |
Total | $ 74,103 | $ 70,157 |
Select balance sheet data - S_2
Select balance sheet data - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 338,627 | $ 319,993 | |
Less accumulated depreciation | 209,118 | 199,247 | |
Total property, plant and equipment, net | 129,509 | $ 1,136 | 120,746 |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 1,033 | 1,033 | |
Property, plant and equipment useful lives | Indefinite | ||
Land Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 3,169 | 3,169 | |
Land Improvements [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment useful lives | 15 years | ||
Land Improvements [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment useful lives | 39 years | ||
Building and Building Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 57,971 | 56,243 | |
Building and Building Improvements [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment useful lives | 15 years | ||
Building and Building Improvements [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment useful lives | 39 years | ||
Machinery, Equipment and Tooling [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 230,803 | 222,202 | |
Machinery, Equipment and Tooling [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment useful lives | 3 years | ||
Machinery, Equipment and Tooling [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment useful lives | 10 years | ||
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 3,947 | 3,943 | |
Property, plant and equipment useful lives | 5 years | ||
Office Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 18,785 | 17,960 | |
Office Furniture and Fixtures [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment useful lives | 3 years | ||
Office Furniture and Fixtures [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment useful lives | 7 years | ||
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, gross | $ 22,919 | $ 15,443 |
Select balance sheet data - Add
Select balance sheet data - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Jan. 01, 2022 | |
Select Balance Sheet Data [Line Items] | ||||||
Impairment of inventory | $ 329 | $ 700 | ||||
Decreased inventories, net | 4,033 | $ 8,984 | 39 | |||
Depreciation | $ 5,507 | $ 5,161 | 10,975 | 10,236 | ||
Impairment of long-lived asset | 12,875 | |||||
Purchase commitments for property, plant and equipment canceled | 906 | 2,089 | ||||
Finance leases right of use assets | 981 | 981 | $ 981 | |||
Machinery and Equipment Sold | 4,971 | |||||
Gain on sale of assets | 520 | 625 | (66) | |||
Property, plant and equipment, net | 129,509 | 129,509 | 120,746 | $ 1,136 | ||
Assets held for sale | 1,288 | 1,288 | ||||
Amortization expense | $ 1,738 | $ 2,677 | $ 3,476 | $ 5,353 | ||
Other Current Liabilities [Member] | ||||||
Select Balance Sheet Data [Line Items] | ||||||
Impairment of inventory | $ 661 |
Select balance sheet data - S_3
Select balance sheet data - Schedule of Changes In Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Select Balance Sheet Data [Abstract] | |
Balance | $ 71,535 |
Impairment | 0 |
Balance | $ 71,535 |
Select balance sheet data - S_4
Select balance sheet data - Schedule of Listing of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Amortizable intangible assets [Abstract] | ||
Accumulated amortization | $ (58,470) | $ (54,994) |
Total amortizable intangible assets, net | 43,474 | 46,950 |
Total intangible assets, net | 47,285 | 50,761 |
Customer relationships and contracts [Member] | ||
Amortizable intangible assets [Abstract] | ||
Amortizable intangible assets, gross | $ 78,340 | 78,340 |
Trade name [Member] | ||
Amortizable intangible assets [Abstract] | ||
Intangible assets useful Lives | 10 years | |
Amortizable intangible assets, gross | $ 14,780 | 14,780 |
Non-compete agreements [Member] | ||
Amortizable intangible assets [Abstract] | ||
Intangible assets useful Lives | 5 years | |
Amortizable intangible assets, gross | $ 8,800 | 8,800 |
Patents [Member] | ||
Amortizable intangible assets [Abstract] | ||
Intangible assets useful Lives | 19 years | |
Amortizable intangible assets, gross | $ 24 | 24 |
Non-amortizable Brand Name [Member] | ||
Amortizable intangible assets [Abstract] | ||
Total intangible assets, net | $ 3,811 | $ 3,811 |
Minimum [Member] | Customer relationships and contracts [Member] | ||
Amortizable intangible assets [Abstract] | ||
Intangible assets useful Lives | 9 years | |
