Please wait

.3

​

Table of Contents

Page

Unaudited Pro Forma Consolidated and Combined Financial Information

2

Unaudited Pro Forma Consolidated and Combined Balance Sheet

4

​

​

Unaudited Pro Forma Consolidated and Combined Income Statement for the Three Months Ended March 31, 2025

6

​

Unaudited Pro Forma Consolidated and Combined Income Statement for the Twelve Months Ended December 31, 2024

7

​

Notes to Financial Statements

8

​

​


UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL INFORMATION

Introduction

On May 23, 2025, Mayville Engineering Company, Inc. (“MEC”, “the Company”, “we”, “our”, “us” or similar terms) entered into a Purchase Agreement (the "Agreement") with Tide Rock YieldCo, LLC (“Tide Rock”), a Delaware limited liability company (“Seller”), to purchase all the issued and outstanding equity interests of Accu-Fab, LLC (“Accu-Fab”), a Delaware limited liability company (the “Acquisition”). According to the terms of the Agreement, at closing on July 1, 2025, the Seller transferred all of its shares of Accu-Fab to the Company, and the Company acquired those shares for a total purchase consideration of $141.2 million.

The Company financed the Acquisition by borrowing under its existing credit arrangement. On June 26, 2025, the Company entered into the first amendment to its amended and restated credit agreement, dated as of June 28, 2023, to increase its borrowing capacity. However, the additional borrowing capacity was not needed to finance the Acquisition. The Company filed the amended and restated credit agreement with the Securities and Exchange Commission (“SEC”) on June 27, 2025, as Exhibit 10 to its Form 8-K dated June 26, 2025.

The following Unaudited Pro Forma Consolidated and Combined Financial Information presents the pro forma effects of the acquisition of Accu-Fab by the Company.

The following Unaudited Pro Forma Consolidated and Combined Financial Information was prepared in accordance with Article 11 of Regulation S-X using accounting policies in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). The Unaudited Pro Forma Consolidated and Combined Financial Information (1) was prepared using the acquisition method of accounting pursuant to Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), the Company being the acquiring entity and (2) is based on the Company’s historical Consolidated Financial Statements and Accu-Fab's historical Financial Statements, as adjusted to present the Pro Forma impact of the Acquisition.

In accordance with ASC 805, we use our best estimates and assumptions to accurately assign fair value to the tangible assets acquired, identifiable intangible assets and liabilities assumed, and the related income tax impacts as of the Acquisition date. The estimate of the excess purchase price over the fair value of net tangible assets acquired was allocated to identifiable intangible assets and goodwill. The fair values assigned to Accu-Fab's tangible and identifiable intangible assets acquired and liabilities assumed are based on the Company’s estimates and assumptions. The estimated fair values of these assets acquired and liabilities assumed are considered preliminary and are based on the information that was available as of the date of the Acquisition. In the opinion of the Company’s management, the Unaudited Pro Forma Consolidated and Combined Financial Information includes all material adjustments necessary to be in accordance with Article 11 of Regulation S-X.

The purchase price allocation reflected in the following Unaudited Pro Forma Consolidated and Combined Financial Information is preliminary in nature as the final, actual purchase price and certain valuations have not been finalized. Accordingly, although these amounts represent Company management’s current best estimate of fair value, the final purchase price allocation may differ materially from the preliminary allocation utilized in the following Unaudited Pro Forma Consolidated and Combined Financial Information. In addition, the Unaudited Pro Forma Consolidated and Combined Statement of Comprehensive Income (Loss) Information includes various estimates which are subject to material change and may not be indicative of what may be expected to occur in the future. The Pro Forma adjustments are described in the accompanying Notes to the Unaudited Pro Forma Consolidated and Combined Financial Information.

The Unaudited Pro Forma Consolidated and Combined Financial Information is presented for informational purposes only. Such information is not necessarily indicative of the operating results or financial position that would have been achieved if the Acquisition had been consummated on the dates indicated or that the combined company may achieve in future periods. Further, the Unaudited Pro Forma Consolidated Combined Financial Information does not reflect any revenue and operating synergies or cost savings that may result from the Acquisition.

The Unaudited Pro Forma Consolidated Combined Financial Information gives effect to the accounting for the Acquisition, including the pro forma adjustments intended to illustrate the estimated effects of the Acquisition (the “Transaction Accounting Adjustments” or “Adjustments”).

