Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38894 | |
Entity Registrant Name | Mayville Engineering Company, Inc. | |
Entity Incorporation, State or Country Code | WI | |
Entity Tax Identification Number | 39-0944729 | |
Entity Address, Address Line One | 135 S. 84th Street, Suite 300 | |
Entity Address, City or Town | Milwaukee | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53214 | |
City Area Code | 414 | |
Local Phone Number | 381-2860 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | MEC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 20,526,787 | |
Entity Central Index Key | 0001766368 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
ASSETS | ||
Cash and cash equivalents | $ 314 | $ 672 |
Receivables, net of allowances for doubtful accounts of $669 at March 31, 2024 and $685 at December 31, 2023 | 70,331 | 57,445 |
Inventories, net | 66,106 | 67,782 |
Tooling in progress | 5,232 | 5,457 |
Prepaid expenses and other current assets | 3,523 | 3,267 |
Total current assets | 145,506 | 134,623 |
Property, plant and equipment, net | 172,095 | 175,745 |
Goodwill | 92,650 | 92,650 |
Intangible assets, net | 56,934 | 58,667 |
Operating lease assets | 31,018 | 32,233 |
Other long-term assets | 1,698 | 2,743 |
Total assets | 499,901 | 496,661 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Accounts payable | 54,457 | 46,526 |
Current portion of operating lease obligation | 5,010 | 5,064 |
Accrued liabilities: | ||
Salaries, wages, and payroll taxes | 6,131 | 6,368 |
Profit sharing and bonus | 1,455 | 3,107 |
Other current liabilities | 12,093 | 10,644 |
Total current liabilities | 79,146 | 71,709 |
Bank revolving credit notes | 139,817 | 147,493 |
Operating lease obligation, less current maturities | 27,532 | 28,606 |
Deferred compensation, less current portion | 4,182 | 3,816 |
Deferred income tax liability | 12,847 | 12,606 |
Other long-term liabilities | 2,340 | 2,453 |
Total liabilities | 265,864 | 266,683 |
Commitments and contingencies (see Note 9) | ||
Common shares, no par value, 75,000,000 authorized, 22,009,409 shares issued at March 31, 2024 and 21,853,477 at December 31, 2023 | ||
Additional paid-in-capital | 206,191 | 205,373 |
Retained earnings | 37,359 | 34,118 |
Treasury shares at cost, 1,542,893 shares at March 31, 2024 and December 31, 2023 | (9,513) | (9,513) |
Total shareholders' equity | 234,037 | 229,978 |
Total | $ 499,901 | $ 496,661 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheets | ||
Allowances for doubtful accounts | $ 669 | $ 685 |
Common shares, no par value | $ 0 | $ 0 |
Common shares, shares authorized | 75,000,000 | 75,000,000 |
Common shares, Shares, issued | 22,009,409 | 21,853,477 |
Treasury stock at cost | 1,542,893 | 1,542,893 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net sales | $ 161,269 | $ 142,645 |
Cost of sales | 140,336 | 126,268 |
Amortization of intangible assets | 1,733 | 1,738 |
Profit sharing, bonuses, and deferred compensation | 3,800 | 3,003 |
Other selling, general and administrative expenses | 7,769 | 6,966 |
Income from operations | 7,631 | 4,670 |
Interest expense | (3,356) | (1,658) |
Income before taxes | 4,275 | 3,012 |
Income tax expense | 1,034 | 441 |
Net income and comprehensive income | $ 3,241 | $ 2,571 |
Earnings per share: | ||
Basic | $ 0.16 | $ 0.13 |
Diluted | $ 0.16 | $ 0.12 |
Weighted average shares outstanding: | ||
Basic | 20,485,933 | 20,315,338 |
Diluted | 20,700,046 | 20,749,948 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 3,241 | $ 2,571 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 7,521 | 6,142 |
Amortization | 1,733 | 1,738 |
Allowance for doubtful accounts | (16) | 27 |
Inventory excess and obsolescence reserve | (247) | 11 |
Stock-based compensation expense | 1,157 | 1,066 |
Loss (gain) on disposal of property, plant and equipment | 2 | (138) |
Deferred compensation | 316 | (163) |
Non-cash lease expense | 1,215 | 1,286 |
Other non-cash adjustments | 69 | 83 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (12,870) | (16,265) |
Inventories | 1,923 | 2,749 |
Tooling in progress | 225 | (100) |
Prepaids and other current assets | (199) | 110 |
Accounts payable | 6,727 | (2,290) |
Deferred income taxes | 1,159 | 441 |
Operating lease obligations | (1,128) | (1,206) |
Accrued liabilities | (203) | (2,105) |
Net cash provided by (used in) operating activities | 10,625 | (6,043) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property, plant and equipment | (2,775) | (2,408) |
Proceeds from sale of property, plant and equipment | 107 | 153 |
Net cash used in investing activities | (2,668) | (2,255) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from bank revolving credit notes | 119,351 | 119,700 |
Payments on bank revolving credit notes | (127,026) | (110,360) |
Repayments of other long-term debt | (195) | (286) |
Shares withheld for employees' taxes | (683) | (661) |
Payments on finance leases | (107) | (96) |
Proceeds from the exercise of stock options | 345 | |
Net cash provided by (used in) financing activities | (8,315) | 8,297 |
Net increase (decrease) in cash and cash equivalents | (358) | (1) |
Cash and cash equivalents at beginning of period | 672 | 127 |
Cash and cash equivalents at end of period | 314 | 126 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 2,094 | 112 |
Cash paid for taxes | 2 | |
Non-cash property, plant & equipment, net | $ 1,650 | 1,534 |
Non-cash 401(k) contribution of treasury stock | $ 2,500 |
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, 2022 | $ 200,945 | $ (9,352) | $ 26,274 | $ 217,867 |
Net income (loss) | 2,571 | 2,571 | ||
Purchase of treasury stock | (661) | (661) | ||
401(k) contribution | 2,500 | 2,500 | ||
Stock-based compensation | 1,066 | 1,066 | ||
Ending, Balance at Mar. 31, 2023 | 202,011 | (7,513) | 28,845 | 223,343 |
Beginning, Balance at Dec. 31, 2023 | 205,373 | (9,513) | 34,118 | 229,978 |
Net income (loss) | 3,241 | 3,241 | ||
Restricted stock units net of tax withholding | (524) | (524) | ||
Stock options exercised | 185 | 185 | ||
Stock-based compensation | 1,157 | 1,157 | ||
Ending, Balance at Mar. 31, 2024 | $ 206,191 | $ (9,513) | $ 37,359 | $ 234,037 |
Basis of presentation
Basis of presentation | 3 Months Ended |
Mar. 31, 2024 | |
Basis of presentation | |
Basis of presentation | Mayville Engineering Company, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements (in thousands except share amounts, per share data, years and ratios) (unaudited) 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, 2023, 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 2023 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, vertically-integrated, value-added manufacturing partner providing a full suite of manufacturing solutions from concept to production, including design, prototyping and tooling, fabrication, aluminum extrusion, 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 Milwaukee, Wisconsin, we are a leading Tier I U.S. supplier of highly engineered components to original equipment manufacturer (OEM) customers with leading positions in their respective markets. The Company operates three 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. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Improvements to Income Tax Disclosures , amending Accounting Standards Codification (ASC) 740, Income Taxes. The amendment is intended to enhance the transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments require that on an annual basis, entities disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, the amendments require that entities disclose additional information about income taxes paid as well as additional disclosures of pretax income and income tax expense and remove the requirement to disclose certain items that are no longer considered cost beneficial or relevant. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively and allows for early adoption. The Company is evaluating the potential impact of this guidance on the consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures , amending ASC 280, Segment Reporting . The amendment is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and contain other disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods after December 15, 2024. Early adoption is permitted and may be applied prospectively or retrospectively. The Company is evaluating the potential impact of this guidance on the consolidated financial statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2024 | |
