Mayville Engineering Company, Inc. (NYSE: MEC) (the “Company” or “MEC”), a leading value-added provider of design, prototyping and manufacturing solutions serving diverse end-markets, today announced that it has entered into an amended and restated Credit Agreement led by Wells Fargo Bank.
Under the terms of the amended and restated Credit Agreement, the total allowable borrowings under MEC’s credit facility have increased from $200 million to $250 million. The Credit Agreement includes an uncommitted accordion feature of $100 million, for a total borrowing capacity of up to $350 million. The applicable interest rate on the credit facility is SOFR plus an applicable interest rate margin range of between 1.25% to 2.75%, subject to the consolidated total net leverage ratio of the Company. The amended and restated Credit Agreement matures in June 2028. A portion of the availability under the upsized credit facility will be used to finance the previously announced acquisition of Mid-States Aluminum, together with general corporate purposes.
Further, as stipulated in the amended and restated Credit Agreement, the Company is allowed a maximum consolidated total leverage ratio of up to 3.50 to 1.00, up from 3.25 to 1.00, together with an 0.50 to 1.00 acquisition-related leverage holiday for each of the four consecutive quarters ending immediately after consummation of an acquisition, for maximum leverage of 4.00 to 1.00 under the Credit Agreement. As previously disclosed, given the expected cash generation of MEC pro-forma for its planned acquisition of Mid-States Aluminum, the Company intends to reduce its net leverage to between 1.5x and 2.0x within the first 18 months following the close of the Mid-States acquisition.
“Our amended, upsized credit facility provides MEC with additional liquidity with which to fund both the recently announced acquisition of Mid-States Aluminum and the profitable growth of our business,” stated Todd Butz, Chief Financial Officer. “We appreciate the continued support of our lending syndicate as we position MEC for sustained, long-term value creation.”
ABOUT MAYVILLE ENGINEERING COMPANY
Founded in 1945, Mayville Engineering Company (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, coating, assembly and aftermarket components. Our customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction & access equipment, power sports, agriculture, military and other end markets. Along with process engineering and development services, MEC maintains an extensive manufacturing infrastructure with 20 facilities across seven states. These facilities make it possible to offer conventional and CNC (computer numerical control) stamping, shearing, fiber laser cutting, forming, drilling, tapping, grinding, tube bending, machining, welding, assembly, and logistic services. MEC also possesses a broad range of finishing capabilities including shot blasting, e-coating, powder coating, wet spray and military grade chemical agent resistant coating (CARC) painting.
FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements that reflect plans, estimates and beliefs. Such statements involve risk and uncertainties. Actual results may differ materially from those contemplated by these forward-looking statements as a result of various factors. Important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements include, but are not limited to: macroeconomic conditions, including inflation, rising interest rates and recessionary concerns, as well as ongoing supply chain challenges, labor availability and cost pressures, and the COVID-19 pandemic, have had, and may continue to have, a negative impact on our business, financial condition, cash flows and results of operations (including future uncertain impacts); risks relating to developments in the industries in which our customers operate; risks related to scheduling production accurately and maximizing efficiency; our ability to realize net sales represented by our awarded business; failure to compete successfully in our markets; our ability to maintain our manufacturing, engineering and technological expertise; the loss of any of our large customers or the loss of their respective market shares; risks related to entering new markets; our ability to recruit and retain our key executive officers, managers and trade-skilled personnel; volatility in the prices or availability of raw materials critical to our business; manufacturing risks, including delays and technical problems, issues with third-party suppliers, environmental risks and applicable statutory and regulatory requirements; our ability to successfully identify or integrate acquisitions; our ability to develop new and innovative processes and gain customer acceptance of such processes; risks related to our information technology systems and infrastructure; geopolitical and economic developments, including foreign trade relations and associated tariffs; results of legal disputes, including product liability, intellectual property infringement and other claims; risks associated with our capital-intensive industry; risks related to our treatment as an S Corporation prior to the consummation of our initial public offering; risks related to our employee stock ownership plan’s treatment as a tax-qualified retirement plan; and other factors described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, as such may be amended or supplemented in our subsequently filed Quarterly Reports on Form 10-Q. This discussion should be read in conjunction with our audited consolidated financial statements included in the Company’s previously filed Annual Report on Form 10-K for the year ended December 31, 2022. We undertake no obligation to update or revise any forward-looking statements after the date on which any such statement is made, whether as a result of new information, future events or otherwise, except as required by federal securities laws.
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