UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015
Commission File No.: 001-32401
MANITEX INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Michigan
(State of incorporation)
9725 Industrial Drive
Bridgeview, Illinois
(Address of principal executive offices)
42-1628978
(I.R.S. Employer
Identification No.)
60455
(Zip Code)
Registrant’s telephone number, including area code: (708) 430-7500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, no par value
Preferred Share Purchase Rights
Name of each exchange on which registered
The NASDAQ Stock Market LLC
The NASDAQ Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Non-Accelerated Filer
Accelerated Filer
Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The aggregate market value of the shares of common stock, no par value (“Common Stock”), held by non-affiliates of the registrant as of June 30,
2015 was approximately $92 million based upon the closing price for the Common Stock of $7.64 on the NASDAQ Stock Market on such date.
The number of shares of the registrant’s common stock outstanding as of March 1, 2016 was 16,125,661.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Annual Report on Form 10-K incorporates by reference information (to the extent specific sections are referred to herein) from the
registrant’s Proxy Statement for its 2016 Annual Meeting (the “2016 Proxy Statement”) to be filed with the Commission within 120 days after the
end of the fiscal year ended December 31, 2015.
TABLE OF CONTENTS
PART I
ITEM 1.
ITEM 1A.
ITEM 1B.
ITEM 2.
ITEM 3.
ITEM 4.
PART II
ITEM 5.
ITEM 6.
ITEM 7.
ITEM 7A.
ITEM 8.
ITEM 9.
ITEM 9A.
ITEM 9B.
PART III
ITEM 10.
ITEM 11.
ITEM 12.
ITEM 13.
ITEM 14.
PART IV
ITEM 15.
BUSINESS ........................................................................................................................................................
RISK FACTORS ...............................................................................................................................................
UNRESOLVED STAFF COMMENTS ............................................................................................................
PROPERTIES ...................................................................................................................................................
LEGAL PROCEEDINGS .................................................................................................................................
MINE SAFETY DISCLOSURES .....................................................................................................................
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES ...................................................................................
SELECTED FINANCIAL DATA ....................................................................................................................
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS .......................................................................................................................................
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ..................................
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ..................................................................
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE .......................................................................................................................
CONTROLS AND PROCEDURES .................................................................................................................
OTHER INFORMATION .................................................................................................................................
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ..........................................
EXECUTIVE COMPENSATION ....................................................................................................................
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS ..................................................................................................
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
PRINCIPAL ACCOUNTANT FEES AND SERVICES ..................................................................................
EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES .......................................................................
SIGNATURES ........................................................................................................................................................................
1
2
11
17
17
18
18
19
19
21
22
40
41
95
95
96
97
97
97
97
97
97
98
98
99
i
PART I
References to the “Company,” “we,” “our” and “us” refer to Manitex International, Inc., together in each case with our subsidiaries
and any predecessor entities unless the context suggests otherwise.
Forward-Looking Statements
When reading this section of this Annual Report on Form 10-K, it is important that you also read the financial statements and related
notes thereto. This Annual Report on Form 10-K and certain information incorporated herein by reference contain forward-looking
statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this
Annual Report on Form 10-K, other than statements that are purely historical, are forward-looking statements and are based upon
management’s present expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future. We
use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,”
“should,” “could,” and similar expressions to identify forward-looking statements. Forward-looking statements in this Annual Report
on Form 10-K include, without limitation: (1) projections of revenue, earnings, capital structure and other financial items,
(2) statements of our plans and objectives, (3) statements regarding the capabilities and capacities of our business operations,
(4) statements of expected future economic conditions and the effect on us and on our customers, (5) expected benefits of our cost
reduction measures, and (6) assumptions underlying statements regarding us or our business. Our actual results may differ from
information contained in these forward looking-statements for many reasons, including those described below and in the section
entitled “Item 1A. Risk Factors”:
(1)
(2)
(3)
(4)
a future substantial deterioration in economic conditions, especially in the United States and Europe;
the cyclical nature of the markets we operate in;
our ability to negotiate extensions of our credit agreements and to obtain additional debt or equity financing when needed;
government spending; fluctuations in the construction industry, and capital expenditures in the oil and gas industry;
(5) Our increasingly international operations expose us to additional risks and challenges associated with conducting business
internationally;
(6)
(7)
(8)
difficulties in implementing new systems, integrating acquired businesses, managing anticipated growth, and responding to
technological change;
our level of indebtedness and our ability to meet financial covenants required by our debt agreements;
our customers’ diminished liquidity and credit availability;
(9)
increases in interest rates;
(10) the performance of our competitors;
(11) shortages in supplies and raw materials or the increase in costs of materials;
(12) product liability claims, intellectual property claims, and other liabilities;
(13) the volatility of our stock price;
(14) future sales of our common stock;
(15) the willingness of our stockholders and directors to approve mergers, acquisitions, and other business transactions;
(16) currency transaction (foreign exchange) risks and the risk related to forward currency contracts;
(17) certain provisions of the Michigan Business Corporation Act and the Company’s Articles of Incorporation, as amended,
Amended and Restated Bylaws, and the Company’s Preferred Stock Purchase Rights may discourage or prevent a change in
control of the Company;
(18) a substantial portion of our revenues are attributed to limited number of customers which may decrease or cease purchasing any
time;
(19) a disruption or breach in our information technology systems; and
(20) other factors.
The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties
not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial
1
condition or operating results. We do not undertake, and expressly disclaim, any obligation to update this forward-looking
information, except as required under applicable law.
ITEM 1. BUSINESS
Our Business
The Company is a leading provider of engineered specialty lifting and loading products. The Company operates in three business
segments: the Lifting Equipment segment, the ASV segment and the Equipment Distribution segment.
Lifting Equipment Segment
Through its Lifting Equipment segment, the Company designs, manufactures and distributes a diverse group of products that serve
multiple functions and are used in a variety of industries. Through its Manitex, Inc. subsidiary it markets a comprehensive line of
boom trucks, truck cranes and sign cranes. Manitex’s boom trucks and crane products are primarily used for industrial projects,
energy exploration and infrastructure development, including, roads, bridges and residential and commercial construction.
PM Group S.p.A. (“PM”) is a leading Italian manufacturer of truck mounted hydraulic knuckle boom cranes with a 50-year history of
technology and innovation, and a product range spanning more than 50 models. Its largest subsidiary, Oil & Steel (“O&S”), is a
manufacturer of truck-mounted aerial platforms with a diverse product line and an international client base.
Manitex Liftking ULC (“Manitex Liftking” or “Liftking”) sells a complete line of rough terrain forklifts, a line of stand-up electric
forklifts, cushioned tired forklifts with lifting capacities from 18 thousand to 40 thousand pounds, and special mission oriented
vehicles, as well as other specialized carriers, heavy material handling transporters and steel mill equipment. Manitex Liftking’s rough
terrain forklifts are used in both commercial and military applications.
Badger Equipment Company (“Badger”) is a manufacturer of specialized rough terrain cranes and material handling products. Badger
primarily serves the needs of the construction, municipality, and railroad industries.
Manitex Sabre, Inc. (“Sabre”) manufactures a comprehensive line of specialized mobile tanks for liquid and solid storage and
containment solutions with capacities from 8,000 to 21,000 gallons. Its mobile tanks will be sold to specialized independent tank
rental companies and through the Company’s existing dealer network. The tanks are used in a variety of end markets such as
petrochemical, waste management and oil and gas drilling CVS Ferrari, srl (“CVS”) designs and manufactures a range of reach
stackers and associated lifting equipment for the global container handling market that are sold through a broad dealer network.
CVS’s Valla SpA (“Valla”) division offers a full range of electric precision pick and carry cranes.
In December 2015, the Company completed the sale of its Load King subsidiary.
ASV Segment
A.S.V., LLC (“ASV”) manufactures a line of high quality compact rubber tracked and skid steer loaders. The ASV products are
distributed through Terex Corporation (“Terex”) distribution channels as well as through the Company and other independent dealers.
This independent dealer network now has over 100 locations. The products are used in the site clearing, general construction, forestry,
golf course maintenance and landscaping industries, with general construction being the largest market.
Equipment Distribution Segment
The Equipment Distribution segment comprises the operations of Crane & Machinery (“C&M”), a division of Manitex International,
North American Equipment, Inc. (“NAE”) and North American Distribution, Inc. (“NAD”). The segment markets products used
primarily for infrastructure development and commercial construction applications that include road and bridge construction, general
contracting, roofing, scrap handling and sign construction and maintenance. C&M is a distributor of Terex rough terrain and truck
cranes products and supplies repair parts for a wide variety of medium to heavy duty construction equipment and sells domestically
and internationally, predominately to end users, including the rental market. It also provides crane equipment repair services in the
Chicago area. The segment markets previously-owned construction and heavy equipment and trailers both domestically and
internationally through North American Equipment, Inc., a subsidiary of the Company. The segment purchases previously owned
equipment of various ages and conditions and often refurbish the equipment before resale. The segment also sells Valla products
through NAD.
2
Recent Acquisitions
On March 12, 2015, the Company entered into inventory and equipment purchase agreements with Columbia Tanks, LLC. Financial
results are included in the consolidated results beginning on March 12, 2015.
On January 15, 2015, the Company acquired PM Group S.p.A. (“PM”) which is based in San Cesario sul Panaro, Modena, Italy.
PM’s financial results are included in the consolidated results beginning on January 15, 2015.
On December 19, 2014 the Company completed an agreement with Terex and has become the majority owner of ASV, which is
located in Grand Rapids, Minnesota. As a result of the transaction, the Company owns 51% of ASV and Terex owns 49% of ASV.
ASV’s financial results are included in the consolidated results beginning on December 20, 2014.
On December 16, 2014, the Company, BGI USA Inc. (“BGI”), Movedesign SRL and R& S Advisory S.r.l., entered into an operating
agreement for Lift Ventures LLC (“Lift Ventures”), a joint venture entity. Lift Ventures manufactures and sells certain products and
components, including the Schaeff line of electric forklifts and certain Liftking products. The Company owns 25% of the equity of Lift
Ventures and licenses certain intellectual property related to the Company’s products to Lift Ventures.
On November 30, 2013, CVS Ferrari Srl., an Italian corporation and a wholly subsidiary of Manitex International, Inc., purchased the
assets of Valla SpA. Valla develops mobile cranes from 2 to 90 tons, using electric, diesel and hybrid power options. Its cranes offer
wheeled or tracked, fixed or swing boom configurations, with special applications designed specifically to meet the needs of its
customers. Valla’s financial results are included in the consolidated results beginning on November 30, 2013.
On August 19, 2013, Manitex Sabre, Inc. (“Sabre”) acquired the assets of Sabre Manufacturing, LLC, which is located in Knox,
Indiana. Sabre manufactures a comprehensive line of specialized mobile tanks for liquid and solid storage and containment solutions.
Sabre’s financial results are included in the consolidated results beginning on August 19, 2013.
Discontinued Operations
On December 28, 2015, the Company completed the sale of Manitex Load King, Inc. for approximately $6.525 million. Load King
manufactures specialized custom trailers and hauling systems typically used for transporting heavy equipment. See Note 25
“Discontinued Operations” in the Notes to Consolidated Financial Statements for more information on the Company’s discontinued
operations.
General Corporate Information
The Company’s principal executive offices are located at 9725 Industrial Drive, Bridgeview, Illinois 60455 and our telephone number
is (708) 430-7500. The Company’s website address is www.manitexinternational.com. Information contained on our website is not
incorporated by reference into this report and such information should not be considered to be part of this report.
3
FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS
The following is financial information about our Lifting Equipment, ASV and Equipment Distribution segments for the years ending
December 31, 2015, 2014 and 2013. The accounting policies of the segments are the same as those described in the summary of
significant accounting policies in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K, except
corporate expenses are not allocated to segments. The Company evaluates segment performance based upon operating income before
corporate expenses. Amounts shown are in thousands of dollars.
(In Thousands)
AS OF OR FOR THE YEARS ENDED
DECEMBER 31,
2014
2013
2015
Revenues from continuing operations:
Lifting Equipment
ASV
Equipment Distribution
Inter-segment Eliminations
Total
Operating income from continuing operations:
Lifting Equipment
ASV
Equipment Distribution
Corporate expense
Elimination of inter-segment profit in inventory
Total
Total assets:
Lifting Equipment
ASV
Equipment Distribution
Corporate
Assets of discontinued operations
Total
$
$
$
$
$
$
261,232 $
116,935
13,216
(4,646)
386,737 $
228,518 $
2,264
21,104
(4,722 )
247,164 $
213,520
—
16,951
(651)
229,820
11,770 $
5,496
(136)
(8,522)
(187)
8,421 $
23,178 $
(121 )
374
(7,968 )
11
15,474 $
24,803
—
628
(6,391)
(10)
19,030
267,226 $
122,672
14,585
2,175
—
406,658 $
158,564 $
129,661
15,612
1,636
11,683
317,156 $
156,855
—
10,847
1,075
13,837
182,614
Lifting Equipment Segment
Boom Trucks
A boom truck is a straight telescopic boom crane outfitted with a hook and winch which is mounted on a standard flatbed commercial
(Class 7 or 8) truck chassis. Relative to other lifting equipment, boom trucks provide increased versatility and are capable of
transporting relatively large payloads from site to site at highway speeds. A boom truck is usually sold with outriggers, pads and
devices for reinforcing the chassis in order to improve safety and stability. Although produced in a wide range of models and sizes,
boom trucks can be broadly distinguished by their normal lifting capability as light, medium, and heavy-cranes. Various models of
medium or heavy-lift boom trucks can safely lift loads from 15 to 70 tons and operating radii can exceed 200 feet. Another advantage
of the boom truck is the ability to provide occasional man lift capabilities at a very low cost to height ratio. While it is not uncommon
to see a very old boom truck, most replacement cycles seem to trend to seven years. The market for boom trucks has historically been
cyclical.
Although the Company offers a complete line of boom trucks from light to heavy capacity cranes much of our efforts have been
devoted to the development of higher capacity boom trucks specifically designed to meet the particular needs of customers including
those in energy production and power distribution. We believe it is an advantage to be skewed towards the heavier lifting capacity,
since the heavier capacity cranes have somewhat higher margins.
Markets that drive demand for boom trucks include power distribution, oil and gas recovery, infrastructure and new home, commercial
and industrial construction. The new home construction market, which uses lower capacity cranes, is probably the most cyclical.
The Company sells its boom trucks through a network of over forty full service dealers in the United States, Canada, Mexico, South
America, and the Middle East. A number of our dealers maintain a rental fleet of their own. Boom trucks can be rented for either short
or long-term periods.
4
In 2011, the overall market for boom trucks strengthened considerably. It was, however, still considerably below previous market
peaks. In 2011, Company unit sales increased approximately 60%. The Company believes its 2011 percent unit sales growth was
lower than the overall industry growth in 2011. Much of the industry’s unit sales growth occurred in the lower lifting capacity boom
truck segment, a market segment where we traditionally have our lowest market share.
In 2012, the market for boom trucks again showed considerable improvement with total industry unit sales approaching pre-2008
levels. The market dynamics were, however, considerably different than they previously were. Much of the current demand then was
being driven by niche market sectors, i.e., oil and gas exploration and power line construction. The demand from the general
construction market although slowly improving still did not approach pre-2008 levels. For 2012, the Company’s boom truck unit
sales increased by approximately 65% as compared to the prior year. The increase in unit sales reflects the Company’s strategic
initiatives which have emphasized the development of boom trucks with higher lifting capacities that target the oil and gas and power
line distribution market segments.
In 2013, the overall market for boom truck was marginally down from the prior year. However, revenues generated from boom truck
sales by the Company increased by approximately 30% in 2013. Accordingly, the Company’s market share was also up. The revenue
increase was principally attributed to an increase in production capacity. This increase in capacity allowed us to reduce the backlog
that existed at December 31, 2012 and to more aggressively promote the sale of our lower tonnage cranes. A significant portion of the
December 2012 backlog was for higher tonnage cranes used in niche market segments particularly the North American energy sector.
During the year, there was a softening in the demand for our products which are related to the energy sector.
In 2014, the Company saw a decline in orders for cranes with higher lifting capacities that serve niche markets, including the North
American energy sector slowdown from prior years, largely as a result of the fall in oil prices. However, demand for lower capacity
cranes increased, offsetting the decrease in revenues generated from the sale of cranes with higher lifting capacities. The increase in
revenues generated from the sale of cranes with lower lifting capacity is reflective of the continued growth of general construction
activity in North America. The change in mix did, however, result in lower gross profit percent for 2014.
In 2015, oil prices continued to decline and the U.S. oil rig count dropped from 1,600 in January 2015 to just over 500 at end of the
year. As a result of this decrease in rig count, the oil and gas industry further curtailed purchasing and began selling excess equipment
into the general construction market, which further depressed the demand for boom trucks. We have recently observed a slight
moderating of the selloff of excess equipment by the energy sector and are hopeful that the selloff of excess equipment by the energy
sector will be largely completed by the end of 2016. The aforementioned factors resulted in a significant decrease in revenues during
the year from the sale of boom trucks.
PM Group
PM is a leading Italian manufacturer of truck mounted hydraulic knuckle boom cranes with a 50-year history of technology and
innovation, and a product range spanning more than 50 models. Its largest subsidiary, Oil & Steel (“O&S”), is a manufacturer of
truck-mounted aerial platforms with a diverse product line
PM knuckle boom cranes are hydraulic folding and articulating cranes, mounted on a commercial chassis, with lifting capacities that
range from small (lifting capacity up to three ton meter) to super heavy (lifting capacity two hundred and ten ton meter), often
supplied with a jib for additional reach. With a compact design and footprint, the crane can be mounted to maximize the load carrying
capability of the chassis onto which it is mounted. Combined with the cranes ability to operate in a compact footprint the ability to
carry a payload provides a competitive advantage over other truck mounted cranes and makes the knuckle boom crane particularly
attractive for a variety of end uses in the construction and product delivery sectors.
The knuckle boom crane market is a global market with a wide variety of end sector applications, but focused particularly on
residential and non-residential construction, road and bridge and infrastructure development. Historically the knuckle boom crane has
not had significant application in the energy sector. PM knuckle boom cranes are sold into a variety of geographies including West
and East Europe, Central Asia, Africa, North and Central America, South America, the Middle East and the Far East and Pacific
region. Historically, PM focused on its domestic and local Western European markets, but in recent years has expanded its sales and
distribution efforts internationally. PM has ten international sales and distribution offices located in several European countries as well
as the Far East and Latin America. During 2015, after acquisition by Manitex, the Company expanded its distribution capability with
the existing Manitex dealer network in North America as well as expanding the number of independent service centers in the US.
The market for knuckle boom cranes has been growing in recent years as the acceptability of the product has grown and its advantages
have been accepted. Growth in North America where the straight mast boom truck crane has been the more dominant product has been
more rapid in recent years in combination with the overall improvement in the North American construction sector. PM Group share
of the North American market has been historically low; however this is an area of growth opportunity for the Company following its
acquisition by Manitex.
5
PM aerial platforms are self-propelled or truck mounted and places an operator in a basket in the air in order to perform maintenance,
repairs or similar activities. The equipment is used in a variety of applications including utilities, sign work and industrial maintenance
and is often sold to rental operations. PM group product serves in a number of geographies in West and East Europe but also the near
and Far East and sells through dealers as well as its own sales and distribution offices. The market generally follows the domestic
economic cycle for any particular country. Consequently, the market has shown a positive trend in the recent past as European
economies recover from the 2009 / 2010 economic crisis.
Industrial Cranes
Our Badger subsidiary sells specialized industrial cranes through a network of dealers. The Badger product line includes specialized
15 and 30 ton industrial cranes (which can be used by the railroads) as well as a 10 ton carry deck crane which are all sold under both
the Badger and Manitex names. Additionally, Badger sells lattice cranes with 20 to 30 ton lifting capacity marketed under the Little
Giant trade name. The Little Giant line has five lattice boom models, three of which are dedicated rail cranes. In addition, Badger also
sells a 30 ton truck crane and a 25 ton crawler crane under the Little Giant name. Badger also has the capability to manufacture
certain of our lower capacity boom trucks and provides expanded boom truck manufacturing capacity when needed.
The products are used by railroads, refineries, states, municipalities, and for general construction. The Company believes it has an
advantage over its competitors in selling to railroads as it is the only crane manufacturer that has integrated the installation of rail gear
into its production process. Competitors send their cranes to a third party to have rail gear added which both increases cost and delays
deliveries.
Our Valla product line of industrial cranes is a full range of precision pick and carries cranes from 2 to 90 tons, using electric, diesel,
and hybrid power options. Its cranes offer wheeled or tracked, and fixed or swing boom configurations, with special applications
designed specifically to meet the needs of its customers. The product is sold internationally through dealers and into the rental
distribution channel.
Rough Terrain Forklifts
Manitex Liftking manufactures a complete range of straight mast forklifts with capacities from 6,000 to 50,000 lbs. and lift heights
from 10 to 32 feet. All Manitex Liftking straight mast forklifts feature exceptional ground clearance, easy access to service points,
ergonomic controls and easy operation. The Company also produces a series of tag along forklifts that mount to trucks with lifting
capacity ranging from 4,000 to 6,000 pounds. These mounted forklifts are ideal for bricklaying, landscaping, construction or any other
application that requires a forklift to tag along. The forklifts feature an easy to mount system, which allows an operator to securely
mount or dismount the forklift quickly.
Manitex Liftking forklifts include four rough terrain forklifts, in several configurations, which are sold under the Noble trade name.
The Noble product line was originally designed and marketed by Caterpillar. Noble has a reputation for providing durable, innovative
and high quality products. The Noble rough terrain forklifts are currently distributed through the Caterpillar dealer network.
The Company sells its rough terrain forklifts through a network of dealers in the United States and Canada.
Military Forklifts
Manitex Liftking military forklifts are used worldwide during both periods of conflict and peace. Manitex Liftking military units are
working for national militaries including the United States, Canada, and Great Britain. The Company’s exported military products
(including products sold to the U.S.) are sold through the Canadian Commercial Corporation which has direct contracts with various
foreign (outside of Canada) government agencies. The U.S. Department of Defense alone has hundreds of Manitex Liftking vehicles
in the Navy, Army and Air Force that they depend on daily. These vehicles range from small shipboard approved forklifts to the
biggest articulating, rough-terrain forklift in the world.
Manitex Liftking military forklifts have innovative features that allow them to meet strict military standards and perform in almost any
terrain. These features include the patented hydraulically removable counterweight that permits aircraft transportability of the forklift
without exceeding the load limits of the aircraft. The water fording capability of some Manitex Liftking vehicles allow continuous
operation in water depths of up to 5 feet (1.5 meters), providing true all-terrain operation. The Company believes that these features
have helped position Manitex Liftking as the product of choice for rough terrain military forklifts.
All of Manitex Liftking’s shipboard approved vehicles are structurally engineered to withstand a depth charge explosion while on an
aircraft carrier, and still be fully operational. The detachable mast and 2-piece operator’s cab on some of Manitex Liftking’s bigger
vehicles allow easy disassembly to satisfy height restrictions while being transported by road or rail. Attachments such as fork rollers
and standard ISO container handlers further increase the versatility of a Manitex Liftking forklift.
6
Manitex Liftking’s forklifts are built to exacting military standards including compliance with the quality controls required by ISO
9001-2008. Before being shipped each machine is thoroughly tested on a military approved endurance track located adjacent to
Manitex Liftking’s military vehicle manufacturing plant. There are a limited number of test tracks in North America, and having a
military approved test track is an advantage.
The timing of customer orders can be expected to result in fluctuations in revenues from period to period. The expected fluctuations,
however, are not as dependent on general economic conditions as is our commercial business. The Company currently has a backlog
of $5.8 million, which is expected to be filled in 2016. The Company currently has four open military contracts that provides for
purchases up to approximately $100 million between now and 2019. The future sales are, however, dependent on the receipt of future
orders against these four open military contracts.
Mission Oriented Vehicles and Specialized Carriers
The Company has the capability to design, and manufacture special mission oriented vehicles and specialized carriers which are
designed and built to meet unique customer needs and requirements. The Company’s specialized lifting equipment has met the
particular needs of customers in various industries including utility, ship building and steel mill industries. Due to the unique nature
of these products, the Company only receives orders for this type of product infrequently and in limited quantities. Mission oriented
vehicles and specialized carriers are sold directly to the end users.
Transporters, used in ship building, are one example of a specialized carrier built by Manitex Liftking. The ship builder will construct
a segment of the hull on our transporter. When the section of the hull is complete, the ship builder will move the section to the already
completed portion of the hull and attach it. Manitex Liftking has built transporters capable of transporting 500,000 pounds.
Container Handling Equipment
The Company through its Italian subsidiary, CVS Ferrari, srl (“CVS”) manufactures a range of container handling equipment to serve
ports and inter-modal customers on a worldwide basis. CVS owns rights and designs to manufacture a variety of products, including
reach stackers, empty container handlers, forklift, straddle carriers, and tractors.
The container handling market is a somewhat cyclical market, which is impacted by both general economic conditions as well as the
timing of major port construction projects. Although demand is impacted by general economic conditions, a significant portion of the
funding for purchases comes from governments or governmental agencies, which may be less sensitive to general economic
conditions. The effect of an economic downturn may also be delayed as there are long-lead times for major contracts, which may be
received prior to the deterioration of economic conditions.
While CVS’s sales have historically been in Italy and other European countries, it has also historically had a market presence in
Africa, South America, the Middle East and the Far East. In recent years CVS has devoted efforts to expand its international presence.
In 2013 CVS added new dealers in Latin America that began to generate additional revenues starting in the second half of 2013.
During 2015, the Company executed a dealership agreement with a Canadian dealer that serves the North American Market. In its
markets, CVS competes with several other companies, including three companies that are significantly larger than CVS. In attempting
to expand its presence in the North American market, CVS faces competition from these competitors and also domestic
manufacturers.
As discussed above, CVS during the last two years has continued to expand its dealer network and has also benefited from a modest
increase in demand in its local Italian market.
Mobile Tanks
Manitex Sabre manufactures a comprehensive line of specialized mobile tanks for liquid and solid storage and containment solutions
with capacities from 8,000 to 21,000 gallons. Its mobile tanks are sold to specialized independent tank rental companies and through
the Company’s existing dealer network.
The tanks have historically been used in variety of end markets such as petrochemical, waste management and oil and gas drilling.
However, when we purchased Sabre in 2013, their business heavily skewed towards the energy sector. Since early 2014, we have
been working to diversify the products, customers, and applications. This includes expanding environmental applications and using
our tanks to store deicer fluid at airports.
7
ASV Segment
Loaders and Skid Steer
ASV manufactures and sells a complete range of compact rubber tracked loaders (CTL) and skid steer loaders (SSL). Our CTLs with
rated operating capacity between 700 pound and 3,500 pounds are used in the site clearing, general construction, forestry, golf course
maintenance and landscaping industries, with general construction being the largest market. The CTL manufactured by ASV has
several patented features and unique attributes, including the only available rubber tracked undercarriage system. CTLs equipped with
the available rubber tracked undercarriage system significantly minimize or reduce damages to the surface (ground) on which it is
operating. Our SSLs with rated operating capacity between 1,600 pound and 3,200 pounds are used in general construction, material
handling, including scrap and waste, and agricultural markets.
When we acquired our interest in ASV, the products were only marketed under the Terex brand and sold exclusively through the
Terex distribution network. Since then, we have reintroduced the ASV brand to the marketplace and have entered into dealership
agreements with independent dealers. Presently, these dealers have more than 100 locations to serve customers. The Company
continues and will continue to sell Terex branded products and will continue sell through the Terex distribution network.
Equipment Distribution Segment
The Equipment Distribution segment comprises the operations of Crane & Machinery (“C&M”), a division of Manitex International,
North American Equipment, Inc. (“NAE”) and North American Distribution, Inc. (“NAD”). The segment markets products used
primarily for infrastructure development and commercial construction applications that include road and bridge construction, general
contracting, roofing, scrap handling and sign construction and maintenance. C&M is a distributor of Terex rough terrain and truck
cranes products and supplies repair parts for a wide variety of medium to heavy duty construction equipment and sells domestically
and internationally, predominately to end users, including the rental market. It also provides crane equipment repair services in the
Chicago area. The segment markets previously-owned construction and heavy equipment and trailers both domestically and
internationally through NAE. NAE purchases previously owned equipment of various ages and conditions and often refurbishes the
equipment before resale. The segment also sells Valla products through NAD.
Revenues attributable to the Company’s Equipment Distribution segment were less than 10% of the Company’s total revenues for
fiscal years 2015, 2014 and 2013.
Part Sales
Each of our segments supplies repair and replacement parts for its products. The parts business margins are higher than our overall
margins. Part sales as a percentage of revenues tend to increase when there is a down-turn in the industry. Part sales as a percentage of
revenues is approximately 15%, 11% and 15% for the years ended December 31, 2015, 2014 and 2013, respectively.
Total Company Revenues by Sources
The sources of the Company’s revenues are summarized below:
Boom trucks, knuckle boom & truck cranes
Industrial cranes and forklifts
Container handling equipment
Rough terrain forklifts
Military forklifts
Rough terrain cranes
Compact loaders and skid steers
Mobile tanks
Used Construction Equipment
Part sales
Total Revenue
2015
2014
2013
36%
2%
7%
5%
3%
4%
22%
3%
3%
15%
100%
46 %
7 %
16 %
4 %
4 %
2 %
1 %
6 %
3 %
11 %
100 %
50%
4%
15%
7%
2%
1%
0%
3%
3%
15%
100%
In 2015, 2014 and 2013, no customer accounted for 10% or more of the Company’s revenue.
8
Raw Materials
The Company purchases a variety of components used in the production of its products. The Company purchases steel and a variety
of machined parts, components and subassemblies including weldments, winches, cylinders, frames, rims, axles, wheels, tires,
suspensions, cables, booms and cabs, as well as engines, transmissions and cabs. Additionally, Manitex and PM mount their cranes on
commercial truck chassis, which are either purchased by the Company or supplied by the customer. Lead times for these materials
(including chassis) vary from several weeks to many months. The Company is vulnerable to a supply interruption in instances when
only one supplier has been qualified and identifying and qualifying alternative suppliers can be very time consuming, and in some
cases, could take longer than a year. The Company has been working on qualifying secondary sources of some products to assure
supply consistency and to reduce costs. The degree to which our supply base can respond to changes in market demand directly affects
our ability to increase production and the Company attempts to maintain some additional inventory in order to react to unexpected
increases in demand. During 2013, 2014 and 2015, raw materials and components were generally available to meet our production
schedules and had no significant impact on full year revenues. During the first part of 2014 delivery of chassis for our larger cranes
had a modest impact on production, however this was alleviated during the year as manufacturers increased their production and
demand also slowed compared to the first half of the year.
Any future supply chain issues that might impact the Company will in part depend on how fast the rate of growth is for a product as
well as the rate of growth in the general economy. Strong general economic growth could put us in competition for parts with other
industries. Additionally, events or circumstance at a particular supplier could impact the availability of a necessary component.
Patents and Trademarks
The Company protects its trade names and trademarks through registration. Its technology consists of bill of materials, drawings,
plans, vendor sources and specifications and although the Company’s technology has considerable value, it does not generally have
patent protection. The Company has (on rare occasions) filed for patent protection on a specific feature. In the future, the Company
will consider seeking patent protection on any new design features believed to present a significant future benefit.
The Company owns and uses several trademarks relating to its brands that have significant value and are instrumental to the
Company’s ability to market its products. The Company’s most significant trademarks are its mark “Manitex” (presently registered
with the United States Patent and Trademark Office until 2017), and its mark “LIFTKING” (presently registered with the Canadian
Intellectual Property Office). Badger Equipment Company markets its products under the “Little Giant” and Badger trade names. The
Company’s PM Group subsidiary sells its products using the trademark “PM” and PM Group’s O&S subsidiary sells its products
using the “OIL & STEEL” trademark. The Manitex, Liftking, Badger, Little Giant, PM and OIL & STEEL trademarks and trade
names are important to the marketing and operation of the Company’s business as a significant number of our products are sold under
those names. The use of the trade name “Noble” is also important to the Company’s business. Although the Company does not own
the Noble trade name, it has the right to use the Noble name in connection with its rough terrain forklift product line. ASV product is
marketed under the Terex trade name to which it has a license, and also under the ASV trade name. Other important trademarks that
are registered by ASV include “Posi-Track”, “Loegering” VTS and VTS Versatile Track System. ASV has a number of patents for its
current machines presently registered with the United States Patent and Trademark Office until 2023 and the original patent for now
discontinued machines that expires in 2018. PM Group’s O&S subsidiary has three patents. One is registered with the Italian Patents
and Trademarks Office until 2028. O&S has two additional patents registered with OHIM that are inforce until 2031 and 2034,
respectively.
Seasonality
Traditionally, the Company’s peak selling periods for cranes and commercial rough terrain forklifts are the second and third quarters
of a calendar year as a result of the need for equipment in the spring, summer and fall construction seasons. A significant portion of
cranes sold over the last several years have been deployed in specialized industries or applications, such as oil and gas production,
power distribution and in the railroad industry. Sales in these market segments are subject to significant fluctuations which correlate
more with general economic conditions and the prices of commodities, including oil, and generally are not of a seasonal nature.
The Lifting Equipment segment’s military, special mission oriented vehicles and specialized carriers business is dependent on both the
receipt of customers’ orders and the timing of contract awards related to major port projects. The timing of customer orders can be
expected to result in non-seasonal fluctuations in revenues from period to period.
Sales of cranes from the Equipment Distribution segment mirror the seasonality of the overall Company. However, the sale of parts is
much less seasonal given the geographic breadth of the customer base. Crane repairs are performed by the Equipment Distribution
segment throughout the year but are somewhat affected by the slowdown in construction activity during the typically harsh winters in
the Midwestern United States.
9
Peak sales of ASV products are traditionally in the first half of a calendar year as a result of the need to have new equipment available
for the spring, summer and fall construction seasons, although this is partially offset by sales to export markets in the southern
hemisphere. The financial crisis that began in 2008 dramatically depressed demand for products used in commercial construction and
home building, the market areas subject to the greatest seasonality. As such, the seasonal impact on ASV’s business has not as
significant in recent years.
Competition
Lifting Equipment Segment
The market for the Company’s boom trucks and knuckle boom cranes, commercial rough terrain forklifts, container handling
equipment and trailers is highly competitive. The Company competes based on product design, quality of products and services,
product performance, maintenance costs and price. Several competitors have greater financial, marketing, manufacturing and
distribution resources than we do. The Company believes that it effectively competes with its competitors.
Military forklifts, special mission oriented vehicles and specialized carriers are highly engineered products and, therefore, only face
limited competition. The Company’s rough terrain cranes serve smaller niche markets and, therefore, also have less competition.
The Company’s boom cranes compete with cranes manufactured by National Crane, Terex, Weldco Beales, Elliott and Altec. The
Company’s knuckle boom cranes compete with Palfinger, Fassi, Effer and HIAB. The Company competes with Linamar, Sellick,
Harlo, Manitou, Mastercraft and Load Lifter in selling rough terrain forklifts. The Company competes primarily with Terex and
Broderson in selling rough terrain and industrial cranes. The Company’s container handling equipment competes with similar
equipment sold by Cargotec, Konecranes and Terex.
ASV Segment
The Company’s compact and skid steer loaders compete with product manufactured and sold by Bobcat (part of Doosan), Caterpillar,
CNH, Gehl, Takeuchi, John Deere and Wacker Neuson.
Equipment Distribution Segment
Our Equipment Distribution segment has a dealership arrangement with Terex and must compete against dealers of other rough terrain
and truck crane manufacturers such as Imperial Crane (Tadano and Elliot) and Walter Payton Power (Grove) who operate in the same
geographic market in and around Chicago. The same dynamic holds true in selling Manitex boom trucks which are part of our Lifting
Equipment segment. The Equipment Distribution segment competes against Runnion Equipment (dealer for National Crane), Power
Equipment Leasing (dealer for Elliott) and Guiffre Cranes (dealer for Terex boom trucks). Runnion is also authorized to sell Manitex
boom trucks. Our Equipment Distribution segment competes with other PM dealers for distribution in North America.
While no geographic limitations exist regarding the Equipment Distribution segment’s ability to sell cranes internationally, the lack of
any barriers to entry and the heavy use of the Internet make this a highly active and competitive market in which to distribute cranes.
Competition for our Equipment Distribution segment’s repair business is even more intense since it is limited geographically due to
the necessity of having physical access to the cranes. Most of the above referenced companies also compete in this aspect of the
business, as do other types of crane and equipment dealers from nearby areas such as Indiana or Wisconsin.
Parts sales from the Equipment Distribution segment are global in scope and benefit greatly from the Internet and the tenure and
expertise of our employees. While competition in this area is extensive, the breadth of the products offered and the segment’s long
history in this part of the business is we believe a competitive advantage.
The Distribution segment also markets previously-owned construction and heavy equipment, domestically and internationally. We
provide a wide range of used lifting and construction equipment of various ages and condition. The sale of used equipment is highly
competitive as other dealers, rental companies, and end users also sell used equipment. The Distribution Equipment segment has a
competitive advantage as it has broad product offering and has the capability to refurbish the equipment to the customers’
specification.
The Equipment Distribution segment competes based on the design, quality and performance of the products it distributes, price and
the supporting repair and part services that it provides. Several competitors have greater financial, marketing and distribution
resources than we do. The Company, however, believes that it effectively competes with its competitors.
10
Backlog
The backlog at December 31, 2015 was approximately $82.5 million, compared to a backlog of approximately $98.2 million (restated
to exclude Load King) at December 31, 2014. The Company expects to ship product to fulfill its existing backlog within the next
twelve months.
Research and Development
The Company spent $5.8 million, $2.1 million and $2.3 million on company-sponsored research and development activities for 2015,
2014 and 2013, respectively.
Geographic Information
The information regarding revenue, the basis for attributing revenue from external customers to individual countries, and long-lived
assets is found in Note 18 “Segment Information” to our consolidated financial statements, is hereby incorporated by reference into
this Part I, Item 1.
Employees
As of December 31, 2015, the Company had 961 full time employees. The Company has not experienced any work stoppages and
anticipates continued good employee relations. Nineteen (19) of our employees are covered by collective bargaining agreements.
Twelve (12) of our employees at our Badger subsidiary are represented by International Union, UAW and its local No. 316. The
current union contract expires on January 21, 2017. Four employees are currently represented by Automobile Mechanics’ Local 701.
The union contract expires on September 30, 2017. The employees represented by the Automobile Mechanics’ Local 701 are
mechanics that work in our Equipment Distribution segment. A number of our Equipment Distribution segment’s customers in the
Chicago metropolitan area mandate union mechanics usage for any service / repair jobs. Three employees at ASV are represented by
International Brotherhood of Boilermakers Local 647. The current union contract expires on May 10, 2017.
Governmental Regulation
The Company is subject to various governmental regulations, such as environmental regulations, employment and health regulations,
and safety regulations. We have various internal controls and procedures designed to maintain compliance with these regulations. The
cost of compliance programs is not material, but is subject to additions to or changes in federal, state or local legislation or changes in
regulatory implementation or interpretation of government regulations.
Available Information
The Company makes available free of charge our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to those reports filed or furnished as required by Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended, through our Internet Website (www.manitexinternational.com) as soon as is reasonably practicable after we
electronically file such material with, or furnish it to, the Securities and Exchange Commission. Information contained in or
incorporated into our Internet Website is not incorporated by reference herein.
ITEM 1A. RISK FACTORS
You should carefully consider the following risks, together with the cautionary statement under the caption “Forward-Looking
Statements” and the other information included in this report. The risks described below are not the only ones the Company faces.
Additional risks that are currently unknown to the Company or that the Company currently considers to be immaterial may also impair
its business or adversely affect the Company’s financial condition or results of operations. If any of the following risks actually occur,
the Company’s business, financial condition or results of operation could be adversely affected.
Significant deterioration in economic conditions, especially in the United States and Europe, has had and may again have negative
effects on the Company’s results of operations and cash flows
Significant deterioration in economic conditions, especially in the United States and Europe, has had and may again have negative
effects on the Company’s results of operations and cash flows. Economic conditions affect the Company’s sales volumes, pricing
levels and overall profitability. Demand for many of the Company’s products depends on end-use markets. Challenging economic
conditions may reduce demand for our products and may also impair the ability of customers to pay for products they have purchased.
As a result, the Company’s reserves for doubtful accounts and write-offs for accounts receivable may increase.
11
A significant deterioration in economic conditions has caused and may again cause deterioration in the credit quality of our customers
and the estimated residual value of our equipment. This could further negatively impact the ability of our customers to obtain the
resources they need to make purchases of our equipment. Reduced credit availability will diminish our customers’ ability to invest in
their businesses, refinance maturing debt obligations, and meet ongoing working capital needs. If customers do not have sufficient
access to credit, demand for the Company’s products will likely decline. Reduced access to credit and the capital markets will also
negatively affect the Company’s ability to invest in strategic growth initiatives such as acquisitions.
The Company may require additional funding, which may not be available on favorable terms or at all.
Our future capital requirements will depend on the amount of cash generated or required by our current operations, as well as
additional funds which may be needed to finance future acquisitions. Future cash needs are subject to substantial uncertainty.
We cannot guarantee that adequate funds will be available when needed, and if we do not receive sufficient capital, we may be
required to alter or reduce the scope of our operations or to forego making future acquisitions. If we raise additional funds by issuing
equity securities, existing stockholders may be diluted.
The Company’s business is sensitive to increases in interest rates.
The Company is exposed to interest rate volatility with regard to future issuances of fixed rate debt and existing issuances of variable
rate debt. Primary exposure includes movements in the U.S. prime rate, the Canadian prime rate and Italian short-term borrowing
rates.
If interest rates rise, it becomes more costly for the Company’s customers to borrow money to pay for the equipment they buy from
the Company. Should the U. S. Federal Reserve Board decide to increase rates, prospects for business investment and manufacturing
could deteriorate sufficiently and impact sales opportunities.
The Company’s business is sensitive to government spending.