Acquisitions | |
Acquisitions | Note 2. Acquisition On July 1, 2023, the Company completed its acquisition of Mid-States Aluminum (MSA). The acquisition was consummated in accordance with terms and conditions of the certain Unit Purchase Agreement, dated as of June 19, 2023, among the Company and shareholders of MSA. The purchase price of the acquisition was $95,945, subject to adjustments for the amount of cash, indebtedness, net working capital and certain expenses of MSA as of the closing. At the closing of the acquisition, the Company applied an estimate of the adjustments and paid total net consideration of $90,002. The Company financed the acquisition by borrowing under its amended and restated credit agreement, as described in Note 4 – Debt in the Notes to Condensed Consolidated Financial Statements. Located in Fond du Lac, WI, MSA is an industry leading, vertically-integrated manufacturer of custom aluminum extrusions and fabrications that also offers related services including design, engineering, anodizing and finishing, assembly and packaging. The acquisition enables MEC to secure an attractive entry point within light-weight materials fabrication, while providing significant new cross-selling opportunities with both new and existing customers. The aggregate purchase price has been allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values at the acquisition date. The estimate of the excess purchase price over the preliminary estimated fair value of net tangible assets acquired was allocated to identifiable intangible assets and goodwill. The Company engaged an independent third party to assist with the identification and valuation of these intangible assets. Management makes significant estimates and assumptions when determining the fair value of assets acquired and liabilities assumed. These estimates include, but are not limited to, discount rates, projected future net sales, projected future expected cash flows, useful lives, attrition rates, royalty rates and growth rates. These measures are based on significant Level 3 inputs (see Note 13) not observable in the market . The following table is a summary of the assets acquired, liabilities assumed and net cash consideration paid for MSA during 2023: Preliminary Estimated Opening Balance Useful Sheet Allocation Life Cash $ 324 Accounts receivable, net 7,381 Inventory 9,698 Property, plant and equipment 41,271 Other assets 291 Intangible assets Developed technology 4,900 7 Years Customer relationships 17,700 17 Years Goodwill 21,115 Indefinite Total assets acquired 102,680 Accounts payable (2,386) Accrued expenses (1,509) Other liabilities (1,984) Debt (7,884) Total consideration $ 88,917 Inventory was valued at its estimated fair value, which is defined as expected sales price, less costs to sell, plus a reasonable margin for selling effort. The valuation resulted in an inventory fair value step-up of $891 and was fully expensed and reflected in cost of sales on the Condensed Consolidated Statements of Comprehensive Income during the three months ended September 30, 2023. Property, plant and equipment was valued at its estimated fair value using the cost, market and sales comparison approaches. The valuation resulted in a property, plant and equipment fair value step-up of $21,157. Depreciation on property, plant and equipment is computed on a straight-line basis over the estimated useful life of the respective assets. The Company also recorded $17,700 of customer relationships intangible assets with an estimated useful life of 17 years and $4,900 of developed technology intangible assets with an estimated useful life of 7 years. The purchase price allocated to these assets was based on management’s forecasted cash inflows and outflows and using a relief from royalty method for developed technologies and the multi-period excess earnings method for customer relationships. Amortization expense related to these intangible assets is recorded on a straight-line basis and reflected in amortization of intangible expenses on the Condensed Consolidated Statements of Comprehensive Income. The purchase price of MSA exceeded the preliminary estimated fair value of identifiable net assets and accordingly, the difference was allocated to goodwill, which is not tax deductible. The Company believes that the information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the purchase price allocations are preliminary as we continue to gather the necessary information to finalize our fair value estimates and provisional amounts. Provisional amounts include items related to working capital adjustments, intangibles, indemnification of assets and liabilities and deferred taxes. As of December 31, 2023, the Company finalized the net working capital adjustment in conjunction with the fair value estimates for assets acquired, liabilities assumed, identifiable assets and the net income tax provision. Since its preliminary estimates, the Company adjusted the purchase price by ($1,084) related to working capital adjustments. The offsetting adjustment was primarily related to goodwill. The Company has recorded preliminary estimates for the items noted in the preceding paragraph and will record adjustments, if an, to the preliminary amounts upon finalization of the respective valuations. Such changes are not expected to be significant. The Company expects to complete the purchase price allocation as soon as possible but no later than one year from the acquisition date. Pro Forma Financial Information (Unaudited) In accordance with ASC 805, the following unaudited pro forma combined results of operations have been prepared and presented to give effect to the MSA acquisition as if it had occurred on January 1, 2023, the beginning of the comparable period, applying certain assumptions and pro forma adjustments. These pro forma adjustments primarily relate to the estimated depreciation expense associated with the fair value of the acquired property, plant and equipment, amortization of identifiable intangible assets, interest expense related to additional debt needed to fund the acquisition, and the tax impact of these adjustments. Additionally, the pro forma adjustments include non-recurring expenses related to transaction costs and the sale of stepped-up inventory. The unaudited pro forma consolidated results are provided for illustrative purposes only, are not indicative of the Company’s actual consolidated results of operations or consolidated financial position and do not reflect any revenue and operating synergies or cost savings that may result from the acquisition. Three Months Ended March 31, 2023 Net sales $ 158,720 Net income $ 1,384 |
Select balance sheet data
Select balance sheet data | 3 Months Ended |
Mar. 31, 2024 | |
Select balance sheet data | |
Select balance sheet data | Note 3. Select balance sheet data Inventory Inventories are stated at the lower of cost, determined on the first-in, first-out method, or 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 March 31, 2024 and December 31, 2023 consist of: March 31, December 31, 2024 2023 Finished goods and purchased parts $ 29,862 $ 31,489 Raw materials 25,238 25,929 Work-in-process 11,006 10,363 Total $ 66,106 $ 67,782 Property, plant and equipment Property, plant and equipment as of March 31, 2024 and December 31, 2023 consist of: Useful Lives March 31, December 31, Years 2024 2023 Land Indefinite $ 2,640 $ 2,640 Land improvements 15-39 4,378 4,378 Building and building improvements 15-39 81,558 79,682 Machinery, equipment and tooling 3-10 300,627 295,960 Vehicles 5 4,452 4,571 Office furniture and fixtures 3-7 22,089 21,325 Construction in progress N/A 6,303 9,779 Total property, plant and equipment, gross 422,047 418,335 Less accumulated depreciation 249,952 242,590 Total property, plant and equipment, net $ 172,095 $ 175,745 Depreciation expense was $7,521 and $6,142 for the three months ended March 31, 2024 and 2023, respectively. Goodwill There were no changes to the goodwill balance of $92,650 between December 31, 2023 and March 31, 2024. Intangible Assets The following is a listing of definite-lived intangible assets, the useful lives in years (amortization period) and accumulated amortization as of March 31, 2024 and December 31, 2023: March 31, 2024 Useful Lives Gross Carrying Accumulated Years Amount