The following Unaudited Pro Forma Consolidated Combined Financial Information as of and for the three months ended March 31, 2025, and for the year ended December 31, 2024, is derived from:

2

​


●The historical Unaudited Consolidated and Combined Financial Statements and accompanying notes of MEC as of and for the three months ended March 31, 2025, included in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025, as filed with the SEC on May 7, 2025.
●The historical Audited Consolidated and Combined Financial Statements and accompanying notes of MEC as of and for the year ended December 31, 2024, included in its Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 6, 2025.
●The historical Unaudited Consolidated and Combined Financial Statements and accompanying notes of Accu-Fab as of and for the three months ended March 31, 2025, included as .2 to this Form 8-K/A.
●The historical Audited Consolidated and Combined Financial Statements and accompanying notes of Accu-Fab as of and for the year ended December 31, 2024, included as to this Form 8-K/A.

All terms defined in this section of the report are used solely for the purposes of this section and do not apply to any other section of this Current Report on Form 8-K/A.

​

3

​


Unaudited Pro Forma Consolidated and Combined Balance Sheet

As of March 31, 2025

(in thousands, except share amounts and per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mayville Engineering

​

​

​

​

​

​

​

​

​

​

​

​

Company, Inc.

​

Accu-Fab, LLC.

​

Transaction Accounting

​

Note

​

Pro Forma

​

​

(Historical)

​

(Historical)

​

Adjustments

​

Ref.

​

Combined

ASSETS

​

  

​

​

​

​

​

​

​

​

​

Current assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

183

​

$

1,497

​

$

(141,185)

​

5(a)

​

$

1,680

​

​

​

​

​

​

​

​

​

141,185

​

5(b)

​

​

​

Receivables, net of allowances for doubtful accounts

​

 

57,927

​

 

13,409

​

 

—

​

​

​

 

71,336

Inventories, net

​

 

55,834

​

 

3,943

​

 

307

​

5(c)

​

 

60,084

Tooling in progress

​

 

4,432

​

 

—

​

 

—

​

​

​

 

4,432

Prepaid expenses and other current assets

​

 

3,635

​

 

269

​

 

—

​

​

​

 

3,904

Total current assets

​

 

122,011

​

 

19,118

​

 

307

​

​

​

 

141,436

Non-current assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Property, plant and equipment, net

​

 

152,724

​

 

8,932

​

 

1,193

​

5(d)

​

 

162,849

Assets held for sale

​

​

1,402

​

​

—

​

​

—

​

​

​

​

1,402

Goodwill

​

 

92,650

​

 

12,579

​

 

34,831

​

5(e)

​

 

140,060

Intangible assets, net

​

 

50,001

​

 

18,357

​

 

50,343

​

5(f)

​

 

118,701

Operating lease assets

​

​

27,297

​

​

4,341

​

​

370

​

5(g)

​

​

32,008

Notes receivable - related party

​

​

—

​

​

6,200

​

​

(6,200)

​

5(h)

​

​

—

Other long-term assets

​

 

1,617

​

 

—

​

 

—

​

​

​

 

1,617

Total non-current assets

​

​

325,691

​

 

50,409

​

 

80,537

​

​

​

 

456,637

Total Assets

​

$

447,702

​

$

69,527

​

$

80,844

​

​

​

$

598,073

LIABILITIES

​

 

  

​

 

​

​

 

​

​

​

​

 

​

Current liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Accounts payable

​

$

49,749

​

$

3,966

​

$

—

​

​

​

$

53,715

Current portion of operating lease obligation

​

​

4,806

​

​

1,130

​

​

—

​

​

​

​

5,936

Accrued liabilities:

​

 

​

​

 

​

​

 

​

​

​

​

 

​

Salaries, wages, and payroll taxes

​

​

6,163

​

​

364

​

​

​

​

​

​

​

6,527

Bonuses and deferred compensation

​

 

2,630

​

 

411

​

 

—

​

​

​

 

3,041

Other current liabilities

​

 

9,589

​

 

149

​

 

1,854

​

5(i)

​

 

11,592

Total current liabilities

​

 

72,937

​

 

6,020

​

 