Many of the Company’s customers depend substantially on government spending, including highway construction and maintenance
and other infrastructure projects by U.S. federal and state governments and governments in other nations. Any decrease or delay in
government funding of highway construction and maintenance and other infrastructure projects could cause the Company’s revenues
and profits to decrease.
Additionally, the portion of business that is military related (including an international agency) has in the past fluctuated significantly
between years. A significant decrease in military related revenues would adversely affect our results of operations and our cash flow.
The Company’s business is affected by the cyclical nature of its markets.
A substantial portion of our revenues are attributed to limited number of customers which may decrease or cease purchasing any time,
since the Company’s products depends upon the general economic conditions of the markets in which the Company competes. The
Company’s sales depend in part upon its customers’ replacement or repair cycles. Adverse economic conditions, including a decrease
in commodity prices, may cause customers to forego or postpone new purchases in favor of repairing existing machinery. Downward
economic cycles may result in reductions in sales of the Company’s products, which may reduce the Company’s profits. The
Company has taken a number of steps to reduce its fixed costs and diversify its operations to decrease the negative impact of these
cycles. There can be no assurance, however, that these steps will prevent the negative impact of poor economic conditions.
The Company’s revenues are attributed to limited number of customers which may decrease or cease purchasing any time.
The Company’s revenues are attributed to a limited number of customers. We generally do not have long-term supply agreements with
our customers. Even if a multi-year contract exists, the customer is not required to commit to minimum purchases and can cease
purchasing at any time. If we were to lose either a significant customer or several smaller customers our operating results and cash
flows would be adversely impacted.
The Company is dependent upon third-party suppliers, making us vulnerable to supply shortages.
The Company obtains materials and manufactured components from third-party suppliers. Any delay in the ability of the Company’s
suppliers to provide the Company with necessary materials and components may affect the Company’s capabilities at a number of our
manufacturing locations, or may require the Company to seek alternative supply sources. Delays in obtaining supplies may result from
a number of factors affecting the Company’s suppliers including capacity constraints, labor disputes, the impaired financial condition
12
of a particular supplier, suppliers’ allocations to other purchasers, weather emergencies or acts of war or terrorism. Any delay in
receiving supplies could impair the Company’s ability to deliver products to customers and, accordingly, could have a material
adverse effect on business, results of operations and financial condition.
In addition, the Company purchases material and services from suppliers on extended terms based on the Company’s overall credit
rating. Negative changes in the Company’s credit rating may impact suppliers’ willingness to extend terms and increase the cash
requirements of the business.
Price increases in materials could affect our profitability.
We use large amounts of steel and other items in the manufacture of our products. In the past, market prices of some of our key raw
materials increased significantly. If we experience future significant increases in material costs, including steel, we may not be able to
reduce product cost in other areas or pass future raw material price increases on to our customers and our margins could be adversely
affected.
The Company depends on its information technology systems. If its information technology systems do not perform in a
satisfactory manner or if the security of them is breached, it could be disruptive and or adversely affect the operations and results
of operations of the Company.
The Company depends on its information technology systems, some of which are managed by third parties, to process, transmit and
store electronic information (including sensitive data such as confidential business information and personally identifiable data
relating to employees, customers and other business partners), and to manage or support a variety of critical business processes and
activities. If our information technology systems do not perform in a satisfactory manner, it could be disruptive and or adversely affect
the operations and results of operations of the Company, including the ability of the Company to report accurate and timely financial
results.
Furthermore, our information technology systems may be damaged, disrupted or shut down due to attacks by computer hackers,
computer viruses, employee error or malfeasance, power outages, hardware failures, telecommunication or utility failures,
catastrophes or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning
may be ineffective or inadequate. A failure of or breach in information technology security could expose us and our customers,
distributors and suppliers to risks of misuse of information or systems, the compromise of confidential information, manipulation and
destruction of data, defective products, production downtimes and operations disruptions. In addition, such breaches in security could
result in litigation, regulatory action and potential liability, as well as the costs and operational consequences of implementing further
data protection measures, each of which could have a material adverse effect on our business or results of operations.
The Company’s level of indebtedness reduces financial flexibility and could impede our ability to operate.
As of December 31, 2015, the Company’s total debt was $175.9 million, which includes: revolving term credit facilities, notes
payable, convertible debt and capital lease obligations.
Our level of debt affects our operations in several important ways, including the following:
a significant portion of our cash flow from operations is likely to be dedicated to the payment of the principal and interest
on our indebtedness;
our ability to obtain additional financing in the future for working capital, capital expenditures or acquisitions may be
limited;
we may be unable to refinance our indebtedness on terms acceptable to us or at all;
our cash flow may be insufficient to meet our required principal and interest payments; and
we may be unable to obtain additional loans as a result of covenants and agreements with existing debt holders.
The Company must comply with restrictive covenants in its outstanding debt agreements.
The Company’s existing debt agreements contain a number of significant covenants which may limit its ability to, among other things,
borrow additional money, make capital expenditures, pay dividends, dispose of assets and acquire new businesses. These covenants
also require the Company to meet certain financial tests. The Company is currently in compliance with all active covenants. A
default or other event of non-compliance, if not waived or otherwise permitted by the Company’s lenders, could result in acceleration
of the Company’s debt and possibly bankruptcy.
13
Certain of the Company’s products are significantly affected by the level of capital expenditures in the oil and gas industry and
lower capital expenditures have affected and may continue to affect the results of the Company’s operations.
The demand for our product in part depends on the condition of the oil and gas industry and, in particular, on the level of capital
expenditures of companies engaged in the exploration, development, and production of oil and natural gas. Capital expenditures by
these companies are influenced by the following factors:
the oil and gas industry’s ability to economically justify placing discoveries of oil and gas reserves in production;
current and projected oil and gas prices;
the oil and gas industry’s need to clear all structures from the lease once the oil and gas reserves have been depleted;
weather events, such as major tropical storms;
the abilities of oil and gas companies to generate, access and deploy capital;
exploration, production and transportation costs;
the discovery rate of new oil and gas reserves;
the sale and expiration dates of oil and gas leases and concessions;
local and international political and economic conditions;
the ability or willingness of host country government entities to fund their budgetary commitments; and
technological advances.
Historically, prices of oil and natural gas and exploration, development and production have fluctuated substantially. A sustained
period of substantially reduced capital expenditures by oil and gas companies will result in decreased demand for certain equipment
produced by the Company, lower margins, and possibly net losses.
The Company may face limitations on its ability to integrate acquired businesses.
The Company has completed twelve acquisitions since 2006. The successful integration of new businesses depends on the Company’s
ability to manage these new businesses and cut excess costs. While the Company believes it has successfully integrated these
acquisitions to date, the Company cannot ensure that these acquired companies will operate profitably or that the intended beneficial
effect from these acquisitions will be realized.
If the Company is unable to manage anticipated growth effectively, the business could be harmed.
If the Company fails to manage growth, the Company’s financial results and business prospects may be harmed. To manage the
Company’s growth and to execute its business plan efficiently, the Company will need to institute operational, financial and
management controls, as well as reporting systems and procedures. The Company also must effectively expand, train and manage its
employee base. The Company cannot assure you that it will be successful in any of these endeavors.
The Company relies on key management.
The Company relies on the management and leadership skills of David Langevin, Chairman and Chief Executive Officer. When Mr.
Langevin joined the Company, he signed a three year employment agreement with the Company which expired on December 31,
2008. Mr. Langevin’s employment agreement has been extended and now expires on December 31, 2018. Under the employment
agreement, Mr. Langevin’s employment term automatically extends for successive periods of three year unless either the Company or
Mr. Langevin gives written notice to the other party of non-renewal at least 90 days prior to the end of the then current employment
term. The loss of his services could have a significant and negative impact on the Company’s business. In addition, the Company
relies on the management and leadership skills of other senior executives. The Company could be harmed by the loss of key personnel
in the future.
14
The Company’s success depends upon the continued protection of its trademarks and the Company may be forced to incur
substantial costs to maintain, defend, protect and enforce its intellectual property rights.
The Company’s registered and common law trademarks, as well as certain of the Company’s licensed trademarks, have significant
value and are instrumental to the Company’s ability to market its products. The Company’s marks “Manitex” “Liftking” “Badger”,
“Sabre”, “Valla”, “ASV” “PM” and “O&S” are important to the Company’s business as the majority of the Company’s products are
sold under those names. The Company has not registered all of its trademarks in the United States nor in the foreign countries where it
does business. The Company cannot assure you that third parties will not assert claims against any such intellectual property or that
the Company will be able to successfully resolve all such claims. If the Company has to change the names of any of its products, it
may experience a loss of goodwill associated with its brand names, customer confusion and a loss of sales.
In addition, international protection of the Company’s intellectual property may not be available in some foreign countries to the same
extent permitted by the laws of the United States. The Company could also incur substantial costs to defend legal actions relating to
use of its intellectual property, which could have a material adverse effect on the Company’s business, results of operations or
financial condition.
The Company may be unable to effectively respond to technological change, which could have a material adverse effect on the
Company’s results of operations and business.
The markets served by the Company are not historically characterized by rapidly changing technology. Nevertheless, the Company’s
future success will depend in part upon the Company’s ability to enhance its current products and to develop and introduce new
products. If the Company fails to anticipate or respond adequately to competitors’ product improvements and new production
introductions, future results of operations and financial condition will be negatively affected.
The Company operates in a highly competitive industry and the Company is particularly subject to the risks of such competition.
The Company competes in a highly competitive industry and the competition which the Company encounters has an effect on its
product prices, market share, revenues and profitability. Because certain competitors have substantially greater financial, production,
research and development resources and substantially greater name recognition than the Company, the Company is particularly
subject to the risks inherent in competing with them and may be put at a competitive disadvantage. To compete successfully, the
Company’s products must excel in terms of quality, price, product line, ease of use, safety and comfort, and the Company must also
provide excellent customer service. The greater financial resources of the Company’s competitors may put it at a competitive
disadvantage. If competition in the Company’s industry intensifies or if the Company’s current competitors enhance their products or
lower their prices for competing products, the Company may lose sales or be required to lower its prices. This may reduce revenue
from the Company’s products and services, lower its gross margins or cause the Company to lose market share. The Company may
not be able to differentiate our products from those of competitors, successfully develop or introduce less costly products, offer better
performance than competitors or offer purchasers of our products payment and other commercial terms as favorable as those offered
by competitors.
The Company faces product liability claims and other liabilities due to the nature of its business.
In the Company’s lines of business numerous suits have been filed alleging damages for accidents that have occurred during the use or
operation of the Company’s products. The Company is self-insured, up to certain limits, for these product liability exposures, as well
as for certain exposures related to general, workers’ compensation and automobile liability. Insurance coverage is obtained for
catastrophic losses as well as those risks required to be insured by law or contract. Any material liabilities not covered by insurance
could have an adverse effect on the Company’s financial condition.
Our increasingly international operations expose us to additional risks and challenges associated with conducting business
internationally.
The international expansion of our business may expose us to risks inherent in conducting foreign operations. These risks include:
challenges associated with managing geographically diverse operations, which require an effective organizational
structure and appropriate business processes, procedures and controls;
the increased cost of doing business in foreign jurisdictions, including compliance with international and U.S. laws and
regulations that apply to our international operations;
currency exchange and interest rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk
of entering into hedging transactions, if we chose to do so in the future;
potentially adverse tax consequences;
15
complexities and difficulties in obtaining protection and enforcing our intellectual property;
compliance with additional regulations and government authorities in a highly regulated business; and
general economic and political conditions internationally.
The risks that the Company faces in its international operations may continue to intensify as the Company further develops and
expands its international operations.
The Company is subject to currency fluctuations.
Changes in exchange rates between various currencies have had, and will continue to have, an impact on our earnings. We regularly
evaluate opportunities for, and at times engage in, hedging activities to mitigate the impact that changes in exchange rates for various
currencies may have on our financial results. Our hedging activities are designed to reduce and delay, but not to eliminate, the effects
of foreign currency fluctuations. Factors that could affect the effectiveness of our hedging activities include volatility of currency
markets, and the availability of effective hedging instruments. Since the hedging activities are designed to reduce volatility, they may
have the effect of reducing both the negative and positive impacts that changes in exchange rates may have. Our future financial
results could be significantly affected by the value of the U.S. dollar versus the native currencies of our subsidiaries (Canadian dollar
and Euro) as well as the native currencies of foreign subsidiaries and other currencies in which they conduct business. The degree to
which our financial results are affected for any given time period will depend in part upon our hedging activities. There can be no
assurance that our hedging activities will have the desired beneficial impact on our financial condition or results of operations.
Moreover, no hedging activity can completely insulate us from the risks associated with changes in currency exchange rates. We
currently have exposure to changes in exchange rates for a number of currencies including the Canadian dollar, the Euro, the Chilean
peso and the Argentinean peso.
Risks Relating to our Common Stock
The Company’s principal shareholders, executive officers and directors hold a significant percentage of the Company’s common
stock, and these shareholders may take actions that may be adverse to your interests.
The Company’s principal shareholders, executive officers and directors beneficially own, in the aggregate, approximately 33 % of the
Company’s common stock as of February 1, 2016. As a result, these shareholders, acting together, will be able to significantly
influence all matters requiring shareholder approval, including the election and removal of directors and approval of significant
corporate transactions such as mergers, consolidations, sales and purchases of assets. They also could dictate the management of the
Company’s business and affairs. This concentration of ownership could have the effect of delaying, deferring or preventing a change
in control or impeding a merger or consolidation, takeover or other business combination, which could cause the market price of our
common stock to fall or prevent you from receiving a premium in such a transaction.
The cost of compliance with Section 404 of the Sarbanes-Oxley Act of 2002 may negatively impact the Company’s income.
The Company is subject to the rules and regulations of the SEC, including those rules and regulations mandated by the Sarbanes-
Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act requires all reporting companies to include in their annual report a
statement of management’s responsibilities for establishing and maintaining adequate internal control over financial reporting,
together with an assessment of the effectiveness of those internal controls. Section 404 further requires that the reporting company’s
independent auditors attest to, and report on, this management assessment. The Company expects its expenses related to its internal
and external auditors to be significant. If we fail to maintain a system of adequate controls, it could have an adverse effect on our
business and stock price.
The price of our common stock is highly volatile.
The trading price of the Company’s common stock is highly volatile and could be subject to wide fluctuations in price in response to
various factors, many of which are beyond the Company’s control, including:
the degree to which the Company successfully implements its business strategy;
actual or anticipated variations in quarterly or annual operating results;
changes in recommendations by the investment community or in their estimates of the Company’s revenues or operating
results;
failure to meet expectations of industry analysts;
speculation in the press or investment community;
16
strategic actions by the Company’s competitors;
announcements of technological innovations or new products by the Company or competitors; and
changes in business conditions affecting the Company and its customers.
In the past, following periods of volatility in the market price of a company’s securities, class action litigation has often been brought
against companies. If a securities class action suit is filed against us, whether or not meritorious, we would incur substantial legal fees
and our management’s attention and resources would be diverted from operating our business in order to respond to the litigation.
Provisions of the Michigan Business Corporation Act and the Company’s Articles of Incorporation, Amended and Restated
Bylaws, and Rights Agreement may discourage or prevent a takeover of the Company.
Provisions of the Company’s Articles of Incorporation and Amended and Restated Bylaws, Michigan law, and the Rights Agreement,
dated October 17, 2008, between the Company and Broadridge Corporate Issuer Solution, Inc., as rights agent, could make it more
difficult for a third party to acquire the Company, even if doing so would be perceived to be beneficial to you. These provisions could
discourage potential takeover attempts and could adversely affect the market price of the Company’s shares. Because of these
provisions, you might not be able to receive a premium on your investment. These provisions:
authorize the Company’s Board of Directors, with approval by a majority of its independent Directors but without
requiring shareholder consent, to issue shares of “blank check” preferred stock that could be issued by the Company’s
Board of Directors to increase the number of outstanding shares and prevent a takeover attempt;
limit our shareholders’ ability to call a special meeting of the Company’s shareholders;
limit the Company’s shareholders’ ability to amend, alter or repeal the Company bylaws;
may result in the issuance of preferred stock, which would significantly dilute the stock ownership percentage of certain
shareholders and make it more difficult for a third party to acquire a majority of the Company’s outstanding voting stock;
and
restrict business combinations with certain shareholders.
The provisions described above could prevent, delay or defer a change in control of the Company or its management.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
ITEM 2. PROPERTIES
The Company’s executive offices are located at 9725 Industrial Drive, Bridgeview, Illinois 60455. The Company has ten principal
operating plants. The Company’s Equipment segment operates from the facilities described in this paragraph. The Company builds
boom trucks, and sign cranes in its 188,000 sq. ft. leased facility located in Georgetown, Texas. The Company manufactures its
knuckle boom cranes, in two owned facilities, the 542,000 sq. ft. plant located in S. Cesario sul Panaro, Italy and the 213,000 sq. ft.
facility located in Arad, Romania. The Romania facility also produces sub-assemblies that are incorporated into PM products
manufactured in Italy. The Company builds rough terrain forklifts and special mission oriented vehicles, as well as other specialized
carriers in its 85,000 sq. ft. leased facility located in Woodbridge, Ontario. The Company builds specialized rough terrain cranes and
material handling product in its 170,000 sq. ft. leased facility located in Winona, Minnesota. The Company builds reach stackers and
container handling equipment in its 103,000 sq. ft. leased facility in Cadeo, Italy. The Company builds its specialized mobile tanks for
liquid and solid storage and containment solutions in its two 100,000 sq. ft. leased facilities located in Knox, Indiana and Fort Wayne,
Indiana.
The Company’s ASV segment builds its compact track loaders and skid steer loaders in its 220,000 sq. ft. owned facility located in
Grand Rapids, Minnesota. In addition, it owns a 10,000 sq. ft. facility for selling and servicing equipment and a 47,000 sq. ft. leased
facility used for research and development, testing and material storage. These two additional locations are also located Grand
Rapids, Minnesota.
The Company operates its crane distribution business from a 39,000 sq. ft. leased facility located in Bridgeview, Illinois.
All our facilities are used exclusively by our Lifting Equipment and ASV segments except for our Bridgeview facility. The
Bridgeview facility houses our corporate offices and our Equipment Distribution segment operations.
17
The Company believes that its facilities are suitable for its business and will be adequate to meet our current needs.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in various legal proceedings, including product liability and workers’ compensation matters which have
arisen in the normal course of operations. The Company has product liability insurance with self-insurance retention that ranges from
$50 thousand to $0.5 million. ASV product liability cases that existed on date of acquisition have a $4 million self-retention limit. The
Company has a $250 thousand per claim deductible on worker compensation claims and aggregates of $1.2 million, $1.3 million, $1.9
million, and $1.6 million for 2013, 2014, 2015 and 2016 policy years, respectively. Certain cases are at a preliminary stage and it is
not possible to estimate the amount or timing of any cost to the Company. However, the Company does not believe that these
contingencies, in the aggregate, will have a material adverse effect on the Company. Reserves have been established for several
liability cases related to ASV and PM acquisitions. When it is probable that a loss has been incurred and possible to make a reasonable
estimate of the Company’s liability with respect to such matters, a provision is recorded for the amount of such estimate or the
minimum amount of a range of estimates when it is not possible to estimate the amount within the range that is most likely to occur.
ITEM 4. MINING SAFETY DISCLOSURES
Not applicable
18
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Market for the Company’s Common Stock
The Company’s common stock is listed on The NASDAQ Capital Market trading under the symbol MNTX. The following table sets
forth the high and low sales prices of the common stock for the fiscal periods indicated, as reported on The NASDAQ Capital Market.
Price Range of Common Stock
2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2014
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
High
Low
12.98 $
10.25 $
8.10 $
7.64 $
8.37
7.46
5.28
5.12
High
Low
17.44 $
17.16 $
16.73 $
12.73 $
13.19
15.79
11.29
9.58
$
$
$
$
$
$
$
$
Number of Common Stockholders
As of February17, 2016, there were 159 record holders of the Company’s common stock.
Dividends
During the fiscal years ended December 31, 2015, 2014 and 2013, the Company did not declare or pay any cash dividends on its
common stock and the Company does not intend to pay any cash dividends in the foreseeable future. Furthermore, the terms of our
credit facility do not allow us to declare or pay dividends without the prior written consent of the lender.
Performance Graph
The following stock performance graph is intended to show our stock performance compared with that of comparable companies. The
stock performance graph shows the change in market value of ten thousand dollars invested in our Common Stock, the Russell 2000
Index and a peer group of comparable companies (“Peer Group”) for the five year period commencing December 31, 2010 through
December 31, 2015. The cumulative total stockholder return of the peer group and Russell 2000 Index assumes dividends are
reinvested. The stockholder return shown on the graph below is not indicative of future performance. The companies in the Peer
Group are weighted by market capitalization.
The Peer Group consists of the following companies, which are in similar lines of business to Manitex International Inc. Lindsay
Corporation (LNN), Gencor Industries Inc. (GENC), Astec Industries, Inc. (ASTE), Columbus McKinnon Corporation (CMCO) and
Alamo Group, Inc. (ALG). The companies in the Peer Group generally have market capitalizations that are significantly greater than
the Company’s market capitalization. It was necessary to select companies with higher market capitalizations to find companies with
similar lines of business. Our competitors are most often either small privately owned companies with a narrow product line or a
segment of a very large company. In selecting our Peer Group, we intentionally excluded the companies that had the largest market
capitalization even when their product lines were similar to ours.
19
CUMULATIVE TOTAL RETURN
Based upon an initial investment of $10,000 on December 31, 2010
with dividends reinvested
December 31, December 31, December 31, December 31, December 31, December 31,
2010
2011
2012
2013
2014
2015
Manitex International, Inc.
Russell 2000 Index
Construction Equipment (5 stocks)
$
$
$
10,000 $
10,000 $
10,000 $
11,013 $
9,455 $
9,719 $
18,545 $
10,838 $
13,356 $
41,247 $
14,849 $
19,081 $
33,013 $
15,373 $
18,521 $
15,455
14,495
18,405
Issuer Purchases of Equity Securities
The following table provides information about the Company’s purchases of equity securities during the quarter ended December 31,
2015:
Period
October 1 through October 31, 2015
November 1 through November 30, 2015
December 1 through December 31, 2015
Total
Total
number
of shares
purchased
(1)
Average
price
paid per
share
—
—
12,125 $
12,125 $
—
—
5.95
5.95
Total number
of shares
purchased as
part of publicly
announced
plans or programs
—
—
—
—
Maximum number
or approximate
dollar value of
shares that may
yet be purchased
under the
plans or programs
—
—
—
—
(1) The Company purchased and cancelled 12,125 shares of its common stock on December 31, 2015. The shares were purchased
from employees on December 31, 2015 at the market closing price of $5.95 on that date. The employees used the proceeds from
the sale of shares to satisfy their withholding tax obligations that arose when restricted shares vested on that date.
20
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction with our financial statements and the related notes thereto and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this report.
The Company’s results include the results for companies acquired from their respective effective dates of acquisition: July 1, 2010 for
CVS (and July 1, 2011 for the effect of assets purchased), August 19, 2013 for Sabre, November 30, 2013 for Valla, December 16,
2014 for Lift Ventures, December 20, 2014 for ASV, January 15, 2016 for the PM Group and March 12, 2015 for Columbia Tanks.
(In thousands except share information)
Summary of Operations:
Net revenues
Operating income (loss)
Net (loss) income from continuing operations
Net income from continuing operations attributable to
shareholders of Manitex International, Inc.
Earnings per share from continuing operations attributable
to shareholders of Manitex International, Inc.
Basic
Diluted
Shares used to calculate earnings per share:
Basic
Diluted
2015
2014
2013
2012
2011
$
386,737 $
8,421
(3,984)
247,164 $
15,474
8,102
229,820 $
19,030
11,302
186,099 $
14,794
8,525
131,109
6,286
2,683
$
(4,032) $
8,238 $
11,302 $
8,525 $
2,683
$
$
(0.25) $
(0.25) $
0.59 $
0.59 $
0.89 $
0.89 $
0.71 $
0.71 $
0.23
0.23
15,970,074 13,858,189 12,671,205 11,948,356 11,441,914
15,970,074 13,904,289 12,717,575 11,957,458 11,548,158
Total assets
Total debt
Total shareholders equity attributed to shareholders of
Manitex International, Inc.
$
$
$
406,658 $
175,868 $
317,156 $
112,294 $
180,497 $
54,201 $
149,245 $
49,138 $
118,353
42,227
107,012 $
104,766 $
84,991 $
59,533 $
46,794
(1) The financial data for the years 2011 to 2015 present Manitex Load King, Inc. as a discontinued operation. The above financial
data includes the results of acquired business from their respective dates of acquisition: CVS SpA in Liquidation, July 1, 2011;
Sabre Manufacturing, LLC, August 19, 2013; Valla SpA, November 30, 2013; Lift Ventures, LLC, December 16, 2014; A.S.V,
Inc., (purchased 51% ownership interest), December 19, 2014; PM Group, January 15, 2015, and Colombia Tanks, March 12,
2015. The above results for 2011, also include the results of operation of CVS for the period from January 1, 2011 through
June 30, 2011 a period of time during which the Company was operating CVS and renting the assets acquired on July 1, 2011.
21
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following management’s discussion and analysis of financial condition and results of continuing operations should be read in
conjunction with the Company’s financial statements and notes, and other information included elsewhere in this Report.
FORWARD-LOOKING STATEMENTS
When reading this section of this Annual Report on Form 10-K, it is important that you also read the financial statements and related
notes thereto. This Annual Report on Form 10-K and certain information incorporated herein by reference contain forward-looking
statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this
Annual Report on Form 10-K, other than statements that are purely historical, are forward-looking statements and are based upon
management’s present expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future. We
use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,”
“should,” “could,” and similar expressions to identify forward-looking statements. Forward-looking statements in this Annual Report
on Form 10-K include, without limitation: (1) projections of revenue, earnings, capital structure and other financial items,
(2) statements of our plans and objectives, (3) statements regarding the capabilities and capacities of our business operations,
(4) statements of expected future economic conditions and the effect on us and on our customers, (5) expected benefits of our cost
reduction measures, and (6) assumptions underlying statements regarding us or our business.
Our actual results may differ from information contained in these forward looking-statements for many reasons, including those
described below and in the section entitled “Item 1A. Risk Factors”: (1) a future substantial deterioration in economic conditions,
especially in the United States and Europe; (2) the cyclical nature of the markets we operate in; (3)our ability to negotiate extensions
of our credit agreements and to obtain additional debt or equity financing when needed; (4) government spending; fluctuations in the
construction industry, and capital expenditures in the oil and gas industry; (5) Our increasingly international operations expose us to
additional risks and challenges associated with conducting business internationally;(6) difficulties in implementing new systems,
integrating acquired businesses, managing anticipated growth, and responding to technological change; (7) our level of indebtedness
and our ability to meet financial covenants required by our debt agreements; (8) our customers’ diminished liquidity and credit
availability; (9) increases in interest rates; (10) the performance of our competitors; (11) shortages in supplies and raw materials or the
increase in costs of materials; (12) product liability claims, intellectual property claims, and other liabilities; (13) the volatility of our
stock price; (14) future sales of our common stock; (15) the willingness of our stockholders and directors to approve mergers,
acquisitions, and other business transactions; (16) currency transaction (foreign exchange) risks and the risk related to forward
currency contracts; (17) certain provisions of the Michigan Business Corporation Act and the Company’s Articles of Incorporation, as
amended, Amended and Restated Bylaws, and the Company’s Preferred Stock Purchase Rights may discourage or prevent a change in
control of the Company; (18) a substantial portion of our revenues are attributed to limited number of customers which may decrease
or cease purchasing any time; (19) a disruption or breach in our information technology systems and (20) other risks described in the
section entitled “Risk Factors” and elsewhere in our Annual Report on Form 10-K.
The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties
not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial
condition or operating results. We do not undertake, and expressly disclaim, any obligation to update this forward-looking
information, except as required under applicable law.
OVERVIEW
The Company is a leading provider of engineered lifting solutions. The Company operates in three business segments: the Lifting
Equipment segment, the ASV segment and the Equipment Distribution segment.
Lifting Equipment Segment
Through its Lifting Equipment Segment, the Company designs, manufactures and distributes a diverse group of products that serve
multiple functions and are used in a variety of industries. Through its Manitex, Inc. subsidiary it markets a comprehensive line of
boom trucks, truck cranes and sign cranes. Manitex’s boom trucks and crane products are primarily used for industrial projects,
energy exploration and infrastructure development, including, roads, bridges and commercial construction.
PM Group S.p.A. (“PM”) is a leading Italian manufacturer of truck mounted hydraulic knuckle boom cranes with a 50-year history of
technology and innovation, and a product range spanning more than 50 models. Its largest subsidiary, Oil & Steel (“O&S”), is a
manufacturer of truck-mounted aerial platforms with a diverse product line and an international client base.
22
Manitex Liftking ULC (“Manitex Liftking” or “Liftking”) sells a complete line of rough terrain forklifts, a line of stand-up electric
forklifts, cushioned tired forklifts with lifting capacities from 18 thousand to 40 thousand pounds, and special mission oriented
vehicles, as well as other specialized carriers, heavy material handling transporters and steel mill equipment. Manitex Liftking’s rough
terrain forklifts are used in both commercial and military applications.
Badger Equipment Company (“Badger”) is a manufacturer of specialized rough terrain cranes and material handling products. Badger
primarily serves the needs of the construction, municipality, and railroad industries.
Manitex Sabre, Inc. (“Sabre”) manufactures a comprehensive line of specialized mobile tanks for liquid and solid storage and
containment solutions with capacities from 8,000 to 21,000 gallons. Its mobile tanks will be sold to specialized independent tank
rental companies and through the Company’s existing dealer network. The tanks are used in a variety of end markets such as
petrochemical, waste management and oil and gas drilling
CVS Ferrari, srl (“CVS”) designs and manufactures a range of reach stackers and associated lifting equipment for the global container
handling market that are sold through a broad dealer network. CVS’s Valla SpA (“Valla”) division offers a full range of precision
pick and carry cranes.
In December 2015, the Company completed the sale of its Load King subsidiary. For financial statement presentation Load King is
presented as a discontinued operation. See Note 25.
ASV Segment
A.S.V., LLC (“ASV”) manufactures a line of high quality compact rubber tracked and skid steer loaders. The ASV products are
distributed through Terex Corporation (“Terex”) distribution channels as well as through the Company and other independent dealers.
This independent dealer network now has over 100 locations. The products are used in the site clearing, general construction, forestry,
golf course maintenance and landscaping industries, with general construction being the largest market.
Equipment Distribution Segment
The Equipment Distribution segment located in Bridgeview, Illinois, comprises the operations of Crane & Machinery (“C&M”), a
division of Manitex International, North American Equipment, Inc. (“NAE”) and North American Distribution, Inc. (“NAD”). The
segment markets products used primarily for infrastructure development and commercial construction applications that include road
and bridge construction, general contracting, roofing, scrap handling and sign construction and maintenance. C&M is a distributor of
Terex rough terrain and truck cranes products and supplies repair parts for a wide variety of medium to heavy duty construction
equipment and sells domestically and internationally, predominately to end users, including the rental market. It also provides crane
equipment repair services in the Chicago area. The segment markets previously-owned construction and heavy equipment and trailers
both domestically and internationally through North American Equipment, Inc., a subsidiary of the Company. The segment purchase
previously owned equipment of various ages and conditions and often refurbishes the equipment before resale. The segment also sells
Valla products through NAD.
Economic Conditions
Historically a significant portion of the Company’s revenues has been attributed to demand from niche market segments, particularly
the North American energy sector. In our Annual Report on Form 10-K/A for the year ended December 31, 2013, we stated that, there
had been a softening in the demand for our products which was related to the energy sector. This softness continued through much of
the first quarter 2014, which together with slower construction market demand caused a decrease in revenues from our existing
products which was more than offset by additional revenues related to our acquisitions. Towards the end of the first quarter 2014, the
Company received significant new orders, which increased our backlog to $95 million from $72 million at December 31, 2013.
During the second, third and fourth quarters of 2014 order intake remained at a level consistent with our output and the backlog at
December 31, 2014 was $98.2 million. Although order remained level, the demand for cranes with higher lifting capacity, which are
often used by the energy sector, declined at the end of the second quarter 2014. The decline in demand for cranes with higher capacity
was offset by cranes with lower lifting capacity and other product, both of which have lower margins. Crude oil prices fell sharply
during the fourth quarter of 2014 and remained in the fifty dollar per barrel range through June 2015. After that point oil prices began
again to erode significantly decreasing to under $30 dollar a barrel. As result, the number of oil rigs in service has dropped from
approximately from 1,600 in January 2015 to 500 at the end of the year.
As a result of this decrease in rig count, the oil and gas industry further curtailed purchasing and began selling excess equipment into
the general construction market, which further depressed the demand for boom trucks. The rig count between July 2015 and
December 2015 continued to decline and oil companies continued to sell excess equipment. We have recently observed a slight
moderating of the sell-off of excess equipment by the energy sector and are hopeful that the selloff of excess equipment by the energy
23
sector will be largely completed by the end of 2016. The aforementioned factors resulted in a significant decrease in revenues during
the year from the sale of boom trucks, mobile tanks and used equipment.
The market for a number of the company products, including the PM knuckle boom cranes, ASV compact track loader skid steer
loaders, military forklifts, port handling equipment have not been significantly affected by decrease in oil prices. The markets for
these products have either been stable or growing. In particular the market for knuckle boom cranes, including the North American
market, is continuing to grow. PM currently has a very small share of the market for knuckle boom cranes in North America. The
Company has started to manufacture knuckle boom cranes in the United State and is marketing them through the Company’s current
distribution channels. The Company currently has a strong presence in North America for its boom trucks. The Company believes that
it can significantly increase the Company’s share for knuckle boom cranes in North American. The Company believes this is an
immediate opportunity that will continue grow over time.
The strengthening of the U.S. dollar against other currencies, including the Euro and the Canadian dollar also had an adverse impact
on the Company 2015 results as a substantial portion of our revenues and profits are generated by our foreign subsidiaries. Foreign
revenues and profit contribute less when they are converted at a lower exchange rate.
Factors Affecting Revenues and Gross Profit
The Company derives most of its revenue from purchase orders from dealers and distributors. The demand for the Company’s
products depends upon the general economic conditions of the markets in which the Company competes. The Company’s sales
depend in part upon its customers’ replacement or repair cycles. Adverse economic conditions, including a decrease in commodity
prices, may cause customers to forego or postpone new purchases in favor of repairing existing machinery. Additionally, our Manitex
Liftking and ASV subsidiaries are impacted by residential housing starts. Liftking is further impacted by the timing of orders received
for military. CVS revenues are impacted in part by the timing of contract awards related to major port projects.
Gross profit varies from period to period. Factors that affect gross profit include product mix, production levels and cost of raw
materials. Margins tend to increase when production is skewed towards larger capacity cranes, special mission oriented vehicles,
specialized carriers and heavy material transporters.
24
The following table sets forth certain financial data for the three years ended December 31, 2015, 2014 and 2013:
Results of Consolidated Operations
MANITEX INTERNATIONAL, INC.
(In thousands, except share data)
Net revenues
Cost of sales
Gross profit
Operating expenses
Research and development costs
Selling, general and administrative expenses
Total operating expenses
Operating income
Other income (expense)
Interest expense
Foreign currency transaction (loss) gain
Other income (loss)
Total other expense
(Loss) income before income taxes and loss in
non-marketable equity interest from continuing operations
Income tax (benefit) expense from continuing operations
Loss in non-marketable equity interest, net of taxes
Net (loss) income from continuing operations
For the Year
Ended
For the Year
Ended
For the Year
Ended
December 31, December 31, December 31,
2014
247,164 $
199,715
47,449
2015
386,737 $
317,231
69,506
2013
229,820
184,083
45,737
$
5,829
55,256
61,085
8,421
(12,984)
30
23
(12,931)
(4,510)
(725)
(199)
(3,984)
2,093
29,882
31,975
15,474
(2,777 )
(107 )
(36 )
(2,920 )
12,554
4,452
—
8,102
2,308
24,399
26,707
19,030
(2,501)
(95)
(50)
(2,646)
16,384
5,082
—
11,302
Discontinued operations:
Income (loss) from discontinued operations, net of
income taxes (benefit) of $21, $(776) and $(813) in
2015, 2014 and 2013, respectively
(Loss) on sale of discontinued operations , net of
$(764) income tax benefit in 2015
Net (loss) income
Net (income) loss attributable to noncontrolling interest
Net (loss) income attributable to shareholders
of Manitex International, Inc.
38
(1,135 )
(1,124)
$
(1,378)
(5,324) $
(48)
—
6,967 $
136
—
10,178
—
$
(5,372) $
7,103 $
10,178
Year Ended December 31, 2015 from Continuing Operations Compared to Year Ended December 31, 2014 from Continuing
Operations
The above results include the results for companies acquired from their respective effective dates of acquisition: August 19, 2013 for
Sabre, November 30, 2013 for Valla, December 16, 2014 for Lift Ventures, December 20, 2014 for ASV, January15, 2015 for PM
Group and March 12, 2015 for Columbia Tanks. Results have been restated to remove discontinued operations.
Net (loss) income from continuing operations
For the year ended December 31, 2015, net loss was $4.0 million, which consists of revenue of $386.7 million, cost of sales of $317.2
million, research and development costs of $5.8 million, SG&A costs of $55.3 million, interest expense of $13.0 million, foreign
currency transaction gain of $0.03 million and income tax benefit of $0.7 million.
For the year ended December 31, 2014, net income was $8.1 million, which consists of revenue of $247.2 million, cost of sales of
$199.7 million, research and development costs of $2.1 million, SG&A costs of $29.9 million, interest expense of $2.8 million,
foreign currency transaction loss of $0.1 million and income tax expense of $4.5 million.
25
Net revenue and gross profit —For the year ended December 31, 2015, net revenue and gross profit were $386.7 million and $69.5
million, respectively. Gross profit as a percent of sales was 18.0% for the year ended December 31, 2015. For the year ended
December 31, 2014 net revenue and gross profit were $247.2 million and $47.4 million, respectively. Gross profit as a percent of sales
was 19.2% for the year ended December 31, 2014.
For 2015 revenues increased $139.6 million or 56.5% from $247.2 million for 2014 to $386.7 million for 2015. Without the ASV and
PM transactions, revenues would have decreased, as these two acquisitions resulted in an increase in revenues of approximately $200
million for the year ended December 31, 2015. The impact of the stronger dollar (vs. the Canadian dollar and the Euro) resulted in a
decrease in revenues from our CVS and Liftking operations that aggregated approximately $13.3 million. The remaining decrease is
primarily attributed a decline in crane products sales. This decline is attributed to a decrease in demand from the energy sector the
result of significant decline in oil prices. The demand for new cranes from the general construction market has also declined
significantly as used cranes from the energy sector are being redeployed due to surpluses into the general construction market. Finally,
revenues from the sale of used construction equipment were also lower in part due to the weak Canadian dollar which made it harder
to sell product into Canada.
Gross profit as a percent of net revenues decreased 1.2% to 18% for the year ended December 31, 2015 from 19.2% for the
comparable 2014 period. The decrease in margin percent is principally attributed to product mix, including the unfavorable impact of
decreased sales of crane products which generally have higher margins partially offset by the increase in parts sales as a percent of
total revenues. Part sales, which have significantly higher margins, increased from 11% to 15% of total revenues from 2014 to 2015.
Research and development —Research and development for the year ended December 31, 2015 was $5.8 million compared to $2.1
million for the comparable period in 2014. Excluding $4.1 million additional expenses for ASV and PM for the year ended
December 31, 2015, expenditure on R&D decreased $0.4 million as engineering resources in the Lifting Segment were reduced as a
response to reduced volumes. The Company’s research and development spending continues to reflect our continued commitment to
develop and introduce new products that gives the Company a competitive advantage.
Selling, general and administrative expense —Selling, general and administrative expense for the year ended December 31, 2015
was $55.3 million compared to $29.9 million for the comparable period in 2014, an increase of $25.3 million. This increase is the net
of an increase of $28.0 million in expense relate to the ASV and PM acquisitions offset by a decrease of $2.7 million decrease in
expense from existing operations. The decrease is attributed principally to the impact of a stronger U.S. dollar and because 2014 had
non-recurring expenses of approximately $0.7 million related to attendance at the 2014 ConExpo show, which is held every three
years. The effect of the stronger U.S. dollar resulted in decrease in expense from our CVS and Liftking operations that aggregated
approximately $1.5 million. The remaining decrease is attributed to lower selling expenses, and other changes including the timing of
transaction related expenses.
Operating income —The Company had operating income of $8.4 million and $15.5 million for the years ended December 31, 2015
and 2014, respectively. The decrease in operating income is due to increases in research and development costs and selling, general
and administrative expense which are only partially offset by an increase in gross profit. The increase in gross profit is attributable to
an increase in revenues as the gross profit percent decreased 1.2% between 2015 and 2014.
Interest expense —Interest expense was $13 million and $2.8 million for the years ended December 31, 2015 and 2014, respectively.
The increase in interest expense is principally attributed to additional interest expense at our two newly acquired companies plus
interest on the additional debt incurred to purchase the two new companies.
Foreign currency transaction gains and loss —The Company attempts to purchase forward currency exchange contracts such that
the exchange gains and losses on the assets and liabilities denominated in other than the reporting units’ functional currency will be
offset by the changes in the market value of the forward currency exchange contracts it holds. The Company records at the balance
sheet date the forward currency exchange contracts at their market value with any associated gain or loss being recorded in current
earnings as a currency gain or loss.
For the year ended December 31, 2015, the Company had a foreign currency gain of $0.03 million compared to a loss of $0.1 million
for 2014. As stated above, the Company attempts to purchase forward exchange contracts such that the exchange gains and losses on
the assets and liabilities denominated in other than the reporting units’ functional currency will be offset. There are still certain risks
at PM for which an effective hedging strategy may not be available which may result in future gains or loss that are not offset.
Income tax — Income tax expense (benefit) for continuing operations was $(0.7) million and $4.5 million for the years ended
December 31, 2015 and 2014, respectively. The income tax benefit is attributed to a pre-tax loss of $4.7 million from continuing
operations for the year ended December 31, 2015. The Company’s effective rate decreased to 15.4% for 2015 from 35.5% for 2014.