Amortization Net Amortizable intangible assets: Customer relationships and contracts 9-17 $ 96,040 $ 54,266 $ 41,774 Trade name 10 14,780 7,816 6,964 Non-compete agreements 5 8,800 8,800 — Developed technology 7 4,900 525 4,375 Patents 19 24 14 10 Total intangible assets, net $ 124,544 $ 71,421 $ 53,123 December 31, 2023 Useful Lives Gross Carrying Accumulated Years Amount Amortization Net Amortizable intangible assets: Customer relationships and contracts 9-17 $ 96,040 $ 53,078 $ 42,962 Trade name 10 14,780 7,446 7,334 Non-compete agreements 5 8,800 8,800 — Developed technology 7 4,900 350 4,550 Patents 19 24 14 10 Total intangible assets, net $ 124,544 $ 69,688 $ 54,856 Additionally, the Company reported an indefinite lived non-amortizable brand name asset with a balance of $3,811 as of March 31, 2024 and December 31, 2023. Changes in intangible assets between December 31, 2023 and March 31, 2024 consist of: Balance as of December 31, 2023 $ 58,667 Amortization expense (1,733) Balance as of March 31, 2024 $ 56,934 For the three months ended March 31, 2024 and 2023, amortization expense was $1,733 and $1,738, respectively. Future amortization expense is expected to be as followed: Year ending December 31, 2024 (remainder) $ 5,200 2025 $ 6,933 2026 $ 6,933 2027 $ 6,933 2028 $ 6,877 Thereafter $ 20,247 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt | |
Debt | Note 4. Debt Bank Revolving Credit Notes On June 28, 2023, we entered into an amended and restated credit agreement (the Credit Agreement) with certain lenders and Wells Fargo Bank, National Association, as administrative agent (the Agent). The Credit Agreement provides for a $250,000 revolving credit facility, with a letter of credit sub-facility, and a swingline facility in an aggregate amount of $25,000. The Credit Agreement also provides the availability of incremental facilities to the greater of $100,000 and 125% of the Company’s twelve month trailing Consolidated EBITDA through an accordion feature. All amounts borrowed under the credit agreement mature on June 28, 2028. 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, incur, assume or suffer to exist liens; make certain investments; allow our subsidiaries to merge or consolidate with another entity; make certain asset dispositions; pay certain dividends or other distributions to shareholders; enter into transactions with affiliates; enter into sale leaseback transactions; and exceed the limits on annual capital expenditures. The Credit Agreement also requires us to satisfy certain financial covenants, including a minimum consolidated interest coverage ratio of 3.00 to 1.00 as well as a consolidated total leverage ratio not to exceed 4.00 to 1.00 (which was increased as of July 1, 2023 from 3.50 to 1.00 in connection with the acquisition of MSA). The Company incurred deferred financing costs of $1,248 associated with executing the Credit Agreement, which has been recorded as an other long-term asset in the Condensed Consolidated Balance Sheets and will be amortized over the duration of the agreement. At March 31, 2024, our consolidated total leverage ratio was 1.98 to 1.00 as compared to a covenant maximum of 4.00 to 1.00 under the Credit Agreement. At March 31, 2024, our consolidated interest coverage ratio was 4.87 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 secured overnight financing rate (SOFR) plus an applicable margin based on the current consolidated total leverage ratio. The interest rate was 7.68% and 7.71% as of March 31, 2024 and December 31, 2023, respectively. Additionally, the agreement has a fee on the average daily unused portion of the aggregate unused revolving commitments. This fee was 0.30% as of March 31, 2024 and December 31, 2023. Prior to June 28, 2023, the Company maintained a credit agreement (Former Credit Agreement) with certain lenders and the Agent. The Former Credit Agreement provided for a $200,000 revolving credit facility, 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 Former Credit Agreement also provided for an additional $100,000 of debt capacity through an accordion feature. The Company was in compliance with all financial covenants of its credit agreements as of March 31, 2024 and December 31, 2023. The amount borrowed on the revolving credit notes was $139,817 and $147,493 as of March 31, 2024 and December 31, 2023, respectively. Other Debt With the consummation of the MSA acquisition, the Company assumed a Fond du Lac County and Fond du Lac Economic Development Corporation term note (Fond du Lac Term Note). The Fond du Lac Term Note is secured by a security agreement, payable in annual installments of |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
Leases | Note 5. Leases 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 right-of-use (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, four vehicles and a number of copiers. The Company recognizes an 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 March 31, 2024 2023 Finance lease cost: Amortization of finance lease assets $ 104 $ 94 Interest on finance lease liabilities 8 11 Total finance lease expense 112 105 Operating lease expense 1,340 1,286 Short-term lease expense 152 139 Variable lease expense 52 69 Lease income (1) (532) (631) Total lease expense $ 1,124 $ 968 (1) The Company subleased a portion of its Hazel Park, MI facility starting in June 2022. Lease income for the three months ended March 31, 2024 and 2023 was $532 and $631 , respectively. Lease related supplemental cash flow information: Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities for finance leases: Operating cash flows $ 8 $ 11 Financing cash flows $ 107 $ 96 Cash paid for amounts included in the measurement of lease liabilities for operating leases: Operating cash flows $ 1,481 $ 1,425 Right-of-use assets obtained in exchange for recorded lease obligations: Operating leases $ 134 $ — Finance leases $ 1 $ — |
Employee stock ownership plan
Employee stock ownership plan | 3 Months Ended |
Mar. 31, 2024 | |
Employee stock ownership plan | |
Employee stock ownership plan | Note 6. Employee stock ownership plan Under the Mayville Engineering Company, Inc. Employee Stock Ownership Plan (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 March 31, 2024 and 2023, the Company recorded no ESOP expense. As of January 1, 2023, the Company amended the plan reducing the distribution period from five years to three years. At various times following death, disability, retirement, termination of employment or the exercise of diversification rights, 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 March 31, 2024 and December 31, 2023, the ESOP shares consisted of 3,732,076 and 4,062,583 in allocated shares, respectively. |
Retirement plans
Retirement plans | 3 Months Ended |
Mar. 31, 2024 | |
Retirement plans | |
Retirement plans | Note 7. 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 Company provides a 50% match for employee contributions, up to 6%. For the three months ended March 31, 2024 and 2023, the Company’s employer match expense was $1,053 and $874, respectively. Additionally, the 401(k) Plan 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). For the three months ended March 31, 2024 and 2023, the Company’s estimated discretionary profit-sharing expense was $0. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income taxes | |
Income taxes | Note 8. 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 and adjusted for discrete taxable events that may occur in the quarter. As the year progresses, the Company will refine its estimate based on facts and circumstances by each tax jurisdiction. Income tax expense was $1,034 and $441, and the effective tax rate (ETR) was 24.19% and 14.65% for the three months ended March 31, 2024 and 2023, respectively. Our ETR is different from the expected tax rate due to state taxes, non-deductible items, research and development credits and excess tax benefit associated with stock-based compensation items. Uncertain Tax Positions Based on the Company’s evaluation, it has been concluded that there is one unrecognized tax benefit requiring recognition in its financial statements as of March 31, 2024. The Company does not anticipate that there will be a material change in the balance of the unrecognized tax benefits in the next twelve months. Any interest and penalties related to uncertain tax positions are recorded in income tax expense. At March 31, 2024 and December 31, 2023, a total of $805 and $771 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, 2020, and state tax returns beginning January 1, 2019, are open for examination. |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and contingencies | |