Maximum [Member] | Customer relationships and contracts [Member] | ||
Amortizable intangible assets [Abstract] | ||
Intangible assets useful Lives | 12 years |
Select balance sheet data - S_5
Select balance sheet data - Schedule of Changes In Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Select Balance Sheet Data [Abstract] | ||||
Balance | $ 50,761 | |||
Amortization expense | $ (1,738) | $ (2,677) | (3,476) | $ (5,353) |
Balance | $ 47,285 | $ 47,285 |
Select balance sheet data - S_6
Select balance sheet data - Schedule of Future Amortization Expense (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Select Balance Sheet Data [Abstract] | |
2022 (remainder) | $ 3,476 |
2023 | 6,866 |
2024 | 5,192 |
2025 | 5,192 |
2026 | 5,192 |
Thereafter | $ 17,556 |
Bank revolving credit notes - A
Bank revolving credit notes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 26, 2019 | Dec. 31, 2021 | Jun. 30, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | |
Line Of Credit Facility [Line Items] | |||||
Revolving credit notes | $ 67,610 | $ 76,063 | $ 67,610 | ||
A&R Credit Agreement [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Minimum interest coverage ratio | 3% | ||||
Maximum consolidated leverage ratio | 3.25% | ||||
A&R Credit Agreement [Member] | The Agent [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Credit agreement additional borrowing capacity through accordion feature | $ 100,000 | ||||
Credit agreement maturity date | Sep. 26, 2024 | ||||
Second Amendment [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Minimum interest coverage ratio | 3% | ||||
Maximum consolidated leverage ratio | 3.25% | ||||
Debt instrument covenant description | The Second Amendment provided the Company with temporary changes to the total leverage ratio covenant for the period from June 30, 2020, through December 31, 2021, or such earlier date as the Company may elect (Covenant Relief Period), in return for certain increases in interest rates, fees and restrictions on certain activities of the Company, including capital expenditures, acquisitions, dividends and share repurchases. New pricing, which took effect for the quarters ending on and after September 30, 2020, includes interest at a fluctuating London Interbank Offered Rate (LIBOR) (at a floor of 75 basis points), plus 1.00% to 2.75%, along with the commitment fee ranging from 20 to 50 basis points. | ||||
Floor rate | 0.75% | ||||
Leverage ratio | 3.25% | 4.25% | |||
Consolidated leverage ratio | 1.52% | ||||
Interest coverage ratios | 18.34% | ||||
Second Amendment [Member] | Minimum [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument commitment fee percentage | 0.20% | ||||
Second Amendment [Member] | Minimum [Member] | LIBOR [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1% | ||||
Second Amendment [Member] | Maximum [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument commitment fee percentage | 0.50% | ||||
Second Amendment [Member] | Maximum [Member] | LIBOR [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 2.75% | ||||
Third Amendment [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Capital expenditure incurred | 35,000 | ||||
Third Amendment [Member] | Maximum [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Capital expenditure incurred | $ 70,000 | ||||
Fourth Amendment [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Capital expenditure incurred | $ 35,000 | ||||
Fourth Amendment [Member] | Maximum [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Capital expenditure incurred | $ 65,000 | ||||
Revolving Credit Facility [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Interest rate | 2.06% | 1.75% | |||
Revolving commitments fee percentage | 0.20% | 0.20% | |||
Revolving credit notes | $ 67,610 | $ 76,063 | $ 67,610 | ||
Revolving Credit Facility [Member] | A&R Credit Agreement [Member] | The Agent [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Credit agreement borrowing capacity | $ 200,000 | ||||
Letter of Credit Sub-facility [Member] | A&R Credit Agreement [Member] | The Agent [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Credit agreement borrowing capacity | 5,000 | ||||
Swingline Facility [Member] | A&R Credit Agreement [Member] | The Agent [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Credit agreement borrowing capacity | $ 20,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jan. 01, 2022 | |
Leases | ||
Lease option to extend | true | |