The decrease in the effective tax rate is due primarily to income tax expense and rate differences in foreign jurisdictions, income tax
expense related settlements of U.S. and foreign income tax examinations, adjustments to tax credits in connection with the finalization
26
of income tax filings, and a partial reduction in the domestic production activity deduction in connection with the carryback of the
2015 U.S. federal net operating loss for a refund of income taxes previously paid.
Net (loss) income from continuing operations —Net loss for the year ended December 31, 2015 was $4.0 million. This compares
with a net income for the year ended December 31, 2014 of $8.1 million.
Year Ended December 31, 2014 from Continuing Operations Compared to Year Ended December 31, 2013 from Continuing
Operations
The above results include the results for companies acquired from their respective effective dates of acquisition: August 19, 2013 for
Sabre, November 30, 2013 for Valla, December 16, 2014 for Lift Ventures and December 20, 2014 for ASV. The results for 2015,
2014 and 2013 have been restated to remove discontinued operations.
Net income from continuing operations
For the year ended December 31, 2014, net income was $8.1 million, which consists of revenue of $247.2 million, cost of sales of
$199.7 million, research and development costs of $2.1 million, SG&A costs of $29.9 million, interest expense of $2.8 million,
foreign currency transaction loss of $0.1 million and income tax expense of $4.5 million.
For the year ended December 31, 2013, net income was $11.3 million, which consists of revenue of $229.8 million, cost of sales of
$184.1 million, research and development costs of $2.3 million, SG&A costs of $24.4 million, interest expense of $2.5 million,
foreign currency transaction loss of $0.1 million and income tax expense of $5.1 million.
Net revenue and gross profit —For the year ended December 31, 2014, net revenue and gross profit were $247.2 million and $47.4
million, respectively. Gross profit as a percent of sales was 19.2% for the year ended December 31, 2014. For the year ended
December 31, 2013 net revenue and gross profit were $229.8 million and $45.7 million, respectively. Gross profit as a percent of sales
was 19.9% for the year ended December 31, 2013.
For 2014 revenues increased $17.3 million or 7.5% from 2013 to $247.2 million, including $2.3 million from the ASV that
commenced operations in mid-December of 2014. Excluding ASV, 2014 revenues increased $15.0 million or 6.5%, driven
substantially by growth in container handling equipment, material handling equipment and equipment distribution revenues that grew
year over year by 20%, 14% and 24% respectively. Crane revenues decreased in line with the reduction in our largest market, the
boom and truck crane market that was down almost 8% year over year and shipments of larger tonnage cranes being down
approximately 19% reflecting a softer oil and gas market. Our CVS container handling products benefited from a modest
strengthening in Europe as well as expansion and improved distribution into overseas markets.
Gross profit as a percent of net revenues decreased 0.7% to 19.2% for the year ended December 31, 2014 from 19.9% for the
comparable 2013 period. The slight decrease in margin percent is principally attributed to product mix, including the unfavorable
impact of decreased sales of crane products which generally have higher margins and the effect that the decrease in parts sales as a
percent of total revenues. Part sales, which have significantly higher margins, decreased from 15% to 11% of total revenues from 2013
to 2014.
Research and development —Research and development for the year ended December 31, 2014 was $2.1 million compared to $2.3
million for the comparable period in 2013. The Company’s research and development spending continues to reflect our continued
commitment to develop and introduce new products that gives the Company a competitive advantage.
Selling, general and administrative expense —Selling, general and administrative expense for the year ended December 31, 2014
was $29.9 million compared to $24.4 million for the comparable period in 2013. Selling general and administrative expense as a
percent of revenue for year ended December 31, 2014 was 12.1% an increase of 1.5% from the 10.6% for the comparable period in
2013.
The increase in selling, general and administrative expense is $5.5 million of which approximately $3.4 million is attributed to
increases in expenses at companies acquired in 2013 (full year effect) and 2014, another $2.3 million is related to transaction expenses
for the ASV and PM (closed January 2015) acquisitions. Another $0.5 million is related to expense incurred in connection with our
participation at the ConExpo show in March 2014. This show, which is held every three years, is an international gathering place for
the construction industry. Other items had an impact of decreasing expense by $0.7 million, including a substantial decrease in
management bonuses which was partially offset by an increase in deferred stock base compensation and increase in selling expenses,
the result of an expansion of the sales organization.
27
Operating income —The Company, had operating income of $15.5 million and $19.0 million for the years ended December 31, 2014
and 2013, respectively. The decrease in operating income is due to an increase in selling, general and administrative expense offset by
an increase in gross profit and a small decrease in research and development costs. The increase in gross profit is attributable to an
increase in revenues as the gross profit percent decreased 0.7% between 2014 and 2013.
Interest expense —Interest expense was $2.8 million and $2.5 million for the years ended December 31, 2014 and 2013, respectively.
The increase is largely due to higher interest expense in December 2014, the result of an increase in outstanding debt of approximately
$57.1 million associated with the ASV acquisition.
Foreign currency transaction gains and loss —The Company attempts to purchase forward currency exchange contracts such that
the exchange gains and losses on the assets and liabilities denominated in other than the reporting units’ functional currency will be
offset by the changes in the market value of the forward currency exchange contracts it holds. The Company records at the balance
sheet date the forward currency exchange contracts at their market value with any associated gain or loss being recorded in current
earnings as a currency gain or loss.
For the year ended December 31, 2014, the Company had foreign currency loss of $0.1 million compared to a loss of $0.1 million for
2013.
Income tax — Income tax expense was $4.5 million and $5.1 million for the years ended December 31, 2014 and 2013, respectively.
The decrease in income tax is attributed to a decrease in pre-tax income, as the Company’s effective rate increased to 35.5% for 2014
from 31.0% effective tax rate for 2013. The increase in the effective tax rate for 2014 is due primarily to higher foreign and state and
local taxes.
Net income from continuing operations —Net income for the year ended December 31, 2014 was $8.1 million. This compares with
a net income for the year ended December 31, 2013 of $11.3 million.
SEGMENT INFORMATION
Lifting Equipment Segment
Net revenues
Operating income
Operating margin
$
2015
261,232 $
11,770
4.5%
2013
2014
228,518 $ 213,520
24,803
11.6%
23,178
10.1 %
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Net revenues —Net revenues increased $32.7 million to $261.2 million for the year ended December 31, 2015 from $228.5 million
for the comparable period in 2014.
For 2015 revenues increased $32.7 million or 14.3% from $228.5 million for 2014 to $261.2 million for 2015. Without the PM
transactions, revenues would have decreased, as the PM acquisitions resulting in an increase in revenues of approximately $90 million
for the year ended December 31, 2015. The impact of the stronger dollar (vs. the Canadian dollar and the Euro) resulted in decrease in
revenues from our CVS and Liftking operations that aggregated approximately $13.3 million. The remaining decrease is primarily
attributed a decline in crane products sales. This decline is attributed to a decrease in demand from the energy sector the result of
significant decline in oil prices. The demand for new cranes from the general construction market has also declined significantly as
used cranes from the energy sector are being redeployed due to surpluses into the general construction market.
Operating income and operating margins —Operating income of $11.8 million for the year ended December 31, 2015 was
equivalent of 4.8% of net revenues compared to an operating income of $23.2 million for the year ended December 31, 2014 or 10.1%
of net revenues.
The decrease in operating income is the result of increase in operating expenses which more than offset an increase in the gross profit.
Operating income and operating income as a percent of revenues decreased as the increase in operating expenses as percent of
revenues was significantly higher than the improvement in the gross margin percent. Operating expense increased as a percent of
revenues for two primary reasons. Operating expenses as percent of revenues are higher for PM (which now comprises a significant
portion of our business) than they are in our other operating units. Secondly, operating expenses as percent of revenues increased at
our other crane manufacturing businesses due a decrease in revenues. PM operating expense and gross margin percent are higher due
to their distribution platform.
28
The gross profit percent improvement is primarily due to the fact that PM has a higher gross profit margin than our other business
units. The PM gross profit margin improvement more than offset the decline in the gross margin percent for other crane products.
The decrease in operating income as stated above is due to the increase in operating expenses.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Net revenues —Net revenues increased $15.7 million to $228.5 million for the year ended December 31, 2014 from $213.5 million
for the comparable period in 2013.
Approximately 75% of the increase in revenues is attributed to having Sabre and Valla for a full year in 2014. The remaining increase
is attributed to higher sales of container handling equipment which was offset by a decrease in the sales of crane products.
Additionally, we saw a shift toward cranes with lower lifting capacity during the year. Container handling sales continue to benefit in
2014 from obtaining new dealers in Latin America in 2013. Additionally, the Italian market for container handling equipment
strengthened during the year. The decrease in crane sales is due to a softening in demand from the energy sector.
Operating income and operating margins —Operating income of $23.2 million for the year ended December 31, 2014 was
equivalent to 10.1% of net revenues compared to an operating income of $24.8 million for the year ended December 31, 2013 or
11.6% of net revenues.
Operating income decreased $1.6 million which is the result of increase in operating expenses as gross profit was not significantly
different between years. The benefit that an increase in revenues had on gross profit was essentially offset by a decrease in the gross
margin percent. The increase in operation expense is attributed to an increase in selling, general and administrative expense as
research and development cost decreased $0.2 million. The increase in operating expenses is attributed to increases in expenses at
companies acquired in 2013 (full year effect), cost to participate in the ConExpo trade show in March 2014 and higher selling
expenses.
The decrease in operating margin percent is the result of a decrease in gross margin percent and higher operating expenses.
ASV Segment
Net revenues
Operating income (loss)
Operating margin
$
2015
116,935 $
5,496
4.7%
2014
2,264
(121 )
(5.3 )%
ASV results are included from the effective date of acquisition, December 20, 2014.
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Net revenues —The ASV segment had net revenues of $116.9 million for the year ended December 31, 2015 compared to $2.3
million for the year ended December 31, 2014. Revenues for 2014 represents a twelve day period as ASV was acquired in December
2014.
During 2015, ASV started to sell their compact track and skid steer loaders under the ASV brand. By the end of the year, ASV had a
100 dealer locations in North America. ASV branded product accounted for approximately 9% of 2015 machine units and is expected
to grow significantly in 2016 and beyond.
Operating income (loss) and operating margin —Operating income of $5.5 million for the year ended December 31, 2015 was
equivalent to 4.7% of net revenues compared to an operating loss of ($0.1) for the year ended December 31, 2014 or (5.3)% of net
revenues. The market for general construction equipment was relatively steady during the year. However, the pricing environment
for ASV became more competitive during the second half of the year and adversely impacted the second half results. The segment
also had higher than normal research and development costs due to the continuing Tier 4 final engine implementation program that is
being rolled to the full product line.
Year Ended December 31, 2014
Net revenues —The ASV segment had net revenues of $2.3 million for the year ended December 31, 2014.
29
Operating (loss) and operating margin —Operating loss of $0.1 million for the year ended December 31, 2014 was equivalent to
(5.3)% of net revenues. The results for the period include costs of approximately $0.2 million of expenses related to our purchase of
our interest in ASV from the Terex Corporation and the inventory step up adjustment from purchased accounting
Equipment Distribution Segment
Net revenues
Operating (loss) income
Operating margin
$
2015
$
13,216
(136)
(1.0)%
2014
21,104 $
374
1.8 %
2013
16,951
628
3.7%
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Net revenues —The Equipment Distribution segment had net revenues of $13.2 million and $21.1 million for the years ended
December 31, 2015 and 2014, respectively, a decrease of $7.9 million. The $7.9 million decrease is attributed to both a decrease in
sales of new cranes and used construction equipment. New crane sales continue to be significantly adversely impacted by reduced
demand for product from energy sector the result of a very steep decline in oil prices. Additionally, 2014 benefited from a substantial
initial sale of equipment into the rental sector. Sales for remarked product was lower in part due to lower demand from Canada as the
strong U.S. dollar was making our equipment significantly more expense to Canadian customers.
Operating (loss) income and operating margins —Operating loss of ($0.1) million for the year ended December 31, 2015 was
equivalent to (1.0)% of net revenues and compares to operating income of $0.4 million for the year ended December 31, 2014 or 1.8%
of net revenues.
Operating income and margin was adversely impacted by loss of from reduced sales, although gross margin percent improved due to a
higher proportion of parts sales in total revenues. The change from a modest operating income in 2014 to a small operating loss in
2015 is result of a decrease in gross profit the result of the decrease in revenues. The gross profit percent improved modestly as part
sales (which have higher margins) represented higher portion of the revenues in 2015.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Net revenues —The Equipment Distribution segment had net revenues of $21.1 million and $17.0 million for the years ended
December 31, 2014 and 2013, respectively, an increase of $4.1 million. The increase in revenue is primarily due to an increase in sales of
products manufactured by the Lifting Segment. An increase in sales of new Terex cranes also contributed to the increase in revenues.
Operating income (loss) and operating margins —Operating income of $0.4 million for the year ended December 31, 2014 was
equivalent to 1.8% of net revenues and compares to operating income of $0.6 million for the year ended December 31, 2013 or 3.7%
of net revenues.
Operating income decreased $0.3 million between years. The decrease in operating income is attributable to a $0.1 million decrease in
gross profit and $0.2 million increase in operating expenses. The decrease in gross profit is due to a decrease in the gross profit
percent that is the result of an increase in sales of products manufactured by the Lifting Segment, which were sold at lower margins
and a decrease in part sales. A decrease in part sales and part sales as a percent of revenues will decrease the gross margin percent as
part sales margins are substantially higher than those realized on the sale of new cranes and used equipment. The increase in operating
expense is due to higher selling expense related to our efforts to increase Valla market penetration.
Liquidity and Capital Resources
Cash and cash equivalents were $8.6 million and $4.4 million at December 31, 2015 and December 31, 2014, respectively. In
addition, the Company has U.S. and Canadian revolving credit facilities, with maturity dates of August 19, 2018 and our Canadian
Subsidiary also has a specialized export facility. Additionally, ASV has a revolving credit facility, which is for its sole use, with a
maturity date of December 19, 2019. At December 31, 2015 the Company had approximately $8.4 million available in North America
to borrow under its revolving credit facilities. ASV has a revolving credit facility with approximately $7.3 million of availability.
At December 31, 2015, CVS had established demand credit facilities with twelve Italian banks. Under the facilities, CVS can borrow
up to €0.4 million ($0.4 million) on an unsecured basis and additional amounts as advances against orders, invoices and letters of
credit with a total maximum facilities (including the unsecured portion) of €18.6 million ($20.2 million). The Company has granted
guarantees in respect to available credit facilities in the amount of €0.6 ($0.6). The maximum amount outstanding is limited to 80% of
the assigned accounts receivable if there is an invoice issued or 50% if there is an order/contract issued. The banks will evaluate each
30
request to borrow individually and determine the allowable advance percentage and interest rate. In making its determination the bank
considers the customer’s credit and location of the customer. At December 31, 2015, the banks had advanced CVS €3.6 million
($3.9 million) and had issued performance bonds which total €0.8 million ($0.9 million), which also count against the maximum that
can be borrowed under these facilities. Future advances are dependent on having available collateral.
At December 31, 2015, the PM Group had established working capital facilities with seven Italian and seven South American banks.
Under these facilities, the PM Group can borrow $27.7 million against orders, invoices and letters of credit. At December 31, 2015,
the PM Group had received advances of $16.1 million. Future advances are dependent on having available collateral.
The Company needs cash to meet its working capital needs as the business grows, to acquire capital equipment, and to fund
acquisitions and debt repayment. We intend to use cash flows from operations and existing availability under the current revolving
credit facilities to fund anticipated levels of operations for approximately the next 12 months. As our availability under our credit lines
is limited, it is important that we manage our working capital. Our emphasis during 2015 has been to decrease the Company’s
existing debt balance. The Company expects to continue to make debt reduction a priority during 2016. The Company may need to
raise additional capital through debt or equity financings to support our long-term growth strategy, which may include additional
acquisitions. There is no assurance that such financing will be available or, if available, on acceptable terms.
31
Outstanding borrowings and required payments
The following is a summary of our outstanding borrowings at December 31, 2015:
Outstanding
Balance
Interest
Rate
$
26.5 4.42 to 6.50%
7.2 4.97 to 6.70%
Interest
Paid
Principal Payment
Monthly August 19, 2018 maturity
Monthly August 19, 2018 maturity
(In millions)
U.S. Revolver
Canadian Revolver
Specialized export facility
Note payable—Terex
Note payable—Terex
Convertible note—Terex
Convertible note—Perella
3.20%
6.00%
4.50%
7.5%
7.5%
8.0%
4.0%
12.50%
1.5%
4.0%
4.0%
1.8
0.3
1.6
6.7
14.4
5.4
0.1
0.1
0.2
0.5
Comerica Term loan
ASV revolving credit facility
2.2
12.4
38.0
0.8
10.50%
4.4 to 5.6%
ASV Term loan
Capital lease—cranes for sale
Capital lease—Georgetown
facility
Acquisition note—Valla
Equipment note-Sabre
Inventory note-Sabre
Capital leases—Winona
facility
Monthly
Quarterly
60 days after shipment or 5 days after
receipt of payment
$0.25 million March 1, 2016 ($0.15
million can be paid in stock)
$0.04 million interest payment June 19,
2016 and $1.64 million interest and
principal payment on December 19, 2016
Semi-Annual
Semi-Annual December 19, 2019 maturity
Semi-Annual January 7, 2021 maturity
$0.50 million quarterly principal
payments unpaid balance due August 19,
2018
Quarterly
Monthly December 19, 2019 maturity
$0.50 million quarterly plus interest
unpaid balance due December 19, 2019
Monthly
Monthly Over 36 or 60 months
$0.06 million monthly payment includes
interest
Monthly
Annually $0.1 in 2016
Monthly $0.03 million monthly
Monthly $0.03 million monthly
Variable semi-annual starting June 2019
through December 2021
$0.09 million monthly through October
2020
Monthly
Annually $0.5 million payment due October 2016
Variable semi-annual starting June 2016
through December 2022. Payments
scheduled for 2016 total $3 million
Upon payment of invoice or letter of
credit
Over 12 quarters and 19 semi-annual
payments
Upon payment of invoice or letter of
credit
Monthly
Monthly
Semi-Annual
n.a.
Final Payment To be paid in 2016
PM unsecured borrowings
15.4
2.46%
Semi-Annual
PM Autogru term loan
PM Autogru term loan
0.5
0.5
3.00%
2.50%
PM short-term working
capital borrowings
CVS notes payable
CVS short-term working
capital borrowings
16.7
0 to 2.91%
16.1 1.92 to 14.0%
4.5 0.50 to 3.65% Quarterly/Semi-Annual
4.0 2.25 to 6.50%
$
175.9
The debt has various maturity dates. See Notes 11 and 12 to the financial statements for additional details.
Change in outstanding debt
In 2015, existing debt (including lines of credit, capital lease obligations and the current portion of notes payable and capital lease
obligations) increased $63.6 million dollars to $175.9 million from $112.3 million (including debt from discontinued operations) at
December 31, 2014. The increase in debt is attributed to PM borrowings of $61.9 million (at date of acquisition), the $14.4 million Perella
convertible note, the $14.0 million term loan and the $16.2 million ASV borrowed during 2015 to pay the $16.2 million income tax
payable recognized at December 31, 2014 related to conversion of ASV to an LLC. The proceeds from the Perella convertible and the
term loan were used to purchase PM. The aforementioned four borrowing in total aggregated to $106.5 million.
32
Net debt payments and changes is in exchange rates had the impact of reducing the increase in debt by $43.2 million from the $106.5
million referred above to the $63.3 million shown in the below table.
Our debt increased by approximately $63.6 million. The following is a summary of changes in debt:
(In millions)
U.S. Revolver
Canadian Revolver
Special export facility
Notes payable-Terex
Load King bank debt
Capital leases—buildings
Capital leases—equipment
Convertible note—Terex
Convertible note—Perella
Comerica Term loan
ASV Term loan
ASV Revolving Credit Facility
PM
CVS working capital borrowings
Increase/
(decrease)
(7.7 )
(1.4 )
(1.0 )
(0.2 )
(1.7 )
3.2
(0.8 )
0.1
14.4
2.2
(2.0 )
8.8
49.2
0.5
63.6
$
$
2015
Operating activities provided $9.0 million of cash for the year ended December 31, 2015, and is comprised non-cash items of $15.4
million, which generated cash, offset by a net loss of $5.3 million and an increase in working capital of $1.1 million both of which
consumed cash. The following are principal non-cash items that generated cash: depreciation and amortization of $12.1 million, stock
based compensation of $1.5 million, an increase in inventory reserves of $1.1 million, amortization of deferred bank fees of $1.2
million, amortization of debt discount of $0.7 million and the non-cash loss on sale of discontinued operations of $1.4 million. A
change in deferred taxes of $2.1 million and change in interest rate swaps of $0.7 million both consumed cash. Other less significant
non-cash items in aggregated generated a net $0.2 million of cash.
The change in assets and liabilities consumed $1.1 million in cash. The changes in assets and liabilities had the following impact on
cash flows: accounts receivable generated $23.5 million, inventory consumed $10.3 million, prepaid expenses consumed $3.3 million,
accounts payable generated $6.7 million, accrued expenses consumed $2.4 million, income tax payable on ASV conversion consumed
$16.2 million, other current liabilities consumed $1.5 million, and other long-term liabilities generated $2.5 million. The decrease in
accounts receivable is the result of collecting accounts receivable faster, and due to the fact that sales for the current quarter are lower
when compared to sales for the quarter ended December 31, 2014 when adjusted for acquisitions. Inventory increased as our crane
operations built a number of cranes with a value of approximately $2.9 million. The Company believes having cranes available for
immediate shipment in the current market is a competitive advantage. Additionally, our Manitex subsidiary raw material was higher
as they had approximately $3.0 million of PM inventory to support our efforts to expand PM distribution in North America. The
additional $4.0 million is spread throughout all other locations. The increase in prepaid expenses and other is due to an increase in
income tax receivables, and the increase in unrealized gains associated with forward currency contracts that the Company holds.
Forward currency contracts are valued at their fair market values at the balance sheet date with any gains being included in prepaid
expenses and other. The decrease in accounts payable is due to timing of vendor payments and raw material purchases. Together,
accrued expenses and other long-term liabilities generated $0.1 million of cash. These two line items are being discussed together as
the increase in other long-term liability is principally due to a reclassifications of liabilities previously included in accrued expenses.
Cash flows related to investing activities consumed $9.4 million of cash for the year ended December 31, 2015. The Company used
$13.7 million for acquisitions and invested another $2.4 in capital equipment offset by $6.5 million and $0.5 million generated from
the sale of discontinued operations and from the sales of miscellaneous pieces of equipment, respectively. The amount spent for
capital equipment was spread throughout the organization and no expenditure individually was significant.
Financing activities generated $5.9 million in cash for the year ended December 31, 2015. The Company generated $27.9 million net
of expenses to finance the PM acquisition by issuing a $15.0 convertible note and entering into a $14.0 million term loan. At
33
December 31, 2015, the Company had repaid $11.8 million of the term loan reducing the term loan to $2.2 million. This resulted in
net generation of cash of $16.1 million at end of the year.
Other financing activity consumed $10.2 million of cash. This amount includes $2.0 million in payments against ASV’s term note,
$1.4 million in capital lease payments and a $6.5 million net use of cash by our Italian operations. The Italian operations reduced their
working capital facilities by $7.7 million and made note payment that totaled $4.8 million. The Italian operations, however, entered
into new term loans for $6.4 million, which was the source of most of the funds used to reduce working capital borrowings. .
2014
Operating activities used $1.5 million of cash for the year ended December 31, 2014, and is comprised of net earnings of $8.8 million,
and non-cash items of $5.8 million, cash provided by discontinued operations of $0.8 million offset by an increase in working capital
of $16.9 million. The following are the principal non-cash items: depreciation and amortization of $4.2 million, and stock based
deferred compensation of $1.1 million.
The increase in working capital is principally due to increases in accounts receivable of $13.6 million, and inventory of $7.0 million,
partially offset by increase in accounts payable of $2.7 million, accrued expenses of $0.6 million and other current liabilities of $0.6
million. The increase in accounts receivables is primarily due to a longer collection cycle in 2014. The collection cycle was lengthened
in part because there were certain receivables from governmental agencies on which payment was delayed. The timing of payments
from a couple of larger customers also contributed to a longer payment cycle. Additionally, a modest increase in revenues between the
fourth quarter 2014 versus 2013 also contributed to a higher receivable balance in 2014. The increase in inventory is attributed to
increases in inventory at Liftking, CVS and Crane & Machinery. The increase at Liftking is related to military contracts. The increase
at CVS is related to continued anticipated increases in revenues. Finally, the increase at Crane & Machinery represents primarily Valla
and PM inventory, which is being purchased to shorten the delivery cycle to U.S. customers. The increase in accounts payable is due
to the increase in inventory. The increase in accruals is primarily related to increased accruals for payroll and benefits in our European
operations offset by a decrease in accrued bonuses. The increase in other current liabilities represents an increase in deposits received
from our customers.
Cash flows related to investing activities consumed $25.9 million of cash for the year ended December 31, 2014. The Company used
$25.0 million to acquire ASV, invested another $0.8 in capital equipment. Additionally, discontinued operations used $0.1 million of
cash. The $0.8 million spent to purchase capital equipment is the total of numerous purchases for various operations. No single item
in itself was particularly significant.
Financing activities generated $26.6 million in cash for the year ended December 31, 2014. The Company raised $12.5 million in a
private placement of common stock in December 2014 and another $7.5 million (including the portion allocated to equity) from the
issuance of a convertible note. The last major source of cash was a $5.0 million increase in the amount borrowed under the U.S.
revolver. This additional $5.0 million was used to purchase ASV. Other cash financing activities excluding discontinued operations in
aggregate generated $1.7 million. Discontinued operations used $0.1 million.
Contingencies
The Company is involved in various legal proceedings, including product liability and workers’ compensation matters which have
arisen in the normal course of operations. Certain cases are at a preliminary stage, and it is not possible to estimate the amount or
timing of any cost to the Company.
The Company does not believe that these contingencies in aggregate will have a material adverse effect on the Company.
Off Balance Sheet Arrangements
Comerica has issued $0.645 million in standby letters of credit in favor of an insurance carrier and a state to secure obligations which
may arise in connection with future payments that may be incurred under the Company’s workman compensation insurance policies.
JP Morgan Chase has issued a $0.2 million standby letter of credit in favor of an insurance carrier to secure obligations which may
arise in connection with future deductibles payments that may be incurred under the Company’s workman compensation insurance
policies.
34
Contractual Obligations
The following is a schedule as of December 31, 2015 of our long-term contractual commitments, future minimum lease payments
under non-cancelable operating lease arrangements and other long-term obligations.
(in thousands)
Long-term debt obligations (4)
PM/CVS working capital borrowing (3)
Operating lease obligations
Capital lease obligations (3)
Legal Settlement (see Note 23) (3)
Service agreements
Purchase obligations (1)
Total
Total
182,183 $
19,721
6,591
12,664
1,520
10,878
33,469
267,026 $
$
$
Payments due by period
2017-
2018
63,499 $
15,541
2,879
2,050
190
5,437
—
89,596 $
2016
19,864 $
4,180
2,024
1,708
95
2,603
33,469
63,943 $
Thereafter
2019-
2020
71,652 $
—
1,366
1,821
190
2,838
—
77,867 $
27,168
—
322
7,085
1,045
—
—
35,620
(1) Except for a very insignificant amount, purchase obligations are for inventory items. Purchase obligations not for inventory
would include research and development materials, supplies and services.
(2) At December 31, 2015, the Company had unrecognized tax benefits of $935 thousand for which the Company is unable to make
reasonably reliable estimates of the period of cash settlement with the respective tax authority. Thus, these liabilities have not
been included in the contractual obligations table. (see Note 14).
(3) CVS, PM working capital borrowing, Capital lease obligations and legal settlement include imputed interest.
(4) Long-term debt obligations include expected interest expense. Interest expense is calculated using current interest rates for
indebtedness as of December 31, 2015.
Related Party Transactions
For a description of the Company’s related party transactions, please see Note 22 to the Company’s consolidated financial statements
entitled “Transactions between the Company and Related Parties.”
Critical Accounting Policies and Estimates
The preparation of our financial statements and related disclosures in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and judgments that affect our reported amounts of assets and
liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, we evaluate our
estimates and assumptions based upon historical experience and various other factors and circumstances. Management believes that
our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and
assumptions under different future circumstances. We have identified the following critical accounting policies that affect the more
significant judgments and estimates used in the preparation of our consolidated financial statements.
Revenue Recognition. Revenue and related costs are recognized when title passes and risk of loss pass to our customers which
generally occurs upon shipment depending upon the terms of the contract. Under certain contracts with our customers title passes to
the customers when the units are completed. The units are segregated from our inventory and identified as belonging to the customer,
the customer is notified that the units are complete and awaiting pick up or delivery as specified by the customer before income is
recognized. Additionally, the customer is requested to sign an “Invoice Authorization Form” which acknowledges the contract terms
and acknowledges that the customer has economic ownership and control over the unit. It also acknowledges that we are going to
invoice the unit per terms of the contract. The Company insures any custodial risk that it may retain.
For FOB contracts, customers may be invoiced prior to the time customers take physical possession. Revenue is recognized in such
cases only when the customer has a fixed commitment to purchase the units, the units have been completed, tested and made available
to the customer for pickup or delivery, and the customer has authorized in writing that we hold the units for pickup or delivery at a
time specified by the customer. In such cases, the units are invoiced under our customary billing terms, title to the units and risks of
ownership pass to the customer upon invoicing, the units are segregated from our inventory and identified as belonging to the
customer and we have no further obligations under the order. The Company insures any custodial risk that it may retain.
35
In addition, our policy requires in all instances certain minimum criteria be met in order to recognize revenue, specifically:
a)
b)
c)
Persuasive evidence that an arrangement exists;
The price to the buyer is fixed or determinable;
Collectability is reasonably assured; and
d) We have no significant obligations for future performance.
Interest Rate Swap Contracts. The Company enters into derivative instruments to manage its exposure to interest rate risk related to
certain foreign term loans. Derivatives are initially recognized at fair value at the date the contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in current earnings
immediately unless the derivative is designated and effective as a hedging instrument, in which case the effective portion of the gain
or loss is recognized and is reported as a component of other comprehensive income and reclassified into earnings in the same period
or periods during which the hedging instrument affects earnings (date of sale). As part of the acquisition of PM Group, which was
acquired on January 15, 2015, the Company acquired interest rate swap contracts, which manage the exposure to interest rate risk
related to term loans with certain financial institutions in Italy. These contracts have been determined not to be hedge instruments
under ASC 815-10. Further details of derivative financial instruments are disclosed in Notes 5 and 6.
Investment—Equity Method of Accounting. Our non-marketable equity investments are investments we have made in privately-held
companies accounted for under the equity method. We periodically review our non-marketable equity investments for impairment. No
impairments were recognized for the year ended December 31, 2015.
Allowance for Doubtful Accounts. Accounts Receivable is reduced by an allowance for amounts that may become uncollectible in the
future. The Company’s estimate for the allowance for doubtful accounts related to trade receivables includes evaluation of specific
accounts where we have information that the customer may have an inability to meet its financial obligations.
Inventories and Related Reserve for Obsolete and Excess Inventory. Inventories are valued at the lower of cost or market and are
reduced by a reserve for excess and obsolete inventories. The estimated reserve is based upon specific identification of excess or
obsolete inventories.
Other Intangible Assets. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles—Goodwill
and Other”. The Company capitalizes certain costs related to patent technology. Additionally, a substantial portion of the purchase
price related to the Company’s acquisitions has been assigned to patents or unpatented technology, trade name, customer backlog, and
customer relationships. Under the guidance, Other Intangible Assets with definite lives are amortized over their estimated useful lives.
Intangible assets with indefinite lives are tested annually for impairment.
Goodwill. Goodwill, representing the difference between the total purchase price and the fair value of assets (tangible and intangible)
and liabilities at the date of acquisition, is reviewed for impairment annually, and more frequently as circumstances warrant, and
written down only in the period in which the recorded value of such assets exceed their fair value. The Company does not amortize
goodwill in accordance with Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 350,
“Intangibles—Goodwill and Other” (“ASC 350”). The Company selected October 1 as the date for the required annual impairment
test.
Goodwill is tested for impairment at the reporting unit level (reportable segment). The Company’s three operating segments comprise
the reporting units for goodwill impairment testing purposes.
Under ASU 2011-08, entities are provided with the option of first performing a qualitative assessment on none, some, or all of its
reporting units to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If
after completing a qualitative analysis, it is determined that it is more likely than not that the fair value of a reporting unit is less than
its carrying value a quantitative analysis is required.
In 2015 and 2014, the Company elected to evaluate the Lifting Equipment and Equipment Distribution reporting unit’s goodwill using
the quantitative two step approach. Additionally, in 2015 the Company evaluated ASV’s goodwill using the quantitative approach.
The first step used to identify potential impairment involves comparing the reporting unit’s estimated fair value to its carrying value,
including goodwill. The aforementioned Step one quantitative tests did not indicate impairment. During the first step testing, the
Company evaluated goodwill for impairment using a business valuation method, which is calculated as of a measurement date by
determining the present value of debt-free, after-tax projected future cash flows, discounted at the weighted average cost of capital of a
hypothetical third party buyer. The market approach was also considered in evaluating the potential for impairment by calculating fair
value based on multiples of earnings before interest, taxes, depreciation and amortization (EBITDA) of comparable, publicly traded
36
companies. This analysis also did not indicate impairment. The estimated fair values of the Lifting Equipment and ASV reporting
segments were within 10% of their carrying values. The fair value of the Equipment Distribution segment exceeded its carrying value
by slightly more than 10%. Moreover, the Company also observed implied EBITDA multiples from relatively recent merger and
acquisition activity in the industry, which was used to test the reasonableness of the results.
The second step of the process involves the calculation of an implied fair value of goodwill for each reporting unit for which step one
indicated impairment. The implied fair value of goodwill is determined by measuring the excess of the estimated fair value of the
reporting unit over the estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was
being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the
reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of
the goodwill, an impairment charge is recorded for the excess. An impairment loss cannot exceed the carrying value of goodwill
assigned to a reporting unit and the subsequent reversal of goodwill impairment losses is not permitted.
The determination of fair value requires the Company to make significant estimates and assumptions. These estimates and
assumptions primarily include, but are not limited to, revenue growth and operating earnings projections, discount rates, terminal
growth rates, and required capital expenditure projections. Our projections make certain assumptions including expanding PM market
share in North America, a normalization of energy markets over time and a continued expansion of dealer networks, particularly for
ASV. If our progress in meeting these and other assumptions is slower or different than what was anticipated, it may impact our
ability to meet the projections. Due to the inherent uncertainty involved in making these estimates, actual results could differ
materially from those estimates. Deterioration in the market or actual results as compared with the projections (including not meeting
near term projections) may result in an impairment in the near term. In the event, the Company determines that goodwill is impaired in
the future the Company would need to recognize a non-cash impairment charge.
For 2013, the Company determined on a qualitative basis, that it was not more likely than not that the fair value of the Lifting
reporting unit was less than its carrying value. For 2013, the Company also determined on a qualitative basis, that it was not more
likely than not that the fair value of the Equipment Distribution reporting unit was less than its carrying value.
The Company did not have any impairment for the years ended December 31, 2015, 2014 and 2013.
Impairment of Long Lived Assets. The Company’s policy is to assess the realizability of its long-lived assets, including intangible
assets, and to evaluate such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of
such assets (or group of assets) may not be recoverable. Impairment is determined to exist if the estimated future undiscounted cash
flows are less than the carrying value. Future cash flow projections include assumptions for future sales levels, the impact of cost
reduction programs, and the level of working capital needed to support each business. The amount of any impairment then recognized
would be calculated as the difference between the estimated fair value and the carrying value of the asset. The Company did not have
any impairment for the years ended December 31, 2015, 2014 and 2013.
Warranty Expense. The Company establishes reserves for future warranty expense at point when revenue is recognized by the
Company and is based on a percentage of revenues. The provision for estimated warranty claims, which is included in cost of sales, is
based on sales.
Retirement Benefit Costs and Termination Benefits. Payments to defined contribution retirement benefit plans are recognized as an
expense when employees have rendered service entitling them to the contributions. For defined benefit retirement benefit plans, the
cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of
each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a
charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other
comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is
recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning
of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:
service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
net interest expense or income; and
remeasurement.
The PM Group presents the first two components of defined benefit costs in profit or loss in the line item personnel. Curtailment gains
and losses are accounted for as past service costs. The retirement benefit obligation recognized in the consolidated statement of
financial position represents the actual deficit or surplus in PM Group’s defined benefit plans. Any surplus resulting from this
calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in
37
future contributions to the plans. A liability for a termination benefit is recognized at the earlier of when the entity can no longer
withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
Litigation Claims. In determining whether liabilities should be recorded for pending litigation claims, the Company must assess the
allegations and the likelihood that it will successfully defend itself. When the Company believes it is probable that it will not prevail in
a particular matter, it will then make an estimate of the amount of liability based, in part, on the advice of outside legal counsel.
Income Taxes. The Company accounts for income taxes under the provisions of ASC 740 “Income Taxes,” which requires recognition
of income taxes based on amounts payable with respect to the current year and the effects of deferred taxes for the expected future tax
consequences of events that have been included in the Company’s financial statements or tax returns. Under this method, deferred tax
assets and liabilities are determined based on the differences between the financial accounting and tax basis of assets and liabilities, as
well as for operating losses and tax credit carryforwards using enacted tax rates in effect for the year in which the differences are
expected to reverse. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not a tax benefit will
not be realized.
ASC 740 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return, as well as guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of
the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income prior to the expiration of any net operating loss carryforwards. See Note 15, Income Taxes, for further details.
Comprehensive Income
Reporting “Comprehensive Income” requires reporting and displaying comprehensive income and its components. Comprehensive
income includes, in addition to net earnings, other items that are reported as direct adjustments to stockholder’s equity. Currently, the
comprehensive income adjustment required for the Company has two components. First is a foreign currency translation adjustment,
the result of consolidating its foreign subsidiaries. The second component is a derivative instrument fair market value adjustment (net
of income taxes) related to forward currency contracts designated as a cash flow hedge.
Business Combinations
The Company accounts for acquisitions in accordance with guidance found in ASC 805, Business Combinations. The guidance
requires consideration given, including contingent consideration, assets acquired and liabilities assumed to be valued at their fair
market values at the acquisition date. The guidance further provides that: (1) in-process research and development will be recorded at
fair value as an indefinite-lived intangible asset; (2) acquisition costs will generally be expensed as incurred, (3) restructuring costs
associated with a business combination will generally be expensed subsequent to the acquisition date; and (4) changes in deferred tax
asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense.
ASC 805 requires that any excess of purchase price over fair value of assets acquired, including identifiable intangibles and liabilities
assumed be recognized as goodwill. In accordance with ASC 805, any excess of fair value of acquired net assets, including
identifiable intangibles assets, over the acquisition consideration results in a bargain purchase gain. Prior to recording a gain, the
acquiring entity must reassess whether all acquired assets and assumed liabilities have been identified and recognized and perform re-
measurements to verify that the consideration paid, assets acquired and liabilities assumed have been properly valued.
ASV, PM Group and Columbia Tank results are included in the Company’s results from their respective dates of acquisition of
December 20, 2014, January 15, 2015 and March 12, 2015.
Recently Adopted Accounting Guidance
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” (“ASU 2014-09”). ASU 2014-09 outlines a
new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes
most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-
step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in
exchange for those goods or services. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early
adoption is not permitted. The Company is evaluating the impact that adoption of this guidance will have on the determination or
reporting of its financial results.
38
In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide that a
Performance Target Could be Achieved after the Requisite Service Period,” (“ASU 2014-12”). ASU 2014-12 requires that a
performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance
condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU 2014-12 is
effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. Adoption of this guidance is not
expected to have a significant impact on the determination or reporting of the Company’s financial results.
In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going
Concern,” (“ASU 2014-15”). ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to
continue as a going concern for a one year period subsequent to the date of the financial statements. An entity must provide certain
disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The guidance is
effective for all entities for the first annual period ending after December 15, 2016 and interim periods thereafter, with early adoption
permitted. Adoption of this guidance is not expected to have any impact on the determination or reporting of the Company’s financial
results.
In April 2015, the FASB issued ASU 2015-03, “Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs,” (“ASU
2015-03”). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a
direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance is effective for reporting
periods beginning after December 15, 2015 and interim periods within those fiscal years with early adoption permitted. ASU 2015-03
should be applied on a retrospective basis, wherein the balance sheet of each period presented should be adjusted to reflect the effects
of adoption. Adoption of this guidance is not expected to have a significant impact on the determination or reporting of the Company’s
financial results.
In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” (“ASU 2015-11”). ASU 2015-11 requires
inventory be measured at the lower of cost and net realizable value and options that currently exist for market value be eliminated.
ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable
costs of completion, disposal, and transportation. The guidance is effective for reporting periods beginning after December 15, 2016
and interim periods within those fiscal years with early adoption permitted. ASU 2015-11 should be applied prospectively. The
Company is evaluating the impact adoption of this guidance will have on determination or reporting of its financial results.
In August 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with
Line-of-Credit Arrangements,” which amends ASC 835-30, “Interest - Imputation of Interest”. The ASU clarifies the presentation and
subsequent measurement of debt issuance costs associated with lines of credit. These costs may be presented as an asset and amortized
ratably over the term of the line of credit arrangement, regardless of whether there are outstanding borrowings on the arrangement.
The effective date will be the first quarter of fiscal year 2016 and will be applied retrospectively. The adoption is not expected to have
a material effect on the Company’s financial results.
In September 2015, the FASB issued ASU 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period
Adjustments.” This ASU requires that an acquirer recognize adjustments to provisional amounts that are identified during the
measurement period in the reporting period in which the adjustment amounts are determined. The effective date will be the first
quarter of fiscal year 2016. The adoption is not expected to have a material effect on the Company’s financial results.