Commitments and contingencies | Note 9. Commitments and contingencies Litigation On August 4, 2022, the Company filed a lawsuit against Peloton Interactive, Inc. (“Peloton”) in the Supreme Court of the State of New York, New York County. The lawsuit arises from a March 2021 Supply Agreement between the parties, pursuant to which MEC was to manufacture and supply custom component parts for Peloton’s exercise bikes (the “Manufacturing Project”). In the lawsuit, the Company originally asserted two claims (1) breach and anticipatory repudiation of contract and (2) breach of the duty of good faith and fair dealing (pleaded in the alternative). In January 2023, in response to Peloton’s motion to dismiss, the court allowed the first claim to proceed and dismissed the alternative claim. In the remaining claim, MEC asserts that Peloton breached and anticipatorily repudiated the Supply Agreement by unilaterally cancelling the Manufacturing Project, and refusing to pay MEC certain monthly fixed revenue payments owed under the terms of the Supply Agreement. The parties cross-appealed the court’s order on the motion to dismiss – Peloton appealed the portion of the order that denied the motion to dismiss the claim for breach and anticipatory repudiation of contract and MEC appealed the portion of the order that dismissed the claim for breach of duty of good faith and fair dealing. On April 11, 2024, the First Department, Appellate Division issued a decision and order affirming the court’s order on the motion to dismiss and affirming the court’s dismissal of the alternate claim of good faith and fair dealing. On November 3, 2023, Peloton filed a counterclaim alleging that Peloton was induced by fraud to enter into the Supply Agreement and seeking recission of the Supply Agreement and damages, among other forms of relief. On November 22, 2023, the Company answered Peloton’s counterclaim, denying the allegations in the counterclaim. The total amount for damages claimed by MEC is substantial but the amount and timing of the ultimate recovery is uncertain. As a result, any recovery from this litigation or settlement of this claim is a contingent gain and will be recognized if, and when, realized or realizable. 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 | 3 Months Ended |
Mar. 31, 2024 | |
Deferred compensation | |
Deferred compensation | Note 10. Deferred compensation The Mayville Engineering Company 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 their 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 or 180 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 months ended March 31, 2024 and 2023, eligible employees elected to defer compensation of $365 and $236, respectively. As of March 31, 2024 and December 31, 2023, the short-term portion accrued for all benefit years less than twelve months under this plan was $239 and $289, respectively. As of March 31, 2024 and December 31, 2023, the long-term portion accrued for all benefit years greater than twelve months under this plan was $4,182 and $3,816. These amounts include the initial deferral of compensation and were adjusted for changes in the value of investment options chosen by the participants. Total expense for the deferred compensation plan for the three months ended March 31, 2024 and 2023 was $237 and $560, respectively. These expenses are included in profit-sharing, bonuses and deferred compensation on the Condensed Consolidated Statements of Comprehensive Income. Additionally, the Company made cash distributions of $286 and $958 for the three months ended March 31, 2024 and 2023, respectively. |
Self-Funded insurance
Self-Funded insurance | 3 Months Ended |
Mar. 31, 2024 | |
Self-Funded insurance | |
Self-Funded insurance | Note 11. 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. The Company has an aggregate stop loss limit to mitigate risk. Expenses related to this were $6,169 and $4,634 for the three months ended March 31, 2024 and 2023. An estimated accrued liability of $1,384 and $1,018 was recorded as of March 31, 2024 and December 31, 2023, respectively, for estimated unpaid claims and is included within other current liabilities on the Condensed Consolidated Balance Sheets. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2024 | |
Segments | |
Segments | Note 12. Segments The Company applies the provisions of ASC 280, Segment Reporting |
Fair value of financial instrum
Fair value of financial instruments | 3 Months Ended |
Mar. 31, 2024 | |
Fair value of financial instruments | |
Fair value of financial instruments | Note 13. 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 March 31, Report Date Using 2024 (Level 1) (Level 2) (Level 3) Deferred compensation liability $ 4,421 $ 4,421 $ — $ — Total $ 4,421 $ 4,421 $ — $ — Balance at Fair Value Measurements at December 31, Report Date Using 2023 (Level 1) (Level 2) (Level 3) Deferred compensation liability $ 4,105 $ 4,105 $ — $ — Total $ 4,105 $ 4,105 $ — $ — 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 all 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 other current liabilities 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. There was no impairment recognized as of the quarter end March 31, 2024. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share | |
Earnings Per Share | Note 14. Earnings Per Share The Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share market price of the common stock during the period exceeds the exercise price of the options (they are “in the money”), and the assumed exercise of the options do not have an anti-dilutive impact on earnings per share. A reconciliation of basic and diluted net income per share attributable to the Company were as follows: March 31, 2024 2023 Net income attributable to MEC $ 3,241 $ 2,571 Average shares outstanding 20,485,933 20,315,338 Basic income per share $ 0.16 $ 0.13 Average shares outstanding 20,485,933 20,315,338 Effect of dilutive stock-based compensation 214,113 434,610 Total potential shares outstanding 20,700,046 20,749,948 Diluted income per share $ 0.16 $ 0.12 There were no options in the money that were excluded in the computation of diluted earnings per share for the three months ended March 31, 2024 and 2023 because they would have had an anti-dilutive impact on earnings per share. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2024 | |
Revenue Recognition | |
Revenue Recognition | Note 15. 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 or other documented customer acceptance. 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 twelve-month period. The following table reflects the changes in our contract assets and liabilities during the three months ended March 31, 2024: Contract Contract Assets Liabilities As of December 31, 2023 $ 5,457 $ 3,635 Net activity (225) (538) As of March 31, 2024 $ 5,232 $ 3,097 Disaggregated Revenue The following tables represent a disaggregation of revenue by product category and end market: Three Months Ended March 31, Product Category 2024 2023 Outdoor sports $ 2,159 $ 2,305 Fabrication 90,914 87,001 Performance structures 45,770 26,675 Tube 19,074 20,352 Tank 11,076 11,119 Total 168,993 147,452 Intercompany sales elimination (7,724) (4,807) Total, net sales $ 161,269 $ 142,645 Three Months Ended March 31, End Market 2024 2023 Commercial vehicle $ 58,954 $ 59,155 Construction & access 28,446 26,507 Powersports 30,291 24,098 Agriculture 14,958 14,451 Military 7,952 8,569 Other 20,668 9,866 Total, net sales $ 161,269 $ 142,645 |
Concentration of major customer
Concentration of major customers | 3 Months Ended |
Mar. 31, 2024 | |
Concentration of major customers | |
Concentration of major customers | Note 16. 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 As of As of March 31, March 31, December 31, 2024 2023 2024 2023 Customer A 16.6 % 15.3 % 11.8 % <10 % B 14.0 % 15.6 % 11.6 % 12.6 % C <10 % 12.1 % <10 % <10 % D <10 % <10 % 13.0 % 12.7 % |
Stock-based compensation
Stock-based compensation | 3 Months Ended |
Mar. 31, 2024 | |
Stock-based compensation | |