1,854

​

​

​

 

80,811

Non-current liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Bank revolving credit notes

​

 

77,479

​

 

—

​

 

141,185

​

5(b)

​

 

218,664

Operating lease obligation, less current maturities

​

​

24,219

​

​

2,940

​

​

—

​

​

​

​

27,159

Deferred compensation, less current portion

​

​

3,877

​

​

—

​

​

—

​

​

​

​

3,877

Deferred income tax liability

​

 

16,293

​

 

—

​

 

—

​

​

​

 

16,293

Notes payable - related party

​

 

—

​

 

2,640

​

 

(2,640)

​

5(h)

​

 

—

Other long-term liabilities

​

 

2,940

​

 

226

​

 

—

​

​

​

 

3,166

Total non-current liabilities

​

​

124,808

​

​

5,806

​

​

138,545

​

​

​

​

269,159

Total Liabilities

​

$

197,745

​

$

11,826

​

$

140,399

​

​

​

$

349,970

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

4

​


EQUITY

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Stockholders' equity

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Common shares

​

​

—

​

​

65,303

​

​

(65,303)

​

5(j)

​

​

—

Additional paid-in-capital

​

​

207,007

​

​

—

​

​

—

​

​

​

​

207,007

Retained earnings

​

​

60,106

​

​

(7,602)

​

​

11,162

​

5(j)

​

​

58,252

​

​

​

​

​

​

​

​

​

(1,854)

​

5(j)

​

​

​

​

​

​

​

​

​

​

​

​

(3,560)

​

5(h)

​

​

​

Treasury shares at cost

​

​

(17,156)

​

​

—

​

​

—

​

​

​

​

(17,156)

Total shareholders’ equity

​

 

249,957

​

 

57,701

​

 

(59,555)

​

​

​

 

248,103

Total Equity

​

$

249,957

​

$

57,701

​

$

(59,555)

​

​

​

$

248,103

Total liabilities and equity

​

$

447,702

​

$

69,527

​

$

80,844

​

​

​

$

598,073

​

See the accompanying notes to Unaudited Pro Forma Consolidated and Combined Financial Information

​

5

​


Unaudited Pro Forma Consolidated and Combined Income (Loss) Statement

For the Three Months ended March 31, 2025

(in thousands, except share amounts and per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mayville Engineering

​

​

​

Transaction

​

​

​

​

​

​

Company, Inc.

​

Accu-Fab, LLC.

​

Accounting

​

Note

​

Pro Forma

​

(Historical)

​

(Historical)

​

Adjustments

​

Ref.

​

Combined

Net sales

$

135,579

 

$

16,286

​

$

—

​

​

​

$

151,865

Cost of sales

​

120,255

 

​

10,695

​

​

(88)

​

6(a)

​

​

130,894

​

​

​

 

​

​

​

​

32

​

6(b)

​

​

​

Amortization of intangible assets

​

1,733

​

​

608

​

​

855

​

6(c)

​

​

3,196

Bonuses and deferred compensation

​

3,325

 

​

—

​

​

—

​

​

​

​

3,325

Other selling, general and administrative expenses

​

8,689

​

​

2,496

​

​

(22)

​

6(a)

​

​

11,163

Total income from operations

​

1,577

​

​

2,487

​

​

(777)

​

​

​

​

3,287

Interest expense

​

1,567

​

​

35

​

​

(38)

​

6(d)

​

​

3,506

​

​

​

​

​

​

​

​

1,942

​

6(f)

​

​

​

Income before taxes

​

10

​

​

2,452

​

​

(2,681)

​

​

​

​

(219)

Other income, net

​

—

​

​

13

​

​

—

​

​

​

​

13

Income tax benefit

​

(10)

​

​

—

​

​

(52)

​

6(h)

​

​

(62)

Net income (loss) and comprehensive income (loss)

$

20

​

$

2,465

​

$

(2,629)

​

​

​

$

(144)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Earnings (loss) per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic

$

0.00

​

​

​

​

​

​

​

​

​

$

(0.01)

Diluted

$

0.00

​

​

​

​

​

​

​

​

​

$

(0.01)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average shares outstanding:

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic

​

20,520,696

​

​

​

​

​

​

​

​

​

​

20,520,696

Diluted

​

20,750,938

​

​

​

​

​

​

​

​

​

​

20,750,938

​

See the accompanying notes to Unaudited Pro Forma Consolidated and Combined Financial Information

​

6

​


Unaudited Pro Forma Consolidated and Combined Income (Loss) Statement

For the Year Ended December 31, 2024

(in thousands, except share amounts and per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mayville Engineering

​

​

​

Transaction

​

​

​

​

​

​

Company, Inc.