In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (“ASU 2015-17”), Income Taxes (Topic 740):
Balance Sheet Classification of Deferred Taxes. The amendments in ASU 2015-17 seek to simplify the presentation of deferred
income taxes and require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial
position. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim
periods within those annual periods, with early application permitted for all entities as of the beginning of an interim or annual
reporting period. The Company has not determined the full impact of implementation of this standard, but believes it will not be
material to net income. The Company believes that the main impact of adoption of the standard will be the reclassification of $3.0
million of current deferred tax assets to a reduction in deferred tax liabilities for the period ending December 31, 2015.
In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of
Financial Assets and Financial Liabilities." The amendments in ASU 2016-01, among other things, require equity investments (except
those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair
value with changes in fair value recognized in net income; requires public business entities to use the exit price notion when
measuring fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial
liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables); and eliminates the
requirement for public business entities to disclose the method(s) and significant assumptions used to estimate fair value that is
required to be disclosed for financial instruments measured at amortized cost. The effective date will be the first quarter of fiscal year
2018. The Company is evaluating the impact the adoption of this new standard will have on its consolidated financial statements.
39
In February 2016, the FASB issued a standards update that requires lessees to recognize on the balance sheet the assets and liabilities
associated with the rights and obligations created by those leases. The guidance for lessors is largely unchanged from current U.S.
GAAP. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12
months. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from
a lease by a lessee primarily will depend on its classification as finance or operating lease. The update is effective for reporting periods
beginning after December 15, 2018. Early adoption is permitted. We are in the process of evaluating the impact of this update on our
consolidated financial statements.
Except as noted above, the guidance issued by the FASB during the current year is not expected to have a material effect on the
Company’s consolidated financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to certain market risks that exist as part of our ongoing business operations and the Company’s use of
derivative financial instruments, where appropriate, to manage our foreign change risks. As a matter of policy, the Company does not
engage in trading or speculative transactions. For further information on accounting policies related to derivative financial
instruments, refer to Note 6—“Derivative Financial Instruments” in our Consolidated Financial Statements.
Foreign Exchange Risk
The Company is exposed to fluctuations in foreign currency cash flows related to third-party purchases and sales, intercompany
product shipments and intercompany loans. The Company is also exposed to fluctuations in the value of foreign currency investments
in subsidiaries and cash flows related to repatriation of these investments. Additionally, the Company is exposed to volatility in the
translation of foreign currency earnings to U.S. Dollars. Primary exposures include the U.S. Dollar when compared to functional
currencies of our major foreign subsidiaries, which include the Euro and the Canadian dollar. The Company assesses foreign currency
risk based on transactional cash flows, identifies naturally offsetting positions and purchases hedging instruments to partially offset
anticipated exposures. At December 31, 2015, the Company had foreign exchange contracts with a notional value of $11 million. The
fair market value of these arrangements was approximately $0.5 million at December 31, 2015. This represents the approximate
amount the Company would have received if it had settled (exited) these contracts at December 31, 2015. At December 31, 2015, the
Company performed a sensitivity analysis on the effect that aggregate changes in the translation effect of foreign currency exchange
rate changes would have on our operating income. Based on this sensitivity analysis, we have determined that a change in the value of
the U.S. dollar relative to currencies outside the U.S. by 10% to amounts already incorporated in the financial statements for the year
ended December 31, 2015 would have $0.7 million impact on the translation effect of foreign currency exchange rate changes already
included in our reported operating income for the period.
Interest Rate Risk
The Company is exposed to interest rate volatility with regard to future issuances of fixed rate debt and existing issuances of variable
rate debt. Primary exposure includes movements in the U.S. prime rate, the Canadian prime rate and EURIBOR. At December 31,
2015, the Company had approximately $132.9 million of variable interest debt with average weighted average interest rate at year end
of approximately 5.5%. The Company’s PM subsidiary had interest rate swaps on €20.7 million of its debt. The fair value of the
interest rate swaps, which represents the cost to settle these arrangements at December 31, 2015 was approximately $1.2 million. At
December 31, 2015, the Company performed a sensitivity analysis to determine the impact that in increase in interest rates would
have. Based on this sensitivity analysis, the Company has determined that an increase of 10% in our average floating interest rates at
December 31, 2015 would increase interest expense by approximately $0.7 million.
Commodities Risk
Principal materials and components that the Company uses in our various manufacturing processes include steel, castings, engines,
tires, hydraulics, cylinders, drive trains, electric controls and motors, and a variety of other commodities and fabricated or
manufactured items. Extreme movements in the cost and availability of these materials and components may affect the Company’s
financial performance. Changes input costs did not have a significant effect on the Company’s operating performance in 2015. During
2015, raw materials and component were generally available to meet our production schedules and had no significant impact on 2015
revenues.
In the absence of labor strikes or other unusual circumstances, substantially all materials and components are normally available from
multiple suppliers. However, certain businesses receive materials and components from a single source supplier, although alternative
suppliers of such materials may be generally available. Current and potential suppliers are evaluated on a regular basis on their ability
to meet our requirements and standards. The Company actively manages our material supply sourcing, and may employ various
40
methods to limit risk associated with commodity cost fluctuations and availability. The inability of suppliers, especially any single
source suppliers for a particular business, to deliver materials and components promptly could result in production delays and
increased costs to manufacture the Company’s products. To mitigate the impact of these risks, the Company continues to search for
acceptable alternative supply sources and less expensive supply options on a regular basis, including improving the globalization.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The report of the Company’s independent registered public accounting firm and the Company’s Consolidated Financial Statements are
filed pursuant to this Item 8 and are included in this report. See the Index to Financial Statements.
41
The financial statements of the registrant required to be included in Item 8 are listed below:
Index to Financial Statements
Report of Independent Registered Public Accounting Firm ....................................................................................................
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2015 and 2014 ...........................................................................................
Consolidated Statements of Income (Loss) for the Years Ended December 31, 2015, 2014 and 2013 ...................................
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2015, 2014 and 2013 .........
Consolidated Statements of Shareholders’ Equity for Years Ended December 31, 2015, 2014 and 2013 ..............................
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013 .......................................
Page
Reference
43
44
45
46
47
48
Notes to Consolidated Financial Statements ............................................................................................................................
49-94
42
Report of Independent Registered Public Accounting Firm
To the Board of Directors and
Shareholders of Manitex International, Inc.
We have audited the accompanying consolidated balance sheets of Manitex International, Inc. and Subsidiaries (the “Company”) as of
December 31, 2015 and 2014, and the related consolidated statements of income (loss), comprehensive income (loss), shareholders’
equity, and cash flows for each of the years in the three-year period ended December 31, 2015. We also have audited the Company’s
internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s
management is responsible for these consolidated financial statements, for maintaining effective internal control over financial
reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual
Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express an opinion on these
consolidated financial statements and an opinion on the company’s internal control over financial reporting based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all
material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the
amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall consolidated financial statement presentation. Our audit of internal control over
financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits
provide a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
Manitex International, Inc. and Subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows
for each of the years in the three-year period ended December 31, 2015, in conformity with accounting principles generally accepted
in the United States of America. Also in our opinion, Manitex International, Inc. and Subsidiaries maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
/s/ UHY LLP
UHY LLP
Sterling Heights, Michigan
March 10, 2016
43
MANITEX INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
As of December 31,
2015
2014
ASSETS
$
8,578 $
Current assets
Cash
Trade receivables (net)
Accounts receivable from related party
Other receivables
Inventory (net)
Deferred tax asset
Prepaid expense and other
Current assets of discontinued operations
Total current assets
Total fixed assets (net)
Intangible assets (net)
Goodwill
Other long-term assets
Non-marketable equity investment
Long-term assets of discontinued operations
Total assets
LIABILITIES AND EQUITY
Current liabilities
Notes payable—short term
Revolving credit facilities
Current portion of capital lease obligations
Accounts payable
Accounts payable related parties
Income tax payable on conversion of ASV
Accrued expenses
Other current liabilities
Current liabilities of discontinued operations
Total current liabilities
Long-term liabilities
Revolving term credit facilities
Notes payable
Capital lease obligations
Convertible note-related party (net)
Convertible note (net)
Deferred gain on sale of building
Deferred tax liability
Other long-term liabilities
Long-term liabilities of discontinued operations
Total long-term liabilities
Total liabilities
Commitments and contingencies
Equity
Preferred Stock—Authorized 150,000 shares, no shares issued or outstanding at
December 31, 2015 and December 31, 2014
Common Stock—no par value 25,000,000 shares authorized, 16,072,100 and 14,989,694 shares issued and
outstanding at December 31, 2015 and December 31, 2014, respectively
Paid in capital
Retained earnings
Accumulated other comprehensive loss
Equity attributable to shareholders of Manitex International, Inc.
Equity attributable to noncontrolling interest
Total equity
Total liabilities and equity
The accompanying notes are an integral part of these financial statements
44
63,388
388
3,254
119,269
2,951
4,872
—
202,700
41,985
70,629
80,089
5,503
5,752
—
406,658 $
30,323 $
1,795
1,004
62,137
1,611
—
21,053
2,113
—
120,036
46,097
69,676
5,850
6,737
14,386
1,288
4,525
7,763
—
156,322
276,358
—
93,186
2,630
16,588
(5,392 )
107,012
23,288
130,300
406,658 $
$
$
$
4,368
58,433
8,609
480
90,745
1,325
1,691
8,206
173,857
25,788
51,251
52,666
4,166
5,951
3,477
317,156
11,880
2,798
1,631
34,113
503
16,231
15,973
2,407
2,425
87,961
46,457
38,423
2,710
6,611
—
1,268
2,082
1,973
1,665
101,189
189,150
—
82,040
1,789
21,960
(1,023)
104,766
23,240
128,006
317,156
MANITEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In thousands, except share and per share data)
For the years ended December 31,
$
2015
2014
2013
386,737 $
317,231
69,506
$
247,164
199,715
47,449
229,820
184,083
45,737
5,829
55,256
61,085
8,421
(12,984)
30
23
(12,931)
(4,510)
(725)
(199)
(3,984)
(2,083)
(743)
(1,340)
(5,324)
(48)
2,093
29,882
31,975
15,474
(2,777)
(107)
(36)
(2,920)
12,554
4,452
—
8,102
(1,911)
(776)
(1,135)
6,967
136
2,308
24,399
26,707
19,030
(2,501)
(95)
(50)
(2,646)
16,384
5,082
—
11,302
(1,937)
(813)
(1,124)
10,178
—
$
(5,372) $
7,103 $
10,178
Net revenues
Cost of sales
Gross profit
Operating expenses
Research and development costs
Selling, general and administrative expenses
Total operating expenses
Operating income
Other income (expense)
Interest expense
Foreign currency transaction gain (loss)
Other income (loss)
Total other expense
(Loss) income before income taxes and loss in non-marketable equity
interest from continuing operations
Income tax (benefit) expense from continuing operations
Loss in non-marketable equity interest, net of taxes
Net (loss) income from continuing operations
Discontinued operations: (Note 25)
Loss from operations of discontinued operations (including loss on
disposal of $2,142 in 2015)
Income tax benefit
Loss on discontinued operations
Net (loss) income
Net (income) loss attributable to noncontrolling interest
Net (loss) income attributable to shareholders of Manitex
International, Inc.
Earnings Per Share
Basic
(Loss) earnings from continuing operations attributable to
shareholders of Manitex International, Inc.
Loss from discontinued operations attributable to shareholders of
Manitex International, Inc.
(Loss) earnings attributable to shareholders of Manitex
International, Inc.
Diluted
(Loss) earnings from continuing operations attributable to
shareholders of Manitex International, Inc.
Loss from discontinued operations attributable to shareholders of
Manitex International, Inc.
(Loss) earnings attributable to shareholders of Manitex
International, Inc.
Weighted average common shares outstanding
$
$
$
$
$
$
Basic
Diluted
(0.25) $
0.59 $
0.89
(0.08) $
(0.08) $
(0.09)
(0.34) $
0.51 $
0.80
(0.25) $
0.59 $
0.89
(0.08) $
(0.08) $
(0.09)
(0.34) $
0.51 $
0.80
15,970,074
15,970,074
13,858,189
13,904,289
12,671,205
12,717,575
The accompanying notes are an integral part of these financial statements
45
MANITEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
Net (loss) income:
Other comprehensive income (loss)
Foreign currency translation adjustments
Derivative instrument fair market value adjustment—net of
income taxes of $(3) and$3 for 2014 and 2013, respectively
Total other comprehensive (loss)
Comprehensive (loss) income
Comprehensive (income) loss attributable to noncontrolling interest
Total comprehensive (loss) income attributable to shareholders of
Manitex International, Inc.
For the Year Ended December 31,
2014
2013
2015
$
(5,324) $
6,967 $
10,178
(4,369)
(1,419)
—
(4,369)
(9,693)
(48)
7
(1,412)
5,555
136
(320)
(7)
(327)
9,851
—
$
(9,741) $
5,691 $
9,851
The accompanying notes are an integral part of these financial statements
46
MANITEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(In thousands, except per share data)
For the years ended December 31,
Number of common shares outstanding
Balance at beginning of the year
Stock offering
Employee 2004 incentive plan grant
Repurchase to satisfy withholding and cancelled
Stock issued in connection with asset purchase (see Note 19)
Balance end of year
Common Stock
Balance at beginning of the year
Stock offering
Employee 2004 incentive plan grant
Repurchase to satisfy withholding and cancelled
Stock issued in connection with asset purchase (see Note 19)
Balance end of year
Paid in Capital
Balance at beginning of the year
Equity component of Convertible debt issuance
Employee 2004 incentive plan grant
Excess tax benefits related to vesting of restricted stock
Balance end of year
Retained Earnings
Balance at beginning of the year
Net (loss) income attributable to shareholders of Manitex
International, Inc.
Balance end of year
Accumulated Other Comprehensive(loss) Income
Balance at beginning of the year
(Loss) gain on foreign currency translation
Derivative instrument fair market adjustment—net of income taxes
Balance end of year
Equity Attributable to Noncontrolling Interest
Balance at beginning of the year
Acquisition noncontrolling business
Net income (loss) attributable to noncontrolling interest
Balance end of year
$
$
$
$
$
$
$
$
$
$
The accompanying notes are an integral part of these financial statements
2015
2014
2013
14,989,694
—
100,441
(12,518)
994,483
16,072,100
13,801,277
1,108,156
89,114
(8,853)
—
14,989,694
12,268,443
1,375,000
74,320
(4,414)
87,928
13,801,277
82,040 $
—
1,097
(75)
10,124
93,186 $
1,789 $
457
384
—
2,630 $
68,554 $
12,500
1,100
(114)
—
82,040 $
1,191 $
572
3
23
1,789 $
53,040
13,927
657
(70)
1,000
68,554
1,098
—
7
86
1,191
21,960 $
14,857 $
4,679
(5,372)
16,588 $
7,103
21,960 $
10,178
14,857
(1,023) $
(4,369)
—
(5,392) $
23,240 $
—
48
23,288 $
389 $
(1,419)
7
(1,023) $
— $
23,376
(136)
23,240 $
716
(320)
(7)
389
—
—
—
—
47
MANITEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
For the years ended December 31,
2015
2014
2013
$
(5,324) $
6,967
$
10,178
12,082
(167)
—
(119)
1,069
(2,074)
1,204
743
(706)
199
1,481
301
60
1,378
23,475
—
(10,286)
(3,258)
111
6,717
(2,458)
(16,231)
(1,472)
2,524
(214)
9,035
(13,747)
518
(2,369)
(233)
6,525
(96)
(9,402)
14,000
(11,800)
—
15,000
443
(7,731)
7,289
(1,274)
(8,466)
(75)
—
—
(1,446)
—
5,940
5,573
(1,363)
4,368
8,578 $
4,188
165
183
3
156
(254)
259
—
—
—
1,104
—
(35)
—
(13,889)
315
(7,010 )
(16)
(123)
2,676
565
—
641
(30)
2,632
(1,503 )
(24,998)
—
(784)
—
—
(140)
(25,922)
—
—
12,500
7,500
5,563
2,532
677
(519)
(947)
(114)
22
942
(1,397 )
(113)
26,646
(779)
(944)
6,091
4,368
$
3,573
172
—
(100 )
(110 )
(168 )
205
—
—
—
664
—
(83 )
—
980
271
(7,931 )
(427 )
—
(3,832 )
(115 )
—
(122 )
(36 )
59
3,178
(13,000)
139
(963 )
—
—
(252 )
(14,076)
15,000
(15,000)
13,927
—
5,409
(1,960 )
809
(1,102 )
(809 )
(70 )
86
—
(1,185 )
(107 )
14,998
4,100
102
1,889
6,091
Cash flows from operating activities:
Net (loss) income
Adjustments to reconcile net income to cash used for operating activities:
Depreciation and amortization
Changes in allowances for doubtful accounts
Acquisition expenses financed by seller
(Gain) loss on disposal of assets
Changes in inventory reserves
Deferred income taxes
Amortization of deferred financing cost
Amortization of debt discount
Change in value of interest rate swaps
Loss in non-marketable equity interest
Share-based compensation
Deferred gain on sale and lease back
Reserves for uncertain tax provisions
Loss on sale of discontinued operations
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable
(Increase) decrease in accounts receivable finance
(Increase) decrease in inventory
(Increase) decrease in prepaid expenses
(Increase) decrease in other assets
Increase (decrease) in accounts payable
Increase (decrease) in accrued expense
Increase (decrease) in income tax payable on ASV conversion
Increase (decrease) in other current liabilities
Increase (decrease) in other long-term liabilities
Discontinued operations - cash provided by (used) for operating activities
Net cash provided by used for operating activities
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired
Proceeds from the sale of fixed assets
Purchase of property and equipment
Investment in intangibles other than goodwill
Proceeds from the sale of discontinued operations
Discontinued operations - cash used for investing activities
Net cash used for investing activities
Cash flows from financing activities:
New borrowings—term loan
Repayment of term loan
Net proceeds from stock offering
New borrowings—convertible notes
Borrowing on revolving term credit facilities
Net borrowings (repayments) on working capital facilities
New borrowings—other
Bank fees and cost related to new financing
Note payments
Shares repurchased for income tax withholding on share-based compensation
Excess tax benefits related to vesting of restricted stock
Proceeds from capital leases
Payments on capital lease obligations
Discontinued operations - cash used for financing activities
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
Effect of exchange rate changes on cash
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at end of period
$
(See Note 15 for other supplemental cash flow information)
The accompanying notes are an integral part of these financial statements
48
MANITEX INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
Note 1. Nature of Operations
The Company is a leading provider of engineered lifting solutions. The Company operates in three business segments: the Lifting
Equipment segment, the ASV segment and the Equipment Distribution segment.
Lifting Equipment Segment
The Company is a leading provider of engineered lifting solutions. The Company designs, manufactures and distributes a diverse
group of products that serve different functions and are used in a variety of industries. Through its Manitex, Inc. subsidiary it markets
a comprehensive line of boom trucks, truck cranes and sign cranes. Manitex’s boom trucks and crane products are primarily used for
industrial projects, energy exploration and infrastructure development, including, roads, bridges and commercial construction. Badger
Equipment Company (“Badger”) is a manufacturer of specialized rough terrain cranes and material handling products. Badger
primarily serves the needs of the construction, municipality and railroad industries.
PM Group S.p.A. (“PM”) is a leading Italian manufacturer of truck mounted hydraulic knuckle boom cranes with a 50-year history of
technology and innovation, and a product range spanning more than 50 models. Its largest subsidiary, Oil & Steel (“O&S”), is a
manufacturer of truck-mounted aerial platforms with a diverse product line and an international client base.
Manitex Liftking ULC (“Manitex Liftking” or “Liftking”) sells a complete line of rough terrain forklifts, a line of stand-up electric
forklifts, cushioned tired forklifts with lifting capacities from 18 thousand to 40 thousand pounds and special mission oriented
vehicles, as well as other specialized carriers, heavy material handling transporters and steel mill equipment. Manitex Liftking’s rough
terrain forklifts are used in both commercial and military applications. Specialty mission oriented vehicles and specialized carriers are
designed and built to meet the Company’s unique customer needs and requirements. The Company’s specialized lifting equipment has
met the particular needs of customers in various industries that include utility, ship building and steel mill industries.
Manitex Load King, Inc. (“Load King”) manufactures specialized custom trailers and hauling systems typically used for transporting
heavy equipment. Load King trailers serve niche markets in the commercial construction, railroad, military and equipment rental
industries through a dealer network. Load King was sold on December 29, 2015 and is presented as discontinued operation.
CVS Ferrari, srl (“CVS”) designs and manufactures a range of reach stackers and associated lifting equipment for the global container
handling market, that are sold through a broad dealer network. On November 30, 2013, CVS acquired the assets of Valla SpA
(“Valla”) located in Piacenza, Italy. Valla offers a full range of precision pick and carry cranes from 2 to 90 tons, using electric, diesel,
and hybrid power options. Its cranes offer wheeled or tracked and fixed or swing boom configurations, with special applications
designed specifically to meet the needs of its customers.
On August 19, 2013, Manitex Sabre, Inc. (“Sabre”) acquired the assets of Sabre Manufacturing, LLC, which is located in Knox,
Indiana. Sabre manufactures a comprehensive line of specialized mobile tanks for liquid and solid storage and containment solutions
with capacities from 8,000 to 21,000 gallons. Its mobile tanks are sold to specialized independent tank rental companies and through
the Company’s existing dealer network. The tanks are used in a variety of end markets such as petrochemical, waste management and
oil and gas drilling. On March 12, 2015, the Company acquired certain assets of Columbia Tank and merged its operations with
Sabre.
ASV Segment
On December 19, 2014, the Company acquired 51% of A.S.V., Inc. from Terex Corporation (“Terex”). Subsequent to the acquisition
date ASV was converted to an LLC and its name was changed to A.S.V., LLC (ASV). ASV is located in Grand Rapids, Minnesota
manufactures a line of high quality compact track and skid steer loaders. The products are used in the site clearing, general
construction, forestry, golf course maintenance and landscaping industries, with general construction being the largest market. The
ASV products are distributed through the Terex distribution channels as well as through the Company and other independent dealers.
ASV’s financial results are included in the Company’s consolidated results beginning on December 20, 2014.
Equipment distribution segment
The Equipment Distribution segment located in Bridgeview, Illinois, comprises the operations of Crane & Machinery (“C&M”), a
division of Manitex International, North American Equipment, Inc. (“NAE”) and North American Distribution, Inc. (“NAD”). The
49
segment markets products used primarily for infrastructure development and commercial construction applications that include road
and bridge construction, general contracting, roofing, scrap handling and sign construction and maintenance. C&M is a distributor of
Terex rough terrain and truck cranes products and supplies repair parts for a wide variety of medium to heavy duty construction
equipment and sells domestically and internationally, predominately to end users, including the rental market. It also provides crane
equipment repair services in the Chicago area. The segment markets previously-owned construction and heavy equipment and trailers
both domestically and internationally through NAE. The segment purchase previously owned equipment of various ages and
conditions and often refurbishes the equipment before resale. The segment also sells Valla products through NAD.
Note 2. Basis of Presentation
The consolidated financial statements, included herein, have been prepared by the Company pursuant to the rules and regulations of
the United States Securities and Exchange Commission. Pursuant to these rules and regulations, the financial statements are prepared
in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statement
includes the accounts of Manitex International, Inc., and its subsidiaries. Significant intercompany transactions have been eliminated
in consolidation. Sabre, Valla, ASV, PM and Columbia Tank have been included in the Company’s financial results from their
respective effective date of acquisition which are August 19, 2013, November 30, 2013, December 20, 2014, January 15, 2015 and
March 12, 2015, respectively. The Company owns 25% of Lift Ventures LLC (“Lift Ventures”) and accounts for it as an
unconsolidated equity investment. The investment in Lift Ventures has been reflected in the Company’s financial statements on the
balance sheet on the line titled “Non-marketable equity investment”. Lift Venture financial results are included from December 16,
2014.
Financial statements are presented in thousands of dollars except for per share amounts.
Note 3. Summary of Significant Accounting Policies
The summary of significant accounting policies of Manitex International, Inc. is presented to assist in understanding the Company’s
financial statements. The financial statements and notes are representations of the Company’s management who is responsible for
their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Cash and Cash Equivalents —For purposes of the statement of cash flows, the Company considers all short-term securities purchased
with maturity dates of three months or less to be cash equivalents.
Revenue Recognition —Revenue and related costs are recognized when title passes and risk of loss pass to our customers which
generally occurs upon shipment depending upon the terms of the contract. Under certain contracts with our customers title passes to
the customers when the units are completed. The units are segregated from our inventory and identified as belonging to the customer,
the customer is notified that the units are complete and awaiting pick up or delivery as specified by the customer before income is
recognized. Additionally, the customer is requested to sign an “Invoice Authorization Form” which acknowledges the contract terms
and acknowledges that the customer has economic ownership and control over the unit. It also acknowledges that we are going to
invoice the unit per terms of the contract. The Company insures any custodial risk that it may retain.
For FOB contracts, customers may be invoiced prior to the time customers take physical possession. Revenue is recognized in such
cases only when the customer has a fixed commitment to purchase the units, the units have been completed, tested and made available
to the customer for pickup or delivery, and the customer has authorized in writing that we hold the units for pickup or delivery at a
time specified by the customer. In such cases, the units are invoiced under our customary billing terms, title to the units and risks of
ownership pass to the customer upon invoicing, the units are segregated from our inventory and identified as belonging to the
customer and we have no further obligations under the order. The Company insures any custodial risk that it may retain.
In addition, our policy requires in all instances certain minimum criteria be met in order to recognize revenue, specifically:
a)
b)
c)
d) We have no significant obligations for future performance.
Persuasive evidence that an arrangement exists;
The price to the buyer is fixed or determinable;
Collectability is reasonably assured; and
Investment—Equity Method of Accounting —Our non-marketable equity investments are investments we have made in privately-
held companies accounted for under the equity method. We periodically review our non-marketable equity investments for
impairment. No impairments were recognized for the year ended December 31, 2015.
50
Allowance for Doubtful Accounts —The Company has adopted a policy consistent with U.S. GAAP for the periodic review of its
accounts receivable to determine whether the establishment of an allowance for doubtful accounts is warranted based on the
Company’s assessment of the collectability of the accounts. The Company established an allowance for bad debt of $240 and $458 at
December 31, 2015 and 2014, respectively. The Company also has in some instances a security interest in its accounts receivable until
payment is received.
Property, Equipment and Depreciation —Property and equipment are stated at cost or the fair market value at date of acquisition for
property and equipment acquired in connection with the acquisition of a company. Depreciation of property and equipment is
provided over the following useful lives:
Asset Category
Buildings
Machinery and equipment
Furniture and fixtures
Leasehold improvements
Depreciable Life
20 –33 years
1 – 15 years
3 – 12 years
1.5 – 12 years
Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures
for maintenance and repairs are charged to expense as incurred. Depreciation expense for the years ended December 31, 2015, 2014
and 2013 was $5,055, $1,555 and $1,339, respectively.
Other Intangible Assets —The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles—
Goodwill and Other”. The Company capitalizes certain costs related to patent technology. Additionally, a substantial portion of the
purchase price related to the Company’s acquisitions has been assigned to patents or unpatented technology, trade name, customer
backlog, and customer relationships. Under the guidance, Other Intangible Assets with definite lives are amortized over their
estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment.
Goodwill is tested for impairment at the reporting unit level (reportable segment). The Company’s three operating segments comprise
the reporting units for goodwill impairment testing purposes.
Under ASU 2011-08, entities are provided with the option of first performing a qualitative assessment on none, some, or all of its
reporting units to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If
after completing a qualitative analysis, it is determined that it is more likely than not that the fair value of a reporting unit is less than
its carrying value a quantitative analysis is required.
In 2015 and 2014, the Company elected to evaluate the Lifting Equipment and Equipment Distribution reporting unit’s goodwill using
the quantitative two step approach. Additionally, in 2015 the Company evaluated ASV’s goodwill using the quantitative approach.
The first step used to identify potential impairment involves comparing the reporting unit’s estimated fair value to its carrying value,
including goodwill. The aforementioned step one quantitative tests did not indicate impairment. During the first step testing, the
Company evaluated goodwill for impairment using a business valuation method, which is calculated as of a measurement date by
determining the present value of debt-free, after-tax projected future cash flows, discounted at the weighted average cost of capital of a
hypothetical third party buyer. The market approach was also considered in evaluating the potential for impairment by calculating fair
value based on multiples of earnings before interest, taxes, depreciation and amortization (EBITDA) of comparable, publicly traded
companies. This analysis also did not indicate impairment. The estimated fair values of the Lifting Equipment and ASV reporting
segments were within 10% of their carrying values. The fair value of the Equipment Distribution segment exceeded its carrying value
by slightly more than 10%. Moreover, the Company also observed implied EBITDA multiples from relatively recent merger and
acquisition activity in the industry, which was used to test the reasonableness of the results.
The second step of the process involves the calculation of an implied fair value of goodwill for each reporting unit for which step one
indicated impairment. The implied fair value of goodwill is determined by measuring the excess of the estimated fair value of the
reporting unit over the estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was
being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the
reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of
the goodwill, an impairment charge is recorded for the excess. An impairment loss cannot exceed the carrying value of goodwill
assigned to a reporting unit and the subsequent reversal of goodwill impairment losses is not permitted.
The determination of fair value requires the Company to make significant estimates and assumptions. These estimates and
assumptions primarily include, but are not limited to, revenue growth and operating earnings projections, discount rates, terminal
growth rates, and required capital expenditure projections. . Our projections make certain assumptions including expanding PM
market share in North America, a normalization of energy markets over time and a continued expansion of dealer networks,
51
particularly for ASV. If our progress in meeting these and other assumptions is slower or different than what was anticipated, it may
impact our ability to meet the projections. Due to the inherent uncertainty involved in making these estimates, actual results could
differ materially from those estimates. Deterioration in the market or actual results as compared with the projections (including not
meeting near term projections) may result in an impairment in the near term. In the event, the Company determines that goodwill is
impaired in the future the Company would need to recognize a non-cash impairment charge.
For 2013, the Company determined on a qualitative basis, that it was not more likely than not that the fair value of the Lifting
reporting unit was less than its carrying value. For 2013, the Company also determined on a qualitative basis, that it was not more
likely than not that the fair value of the Equipment Distribution reporting unit was less than its carrying value.
The Company did not have any impairment for the years ended December 31, 2015, 2014 and 2013.
Impairment of Long Lived Assets —The Company’s policy is to assess the realizability of its long-lived assets, including intangible
assets, and to evaluate such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of
such assets (or group of assets) may not be recoverable. Impairment is determined to exist if the estimated future undiscounted cash
flows are less than the carrying value. Future cash flow projections include assumptions for future sales levels, the impact of cost
reduction programs, and the level of working capital needed to support each business. The amount of any impairment then recognized
would be calculated as the difference between estimated fair value and the carrying value of the asset. The Company did not have any
impairment for the years ended December 31, 2015, 2014 and 2013.
Inventory —Inventory consists of stock materials and equipment stated at the lower of cost (first in, first out) or market. All
equipment classified as inventory is available for sale. The company records excess and obsolete inventory reserves. The estimated
reserve is based upon specific identification of excess or obsolete inventories. Selling, general and administrative expenses are
expensed as incurred and are not capitalized as a component of inventory.
Foreign Currency Translation and Transactions —The financial statements of the Company’s non-U.S. subsidiaries are translated
using the current exchange rate for assets and liabilities and the weighted-average exchange rate for the year for income and expense
items. Resulting translation adjustments are recorded to accumulated other comprehensive income (OCI) as a component of
shareholders’ equity.
The Company converts receivables and payables denominated in other than the Company’s functional currency at the exchange rate as
of the balance sheet date. The resulting transaction exchange gains or losses, except for certain transaction gains or loss related to
intercompany receivable and payables, are included in other income and expense. Transaction gains and losses related to
intercompany receivables and payables not anticipated to be settled in the foreseeable future are excluded from the determination of
net income and are recorded as a translation adjustment (with consideration to the tax effect) to accumulated other comprehensive
income (OCI) as a component of shareholders’ equity.
Derivatives—Forward Currency Exchange Contracts —The Company enters into forward currency exchange contracts in
relationship such that the exchange gains and losses on the assets and liabilities denominated in other than the reporting units’
functional currency would be offset by the changes in the market value of the forward currency exchange contracts it holds. The
forward currency exchange contracts that the Company has to offset existing assets and liabilities denominated in other than the
reporting units’ functional currency have been determined not to be considered a hedge under ASC 815-10. The Company records at
the balance sheet date the forward currency exchange contracts at its market value with any associated gain or loss being recorded in
current earnings. Both realized and unrealized gains and losses related to forward currency contracts are included in current earnings
and are reflected in the Statement of Operations in the other income expense section on the line titled foreign currency transaction gain
(loss).
The Company has entered into forward currency contracts to hedge certain future U.S. dollar sales of its Canadian Subsidiary. The
forward currency contracts to hedge future sales are designated as cash flow hedges under ASC 815-10. As required, forward currency
contracts are recognized as an asset or liability at fair value on the Company’s Consolidated Balance Sheet. For derivative instruments
that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a
component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged
transaction affects earnings (date of sale). Gains or losses on cash flow hedges when recognized into income are included in net
revenues (see Note 6).
Interest Rate Swap Contracts—The Company enters into derivative instruments to manage its exposure to interest rate risk related to
certain foreign term loans. Derivatives are initially recognized at fair value at the date the contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in current earnings
immediately unless the derivative is designated and effective as a hedging instrument, in which case the effective portion of the gain
or loss is recognized and is reported as a component of other comprehensive income and reclassified into earnings in the same period
52
or periods during which the hedging instrument affects earnings (date of sale). As part of the acquisition of PM Group, which was
acquired on January 15, 2015, the Company acquired interest rate swap contracts, which manage the exposure to interest rate risk
related to term loans with certain financial institutions in Italy. These contracts have been determined not to be hedge instruments
under ASC 815-10.
Credit Risk Concentrations —Financial instruments which potentially subject the Company to concentrations of credit risk consist
primarily of cash, trade receivables and payables. The Company maintains its cash balances and marketable securities at banks located
in Detroit, Michigan, New York, New York, Toronto, Canada as well as several separate Italian banks. Accounts in the United States
are insured by the Federal Deposit Insurance Corporation up to $250. At December 31, 2015 and 2014, the Company had uninsured
balances of $4,120 and $5,814, respectively.
As of December 31, 2015 and 2014, no customers accounted for 10% or more of total Company’s accounts receivable.
In 2015, 2014 and 2013, no one customer accounted for 10% or more of total company’s revenues. For 2015, 2014 and 2013
purchases from any single supplier did not exceed 10% of total purchases.
Research and Development Expenses— The Company expenses research and development costs, as incurred. For the periods ended
December 31, 2015, 2014 and 2013 expenses were $5,829, $2,093 and $2,308, respectively.
Advertising —Advertising costs are expensed as incurred and were $953, $455 and $616 for the years ended December 31, 2015,
2014 and 2013, respectively.
Retirement Benefit Costs and Termination Benefits —Payments to defined contribution retirement benefit plans are recognized as an
expense when employees have rendered service entitling them to the contributions. For defined benefit retirement benefit plans, the
cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of
each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a
charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other
comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is
recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning
of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:
service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
net interest expense or income; and
remeasurement.
Curtailment gains and losses are accounted for as past service costs. The retirement benefit obligation recognized in the consolidated
statement of financial position represents the actual deficit or surplus in PM Group’s defined benefit plans. Any surplus resulting from
this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in
future contributions to the plans. A liability for a termination benefit is recognized at the earlier of when the entity can no longer
withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
Litigation Claims —In determining whether liabilities should be recorded for pending litigation claims, the Company must assess the
allegations and the likelihood that it will successfully defend itself. When the Company believes it is probable that it will not prevail in
a particular matter, it will then record an estimate of the amount of liability based, in part, on advice of outside legal counsel.
Shipping and Handling —The Company records the amount of shipping and handling costs billed to customers as revenue. The cost
incurred for shipping and handling is included in the cost of sales.
Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
53
Income Taxes —The Company accounts for income taxes under the provisions of ASC 740 “ Income Taxes,” which requires
recognition of income taxes based on amounts payable with respect to the current year and the effects of deferred taxes for the
expected future tax consequences of events that have been included in the Company’s financial statements or tax returns. Under this
method, deferred tax assets and liabilities are determined based on the differences between the financial accounting and tax basis of
assets and liabilities, as well as for operating losses and tax credit carryforwards using enacted tax rates in effect for the year in which
the differences are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not
a tax benefit will not be realized.
ASC 740 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return, as well as guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of
the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income prior to the expiration of any net operating loss carryforwards. See Note 14, Income Taxes, for further details.
Accrued Warranties —Warranty costs are accrued at the time revenue is recognized. The Company’s products are typically sold with
a warranty covering defects that arise during a fixed period of time. The specific warranty offered is a function of customer
expectations and competitive forces. The Equipment Distribution segment does not accrue for warranty costs at the time of sales, as
they are reimbursed by the manufacturers for any warranty that they provide to their customers.
A liability for estimated warranty claims is accrued at the time of sale. The liability is established using historical warranty claim
experience. Historical warranty experience is, however, reviewed by management. The current provision may be adjusted to take into
account unusual or non-recurring events in the past or anticipated changes in future warranty claims. Adjustments to the initial
warranty accrual are recorded if actual claim experience indicates that adjustments are necessary. Warranty reserves are reviewed to
ensure critical assumptions are updated for known events that may impact the potential warranty liability.
Debt Issuance Costs —Debt issuance costs incurred in securing the Company’s financing arrangements are capitalized and amortized
over the term of the associated debt. Deferred financing cost are included with other long-term assets on the Company’s balance sheet.
Sale and Leaseback —In accordance with ASC 840-40 Sales-Leaseback Transactions, the Company has recorded deferred revenue in
relationship to the sale and leaseback of one of the Company’s operating facilities and on certain equipment. As such, the deferred
gains have been deferred and is being amortized on a straight line basis over the life of the leases.
Computation of EPS —Basic Earnings per Share (“EPS”) was computed by dividing net income (loss) by the weighted average
number of common shares outstanding during the period.
The number of shares related to options, warrants, restricted stock, convertible debt and similar instruments included in diluted EPS
(“EPS”) is based on the “Treasury Stock Method” prescribed in ASC 260-10, Earnings per Share. This method assumes theoretical
repurchase of shares using proceeds of the respective stock option or warrant exercised, and for restricted stock the amount of
compensation cost attributed to future services which has not yet been recognized and the amount of current and deferred tax benefit,
if any, that would be credited to additional paid in capital upon the vesting of the restricted stock, at a price equal to the issuer’s
average stock price during the related earnings period. Accordingly, the number of shares includable in the calculation of EPS in
respect of the stock options, warrants, restricted stock, convertible debt and similar instruments is dependent on this average stock
price and will increase as the average stock price increases.
Stock Based Compensation —In accordance with ASC 718 Compensation-Stock Compensation, share-based payments to employees,
including grants of restricted stock units, are measured at fair value as of the date of grant and are expensed in the consolidated
statement of income over the service period (generally the vesting period).
Comprehensive Income —“Reporting Comprehensive Income” requires reporting and displaying comprehensive income and its
components. Comprehensive income includes, in addition to net earnings, other items that are reported as direct adjustments to
shareholder’s equity. Currently, the comprehensive income adjustment required for the Company has two components. First is a
foreign currency translation adjustment, the result of consolidating its foreign subsidiary. The second component is a derivative
instrument fair market value adjustment (net of income taxes) related to forward currency contracts designated as a cash flow hedge.
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the
derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods
during which the hedged transaction affects earnings (date of sale). See Note 6 for additional details.
54
Reclassifications —Certain reclassifications have been made to the 2014 and 2013 financial statements to conform to the 2015
presentation.
Business Combinations —The Company accounts for acquisitions in accordance with guidance found in ASC 805, Business
Combinations. The guidance requires consideration given, including contingent consideration, assets acquired and liabilities assumed
to be valued at their fair market values at the acquisition date. The guidance further provides that: (1) in-process research and
development will be recorded at fair value as an indefinite-lived intangible asset; (2) acquisition costs will generally be expensed as
incurred, (3) restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date;
and (4) changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect
income tax expense.
ASC 805 requires that any excess of purchase price over fair value of assets acquired, including identifiable intangibles and liabilities
assumed be recognized as goodwill. In accordance with ASC 805, any excess of fair value of acquired net assets, including
identifiable intangibles assets, over the acquisition consideration results in a bargain purchase gain. Prior to recording a gain, the
acquiring entity must reassess whether all acquired assets and assumed liabilities have been identified and recognized and perform re-
measurements to verify that the consideration paid, assets acquired and liabilities assumed have been properly valued.
55
Note 4. Earnings per Common Share
Basic net earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for
the period. Diluted earnings per share reflects the potential dilution of restricted stock units. Details of the calculations are as follows:
2015
2014
2013
Net (loss) income attributable to shareholders of Manitex
International, Inc.
$
Net (loss) income from continuing operations
Less: (Income) loss attributable to noncontrolling interest
(3,984) $
(48)
8,102 $
136
11,302
—
Net (loss) income from continuing operations
attributable to shareholders of Manitex International,
Inc.
Income (loss) from operations of discontinued operations,
net of income taxes
(Loss) on sale of discontinued operations , net of income
tax benefit
Net (loss) income attributable to shareholders of
Manitex International, Inc.
(4,032)
8,238
11,302
38
(1,135 )
(1,124)
(1,378)
—
—
$
(5,372) $
7,103 $
10,178
(Loss) earnings per share
Basic
(Loss) earnings from continuing operations attributable
to shareholders' of Manitex International, Inc.
(Loss) from operations of discontinued operations
attributable to shareholders of Manitex International,
Inc., net of tax
(Loss) on sale of discontinued operations attributable to
shareholders of Manitex International, Inc., net of tax $
(Loss) earnings attributable to shareholders of Manitex
International, Inc.
$
$
$
Diluted
(Loss) earnings from continuing operations attributable
to shareholders of Manitex International, Inc.