Stock-based compensation | Note 17. Stock-based compensation The Mayville Engineering Company, Inc. 2019 Omnibus Incentive Plan provided 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 The actual number of PSUs, if any, to be earned by the award recipients is determined after the end of a performance measurement period. The performance measures include Adjusted EBITDA, which represents net income before interest expense, provision for income taxes, depreciation, amortization, stock-based compensation, legal costs due to the former fitness customer and adjusted for items to be determined unusual in nature or infrequent in occurrence, for the year ended December 31, 2026, and the average annual return on invested capital (ROIC), for the three-years ended December 31, 2024, 2025 and 2026, respectively. ROIC represents net operating profit after taxes divided by invested capital for an annual period. These performance targets are subject to adjustments or exclusions as deemed appropriate to account for extraordinary or unanticipated events that do not reflect the core business of the Company, and have been set for each of the minimum, target and maximum levels with the actual performance amount received determined by the Compensation Committee of the Board of Directors. Cancellations and forfeitures are accounted for as incurred. Stock awards were granted on March 15, 2024, November 3, 2023, September 18, 2023, June 26, 2023, April 18, 2023, March 13, 2023, February 28, 2023 and January 25, 2023. During the three months ended March 31, 2024, 154,372 RSUs vested. For the same period, 206,524 options vested with a weighted average strike price of $13.54. During the three months ended March 31, 2023, 132,433 RSUs vested. For the same period, 197,597 options vested with a strike price of $11.65. As of March 31, 2024, 1,222,302 options remained outstanding with a weighted average strike price of $11.36 and a weighted average contractual life of 7.40 years remaining. The Company’s stock-based compensation expense by award type is summarized as follows: Three Months Ended March 31, 2024 2023 RSU awards $ 789 $ 715 PSU awards 20 — Option awards 348 351 Stock-based compensation expense, net of tax $ 1,157 $ 1,066 A roll-forward of unrecognized stock-based compensation expense is displayed in the table below. Unrecognized stock-based compensation expense as of March 31, 2024 will be expensed over the remaining requisite service period from which individual award values relate, up to March 15, 2027. RSUs PSUs Options Total Balance as of December 31, 2023 $ 2,304 $ — $ 1,513 $ 3,817 Grants 4,423 1,423 — 5,846 Forfeitures (32) — — (32) Expense (789) (20) (348) (1,157) Balance as of March 31, 2024 $ 5,906 1,403 $ 1,165 $ 8,474 |
Common Equity
Common Equity | 3 Months Ended |
Mar. 31, 2024 | |
Common Equity | |
Common Equity | Note 18. Common Equity At March 31, 2024 the authorized stock of the Company consisted of 75,000,000 shares of common stock without par value. Changes in outstanding common shares are summarized as follows: Shares Outstanding Shares as of December 31, 2022 20,172,746 Treasury stock purchases (41,148) Common stock issued (including stock-based compensation impact) 290,432 Balance as of March 31, 2023 20,422,030 Shares Outstanding Balance as of December 31, 2023 20,310,584 Treasury stock purchases — Common stock issued (including stock-based compensation impact) 155,932 Balance as of March 31, 2024 20,466,516 |
Subsequent events
Subsequent events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent events | |
Subsequent events | Note 19. Subsequent events The Company has evaluated subsequent events since March 31, 2024, 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) | 3 Months Ended |
Mar. 31, 2024 | |
Basis of presentation | |
Nature of Operations | Nature of Operations MEC is a leading U.S.-based, vertically-integrated, value-added manufacturing partner providing a full suite of manufacturing solutions from concept to production, including design, prototyping and tooling, fabrication, aluminum extrusion, 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 Milwaukee, Wisconsin, we are a leading Tier I U.S. supplier of highly engineered components to original equipment manufacturer (OEM) customers with leading positions in their respective markets. The Company operates three 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Improvements to Income Tax Disclosures , amending Accounting Standards Codification (ASC) 740, Income Taxes. The amendment is intended to enhance the transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments require that on an annual basis, entities disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, the amendments require that entities disclose additional information about income taxes paid as well as additional disclosures of pretax income and income tax expense and remove the requirement to disclose certain items that are no longer considered cost beneficial or relevant. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively and allows for early adoption. The Company is evaluating the potential impact of this guidance on the consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures , amending ASC 280, Segment Reporting . The amendment is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and contain other disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods after December 15, 2024. Early adoption is permitted and may be applied prospectively or retrospectively. The Company is evaluating the potential impact of this guidance on the consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Acquisition [Line Items] | |
Schedule of Pro Forma Financial Information | Three Months Ended March 31, 2023 Net sales $ 158,720 Net income $ 1,384 |
Mid-States Aluminum [Member] | |
Business Acquisition [Line Items] | |
Schedule of assets acquired, liabilities assumed and net cash consideration paid | The following table is a summary of the assets acquired, liabilities assumed and net cash consideration paid for MSA during 2023: Preliminary Estimated Opening Balance Useful Sheet Allocation Life Cash $ 324 Accounts receivable, net 7,381 Inventory 9,698 Property, plant and equipment 41,271 Other assets 291 Intangible assets Developed technology 4,900 7 Years Customer relationships 17,700 17 Years Goodwill 21,115 Indefinite Total assets acquired 102,680 Accounts payable (2,386) Accrued expenses (1,509) Other liabilities (1,984) Debt (7,884) Total consideration $ 88,917 |
Select balance sheet data (Tabl
Select balance sheet data (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Select balance sheet data | |
Schedule of Inventories | March 31, December 31, 2024 2023 Finished goods and purchased parts $ 29,862 $ 31,489 Raw materials 25,238 25,929 Work-in-process 11,006 10,363 Total $ 66,106 $ 67,782 |
Schedule of Property, Plant and Equipment | Useful Lives March 31, December 31, Years 2024 2023 Land Indefinite $ 2,640 $ 2,640 Land improvements 15-39 4,378 4,378 Building and building improvements 15-39 81,558 79,682 Machinery, equipment and tooling 3-10 300,627 295,960 Vehicles 5 4,452 4,571 Office furniture and fixtures 3-7 22,089 21,325 Construction in progress N/A 6,303 9,779 Total property, plant and equipment, gross 422,047 418,335 Less accumulated depreciation 249,952 242,590 Total property, plant and equipment, net $ 172,095 $ 175,745 |
Schedule of Listing of Intangible Assets | March 31, 2024 Useful Lives Gross Carrying Accumulated Years Amount Amortization Net Amortizable intangible assets: Customer relationships and contracts 9-17 $ 96,040 $ 54,266 $ 41,774 Trade name 10 14,780 7,816 6,964 Non-compete agreements 5 8,800 8,800 — Developed technology 7 4,900 525 4,375 Patents 19 24 14 10 Total intangible assets, net $ 124,544 $ 71,421 $ 53,123 December 31, 2023 Useful Lives Gross Carrying Accumulated Years Amount Amortization Net Amortizable intangible assets: Customer relationships and contracts 9-17 $ 96,040 $ 53,078 $ 42,962 Trade name 10 14,780 7,446 7,334 Non-compete agreements 5 8,800 8,800 — Developed technology 7 4,900 350 4,550 Patents 19 24 14 10 Total intangible assets, net $ 124,544 $ 69,688 $ 54,856 |
Schedule of Changes In Intangible Assets | Balance as of December 31, 2023 $ 58,667 Amortization expense (1,733) Balance as of March 31, 2024 $ 56,934 |
Schedule of Future Amortization Expense | Year ending December 31, 2024 (remainder) $ 5,200 2025 $ 6,933 2026 $ 6,933 2027 $ 6,933 2028 $ 6,877 Thereafter $ 20,247 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