Operating lease assets | $ 37,842 | |
Operating lease liability | $ 38,334 | |
Real Property [Member] | ||
Leases | ||
Operating lease assets | $ 37,908 | |
Operating lease liability | 38,185 | |
Real Property [Member] | Maximum [Member] | ||
Leases | ||
Lease term | 10 years | |
Personal Property [Member] | ||
Leases | ||
Operating lease assets | 2,415 | |
Operating lease liability | $ 2,418 | |
Personal Property [Member] | Maximum [Member] | ||
Leases | ||
Lease term | 7 years |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Leases [Abstract] | ||
Amortization of finance lease assets | $ 78 | $ 157 |
Interest on finance lease liabilities | 11 | 22 |
Total finance lease expense | 89 | 179 |
Operating lease expense | 1,512 | 3,034 |
Short-term lease expense | 139 | 318 |
Variable lease expense | 61 | 108 |
Sublease income | (146) | (146) |
Total lease expense | 1,655 | 3,493 |
Rent expense | $ 1,081 | $ 2,165 |
Leases - Supplemental informati
Leases - Supplemental information related to leases (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 01, 2022 |
Leases [Abstract] | ||
Finance leases right of use assets | $ 981 | $ 981 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, plant and equipment, net | |
Operating lease assets | $ 37,842 | |
Total lease assets | 38,823 | |
Current portion of finance lease obligation | 323 | |
Current portion of operating lease obligation | 4,803 | |
Finance lease obligation, less current maturities | 730 | |
Operating lease obligation, less current maturities | 33,531 | |
Total lease liabilities | $ 39,387 | |
Weighted average remaining lease term (in years) - Finance leases | 3 years 1 month 6 days | |
Weighted average remaining lease term (in years) - Operating leases | 8 years | |
Weighted average discount rate -Finance leases | 4% | |
Weighted average discount rate -Operating leases | 2.46% |
Leases - ROU asset balances (De
Leases - ROU asset balances (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Leases | |
Total lease assets | $ 38,823 |
Real estate leases | |
Leases | |
Total lease assets | 35,706 |
Equipment [Member] | |
Leases | |
Total lease assets | 2,874 |
Vehicles [Member] | |
Leases | |
Total lease assets | $ 243 |
Leases - Minimum lease payments
Leases - Minimum lease payments under ASC 842 (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Operating leases | |
2022 (remainder) | $ 2,837 |
2023 | 5,704 |
2024 | 5,667 |
2025 | 4,837 |
2026 | 4,656 |
Thereafter | 18,771 |
Total | 42,472 |
Less: imputed interest | (4,138) |
Total lease obligations | 38,334 |
Finance leases | |
2022 (remainder) | 179 |
2023 | 359 |
2024 | 357 |
2025 | 223 |
Total lease payments | 1,118 |
Less: imputed interest | (65) |
Total lease obligations | 1,053 |
Leases | |
2022 (remainder) | 3,016 |
2023 | 6,063 |
2024 | 6,024 |
2025 | 5,060 |
2026 | 4,656 |
Thereafter | 18,771 |
Total lease payments | 43,590 |
Less: imputed interest | (4,203) |
Total lease obligations | $ 39,387 |
Leases - Future minimum lease p
Leases - Future minimum lease payments under ASC 840 (Details) $ in Thousands | Jun. 30, 2021 USD ($) |
Operating lease | |
2021 (remainder) | $ 2,647 |
2022 | 5,528 |
2023 | 5,521 |
2024 | 4,786 |
2025 | 4,282 |
Thereafter | 21,912 |
Total minimum lease payments | 44,676 |
Finance lease | |
2022 (remainder) | 367 |
2023 | 734 |
2024 | 734 |
2025 | 514 |
2026 | 226 |
Total | 2,575 |
Leases | |
2021 (remainder) | 3,014 |
2022 | 6,262 |
2023 | 6,255 |
2024 | 5,300 |
2025 | 4,508 |
Thereafter | 21,912 |
Total minimum lease payments | $ 47,251 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities for finance leases: Operating cash flows | $ 22 | |
Cash paid for amounts included in the measurement of lease liabilities for finance leases: Financing cash flows | 157 | $ 310 |
Cash paid for amounts included in the measurement of lease liabilities for operating leases: Operating cash flows | 2,837 | |
Right-of-use assets obtained in exchange for recorded lease obligations: Operating cash flows | $ 106 |
Employee stock ownership plan -
Employee stock ownership plan - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||
Employee stock ownership plan (ESOP), (income) expense | $ 1,330 | $ 228 | $ 1,820 | $ 701 | |
Shares in ESOP | 5,684,879 | 5,684,879 | 7,292,392 | ||
Employee Stock Option [Member] | |||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||
Employee stock ownership plan (ESOP), (income) expense | $ 1,330 | $ 228 | $ 1,820 | $ 701 |