(Loss) from operations of discontinued operations
attributable to shareholders of Manitex International,
Inc., net of tax
(Loss) on sale of discontinued operations attributable to
shareholders of Manitex International, Inc., net of tax $
(Loss) earnings attributable to shareholders of Manitex
International, Inc.
$
$
$
(0.25) $
0.59 $
0.89
— $
(0.08 ) $
(0.09)
(0.09) $
— $
—
(0.34) $
0.51 $
0.80
(0.25) $
0.59 $
0.89
— $
(0.08 ) $
(0.09)
(0.09) $
— $
—
(0.34) $
0.51 $
0.80
Weighted average common shares outstanding
Basic
Diluted
Basic
Dilutive effect of warrants
Dilutive effect of restricted stock units
15,970,074 13,858,189 12,671,205
15,970,074 13,858,189 12,671,205
—
46,370
15,970,074 13,904,289 12,717,575
—
46,100
—
—
There are 118,773 restricted stock units which are anti-dilutive and therefore are not included in the average number of diluted shares
shown above for the year ended December 31, 2015.
Note 5. Fair Value Measurements
The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis
as of December 31, 2015 and 2014 by level within the fair value hierarchy. As required by ASC 820-10, financial assets and liabilities
are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
56
The following is a summary of items that the Company measures at fair value on a recurring basis:
Assets:
Forward currency exchange contracts
Total current assets at fair value
Liabilities:
Forward currency exchange contracts
Interest rate swap contracts
PM contingent liabilities
Convertible debt- Perella ( See Note 13) (nonrecurring)
Valla contingent consideration
Total liabilities at fair value
Assets:
Forward currency exchange contracts
Total current assets at fair value
Liabilities:
Forward currency exchange contracts
Convertible debt- Terex ( See Note 13) (nonrecurring)
Valla contingent consideration
Total liabilities at fair value
Fair Value at December 31, 2015
Level 1
Level 2
Level 3
Total
— $
— $
— $
—
—
—
—
— $
600 $
600 $
— $
— $
600
600
74 $
1,177
—
14,286
—
15,537 $
— $
—
1,187
—
199
1,386 $
74
1,177
1,187
14,286
199
16,923
Fair Value at December 31, 2014
Level 1
Level 2
Level 3
Total
— $
— $
— $
—
—
— $
268 $
268 $
29 $
6,607
—
6,636 $
— $
— $
— $
—
204
204 $
268
268
29
6,607
204
6,840
$
$
$
$
$
$
$
$
The carrying value of the amounts reported in the Consolidated Balance Sheets for cash, accounts receivable, accounts payable and
short-term variable debt, including any amounts outstanding under the Company’s revolving credit facilities and working capital
borrowing, approximate fair value due to the short periods during which these amounts are outstanding.
The book and fair value of the Company’s term debt was $79,912 and $79,912 for the year ended December 31, 2015, and $42,266
and $42,074 for the year ending December 31, 2014. The book and fair value of the Company’s capital leases was $6,854 and $9,214
for the year ended December 31, 2015 and $4,341 and $4,960 for the year ending December 31, 2014. There is no difference between
the book value and the fair value for amount recorded in connection with a long-term legal settlement, which was $960 and $1,007 for
the periods ending December 31, 2015 and 2014, respectively.
Fair Value Measurements
ASC 820-10 classifies the inputs used to measure fair value into the following hierarchy:
Level 1
- Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets
or liabilities;
Level 2
- Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for
substantially the full term of the asset or liability; and
Level 3
- Prices or valuation techniques that require inputs that are both significant to the fair value measurement and
unobservable (i.e., supported by little or no market activity)
Fair value of the forward currency contracts are determined on the last day of each reporting period using observable inputs, which are
supplied to the Company by the foreign currency trading operation of its bank and are Level 2 items.
57
Note 6. Derivative Financial Instruments
ASC 815-10 requires enhanced disclosures regarding an entity’s derivative and hedging activities as provided below.
The Company’s risk management objective is to use the most efficient and effective methods available to us to minimize, eliminate,
reduce or transfer the risks which are associated with fluctuation of exchange rates between the Canadian and U.S. dollar and the Euro
and the U.S. dollar.
When the Company’s Canadian subsidiary receives a significant new U.S. dollar order, management will evaluate different options
that may be available to mitigate future currency exchange risks. The decision to hedge future sales is not automatic and is decided
case by case. The Company will only use hedge instruments to hedge firm existing sales orders and not estimated exposure, when
management determines that exchange risks exceeds desired risk tolerance levels. The forward currency contracts used to hedge
future sales are designated as cash flow hedges under ASC 815-10 provided certain criteria are met.
The Company enters into forward currency exchange contracts to the extent possible in relationship such that the exchange gains and
losses on the assets and liabilities denominated in other than the reporting units’ functional currency would be offset by the changes in
the market value of the forward currency exchange contracts it holds. The forward currency exchange contracts that the Company has
to offset existing assets and liabilities denominated in other than the reporting units’ functional currency have been determined not to
be considered a hedge under ASC 815-10. Items denominated in other than a reporting units functional currency includes U.S.
denominated accounts receivables and accounts payable held by our Canadian subsidiary and certain intercompany receivables and
payables between foreign subsidiaries and the Company, one of the Company’s other subsidiaries or subsidiary of the PM Group.
As required, forward currency contracts are recognized as an asset or liability at fair value on the Company’s Consolidated Balance
Sheet. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the
derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods
during which the hedged transaction affects earnings (date of sale). Gains or losses on cash flow hedges when recognized into income
are included in net revenues. Gains and losses on the derivative instruments representing either hedge ineffectiveness or hedge
components excluded from the assessment of effectiveness are recognized in current earnings. The Company expects minimal
ineffectiveness as the Company has hedged only firm sales orders and has not hedged estimated exposures. As of December 31, 2015,
the Company had no outstanding forward currency contracts that were in place to hedge future sales. Therefore, there are currently no
unrealized pre-tax gains or loss which will reclassified from other comprehensive income into earnings during the next 12 months.
For instruments not qualifying as cash flow hedges under ASC 815—10, the Company records at the balance sheet date the forward
currency exchange contracts at its market value with any associated gain or loss being recorded in current earnings. Both realized and
unrealized gains and losses related to forward currency contracts are included in current earnings and are reflected in the Statement of
Income in the other income expense section on the line titled foreign currency transaction gains (losses).
At December 31, 2015, the Company had entered into forward currency exchange contracts. The contracts obligate the Company to
purchase CDN $5,602. The contracts mature between March 3, 2016 and March 31, 2016. Under the contract, the Company will
purchase Canadian dollars at exchange rates between .7211 and .7516. The Canadian to US dollar exchange rates was $.7225 at
December 31, 2015. At December 31, 2015, the Company had forward currency contracts to sell Euros. The contracts obligate the
Company to sell €1,300 in total. The contracts, which are in various amounts, mature between February 10, 2016 and July 1, 2016.
Under the contracts, the Company will sell Euros at exchange rates between $1.1419 and $1.4307. The Euro to US dollar exchange
rate was 1.0859 at December 31, 2015. The unrealized currency exchange asset is reported under prepaid expense and other if it is an
asset or under accrued expenses if it is a liability on the balance sheet at December 31, 2015 and 2014.
The Company’s PM Group has an intercompany receivable denominated in Euros from its Chilean subsidiary. At December 31, 2015,
the Company has entered into two forward contracts that mature on January 6, 2016. The purpose of which is to mitigate the income
effect related to this intercompany receivable that results with a change in exchange rate between the Euro and the Chilean peso. The
first contract obligates the Company to purchase €2,600 at $1.148. The second contract obliges the Company to sell 1,840,000 Chilean
pesos at an exchange rate of 616.4567 per U.S. dollar. These two contracts achieve the desired purpose as U.S. dollar amounts
involved in the two forward contracts offset each other.
Interest Rate Swap Contracts
The Company uses financial instruments available on the market, including derivatives, solely to minimize its cost of borrowing and
hedge the risk of interest rate and exchange rate fluctuation. In January 2009, prior to the January 15, 2015 acquisition date, PM Group
entered into the following contracts in order to hedge the interest rate risk related to its term loans with two financial institutions:
58
A contract signed by PM Group, for an original notional amount of € 20,000 (€ 20,000 at December 31, 2015, maturing on
February 3, 2017 with interest payable every February 3 and August 3 each year. PM Group pays interest at a rate of 3.48% and
receives from the counterparties interest at the Euro Interbank Offered Rate (“Euribor”) for the period in question.
A contract signed by PM Group, for an original notional amount of € 8,496 (€ 739 at December 31, 2015), maturing on January 29,
2016 with interest payable every January 30 and July 30 each year. PM Group pays interest at a rate of 2.99% and receives from the
counterparties interest at the Euribor rate for the period in question.
As of December 31, 2015, the Company had the following forward currency contracts and interest rate swaps:
Nature of Derivative
Forward currency purchase
contract
Forward currency sales
contracts
Forward currency purchase
contract
Forward currency sales
contracts
Interest rate swap contracts
Currency
Amount
Type
Canadian dollar
5,602 Not designated as hedge instrument
Euro
Euro
1,300 Not designated as hedge instrument
2,600 Not designated as hedge instrument
Chilean peso
Euro
1,840,000 Not designated as hedge instrument
20,739 Not designated as hedge instrument
The following table provides the location and fair value amounts of derivative instruments that are reported in the Consolidated
Balance Sheet as of December 31, 2015 and 2014:
Total derivatives not designated as a hedge instrument
Fair Value
Asset Derivatives
Foreign currency Exchange Contract
Liabilities Derivatives
Foreign currency Exchange Contract
Interest rate swap contracts
Total derivative liabilities
Balance Sheet Location
Prepaid expense and other $
December 31,
2015
December 31,
2014
600 $
268
Accrued expense
Notes payable
$
$
74 $
1,177
1,251 $
29
—
29
The following tables provide the effect of derivative instruments on the Consolidated Statement of Income for 2015, 2014 and 2013:
Derivatives not designated as Hedge Instrument
Forward currency contracts
Interest rate swap contracts
Total derivatives (loss) gain
Derivatives designated as Hedge Instrument
Location of gain or (loss)
recognized
in Income Statement
Foreign currency
transaction gains (losses) $
$
Interest expense
$
Location of gain or (loss)
recognized
in Income Statement
2015
Gain or (loss)
2014
2013
(35 ) $
(56 )
(91 ) $ 110
110 $
—
$
(178)
—
(178)
2015
Gain or (loss)
2014
2013
Forward currency contracts
Net revenue
$
— $
(26 ) $
(30)
59
The following table shows the beginning and ending amounts of gains and losses related to hedges which have been included in Other
Comprehensive Income and related activity net of income taxes for December 31, 2015 and 2014:
Beginning balance (loss), net of income taxes
Amounts recorded in OCI net of (loss), net of income taxes
Amount reclassified to income, loss (gain), net of income
taxes
Ending balance gain (loss), net of income taxes
$
$
— $
—
—
— $
(7 )
(11 )
18
—
December 31,
2015
December 31,
2014
Note 7. Inventory
The components of inventory at December 31, are summarized as follows:
Raw materials and purchased parts
Work in process
Finished goods and replacement parts
Inventories, net
2015
2014
$
$
85,048 $
9,657 $
24,564 $
119,269 $
59,283
7,861
23,601
90,745
The Company has established reserves for obsolete and excess inventory of $1,724 and $726 as of December 31, 2015 and 2014,
respectively.
Note 8. Property, Plant and Equipment
Property, plant and equipment consist of the following:
Land
Buildings
Machinery and equipment
Furniture and fixtures
Leasehold improvements
Computer software & equipment
Motor vehicles
Construction in progress
Totals
Less: accumulated depreciation
Net property and equipment
2015
2014
$
$
4,458 $
22,063
21,027
661
1,834
1,398
701
288
52,430
(10,445)
41,985 $
989
14,720
14,743
669
1,895
1,414
629
40
35,099
(9,311 )
25,788
Depreciation expense was $5,055 (net of $281 amortization of deferred gain on building), $1,555 (net of $380 amortization of
deferred gain on building), and $1,339 (net of $380 amortization of deferred gain on building) in 2015, 2014 and 2013, respectively.
See Note 12 for information regarding capital leases.
Note 9. Goodwill and Other Intangible Assets
The Company accounts for Other Intangible Assets under the guidance in ASC 350, Intangibles—Goodwill and Other. Under the
guidance intangible assets with definite lives are amortized over their estimated useful lives. Indefinite lived intangible assets are
subject to annual impairment testing. The Company capitalizes certain costs related to patent technology. Additionally, a substantial
portion of the purchase price related to the Company’s acquisitions has been assigned to patents or unpatented technology, trade name,
customer backlog and customer relationships. The intangibles acquired in acquisitions have been valued using a discounted cash flow
approach. Intangibles, except goodwill, are being amortized over their estimated useful lives.
60
Intangible assets were comprised of the following as of December 31, 2015 and 2014:
2015
2014
Patented and unpatented technology
Amortization
Customer relationships
Amortization
Trade names and trademarks
Amortization
Non-competition agreements
Amortization
Customer backlog
Amortization
Total Intangible assets
$
$
29,277 $
(12,631)
43,172
(8,545)
21,625
(2,281)
50
(38)
453
(453)
70,629 $
20,891
(9,802 )
31,477
(5,013 )
15,455
(1,783 )
50
(24 )
462
(462 )
51,251
Useful Lives
7-10 years
5-20 years
25 years -
Indefinite
2-5 years
< 1 year
Amortization expense was $7,027, $2,633 and $2,234 for the periods ended December 31, 2015, 2014 and 2013, respectively.
Estimated amortization expense for the next five years and subsequent is as follows:
2016
2017
2018
2019
2020
And subsequent
Total intangibles currently to be amortized
$
Changes in the Company’s goodwill by business segment were as follows:
Amount
5,877
5,343
5,223
5,013
4,972
35,124
61,552
Balance December 31, 2013
Goodwill for ASV acquisition
Effect of change in exchange rates
Balance December 31, 2014
Goodwill for PM Group Acquisition
Effects of change in exchange rate
Balance December 31, 2015
Equipment
Lifting
Segment
Equipment
Distribution
Segment
ASV
Segment
$
$
$
22,214 $
—
(402)
21,812 $
30,173
(2,750)
49,235 $
275
—
—
275
—
—
275
$
$
$
— $
30,579
—
30,579 $
—
—
30,579 $
Total
22,489
30,579
(402)
52,666
30,173
(2,750)
80,089
61
Note 10. Accounts Payable and Accrual Detail
$
$
$
Accounts payable:
Trade
Bank overdraft
Total accounts payable
Accrued expenses:
Accrued payroll
Accrued employee benefits
Accrued bonuses
Accrued vacation expense
Accrued consulting fees
Accrued interest
Accrued commissions
Accrued expenses—other
Accrued warranty
Accrued income taxes
Accrued taxes other than income taxes
Accrued product liability and workers compensation claims
Accrued liability on forward currency exchange contracts
Total accrued expenses
$
As of December 31,
2015
2014
60,339
1,798
62,137
2,443 $
1,053
916
1,717
—
315
602
3,536
3,564
815
3,634
2,384
74
21,053 $
33,774
339
34,113
2,691
433
1,132
1,309
223
375
497
1,110
3,198
151
953
3,871
30
15,973
Note 11. Revolving Term Credit Facilities and Debt
The Company together with its U.S. and Canadian subsidiaries has a credit agreement as amended (“Credit Agreement”) with
Comerica Bank (“Comerica”) and another lender, who are participants under the credit agreement. The Credit Agreement provides
the Company with (a) a Senior Secured Revolving Credit Facility to the U.S. Borrowers (“U.S. Revolver”), (b) a Secured Term Loan
to the U.S. Borrowers (“Term Loan”) and (c) Senior Secured Revolving Credit Facility to the Canadian Borrower (“Canadian
Revolver”). The two aforementioned credit facilities each mature on August 19, 2018.
The Company is also required to comply with certain financial covenants as defined in the Credit Agreement including maintaining
(1) a Consolidated Fixed Charge Coverage Ratio of not less than 0.65 to 1.00 at December 31, 2015, 1.00 to 1.00 at March 31, 2016
and 1.20 to 1.00 at June 30, 2016 and each quarter thereafter, (2) a Maximum Senior Secured First Lien North American Debt to
Consolidated North American EBITDA Ratio of not more than 7.50 to 1.00 at December 31, 2015, 10.00 to 1.00 at March 31, 2016
and 2.75 at June 30, 2016 and each quarter thereafter, and (3) a Maximum Consolidated North American Total Debt to Consolidated
North American EBITDA Ratio of not more than 11.50 to 1.00 at December 31, 2015, 15.00 to 1.00 at March 31, 2016 and 3.75 to
1.00 at June 30, 2016 and each quarter thereafter.
The indebtedness is collateralized by substantially all of the Company’s assets, except for the assets of the ASV and PM as well as the
Company’s equity interest in these two Companies. The facility contains customary limitations including, but not limited to,
limitations on acquisitions, dividends, repurchase of the Company’s stock and capital expenditures.
U.S. Revolver
At December 31, 2015 the Company had drawn $26,500 under the $35,000 U.S. Revolver. The U.S. Revolver bears interest, at the
Company’s option at the base rate plus a spread or an adjusted LIBOR rate plus a spread. The base rate is the greater of the bank’s
prime rate, the federal funds rate plus 1.00% or the 30 day LIBOR rate Adjusted Daily plus 1.00%. For the U.S. Revolver the interest
rate spread for Base Rate is between 1.75% and 3.0% and for LIBOR the spread is between 2.75% and 4.0% in each case with the
spread being based on the consolidated total debt to consolidated adjusted EBITDA ratio, as defined in the Credit Agreement, for the
preceding twelve months. The base rate and LIBOR spread is currently 3.0% and 4.0%, respectively. Funds borrowed under the
LIBOR options can be borrowed for periods of one, two, three or six months.
The $35,000 U.S. Revolver is a secured financing facility under which borrowing availability is limited to existing collateral as
defined in the agreement. The maximum amount available is limited to (1) the sum of 85% of eligible receivables, (2) the lesser of
85% of eligible bill and hold receivables or $10,000, (3) the lesser of 50% of eligible inventory or $26,500, (43) the lesser of 80% of
62
used equipment purchased for resale or rent or $2,000 reduced by (5) outstanding standby letter or credits issued by the bank. At
December 31, 2015, the maximum the Company could borrow based on available collateral was capped at $32,473.
Under the Credit Agreement, the banks are also paid an annual facility fee between 0.375% and 0.50% payable in quarterly
installments.
The agreement permits the Company to issue unsecured guarantees of indebtedness owed by CVS Ferrari, srl to foreign banks in
respect to working capital financing, not to exceed the lesser of $9,000 or the amount of such financing. Additionally the agreement
allows the Company to make or allow to remain outstanding any investment (whether such investment shall be of the character of
investment of shares of stock, evidence of indebtedness or other securities or otherwise) in, or any loans or advances to CVS or to any
other wholly-owned foreign subsidiary in an amount not to exceed $7,500.
Term Loan
On January 9, 2015, the Company borrowed the entire $14,000 under the Term Loan, the principal amount of which will be repaid in
quarterly installments of $500,000 due on January 1, April 1, July 1, and October 1 each year. For the Term Loan the interest rate
spread for Base Rate is between 2.75% and 5.00% and for LIBOR the spread is between 3.75% and 6.00% in each case with the
spread being based on the Consolidated North American Total Debt to Consolidated North American EBITDA ratio. At December
31, 2015, the entire loan balance was being charged interest at the base interest rate plus a spread of 4.5%.
The Company has made prepayments against the note and has reduced the balance outstanding at December 31, 2015 to $2,200. The
payment due on January 1 has been paid in advance as such the next required payment is due on April 1, 2016
Canadian Revolver
At December 31, 2015 the Company had drawn $7,225 under the Canadian Revolver. The Company is eligible to borrow up to
$12,000. The maximum amount available is limited to the sum of (1) 90% of eligible insured receivables, (2) 85% of eligible
receivables plus (3) the lesser of (i) 50% of eligible inventory including work in process inventory up to CDN$3,000 and (ii) CDN
$10,500. At December 31, 2015, the maximum the Company could borrow based on available collateral was $9,415. The
indebtedness is collateralized by substantially all of Manitex Liftking ULC’s assets. The Company can borrow in either U.S. or
Canadian dollars. The Company can borrow in either U.S. or Canadian dollars. For the Canadian Revolver, the interest rate spread for
U.S. prime based borrowing is between 1.75% and 3.00% and for Canadian prime based borrowings the interest rate spread is between
2.75% and 4.00%, in each case with the spread being based on the Consolidated North American Total Debt to Consolidated North
American EBITDA, as defined in the Credit Agreement, for the preceding twelve months. Alternately, the Company can elect to
borrow Canadian funds and choose to pay interest on based on the Canadian Bankers’ Acceptance Rate plus a spread. The loan
interest rate spread for Bankers’ Acceptance Rate is between 2.75% and 4.0%. As of December 31, 2015 the spread on the U.S.
Prime based borrowing was 3.0%, Canadian Prime based borrowings was 4.0% and the Canadian’s Banker Acceptance borrowing
was 4.0%.
Under the Credit Agreement, the banks are also paid 0.50% annual facility fee payable in quarterly installments.
Specialized Export Facility
The Canadian Revolving Credit facility contains an additional $3,000 Specialized Export Facility that matures on July 1, 2016.
Borrowings under the Specialized Export Facility are guaranteed by the Company and Export Development Canada (“EDC”), a
corporation established by an Act of Parliament of Canada. Under the Export Facility Liftking can borrow 90% of the total cost of
material and labor incurred on export contracts which are subject to the EDC guarantee. The EDC guarantee, which expires on July 1,
2016, is issued under their export guarantee program and covers certain goods that are to be exported from Canada. At December 31,
2015, the maximum the Company could have borrowed based upon available collateral under the Specialized Export Facility was
$3,000. Under this facility, the Company can borrow either Canadian or U.S. dollars.
Any borrowings under the facility in Canadian dollars currently bear interest of 3.2.% which is based on the Canadian prime rate (the
Canadian prime was 2.7% at December 31, 2015). Any borrowings under the facility in U.S. dollars bear interest at the U.S. prime
rate (prime was 3.5% at December 31, 2015). Repayment of advances made under the Export Facility are due sixty days after
shipment of the goods, or five business days after the borrower receives payment in full for the goods covered by the guarantee (the
“Scheduled Payment Date”) or upon the termination of the EDC guarantee.
At December 31, 2015, the Company had outstanding borrowing in connection with the Specialized Export Facility of $1,795.
63
Note Payables—Terex
Related to Crane and Schaeff Acquisitions
At December 31, 2015, the Company has a note payable to Terex Corporation with a remaining balance of $250. The note was issued
in connection with the purchase of substantially all of the domestic assets of Crane & Machinery, Inc. (“Crane”) and Schaeff Lift
Truck, Inc., (“Schaeff”). The note has an annual interest rate of 6% and is payable quarterly. Terex has been granted a lien on and a
subordinated security interest in all of the assets of the Company’s Crane & Machinery Division as security against the payment of the
note.
The Company has one remaining principal payments of $250 due on March 1, 2016. As long as the Company’s common stock is
listed for trading on the NASDAQ or another national stock exchange, the Company may opt to the pay up to $150 of each annual
principal payment in shares of the Company’s common stock having a market value of $150.
Related to ASV Acquisition
On December 19, 2014, the Company executed a note payable to Terex Corporation for $1,594. The note matures on December 19,
2016 and has an annual interest rate of 4.5%. Interest is payable semi-annually beginning on June 19, 2015. The note was issued in
connection with acquisition of 51% interest in ASV from Terex Corporation. The note has an outstanding balance of $1,594 at
December 31, 2015.
Columbia Notes
In connection with Columbia acquisition the Company issued two notes. At date of issuance, the notes had face amounts of $450
(“Inventory Note”) and $390 (“Equipment Note”), respectively and both are non-interest bearing. The Inventory Note matures on
August 31, 2016 and requires the Company to make 18 monthly installment payments of $25. The Equipment Note matures on
May 31, 2016 and requires the Company to make 14 monthly installment payments of $25 and a final payment of $40 on May 31,
2016.
On March 12, 2015, the date of issuance, the fair value of Inventory Note and the Equipment Note was determined to be $436 and
$378, respectively. The fair value of the notes was calculated to equal the present value of future debt payments discounted at a market
rate of return commensurate with similar debt instruments with comparable levels of risk and marketability. A rate of 4.0% was
determined to be the appropriate rate following an assessment of the risk inherent in the debt issued and the market rate for debt of this
nature using corporate credit ratings. The difference between face amount of the promissory note and its fair value is being amortized
over the life of the note and recorded as interest expense.
At December 31, 2015, the Inventory Note and the Equipment Note had balances of $197 and $138, respectively.
CVS Debt
CVS Short-Term Working Capital Borrowings
At December 31, 2015, CVS had established demand credit facilities with twelve Italian banks. Under the facilities, CVS can borrow
up to €375 ($407) on an unsecured basis and additional amounts as advances against orders, invoices and letter of credit with a total
maximum facilities (including the unsecured portion) of €18,562 ($20,156). The Company has granted guarantees in respect to
available credit facilities in the amount of €588 ($638). The maximum amount outstanding is limited to 80% of the assigned accounts
receivable if there is an invoice issued or 50% if there is an order/contract issued. The banks will evaluate each request to borrow
individually and determine the allowable advance percentage and interest rate. In making its determination the bank considers the
customer’s credit and location of the customer.
At December 31, 2015, the banks had advanced CVS €3,629 ($3,941) at variable interest rates which currently range from 2.25% to
6.5%.
At December 31, 2015, the Company has guaranteed €429 ($466) of CVS’s outstanding debt.
Notes Payable
At December 31, 2015, CVS has a €750 ($814) note payable to a bank. The note dated March 27, 2015 had an original principal
amount of €1,000 ($1,116) and an annual interest rate of EURIBOR 3 month plus 140 basis points. Under the terms of the note CVS is
required to make twelve quarterly principal and interest payments beginning on June 30, 2015 through March 31, 2018. The Company
does not guarantee any of the borrowing.
64
At December 31, 2015, CVS has a €2,363 ($2,566) note payable to a bank. The note dated March 4, 2015 had an original principal
amount of €2,363 ($2,566) and an annual interest rate of 0.50% on €2,127 ($2,309) and 3.65% on the balance of €236 ($256). Under
the terms of the note CVS is required to make sixteen semi-annual principal payments beginning on December 31, 2016 thru June 30,
2024. CVS is also required to make nineteen semi-annual interest payments beginning on June 30, 2015 through June 30, 2024. The
Company is guaranteeing €236 ($256) of the borrowing.
At December 31, 2015, CVS has a €1.000 ($1.085) note payable to a bank. The note dated October 20, 2015 had an original principal
amount of €1.000 ($1.085) and an annual interest rate of 1.850%. Under the terms of the note CVS is required to make twelve
quarterly principal and interest payments beginning on January 20, 2016, through October 20, 2018. The Company does not guarantee
any of the borrowing.
Acquisition note—Valla
In connection with the acquisition of Valla, the Company executed a note payable. At December 31, 2015, the note a balance of $86
and is payable on December 31, 2016.
ASV Loan Facilities
In connection with the ASV arrangement, ASV entered into two separate loan facilities on December 19, 2014, one with JPMorgan
Chase Bank, N.A. (“JPMCB”), and the other with Garrison Loan Agency Services LLC (“Garrison”). These two facilities are for the
exclusive use of ASV and restrict the transfer of cash out side of ASV.
Both loan facilities are secured by certain assets of ASV and by a pledge of the equity interest in ASV. Pursuant to an intercreditor
agreement dated as of December 19, 2014 among JPMCB, Garrison and ASV (“ASV Intercreditor Agreement”), the parties have
agreed that (i) JPMCB shall have a first-priority security interest in substantially all personal property of ASV and (ii) Garrison shall
have a first priority security interest in (a) substantially all real property of ASV and (b) a pledge of 100% of the equity interest in
ASV issued to Company and to Terex. ASV’s loans are solely obligations of ASV and have not been guaranteed by the Company and
are not collateralized by any assets outside of ASV.
ASV Revolving Loan Facility with JPMCB
On December 19, 2014 ASV entered into a $35,000 revolving loan facility with JPMCB (“JPMCB Credit Agreement”) as the
administrative agent, which loan facility includes two sub-facilities: (i) a $1,000 sub-facility for letters of credit, and (ii) a $7,500 sub-
facility for loans to be guaranteed by the Export-Import Bank of the United States of America (“Ex-Im Bank Loans”). A portion of the
JPMCB Credit Agreement was used to fund certain transaction costs and payments required by ASV under the ASV arrangement. The
remainder of the loan amount will be available to ASV for its general working capital needs.
The $35,000 revolving loan facility is a secured financing facility under which borrowing availability is limited to existing collateral
as defined in the agreement. The maximum amount available is limited to (1) the sum of 85% of eligible receivables, plus (2) the
lesser of (i) 65% of eligible inventory valued at the lower of cost or market value or (ii) 85% of eligible inventory valued at the net
orderly liquidation value, reduced by (3) (i) certain reserves determined by JPMCB, (ii) the amount of outstanding standby letters of
credit issued under the JPMCB Credit Agreement and (iii) the amount of outstanding Ex-In Bank loans. The facility matures on
December 19, 2019. At December 31, 2015, ASV had drawn $12,372 under the $35,000 JPMCB Credit Agreement. The JPMCB
Credit Agreement bears interest at ASV’s option at JPMCB’ prime rate plus a spread or an adjusted LIBOR rate plus a spread. The
interest rate spread for prime rate is between 0.50% and 1.00% and for LIBOR the spread is between 1.50% and 2.00% in each case
with the spread being based on the aggregate amount of funds available for borrowing by ASV under the JPMCB Credit Agreement,
as defined in the JPMCB Credit Agreement. The base rate and LIBOR spread is currently 1.0% and 2.00%, respectively. Funds
borrowed under the LIBOR options can be borrowed for periods of one, two, three or six months. At December 31, 2015 the
maximum ASV could borrow based on available collateral was capped at $19,669.
The indebtedness of ASV under the JPMCB Credit Agreement is collateralized by substantially all of ASV’s assets, but subject to the
terms of the ASV Intercreditor Agreement. The facility contains customary limitations including, but not limited to, limitations on
additional indebtedness, acquisitions, and payment of dividends. ASV is also required to comply with certain financial covenants as
defined in the JPMCB Credit Agreement including maintaining a Minimum Fixed Charge Coverage ratio of not less than 1.10 to 1.0.
Under the JPMCB Credit Agreement, the banks are also paid a commitment fee payable in monthly installments equal to (i) the
average daily amount of funds available but undrawn multiplied by (ii) an annual rate of 0.25%.
65
ASV Term Loan with Garrison
On December 19, 2014 ASV entered into a $40,000 term loan facility with Garrison (“Garrison Credit Agreement”) as the
administrative agent. A portion of the Garrison Credit Agreement was used to fund certain transaction costs and payments required by
ASV under the ASV arrangement.
At December 31, 2015, ASV had an outstanding balance of $38,000. The Garrison Credit Agreement bears interest, at a one-month
adjusted LIBOR rate plus a spread of between 9.00% and 9.50%. The spread is based on the ratio of ASV’s total debt to its EBITDA,
as defined in the Garrison Credit Agreement. The LIBOR spread is currently 9.5%. The interest rate for the period ending
December 31, 2014 was 10.5%.
ASV is obligated to make quarterly principal payments of $500. Any unpaid principal is due on maturity, which is December 19,
2019. Interest is payable monthly.
The indebtedness of ASV under the Garrison Credit Agreement is collateralized by substantially all of ASV assets, but subject to the
terms of the ASV Intercreditor Agreement. The facility contains customary limitations including, but not limited to, limitations on
additional indebtedness, acquisitions, and payment of dividends. ASV is also required to comply with certain financial covenants as
defined in the Garrison Credit Agreement including maintaining (1) a Minimum Fixed Charge Coverage ratio of not less than 1.10 to
1.0 which shall step up to 1.50 to 1.00 by March 31, 2017, (2) a Leverage Ratio of 4.75 to 1.00, which shall step down to 2.50 to 1.00
by March 31, 2018 and (3) a limitation of $1,600 in capital expenditures in any fiscal year.
PM Group Short-Term Working Capital Borrowings
At December 31, 2015, PM Group had established demand credit and overdraft facilities with seven Italian banks and seven banks in
South America. Under the facilities, PM Group can borrow up to approximately €25,501 ($27,692) for advances against invoices, and
letter of credit and bank overdrafts. Interest on the Italian working capital facilities is charged at the 3-month or 6-month Euribor plus
200 basis points, while interest on overdraft facilities is charged at the 3 month Euribor plus 350 basis points. Interest on the South
American facilities is charged at a flat rate of points for advances on invoices ranging from 8% - 20%.
At December 31, 2015, the Italian banks had advanced PM Group €14,670 ($15,951), at variable interest rates, which currently range
from 1.87% to 1.96%. At December 31, 2015, the South American banks had advanced PM Group €156 ($170). Total short-term
borrowings for PM Group were €14,846 ($16,121) at December 31, 2015.
PM Group Term Loans
At December 31, 2015, PM Group has a €13,766 ($14,948) term loan with two Italian banks, BPER and Unicredit. The term loan is
split into three separate notes and is secured by PM Group’s common stock.
The first note has an outstanding principal balance of €3,901 ($4,236), is charged interest at the 6-month Euribor plus 236 basis points,
effective rate of 2.41% at December 31, 2015. The note is payable in semi-annual installments beginning June 2017 and ending
December 2021. The second note has an outstanding principal balance of €4,865 ($5,283), is charged interest at the 6-month Euribor
plus 286 basis points, effective rate of 2.91% at December 31, 2015. The note is payable in semi-annual installments beginning June
2017 and ending December 2021. The third note has an outstanding principal balance of €5,000 ($5,429) and is non-interest bearing.
The note is payable in two semi-annual installments beginning June 2016 and ending December 2017 and a final balloon payment in
December 2022. Accrued deferred interest on these notes through the date of acquisition at January 15, 2015, totaled €4,857 ($5,274)
and is payable in semi-annual installments beginning June 2015 and ending December 2016. At December 31, 2015, the remaining
deferred interest was €1,481 ($1,608) as the original amount was reduced when the payments of the installments were made.
An adjustment in the purchase accounting to value the non-interest bearing debt at its fair market value was made. At January 15,
2015 it was determined that the fair value of the debt was €1,460 or $1,585 less than the book value. This reduction is not reflected in
the above descriptions of PM debt. This discount is being amortized over the life of the debt and being charged to interest expense. As
of December 31, 2015 the remaining balance was €1,062 or $1,153 and is an offset to the debt shown above.
PM Group is subject to certain financial covenants as defined by the debt restructuring agreement with BPER and Unicredit including
maintaining (1) Net debt to EBITDA, (2) Net Debt to equity, and (3) EBITDA to net financial charges ratios. The covenants are
measured on a semi-annual basis.
66
At December 31, 2015 PM Group has unsecured borrowings with five Italian banks totaling €13,404 ($14,555). Interest on the
unsecured notes is charged at the 3-month Euribor plus 250 basis points, effective rate of 2.46% at December 31, 2015. Principal
payments are due on a semi-annual basis beginning June 2019 and ending December 2021. Accrued interest on these borrowings
through the date of acquisition at January 15, 2015, totaled €358 ($389) and is payable in semi-annual installments beginning June
2019 and ending December 2019.
Autogru PM RO, a subsidiary of PM Group, fully repaid the former note payable and entered into two new note payables in October
2015 totaling €947 ($1,028). The first note is payable in 60 monthly principal installments of €8 ($9), plus interest at the 1-month
Euribor plus 300 basis points, effective rate of 3.00% at December 31, 2015, maturing October 2020. At December 31, 2015, the
outstanding principal balance of the note was €490 ($532). The second new note is payable in one instalment in October 2016 is
charged interest at the 1-month Euribor plus 250 basis points, effective rate of 2.50% at December 31, 2015. At December 31, 2015,
the outstanding principal balance of the note was €440 ($478).
PM has interest rates swaps with a fair market value at December 31, 2015 of €1,084 or $1,177 which has been included in notes
payable.
Schedule of Debt Maturities
Scheduled annual maturities of the principal portion of debt outstanding at December 31, 2015 in the next five years and the remaining
maturity in aggregate are summarized below. Amounts shown include the debt described above in this footnote and the convertible
notes disclosed in Note 13—Convertible Notes at their face amount of $22,500.
2016
2017
2018
2019
2020
Thereafter
$
North
American
except ASV
5,475 $
700
33,726
—
6,737
15,738
62,376
ASV
1,500 $
2,000
2,000
44,872
—
—
50,372
Italy
25,143 $
3,671
5,758
6,039
5,737
11,272
57,620
Interest rate swaps
Debt discount related to non-interest bearing debt
Debt discounts related to convertible notes
Total
$
62,376 $
50,372 $
57,620 $
Total
32,118
6,371
41,484
50,911
12,474
27,010
170,368
1,177
(1,154)
(1,377)
169,014
Note 12. Leases
Capital leases
Georgetown facility
As of September 1, 2015, the lease for the Georgetown facility was amended and extended. Under the Amendment, the initial
monthly rental decreased from $76 to $62 and the lease term was extended to April 30, 2028. Commencing on September 1, 2016,
and each subsequent September 1 during the term of the lease, rent will increase by 3%. It was determined that the lease is a capital
lease. The present value of the future minimum lease payments (including the annual increase) was determined using a 12.5%
discount rate (the discount rate used to record the original lease which was signed in April 2006). The net present value of minimum
lease payments at September 1, 2015 was determined to be $5,423.
As of September 1, 2015, the remaining capital lease obligation (associated with original lease) was increased by approximately
$3,607 so the capital lease obligation associated Georgetown facility would equal to $5,423. The building value was also increased by
a corresponding amount. Finally, accumulated depreciation related to the building at August 31, 2015 was retired with the offset
going against building.
The lease has been classified as a capital lease. At December 31, 2015, the outstanding capital lease obligation is $5,399.
67
Winona facility
The Company had a five year lease which expired on July 10, 2014 that provides for monthly lease payments of $25 for its Winona,
Minnesota facility. The Company has an option to purchase the facility for $500 by giving notice to the landlord of its intent to
purchase the Facility. The Landlord must receive such notice at least three months prior to end of the Lease term. The Company gave
the Landlord the required notice of its election to purchase the facility. The Company and the Landlord are currently in the process of
finalizing the purchase contract. The purchase of the facility is expected to be completed during 2016. At December 31, 2015, the
Company has outstanding capital lease obligation of $500, the amount of the purchase option.
Equipment
The Company has entered into a lease agreement with a bank pursuant to which the Company is permitted to borrow 100% of the cost
of new equipment and 75% of the cost of used equipment with 60 and 36 months repayment periods, respectively. At the conclusion
of the lease period, for each piece of equipment the Company is required to purchase that piece of leased equipment for one dollar.
The equipment, which is acquired in ordinary course of the Company’s business, is available for sales and rental prior to sale.
Under the lease agreement the Company can elect to exercise an early buyout option at any time, and pay the bank the present value of
the remaining rental payments discounted by a specified Index Rate established at the time of leasing. The early buyout option results
in a prepayment penalty which progressively decreases during the term of the lease. Alternatively, the Company under the like-kind
provisions in the agreement can elect to replace or substitute different equipment in place of equipment subject to the early buyout
without incurring a penalty.
The following is a summary of inventory held for sale which was financed under equipment capital lease agreements:
New equipment
Used equipment
Total
Amount
Borrowed
Repayment
Period
Amount of
Monthly
Payment
Balance
As of
December 31,
2015
$
$
1,166
1,754
2,920
60 $
36
$
22 $
25
47 $
752
126
878
The Company has two additional capital leases. As of December 31, 2015, the capitalized lease obligation in aggregate related to the
three leases was $56.
Future Minimum Lease Payments are:
Operating
Leases
2,024 $
1,440
1,439
683
683
322
6,591
Capital Leases
1,708
1,025
1,025
910
911
7,085
12,664
(5,810 )
6,854
(1,004 )
5,850
$
$
Years
2016
2017
2018
2019
2020
Subsequent
Total Minimum Lease Payments
Less: imputed interest
Present value of minimum lease payment
Less: current portion
Long-term capital lease obligations
$
$
68
Capital Item—as of or for the year ended December 31, 2015
Building—Georgetown, TX
Land & Building—Winona, MN
Other Capitalized leases
Totals
Capital Item—as of or for the year ended December 31, 2014
Building—Georgetown, TX
Land & Building—Winona, MN
Other Capitalized leases
Totals
Cost
Accumulated
Depreciation
Depreciation
Expense
Interest
Expense
4,844 $
1,700
2,240
8,784 $
127 $
367
87
581 $
158 $
56
19
233 $
468
—
71
539
Cost
Accumulated
Depreciation
Depreciation
Expense
Interest
Expense
4,913 $
1,700
197
6,810 $
3,529 $
311
67
3,907 $
35 $
57
28
120 $
307
13
4
324
$
$
$
$
Sales and Leaseback—In accordance with ASC 840-40 Sales- Leaseback Transaction, at December 31, 2015 and 2014, the Company
has deferred gain of $1,288 and $1,268, respectively, related to the sale and leaseback of Georgetown operating facilities and certain
equipment. The deferred gain is being amortized over the life of the leases which reduces depreciation expense $80 annually through
April 2028 and will also increase revenue by $60 for the next five years.
Operating leases
The Company leases its Woodbridge, Ontario facility under an operating lease. Monthly payments under the lease are $30. The lease
expires on November 29, 2019. The Company has an option to renew the lease for an additional five years at a rent which is mutually
agreed. In the event that the parties cannot agree the lease has an arbitration provision. Total rent expense related to this lease was
$368, $431 and $489 for the year ended December 31, 2015, 2014 and 2013, respectively.