Summary of components of lease expense | Three Months Ended March 31, 2024 2023 Finance lease cost: Amortization of finance lease assets $ 104 $ 94 Interest on finance lease liabilities 8 11 Total finance lease expense 112 105 Operating lease expense 1,340 1,286 Short-term lease expense 152 139 Variable lease expense 52 69 Lease income (1) (532) (631) Total lease expense $ 1,124 $ 968 (1) The Company subleased a portion of its Hazel Park, MI facility starting in June 2022. Lease income for the three months ended March 31, 2024 and 2023 was $532 and $631 , respectively. |
Schedule of Supplemental cash flow information | Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities for finance leases: Operating cash flows $ 8 $ 11 Financing cash flows $ 107 $ 96 Cash paid for amounts included in the measurement of lease liabilities for operating leases: Operating cash flows $ 1,481 $ 1,425 Right-of-use assets obtained in exchange for recorded lease obligations: Operating leases $ 134 $ — Finance leases $ 1 $ — |
Fair value of financial instr_2
Fair value of financial instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair value of financial instruments | |
Schedule of financial assets and liabilities accounted for at fair value by fair value hierarchy | Balance at Fair Value Measurements at March 31, Report Date Using 2024 (Level 1) (Level 2) (Level 3) Deferred compensation liability $ 4,421 $ 4,421 $ — $ — Total $ 4,421 $ 4,421 $ — $ — Balance at Fair Value Measurements at December 31, Report Date Using 2023 (Level 1) (Level 2) (Level 3) Deferred compensation liability $ 4,105 $ 4,105 $ — $ — Total $ 4,105 $ 4,105 $ — $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share | |
Schedule of earnings per share | March 31, 2024 2023 Net income attributable to MEC $ 3,241 $ 2,571 Average shares outstanding 20,485,933 20,315,338 Basic income per share $ 0.16 $ 0.13 Average shares outstanding 20,485,933 20,315,338 Effect of dilutive stock-based compensation 214,113 434,610 Total potential shares outstanding 20,700,046 20,749,948 Diluted income per share $ 0.16 $ 0.12 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue Recognition | |
Schedule of changes in contract assets and liabilities | Contract Contract Assets Liabilities As of December 31, 2023 $ 5,457 $ 3,635 Net activity (225) (538) As of March 31, 2024 $ 5,232 $ 3,097 |
Schedule of disaggregation of revenue by product category and end market | Three Months Ended March 31, Product Category 2024 2023 Outdoor sports $ 2,159 $ 2,305 Fabrication 90,914 87,001 Performance structures 45,770 26,675 Tube 19,074 20,352 Tank 11,076 11,119 Total 168,993 147,452 Intercompany sales elimination (7,724) (4,807) Total, net sales $ 161,269 $ 142,645 Three Months Ended March 31, End Market 2024 2023 Commercial vehicle $ 58,954 $ 59,155 Construction & access 28,446 26,507 Powersports 30,291 24,098 Agriculture 14,958 14,451 Military 7,952 8,569 Other 20,668 9,866 Total, net sales $ 161,269 $ 142,645 |
Concentration of major custom_2
Concentration of major customers (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Concentration of major customers | |
Schedules of Major Customer Concentrations | Net Sales Accounts Receivable Three Months Ended As of As of March 31, March 31, December 31, 2024 2023 2024 2023 Customer A 16.6 % 15.3 % 11.8 % <10 % B 14.0 % 15.6 % 11.6 % 12.6 % C <10 % 12.1 % <10 % <10 % D <10 % <10 % 13.0 % 12.7 % |
Stock-based compensation (Table
Stock-based compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Stock-based compensation | |
Summary of Stock-based Compensation Expenses | Three Months Ended March 31, 2024 2023 RSU awards $ 789 $ 715 PSU awards 20 — Option awards 348 351 Stock-based compensation expense, net of tax $ 1,157 $ 1,066 |
Schedule of Unrecognized Stock-based Compensation Expense | RSUs PSUs Options Total Balance as of December 31, 2023 $ 2,304 $ — $ 1,513 $ 3,817 Grants 4,423 1,423 — 5,846 Forfeitures (32) — — (32) Expense (789) (20) (348) (1,157) Balance as of March 31, 2024 $ 5,906 1,403 $ 1,165 $ 8,474 |
Common Equity (Tables)
Common Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Common Equity | |
Summary of changes in outstanding common shares | Shares Outstanding Shares as of December 31, 2022 20,172,746 Treasury stock purchases (41,148) Common stock issued (including stock-based compensation impact) 290,432 Balance as of March 31, 2023 20,422,030 Shares Outstanding Balance as of December 31, 2023 20,310,584 Treasury stock purchases — Common stock issued (including stock-based compensation impact) 155,932 Balance as of March 31, 2024 20,466,516 |
Basis of presentation (Details)
Basis of presentation (Details) | 3 Months Ended |
Mar. 31, 2024 facility segment | |
Basis Of Presentation [Line Items] | |
Number of facilities operated | facility | 23 |
Number Of Operating Segments | segment | 1 |
Maximum [Member] | |
Basis Of Presentation [Line Items] | |
The length of the product redevelopment cycle. | 5 years |
Minimum [Member] | |
Basis Of Presentation [Line Items] | |
The length of the product redevelopment cycle. | 3 years |
Acquisitions (Details)
Acquisitions (Details) - Mid-States Aluminum [Member] $ in Thousands | Jun. 19, 2023 USD ($) |
Business Acquisition [Line Items] | |
Purchase price of the acquisition | $ 95,945 |
Total net consideration | $ 90,002 |
Acquisitions - Assets acquired,
Acquisitions - Assets acquired, liabilities assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Jul. 01, 2023 |
Business Acquisition [Line Items] | |||
Goodwill | $ 92,650 | $ 92,650 | |
Developed Technology Rights [Member] | |||
Business Acquisition [Line Items] | |||
Estimated useful life | 7 years | 7 years | 7 years |
Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Estimated useful life | 17 years | ||
Mid-States Aluminum [Member] | |||
Business Acquisition [Line Items] | |||
Cash | $ 324 | ||
Accounts receivable, net | 7,381 | ||
Inventory | 9,698 | ||
Property, plant and equipment | 41,271 | ||
Other assets | 291 | ||
Goodwill | 21,115 | ||
Total assets acquired | 102,680 | ||
Accounts payable | (2,386) | ||
Accrued expenses | (1,509) | ||
Other liabilities | (1,984) | ||
Debt | (7,884) | ||
Total consideration | 88,917 | ||
Mid-States Aluminum [Member] | Developed Technology Rights [Member] | |||
Business Acquisition [Line Items] | |||
Intangibles | $ 4,900 | ||
Estimated useful life | 7 years | ||
Mid-States Aluminum [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangibles | $ 17,700 | ||
Estimated useful life | 17 years |
Acquisitions - Assets (Details)
Acquisitions - Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jul. 01, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | ||||
Operating income | $ 7,631 | $ 4,670 | ||
Developed Technology Rights [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated useful life | 7 years | 7 years | 7 years | |
Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated useful life | 17 years | |||
Mid-States Aluminum [Member] | ||||
Business Acquisition [Line Items] | ||||
Inventory fair value step-up | $ 891 | |||
Property, plant and equipment fair value step-up | 21,157 | |||
Purchase price adjustment | $ (1,084) | |||
Mid-States Aluminum [Member] | Developed Technology Rights [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangibles | $ 4,900 | |||
Estimated useful life | 7 years | |||
Mid-States Aluminum [Member] | Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangibles | $ 17,700 | |||
Estimated useful life | 17 years |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Acquisitions | |
Net sales | $ 158,720 |
Net income | $ 1,384 |
Select balance sheet data - Sch
Select balance sheet data - Schedule of Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Select balance sheet data | ||
Finished goods and purchased parts | $ 29,862 | $ 31,489 |
Raw materials | 25,238 | 25,929 |
Work-in-process | 11,006 | 10,363 |
Total | $ 66,106 | $ 67,782 |
Select balance sheet data - S_2
Select balance sheet data - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 422,047 | $ 418,335 |
Less accumulated depreciation | 249,952 | 242,590 |
Total property, plant and equipment, net | 172,095 | 175,745 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 2,640 | 2,640 |
Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 4,378 | 4,378 |