​

Accu-Fab, LLC.

​

Accounting

​

Note

​

Pro Forma

​

(Historical)

​

(Historical)

​

Adjustments

​

Ref.

​

Combined

Net sales

$

581,604

 

$

61,046

​

$

—

​

​

​

$

642,650

Cost of sales

​

510,507

 

​

40,232

​

​

(339)

​

6(a)

​

​

550,834

​

​

​

​

​

​

​

​

307

​

6(e)

​

​

​

​

​

​

 

​

​

​

​

127

​

6(b)

​

​

​

Amortization of intangible assets

​

6,933

 

​

2,430

​

​

3,420

​

6(c)

​

​

12,783

Bonuses and deferred compensation

​

13,593

 

​

—

​

​

—

​

​

​

​

13,593

Other selling, general and administrative expenses

​

31,518

​

​

9,284

​

​

(85)

​

6(a)

​

​

42,571

​

​

​

​

​

​

​

​

1,854

​

6(g)

​

​

​

Gain on lawsuit settlement

​

(25,500)

​

​

—

​

​

—

​

​

​

​

(25,500)

Total income from operations

​

44,553

​

​

9,100

​

​

(5,284)

​

​

​

​

48,369

Interest expense

​

10,989

​

​

28

​

​

(12)

​

6(d)

​

​

18,882

​

​

​

​

​

​

​

​

7,877

​

6(f)

​

​

​

Income before taxes

​

33,564

​

​

9,072

​

​

(13,149)

​

​

​

​

29,487

Other income, net

​

—

​

​

(21)

​

​

—

​

​

​

​

(21)

Income tax expense (benefit)

​

7,596

​

​

—

​

​

(991)

​

6(h)

​

​

6,605

Net income (loss) and comprehensive income (loss)

$

25,968

​

$

9,051

​

$

(12,158)

​

​

​

$

22,861

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Earnings per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic

$

1.26

​

​

​

​

​

​

​

​

​

$

1.11

Diluted

$

1.24

​

​

​

​

​

​

​

​

​

$

1.09

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average shares outstanding:

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic

​

20,611,192

​

​

​

​

​

​

​

​

​

​

20,611,192

Diluted

​

20,972,192

​

​

​

​

​

​

​

​

​

​

20,972,192

​

See the accompanying notes to Unaudited Pro Forma Consolidated and Combined Financial Information

​

​

​

​

​

​

​

​

7

​


Mayville Engineering Company, Inc. and Subsidiaries

Notes to the Unaudited Pro Forma Consolidated and Combined Financial Information

(in thousands, except share amounts, per share data and years)

Note 1. Basis of Presentation

The accompanying Pro Forma Financial Information was prepared in accordance with Article 11 of Regulation S-X. The Unaudited Pro Forma Consolidated and Combined Balance Sheet is presented as if the Acquisition had occurred on March 31, 2025, and the Unaudited Pro Forma Consolidated and Combined Statements of Operations for the three months ended March 31, 2025, and for the year ended December 31, 2024, give effect to the Acquisition as if it occurred on January 1, 2024.

The Unaudited Pro Forma Consolidated and Combined Financial Information does not reflect any anticipated synergies or dis-synergies, operating efficiencies or cost savings that may result from the integration costs that may be incurred. The pro forma adjustments represent MEC's best estimates and are based upon currently available information and certain assumptions that MEC believes are reasonable under the circumstances. There are no other material transactions or accounting policy differences between MEC and Accu-Fab during the periods presented, other than the adjustments being made in the Pro Forma Financial Information.

Note 2. Significant Accounting Policies

The accounting policies used in the preparation of the Unaudited Pro Forma Consolidated and Combined Financial Information are those set out in MEC’s Audited Financial Statements for the year ended December 31, 2024. Management performed a comprehensive review of the accounting policies between the two entities. Management is currently not aware of any significant accounting policy differences and therefore has not made any adjustments to the Pro Forma Consolidated and Combined Financial Information related to these potential differences.

Note 3. Reclassification Adjustments

Certain reclassifications are reflected in the pro forma adjustments to conform Accu-Fab's presentation to MEC's in the Unaudited Pro Forma Consolidated and Combined Balance Sheet. These reclassifications have no effect on previously reported shareholders’ equity, or income from continuing operations of MEC or Accu-Fab.

​

8

​


The following table presents Accu-Fab's Unaudited reclassified Consolidated Combined Balance Sheet as of March 31, 2025:

Unaudited Pro Forma Consolidated and Combined Balance Sheet

As of March 31, 2025

(in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Accu-Fab, LLC.

​

Reclassification

​

Note

​

Accu-Fab, LLC.

Mayville Engineering Company, Inc.

​

Accu-Fab, LLC.

​

(Historical)

​

Adjustments

​

Ref.

​

Reclassified

ASSETS

​

​

​

  

​

​

​

​

​

​

​

Current assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

Cash and cash equivalents

​

$

1,497

​

$

—

​

​

​

$

1,497

Receivables, net of allowances for doubtful accounts

​

Receivables, net of allowances for doubtful accounts

​

​

13,409

​

​

—

​

​

​

​

13,409

Inventories, net

​

Inventories, net

​

 

3,943

​

 

—

​

​

​

 

3,943

Prepaid expenses and other current assets

​

Prepaid expenses and other current assets

​

 

269

​

 

—

​

​

​

 

269

Total current assets

​

​

​

 

19,118

​

​

—

​

​

​

 

19,118

Non-current assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

Property, plant and equipment, net

​

Property, plant and equipment, net

​

 

8,932

​

 

—

​

​

​

 

8,932

Goodwill

​

Goodwill

​

 

12,579

​

 

—

​

​

​

 

12,579

Intangible assets, net

​

Customer relationships

​

 

18,357

​

 

—

​

​

​

 

18,357

Operating lease assets

​

Operating lease assets

​

​

4,341

​

​

—

​

​

​

​

4,341

Notes receivable - related party

​

Notes receivable - related party

​

​

6,200

​

​

—

​

​

​

​

6,200

Total non-current assets

​

​

​

​

50,409

​

 

—

​

​

​

 

50,409

Total Assets

​

​

​

$

69,527

​

$

—

​

​

​

$

69,527

LIABILITIES

​

​

​

 

  

​

 

​

​

​

​

 

​

Current liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

Accounts payable

​

Accounts payable

​

$

3,966

​

$

—

​

​

​

$

3,966

Current portion of operating lease obligation

​

Current portion of operating lease obligation

​

​

1,130

​

​

—

​

​

​

​

1,130

Accrued liabilities:

​

​

​

 

​

​

 

​

​

​

​

 

​

Salaries, wages, and payroll taxes

​

​

​

​

—

​

​

364

​

3(a)

​

​

364

Bonuses and deferred compensation

​

​

​

 

—

​

 

411

​

3(a)

​

 

411

Other current liabilities

​

Accrued liabilities

​

 

924

​

 

(775)

​

3(a)

​

 

149

Total current liabilities

​

​

​

 

6,020

​

 

—

​

​

​

 

6,020

Non-current liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

Operating lease obligation, less current maturities

​

Operating lease obligation, less current maturities

​

 

2,940

​

 

—

​

​

​

 

2,940

Notes payable - related party

​

Notes payable - related party

​

​

2,640

​

​

—

​

​

​

​

2,640

Other long-term liabilities

​

Other long-term liabilities

​

​

226

​

​

—

​

​

​

​

226

Total non-current liabilities

​

​

​

​

5,806

​

​

—

​

​

​

​

5,806

Total Liabilities

​

​

​

$

11,826

​

$

—

​

​

​

$

11,826

EQUITY

​

​

​

​

​

​

​

​

​

​

​

​

​

Stockholders' equity

​

​

​

​

​

​

​

​

​

​

​

​

​

Common shares

​

Member's equity

​

​

65,303

​

​

—

​

​

​

​

65,303

Retained earnings

​

Retained earnings

​

​

(7,602)

​

​

—

​

​

​

​

(7,602)

Total shareholders’ equity

​

​

​

 

57,701

​

 

—

​

​

​

 

57,701

Total Equity

​

​

​

$

57,701

​

$

—

​

​

​

$

57,701

Total liabilities and equity

​

​

​

$

69,527

​

$

—

​

​

​

$

69,527

9

​


3(a) Adjustment to reclassify a portion of Accu-Fab's "Accrued liabilities" to "Salaries, wages, and payroll taxes" and "Bonuses and deferred compensation" Financial Statement line item.