The Company leases its 40,000 sq. ft. Bridgeview facility from an entity controlled by Mr. David Langevin, the Company’s Chairman
and CEO. Pursuant to the terms of the lease, the Company makes monthly lease payments of $22. The Company is also responsible
for all the associated operations expenses, including insurance, property taxes, and repairs. The lease will expire on June 30, 2020 and
has a provision for six one year extension periods. The lease contains a rental escalation clause under which annual rent is increased
during the initial lease term by the lesser of the increase in the Consumer Price Increase or 2.0%. Rent for any extension period shall,
however, be the then-market rate for similar industrial buildings within the market area.
The Company has the option to purchase the building by giving the landlord written notice at any time prior to the date that is 180
days prior to the expiration of the lease or any extension period. The landlord can require the Company to purchase the building if a
change of Control Event, as defined in the lease, occurs by giving written notice to the Company at any time prior to the date that is
180 days prior to the expiration of the lease or any extension period. The purchase price, regardless whether the purchase is initiated
by the Company or the landlord, will be the Fair Market Value as of the closing date of said sale. Rent expense for the current and
former Bridgeview facility was $256, $256 and $251 for the years ended December 31, 2015, 2014 and 2013, respectively.
The Company leases its 103,000 sq. ft. facility in Cadeo, Italy from Fratelli Ferrari Realty. The lease which was executed on June 30,
2011 is for six years and provides annual rent of €360 ($392) payable in monthly installments. The Company has an option to renew
the lease for an additional six years at a rent which is mutually agreed.
The Company leases its 11,000 ft. facility in Cadeo Via Emila, Italy from Fratelli Ferrari Realty. The lease which was executed on
September 1st, 2012 is for six years and provides annual rent of €54 ($59) payable in monthly installments. The Company has an
option to renew the lease for an additional six years at a rent which is mutually agreed.
The Company leases its Knox, Indiana facility under two operating leases. The leases which expire on August 19, 2020, currently
provides for monthly rent of $11 and $3, respectively. The leases contain a rental escalation clause under which annual rent is
increased during the lease term by the lesser of the increase in the Consumer Price Increase or 2.0%. The Company is also responsible
for all the associated operations expenses, including insurance, property taxes, and repairs. The Company has an option to extend the
leases for an additional five year period. The Company has the right to purchase the facility at a negotiated price any time during the
lease period. If the parties are unable to agree on purchase price, the purchase price under the terms of the lease will be the average of
two appraisals of the premises performed by independent third-party appraisers, one selected by the landlord and one selected by the
Company. Total rent expense related to the leases was $163, $181 and $73 (from date of acquisition on August 19, 2013 through
December 31, 2013) for the year ended December 31, 2015, 2014 and 2013, respectively.
69
The Company leases its Fort Wayne, Indiana facility under an operating lease. The lease which expires on February 12, 2018,
currently provides for monthly rent of $23. The monthly rent increases to $25 on March 12, 2017. The Company has an option to
extend the lease for two three year periods. The monthly rent remains at $25 until March 12, 2019 at which time a rental escalation
clause becomes effective. The escalation clause provides for a rent increase for the next year and each of the next three years if the
Company elects to exercise its second lease extension. The annual rent increase is the lesser of the increase in the Consumer Price
Increase or 2.0%. The Company is also responsible for all the associated operations expenses, including insurance, property taxes, and
repairs. The Company also has right of first refusal to purchase the facility.
The Company’s Crane and Machinery Division leases a number of boom trucks under an operating lease. The lease is a five year
lease and expires on December 29, 2020. The lease provides for a monthly rental payment of $42. The Company entered into the
lease to provide financing for equipment that was manufactured by our Manitex subsidiary and will be in Crane and Machinery’s
rental fleet. The profit on the sale of boom trucks to the lessor was deferred and is being amortized over 60 months and will reduce
monthly rent expense. Crane & Machinery has the option to purchase the boom trucks at the end of the lease for the higher $719 or
then fair market value of the boom trucks.
At December 31, 2015, PM leases forklifts under three operating leases. Two of the leases which expire on February 28, 2023 provide
for monthly rental payments of $2 and $3 respectively. Another lease which expires on April 30, 2020, provides for monthly rental
payments of $8.
Additionally, PM leases automobiles for a number of its employees. The leases expire at various times between February 2, 2016 and
October 5, 2019. Currently, the aggregate monthly rent is approximately $22. Future monthly rents will change as leases expire and
new leases are executed.
The Company has various operating equipment leases with monthly payments ranging from less than $1 to $4 with various expiration
dates through 2019. Additionally, there is on operating lease for $1 that does not expire until 2034. Total rent expense under these
additional leases was $125, $125 and $138 for the years ended December 31, 2015, 2014 and 2013. Finally, PM rents certain
equipment under a number of operating leases. The leases future rental payments total $63. Rent expense in 2015 for these PM leases
was $29.
Note 13. Convertible Notes
Related Party
On December 19, 2014, the Company issued a subordinated convertible debenture with a $7,500 face amount payable to Terex, a
related party. The convertible debenture is subordinated, carries a 5% per annum coupon, and is convertible into Company common
stock at a conversion price of $13.65 per share or a total of 549,451 shares, subject to customary adjustment provisions. The debenture
has a December 19, 2020 maturity date.
From and after the third anniversary of the original issuance date, the Company may redeem the convertible debenture in full (but not
in part) at any time that the last reported sale price of the Company’s common stock equals at least 130% of the Conversion Price (as
defined in the debenture) for at least 20 of any 30 consecutive trading days. Following an election by the holder to convert the
debenture into common stock of the Company in accordance with the terms of the debenture, the Company has the discretion to
deliver to the holder either (i) shares of common stock, (ii) a cash payment, or (iii) a combination of cash and stock.
In accounting for the issuance of the note, the Company separated the note into liability and equity components. The carrying amount
of the liability component was calculated by measuring the estimated fair value of a similar liability that does not have an associated
convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the
fair value of the liability component from the face value of the Note as a whole. The excess of the principal amount of the liability
component over its carrying amount (“debt discount”) is amortized to interest expense over the term of the note using the effective
interest method with an effective interest rate of 7.5 percent per annum. The equity component is not remeasured as long as it
continues to meet the conditions for equity classification.
On December 19, 2014, the components of the note was as follows:
Liability component
Equity component (a component of paid in capital)
$
$
6,607
893
7,500
70
Additionally in connection with the transaction a $321 deferred tax liability was established and was recorded as a deduction to paid in
capital. The deferred tax liability was recognized as the excess of the principal amount being amortized and charged to interest
expenses is not tax deductible.
As of December 31, 2015, the note had remaining principal balance of $6,737 and an unamortized discount of $763. The difference
between this amount and the amount initially recorded represents $130 of discount amortization.
Perella Notes
On January 7, 2015, the Company entered into a Note Purchase Agreement (the “Perella Note Purchase Agreement”) with MI Convert
Holdings LLC (which is owned by investment funds constituting part of the Perella Weinberg Partners Asset Based Value Strategy)
and Invemed Associates LLC (together, the “Investors”), pursuant to which the Company agreed to issue $15,000 in aggregate
principal amount of convertible notes due January 7, 2021 (the “Perella Notes”) to the Investors. The Notes are subordinated, carry a
6.50% per annum coupon, and are convertible, at the holder’s option, into shares of Company common stock, based on an initial
conversion price of $15.00 per share, subject to customary adjustments. Following an election by the holder to convert the debenture
into common stock of the Company in accordance with the terms of the debenture, the Company has the discretion to deliver to the
holder either (i) shares of common stock, (ii) a cash payment, or (iii) a combination of cash and stock. Upon the occurrence of certain
fundamental corporate changes, the Perella Notes are redeemable at the option of the holders of the Perella Notes. The Perella Notes
are not redeemable at the Company’s option prior to the maturity date, and the payment of principal is subject to acceleration upon an
event of default. The issuance of the Perella Notes by the Company was made in reliance upon the exemptions from registration
provided by Rule 506 and Section 4(2) of the Securities Act of 1933.
In connection with the issuance of the Perella Notes, on January 7, 2015, the Company entered into a Registration Rights Agreement
with the Investors (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company has agreed to
register the resale of the shares of common stock issuable upon conversion of the Perella Notes. The Company filed a Registration
Statement on Form S-3 to register the shares with the Securities and Exchange Commission, which was declared effective on
February 23, 2015.
In accounting for the issuance of the note, the Company separated the note into liability and equity components. The carrying amount
of the liability component was calculated by measuring the estimated fair value of a similar liability that does not have an associated
convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the
fair value of the liability component from the face value of the Note as a whole. The excess of the principal amount of the liability
component over its carrying amount (“debt discount”) is amortized to interest expense over the term of the note using the effective
interest method with an effective interest rate of 7.5 percent per annum. The equity component is not remeasured as long as it
continues to meet the conditions for equity classification.
On January 7, 2015, the components of the note were as follows:
Liability component
Equity component (a component of paid in capital)
$
$
14,286
714
15,000
Additionally in connection with the transaction a $257 deferred tax liability was established and was recorded as a deduction to paid in
capital. The deferred tax liability was recognized as the excess of the principal amount being amortized and charged to interest
expenses is not tax deductible.
As of December 31, 2015, the note had remaining principal balance of $14,386 and an unamortized discount of $614. The difference
between this amount and the amount initially recorded represents $100 of discount amortization.
Note 14. Income Taxes
Information pertaining to the Company’s income before income taxes is as follows:
Income before income taxes:
Domestic
Foreign
Total net income before income taxes
Years ended December 31,
2014
2013
2015
$
$
(6,976) $
2,267
(4,709) $
10,782 $
1,772
12,554 $
16,596
(212)
16,384
71
Information pertaining to the Company’s provision (benefit) for income taxes is as follows:
Provision (benefit) for income taxes:
Current:
Federal
State and local
Foreign
Deferred:
Federal
State and local
Foreign
Total provision for income taxes
Years ended December 31,
2014
2013
2015
$
$
(1,777) $
103
1,892
218
(240)
(96)
(607)
(943)
(725) $
3,730 $
172
691
4,593
(327 )
44
142
(141 )
4,452 $
4,982
64
132
5,178
(33)
66
(129)
(96)
5,082
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are
as follows:
Deferred tax assets:
Accrued expenses
Inventory
Other liabilities
Deferred gain
Net operating loss carryforwards
Tax credit carryforwards
Unrealized foreign currency loss
Investment in Partnerships
Interest expense
Restructuring cost
Property, plant and equipment
Total deferred tax asset
Deferred tax liabilities:
Property, plant and equipment
Intangibles
Discount on convertible notes
Deferred State Income Tax
Deferred financing fees
Total deferred tax liability
Net deferred tax liability
Year ended December 31,
2014
2015
$
$
675 $
2,075
616
469
480
1,255
348
16
3,171
1,003
733
10,841
—
11,264
499
441
211
12,415
(1,574) $
581
744
433
458
3
824
219
144
—
—
—
3,406
552
3,290
321
—
—
4,163
(757 )
The Company has not provided for the United States income or the foreign withholding taxes on the $5.4 million of undistributed
earnings of its subsidiaries operating outside of the United States. It is the Company’s intention to reinvest those earnings
permanently. Generally, such amounts become subject to United States taxation upon remittance of dividends and under certain other
circumstances. Determination of the amount of any unrecognized deferred tax liability related to investments in these foreign
subsidiaries is not practicable.
72
The effective tax rate before income taxes varies from the current U.S. federal statutory income tax rate as follows:
Statutory rate
State and local taxes
Permanent differences
Tax credits
Foreign operations
Uncertain tax positions
Other
Years ended December 31,
2015
2014
35.00%
-0.80%
-0.71%
1.50%
-13.15%
-1.04%
-5.41%
15.39%
35.00 %
1.27 %
-2.20 %
-1.25 %
1.69 %
-0.18 %
1.13 %
35.46 %
As of December 31, 2015, the Company has approximately $1,234 of Texas Temporary Margin Tax Credit that may be utilized
through 2026. The Company has reflected a deferred tax asset in the table above.
A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties, is as follows:
Balance at January 1,
Increases in tax positions for prior years
Decreases in tax positions for prior years
Settlements
Balance at December 31,
2015
2014
215 $
40
(18)
698
935 $
250
80
(115 )
—
215
$
$
Of the amounts reflected in the above table at December 31, 2015, the entire amount would reduce the Company’s annual effective tax
rate if recognized. The Company accrued interest of $20 during 2015 and in total, as of December 31, 2015, recognized a liability for
interest of $37. The Company records accrued interest related to income tax matters in the provision for income taxes in the
accompanying consolidated statement of income. Included in the unrecognized tax benefits is a liability for the PM Group’s potential
IRES and IRAP (Italian Income Taxes) audit adjustments for the tax years 2009 – 2013. Depending upon the final resolution of the
PM Group’s audit, the liability could be higher or lower than the amount recorded at December 31, 2015. As of December 31, 2015,
we don’t anticipate a significant change in unrecognized tax benefits within 12 months of the reporting date.
The Company files income tax returns in the United States, Canada and Italy as well as various state and local tax jurisdictions with
varying statutes of limitations. With few exceptions, as of December 31, 2015, we are no longer subject to U.S. federal, state or
foreign examinations by tax authorities for years before 2012.
In connection with the acquisition, the Board of Directors of ASV, Inc. agreed a Plan of Conversion to convert ASV, Inc., a
corporation into a Minnesota limited liability company. Under the plan, all of the issued and outstanding shares of ASV, Inc. were
cancelled and an equal number of limited liability company membership interests were issued to the members of ASV LLC, on a one-
for-one basis
In connection with the conversion, ASV, Inc. had a taxable liability of $16.2 million. This tax liability was recorded on the opening
balance sheet of ASV and paid during 2015.
Since its conversion to an LLC, ASV has been treated as a partnership for tax purposes. The Company received basis in the limited
liability company equal to the fair market value basis in its share of the ASV assets. As such, the Company did not record deferred
taxes in connection with the business combination and the financial reporting and tax basis in ASV were the same.
73
Note 15. Supplemental Cash Flow Disclosures
Interest received and paid, income taxes paid and non-cash transactions incurred during the years ended December 31, 2015, 2014 and
2013 were as follows:
2015
2014
2013
Non-Cash Transactions:
Investment in Lift Ventures (see Note 19)
Note to Terex related to ASV
Capital leases
Issuance of stock in connection with PM acquisition (see
Note 19)
Issuance of stock in connection with Sabre acquisition
Valla working capital
Acquisition note
Contingent consideration
$
— $
—
3,607
5,951 $
1,594
—
10,124
—
—
—
—
—
—
—
—
—
—
—
813
—
1,000
2,173
228
250
Note 16. Employee Benefits
The Company’s sponsors a 401(k) plan. The plan is intended to cover all non-union United States based employees. The plan is open
to employees 21 years of age and older. There is no minimum employment duration required before eligibility. The plan allows for
monthly enrollment and contribution changes.
The Company suspended its discretionary matching contribution on February 15, 2009. On January 1, 2012, the Company again began
to match participants’ contributions. The Company currently matches dollar for dollar participants’ contributions up to 3% of the
participant’s income. There is no dollar limit regarding matched funds and the plan also calls for immediate vesting of the employer
contribution component. The employer match is paid when payroll is processed.
The amount paid in matching contributions by the company for 2015, 2014 and 2013 were $464, $346 and $271, respectively.
The Company also sponsors a nonqualified Supplemental Executive Retirement Plan (“SERP”) for a former senior executive. The
SERP is unfunded. The Company accounts for this plan pursuant to Accounting Standards Codification (“ASC”) 710, “Compensation
– General.” This guidance requires balance sheet recognition of the overfunded or underfunded status of the defined benefit plan.
Actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been
recognized under previous accounting guidance must be recognized in the Statement of Income. The defined benefit obligation for this
plan as of December 31, 2015 is $871, of which, $64 and $807 is reflected in “Accrued Other” and “Other Long-Term Liabilities”,
respectively, on the balance sheet. The balance at December 31, 2014 was $994, of which, $64 and $840 was reflected in “Accrued
Other” and “Other Long-Term Liabilities”, respectively. The Company expects to make annual benefit payments of $65 per year over
the next five years.
Movements on the PM Group’s employee severance indemnity / TFR provision during the period, including the effects of the actuarial
valuation of the TFR, were as follows:
Employee severance indemnity/TFR
$
1,552 $
698 $
763 $
1,487
Balance
As of
January 15,
2015
Increases
Decreases
Balance
As of
December 31,
2015
The estimates, demographic and economic/financial assumptions made, with the support of an independent actuary, for the actuarial
calculation used to determine the defined benefit plans in relation to postemployment benefits (Employee severance indemnity
provision) can be detailed as follows:
Annual Discount
Rate
Annual Rate of
Inflation
Annual Increase
Rate
Probability of
Employee Leaving
Group
Probability of
Advance Payment of
TFR
1.39 %
1.75%
2.81%
10.00%
3.00%
The amount allocated to the Employee severance indemnity provision in 2015 was $698.
74
A reconciliation of the defined benefit obligation is set out below:
Past Service Liability at beginning of the period
Interest cost
Actuarial (Gain)/Loss
Payments
Past Service Liability at end of the period
December 31,
2015
$
$
1,552
13
(37 )
(41 )
1,487
December 31,
2015
Actuarial gains and losses arising from changes in financial
assumptions
Actuarial gains and losses arising from experience
assumptions
Actuarial (Gain)/Loss
$
$
(44 )
7
(37 )
Employees in Italy are entitled to Trattamento di Fine Rapporto (“TFR”) commonly referred to as an employee leaving indemnity),
which represents deferred compensation for employees in the private sector. Under Italian law, an entity is obligated to accrue for TFR
on an individual employee basis payable to each individual upon termination of employment (including both voluntary and
involuntary dismissal). The annual accrual is approximately 7% of total pay, with no ceiling, and is revalued each year by applying a
pre-established rate of return of 1.50%, plus 75% of the Consumer Price Index, and is recorded by a book reserve. TFR is a plan
unfunded.
In October 2006, the Italian Government passed a law, effective January 1, 2007, which reformed the current TFR system, in which
employees are given the ability to make choices as to the destination of the investment of the TFR compensation. In particular, the
new change allowed the employee to direct the TFR funds to a chosen pension fund, such as an industry fund, an existing company
pension plan, open funds, and individual insurance policies, subject to Company agreement. If no choice was made, the TFR
allocations were made automatically to the default pension fund, which may be the industry wide fund, a specific employer-sponsored
plan, or, absent of these alternatives, the employee’s contributions were invested into a “residual” pension fund managed by the
National Social Insurance Institute (INPS). Each Employee had until June 30, 2007 to make a decision as to the destination of his TFR
allocation.
Note 17. Accrued Warranties
A liability for estimated warranty claims is accrued at the time of sale. The liability is established using historical warranty claim
experience. Historical warranty experience is, however, reviewed by management.
The current provision may be adjusted to take into account unusual or non-recurring events in the past or anticipated changes in future
warranty claims. Adjustments to the initial warranty accrual are recorded if actual claim experience indicates that adjustments are
necessary. Warranty reserves are reviewed to ensure critical assumptions are updated for known events that may impact the potential
warranty liability.
The following table summarizes the changes in product warranty liability:
Balance January 1,
Business Acquired
Accrual for warranties issued during the year
Warranty services provided
Changes in estimates
Foreign currency translation
Balance December 31,
2015
2014
$
$
3,198 $
843
4,021
(4,578)
87
(7)
3,564 $
967
2,206
392
(325 )
(27 )
(15 )
3,198
75
Note 18. Segment Information
The Company is a leading provider of engineered specialty lifting and loading products. The Company operates in three business
segments: the Lifting Equipment segment, the ASV segment and the Equipment Distribution segment.
ASV Segment
A.S.V., LLC (“ASV”) manufactures a line of high quality compact rubber tracked and skid steer loaders. The ASV products are
distributed through Terex Corporation (“Terex”) distribution channels as well as through the Company and other independent dealers.
This independent dealer network now has over 100 locations. The products are used in the site clearing, general construction, forestry,
golf course maintenance and landscaping industries, with general construction being the largest market.
The Company operates in three business segments: Lifting Equipment, ASV and Equipment Distribution.
Lifting Equipment Segment
The Lifting Equipment segment is a leading provider of engineered lifting solutions. The Company designs, manufactures and distributes,
predominately through a network of dealers, a diverse group of products that serve different functions and are used in a variety of industries.
The Company markets a comprehensive line of boom trucks, a truck crane and sign cranes, a complete line of rough terrain forklifts,
including both the Liftking and Noble product lines, as well as special mission oriented vehicles, and other specialized carriers, heavy
material handling transporters and steel mill equipment. The Company also manufacturers a number of specialized rough terrain cranes and
material handling products, including 15 and 30-ton cab down rough terrain cranes. Company lifting products are used in industrial
applications, energy exploration and infrastructure development in the commercial sector and for military applications. The company’s
specialized rough terrain cranes primarily serve the needs of the construction, municipality, and railroad industries. Through one of its Italian
subsidiary, the Company manufactures and distributes reach stackers and associated lifting equipment for the global container handling
markets. On November 30, 2013, the Company acquired the assets of Valla SpA (“Valla”) located in Piacenza, Italy. Valla offers a full range
of pick and carry cranes from 2 to 90 tons, using electric, diesel, and hybrid power options. Its cranes offer wheeled or tracked, fixed or swing
boom configurations, with dozens of special applications designed specifically to meet the needs of its customers. Beginning in August 2013,
the Company began to manufacture and market a comprehensive line of specialized trailer tanks for liquid and solid storage and containment.
The tank trailers are used in a variety of end markets such as petrochemical, waste management and oil and gas drilling. As of January 15,
2015, the Company acquired the PM Group. PM Group S.p.A. (“PM”) is a leading Italian manufacturer of truck mounted hydraulic knuckle
boom cranes with a 50-year history of technology and innovation, and a product range spanning more than 50 models. Its largest subsidiary,
Oil & Steel (“O&S”), is a manufacturer of truck-mounted aerial platforms with a diverse product line and an international client base.
ASV Segment
ASV which was acquired on December 19, 2014, is shown as a separate segment. A.S.V manufactures a line of high quality compact rubber
tracked and skid steer loaders. The ASV products are distributed through Terex Corporation (“Terex”) distribution channels as well as through
the Company and other independent dealers. This independent dealer network now has over 100 locations. The products are used in the site
clearing, general construction, forestry, golf course maintenance and landscaping industries, with general construction being the largest market.
Equipment Distribution Segment
The Equipment Distribution segment located in Bridgeview, Illinois, comprises the operations of Crane & Machinery (“C&M”), a
division of Manitex International, North American Equipment, Inc. (“NAE”) and North American Distribution, Inc. (“NAD”). The
segment markets products used primarily for infrastructure development and commercial construction applications that include road and
bridge construction, general contracting, roofing, scrap handling and sign construction and maintenance. C&M is a distributor of Terex
rough terrain and truck cranes products and supplies repair parts for a wide variety of medium to heavy duty construction equipment and
sells domestically and internationally, predominately to end users, including the rental market. It also provides crane equipment repair
services in the Chicago area. The segment markets previously-owned construction and heavy equipment and trailers both domestically
and internationally through NAE. NAE purchase previously owned equipment of various ages and conditions and often refurbishes the
equipment before resale. The Segment also sells Valla products through NAD.
Sabre, Valla, ASV and PM Group results are included in the Company’s results from their respective effective dates of acquisition on
August 19, 2013, November 30, 2013, December 20, 2014 and January 15, 2015.
76
The following is financial information for our three operating segments, i.e., Lifting Equipment, Equipment Distribution and ASV.
The below financial information includes results for each of the above acquisitions from the respective date of acquisition:
Revenues from continuing operations:
Lifting Equipment
ASV
Equipment Distribution
Inter-segment Eliminations
Total
Operating income from continuing operations:
Lifting Equipment
ASV
Equipment Distribution
Corporate expense
Elimination of inter-segment profit in inventory
Total
Total assets:
Lifting Equipment
ASV
Equipment Distribution
Corporate
Assets of discontinued operations
Total
Years ended December 31,
2014
2013
2015
261,232 $
116,935
13,216
(4,646)
386,737 $
228,518 $
2,264
21,104
(4,722 )
247,164 $
213,520
—
16,951
(651)
229,820
11,770 $
5,496
(136)
(8,522)
(187)
8,421 $
23,178 $
(121 )
374
(7,968 )
11
15,474 $
24,803
—
628
(6,391)
(10)
19,030
267,226 $
122,672
14,585
2,175
—
406,658 $
158,564 $
129,661
15,612
1,636
11,683
317,156 $
154,914
—
10,671
1,075
13,837
180,497
$
$
$
$
$
$
Total foreign source net revenue was approximately $177,745, $96,445 and $94,381 for the years ended December 31, 2015, 2014 and
2013, respectively. Total long-lived assets related to the Company’s foreign operations were approximately $83,515 and $8,616 for
the years ended December 31, 2015 and 2014, respectively. Information of external net revenues and long lived asset information by
country is shown on the below tables:
The following is a summary of goodwill by segment:
Goodwill—Lifting Equipment Segment
Balance January 1
Goodwill related to PM acquisition
Foreign currency translation
Balance December 31,
Goodwill—ASV Segment
Balance January 1
Goodwill related to ASV acquisition
Balance December 31,
Goodwill—Equipment Distribution Segment
Balance January 1 and December 31,
Total goodwill at December 31,
$
2015
2014
21,812 $
30,173
(2,750)
49,235
30,579
—
30,579
22,214
—
(402 )
21,812
—
30,579
30,579
275
80,089 $
275
52,666
$
77
Net Revenues
United States
Italy
Canada
Australia
Argentina
United Kingdom
Germany
Iraq
Chile
Turkey
Peru
France
Saudi Arabia
Spain
Hong Kong
Israel
United Arab Emirates
Romania
Algeria
Qatar
Kenya
Czech Republic
Mexico
Finland
Russia
Singapore
Norway
South Africa
Morocco
Korea
Malaysia
New Zealand
Lebanon
Netherlands
Switzerland
Ireland
Poland
Egypt
Venezuela
Slovakia
Brazil
Japan
Other
2015
208,992 $
29,721
28,525
15,408
9,617
8,590
5,766
5,302
5,323
5,023
4,783
4,590
3,546
3,291
2,532
2,333
2,318
2,209
2,114
1,944
1,903
1,875
1,858
1,802
1,759
1,130
1,112
800
740
717
688
687
682
570
458
418
347
212
128
93
77
6
16,748
386,737 $
2014
150,719 $
18,260
34,647
—
—
2,345
3,459
—
592
969
1,840
2,487
815
1
—
527
4,161
—
—
—
—
3,426
4,050
—
710
—
—
516
—
934
—
—
—
—
2,697
—
—
129
—
1,369
3
1,620
10,888
247,164 $
2013
135,439
8,222
44,108
4
—
315
3,246
—
387
5,280
3,849
—
34
535
—
85
1,232
—
—
—
—
1,804
5,096
—
1,623
441
—
3,651
—
—
—
—
—
—
—
—
—
3,285
407
—
—
—
10,777
229,820
$
$
Company attributes revenue to different geographic areas based on where items are shipped or services are performed.
78
Long Lived Assets
United States
Canada
Italy
Long-term assets of discontinued operations
Total Long-Lived Assets
2015
131,902 $
371
83,144
—
215,417 $
2014
133,287
789
7,827
3,477
145,380
$
$
Long-Lived Assets are based on where the operating unit is domiciled.
Note 19. Acquisition and Investment
PM Group
On July 21, 2014 Manitex International, Inc. (the “Company”) entered into a series of agreements to acquire PM S.p.A, (“PM
Group”), a manufacturer of truck mounted cranes based in San Cesario sul Panaro, Modena, Italy. On January 15, 2015, the
Company’s acquisition of PM closed.
The fair value of the purchase consideration is shown below:
Cash
994,483 shares of common stock of Manitex International,
Inc.
Total purchase consideration
€
€
Fair Value
Euros
17,142 $
Fair Value
U.S. Dollars
20,312
8,710
25,852 $
10,124
30,436
Under the acquisition method of accounting, in accordance ASC 805, Business Combinations, the assets acquired and liabilities
assumed are valued based on their estimated fair values as of the date of the acquisition. The excess of the purchase price over the
aggregate estimated fair value of net assets acquired was allocated to goodwill. During the year ended December 31, 2015, it was
stated that the purchase price allocation was preliminary and was subject to final review of certain items including inventory, accrual
and receivable balances. During the year ended December 31, 2015, the purchase price allocation was adjusted. Adjustments for the
following reasons to the previously reported provisional assets or liabilities were made. The adjustment had the following impact on
goodwill:
Adjustment to reduce the value of certain accounts receivables
based on obtaining additional information
Eliminate value assigned to fixed assets determined not to exist
at date of acquisition
Adjustments to deferred tax assets to reflect corrected value
Adjustment to assumed non-recourse debt to reflect
Net impact on goodwill
$
$
260
392
(1,187 )
(344 )
(879 )
The balance sheet at January 15, 2015 was restated to reflect the above changes to PM Group purchase price allocations as follows:
Account
Goodwill
Accounts receivable
Fixed assets
Deferred tax asset
Assumed non-recourse debt
Provisional
amounts
recorded as of
January 15, 2015
$
31,052 $
22,475
17,344
9,680
(62,197)
Adjustment
to purchase
price allocation
Revised amount
recorded as of
January 15, 2015
30,173
22,215
16,952
10,867
(61,853)
(879 ) $
(260 )
(392 )
1,187
344
The above adjustments are non-cash items and, therefore, do not have an impact on the Statement of Cash Flows for the period ended
December 31, 2015.
79
The following table summarizes the revised allocation of the PM Group acquisition consideration to the fair value of the assets
acquired and liabilities assumed at the date of acquisition:
Purchase price allocation:
Cash invested in PM
Trade receivables
Inventory
Other receivables and prepaid expenses
Total fixed assets
Customer relationships
Trade name and trademarks
Patented & Unpatented Technology
Goodwill
Deferred net tax assets
Other long term assets
Accounts payable
Accrued expenses
Other current liabilities
Deferred tax liability
Other long term liabilities
Assumed non-recourse debt
Net assets acquired
€
€
5,994 $
18,795
20,088
3,746
14,342
10,841
5,850
7,657
25,528
9,195
1,267
(22,020)
(7,343)
(1,188)
(11,595)
(2,973)
(52,332)
25,852 $
6,965
22,215
23,743
4,428
16,952
12,813
6,914
9,050
30,173
10,867
1,497
(26,026 )
(8,679 )
(1,404 )
(13,705 )
(3,514 )
(61,853 )
30,436
Contingent Liability: In accordance with ASC 805, the acquirer is to recognize the acquisition date fair value of contingent liability.
The Company entered into an Option Agreement with one of the PM Group senior banks under which the bank will sell to the
Company PM debt with a face value of €5,000. Under the Option Agreement, the bank shall receive €2,500 if PM has 2017 EBITDA,
as defined in the agreement, of between €14,500 and €16,500, and €5,000 if 2017 EBITDA exceeds €16,500. If 2017 EBITDA, as
defined in the agreement, is less than €14,500, the bank is to sell the debt to the Company for €0.001. Given the disparity between the
EBITDA threshold and the Company’s projected financial results, it was determined that a Monte Carlo simulation analysis was
appropriate to determine the fair value of contingent consideration. It was determined that the probability weighted average payment is
€1,093 or $1,270. Based thereon, we determined the fair value of the contingent liability to be €1,093 or $1,270. This amount is
included in other long-term liabilities in the above table.
Non-recourse PM debt: Under the transaction, PM remains obligated for the following debt:
Term debt—interest bearing
Term debt—non-interest bearing
Fair market adjustment for non-interest bearing debt
Working capital borrowings
Interest rate swap derivative contract
Total assumed non-recourse debt
€
€
22,956 $
10,289
(1,460)
18,827
1,720
52,332 $
27,133
12,161
(1,726 )
22,252
2,033
61,853
Non-interest bearing debt: In connection with the acquisition, the Company assumed non-interest bearing debt of €10,289. The fair
value of the non-interest bearing debt was determined to be €8,829 or $10,435. The fair value of the non-interest bearing debt was
calculated to equal the present value of future debt payments discounted at a market rate of return commensurate with similar debt
instruments with comparable levels of risk and marketability. A rate of 5.24% was determined to be the appropriate rate following an
assessment of the risk inherent in the debt issued and the market rate for debt of this nature using corporate credit ratings.
The interest rate swap derivative was valued at its fair value, which is based on quotes from a financial institution.
Tangible assets and liabilities: The tangible assets and liabilities were valued at their respective carrying values by PM, except for
certain adjustments necessary to state such amounts at their estimated fair values at the acquisition date. Significant fair market
adjustments were made to decrease accounts receivable by $260, increase inventory by $911, decrease fixed assets by $4,699 and to
decrease liabilities by $345.
80
Intangible assets: There are three fundamental methods applied to value intangible assets outlined in FASB ASC 820. These methods
include the Cost Approach, the Market Approach, and the Income Approach. Each of these valuation approaches were considered in
our estimation of value.
Trade names and trademarks, patented and unpatented technology: Valued using the Relief from Royalty method, a form of both the
Market Approach and the Income Approach. Because the Company has established trade names and trademarks and has developed
patented and unpatented technology, we estimated the benefit of ownership as the relief from the royalty expense that would need to
be incurred in absence of ownership.
Customer relationships: Because there is a specific earnings stream that can be associated with customer relationships, we determined
the fair value of these relationships based on the excess earnings method, a form of the Income Approach.
Goodwill: Goodwill represents the excess of total consideration paid and the fair value of net assets acquired. The recognition of
goodwill of $30,173 reflects the inherent value in the PM reputation, which has been built since being founded in 1959 and the
prospects for significant future earnings.
In calculating the Company’s deferred tax liabilities the fact that goodwill is not deductible was considered.
Acquisition transaction costs: Cost and expenses related to the acquisition have been expensed as incurred and recorded in selling,
general and administrative expenses. The Company incurred fees of $194 for legal services, $750 for acquisition related bonus
payments, $347 for accounting services in connection with the prior year audit of PM financial statements and $294 for other costs
related to the acquisition.
The results of the acquired PM operations have been included in our consolidated statement of operations since the acquisition date.
PM is included in the Lifting segment for segment reporting purposes.
The following unaudited pro forma information assumes the acquisition of PM occurred on January 1, 2014. The unaudited pro forma
results have been prepared for informational purposes only and do not purport to represent the results of operations that would have
been had the acquisition occurred as of the date indicated, nor of future results of operations. The unaudited pro forma results for the
year ended December 31, 2015 and 2014 are as follows (in thousands, except per share data):
Year Ended
December 31,
2015
389,036 $
Year Ended
December 31,
2014
346,159
$
$
(3,654) $
414
$
$
(0.23) $
(0.23) $
0.03
0.03
16,011,511 14,852,672
16,011,511 14,898,772
Net revenues
(Loss) earnings from continuing operations attributable
to shareholders of Manitex International, Inc.
(Loss) earnings per share from continuing operations
attributable to shareholders of Manitex International, Inc.:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
81
Pro Forma Adjustment Note
The following table summarizes the pro forma adjustments that modify historical results:
Record interest expense on Manitex debt issued in connection
with the acquisition
Transfer acquisition costs between periods
Eliminate impact of capitalizing research and development by
PM
Adjust depreciation to reflect fair values and current lives
Adjust amortization to reflect fair value of intangibles and
current lives
Eliminate historic interest expense on debt forgiven or
converted to non-interest debt
Record amortization of debt discount on non-interest bearing
debt
Transfer amortization of inventory step up between periods
Eliminate profit on debt restructuring (this was not a taxable
event)
Record income tax impact on the above pro forma
adjustments
For the Year Ended December 31,
2015
2014
$
33 $
(1,148)
(45)
(11)
1,814
1,148
142
(395 )
90
1,680
(14)
(1,403 )
27
(912)
549
1,030
6,298
—
662
(1,562 )
Lift Ventures, LLC
On December 16, 2014, Manitex International, Inc. (the “Company”), BGI USA Inc. (“BGI”), Movedesign SRL and R & S Advisory
S.r.l., entered into an operating agreement (the “Operating Agreement”) for Lift Ventures LLC (“Lift Ventures”), a joint venture
entity. The purposes for which Lift Ventures is organized are the manufacturing and selling of certain products and components,
including the Schaeff line of electric forklifts and certain LiftKing products. Pursuant to the Operating Agreement, the Company was
granted a 25% equity stake in Lift Ventures in exchange for the contribution of inventory totaling $5,951 and a license of certain
intellectual property related to the Company’s products.
This investment is a non-marketable equity investment made in a privately-held company accounted for under the equity method.
This investment had a carrying value of $5,752 and $5,951 at December 31, 2015 and 2014, respectively. In the future, we will review
this non-marketable equity investment periodically for impairment. No impairments were recognized for the year ended December 31,
2015 and 2014.
ASV Stock Purchase
On December 19, 2014, the Company closed on the ASV Stock Purchase Agreement entered into between Manitex International, Inc.
(the “Company”) and Terex Corporation (“Terex”) on October 29, 2014, pursuant to which the Company purchased 51% of the issued
and outstanding shares of ASV Inc. a Grand Rapids, Minnesota-based manufacturer of a broad line of technology leading compact
rubber tracked and skid steer loaders and accessories that had been a wholly owned subsidiary of Terex since 2008.
The fair value of the purchase consideration was $49,787 in total as shown below:
Cash
Note payable to seller
Fair value of non-controlling interest in ASV
Total purchase consideration
$
$
25,000
1,411
23,376
49,787
82
Under the acquisition method of accounting, in accordance ASC 805, Business Combinations, the assets acquired and liabilities
assumed are valued based on their estimated fair values as of the date of the acquisition. The excess of the purchase price over the
aggregate estimated fair value of net assets acquired was allocated to goodwill. At December 31, 2014, it was stated that the purchase
price allocation was preliminary and was subject to final review of certain items including inventory, accrual and receivable balances.
During the year ended December 31, 2015, the purchase price allocation was adjusted. Adjustments for the following reasons to the
previously reported provisional assets or liabilities were made. The adjustments had the following impact on goodwill:
Record liabilities that existed at acquisition date that had not
been recorded
Adjustment to reduce the value of certain inventory based on
obtaining additional information
Eliminate value assigned to fixed assets determined not to exist
at date of acquisition
Increase reserves for product liability suits based on additional
information
Adjustment to reserves for worker compensation claims based on
additional information
Adjustment to income tax payable to record tax liability based on
additional information
Net impact on goodwill
$
$
115
460
262
3,199
68
(269 )
3,835
The balance sheet at December 31, 2014 was restated to reflect the above changes to ASV purchase price allocations as follows:
Account
Goodwill
Inventory
Fixed assets
Accrued expenses
Income tax payable on conversion of ASV
Provisional
amounts
recorded as of
December 31,
2014
Adjustment
to purchase
price allocation
Revised amount
recorded as of
December 31,
2014
$
26,744 $
27,217
19,177
(3,975)
(16,500)
3,835 $
(460 )
(262 )
(3,382 )
269
30,579
26,757
18,915
(7,357)
(16,231)
The above adjustments are non-cash items and, therefore, do not have an impact on the Statement of Cash Flows for the period ended
December 31, 2014.
The following table summarizes the preliminary allocation of the ASV acquisition consideration to the fair value of the assets acquired
and liabilities assumed at the date of acquisition:
Purchase price allocation:
Cash
Accounts receivable
Prepaid Expenses
Inventory
Total fixed assets
Customer relationships
Trade name and trademarks
Patented & Unpatented Technology
Goodwill
Capitalized Debt Issuance Costs
Accounts payable
Accrued expenses
Accrued conversion tax
Accrued pension liability
Assumption of non-recourse ASV debt
Net assets acquired
83
$
$
2
18,232
71
26,757
18,915
16,000
7,000
8,000
30,579
2,767
(9,459 )
(7,357 )
(16,231 )
(839 )
(44,650 )
49,787
Deferred bank fees and expense: Legal and bank fees incurred related to establishing term debt and revolving credit financing for
ASV as part of the acquisition transaction. Manitex executed a note payable in the amount of $1,594 in connection with the
transaction. The note was to reimburse Terex for Manitex’s share of fees and expenses, including $1,411 of fees related to new
financing at ASV.
Noncontrolling interest in ASV: Fair value of Terex 49% share of ASV equity calculated by grossing up the fair value of the
controlling interest purchased by the Company to a 100% value, then deducting the $26,411 paid for the majority interest.
Subsequently an adjustment for an implied minority discount of $2,000 (approximately 8%) was applied against initial calculation.
Non-recourse ASV debt: In connection with the transaction, ASV entered into a $40,000, five year Term debt facility and a $35,000
revolving credit facility. At the date of acquisition, ASV had fully drawn funds on the Term debt, $40,000, and had drawn $4,650 on
the revolving credit facility.
Under the acquisition method of accounting, the total consideration is allocated to the assets acquired and liabilities assumed based on
their fair values as of the date of the acquisition as shown below.
Tangible assets and liabilities: The tangible assets and liabilities were valued at their respective carrying values by ASV, except for
certain adjustments necessary to state such amounts at their estimated fair values at acquisition date. Fair market adjustments to fixed
assets and inventory of $3,668 were recorded.
Intangible assets: There are three fundamental methods applied to value intangible assets outlined in FASB ASC 820. These methods
include the Cost Approach, the Market Approach, and the Income Approach. Each of these valuation approaches was considered in
our estimation of value.
Trade names and trademarks, patented and unpatented technology: Valued using the Relief from Royalty method, a form of both the
Market Approach and the Income Approach. Because the Company has established trade names and trademarks and has developed
patented and unpatented technology, we estimated the benefit of ownership as the relief from the royalty expense that would need to
be incurred in absence of ownership.
Customer relationships: Because there is a specific earnings stream that can be associated with customer relationships, we determined
the fair value of these relationships based on the excess earnings method, a form of the Income Approach.
Goodwill: Goodwill represents the excess of total consideration paid and the fair value of net assets acquired. The recognition of
goodwill of $30,579 reflects the inherent value in the ASV reputation, which has been built since being founded in 1983 and the
prospects for significant future earnings.
For income tax purposes, intangible assets and goodwill will be amortized and will result in future tax deductions.
Accrued conversion tax: In connection with the acquisition, the Board of Directors of ASV, Inc. agreed a Plan of Conversion to
convert ASV, Inc., a corporation into a Minnesota limited liability company. Under the plan, all of the issued and outstanding shares
of ASV, Inc. were cancelled and an equal number of limited liability company membership interests were issued to the members of
ASV LLC, on a one-for-one basis. In connection with the conversion, ASV will have a taxable gain.