Land Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment useful lives | 15 years | |
Land Improvements [Member] | Maximum | ||
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 | $ 81,558 | 79,682 |
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 | ||
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 | $ 300,627 | 295,960 |
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 | ||
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 | $ 4,452 | 4,571 |
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 | $ 22,089 | 21,325 |
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 | ||
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 | $ 6,303 | $ 9,779 |
Select balance sheet data - Add
Select balance sheet data - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Select balance sheet data | ||
Depreciation | $ 7,521 | $ 6,142 |
Amortization expense | $ 1,733 | $ 1,738 |
Select balance sheet data - S_3
Select balance sheet data - Schedule of Changes In Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Select balance sheet data | |
Change in goodwill carrying amount | $ 0 |
Balance (beginning) | 92,650 |
Balance (ending) | $ 92,650 |
Select balance sheet data - S_4
Select balance sheet data - Schedule of Listing of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Jul. 01, 2023 |
Amortizable intangible assets [Abstract] | |||
Amortizable intangible assets, gross | $ 124,544 | $ 124,544 | |
Accumulated amortization | 71,421 | 69,688 | |
Total amortizable intangible assets, net | 53,123 | 54,856 | |
Total intangible assets, net | 56,934 | 58,667 | |
Customer relationships and contracts [Member] | |||
Amortizable intangible assets [Abstract] | |||
Amortizable intangible assets, gross | 96,040 | 96,040 | |
Accumulated amortization | 54,266 | 53,078 | |
Total amortizable intangible assets, net | $ 41,774 | $ 42,962 | |
Trade name [Member] | |||
Amortizable intangible assets [Abstract] | |||
Intangible assets useful Lives | 10 years | 10 years | |
Amortizable intangible assets, gross | $ 14,780 | $ 14,780 | |
Accumulated amortization | 7,816 | 7,446 | |
Total amortizable intangible assets, net | $ 6,964 | $ 7,334 | |
Non-compete agreements [Member] | |||
Amortizable intangible assets [Abstract] | |||
Intangible assets useful Lives | 5 years | 5 years | |
Amortizable intangible assets, gross | $ 8,800 | $ 8,800 | |
Accumulated amortization | $ 8,800 | $ 8,800 | |
Developed technology [Member] | |||
Amortizable intangible assets [Abstract] | |||
Intangible assets useful Lives | 7 years | 7 years | 7 years |
Amortizable intangible assets, gross | $ 4,900 | $ 4,900 | |
Accumulated amortization | 525 | 350 | |
Total amortizable intangible assets, net | $ 4,375 | $ 4,550 | |
Patents [Member] | |||
Amortizable intangible assets [Abstract] | |||
Intangible assets useful Lives | 19 years | 19 years | |
Amortizable intangible assets, gross | $ 24 | $ 24 | |
Accumulated amortization | 14 | 14 | |
Total amortizable intangible assets, net | 10 | 10 | |
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 | 9 years | |
Maximum | Customer relationships and contracts [Member] | |||
Amortizable intangible assets [Abstract] | |||
Intangible assets useful Lives | 17 years | 17 years |
Select balance sheet data - S_5
Select balance sheet data - Schedule of Changes In Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Select balance sheet data | ||
Balance | $ 58,667 | |
Amortization expense | (1,733) | $ (1,738) |
Balance | $ 56,934 |
Select balance sheet data - S_6
Select balance sheet data - Schedule of Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Select balance sheet data | |
2024 (remainder) | $ 5,200 |
2025 | 6,933 |
2026 | 6,933 |
2027 | 6,933 |
2028 | 6,877 |
Thereafter | $ 20,247 |
Debt - Credit Agreements (Detai
Debt - Credit Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 28, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 27, 2023 | |
Line Of Credit Facility [Line Items] | |||||
Revolving credit notes | $ 139,817 | $ 147,493 | |||
A&R Credit Agreement [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Minimum interest coverage ratio | 3% | ||||
Maximum consolidated leverage ratio | 3.50% | 4% | |||
Deferred financing costs | $ 1,248 | ||||
Interest rate at end of period | 7.68% | 7.71% | |||
A&R Credit Agreement [Member] | The Agent [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Credit agreement additional borrowing capacity through accordion feature | $ 100,000 | $ 100,000 | |||
Line of credit facility additional borrowing capacity percentage through accordion feature | 125% | ||||
Line of credit facility additional borrowing capacity period through accordion feature | 12 months | ||||
Credit agreement maturity date | Jun. 28, 2028 | ||||
Second Amendment [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Minimum interest coverage ratio | 3% | ||||
Maximum consolidated leverage ratio | 4% | ||||
Consolidated leverage ratio | 1.98% | ||||
Interest coverage ratios | 4.87% | ||||
Revolving Credit Facility [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Revolving credit notes | $ 139,817 | $ 147,493 | |||
Revolving Credit Facility [Member] | A&R Credit Agreement [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Revolving commitments fee percentage | 0.30% | 0.30% | |||
Revolving Credit Facility [Member] | A&R Credit Agreement [Member] | The Agent [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Credit agreement borrowing capacity | $ 250,000 | 200,000 | |||
Letter of Credit Sub-facility [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 | $ 25,000 | $ 20,000 |
Debt - Other Debt (Details)
Debt - Other Debt (Details) - MSA Acquisition - Fond du Lac Term Note $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Line Of Credit Facility [Line Items] | |
Monthly installment | $ 500 |
Interest rate (as a percent) | 2% |
Balance outstanding | $ 2,375 |
Other liabilities current [Member] | |
Line Of Credit Facility [Line Items] | |
Short-term balance | 500 |
Other liabilities non-current [Member] | |
Line Of Credit Facility [Line Items] | |
Long-term balance | $ 1,875 |
Leases - Components of lease ex
Leases - Components of lease expense (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) item | Mar. 31, 2023 USD ($) | |
Leases | ||
Amortization of finance lease assets | $ 104 | $ 94 |
Interest on finance lease liabilities | 8 | 11 |
Total finance lease expense | 112 | 105 |
Operating lease expense | 1,340 | 1,286 |
Short-term lease expense | 152 | 139 |
Variable lease expense | 52 | 69 |
Lease income | (532) | (631) |
Total lease expense | $ 1,124 | $ 968 |
Number of laser cutting systems under financing leases | item | 2 | |
Number of vehicles under financing leases | item | 4 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases | ||
Cash paid for amounts included in the measurement of lease liabilities for finance leases: Operating cash flows | $ 8 | $ 11 |
Cash paid for amounts included in the measurement of lease liabilities for finance leases: Financing cash flows | 107 | 96 |
Cash paid for amounts included in the measurement of lease liabilities for operating leases: Operating cash flows | 1,481 | $ 1,425 |
Right-of-use assets obtained in exchange for recorded lease obligations: Operating leases | 134 | |
Right-of-use assets obtained in exchange for recorded lease obligations: Finance leases | $ 1 |
Employee stock ownership plan -
Employee stock ownership plan - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jan. 01, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | |
Employee stock ownership plan | |||||
Distribution period | 3 years | 5 years | |||
Shares in ESOP | 3,732,076 | 4,062,583 | |||
Employee Stock Option | |||||
Employee stock ownership plan | |||||
Employee stock ownership plan (ESOP), (income) expense | $ 0 | $ 0 |
Retirement plans - Additional I
Retirement plans - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Retirement plans | ||
Percentage of employee contribution of eligible compensation plan | 50% | |
Employer match percentage | 50% | |
Percent of employee contributions eligible for employer match | 6% | |
Employer match expense | $ 1,053 | $ 874 |
Profit sharing expense | $ 0 | $ 0 |
Income taxes - Additional Infor
Income taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Income taxes | |||
Income tax expense | $ 1,034 | $ 441 | |
Effective income tax rate | 24.19% | 14.65% | |
Unrecognized tax benefits that would impact effective tax rate | $ 805 | $ 771 |