Retirement plans - Additional I
Retirement plans - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Compensation And Retirement Disclosure [Abstract] | |
Percentage of employee contribution of eligible compensation plan | 50% |
Income taxes - Additional Infor
Income taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 1,798 | $ 1,007 | $ 2,974 | $ 1,996 | |
Effective income tax rate | 23.27% | 23.43% | 23.37% | 25.48% | |
Penalties or interest recorded | $ 0 | $ 0 | |||
Tax expense for interest and penalties | 0 | ||||
Unrecognized tax benefits that would impact effective tax rate | $ 394 | $ 394 | $ 314 |
Deferred compensation - Additio
Deferred compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Deferred Compensation Arrangement With Individual Excluding Share Based Payments And Postretirement Benefits [Line Items] | |||||
Description of deferred compensation arrangements | The Mayville Engineering Deferred Compensation Plan is available for certain employees designated to be eligible to participate by the Company and approved by the Board of Directors. | ||||
Deferred compensation plan (Income) expense | $ 1,208 | $ 3,210 | $ 3,755 | $ 6,074 | |
Deferred compensation cash-based arrangements liability, Current | 17,531 | 17,531 | $ 0 | ||
Deferred compensation cash-based arrangements liability, Non current | 2,949 | 2,949 | $ 25,117 | ||
Deferred compensation, distributions paid | 1,048 | 575 | |||
Deferred Profit Sharing [Member] | |||||
Deferred Compensation Arrangement With Individual Excluding Share Based Payments And Postretirement Benefits [Line Items] | |||||
Deferred compensation plan (Income) expense | (2,461) | $ 575 | $ (3,589) | $ 405 | |
Employees [Member] | |||||
Deferred Compensation Arrangement With Individual Excluding Share Based Payments And Postretirement Benefits [Line Items] | |||||
Deferred compensation plan (Income) expense | $ 0 | ||||
Maximum [Member] | |||||
Deferred Compensation Arrangement With Individual Excluding Share Based Payments And Postretirement Benefits [Line Items] | |||||
Annual short term cash incentive | 100% | ||||
Deferred compensation arrangements | 50% |
Self-Funded insurance - Additio
Self-Funded insurance - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Insurance [Abstract] | |||||
Estimated accrued liability | $ 1,421 | $ 1,421 | $ 1,471 | ||
Reinsured limit of aggregate expense | $ 3,388 | $ 3,290 | $ 8,148 | $ 7,011 |
Segments - Additional Informati
Segments - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Fair value of financial instr_3
Fair value of financial instruments - Schedule of Financial Assets and Liabilities Accounted for at Fair Value by Fair Value Hierarchy (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total | $ 20,480 | $ 25,117 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total | 20,480 | 22,272 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total | 2,845 | |
Deferred Compensation Liability [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total | 20,480 | 25,117 |
Deferred Compensation Liability [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total | $ 20,480 | 22,272 |
Deferred Compensation Liability [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total | $ 2,845 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share, Basic [Abstract] | ||||||
Net income attributable to MEC | $ 5,929 | $ 3,822 | $ 3,292 | $ 2,545 | $ 9,751 | $ 5,837 |
Average shares outstanding | 20,581,945 | 20,454,541 | 20,490,944 | 20,316,936 | ||
Basic per share | $ 0.29 | $ 0.16 | $ 0.48 | $ 0.29 | ||
Earnings Per Share, Diluted, Other Disclosures [Abstract] | ||||||
Average shares outstanding | 20,581,945 | 20,454,541 | 20,490,944 | 20,316,936 | ||
Effect of dilutive share-based compensation | 68,606 | 409,990 | 316,733 | 368,805 | ||
Total potential shares outstanding | 20,650,551 | 20,864,531 | 20,807,677 | 20,685,741 | ||
Diluted per share | $ 0.29 | $ 0.16 | $ 0.47 | $ 0.28 |
Earnings per share - Schedule o
Earnings per share - Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 68,606 | 409,990 | 316,733 | 368,805 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 300,510 | 300,510 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Changes in Contract Assets and Liabilities (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Contract asset, beginning balance | $ 3,950 |
Net Activity | 1,367 |
Contract asset, ending balance | 5,317 |
Contract liability, beginning balance | 2,718 |
Net activity | 2,598 |
Contract liability, ending balance | $ 5,316 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Disaggregation of Revenue by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 138,337 | $ 120,213 | $ 274,589 | $ 232,833 |
Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 142,160 | 121,459 | 282,737 | 235,634 |
Intercompany Elimination | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | (3,823) | (1,246) | (8,148) | (2,801) |
Outdoor Sports | Reportable Legal Entities | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 2,522 | 3,006 | 5,049 | 5,677 |
Fabrication | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 83,038 | 78,318 | 165,271 | 147,689 |
Performance structures | Reportable Legal Entities | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 28,197 | 18,753 | 57,157 | 39,208 |
Tube | Reportable Legal Entities | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 19,488 | 15,760 | 37,796 | 30,647 |
Tank | Reportable Legal Entities | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 8,915 | $ 5,622 | $ 17,464 | $ 12,413 |
Concentration of major custom_3
Concentration of major customers - Schedule of Major Customer Concentrations (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Customer A [Member] | Net Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 18.30% | 16.70% | 18.20% | 16.20% | |
Customer A [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 15.10% | 10.20% | |||
Customer B [Member] | Net Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 11.90% | 10.30% | 11.50% | 11.10% | |
Customer B [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | <10 | <10 | |||
Customer C [Member] | Net Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 10.80% | ||||
Concentration risk percentage | <10 | <10 | <10 | ||
Customer C [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | <10 | <10 | |||
Customer D [Member] | Net Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 16.10% | 15.20% | 15.90% | 14.30% | |
Customer D [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 10.20% | ||||
Concentration risk percentage | <10 | ||||
Customer E [Member] | Net Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | <10 | <10 | <10 | <10 | |
Customer E [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 12.70% | 11.20% |
Stock based compensation - Addi
Stock based compensation - Additional Information (Details) - $ / shares | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Apr. 20, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Options, outstanding number | 1,107,714 | ||
Weighted average exercise price | $ 10.31 | ||
Weighted average contractual life remaining | 7 years 8 months 23 days | ||
Unrecognized stock-based compensation recognition period | Apr. 19, 2023 | ||
2019 Omnibus Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Payments based on the value of its common stock | 2,000,000 | ||
Number of shares authorized | 2,500,000 | ||
Restricted Stock Units [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of units, vested | 271,992 | 314,902 | |
Employee Stock Option [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of units, vested | 512,927 | 484,661 | |
Weighted average strike price | $ 9.18 | $ 11.23 |
Stock based compensation - Summ
Stock based compensation - Summary of Stock-based Compensation Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock based compensation expense, net of tax | $ 1,456 | $ 1,388 | $ 2,714 | $ 2,588 |
Unit awards [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock based compensation expense, net of tax | 874 | 849 | 1,626 | 1,568 |
Option awards [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock based compensation expense, net of tax | $ 582 | $ 539 | $ 1,088 | $ 1,020 |
Stock based compensation - Sche
Stock based compensation - Schedule of Unrecognized Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance | $ 7,497 | $ 3,213 |
Grants | 750 | 5,580 |
Forfeitures | (39) | |
Expense | (1,456) | (1,257) |
Ending Balance | 6,791 | 7,497 |
Units [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance | 3,893 | 1,676 |
Grants | 750 | 3,007 |
Forfeitures | (39) | |
Expense | (874) | (751) |
Ending Balance | 3,769 | 3,893 |
Stock Options [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance | 3,604 | 1,537 |
Grants | 2,573 | |
Expense | (582) | (506) |
Ending Balance | $ 3,022 | $ 3,604 |