Acquisition transaction costs: Cost and expenses related to the acquisition have been expensed as incurred and recorded in selling,
general and administrative expenses. The Company incurred fees of $100 for legal services, $750 for acquisition related bonus
payments, $325 for accounting services in connection with the prior year audit of ASV financial statements and $40 for Valuation
services.
The results of the acquired ASV operations have been included in our consolidated statement of operations since the acquisition date.
ASV is being treated as its own segment for segment reporting purposes.
Note 20. Equity
Issuance of Common Stock
Sabre acquisition shares
On August 19, 2013, the Company issued 87,928 shares of common stock. The shares which were part of the consideration paid to the
seller in connection with the purchase of the Sabre assets.
84
Shares issued to Terex Corporation
On December 19, 2014, pursuant to the terms of the Securities Purchase Agreement, the Company issued 1,108,156 shares of
Company’s common stock and received $12,500 of cash.
Shares issued to PM Group
On January 15, 2015, the Company’s acquisition of PM Group closed. The aggregate consideration paid by the Company for PM
Group was $30,436 which reflects exchange rates in effect at the closing. The consideration consisted of $20,312 of cash, and 994,483
shares of Company common stock valued at $10,124.
Stock issued to employees and Directors
The Company issued shares of common stock to employees and Directors at various times in 2015, 2014 and 2013 as restricted stock
units issued under the Company’s 2004 Incentive Plan vested. Upon issuance entries were recorded to increase common stock and
decrease paid in capital for the amounts shown below. The following is a summary of stock issuances that occurred during the three
year period:
Date of Issue
March 4, 2015
March 13, 2015
June 5, 2015
December 31, 2015
December 31, 2015
Date of Issue
March 6, 2014
March 6, 2014
June 5, 2014
December 31, 2014
December 31, 2014
Date of Issue
March 8, 2013
March 8, 2013
September 12, 2013
December 31, 2013
December 31, 2013
Employees or
Director
Directors
Employees
Employees
Employees
Directors
Employees or
Director
Directors
Employees
Employees
Employees
Directors
Employees or
Director
Directors
Employees
Directors
Directors
Employees
Shares Issued
Value of
Shares Issued
77
212
12
219
123
643
6,800 $
22,868
749
36,886
20,620
87,923 $
Shares Issued
Value of
Shares Issued
106
229
8
406
257
1,006
6,600 $
14,292
749
38,005
20,615
80,261 $
Shares Issued
Value of
Shares Issued
69
219
19
151
167
625
6,600 $
20,836
1,667
17,400
23,403
69,906 $
Stock offerings
September 30, 2013 offering
On September 30, 2013, the Company issued 1,375,000 shares of the Company’s common stock, no par value. The shares were issued
to certain investors pursuant to subscription agreements between the Company and the investors that were entered into on
September 25, 2013 (the “Agreements”). Under the Agreements, the investors paid $10.75 per share for a total purchase price of
$14,781. The shares were issued pursuant to a prospectus supplement dated September 25, 2013 and prospectus dated August 9, 2011,
which is part of a registration statement on Form S-3 (Registration No. 333-176189) that was declared effective by the Securities and
Exchange Commission on August 23, 2011.
In connection with this offering, the Company entered into a placement agency agreement (“Placement Agreement”) dated
September 25, 3013 with Avondale Partners, LLC, Roth Capital Partners, LLC, and The Benchmark Company, LLC (the “Agents”).
In accordance with the terms of the Placement Agreement between the Company and the Agents, the Company paid the Agents a cash
fee that represents 5.25% of the gross proceeds of the offering and reimbursed the Agents for reasonable out-of-pocket expenses.
85
In connection with the stock issuance, the Company incurred investment banking fees of $776 and legal fees and expenses of
approximately $78. The Company’s net cash proceeds after fees and expenses of approximately $13,927 were used to repay debt.
Stock Repurchase
The Company purchased shares of Common Stock at various times from certain employees at the closing price on date of purchase.
The stock was purchased from the employees to satisfy employees’ withholding tax obligations related to stock issuances described
above. The following is a summary of common stock purchased during 2015, 2014 and 2013 :
Date of Purchase
June 5, 2015
December 31, 2015
June 5, 2014
December 31, 2014
Shares
Purchased
Closing Price
on Date of
Purchase
393 $
12,125 $
12,518
392 $
8,461 $
8,853
8.54
5.95
16.75
12.71
December 31, 2013
4,414 $
15.88
2004 Equity Incentive Plan
In 2004, the Company adopted the 2004 Equity Incentive Plan and subsequently amended and restated the plan on September 13,
2007, May 28, 2009 and June 5, 2013. The maximum number of shares of common stock reserved for issuance under the plan is
917,046 shares. The total number of shares reserved for issuance however, can be adjusted to reflect certain corporate transactions or
changes in the Company’s capital structure. The Company’s employees and members of the board of directors who are not our
employees or employees of our affiliates are eligible to participate in the plan. The plan is administered by a committee of the board
comprised of members who are outside directors. The plan provides that the committee has the authority to, among other things, select
plan participants, determine the type and amount of awards, determine award terms, fix all other conditions of any awards, interpret
the plan and any plan awards. Under the plan, the committee can grant stock options, stock appreciation rights, restricted stock,
restricted stock units, performance shares and performance units, except Directors may not be granted stock appreciation rights,
performance shares and performance units. During any calendar year, participants are limited in the number of grants they may
receive under the plan. In any year, an individual may not receive options for more than 15,000 shares, stock appreciation rights with
respect to more than 20,000 shares, more than 20,000 shares of restricted stock and/or an award for more than 10,000 performance
shares or restricted stock units or performance units. The plan requires that the exercise price for stock options and stock appreciation
rights be not less than fair market value of the Company’s common stock on date of grant.
The Company awarded under the Amended and Restated 2004 Equity Incentive Plan a total of 145,979; 34,292; and 114,821
restricted stock units to employees and directors during 2015, 2014 and 2013, respectively. The restricted stock units are subject to the
same conditions as the restricted stock awards except the restricted stock units will not have voting rights and the common stock will
not be issued until the vesting criteria are satisfied.
Compensation expense in 2015, 2014 and 2013 includes $1,270, $875 and $445 related to restricted stock units, respectively.
Compensation expense related to restricted stock units will be $784, $387 and $0 for 2016, 2017 and 2018, respectively.
86
The following is a summary of restricted stock units that were awarded during 2015, 2014 and 2013:
2015 Grants
January 1, 2015
March 4, 2015
Vesting Date
January 1, 2016 34,027 units;
January 1, 2017 34,027 units and
35,057 units January 1, 2018
March 4, 2015 6,800 units,
December 31, 2015 6,600 units and
December 31, 2016 6,600 units
March 13, 2015
March 13, 2015 22,868 units
March 6, 2014
Vesting Date
March 6, 2014 20,892 units;
December 31, 2014 6,600 units;
December 31, 2015 6,800 units
2013 Grants
March 8, 2013
June 5, 2013
September 12, 2013
December 31, 2013
Vesting Date
March 8, 2013 27,436 units;
December 31, 2013 6,600 units;
December 31, 2014 6,800 units
June 5, 2014 1,141 units; June 5,
2015 1,142 units; June 5, 2016
1,142 units
September 21, 2013 1,667 units
22,735 units December 31, 2014;
22,735 units December 31, 2015
and 23,423 units December 31,
2016
Number of
Restricted
Stock Units
Closing Price
on
Date of Grant
Value of
Restricted
Stock
Units Issued
103,111 $
12.71 $
1,311
20,000 $
22,868 $
145,979
11.39 $
9.25 $
$
228
212
1,751
Number of
Restricted
Stock Units
Closing Price
on
Date of Grant
Value of
Restricted
Stock
Units Issued
$
34,292 $
34,292
15.99 $
$
548
548
Number of
Restricted
Stock Units
Closing Price
on
Date of Grant
Value of
Restricted
Stock
Units Issued
40,836 $
10.51 $
429
3,425 $
1,667 $
10.45 $
11.19 $
36
19
68,893 $
114,821
15.88 $
$
1,094
1,578
The following table contains information regarding restricted stock units for the years ended December 31, 2015, December 31, 2014
and December 31, 2013, respectively:
Outstanding on January 1,
Issued
Vested and issued
Vested—issued and repurchased for income tax withholding
Forfeited
Outstanding on December 31
Restricted Stock Units
2014
142,851
34,292
(80,261 )
(8,853 )
(2,645 )
85,384
2015
85,384
145,979
(87,923)
(12,518)
(12,149)
118,773
2013
109,750
114,821
(69,906)
(4,414)
(7,400)
142,851
Note 21. Recent Accounting Guidance
Recently Adopted Accounting Guidance
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” (“ASU 2014-09”). ASU 2014-09 outlines a
new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes
most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-
87
step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in
exchange for those goods or services. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017, and early
adoption is not permitted. The Company is evaluating the impact that adoption of this guidance will have on the determination or
reporting of its financial results.
In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide that a
Performance Target Could be Achieved after the Requisite Service Period,” (“ASU 2014-12”). ASU 2014-12 requires that a
performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance
condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU 2014-12 is
effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. Adoption of this guidance is not
expected to have a significant impact on the determination or reporting of the Company’s financial results.
In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going
Concern,” (“ASU 2014-15”). ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to
continue as a going concern for a one year period subsequent to the date of the financial statements. An entity must provide certain
disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The guidance is
effective for all entities for the first annual period ending after December 15, 2016 and interim periods thereafter, with early adoption
permitted. Adoption of this guidance is not expected to have any impact on the determination or reporting of the Company’s financial
results.
In April 2015, the FASB issued ASU 2015-03, “Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs,” (“ASU
2015-03”). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a
direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance is effective for reporting
periods beginning after December 15, 2015 and interim periods within those fiscal years with early adoption permitted. ASU 2015-03
should be applied on a retrospective basis, wherein the balance sheet of each period presented should be adjusted to reflect the effects
of adoption. Adoption of this guidance is not expected to have a significant impact on the determination or reporting of the Company’s
financial results.
In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” (“ASU 2015-11”). ASU 2015-11 requires
inventory be measured at the lower of cost and net realizable value and options that currently exist for market value be eliminated.
ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable
costs of completion, disposal, and transportation. The guidance is effective for reporting periods beginning after December 15, 2016
and interim periods within those fiscal years with early adoption permitted. ASU 2015-11 should be applied prospectively. The
Company is evaluating the impact adoption of this guidance will have on determination or reporting of its financial results.
In August 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with
Line-of-Credit Arrangements,” which amends ASC 835-30, “Interest - Imputation of Interest”. The ASU clarifies the presentation and
subsequent measurement of debt issuance costs associated with lines of credit. These costs may be presented as an asset and amortized
ratably over the term of the line of credit arrangement, regardless of whether there are outstanding borrowings on the arrangement.
The effective date will be the first quarter of fiscal year 2016 and will be applied retrospectively. The adoption is not expected to have
a material effect on the Company’s financial results.
In September 2015, the FASB issued ASU 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period
Adjustments.” This ASU requires that an acquirer recognize adjustments to provisional amounts that are identified during the
measurement period in the reporting period in which the adjustment amounts are determined. The effective date will be the first
quarter of fiscal year 2016. The adoption is not expected to have a material effect on the Company’s financial results.
In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (“ASU 2015-17”), Income Taxes (Topic 740):
Balance Sheet Classification of Deferred Taxes. The amendments in ASU 2015-17 seek to simplify the presentation of deferred
income taxes and require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial
position. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim
periods within those annual periods, with early application permitted for all entities as of the beginning of an interim or annual
reporting period. The Company has not determined the full impact of implementation of this standard, but believes it will not be
material to net income. The Company believes that the main impact of adoption of the standard will be the reclassification of $2,951
of current deferred tax assets to a reduction in deferred tax liabilities for the period ending December 31, 2015.
In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of
Financial Assets and Financial Liabilities." The amendments in ASU 2016-01, among other things, require equity investments (except
those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair
88
value with changes in fair value recognized in net income; requires public business entities to use the exit price notion when
measuring fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial
liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables); and eliminates the
requirement for public business entities to disclose the method(s) and significant assumptions used to estimate fair value that is
required to be disclosed for financial instruments measured at amortized cost. The effective date will be the first quarter of fiscal year
2018. The Company is evaluating the impact the adoption of this new standard will have on its consolidated financial statements.
In February 2016, the FASB issued a standards update that requires lessees to recognize on the balance sheet the assets and liabilities
associated with the rights and obligations created by those leases. The guidance for lessors is largely unchanged from current U.S.
GAAP. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12
months. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from
a lease by a lessee primarily will depend on its classification as a finance or operating lease. The update is effective for reporting
periods beginning after December 15, 2018. Early adoption is permitted. We are in the process of evaluating the impact of this update
on our consolidated financial statements.
Except as noted above, the guidance issued by the FASB during the current year is not expected to have a material effect on the
Company’s consolidated financial statements.
Note 22. Transactions between the Company and Related Parties
In the course of conducting its business, the Company has entered into certain related party transactions.
On December 16, 2014, Manitex International, Inc. (the “Company”), BGI USA Inc. (“BGI”), Movedesign SRL and R & S Advisory
S.r.l., entered into an operating agreement (the “Operating Agreement”) for Lift Ventures LLC (“Lift Ventures”), a joint venture
entity. The purposes for which Lift Ventures is organized are the manufacturing and selling of certain products and components,
including the Schaeff line of electric forklifts and certain LiftKing products. Pursuant to the Operating Agreement, the Company was
granted a 25% equity stake in the Lift Ventures in exchange for the contribution of certain inventory and a license of certain
intellectual property related to the Company’s products.
The Company, through its Manitex and Manitex Liftking subsidiaries, purchases and sells parts to BGI USA, Inc. (“BGI”) including
its subsidiary SL Industries, Ltd (“SL”). BGI is a distributor of assembly parts used to manufacture various lifting equipment. SL
Industries, Ltd is a Bulgarian subsidiary of BGI that manufactures fabricated and welded components used to manufacture various
lifting equipment. The President of Manufacturing Operations is the majority owner of BGI.
The Company through its Manitex Liftking subsidiary provides parts and services to LiftMaster, Ltd (“LiftMaster”) or purchases parts
or services from LiftMaster. LiftMaster is a rental company that rents and services rough terrain forklifts. LiftMaster is owned by the
Vice President of a wholly owned subsidiary of the Company, Manitex Liftking, ULC, and a relative of his.
As of December 31, 2015 the Company had an accounts receivable of $157 and $41 from SL and Lift Ventures, respectively and
accounts payable of $150, $244 and $2 to SL, Lift Ventures and BGI respectively. As of December 31, 2014 the Company had an
accounts receivable of $2 and $16 from LiftMaster and SL, respectively and accounts payable of $1, $519 and $1 to BGI, SL and
Liftmaster respectively. As of December 31, 2013 the Company had an accounts receivable of $6 and $7 from LiftMaster and SL,
respectively and accounts payable which is shown on the balance sheet as “accounts payable related parties” of $6, $796 and $0 to
BGI, SL and Liftmaster respectively.
89
The following is a summary of the amounts attributable to certain related party transactions as described in the footnotes to the table,
for the periods indicated:
Bridgeview Facility (1)
Sales to:
SL Industries, Ltd
BGI
LiftMaster (2)
Total Sales
Inventory Purchases from:
SL Industries, Ltd
Lift Ventures
LiftMaster (2)
BGI
Total Inventory Purchases
2015
2014
2013
$
256 $
256 $
251
60
3
7
70
4,470
1,116
46
7
5,639 $
6
—
185
191
43
—
10
53
5,364
5,337
1
43
5,408 $
21
165
5,523
$
(1) The Company leases its 40,000 sq. ft. Bridgeview facility from an entity controlled by Mr. David Langevin, the Company’s
Chairman and CEO. Pursuant to the terms of the lease, the Company makes monthly lease payments of $22. The Company is
also responsible for all the associated operations expenses, including insurance, property taxes, and repairs. The lease will expire
on June 30, 2020 and has a provision for six one year extension periods. The lease contains a rental escalation clause under
which annual rent is increased during the initial lease term by the lesser of the increase in the Consumer Price Increase or 2.0%.
Rent for any extension period shall however, be the then-market rate for similar industrial buildings within the market area. The
Company has the option, to purchase the building by giving the Landlord written notice at any time prior to the date that is 180
days prior to the expiration of the lease or any extension period. The Landlord can require the Company to purchase the building
if a change of Control Event, as defined in the agreement occurs by giving written notice to the Company at any time prior to
the date that is 180 days prior to the expiration of the lease or any extension period. The purchase price regardless whether the
purchase is initiated by the Company or the landlord will be the Fair Market Value as of the closing date of said sale.
(2) The Company provides parts and services to LiftMaster, Inc. LiftMaster is a rental company that rents and services rough terrain
forklifts. LiftMaster is owned by a relative of an Officer of Manitex Liftking, ULC.
Transactions with Terex
On December 19, 2014, Terex became a related party.
At December 31, 2015 and 2014, ASV has accounts receivable due from Terex for $388 and $8,609 which is shown on the balance
sheet on the line titled “accounts receivable from related party” and accounts payable of $1,413 and $0 on the line titled “accounts
payable related parties”. As part of the agreement Terex retained certain receivables from third party customers. In place of the
retained receivable, Terex gave ASV a receivable for a portion of the third party customer receivable retained by Terex.
At December 31, 2015, the Company has the following notes payable to Terex:
Note related to Crane and Schaeff acquisition
Note payable related to ASV acquisition
Convertible note
$
$
$
250
1,594
6,737
See Note 11 and Note 13 for additional details regarding the above debt obligations.
The following is a summary of the amounts attributable to certain Terex transactions as described in the footnotes to the table, for the
periods indicated:
Sales to Terex
Purchases from Terex
2015
2014
2,472
9,495
108
9
90
In addition to the above referenced purchases, ASV expensed $1,960 and $1,472 for the period ending December 31, 2015 and $216
and $90 for the period from December 20, through December 31, 2014 respectively, on Distribution and Cross Marketing Agreement
and Services Agreement.
Note 23. Legal Proceedings and Other Contingencies
The Company is involved in various legal proceedings, including product liability, employment related issues, and workers’
compensation matters which have arisen in the normal course of operations. The Company has product liability insurance with self-
insurance retention that range from $50 to $500. ASV product liability cases that existed on date of acquisition have a $4,000 self-
retention limit.
Certain cases are at a preliminary stage, and it is not possible to estimate the amount or timing of any cost to the Company. However,
the Company does not believe that these contingencies, in the aggregate, will have a material adverse effect on the Company.
Additionally, the Company has been named as a defendant in several multi-defendant asbestos related product liability lawsuits. In
certain instances, the Company is indemnified by a former owner of the product line in question. In the remaining cases the plaintiff
has, to date, not been able to establish any exposure by the plaintiff to the Company’s products. The Company is uninsured with
respect to these claims but believes that it will not incur any material liability with respect to these to claims.
When it is probable that a loss has been incurred and possible to make a reasonable estimate of the Company’s liability with respect to
such matters, a provision is recorded for the amount of such estimate or the minimum amount of a range of estimates when it is not
possible to estimate the amount within the range that is most likely to occur. The Company established reserves for several ASV and
PM lawsuits in conjunction with the accounting for these two acquisitions.
Additionally beginning on December 31, 2011, the Company’s workmen’s compensation insurance policy has per claim deductible of
$250 and aggregates of $1,000, $1,150, $1,325, $1,875 and $1,575 for 2012, 2013, 2014, 2015 and 2016 policy years, respectively.
The Company is fully insured for any amount on any individual claim that exceeds the deductible and for any additional amounts of
all claims once the aggregate is reached. The Company currently has several workmen compensation claims related to injuries that
occurred after December 31, 2011 and therefore are subject to a deductible. The Company does not believe that the contingencies
associated with these worker compensation claims in aggregate will have a material adverse effect on the Company. Prior to
December 31, 2011, worker compensation claims were fully insured.
On May 5, 2011, Company entered into two separate settlement agreements with two plaintiffs. As of December 31, 2015, the
Company has a remaining obligation under the agreements to pay the plaintiffs $1,520 without interest in 16 annual installments of
$95 on or before May 22 each year. The Company has recorded a liability for the net present value of the liability. The difference
between the net present value and the total payment will be charged to interest expense over payment period.
It is reasonably possible that the “Estimated Reserve for Product Liability Claims” may change within the next 12 months. A change
in estimate could occur if a case is settled for more or less than anticipated, or if additional information becomes known to the
Company.
91
Note 24. Quarterly Financial Data (Unaudited)
Unaudited Quarterly Financial Data
Summarized quarterly financial data for 2015 and 2014 are as follows (in thousands, except per share amounts).
2015
2014
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
$
101,042 $
18,002
100,513 $
18,910
91,691 $
17,395
93,491 $
15,199
59,252 $
11,599
64,926 $
13,325
60,687 $
10,242
62,299
12,283
(231 )
100
(45 )
(3,856)
2,279
3,516
1,761
682
7
38
254
(1,639)
(402)
(530 )
7
(210)
$
(224 ) $
138 $
209 $
(5,495) $
1,877 $
2,986 $
1,768 $
472
$
(0.01 ) $
0.01 $
(0.00 ) $
(0.24 ) $
0.17 $
0.25 $
0.13 $
0.05
$
0.00 $
0.00 $
0.02 $
(0.10 ) $
(0.03) $
(0.04 ) $
0.00 $
(0.02 )
$
(0.01 ) $
0.01 $
0.01 $
(0.34 ) $
0.14 $
0.22 $
0.13 $
0.03
Net revenues
Gross Profit
Net (loss) income from
continuing operations
attributable to shareholders of
Manitex International,Inc.
Net income(loss) from
discontinued operations
Net (loss) income attributable to
shareholders of Manitex
International, Inc.
Earnings per Share
Basic
(Loss) Earnings from
continuing operations
attributable to
shareholders
of Manitex
International, Inc.
Earnings (loss) from
discontinued operations
attributable to
shareholders of Manitex
International, Inc.
(Loss) Earnings
attributable to
shareholders
of Manitex International,
Inc.
Diluted
(Loss) Earnings from
continuing operations
attributable to
shareholders of Manitex
International, Inc.
Earnings (loss) from
discontinued operations
attributable to
shareholders's of Manitex
International, Inc.
(Loss) 'Earnings
attributable to
shareholders
of Manitex International,
Inc.
Shares outstanding
$
$
$
(0.01 ) $
0.01 $
(0.00 ) $
(0.24 ) $
0.16 $
0.25 $
0.13 $
0.05
0.00 $
0.00 $
0.02 $
(0.10 ) $
(0.03) $
(0.04 ) $
0.00 $
(0.01 )
(0.01 ) $
0.01 $
0.01 $
(0.34 ) $
0.14 $
0.22 $
0.13 $
0.03
Basic
Diluted
15,836,423 16,014,059 16,014,594 16,015,219 13,807,312 13,822,383 13,822,918 13,980,142
15,836,423 16,031,011 16,014,594 16,015,219 13,840,506 13,874,289 13,873,157 14,029,205
Results for Sabre, Valla, Lift Venture, ASV, PM and Columbia Tank are included in the Company’s results from their respective
effective dates of acquisition which are August 19, 2013, November 30, 2013, December 16, 2014, December 20, 2014, January 15,
2015 and March 12, 2015, respectively.
92
Note 25. Discontinued Operations
Company Sells Load King
On December 28, 2015, the Company completed the sale of the membership interests of Load King, LLC, a Michigan limited liability
company previously known as Manitex Load King, Inc. (“Load King”) pursuant to a Purchase Agreement (the “Purchase
Agreement”) with Utility One Source Forestry Equipment LLC, a Delaware limited liability company (the “Buyer”). The Company
owned all of the outstanding membership interests of Load King prior to the completion of the transaction.
The Company received cash consideration of $6,525 in connection with sale of Load King. The company recognized a pre-tax loss of
$1,422 on the sale and also had transaction expenses of $720 with a corresponding tax benefit of $764.
The following is the detail of major classes of assets and liabilities of discontinued operations that were summarized on the
Company’s Consolidated Balance Sheets:
As of
December 31,
2014
ASSETS
Current assets
Cash
Trade receivables (net)
Other receivables
Inventory, net
Prepaid expense and other
Total current assets of discontinued operations
Total fixed assets (net)
Intangible assets (net)
Other long-term assets
Total assets of discontinued operations
Current liabilities
Notes payable—short term
Accounts payable
Accrued expenses
$
$
$
Total current liabilities of discontinued operations
Long-term liabilities
Notes payable
Total long-term liabilities of discontinued operations
Total liabilities of discontinued operations
$
2
2,422
(237 )
5,977
42
8,206
2,796
671
10
11,683
119
1,893
413
2,425
1,665
1,665
4,090
93
The following is the detail of major line items that constitute the loss from discontinued operations:
For the Year Ended December 31,
2014
2013
2015
$
Net revenues
Cost of sales
Research and development costs
Selling, general and administrative expenses
Interest expense
Other income
Income (Loss) from discontinued operations before income
taxes
Loss on sale of discontinued operation including transactions
expense of $720
Total loss on discontinued operations before
income taxes
Income tax (benefit) related to discontinued operations
Net loss on discontinued operations
$
18,432 $
16,027
464
1,546
345
9
16,917 $
16,102
459
1,894
373
—
15,251
14,512
604
1,627
445
—
59
(1,911 )
(1,937)
(2,142)
—
—
(2,083)
(743)
(1,340) $
(1,911 )
(776 )
(1,135 ) $
(1,937)
(813)
(1,124)
Note 26. Subsequent Events
Company and its Banks Amend Credit Agreement
Manitex International, Inc. (the “Company”) and certain of its subsidiaries currently have a credit agreement (the “Credit Agreement”)
with Comerica Bank and Fifth Third Bank (the “Banks”). On March 7, 2016, the Company and the Banks entered into Amendment
No. 3 to the Credit Agreement (the “Amendment”). The principal modifications to the Credit Agreement resulting from the
Amendment are as follows:
reducing (i) the maximum amount of the revolving loan facility to $35,000,000 and (ii) the term loan commitment amount
to $950,000; and
adjusting the financial covenants for the fiscal quarters ending December 31, 2015 and March 31, 2016.
94
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) is recorded, processed, summarized, and reported, within the time periods specified by the Securities and Exchange Commission
(“SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure
that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and
communicated to management, including the Chief Executive Officer (principal executive officer) and the Chief Financial Officer
(principal financial officer), as appropriate to allow timely decisions regarding required disclosure.
Under the supervision of, and with the participation of our management, including our Chief Executive Officer (principal executive
officer) and Chief Financial Officer (principal financial officer), we conducted an evaluation of the effectiveness of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by
this report. Based on our evaluation, the Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal
financial officer) have concluded that these controls and procedures were effective as of the end of the period covered by this report to
ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the rules and forms of the SEC.
Management’s Report on Internal Control over Financial Reporting
Management’s Responsibility
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company’s internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management’s Assessment
Management, under the supervision and with the participation of our Chief Executive Officer (principal executive officer) and Chief
Financial Officer (principal financial officer), assessed the effectiveness of the Company’s internal control over financial reporting as
of December 31, 2015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway
Commission (COSO) in Internal Control—Integrated Framework (2013). In connection with such evaluation, our management
concluded that the Company’s internal control over financial reporting was effective as of December 31, 2015.
The effectiveness of the company’s internal control over financial reporting as of December 31, 2015, has been audited by UHY LLP,
an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control over Financial Reporting
During the fourth quarter of 2015, there were no changes in our internal control over financial reporting that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
95
ITEM 9B. OTHER INFORMATION
Company and its Banks Amend Credit Agreement
Manitex International, Inc. (the “Company”) and certain of its subsidiaries currently have a credit agreement (the “Credit Agreement”)
with Comerica Bank and Fifth Third Bank (the “Banks”). On March 7, 2016, the Company and the Banks entered into Amendment
No. 3 to the Credit Agreement (the “Amendment”). The principal modifications to the Credit Agreement resulting from the
Amendment are as follows:
reducing (i) the maximum amount of the revolving loan facility to $35,000,000 and (ii) the term loan commitment amount
to $950,000; and
adjusting the financial covenants for the fiscal quarters ending December 31, 2015 and March 31, 2016.
The above summary of the Amendment is qualified in its entirety by reference to the copy of such Amendment, which is attached as
Exhibit 10.25 to this Annual Report on Form 10-K and is incorporated by reference herein.
96
PART III
Certain information required by Part III is omitted from this Form 10-K as the Company intends to file with the Commission its
definitive Proxy Statement for its 2016 Annual Meeting of Shareholders (the “2016 Proxy Statement”) pursuant to Regulation 14A of
the Securities Exchange Act of 1934, as amended, not later than 120 days after December 31, 2015.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information under the headings “Nominees to Serve Until the 2017 Annual Meeting,” “Executive Officers of the Company who
are not also Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Committee on Directors and Board
Governance,” and “Audit Committee” in our 2016 Proxy Statement is incorporated herein by reference.
Code of Ethics
The Company has adopted a code of ethics applicable to our principal executive officer and principal financial and accounting officer,
in accordance with Section 406 of the Sarbanes-Oxley Act of 2002, the rules of the SEC promulgated thereunder, and the NASDAQ
rules. The code of ethics also applies to all employees of the Company as well as the Board of Directors. In the event that any changes
are made or any waivers from the provisions of the code of ethics are made, these events would be disclosed on the Company’s
website or in a report on Form 8-K within four business days of such event. The code of ethics is posted on our website at
www.manitexinternational.com. Copies of the code of ethics will be provided free of charge upon written request directed to Investor
Relations, Manitex International, Inc., 9725 Industrial Drive, Bridgeview, Illinois 60455.
ITEM 11. EXECUTIVE COMPENSATION
The information under the headings “Compensation Committee Interlocks and Insider Participation,” “Compensation Committee
Report” “COMPENSATION DISCUSSION AND ANALYSIS” “EXECUTIVE COMPENSATION,” and “DIRECTOR
COMPENSATION” in our 2016 Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The information under the headings “Equity Compensation Plan Information” and “PRINCIPAL STOCKHOLDERS” in our 2016
Proxy Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information under the headings “Transactions with Related Persons,” “Corporate Governance,” “Compensation Committee,” and
“Audit Committee” in our 2016 Proxy Statement is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information under the heading “AUDIT COMMITTEE” in our 2016 Proxy Statement is incorporated herein by reference.
97
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Report:
PART IV
(1) Financial Statements
See Index to Financial Statements on page 42.
(2)
Supplemental Schedules
None.
All schedules have been omitted because the required information is not present in amounts sufficient to require submission of the
schedules, or because the required information is included in the consolidated financial statements or notes thereto.
(b) Exhibits
See the Exhibit Index following the signature page.
(c) Financial Statement Schedules
All information for which provision is made in the applicable accounting regulations of the SEC is either included in the financial
statements, is not required under the related instructions or is inapplicable, and therefore has been omitted.
98
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Dated: March 10, 2016
MANITEX INTERNATIONAL, INC.
By:
/s/ D AVID H. G RANSEE
David H. Gransee
Vice President, Chief Financial Officer
(On behalf of the Registrant and as
Principal Financial and Accounting Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David J.
Langevin and David H. Gransee his or her attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to
sign any amendments to this Annual Report on Form 10-K, and to file the same, with Exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-
fact, or substitute or substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.
/s/ D AVID J. LANGEVIN
David J. Langevin,
Chairman and Chief Executive Officer
(Principal Executive Officer)
/s/ D AVID H. GRANSEE
David H. Gransee,
Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ R ONALD M. CLARK
Ronald M. Clark,
Director
/s/ R OBERT S. GIGLIOTTI
Robert S. Gigliotti,
Director
/s/ F REDERICK B. K NOX
Frederick B. Knox,
Director
/s/ M ARVIN B. ROSENBERG
Marvin B. Rosenberg,
Director
/s/ S TEPHEN J. TOBER
Stephen J. Tober,
Director
March 10, 2016
March 10, 2016
March 10, 2016
March 10, 2016
March 10, 2016
March 10, 2016
March 10, 2016
99
Exhibit No.
Description
Exhibit Index
2.1
2.2
2.3
2.4
3.1
3.2
4.1
4.2
4.3
10.1*
10.2*
10.3*
10.4*
10.5*
10.6*
10.7
10.8
10.9
English Summary of Form of Agreement for Sale of Company Division dated June 27, 2011 between C.V.S.
Costruzione Veicoli Speciali S.p.A. and CVS Ferrari srl (incorporated by reference to Exhibit 2.1 to the Current Report
on Form 8-K/A filed on August 8, 2011).
Stock Purchase Agreement, dated October 29, 2014, between Manitex International, Inc. and Terex Corporation
(incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed on November 3, 2014).
Amendment No. 1, dated December 19, 2014 to Stock Purchase Agreement, dated October 29, 2014, between Manitex
International, Inc. and Terex Corporation (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K
filed on December 23, 2014).
Purchase Agreement, dated as of December 28, 2015, by and between Manitex International, Inc. and Utility One
Source Forestry Equipment LLC (incorporate by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on
January 4, 2016).
Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q
filed on November 13, 2008).
Amended and Restated Bylaws of Veri-Tek International, Corp. (now known as Manitex International, Inc.), as
amended (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K filed on March 27, 2008) .
Specimen Common Stock Certificate of Manitex International, Inc. (incorporated by reference to Exhibit 4.1 to the
Annual Report on Form 10-K filed on March 25, 2009).
Rights Agreement, dated as of October 17, 2008, between Manitex International, Inc. and American Stock Transfer &
Trust Company, LLC (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on October 21,
2008).
Subordinated Convertible Promissory Note, dated as of December 19, 2014, between Manitex International, Inc. and
Terex Corporation (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on December 23,
2014).
Employment Agreement, dated December 12, 2012, between Manitex International, Inc. and David J. Langevin
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-k filed on December 17, 2012).
Employment Agreement, dated December 12, 2012, between Manitex International, Inc. and Andrew M. Rooke
(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-k filed on December 17, 2012).
Employment Agreement, dated December 12, 2012, between Manitex International, Inc. and Lubomir T. Litchev
(incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-k filed on December 17, 2012).
Employment Agreement, dated December 12, 2012, between Manitex International, Inc. and David H. Gransee
(incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-k filed on December 17, 2012 ).
Second Amended and Restated Manitex International, Inc. 2004 Equity Incentive Plan (incorporated by reference to
Exhibit 10.4 to the Annual Report on Form 10-K filed on March 30, 2010) .
Form of Restricted Stock Unit Award (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K
filed on November 16, 2007).
Lease dated April 17, 2006 between Krislee-Texas, LLC and Manitex, Inc. for facility located in Georgetown, Texas
(incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K filed on April 13, 2007).
Lease Agreement, dated July 10, 2009, by and between Badger Equipment Company and Avis Industrial Corporation
(incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on July 16, 2009).
Lease Agreement, dated May 26, 2010, between Manitex International, Inc. and KB Building, LLC (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 28, 2010).
10.9(a)
Lease Amendment, dated June 6, 2014 between Manitex International, Inc. and KB Building, LLC (incorporated by
reference to Exhibit 10.2 to the Current Report on Form 8-K filed on June 6, 2014).
100
Exhibit No.
Description
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
Lease dated June 8, 2010, between Aldrovandi Equipment Limited and Manitex Liftking, ULC for facility located in
Woodbridge, Ontario (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on
August 13, 2010).
First Amendment to Commercial lease with Sabre Realty, LLC dated August 19, 2013 (incorporated by reference to
Exhibit 10.3 of the Company’s Current Report on Form 8-K filed (with respect to Items 1.01, 2.01, 2.03, 3.02, and 9.01)
August 20, 2013).
Commercial lease with Sabre Realty, LLC dated January 1, 2009 (incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed (with respect to Items 1.01, 2.01, 2.03, 3.02, and 9.01) August 20, 2013).
Commercial lease with Brave New World Realty, LLC dated August 29, 2011 (incorporated by reference to Exhibit
10.2 of the Company’s Current Report on Form 8-K filed (with respect to Items 1.01, 2.01, 2.03, 3.02, and 9.01)
August 20, 2013).
First Amendment to Commercial lease with Brave New World Realty, LLC dated August 19, 2013 (incorporated by
reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed (with respect to Items 1.01, 2.01, 2.03,
3.02, and 9.01) August 20, 2013).
Amendment No. 1 to Amended and Restated Letter Agreement dated December 23, 2011 (incorporated by reference to
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 5, 2013).
Amended and Restated Specialized Equipment Facility Master Note (incorporated by reference to Exhibit 10.2 to the
Company’s Current Report on Form 8-K filed February 5, 2013).
Reaffirmation of Manitex International, Inc. Guaranty (incorporated by reference to Exhibit 10.3 to the Company’s
Current Report on Form 8-K filed February 5, 2013).
Reaffirmation of Manitex, LLC Guaranty (incorporated by reference to Exhibit 10.4 to the Company’s Current Report
on Form 8-K filed February 5, 2013).
Guarantor Waiver executed by Manitex International, Inc. and Manitex, LLC (incorporated by reference to Exhibit 10.6
to the Company’s Current Report on Form 8-K filed February 5, 2013).
Acknowledgement of Manitex International, Inc. and Manitex, LLC (incorporated by reference to Exhibit 10.7 to the
Company’s Current Report on Form 8-K filed February 5, 2013).
Amendment dated April 3, 2013 to Master Revolving Note dated June 29, 2011 (incorporated by reference to Exhibit
10.1 to the Company’s Current Report on Form 10-K filed April 8, 2013).
First Amendment to the Second Amended and Restated Manitex International, Inc. 2004 Equity Incentive Plan.
(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q August 7, 2013).
Amended and Restated Credit Agreement dated as of January 9, 2015 by and among Manitex International, Inc.,
Manitex, Inc., Manitex Sabre, Inc., Badger Equipment Company and Manitex Load King, Inc. as the U.S. Borrowers,
Manitex Liftking ULC, as the Canadian Borrower, the other persons party thereto that are designed as credit parties,
Comerica Bank, for itself as U.S. Revolving Lender, a U.S. Term Lender, the U.S. Swing Line Lender and as U.S. L/C
Issuer and as U.S. Agent for all lenders, Comerica through its Toronto branch, for itself, as a Canadian Lender and the
Canadian Swing Line Lender and as Canadian Agent for all Canadian lenders, the other financial institutions party
thereto, as lenders, Comerica Bank as Administrative Agent, Sole Lead Arranger and Sole Bookrunner (Incorporated by
reference to Exhibit 10.4 to the Current Report on Form 8-K filed on January 12, 2015).
Amendment No. 1 to Amended and Restated Credit Agreement, dated as of January 9, 2015, by and among Manitex
International, Inc., Manitex, Inc., Manitex Sabre, Inc., Badger Equipment Company and Manitex Load King, Inc. as the
U.S. Borrowers, Manitex Liftking ULC, as the Canadian Borrower, the other persons party thereto that are designed as
credit parties, Comerica Bank, for itself as U.S. Revolving Lender, a U.S. Term Lender, the U.S. Swing Line Lender
and a U.S. L/C Issuer and as U.S. Agent for all lenders, Comerica through its Toronto branch, for itself, as a Canadian
Lender and the Canadian Swing Line Lender and as Canadian Agent for all Canadian lenders, the other financial
institutions party thereto, as lenders, Comerica Bank as Administrative Agent, Sole Lead Arranger and Sole Bookrunner
(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 27, 2015).
101
Exhibit No.
Description
10.25(1)
Amendment No. 3 to Amended and Restated Credit Agreement, dated as of January 9, 2015, by and among Manitex
International, Inc., Manitex, Inc., Manitex Sabre, Inc. and Badger Equipment Company as the U.S. Borrowers, Manitex
Liftking ULC, as the Canadian Borrower, the other persons party thereto that are designed as credit parties, Comerica
Bank, for itself as U.S. Revolving Lender, a U.S. Term Lender, the U.S. Swing Line Lender and a U.S. L/C Issuer and
as U.S. Agent for all lenders, Comerica through its Toronto branch, for itself, as a Canadian Lender and the Canadian
Swing Line Lender and as Canadian Agent for all Canadian lenders, the other financial institutions party thereto, as
lenders, Comerica Bank as Administrative Agent, Sole Lead Arranger and Sole Bookrunner.
10.26
10.27
10.28
10.29
10.30
10.31
10.32
10.33
10.34
10.35
10.36
10.37
10.38
10.39
10.40
Second Amended and Restated Letter Agreement between Manitex Liftking, ULC and Comerica Bank dated November
13, 2013 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 14, 2013).
Second Amended and Restated Specialized Equipment Export Facility Master Revolving Note between Manitex
Liftking, ULC and Comerica Bank dated November 13, 2013 (incorporated by reference to Exhibit 10.2 to the Current
Report on Form 8-K filed on November 14, 2013).
Amendment No. 1 to the Second Amended and Restated Specialized Equipment Export Facility Master Revolving Note
dated November 13, 2013 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 7,
2015).
Amendment No. 2 to the Amended and Restated Specialized Equipment Export Facility Master Revolving Note dated
November 13, 2013 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 1,
2015).
Advance Formula Agreement dated as of December 23, 2011, made by Manitex Liftking, ULC in favor of Comerica
Bank (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed on December 30, 2011).
Amendment No. 1, dated August 10, 2012, to Advance Formula Agreement dated as of December 23, 2011, made by
Manitex Liftking, ULC in favor of Comerica Bank (incorporated by reference to Exhibit 10.2 to the Current Report on
Form 8-K filed on August 13, 2012).
Master Revolving Note in the principal amount of $500,000 dated May 5, 2010, between Manitex International, Inc.
and Comerica Bank (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on August
May 11, 2010).
Amendment No. 1, dated August 10, 2012, to Master Revolving Note in the principal amount of $500,000 dated May 5,
2010, between Manitex International, Inc. and Comerica Bank (incorporated by reference to Exhibit 10.1 to the Current
Report on Form 8-K filed on August 13, 2012) .
Letter agreement dated May 5, 2010, between Manitex International, Inc. and Comerica Bank (incorporated by
reference to Exhibit 10.4 to the Current Report on Form 8-K filed on May 11, 2010) .
Amendment effective as of June 29, 2011 to the Letter Agreement dated May 5, 2010 between Manitex International,
Inc. and Comerica Bank (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed on July 1,
2011).
Comerica Bank Foreign Currency Exchange Master Agreement, dated September 7, 2007, between Veri-Tek
International, Corp. (now known as Manitex International, Inc.) and Comerica Bank (incorporated by reference to
Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on November 14, 2007) .
Specialized Equipment Export Facility Master Revolving Note for $2.0 million dated December 23, 2011, between
Manitex Liftking, ULC and Comerica Bank (incorporated by reference to Exhibit 10.2 to the Current Report on Form
8-K filed on December 30, 2011).
Manitex International, Inc. Guarantee dated as of December 23, 2011 in favor of Comerica Bank related to indebtedness
of Manitex Liftking, ULC Specialized Equipment Export Facility (incorporated by reference to Exhibit 10.4 to the
Current Report on Form 8-K filed on December 30, 2011).
Manitex, LLC Guarantee dated as of December 23, 2011, in favor of Comerica Bank related to indebtedness of Manitex
Liftking, ULC Specialized Equipment Export Facility (incorporated by reference to Exhibit 10.5 to the Current Report
on Form 8-K filed on December 30, 2011).
Manitex International, Inc. Waiver issued to Export Development Canada dated December 9, 2011 (incorporated by
reference to Exhibit 10.6 to the Current Report on Form 8-K filed on December 30, 2011).
102
Exhibit No.
Description
10.41
10.42
10.43
10.44
10.45
10.46
10.47
10.48
10.49
10.50
10.51
10.52
10.53
10.54
10.55
10.56
10.57
10.58
Manitex, LLC Waiver issued to Export Development Canada dated December 9, 2011 (incorporated by reference to
Exhibit 10.7 to the Current Report on Form 8-K filed on December 30, 2011).
Amended and Restated Master Revolving Note (Multi-Currency) for $6.5 million dated December 23, 2011, between
Manitex Liftking, ULC and Comerica Bank (incorporated by reference to Exhibit 10.9 to the Current Report on Form
8-K filed on December 30, 2011).
Amended and Restated Guaranty dated December 23, 2011 from Manitex International, Inc. to Comerica Bank related
to Manitex Liftking, ULC Amended and Restated Master Revolving Note (incorporated by reference to Exhibit 10.10
to the Current Report on Form 8-K filed on December 30, 2011).
Amended and Restated Security Agreement dated as of December 23, 1011 from Manitex International, Inc. to
Comerica Bank related to Manitex Liftking, ULC Amended and Restated Master Revolving Note (incorporated by
reference to Exhibit 10.11 to the Current Report on Form 8-K filed on December 30, 2011).
Amended and Restated Guaranty dated December 23, 2011 from Manitex, LLC to Comerica Bank related to Manitex
Liftking, ULC Amended and Restated Master Revolving Note (incorporated by reference to Exhibit 10.12 to the
Current Report on Form 8-K filed on December 30, 2011).
Security Agreement dated as of December 23, 2011 from Manitex, LLC to Comerica Bank related to Manitex Liftking,
ULC Amended and Restated Master Revolving Note (incorporated by reference to Exhibit 10.13 to the Current Report
on Form 8-K filed on December 30, 2011).
Floorplan and Security Agreement between Manitex International, Inc. and HCA Equipment Finance LLC, dated
December 15, 2008, together with the form of Extension of Credit, which is attached as Exhibit A thereto, and the
Addendum to Floorplan and Security Agreement, dated January 20, 2009 (incorporated by reference to Exhibit 10.1 to
the Current Report on Form 8-K filed on January 27, 2009).
Restructuring Agreement, dated October 6, 2008, by and among Terex Corporation, Crane & Machinery, Inc., and
Manitex International, Inc. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on
October 10, 2008) .
Term Note in principal amount of $2,000,000, dated October 6, 2008, payable by Manitex International, Inc. to Terex
Corporation (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on October 10, 2008).
Security Agreement, dated October 6, 2008, by and between Crane & Machinery, Inc. and Terex Corporation
(incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on October 10, 2008).
Master Revolving Note in the principal amount of $22.5 million dated June 29, 2011 by and between, and between
Manitex, Inc. and Comerica Bank (incorporated by reference to Exhibit 10-2 to the Current Report on Form 8-K filed
on July 1, 2011).
Master Revolving Note in the principal amount of $1.0 million dated June 29, 2011 by and between, and between
Manitex International, Inc. and Comerica Bank (incorporated by reference to Exhibit 10-6 to the Current Report on
Form 8-K filed on July 1, 2011).
Guaranty of Manitex International, Inc. dated June 29, 2011 that guarantees Manitex, Inc. indebtedness to Comerica
Bank (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed on July 1, 2011).
Guaranty of Manitex International, Inc. dated June 29, 2011 that guarantees Manitex Liftking, ULC indebtedness to
Comerica Bank (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed on July 1, 2011).
Guaranty of Badger Equipment Company and Manitex Load King, Inc. dated June 29, 2011 that guarantees Manitex,
Inc. and Manitex International, Inc. indebtedness to Comerica Bank (incorporated by reference to Exhibit 10.11 to the
Current Report on Form 8-K filed on July 1, 2011).
Security Agreement dated June 29, 2011 by and between, and between Badger Equipment Company and Comerica
Bank (incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K filed on July 1, 2011).
Security Agreement dated June 29, 2011 by and between, and between Manitex Load King, Inc. and Comerica Bank
(incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K filed on July 1, 2011).
Guaranty of Manitex, Inc. dated June 29, 2011 that guarantees Manitex International, Inc. indebtedness to Comerica
Bank (incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K filed on July 1, 2011).
103
Exhibit No.
Description
10.59
10.60
10.61
10.62
Loan Agreement dated November 2, 2011, between the South Dakota Board of Economic Development and Manitex
Load King, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 8,
2011).
Promissory Note in the principal amount of $857,500 dated November 2, 2011, between Manitex Load King, Inc. and
the South Dakota Board of Economic Development (incorporated by reference to Exhibit 10.2 to the Current Report on
Form 8-K filed on November 8, 2011).
Mortgage—One Hundred Eighty Day Redemption dated November 2, 2011, between Manitex Load King, Inc. and the
South Dakota Board of Economic Development (incorporated by reference to Exhibit 10.3 to the Current Report on
Form 8-K filed on November 8, 2011).
Guaranty Agreement dated November 2, 2011, between the State of South Dakota Board of Economic Development
and Manitex International, Inc. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on
November 8, 2011).
10.63*
Employment Agreement dated November 2, 2011, between the State of South Dakota Board of Economic Development
and Manitex Load King, Inc. (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on
November 8, 2011).
10.64
10.65
10.66
10.67
10.68
10.69
10.70
10.71
10.72
10.73
10.74
10.75
10.76
Promissory Note in the principal amount of $857,500 dated November 2, 2011, between Manitex Load King, Inc. and
Home Federal Bank (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed on November 8,
2011).
Mortgage One Hundred Eighty Day Redemption dated November 2, 2011, between Manitex Load King, Inc. and Home
Federal Bank (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed on November 8,
2011).
Guaranty dated November 2, 2011, between Manitex International, Inc., Manitex Load King, Inc. and Home Federal
Bank (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed on November 8, 2011).
Promissory Note in the principal amount of $400,000 dated November 2, 2011, between Manitex Load King, Inc. and
Home Federal Bank (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed on November 8,
2011).
Security Agreement dated November 2, 2011, between Home Federal Bank and Manitex Load King, Inc. (incorporated
by reference to Exhibit 10.10 to the Current Report on Form 8-K filed on November 8, 2011).
English Summary of Form of Agreement for the Provision of Goods dated June 29, 2011 between CVS Ferrari Srl and
Cabletronic srl. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K/A filed on August 8,
2011).
English Summary of Form of Letter Agreement dated February 11, 2011 between C.V.S. Costruzione Veicoli Speciali
S.p.A. and CVS Ferrari srl (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K/A filed on
August 8, 2011).
Investment Agreement, dated July 21, 2014, between Manitex International, Inc., IPEF III Holdings n° 11 S.A and
Columna Holdings Limited (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on
July 25, 2014).
Debt Assignment Agreements, dated July 21, 2014, between Manitex International, Inc. and Banca Popolare del’Emilia
Romagna S.C. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on July 25, 2014).
Debt Assignment Agreements, dated July 21, 2014, between Manitex International, Inc. and Unicredit S.P.A.
(incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on July 25, 2014).
Option Agreement, dated July 21, 2014, by and between Manitex International, Inc. and Banca Popolare del’Emilia
Romagna S.C. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on July 25, 2014).
Commitment Letter dated July 21, 2014 the Company and PM Group (incorporated by reference to Exhibit 10.5 to the
Current Report on Form 8-K filed on July 25, 2014).
Common Stock and Convertible Debenture Purchase Agreement, dated October 29, 2014, between Manitex
International, Inc. and Terex Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K
filed on November 3, 2014).
104
Exhibit No.
Description
10.77
10.78
Credit Agreement, dated as of December 19, 2014 among ASV, the Loan Parties party thereto and Garrison Loan
Agency Services LLC, as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Current Report on
Form 8-K filed on December 23, 2014).
Credit Agreement, dated as of December 19, 2014 among ASV, the Loan Parties party thereto, the Lenders party thereto
and JPMorgan Chase bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Current
Report on Form 8-K filed on December 23, 2014).
21.1 (1)
Subsidiaries of the Company.
23.1 (1)
Consent of UHY LLP.
24.1 (1)
31.1 (1)
31.2 (1)
32.1(1)
101(1)
Power of Attorney (included on signature page).
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of
1934, as amended.
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of
1934, as amended.
Certification by Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350.
The following financial information from the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of
Income for the fiscal years ended December 31, 2015, 2014 and 2013, (ii) Consolidated Balance Sheets as of December
31, 2015 and 2014, (iii) Consolidated Statements of Shareholders Equity and Comprehensive Income, (iv) Consolidated
Statements of Cash Flows and (v) Notes to Consolidated Financial Statements.
Denotes a management contract or compensatory plan or arrangement.
*
(1) Filed herewith.
105
Exhibit 10.25
AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT
This Amendment No. 3 to Amended and Restated Credit Agreement (“Amendment”) is made as of
March 7, 2016 (“Amendment No. 3 Effective Date”) among MANITEX INTERNATIONAL, INC., a
Michigan corporation, MANITEX, INC., a Texas corporation, MANITEX SABRE, INC., a Michigan
corporation, and BADGER EQUIPMENT COMPANY, a Minnesota corporation (each, individually a
“US Borrower,” and collectively the “US Borrowers”) and MANITEX LIFTKING, ULC, an Alberta
company (the “Canadian Borrower” and, together with the US Borrowers, the “Borrowers” and each
individually, a “Borrower”) and the other Credit Parties (as defined in the Credit Agreement, defined
below) and COMERICA BANK, a Texas banking association (in its individual capacity, “Comerica”),
as US Agent, US Swing Line Lender, US Issuing Lender and a US Lender, COMERICA BANK, a
Texas banking association and authorized foreign bank under the Bank Act (Canada), through its Toronto
branch (in its individual capacity, “Comerica Canada”) as Canadian Agent, Canadian Swing Line Lender,
Canadian Issuing Lender and a Canadian Lender, FIFTH THIRD BANK, an Ohio banking corporation,
as a US Lender and a Canadian Lender (Canadian Lenders, Canadian Swing Line Lender, US Lenders
and US Swing Line Lender are sometimes referred to herein collectively as the “Lenders”).
PRELIMINARY STATEMENT
The Borrowers, the Credit Parties (as defined in the Credit Agreement), US Agent, Canadian Agent
and the Lenders entered into that certain Amended and Restated Credit Agreement dated January 9, 2015
as amended by an Amendment No. 1 to Amended and Restated Credit Agreement dated as of March 25,
2015 and an Amendment No. 2 to Amended and Restated Credit Agreement dated as of October 30, 2015
(as amended, the “Credit Agreement”) providing terms and conditions governing certain loans and other
credit accommodations extended by the US Agent, Canadian Agent and Lenders to Borrowers (the
“Obligations”).
Borrowers, US Agent, Canadian Agent and the Lenders have agreed to amend the terms of the
Credit Agreement as provided in this Amendment.
AGREEMENT
Defined Terms. In this Amendment, capitalized terms used without separate definition shall have
1.
the meanings given them in the Credit Agreement.
2.
Amendment.
2.1
Agreement:
The following term and its definition are hereby added to Section 1.1 of the Credit
“Annualized” shall mean (i) for the determination made on December 31, 2015, the
actual amount for the twelve month period then ended, (ii) for determinations made after
December 31, 2015 but prior to December 31, 2016, the actual amount of the time to be
annualized multiplied by a fraction, the numerator which is 12 and the denominator of which is
the number of months completed as of the date of determination since January 1, 2016 (rounded
to the nearest integer, if not otherwise an integer) and (iii) for determinations made as of and after
December 31, 2016, the actual amount for the twelve month period then ended.
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2.2
The following terms and their respective definitions contained in Section 1.1 of the Credit
Agreement are hereby amended and restated in their entireties as follows:
“Applicable Measuring Period” shall mean (a) for the fiscal quarter ending December 31,
2015, the four quarter period ending on such date, (b) for the fiscal quarters ending March 31,
2016, June 30, 2016, and September 30, 2016, the period beginning on January 1, 2016 and
ending on such date, and (c) for the fiscal quarter ending December 31, 2016, and each fiscal
quarter thereafter, the four quarter period ending on such date.
“Consolidated Fixed Charge Coverage Ratio” shall mean as of any date of determination
thereof, the ratio of (i) Consolidated Adjusted North American EBITDA, plus Net Repatriated
Loan Proceeds (for greater certainty such Net Repatriated Loan Proceeds are added only to the
extent such Net Repatriated Loan Proceeds are not included in the calculation of Consolidated
Net Income), minus unfinanced Capital Expenditures, minus Distributions, all of the
aforementioned calculated on an Annualized basis for the Applicable Measuring Period ending on
such date, to (ii) Consolidated Fixed Charges for the Applicable Measuring Period ending on
such date, calculated on an Annualized basis, all as determined on a consolidated basis for Parent
and its Restricted Subsidiaries located in North America in accordance with GAAP.
“US Revolving Credit Aggregate Commitment” shall mean Thirty Five Million US
Dollars (US$35,000,000), subject to reduction or termination under Sections 2.10, 2.11 or 9.2
hereof.
2.3
Section 7.1 of the Credit Agreement is hereby amended by adding an “and” at the end of
paragraph (c) and adding the following new paragraph (d):
“(d)
for each calendar month, commencing with the month ending February 29, 2016,
as soon as available, but in any event not later than the date that is thirty (30) days after the end of
each month, a copy of the Parent prepared unaudited Consolidated and Consolidating balance
sheets of the Parent and its Restricted Subsidiaries located in North America as at the end of such
month and the related unaudited statements of income, with detailed financial statement
schedules, stockholders equity and cash flows of the Parent and its Restricted Subsidiaries located
in North America for the portion of the Fiscal Year through the end of such month, with
comparisons to budget and narrative on results achieved, such statements to be in form and
substance satisfactory to US Agent and to be certified by a Responsible Officer of the US
Borrowers and Canadian Borrower as being fairly stated in all material respects;”
2.4
Paragraph (b) of Section 7.2 of the Credit Agreement is hereby amended and restated in
its entirety as follows:
“(b)
(i) Within fifteen (15) days after and as of the end of each bi-weekly period
(commencing with the period ending March 14, 2016), or more frequently as reasonably
requested by the US Agent or the Majority US Revolving Credit Lenders, a US Borrowing Base
Certificate executed by a Responsible Officer of the US Borrowers; and (ii) within fifteen (15)
days after and as of the end of each bi-weekly period (commencing with the period ending March
14, 2016), or more frequently as reasonably requested by the Canadian Agent or the Majority
Canadian Revolving Credit Lenders, a Canadian Borrowing Base Certificate executed by a
Responsible Officer of the Canadian Borrower;”
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2.5
Paragraph (e) of Section 7.2 of the Credit Agreement is hereby amended and restated in
its entirety as follows:
“(e)
(i) Within fifteen (15) days after and as of the end of each bi-weekly period
(commencing with the period ending March 14, 2016), including the last month of each Fiscal
Year, or more frequently as requested by the US Agent or the Majority US Revolving Credit
Lenders, (1) the monthly aging of the accounts receivable and accounts payable of the US
Borrowing Base Obligors, and (2) an Inventory report of the US Borrowing Base Obligors; and
(ii) within fifteen (15) days after and as of the end of each bi-weekly period (commencing with
the period ending March 14, 2016), including the last month of each Fiscal Year, or more
frequently as requested by the Canadian Agent or the Majority Canadian Revolving Credit
Lenders, (i) the monthly aging of the accounts receivable and accounts payable of the Canadian
Borrowing Base Obligors, and (ii) an Inventory report of the Canadian Borrowing Base
Obligors;”
2.6
Effective as of December 31, 2015, Section 7.9 of the Credit Agreement is hereby
amended and restated in its entirety as follows:
“7.9
Financial Covenants. US Borrowers shall maintain on a Consolidated basis the
financial covenants set forth in this Section 7.9, tested on the last day of each fiscal quarter of
Parent:
(a)
Maintain, as of the last day of each fiscal quarter, for the Applicable
Measuring Period then ending, a Consolidated Fixed Charge Coverage Ratio of not less
than the amount set forth below for the periods indicated below, including the quarter
ends indicated and each fiscal quarter end between such dates:
December 31, 2015
March 31, 2016
June 30, 2016 and each fiscal quarter end thereafter
0.65 to 1.00
1.00 to 1.00
1.20 to 1.00
(b)
Maintain, as of the last day of each fiscal quarter, a Senior Secured First
Lien North American Debt to Consolidated Adjusted North American EBITDA Ratio of
not more than the amount set forth below for the periods indicated below, including the
quarter ends indicated and each fiscal quarter end between such dates:
December 31, 2015
March 31, 2016
June 30, 2016 and each fiscal quarter end thereafter
7.50 to 1.00
10.00 to 1.00
2.75 to 1.00
(c)
Maintain, as of the last day of each fiscal quarter, a Consolidated North
American Total Debt to Consolidated Adjusted North American EBITDA Ratio of not
more than the amount set forth below for the periods indicated below, including the
quarter ends indicated and each fiscal quarter end between such dates:
December 31, 2015
March 31, 2016
June 30, 2016 and each fiscal quarter end thereafter
11.50 to 1.00
15.00 to 1.00
3.75 to 1.00”
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2.7
Section 8.1(b) of the Credit Agreement is hereby amended and restated in its entirety as
follows:
“(b)
any Debt set forth in Schedule 8.1(b) attached hereto, and any renewals or
refinancing of such Debt provided that (i) the aggregate principal amount of such renewed or
refinanced Debt shall not exceed the aggregate principal amount of the original Debt outstanding
on February 22, 2016 (less any principal payments and the amount of any commitment reductions
made thereon on or prior to such renewal or refinancing), (ii) the renewal or refinancing of such
Debt shall be on substantially the same or better terms as in effect with respect to such Debt on
February 22, 2016, and shall otherwise be in compliance with this Agreement, (iii) at the time of
such renewal or refinancing no Default or Event of Default has occurred and is continuing or
would result from the renewal or refinancing of such Debt, and (iv) the aggregate amount of such
Debt including Capitalized Leases, but excluding Rental Fleet Debt, shall not exceed
US$7,241,000 in the aggregate at any time;”
2.8
Section 8.7(d) of the Credit Agreement is hereby amended and restated in its entirety as
follows:
“(d)
except as provided in paragraph (i) below, Investments in Foreign Subsidiaries
(excluding the Canadian Borrower, which investments are expressly permitted) and intercompany
loans or intercompany Investments made by any Credit Party to or in any Guarantor or any
Borrower; provided that, the aggregate amount of such Investments in Foreign Subsidiaries
(excluding the Canadian Borrower, which investments are expressly permitted) and intercompany
loans or intercompany Investments from time to time outstanding in respect thereof shall not
exceed US$5,000,000, or the Equivalent Amount in Canadian Dollars, provided, further for the
purpose of this calculation non-cash management fees shall not be included in the calculation;
and provided, further, that in each case, no Default or Event of Default shall have occurred and be
continuing at the time of making such intercompany loan or intercompany Investment or result
from such intercompany loan or intercompany Investment being made and that any intercompany
loans shall be evidenced by and funded under an Intercompany Note pledged to the Agent under
the appropriate Collateral Documents;”
2.9
The reference to “Manitex, Inc.” set forth in Section 8.16 of the Credit Agreement is
deleted and replaced with “Manitex, LLC”.
2.10 Annex II (Percentages and Allocations) to the Credit Agreement is hereby deleted and
replaced in its entirety with Annex II attached hereto
2.11
Schedule 8.1(b) (Debt) to the Credit Agreement is hereby deleted and replaced in its
entirety with Schedule 8.1(b) attached hereto.
2.12
Exhibit J (Form of Covenant Compliance Report) to the Credit Agreement is hereby
deleted and replaced in its entirety with Exhibit J attached hereto.
3.
Amendment Fee. On or before the Amendment No. 3 Effective Date, the US Agent shall have
received from Borrowers a fully earned and non-refundable amendment fee equal to 0.20% of the sum of
each Lender’s US Revolving Credit Commitment Amount (as amended by this Amendment), Term Loan
Amount and Canadian Revolving Credit Commitment Amount. Such amendment fee shall be paid on a
ratable basis to each Lender that has provided its consent to this Amendment on or before March 4, 2016,
by 4:00 p.m. (Eastern).
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4.
Representations and Warranties. The Borrowers represent, warrant, and agree that:
(a)
Except as expressly modified in this Amendment or as otherwise provided in
writing by Borrowers to Lenders, the representations, warranties, and covenants set forth in the Credit
Agreement and in each related document, agreement, and instrument remain true and correct, continue to
be satisfied in all respects, and are legal, valid and binding obligations with the same force and effect as if
entirely restated in this Amendment, other than those representations and warranties that expressly relate
solely to a specific earlier date, which shall remain correct as of such earlier date.
(b) When executed, the Credit Agreement, as amended by this Amendment will
continue to constitute a duly authorized, legal, valid, and binding obligation of the Borrowers enforceable
in accordance with its terms. The Credit Agreement, as amended, along with each related document,
agreement and instrument, is ratified and confirmed and shall remain in full force and effect and the
Credit Parties further represent and warrant that they have taken all actions necessary to authorize the
execution and performance of such documents.
(c)
There is no Default or Event of Default existing under the Credit Agreement, or
any related document, agreement, or instrument, and no event has occurred or condition exists that is or,
with the giving of notice or lapse of time or both, would be such a default.
(d)
As applicable to each such Credit Party, the articles of incorporation, articles of
formation, articles of amalgamation, bylaws, operating agreements and resolutions and incumbency
certificates of the Borrowers and the Guarantors delivered to US Agent and Canadian Agent as of the
Amendment No. 3 Effective Date and/or in connection the Prior Credit Agreement, have not been
repealed, amended or modified since the date of delivery thereof and that same remain in full force and
effect.
Successors and Assigns. This Amendment shall inure to the benefit of and be binding upon the
5.
parties and their respective successors and assigns.
6.
Governing Law. The parties agree that the terms and provisions of this Amendment shall be
governed by and construed in accordance with the laws of the State of Michigan without regard to
principles of conflicts of law.
7.
No Defenses. The Credit Parties acknowledge, confirm, and warrant to US Agent, Canadian
Agent and the Lenders that as of the date hereof the Credit Parties have absolutely no defenses, claims,
rights of set-off, or counterclaims against US Agent, Canadian Agent and the Lenders under, arising out
of, or in connection with, this Amendment, the Credit Agreement, the Loan Documents and/or the
individual advances under the Obligations, or against any of the indebtedness evidenced or secured
thereby.
Ratification. Except for the modifications under this Amendment, the parties ratify and confirm
8.
the Credit Agreement and the Loan Documents and agree that they remain in full force and effect.
9.
Further Modification; No Reliance. This Amendment may be altered or modified only by written
instrument duly executed by the Credit Parties and the Lenders. In executing this Amendment, the Credit
Parties are not relying on any promise or commitment of US Agent, Canadian Agent and/or the Lenders
that is not in writing signed by the applicable Agent and/or the Lenders.
10.
Acknowledgment and Consent of Guarantors. Each of the US Credit Parties has guaranteed the
payment and performance of the Obligations by Borrowers pursuant to Guaranty dated August 19, 2013
(the “Guaranty”) and with respect to North American Distribution, Inc. and North American Equipment,
Inc. by way of joinder dated as of even date herewith (“Joinder Agreement”). Each of the Guarantors, by
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signing below, acknowledges and consents to the execution, delivery and performance of this
Amendment, and agrees that the Guaranty and Joinder Agreement, as applicable, remains in full force and
effect. Each of the Guarantors further represents that it is in compliance with all of the terms and
conditions of its Guaranty or as applicable its Joinder Agreement.
11.
Expenses. Borrowers shall promptly pay all out-of-pocket fees, costs, charges, expenses, and
disbursements of US Agent, Canadian Agent and the Lenders incurred in connection with the preparation,
execution, and delivery of this Amendment, and the other documents contemplated by this Amendment.
12.
RELEASE. BORROWERS AND GUARANTORS, IN EVERY CAPACITY, INCLUDING,
BUT NOT LIMITED TO, AS SHAREHOLDERS, PARTNERS, OFFICERS, DIRECTORS,
INVESTORS AND/OR CREDITORS OF BORROWERS AND/OR GUARANTORS, OR ANY ONE
OR MORE OF THEM, HEREBY WAIVE, DISCHARGE AND FOREVER RELEASE AGENT AND
LENDERS, AGENT’S AND LENDERS’ EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS,
STOCKHOLDERS, AFFILIATES AND SUCCESSORS AND ASSIGNS, FROM AND OF ANY AND
ALL CLAIMS, CAUSES OF ACTION, DEFENSES, COUNTERCLAIMS OR OFFSETS AND/OR
ALLEGATIONS ANY BORROWER AND/OR ANY GUARANTOR MAY HAVE OR MAY HAVE
MADE OR WHICH ARE BASED ON FACTS OR CIRCUMSTANCES ARISING AT ANY TIME UP
THROUGH AND INCLUDING THE DATE OF THIS AMENDMENT, WHETHER KNOWN OR
UNKNOWN, AGAINST ANY OR ALL OF AGENT, LENDERS, AGENT’S AND/OR LENDERS’
EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS, STOCKHOLDERS, AFFILIATES AND
SUCCESSORS AND ASSIGNS.
13. WAIVER OF JURY TRIAL. THE LENDERS, THE AGENTS AND THE BORROWERS
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF
THIS AMENDMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AMENDMENT OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM.
NEITHER THE LENDERS, THE AGENTS NOR THE BORROWERS SHALL SEEK TO
CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A
JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO
HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE LENDERS AND THE
AGENTS OR THE BORROWERS EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL
OF THEM.
14.
Effectiveness and Counterparts. This Amendment may be executed in as many counterparts as
US Agent, Canadian Agent, the Lenders and the Borrowers deem convenient, and shall become effective
upon delivery to US Agent and Canadian Agent of: (i) all executed counterparts hereof from the Lenders
and from Borrowers and each of the Guarantors; (ii) receipt by Agent of all fees payable to Borrowers to
Lenders and Agent as detailed herein and in the Fee Letter from Borrowers to Agent dated on or about the
Amendment No. 3 Effective Date; (iii) the documents listed on the Closing Checklist attached hereto as
Exhibit A; and (iv) any other documents or items which US Agent or Canadian Agent may require to
carry out the terms hereof.
[Signature Pages Follow]
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[Signature Page - Amendment No. 3 to Amended and Restated Credit Agreement - Borrowers]
This Amendment No. 3 to Amended and Restated Credit Agreement is executed and delivered on
the Amendment No. 3 Effective Date.
MANITEX INTERNATIONAL, INC.
By: /s/ Andrew M. Rooke
Andrew M. Rooke
President
Its:
MANITEX, INC.
By: /s/ Andrew M. Rooke
Andrew M. Rooke
President
Its:
MANITEX SABRE, INC.
By: /s/ Andrew M. Rooke
Andrew M. Rooke
Vice President
Its:
BADGER EQUIPMENT COMPANY
By: /s/ Andrew M. Rooke
Andrew M. Rooke
Vice President
Its:
MANITEX LIFTKING, ULC
By: /s/ Andrew M. Rooke
Andrew M. Rooke
Vice President
Its:
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[Signature Page- Amendment No. 3 to Amended and Restated Credit Agreement – Comerica Bank]
COMERICA BANK
By:
Its:
/s/ Sarah R. Miller
Sarah R. Miller
Vice President & Alternate Group Manager
COMERICA BANK, as US Lender, as US Issuing
Lender, and as US Swing Line Lender
By:
Its:
/s/ Sarah R. Miller
Sarah R. Miller
Vice President & Alternate Group Manager
COMERICA BANK, as Canadian Agent
By:
Its:
/s/ Prashant Prakash
Prashant Prakash
Portfolio Risk Manager
COMERICA BANK, as Canadian Lender,
As Canadian Issuing Lender, and as Canadian Swing
Line Lender
By:
Its:
/s/ Prashant Prakash
Prashant Prakash
Portfolio Risk Manager
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[Signature Page - Amendment No. 3 to Amended and Restated Credit Agreement – US Lender]
FIFTH THIRD BANK, as US Lender
By:
Its:
/s/ David Peura
David Peura
Director & Vice President
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[Signature Page - Amendment No. 3 to Amended and Restated Credit Agreement - Canadian Lender]
FIFTH THIRD BANK, an authorized foreign
bank under the Bank Act (Canada), as Canadian
Lender
By:
Its:
/s/ Ramin Ganjavi
Ramin Ganjavi
Director
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[Signature Page - Amendment No. 3 to Amended and Restated Credit Agreement - Guarantors]
GUARANTORS:
MANITEX INTERNATIONAL, INC.
MANITEX, INC.
By: /s/ Andrew M. Rooke
Andrew M. Rooke
President
Its:
By:
Its:
/s/ Andrew M. Rooke
Andrew M. Rooke
President
MANITEX SABRE, INC.
BADGER EQUIPMENT COMPANY
By: /s/ Andrew M. Rooke
Andrew M. Rooke
Vice President
Its:
By:
Its:
/s/ Andrew M. Rooke
Andrew M. Rooke
Vice President
MANITEX, LLC
LIFTKING, INC.
By: /s/ Andrew M. Rooke
Andrew M. Rooke
Vice President
Its:
By:
Its:
/s/ Andrew M. Rooke
Andrew M. Rooke
President
NORTH AMERICAN DISTRIBUTION, INC.
NORTH AMERICAN EQUIPMENT, INC.
By: /s/ Andrew M. Rooke
Andrew M. Rooke
Vice President
Its:
By:
Its:
/s/ Andrew M. Rooke
Andrew M. Rooke
Vice President
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EXHIBIT “A”
DOCUMENTATION CHECKLIST
US Borrowers:
Manitex International, Inc., a Michigan corporation
Manitex, Inc. a Texas corporation
Manitex Sabre, Inc., a Michigan corporation
Badger Equipment Company, a Minnesota corporation
Canadian Borrower:
Manitex Liftking, ULC, an Alberta company
Agent:
Guarantors:
Comerica Bank, as US Agent for all Lenders
Comerica Bank, as Canadian Agent for all Canadian Lenders
Liftking, Inc. (with respect to debt of all Borrowers)
Manitex, LLC (with respect to debt of all Borrowers)
All US Borrowers (with respect to debt of Canadian Borrower)
North American Distribution, Inc. (with respect to debt of all Borrowers)
North American Equipment, Inc. (with respect to debt of all Borrowers)
Subordinated Creditors: Terex Corporation, MI Convert Holdings LLC and Invemed Associates LLC a
Transaction:
Closing Date:
New York limited liability company
Amendment No. 3 to Amended and Restated Credit Agreement
March 7, 2016
Exhibit A to Amendment No. 3 to Amended and Restated Credit Agreement
Detroit_9222014
ITEM
SOURCE
NOTES / STATUS
Ordered/
Drafted
I. LOAN DOCUMENTATION
Primary Loan Documents
1. Summary of Amended Terms and
Conditions
Bodman
9148706
2. Amendment No. 3 to Amended and
Bodman
9222014
Restated Credit Agreement
3. Post-Closing Agreement
9225724
4. Amendment No. 3 to Security
Bodman
8509071
Agreement
5. Grant of Security Interest in Trademarks
Bodman
8490726
6. Closing Certificate
Bodman
9216106
Collateral Instruments/Agreements
7. Reaffirmation of:
Bodman
a. Terex Subordination Agreement
b. Terex Lien Subordination
a. 9216128
b. 9216141
8. Reaffirmation of Subordination
Bodman
9216139
Agreement (MI Convert Holdings LLC
and Invemed Associates LLC)
Exhibit A to Amendment No. 3 to Amended and Restated Credit Agreement
Detroit_9222014
Annex II
Percentages and Allocations
Revolving Credit Facilities
US
Revolving
Credit
Percentage
US Revolving
Credit Allocations
Canadian
Revolving
Credit
Percentage
Canadian
Revolving Credit
Allocations
Term Loan
Percentage
Term Loan
Allocations
Total Allocations
Weighted
Percentage
58%
US$20,300,000.00
58%
US$6,960,000.00
58%
US$551,000.00 US$27,811,000.00
58%
42%
US$14,700,000.00
42%
US$5,040,000.00
42%
US$399,000.00 US$20,139,000.00
42%
Lenders
Comerica
Bank
Fifth Third
Bank
TOTALS
100%
US$35,000,000.00
100%
US$12,000,000.00
100%
US$950,000.00 US$47,950,000.00
100%
Annex II to Amendment No. 3 to Amended and Restated Credit Agreement
Detroit_9222014
Credit Party
Manitex International, Inc.
Schedule 8.1(b)
Debt
Outstanding
Balance
$701,000
$250,000
Creditor
Promissory Note to PIFS Corporation
Promissory Note to Terex Corporation
$5,399,000
Capital lease—Georgetown facility Landlord
$500,000
$56,000
$197,000
$138,000
Capital lease —Winona facility Landlord
Miscellaneous Capital Leases
Columbia – Inventory
Columbia – Equipment
Schedule 8.1(b) to Amendment No. 3 to Amended and Restated Credit Agreement
Detroit_9222014
EXHIBIT J
FORM OF COVENANT COMPLIANCE REPORT
TO:
Comerica Bank, as Agent
RE:
Amended and Restated Credit Agreement dated as of January 8, 2015 (as amended,
supplemented, amended and restated or otherwise modified from time to time the “Credit
Agreement”) by and among MANITEX INTERNATIONAL, INC., a Michigan corporation,
MANITEX, INC., a Texas corporation, MANITEX SABRE, INC., a Michigan corporation,
BADGER EQUIPMENT COMPANY, a Minnesota corporation and MANITEX LOAD KING,
INC., a Michigan corporation (collectively the “US Borrowers”) and MANITEX LIFTKING,
ULC, an Alberta unlimited liability corporation (the “Canadian Borrower” and together with the
US Borrowers, collectively, the “Borrowers”), the other Credit Parties (as defined in the Credit
Agreement) from time to time party thereto, the financial institutions from time to time signatory
thereto, Comerica Bank, a Texas banking association, in its capacity as US Agent (as defined in
the Credit Agreement and referred to herein as the “US Agent”), for and on behalf of the US
Lenders (as defined in the Credit Agreement), Comerica Bank, a Texas banking association and
authorized foreign bank under the Bank Act (Canada), in its capacity as the Canadian Agent (as
defined in the Credit Agreement and referred to herein as the “Canadian Agent”, together with
US Agent, collectively “Agent”), for and on behalf of the Canadian Lenders (as defined in the
Credit Agreement)
This Covenant Compliance Report (“Report”) is furnished pursuant to Section 7.2(a) of the Credit
Agreement and sets forth various information as of ______________, 20___ (the “Computation Date”).
1.
Consolidated Fixed Charge Coverage Ratio (Section 7.9 (a)). On the Computation Date, the
Consolidated Fixed Charge Coverage Ratio, which is required to be not less than the amount set
forth below for the fiscal quarter ends indicated:
December 31, 2015
March 31, 2016
June 30, 2016 and each fiscal quarter end thereafter
0.65 to 1.00
1.00 to 1.00
1.20 to 1.00
was ______ to 1.00, as computed in the supporting documents attached hereto as Schedule 1.
2.
Senior Secured First Lien North American Debt to Consolidated Adjusted North American
EBITDA Ratio (Section 7.9 (b)). On the Computation Date, the Senior Secured First Lien North
American Debt to Consolidated Adjusted North American EBITDA Ratio, which is required to
be not more than the amount set forth below for the fiscal quarter ends indicated:
December 31, 2015
March 31, 2016
June 30, 2016 and each fiscal quarter end thereafter
7.50 to 1.00
10.00 to 1.00
2.75 to 1.00
was ______ to 1.00, as computed in the supporting documents attached hereto as Schedule 2.
3.
Consolidated North American Total Debt to Consolidated Adjusted North American EBITDA
Ratio (Section 7.9(c)). On the Computation Date, the Consolidated North American Total Debt
Exhibit J to Amendment No. 3 to Amended and Restated Credit Agreement
Detroit_9222014
to Consolidated Adjusted North American EBITDA Ratio, which is required to be not more than
the amount set forth below for the fiscal quarter ends indicated:
December 31, 2015
March 31, 2016
June 30, 2016 and each fiscal quarter end thereafter
11.50 to 1.00
15.00 to 1.00
3.75 to 1.00”
was ______ to 1.00, as computed in the supporting documents attached hereto as Schedule 3.
4.
Capital Expenditures (Section 8.6). On the Computation Date, Capital Expenditures, which were
required to be not more than US$3,000,000 (or the Equivalent Amount in Canadian Dollars) in
the aggregate
the Computation Date occurs, were
in which
US$_____________ in the aggregate to date for the Fiscal Year in which the Computation Date
occurs, as evidenced in the supporting documentation attached as Schedule 4.
the Fiscal Year
for
The US Borrowers’ Representative hereby certifies that:
A.
To the best of my knowledge, all of the information set forth in this Report (and in any
Schedule attached hereto) is true and correct in all material respects.
B.
To the best of my knowledge, the representations and warranties of the Credit Parties
contained in the Credit Agreement and in the Loan Documents are true and correct in all material respects
with the same effect as though such representations and warranties had been made on and at the date
hereof, except to the extent that such representations and warranties expressly relate to an earlier specific
date, in which case such representations and warranties were true and correct in all material respects as of
the date when made.
C.
I have reviewed the Credit Agreement and this Report is based on an examination
sufficient to assure that this Report is accurate.
D.
To the best of my knowledge, except as stated in Schedule 5 hereto (which shall describe
any existing Default or Event of Default and the notice and period of existence thereof and any action
taken with respect thereto or contemplated to be taken by Borrowers or any other Credit Party), no
Default or Event of Default has occurred and is continuing on the date of this Report.
Capitalized terms used in this Report and in the Schedules hereto, unless specifically defined to
the contrary, have the meanings given to them in the Credit Agreement.
IN WITNESS WHEREOF, Borrowers have caused this Report to be executed and delivered by
the US Borrowers’ Representative this ______ day of __________________, ____.
MANITEX INTERNATIONAL, INC.
By:
Its:
Exhibit J to Amendment No. 3 to Amended and Restated Credit Agreement
Detroit_9222014
Subsidiaries of Manitex International, Inc.
Exhibit 21.1
1.
Quantum Value Management LLC—a Michigan limited liability company
2.
Manitex, LLC—a Delaware limited liability company
3.
Manitex, Inc.—a Texas corporation
4.
Liftking, Inc.—a Michigan corporation
5.
Manitex Liftking, ULC—an Alberta unlimited liability company
6.
Badger Equipment Company—a Minnesota corporation
7.
CVS Ferrari srl—an Italian corporation
8.
Manitex Sabre, Inc.—a Michigan corporation
9.
A.S.V., LLC – Minnesota limited liability company
10. PM Group S.p.A. – an Italian corporation
Exhibit J to Amendment No. 3 to Amended and Restated Credit Agreement
Detroit_9222014
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-191881 and 333-202103)
and Form S-8 (No. 333-126978) of Manitex International, Inc. of our report dated March 10, 2016, relating to our audit of the
consolidated financial statements and the effectiveness of internal control over financial reporting, which appear in this Form 10-K for
the year ended December 31, 2015.
Exhibit 23.1
/s/ UHY LLP
UHY LLP
Sterling Heights, Michigan
March 10, 2016
Exhibit 31.1
CERTIFICATIONS
I, David J. Langevin, certify that:
1. I have reviewed this annual report on Form 10-K of Manitex International, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Date: March 10, 2016
By:
Name:
Title:
/ S / D AVID J. L ANGEVIN
David J. Langevin
Chairman and Chief Executive Officer
(Principal Executive Officer
of Manitex International, Inc.)
Exhibit 31.2
CERTIFICATIONS
I, David H. Gransee, certify that:
1. I have reviewed this annual report on Form 10-K of Manitex International, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Date: March 10, 2016
/ S / D AVID H. G RANSEE
David H. Gransee
By:
Name:
Title: Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer
of Manitex International, Inc.)
CERTIFICATION PURSUANT TO 18 U.S.C. 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-
OXLEY ACT OF 2002
Solely for the purpose of complying with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we,
the undersigned Chief Executive Officer and Chief Financial Officer of Manitex International, Inc. (the “Company”), hereby certify
that, to the best of our knowledge, the Annual Report of the Company on Form 10-K for the year ended December 31, 2015 (the
“Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Exhibit 32.1
By:
Name:
Title:
/ S / D AVID J. L ANGEVIN
David J. Langevin
Chairman and Chief Executive Officer
(Principal Executive Officer
of Manitex International, Inc.)
Dated: March 10, 2016
/ S / D AVID H. G RANSEE
David H. Gransee
By:
Name:
Title: Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer
of Manitex International, Inc.)
Dated: March 10, 2016