Note 4. Calculation of Estimated Purchase Consideration and Preliminary Purchase Price Allocation

The accounting for the Acquisition is based on currently available information and is considered preliminary. The final accounting for the Acquisition may differ materially from that presented in this Unaudited Pro Forma Consolidated and Combined Financial Information.

Estimated Purchase Consideration

The Unaudited Pro Forma Consolidated and Combined Financial Information reflects the acquisition of Accu-Fab for consideration of $141,185. The estimated fair value of the consideration transferred on the closing date is the value of the cash consideration transferred to the Seller, including payment of Seller’s transaction costs by the Company. The Unaudited Pro Forma Consolidated and Combined Financial Information do not include equity awards that will, in the ordinary course, either vest and settle and/or be granted between signing and closing of the Acquisition.

Preliminary Purchase Price Allocation

Under the acquisition method of accounting, Accu-Fab’s identifiable assets acquired, and liabilities assumed by MEC will be recorded at the acquisition date fair values. The excess purchase price over the fair value of identifiable assets and liabilities is recorded as goodwill.

The following table sets forth a preliminary allocation of the purchase consideration to Accu-Fab’s identifiable tangible and intangible assets expected to be acquired and liabilities expected to be assumed by MEC based on the acquisition date fair value:

​

​

​

(In Thousands)

Fair Value

Cash and cash equivalents

$

1,497

Receivables

​

13,409

Inventories

​

4,250

Prepaid expenses and other current assets

​

269

Property, plant and equipment

​

10,125

Intangible assets

​

68,700

Operating lease assets

​

4,711

Goodwill

​

47,410

Total Assets

$

150,371

Accounts payable

​

3,966

Current portion of operating lease obligation

​

1,130

Salaries, wages and payroll taxes

​

364

Bonuses and deferred compensation

​

411

Other current liabilities

​

149

Operating lease obligation, less current maturities

​

2,940

Other long-term liabilities

​

226

Fair value of consideration transferred

$

141,185

The preliminary purchase accounting was based on certain valuation techniques dependent on the asset class of the acquired assets and liabilities assumed including intangible assets, inventory, property, plant and equipment, and leases. A final determination of the fair value of Accu-Fab’s assets and liabilities will be performed. The final acquisition consideration allocation may be materially different than that reflected in the preliminary acquisition consideration allocation presented herein. Any increase or decrease in fair values of the net assets as compared with the Unaudited Consolidated and Combined Pro Forma Financial Statements may change the amount of the total acquisition consideration allocated to goodwill and other assets and liabilities and may impact the Consolidated and Combined Company Statements of Income due to adjustments in the depreciation and amortization of the adjusted assets.

​

10

​


Note 5. Adjustments to Unaudited Pro Forma Consolidated and Combined Balance Sheet

Transaction Adjustments

The Pro Forma adjustments included in the Unaudited Pro Forma Consolidated and Combined Balance Sheet are as follows:

(a) Reflects the recognition and payment of purchase consideration of $141,185 as determined in Note 4 above.

(b) Reflects the adjustment of $141,185 to cash and cash equivalents, representing the funding of the acquisition through the existing credit facility.

(c) Reflects the adjustment to Accu-Fab's inventory to step up to fair value using a combination of bottom-up (cost-plus) and top-down (selling price less costs) approaches under business combination fair value guidelines. The estimated fair value of inventory is preliminary and subject to change.

(d) Represents the preliminary estimated fair value adjustment to property, plant and equipment acquired. The preliminary fair value of property, plant and equipment was determined primarily using the cost approach, with the market approach applied to certain assets where an active secondary market exists.

The general categories of the acquired property, plant and equipment are the following:

​

​

​

(In Thousands)

Amount

Machinery and equipment

$

9,528

Vehicles

​

120

Leasehold improvements

​

120

Office furniture and fixtures

​

87

Construction in progress

​

10

Finance leases

​

260

Total fair value of property, plant and equipment

​

10,125

Less: carrying amount as of March 31, 2025

​

8,932

Total Pro Forma adjustment

$

1,193

(e) Represents the adjustment to goodwill based on the purchase price allocation.

​

​

​

(In Thousands)

Amount

Goodwill resulting from the Acquisition

$

47,410

Less: Elimination of Accu-Fab's historical goodwill

​

(12,579)

Pro Forma adjustment

$

34,831

(f) Reflects the preliminary estimated fair value of the identifiable intangible assets acquired. The estimated fair values and useful lives of the intangible assets are preliminary and subject to change upon finalization of the purchase price allocation. The preliminary fair value of Customer Relationships was determined using the multi-period excess earnings method (“MPEEM”) and the fair value of non-compete agreements was determined using the With-and-Without Method (“Incremental Cash Flow Approach”), which estimates the present value of incremental after-tax cash flows.

The general categories of the acquired identified intangible assets are the following:

​

​

​

​

​

​

​

​

​

​

Carrying Amount as

​

​

​

​

​

​

(In Thousands)

of March 31, 2025

 

Step-up

​

Fair Value

Customer relationships

$

18,357

​

$

48,143

​

$

66,500

Non-compete agreements

​

—

​

​

2,200

​

​

2,200

Total identifiable intangible assets and Pro Forma adjustment

$

18,357

​

$

50,343

​

$

68,700

(g) Reflects the adjustment to recognize the net lease intangible asset of $370 that represents the off-market terms of the acquired lease agreements. This represents the fair value of lease contracts that are either favorable or unfavorable relative to current

11

​


market terms, as assessed at the acquisition date. The net asset was measured as the present value of the difference between contractual lease payments and market-based lease rates over the remaining lease term. This adjustment results in the recognition of an off-market lease intangible.

(h) Reflects the write-off of the net notes receivable from the Seller at the time of the July 1, 2025 closing, which relates to financing arrangements between Accu-Fab and Tide Rock. During the year ended December 31, 2023, Accu-Fab issued unsecured, non-interest-bearing promissory notes to Tide Rock of $6,850, maturing in 2028. As of March 31, 2025, the outstanding balance was $6,200. In addition, during the year ended December 31, 2024, Accu-Fab received capital loans of $1,215. As of March 31, 2025, the total capital loans balance due was $2,640, which was classified as long-term payables. This adjustment records the write-off of these above-mentioned balances in the Pro Forma Balance Sheet as of March 31, 2025, with the corresponding decrease in equity.

​

​

​

(In Thousands)

Amount

Notes receivable - related party

$

6,200

Notes payable - related party

​

(2,640)

Pro Forma adjustment to equity

$

3,560

(i) Reflects an increase in other current liabilities for the accrual of estimated non-recurring transaction-related expenses of $1,854 incurred by MEC, including legal, accounting and regulatory fees directly associated with the Acquisition with a corresponding decrease to retained earnings.

(j) Reflects the elimination of Accu-Fab's historical equity as of the Closing Date and the equity impact of pre-closing settlement of net notes receivable from related party, as detailed in Note 5(h).

Note 6. Adjustments to Unaudited Pro Forma Consolidated and Combined Statement of Operations

Transaction Adjustments

The Pro Forma adjustments included in the Unaudited Pro Forma Consolidated and Combined Income (Loss) Statement are as follows:

(a)This represents a net decrease in depreciation expense on a straight-line basis of $110 for the three months ended March 31, 2025, and $423 for the year ended December 31, 2024. The decrease is based on the preliminary step-up in the fair value of property, plant, and equipment and the related estimated useful lives assigned. Depreciation expense is allocated based on the nature of activities associated with the use of the property, plant, and equipment. For the three months ended March 31, 2025, $88 is allocated to cost of sales and $22 to other selling, general, and administrative expenses. For the year ended December 31, 2024, $339 is allocated to cost of sales and $85 to other selling, general, and administrative expenses.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Depreciation

​

Depreciation

​

​

​

​

​

Expense for the

​

Expense for the

​

​

​

​

​

Three Months Ended

​

Twelve Months Ended

(In Thousands)

Useful Life

​

Fair Value

    

March 31, 2025

    

December 31, 2024

Machinery and equipment

6

​

$

9,528

​

$

397

​

$

1,588

Vehicles

4

​

​

120

​

​

8

​

​

30

Leasehold improvements

13

​

​

120

​

​

2

​

​

9

Office furniture and fixtures

5

​

​

87

​

​

4

​

​

17

Construction in progress

N/A

​

​

10

​

​

—

​

​

—

Finance leases

​

​

​

260

​

​

—

​

​

—

Total property and equipment acquired

​

​

​

10,125

​

$

411

​

$

1,644

Less: historical depreciation expense

​

​

​

​

​

​

521

​

​

2,067

Pro Forma adjustment for decrease in depreciation expense

​

​

​

​

​

$

(110)

​

$

(423)

(b) Represents the related amortization expense associated with the recognized off-market lease intangible of $32 for the three months ended March 31, 2025, and $127 for the year ended December 31, 2024.

12

​


(c) Represents the Pro Forma adjustment to record incremental amortization expense of $855 for the three months ended March 31, 2025, and $3,420 for the year ended December 31, 2024. These amounts are based on the fair value of identified intangible assets, less historical amortization expense.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortization

​

Amortization

​

​

​

​

​

Expense for the

​

Expense for the

​

​

​

​

​

Three Months

​

Twelve Months

​

​

​

​

​

​

Ended March 31,

​

Ended December 31,

(In Thousands)

Useful Life

​

Fair Value

    

2025

    

2024

Customer relationships

14

​

$

66,500

​

$

1,188

​

$

4,750

Non-compete agreements

2

​

​

2,200

​

​

275

​

​

1,100

Total identifiable intangible assets

​

​

​

68,700

​

​

1,463

​

​

5,850

Less: historical amortization expense

​

​

​

​

​

​

608

​

​

2,430

Pro Forma adjustment for incremental amortization expense

​

​

​

​

​

$

855

​

$

3,420

(d) Reflects the adjustment to eliminate the interest expense on the related party net notes payable as described in Note 5(h) above.

(e) To record the increase to the cost of sales by the amount related to the inventory acquisition date fair value step up, which is described in Note 5(c) above and expected to be sold within one year.

(f) Represents the incremental interest expense of $1,942 related to financing the acquisition for the three months ended March 31, 2025, and $7,877 for the year ended December 31, 2024.

(g) Reflects estimated non-recurring transaction-related expenses of $1,854 incurred by MEC, including legal, accounting and regulatory fees directly associated with the Acquisition. These non-recurring expenses are not anticipated to affect the Unaudited Pro Forma Consolidated and Combined Statement of Operations beyond twelve months after the Closing Date.

(h) Reflects the estimated income tax impact related to the Pro Forma transaction accounting adjustments and pre acquisition net income of Accu-Fab. Tax-related adjustments are based upon a blended statutory tax rate of approximately 24.19%. The applicable blended statutory tax rates are based on the jurisdictions in which the assets are located and are not necessarily indicative of the effective tax rate of MEC following the Acquisition, which could be significantly different depending on post-acquisition activities, including the geographical mix of income.

Earnings (Loss) Per Share

The following table sets forth the computation of Pro Forma basic and diluted earnings per share for the three months ended March 31, 2025 and year ended December 31, 2024:

​

​

​

​

​

​

​

​

​

For the Three

​

For the Twelve

​

​

Months Ended

​

Months Ended

(In thousands, except per share price)

​

March 31, 2025

    

December 31, 2024

Numerator:

​

​

​

​

​

​

Net income (loss) attributable to MEC

​

$

(144)

​

$

22,861

Denominator

​

​

​

​

​

​

Weighted average shares outstanding

​

​

​

​

​

​

Basic

​

​

20,520,696

​

​

20,611,192

​

​

​

​

​

​

​

Effect of dilutive stock-based compensation

​

​

230,242

​

​

361,000

Diluted

​

​

20,750,938

​

​

20,972,192

Earnings (loss) per share:

​

​

​

​

​

​

Basic:

​

$

(0.01)

​

$

1.11

Diluted:

​

$

(0.01)

​

$

1.09

​

13

​