Commitments and contingencies (
Commitments and contingencies (Details) | Aug. 04, 2022 claim |
Litigation | |
Number of claims | 2 |
Deferred compensation - Additio
Deferred compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Deferred compensation | |||
Description of deferred compensation arrangements | The Mayville Engineering Company 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 arrangements | 50% | ||
Annual short term cash incentive | 100% | ||
Deferred compensation plan (Income) expense | $ 3,800 | $ 3,003 | |
Deferred compensation cash-based arrangements liability, Current | 239 | $ 289 | |
Deferred compensation cash-based arrangements liability, Non current | 4,182 | $ 3,816 | |
Deferred compensation, distributions paid | 286 | 958 | |
Deferred Profit Sharing | |||
Deferred compensation | |||
Deferred compensation plan (Income) expense | 237 | 560 | |
Employees | |||
Deferred compensation | |||
Deferred compensation plan (Income) expense | $ 365 | $ 236 |
Self-Funded insurance - Additio
Self-Funded insurance - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Self-Funded insurance | |||
Health care self-insurance expense | $ 6,169 | $ 4,634 | |
Estimated accrued liability | $ 1,384 | $ 1,018 |
Segments - Additional Informati
Segments - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Segments | |
Number of operating segments | 1 |
Fair value of financial instr_3
Fair value of financial instruments - Assets and Liabilities at Fair Value (Details) - Fair Value, measurements, recurring - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair value of financial instruments | ||
Total | $ 4,421 | $ 4,105 |
Fair Value, Inputs, Level 1 | ||
Fair value of financial instruments | ||
Total | 4,421 | 4,105 |
Deferred compensation liability | ||
Fair value of financial instruments | ||
Total | 4,421 | 4,105 |
Deferred compensation liability | Fair Value, Inputs, Level 1 | ||
Fair value of financial instruments | ||
Total | $ 4,421 | $ 4,105 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share, Basic [Abstract] | ||
Net Income (Loss) | $ 3,241 | $ 2,571 |
Average shares outstanding | 20,485,933 | 20,315,338 |
Basic income per share | $ 0.16 | $ 0.13 |
Earnings Per Share, Diluted, Other Disclosures [Abstract] | ||
Average shares outstanding | 20,485,933 | 20,315,338 |
Effect of dilutive stock-based compensation | 214,113 | 434,610 |
Total potential shares outstanding | 20,700,046 | 20,749,948 |
Diluted income per share | $ 0.16 | $ 0.12 |
Earnings Per Share - Antidiluti
Earnings Per Share - Antidilutive Securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Stock Options | ||
Earnings Per Share | ||
Antidilutive securities excluded from computation of diluted earnings per share | 0 | 0 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Changes in Contract Assets and Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Revenue Recognition | |
Contract asset, beginning balance | $ 5,457 |
Net activity | (225) |
Contract asset, ending balance | 5,232 |
Contract liability, beginning balance | 3,635 |
Net activity | (538) |
Contract liability, ending balance | $ 3,097 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Disaggregation of Revenue by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue Recognition | ||
Total, net sales | $ 161,269 | $ 142,645 |
Operating segments | ||
Revenue Recognition | ||
Total, net sales | 168,993 | 147,452 |
Intercompany sales elimination | ||
Revenue Recognition | ||
Total, net sales | (7,724) | (4,807) |
Outdoor sports | ||
Revenue Recognition | ||
Total, net sales | 2,159 | 2,305 |
Fabrication | ||
Revenue Recognition | ||
Total, net sales | 90,914 | 87,001 |
Performance structures | ||
Revenue Recognition | ||
Total, net sales | 45,770 | 26,675 |
Tube | ||
Revenue Recognition | ||
Total, net sales | 19,074 | 20,352 |
Tank | ||
Revenue Recognition | ||
Total, net sales | $ 11,076 | $ 11,119 |
Revenue Recognition - Schedul_3
Revenue Recognition - Schedule of Disaggregation of Revenue by End Market (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue Recognition | ||
Total, net sales | $ 161,269 | $ 142,645 |
Commercial vehicle | ||
Revenue Recognition | ||
Total, net sales | 58,954 | 59,155 |
Construction & access | ||
Revenue Recognition | ||
Total, net sales | 28,446 | 26,507 |
Powersports | ||
Revenue Recognition | ||
Total, net sales | 30,291 | 24,098 |
Agriculture | ||
Revenue Recognition | ||
Total, net sales | 14,958 | 14,451 |
Military | ||
Revenue Recognition | ||
Total, net sales | 7,952 | 8,569 |
Other | ||
Revenue Recognition | ||
Total, net sales | $ 20,668 | $ 9,866 |
Concentration of major custom_3
Concentration of major customers - Schedule of Major Customer Concentrations (Details) - Customer Concentration Risk | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Customer A | Net Sales | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 16.60% | 15.30% | |
Customer A | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 11.80% | ||
Concentration risk percentage | <10 | ||
Customer B | Net Sales | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 14% | 15.60% | |
Customer B | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 11.60% | 12.60% | |
Customer C | Net Sales | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 12.10% | ||
Concentration risk percentage | <10 | ||
Customer C | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | <10 | <10 | |
Customer D | Net Sales | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | <10 | <10 | |
Customer D | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13% | 12.70% |
Stock-based compensation - Addi
Stock-based compensation - Additional Information (Details) - $ / shares | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Apr. 20, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Options, issued and outstanding number | 1,222,302 | ||
Options, issued and outstanding weighted average exercise price | $ 11.36 | ||
Weighted average contractual life remaining | 7 years 4 months 24 days | ||
Unrecognized stock-based compensation recognition period | Mar. 15, 2027 | ||
2019 Omnibus Incentive Plan | |||
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 | ||
RSU awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of units, vested | 154,372 | 132,433 | |
Employee Stock Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Options vested (in shares) | 206,524 | 197,597 | |
Weighted average strike price | $ 13.54 | $ 11.65 |
Stock-based compensation - Summ
Stock-based compensation - Summary of Stock-based Compensation Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based compensation expense, net of tax | $ 1,157 | $ 1,066 |
Unit awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based compensation expense, net of tax | 789 | 715 |
Option awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based compensation expense, net of tax | 348 | $ 351 |
PSU awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based compensation expense, net of tax | $ 20 |
Stock-based compensation - Sche
Stock-based compensation - Schedule of Unrecognized Stock-based Compensation Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Beginning Balance | $ 3,817 |
Grants | 5,846 |
Forfeitures | (32) |
Expense | (1,157) |
Ending Balance | 8,474 |
RSU | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Beginning Balance | 2,304 |
Grants | 4,423 |
Forfeitures | (32) |
Expense | (789) |
Ending Balance | 5,906 |
PSU | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Beginning Balance | 0 |
Grants | 1,423 |
Expense | (20) |
Ending Balance | 1,403 |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Beginning Balance | 1,513 |
Expense | (348) |
Ending Balance | $ 1,165 |
Common Equity (Details)
Common Equity (Details) - shares | Mar. 31, 2024 | Dec. 31, 2023 |
Common Equity | ||
Common shares, shares authorized | 75,000,000 | 75,000,000 |
Common Equity - Changes in outs
Common Equity - Changes in outstanding common shares (Details) - Common Stock [Member] - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Beginning balance | 20,310,584 | 20,172,746 |
Treasury stock purchases | (41,148) | |
Common stock issued (including stock-based compensation impact) | 155,932 | 290,432 |
Ending balance | 20,466,516 | 20,422,030 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 3,241 | $ 2,571 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |