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, 2016
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,
2016 was approximately $88 million based upon the closing price for the Common Stock of $6.93 on the NASDAQ Stock Market on such date.
The number of shares of the registrant’s common stock outstanding as of March 1, 2017 was 16,552,186.
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 2017 Annual Meeting (the “2017 Proxy Statement”) to be filed with the Commission within 120 days after the
end of the fiscal year ended December 31, 2016.
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
10
15
16
16
16
17
17
19
20
37
38
89
89
90
91
91
91
91
91
91
92
92
93
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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)
(5)
a future substantial deterioration in economic conditions, especially in the United States and Europe;
government spending; fluctuations in the construction industry, and capital expenditures in the oil and gas industry;
our level of indebtedness and our ability to meet financial covenants required by our debt agreements;
our ability to negotiate extensions of our credit agreements and to obtain additional debt or equity financing when needed;
the cyclical nature of the markets we operate in;
(6)
increase in interest rates;
(7) Our increasingly international operations expose us to additional risks and challenges associated with conducting business
internationally;
(8)
difficulties in implementing new systems, integrating acquired businesses, managing anticipated growth, and responding to
technological change;
(9)
our customers’ diminished liquidity and credit availability;
(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;
(20) our reliance on the management and leadership skills of our senior executives;
(21) the cost of compliance with Section 404 of the Sarbanes-Oxley Act of 2002; and
(22) Impairment in the carrying value of goodwill could negatively affect our operating results; and
(23) other factors.
1
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.
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.
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
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 independent dealers, the Terex Corporation (“Terex”) distribution channels as well as through the Company. This
independent dealer network now has over 150 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 consists of two of the Company’s subsidiaries, Crane and Machinery, Inc. (“C&M”) and Crane
and Machinery Leasing, Inc. (“C&M Leasing”). C&M is a distributor of Terex rough terrain and truck cranes products as well as
Manitex’s own products. C&M offers equipment repair services in the Chicago area and supplies repair parts for a wide variety of
medium to heavy duty construction equipment both domestically and internationally. C&M Leasing rents equipment manufactured by
the Company as well as a limited amount of equipment manufactured by third parties.
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
2
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. In 2016, the Company
determined its investment in Lift Ventures was impaired and has recognized an impairment charge to write off its entire investment in
Lift Ventures LLC (See Note 26).
On November 30, 2013, CVS Ferrari srl (“CVS”), an Italian corporation and a wholly subsidiary of Manitex International, Inc.,
purchased the assets of Valla SpA (“Valla”). 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 was reorganized as Manitex Valla srl (“Valla”) in conjunction with the sale of CVS in
December 2016. 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
CVS Ferrari srl (“CVS”) designed and manufactured a range of reach stackers and associated lifting equipment for the global
container handling market. CVS was sold on December 22, 2016, and is presented as a discontinued operation.
Manitex Liftking ULC (“Manitex Liftking” or “Liftking”) sold a complete line of rough terrain forklifts, a line of stand-up electric
forklifts, cushioned tiered 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. Liftking was sold on
September 30, 2016, and is presented as a discontinued operation.
Manitex Load King, LLC (“Load King”) manufactured specialized custom trailers and hauling systems typically used for transporting
heavy equipment. Load King trailers served niche markets in the commercial construction, railroad, military and equipment rental
industries through a dealer network. Load King was sold on December 28, 2015, and is presented as a discontinued operation.
General Corporate Information
Our predecessor company was formed in 1993 and was purchased in 2003 by Veri-Tek International, Corp., which changed its name
to Manitex International, Inc. in 2008. Our principal executive offices are located at 9725 Industrial Drive, Bridgeview, Illinois 60455
and our telephone number is (708) 430-7500. our 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, 2016, 2015 and 2014. 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,
2015
2014
2016
Revenues from continuing operations:
Lifting Equipment
ASV
Equipment Distribution
Inter-segment Eliminations
Total
Operating (loss) 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
$
$
$
$
$
$
172,405 $
103,803
16,404
(3,653)
288,959 $
193,436 $
116,935
13,216
(3,906 )
319,681 $
158,319
2,264
21,104
(4,685)
177,002
2,301 $
6,009
(2,893)
(7,406)
274
(1,715) $
8,557 $
5,496
(136 )
(8,522 )
(187 )
5,208 $
20,641
(121)
374
(7,968)
11
12,937
188,791 $
119,732
8,742
720
—
317,985 $
208,734 $
122,672
14,585
2,175
53,257
401,423 $
98,680
124,146
15,612
1,262
74,567
314,267
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. Historically, the new home construction market, which uses lower capacity cranes, has probably been the
most cyclical. More recently demand from the energy sector has become significantly impacted by changes in oil prices.
4
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.
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, the Company continued to aggressively pursue other markets for its boom trucks including the tree industry, utility industry,
and the general construction markets. This focus offset and mitigated the impact of the energy market decline. While 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 we noted that
the energy companies began selling excess equipment into our other markets. This combined impact lower energy market sales
combined with the selling off of excess equipment – resulted in a significant decrease in boom truck revenues during the year.
In 2016, we noted that this selloff of excess equipment continued through much of the year. This selloff dampened demand for new
equipment in both the energy market and the other markets we serve with our boom trucks. We did note that oil prices did begin to
increase and by the beginning of June were approaching $50 per barrel. Additionally, the oil rig count began to increase again and by
year end totaled 525 oil rigs. Late in the year, orders received began to increase and included orders for a number of cranes in a
multitude of markets that the Company serves. We are hopeful that this trend will gain momentum in 2017 as we continue to focus
our efforts into the tree, utility, general construction, energy and other industries.
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 twelve international sales and distribution offices located in several European countries as
well as the Far East and Latin America. 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.
5
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.
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.
As PM severs a global market, its revenues are affected by changes in economic conditions in markets they serve. In 2016, the middle-
east market was soft and had an impact on PM 2016 revenues.
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 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. The product is sold internationally through dealers and into the rental
distribution channel.
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
other direct customers.
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.
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.
6
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 150 locations to serve customers. The Company
continues and will continue to sell Terex branded products and will continue to sell through the Terex distribution network.
Equipment Distribution Segment
The Equipment Distribution segment consists of two of the Company’s subsidiaries, Crane and Machinery, Inc. (“C&M”) and Crane
and Machinery Leasing, Inc. (“C&M Leasing”). C&M is a distributor of Terex rough terrain and truck cranes products as well as
Manitex’s own products. C&M offers equipment repair services in the Chicago area and supplies repair parts for a wide variety of
medium to heavy duty construction equipment both domestically and internationally.
C&M Leasing rents equipment manufactured by the Company as well as equipment manufactured by third parties. C&M Leasing
has recently expanded its rental fleet.
Revenues attributable to the Company’s Equipment Distribution segment were less than 10% of the Company’s total revenues for
fiscal years 2016 and 2015 and approximately 12% for 2014.
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 are approximately 19%, 16% and 12% for the years ended December 31, 2016, 2015 and 2014, 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
Rough terrain forklifts
Rough terrain cranes
Compact loaders and skid steers
Mobile tanks
Used Construction Equipment
Part sales
Total Revenue
2016
2015
2014
45%
2%
1%
1%
24%
3%
5%
19%
100%
43 %
2 %
0 %
4 %
27 %
4 %
4 %
16 %
100 %
64%
8%
0%
2%
1%
9%
4%
12%
100%
In 2016, 2015 and 2014, no customer accounted for 10% or more of the Company’s revenue.
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 2016, 2015 and 2014, 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.
7
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). 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, 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. 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”, 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 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.
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.
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.
Competition
Lifting Equipment Segment
The market for the Company’s boom trucks and knuckle boom cranes, industrial cranes 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.
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 primarily with Terex and
Broderson in selling rough terrain and industrial cranes. The Company’s mobile tanks compete with tanks sold by Dragon Tank and
Pinnacle Mfg., LLC.
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.
8
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 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.
Backlog
The backlog at December 31, 2016 was approximately $38.1 million, compared to a backlog of approximately $65.4 million (restated
to exclude discontinued operations) at December 31, 2015. The December 31, 2016 backlog, however, has increased by $11.0 million
since September 30, 2016 when it was at $27.1 million. The backlog has continued to grow during the early part of 2017 and was
$51.0 million at January 31, 2017. The Company expects to ship product to fulfill its existing backlog within the next twelve months.
Research and Development
The Company spent $4.9 million, $5.0 million and $1.1 million on company-sponsored research and development activities for 2016,
2015 and 2014, 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, 2016, the Company had 709 full time employees. The Company has not experienced any work stoppages and
anticipates continued good employee relations. Eighteen (18) of our employees are covered by collective bargaining agreements.
Eleven (11) 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 20, 2020. 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 1, 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.
9
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.
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.
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. Additionally, oil and gas companies may sell excess equipment
into the general construction market which could further depress demand for certain of products.
10
The Company’s level of indebtedness reduces financial flexibility and could impede our ability to operate.
As of December 31, 2016, the Company’s total debt was $140.3 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.
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 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 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, LIBOR 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.
11
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
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 may face limitations on its ability to integrate acquired businesses.
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.
12
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, 2019. 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.
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” “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 required to record goodwill impairment charges on all or a significant amount of the goodwill on its
Consolidated Balance Sheets.
As of December 31, 2016, the Company had approximately $70.2 million of goodwill. The Company tests goodwill for impairment at
least annually. If the carrying value of goodwill exceeds the implied fair value of the goodwill, an impairment charge is recorded for
the excess. An impairment of a significant portion of goodwill could materially negatively affect the Company’s results of operations.
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.
13
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;
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 if 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 (primarily the
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 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 32 % of the
Company’s common stock as of February 1, 2017. 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.
14
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;
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
15
ITEM 2. PROPERTIES
The Company’s executive offices are located at 9725 Industrial Drive, Bridgeview, Illinois 60455. The Company has seven principal
operating plants. The Company’s Lifting 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 manufactures its precision pick and carry cranes in a 58,000 sq. ft. facility located in Piacenza,
Italy. 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 its specialized mobile tanks for liquid and solid storage and containment solutions in its
100,000 sq. ft. leased facility located in Knox, 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.
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, $1.6 million and $1.6 million for 2013, 2014, 2015, 2016 and 2017 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
16
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
2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
High
Low
6.30 $
7.23 $
7.68 $
7.62 $
4.25
5.18
4.98
4.98
High
Low
12.98 $
10.25 $
8.10 $
7.64 $
8.37
7.46
5.28
5.12
$
$
$
$
$
$
$
$
Number of Common Stockholders
As of February 17, 2017, there were 206 record holders of the Company’s common stock.
Dividends
During the fiscal years ended December 31, 2016, 2015 and 2014, 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, 2011 through
December 31, 2016. 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.
17
CUMULATIVE TOTAL RETURN
Based upon an initial investment of $10,000 on December 31, 2011
with dividends reinvested
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
2011
2012
2013
2014
2015
2016
Manitex (MNTX)
Construction Equipment (5 stocks)
Russell 2000 Index
December 31, December 31, December 31, December 31, December 31, December 31,
2011
2012
2013
2014
2015
2016
Manitex International, Inc.
Russell 2000 Index
Construction Equipment (5 stocks)
$
$
$
10,000 $
10,000 $
10,000 $
16,840 $
11,463 $
12,827 $
37,453 $
15,705 $
17,162 $
29,976 $
16,259 $
16,564 $
14,033 $
15,331 $
15,211 $
16,176
18,317
22,901
Issuer Purchases of Equity Securities
The following table provides information about the Company’s purchases of equity securities during the quarter ended December 31,
2016:
Period
October 1 through October 31, 2016
November 1 through November 30, 2016
December 1 through December 31, 2016
Total
Total
number
of shares
purchased
(1)
Average
price
paid per
share
—
—
3,530 $
3,530 $
—
—
6.86
6.86
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 3,530 shares of its common stock on December 31, 2016. The shares were purchased
from employees on December 31, 2016 at the market closing price of $6.86 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.
18
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: August 19, 2013
for Sabre, November 30, 2013 for Valla, December 16, 2014 for Lift Ventures, December 20, 2014 for ASV, January 15, 2015 for the
PM Group and March 12, 2015 for Columbia Tanks.
The financial data for the years 2012 to 2016 present Manitex Load King, Inc., Liftking and CVS as discontinued operations.
(In thousands except share information)
Summary of Operations:
Net revenues
Operating (loss) income
Net (loss) income from continuing operations
Net (loss) income from continuing operations
attributable to shareholders of Manitex
International, Inc.
Earnings (loss) per share from continuing operations
attributable to shareholders of Manitex
International, Inc.
Basic
Diluted
Shares used to calculate earnings per share:
2016
2015
2014
2013
2012
$
288,959 $
(1,715)
(21,775)
319,681 $
5,208
(5,261)
177,002 $
12,937
7,043
164,678 $
18,142
11,489
128,174
13,148
8,322
$
(21,201) $
(5,309) $
7,179 $
11,489 $
8,322
$
$
(1.31) $
(1.31) $
(0.33) $
(0.33) $
0.52 $
0.52 $
0.91 $
0.90 $
0.70
0.70
Basic
Diluted
16,133,284 15,970,074 13,858,189 12,671,205 11,948,356
16,133,284 15,970,074 13,904,289 12,717,575 11,957,458
Total assets
Total debt
Total shareholders equity attributed to shareholders of
Manitex International, Inc.
$
$
$
317,985 $
140,258 $
401,423 $
157,772 $
314,267 $
89,998 $
180,497 $
36,743 $
151,504
33,337
74,398 $
107,012 $
120,391 $
76,632 $
47,245
19
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; (20) our reliance on the management
and leadership skills of our senior executives; (21) the cost of compliance with Section 404 of the Sarbanes-Oxley Act of 2002; (22)
impairment in the carrying of goodwill could negatively affect our operating results and (22) 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.
20
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 are sold to specialized independent tank rental
companies and other direct customers. The tanks are used in a variety of end markets such as petrochemical, waste management and
oil and gas drilling.
Valla SpA (“Valla”) division offers a full range of precision pick and carry cranes.
In December 2015, September 2016 and December 2016, the Company completed the sale of its Load King, Liftking and CVS
subsidiaries, respectively. For financial statement presentation Load King, Liftking and CVS are presented as discontinued operations.
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 both its own distribution network and through Terex Corporation’s (“Terex”) distribution channels as well as
through the Company. ASV’s independent dealer network now has over 150 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, Inc. (“C&M”)
and Crane & Machinery Leasing, Inc. (“C&M Leasing”). 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. The segment also sells Manitex and Valla product, provides crane equipment
repair services in the Chicago area and through C&M Leasing rents lifting equipment primarily in the Chicago area.
Economic Conditions
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, the Company continued to aggressively pursue other markets for its boom trucks including the tree industry, utility industry,
and the general construction markets. This focus offset and mitigated the impact of the energy market decline. While 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 we noted that
the energy companies began selling excess equipment into our other markets. This combined impact lower energy market sales
combined with the selling off of excess equipment – resulted in a significant decrease in boom truck revenues during the year.
In 2016, we noted that this selloff of excess equipment continued through much of the year. This selloff dampened demand for new
equipment in both the energy market and the other markets we serve with our boom trucks. We did note that oil prices did begin to
increase and by the beginning of June were approaching $50 per barrel. Additionally, the oil rig count began to increase again and by
year end totaled 525 oil rigs. Late in the year, orders received began to increase and included orders for a number of cranes in a
multitude of markets that the Company serves. We are hopeful that this trend will gain momentum in 2017 as we continue to focus
our efforts into the tree, utility, general construction, energy and other industries.
The market for PM knuckle boom cranes, and ASV compact track loaders and skid steer loaders, have not been significantly affected
by decrease in oil prices. The markets for these products have been more stable. The North American market for knuckle boom
cranes is growing. PM currently has a small share of the market for knuckle boom cranes in North America. The Company has started
to manufacture knuckle boom cranes on a limited basis in the United States 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 to grow over time.
21
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.
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.
The following table sets forth certain financial data for the three years ended December 31, 2016, 2015 and 2014:
Results of Consolidated Operations
MANITEX INTERNATIONAL, INC.
(In thousands, except share data)
Net revenues
Cost of sales
Gross profit
Operating expenses
For the Year
Ended
For the Year
Ended
For the Year
Ended
December 31, December 31, December 31,
2015
319,681 $
260,775
58,906
2016
288,959 $
240,375
48,584
2014
177,002
140,739
36,263
$
Research and development costs
Selling, general and administrative expenses
Total operating expenses
Operating (loss) income
Other income (expense)
Interest expense
Interest expense related to write off of debt issuance costs
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
4,877
45,422
50,299
(1,715)
(11,000)
(3,635)
(1,115)
897
(14,853)
(16,568)
(545)
(5,752)
(21,775)
4,983
48,715
53,698
5,208
(11,842 )
—
(293 )
(43 )
(12,178 )
(6,970 )
(1,908 )
(199 )
(5,261 )
1,084
22,242
23,326
12,937
(1,854)
—
(423)
(101)
(2,378)
10,559
3,516
—
7,043
Discontinued operations:
(Loss) income from discontinued operations, net of
income tax expenses of $37, $440 and $147 in
2016, 2015 and 2014, respectively
Net (loss) income
Net (income) loss attributable to noncontrolling interest
Net (loss) income attributable to shareholders
of Manitex International, Inc.
$
(13,959)
(35,734) $
574
(63 )
(5,324 ) $
(48 )
(76)
6,967
136
$
(35,160) $
(5,372 ) $
7,103
Year Ended December 31, 2016 from Continuing Operations Compared to Year Ended December 31, 2015 from Continuing
Operations
The above results include the results for companies acquired from their respective effective dates of acquisition: 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.
22
Net (loss) income from continuing operations
For the year ended December 31, 2016, net loss was $21.8 million, which consists of revenue of $289.0 million, cost of sales of
$240.4 million, research and development costs of $4.9 million, SG&A costs of $45.4 million, interest expense of $14.6 million,
foreign currency transaction loss of $1.1 million, other income of $0.9 million, loss in non-marketable equity interest of $5.8 million
and income tax benefit of $0.5 million.
For the year ended December 31, 2015, net loss was $5.3 million, which consists of revenue of $319.7 million, cost of sales of $260.8
million, research and development costs of $5.0 million, SG&A costs of $48.7 million, interest expense of $11.8 million, foreign
currency transaction loss of $0.3 million, loss in non-marketable equity interest of $0.2 million and income tax benefit of $1.9 million.
Net revenue and gross profit —For the year ended December 31, 2016, net revenue and gross profit were $289.0 million and $48.6
million, respectively. Gross profit as a percent of sales was 16.8% for the year ended December 31, 2016. For the year ended
December 31, 2015, net revenue and gross profit were $319.7 million and $58.9 million, respectively. Gross profit as a percent of
sales was 18.4% for the year ended December 31, 2015.
For 2016 revenues decreased $30.7 million or 9.6% from $319.7 million for 2015 to $289.0 million for 2016. Revenues for the Lifting
Equipment and ASV segments decreased by $21.0 million and $13.1 million or by 10.9% and 11.2%, respectively. Revenues for the
Equipment Distribution segment increased by $3.2 million or 24.2%. The 2016 results for the Lifting Equipment segment include a
completed first quarter of revenues for PM Group, compared to seventy five days from the date of acquisition in the three months
ended March 31, 2015. PM revenues for the first 15 days of 2015 were approximately $3.3 million. Taking this effect into account
the Lifting Equipment segment revenues would have decreased by $34.0 million or 10.6%.
All the product lines within the Lifting Equipment segment experienced year over year revenues declines. The decline in revenues is
attributed to the effect that lower oil prices are having on our markets.
ASV revenues decline is attributable to a $9.8 million reduction in sales of undercarriages and parts to Caterpillar and a decrease in
machine sales. The decrease in sales to Caterpillar is due to a slowdown in the Caterpillar production volumes of multi-terrain track
loaders that use our undercarriage. A decrease in private labeled products is the principal reason for the decline in machine sales.
ASV continues to expand its own dealer network and is becoming less dependent on private labeled products. Approximately 70% of
the machine sales for the year ended December 31, 2016 were through ASV managed distribution.
Equipment Distribution segment revenue increase is primarily the result of the sale of equipment at less than our normal margins
which was consistent with our priority of reducing debt in 2016.
Gross profit as a percent of net revenues decreased 1.6% to 16.8% for the year ended December 31, 2016 from 18.4% for the
comparable 2015 period. The decrease in gross profit is attributed to lower volumes, change in product mix including a shift towards
lower capacity boom truck and aggressive sales pricing especially towards at the end of the year in effort to move existing finished
goods inventory. The sale of finished goods inventory at less than our normal margins was consistent with our priority of reducing
debt in 2016. Partially offsetting other factors is the beneficial impact that an increase in part sales as percent of total revenues had.
Part sales, which have significantly higher gross margins, increased from increased from 16% to 19% of total revenues from 2015 to
2016.
Research and development —Research and development for the year ended December 31, 2016 was $4.9 million compared to $5.0
million for the comparable period in 2015. Research and development expenditures were relatively consistent with the prior period.
The Company’s research and development spending continues to reflect our continued commitment to develop and introduce new
products that give the Company a competitive advantage.
Selling, general and administrative expense —Selling, general and administrative expense for the year ended December 31, 2016
was $45.4 million compared to $48.7 million for the comparable period in 2015, a decrease of $3.3 million. The decrease was
impacted by a $0.5 million favorable change in an estimate regarding a product liability claim as it was determined that the claim
could be settled for less than what was reserved. The remaining decrease is principally attributed to cost reductions made in response
to decreased revenues and to lower variable selling expenses.
Operating (loss) income —The Company had operating loss of $1.7 million compared with an income of $5.2 million for the years
ended December 31, 2016 and 2015, respectively. The adverse change in operating income is the result of decrease in gross profit of
$10.3 million, the result of a decrease in revenues and lower gross profit margin. The decrease in gross margin was partially offset by
a $3.4 million decrease in operating expenses.
23
Interest expense —Interest expense was $14.6 million and $11.8 million for the years ended December 31, 2016 and 2015,
respectively. Included in interest expense is $3.6 million for deferred financing costs which were expensed as associated debt was
refinanced in the second and fourth quarters of 2016. Excluding the deferred financing costs, interest expense decreased by $0.8
million primarily attributed to decreases in debt.
Foreign currency transaction loss — Foreign currency loss was $1.1 million and $0.3 million for the years ended December 31,
2016 and 2015, respectively. As stated in the past, 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. Currency risks can be reduced but not
eliminated in part because the Company has not been able to identify a strategy to effectively hedge the currency risks related to the
Argentinian peso. 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.
A substantial portion of the 2016 loss is attributable to exchange losses related to the Argentinian peso. As previously stated, the
Company has not been able to identify a strategy to effectively hedge currency risks related to the Argentinian peso. The 2016
currency loss also reflects the recognition of deferred loss of $0.2 million related to an intercompany receivable. The loss had been
previously deferred in other comprehensive income as there was an intercompany receivable that was not expected to be repaid. The
repayment of the receivable resulted in the recognition of the previously deferred loss.
Other income (loss) — In 2016, the Company had other income of $0.9 million. The other income is the result of revaluing a
contingent acquisition liability related to an option to acquire certain PM bank debt. The contingent liability is related to a potential
future payment, which is based on PM’s 2017 earnings before interest, taxes, depreciation and amortization (EBITDA). During 2016,
the fair of this liability was recalculated based on updated 2017 EBITDA projections. This revaluation result in gain of approximately
$0.9 million.
Loss in non-marketable equity interest — The Company had losses related its non-marketable equity investment of $5.8 million
and $0.2 million for the years ended December 31, 2016 and 2015, respectively. The increase in the loss is result of recognizing an
impairment charge of $5.6 million to write off its entire investment in Lift Ventures LLC during 2016. See Note 26 to the financial
statements for additional information related this impairment.
Income tax — Income tax expense (benefit) for continuing operations was $(0.5) million and $(1.9) million for the years ended
December 31, 2016 and 2015, respectively. The income tax benefit is attributed to a pre-tax loss of $22.3 million and $7.2 million
from continuing operations for the years ended December 31, 2016 and December 31, 2015, respectively. The Company’s effective
rate decreased to 2.44% for 2016 from 26.84% for 2015. The decrease in the effective tax rate is due primarily to the establishment of
a full valuation allowance against the portion of the Company’s net U.S. deferred tax assets that could not be realized by carrying back
the 2016 tax loss for a refund of taxes paid in prior years.
Loss in non-marketable equity interest — The Company had losses related its non-marketable equity investment of $5.8 million
and $0.2 million for the years ended December 31, 2016 and 2015, respectively. The increase in the loss is result of recognizing an
impairment charge of $5.6 million to write off its entire investment in Lift Ventures LLC during 2016. See Note 26 to the financial
statements for additional information related this impairment.
Net loss from continuing operations —Net loss for the years ended December 31, 2016 and 2015 was $21.8 million and $5.3
million, respectively. The change is explained above.
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: December 16, 2014
for Lift Ventures, December 20, 2014 for ASV, January 15, 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 $5.3 million, which consists of revenue of $319.7 million, cost of sales of $260.8
million, research and development costs of $5.0 million, SG&A costs of $48.7 million, interest expense of $11.8 million, foreign
currency transaction loss of $0.3 million, loss in non-marketable equity interest of $0.2 million and income tax benefit of $1.9 million.
24
For the year ended December 31, 2014, net income was $7.0 million, which consists of revenue of $177.0 million, cost of sales of
$140.7 million, research and development costs of $1.1 million, SG&A costs of $22.2 million, interest expense of $1.9 million,
foreign currency transaction loss of $0.4 million, other loss $0.1 million and income tax expense of $3.5 million.
Net revenue and gross profit —For the year ended December 31, 2015, net revenue and gross profit were $319.7 million and $58.9
million, respectively. Gross profit as a percent of sales was 18.4% for the year ended December 31, 2015. For the year ended
December 31, 2014 net revenue and gross profit were $177.0 million and $36.3 million, respectively. Gross profit as a percent of sales
was 20.5% for the year ended December 31, 2014.
For 2015 revenues increased $142.7 million or 80.6% from $177.0 million for 2014 to $319.7 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 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 2.1% to 18.4% for the year ended December 31, 2015 from 20.5% for the
comparable 2014 period. The decrease in margin percent is principally attributed to decreased volume, changes in product mix,
including the unfavorable impact of decreased sales of higher capacity 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
12% to 16% of total revenues from 2014 to 2015.
Research and development —Research and development for the year ended December 31, 2015 was $5.0 million compared to $1.1
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 $0.2 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 $48.7 million compared to $22.2 million for the comparable period in 2014, an increase of $26.5 million. This increase is the net
of an increase of $28.0 million in expense related to the ASV and PM acquisitions offset by a decrease of $1.5 million in expense from
existing operations. A major component of the decrease in expense is related to participation in the ConExpo show, which is held
every three years. 2014 included non-recurring expenses of $0.7 million related to participation at the 2014 ConExpo show. The
remaining decrease is attributed to cost reductions, lower selling expenses, and other changes including the timing of transaction
related expenses.
Operating income —The Company had operating income of $5.2 million and $12.9 million for the years ended December 31, 2015
and 2014, respectively. The decrease in operating income is due to a decrease in gross profit percent and increases in research and
development costs and selling, general and administrative expense.
Interest expense —Interest expense was $11.8 million and $1.9 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 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 loss of $0.3 million compared to a loss of $0.4 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 losses that are not offset.
Income tax — Income tax expense (benefit) for continuing operations was $(1.9) million and $3.5 million for the years ended
December 31, 2015 and 2014, respectively. The income tax benefit is attributed to a pre-tax loss of $7.2 million from continuing
operations for the year ended December 31, 2015. The Company’s effective rate decreased to 26.8% for 2015 from 33.3% for 2014.
The decrease in the effective tax rate is due primarily to income tax expense and rate differences in foreign jurisdictions, income tax
25
expense related settlements of U.S. and foreign income tax examinations, adjustments to tax credits in connection with the finalization
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 ($5.3) million. This compares
with a net income for the year ended December 31, 2014 of $7.0 million.
SEGMENT INFORMATION
Lifting Equipment Segment
Net revenues
Operating income
Operating margin
$
2016
172,405 $
2,301
1.3%
2014
2015
193,436 $ 158,319
20,641
13.0%
8,557
4.4 %
Year Ended December 31, 2016 Compared to Year Ended December 31, 2015
Net revenues —Net revenues decreased $21.0 million to $172.4 million for the year ended December 31, 2016 from $193.4 million
for the comparable period in 2015.
For 2016 revenues decreased $21.0 million or 10.9% from $193.4 million for 2015 to $172.4 million for 2016. All the product lines
within this segment experienced year over year revenues declines. The decline in revenues is attributed to decreased demand from
end markets related in large part to lower oil prices. The 2016 results for this segment includes a complete first quarter of revenues for
PM Group, compared to seventy five days from the date of acquisition in 2015. PM revenues for the first 15 days of 2015 were
approximately $3.3 million.
Operating income and operating margins —Operating income of $2.3 million for the year ended December 31, 2016 was
equivalent of 1.3% of net revenues compared to an operating income of $8.6 million for the year ended December 31, 2015 or 4.4% of
net revenues. The decrease in operating income is due to a decrease in gross profit as both revenues and the gross profit margin
percent were lower in 2016. The decrease in gross profit is attributed to lower volumes, change in product mix including a shift
towards lower capacity boom truck and aggressive sales pricing especially towards at the end of the year in effort to move existing
finished goods inventory. The sale of finished goods inventory at less than our normal margins was consistent with our priority of
reducing debt in 2016.
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Net revenues —Net revenues increased $35.1 million to $193.4 million for the year ended December 31, 2015 from $158.3 million
for the comparable period in 2014.
For 2015 revenues increased $35.1 million or 22.1% from $158.3 million for 2014 to $193.4 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 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 $8.6 million for the year ended December 31, 2015 was
equivalent of 4.4% of net revenues compared to an operating income of $20.6 million for the year ended December 31, 2014 or 13.0%
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.
26
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.
ASV Segment
Net revenues
Operating income (loss)
Operating margin
$
2016
103,803 $
6,009
5.8%
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, 2016 Compared to Year Ended December 31, 2015
Net revenues —The ASV segment had net revenues of $103.8 million for the year ended December 31, 2016 compared to $116.9
million for the year ended December 31, 2015. ASV revenues decline is primarily attributable to $9.8 million reduction in sales of
undercarriages and parts to Caterpillar as well as a decrease in machine sales. Machine sales decreased despite an increase in machine
sales through ASV’s own distribution network, as this only partially offset declines in machine sales through the Terex distribution
network. Sales through the Terex dealer network have been adversely impacted by uncertainty arising from changes within the Terex
construction segment, including the disposal by Terex of some of its compact construction equipment product lines. In August 2016,
Terex announced that it would focus its business going forward on its aerial work platforms, cranes and materials processing. For the
year ended December 31, 2016, sales of machines through ASV-managed distribution network increased to 70% of machine sales,
compared to 44% in the prior year. We continue to focus on increasing the independent ASV dealer network to offset the lower
volumes of Terex branded product being sold.
Operating income and operating margin —Operating income of $6.0 million for the year ended December 31, 2016 was equivalent
to 5.8% of net revenues compared to $5.5 million for the year ended December 31, 2015 or 4.7% of net revenues. The improvement in
operating income is principally due to a $0.5 million favorable adjustment to the reserve for accrued product liability claims. The
effect that lower revenues had was offset an improvement in gross margin from a favorable mix of higher capacity machines, lower
sales of skid steer loaders that have a lower average gross profit percent, and improved net pricing from increased sales into the ASV
distribution channel, and the benefit of reduced costs of sales from cost reduction and efficiency actions, such as favorable purchase
price variances and warranty costs.
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.
Equipment Distribution Segment
Net revenues
Operating (loss) income
Operating (loss) margin
2016
2015
$
$
16,404
(2,893)
(17.6)%
$
13,216
(136 )
(1.0 )%
2014
21,104
374
1.8%
27
Year Ended December 31, 2016 Compared to Year Ended December 31, 2015
Net revenues —The Equipment Distribution segment had net revenues of $16.4 million and $13.2 million for the years ended
December 31, 2016 and 2015, respectively, an increase of $3.2 million. The increase in revenue was primarily the result of used
equipment sales to reduce inventory on hand and on occasion has made concessions to facilitate the sale.
Operating loss and operating margins —Operating loss of ($2.9) million for the year ended December 31, 2016 was equivalent to
(17.6)% of net revenues compared to ($0.1) million for the year ended December 31, 2015 or (1.0)% of net revenues.
The expanded operating loss in 2016 is attributable to the sale of equipment at zero or lower margins to move equipment that was held
by the segment.
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 the energy sector resulting from 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.
Liquidity and Capital Resources
Cash, cash equivalents and restricted cash were $6.4 million and $5.9 million at December 31, 2016 and December 31, 2015,
respectively. In addition, the Company has a U.S. revolving credit facility with a maturity date of July 20, 2019. Additionally, ASV
has a revolving credit facility, which is for its sole use, with a maturity date of December 23, 2021. At December 31, 2016 the
Company had approximately $2.3 million available to borrow under its revolving credit facility. At December 31, 2016 ASV had
approximately $3.5 million of availability under its revolving credit facility.
At December 31, 2016, the PM Group had established working capital facilities with seven Italian and six South American banks.
Under these facilities, the PM Group can borrow $24.7 million against orders, invoices and letters of credit. At December 31, 2016,
the PM Group had received advances of $19.3 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 operations. However, additional capital may be required if our business expands. The Company thought it
prudent to put a mechanism in place by which supplemental liquidity can be provided to address working capital requirements or other
capital requirements that may arise. On January 23, 2017, Manitex International Inc. entered into a Controlled Equity Offering Sales
Agreement (“Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) pursuant to which the Company may offer and sell shares of
its common stock, no par value per share, having an aggregate offering price up to $20,000 through Cantor. Funds provided through
the Sales Agreement totaled $2,608 in January 2017 2017 from the sale of 294,524 shares of the Company's common stock.
Additionally, the Company issued a press release on January 23, 2017 that indicated the Company’s Board of Directors is considering
strategic alternatives for A.S.V., LLC, its joint venture with Terex Corporation (NYSE:TEX), to realize maximum value for Manitex
shareholders. The Board’s review will include the possibility of a sale of all or a portion of ASV or Manitex’s ownership stake (51%)
in ASV, as well as the possibility of ASV becoming a public company. If a transaction were to take place any funds received would be
used to reduce debt or other corporate purposes.
Nevertheless, our availability under our credit lines is limited, it is important that we manage our working capital. 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.
28
Outstanding borrowings and required payments
The following is a summary of our outstanding borrowings at December 31, 2016:
(In millions)
U.S. Revolver
$
20.0 3.75 to 4.75%
Monthly July 20, 2019 maturity
Outstanding
Balance
Interest
Rate
Interest
Paid
Principal Payment
Note payable—Terex
Convertible note—Terex
Convertible note—Perella
ASV revolving credit facility
1.6
6.9
14.5
15.6
4.50%
7.5%
7.5%
3.6%
$0.04 million interest payment June 19,
2017 and $1.64 million interest and
principal payment on December 19, 2017
Semi-Annual
Semi-Annual December 19, 2019 maturity
Semi-Annual January 7, 2021 maturity
Monthly December 23, 2021 maturity
ASV Term loan A
8.5
4.76%
Monthly
ASV Term loan B
Capital lease—cranes for sale
Capital lease—Georgetown
facility
Capital leases—Winona
facility
PM unsecured borrowings
PM Autogru term loan
PM Autogru term loan
PM term loans with related
accrued interest, interest
rate swaps and FMV
adjustments
PM short-term working
capital borrowings
21.5
0.5
11.00%
4.4 to 5.6%
5.3
12.50%
0.5
12.7
0.4
0.5
n.a.
2.14% to
2.64%
3.00%
2.50%
$0.20 million quarterly plus interest
unpaid balance due December 23, 2021
$0.50 million quarterly plus interest
unpaid balance due December 23, 2021
Monthly
Monthly Over 36 or 60 months
Monthly
$0.06 million monthly payment includes
interest
Final Payment To be paid in 2018
Semi-Annual
Variable semi-annual starting June 2017
through December 2021
$0.09 million monthly through October
2020
Monthly
Annually $0.5 million payment due June 2017
14.1
0 to 2.18%
Semi-Annual
$
19.3 1.43 to 17.0%
141.9
Monthly
Variable semi-annual starting June 2016
through December 2021. Payments
scheduled for 2017 total approximately
$3.0 million
Upon payment of invoice or letter of
credit
Debt issuance costs
(1.6 )
Debt net of issuance costs
$
140.3
The debt has various maturity dates. See Notes 11 and 12 to the financial statements for additional details.
Change in outstanding debt
In 2016, our total debt was reduced by $35.6 million of which $17.5 million was related to continuing operations. The difference is
related to debt that was either paid off or was assumed by the buyer when our former Liftking and CVS subsidiaries were sold.
29
The following is a summary of changes in debt related to continuing operations:
(In millions)
U.S. Revolver
Notes payable-Terex
Capital leases—buildings
Capital leases—equipment
Convertible note—Terex
Convertible note—Perella
Comerica Term loan
ASV Term loan
ASV Revolving Credit Facility
PM
Debt issuance costs
Increase/
(decrease)
(6.5 )
(0.3 )
(0.1 )
(0.6 )
0.2
0.1
(2.2 )
(8.0 )
3.2
(1.7 )
(16.3 )
(1.6 )
(17.9 )
$
$
$
$
$
$
$
$
$
$
$
$
2016
Operating activities consumed $4.2 million of cash for the year ended December 31, 2016, and is comprised of non-cash items of
$38.7 million, which generated cash, offset by a net loss of $35.7 million and an increase in working capital of $7.2 million both of
which consumed cash. The following are principal non-cash items that generated cash: depreciation and amortization of $11.2
million, the non-cash loss on sale of discontinued operations of $14.5 million, an impairment charge related to Lift Venture investment
of $5.8 million, stock based compensation of $1.1 million, an increase in inventory reserves of $1.7 million, amortization of deferred
financing costs of $4.3 million, amortization of debt discount of $0.5 million, and an increase net deferred tax liabilities of $1.2
million. A change in interest rate swaps of $0.7 million and $0.9 million gain related to the revaluation of contingent acquisition
liability both consumed cash. Other less significant non-cash items in aggregated offset each other. The amortization of deferred
financing costs includes approximately $3.6 million that was expensed in connection with refinancing of debt.
The change in assets and liabilities consumed $7.2 million in cash. The changes in assets and liabilities related to continuing
operations and discontinued operations consumed $3.0 million and $4.2 million, respectively. The changes in the items related to
continuing operations had the following impact on cash flows: accounts receivable generated $1.1 million, inventory generated $2.2
million, prepaid expenses consumed $0.4 million, other assets generated $0.2 million, accounts payable consumed $4.3 million,
accrued expenses consumed $0.7 million, other current liabilities generated $0.2 million, and other long-term liabilities consumed
$1.4 million. The decrease in accounts receivable is due to the fact that sales for the fourth quarter 2016 are lower when compared to
sales for the quarter ended December 31, 2015. This impact was largely offset by a longer collection cycle. The lengthening of the
collection cycle is result of an increase in foreign receivables, which traditionally take longer to collect. The decrease in inventory is
attributed to a concerted effort to reduce inventory to generate funds to repay debt. The decrease in accounts payable is attributed a
decrease inventory and timing of vendor payments. The decrease in other long-term liability is due to a reduction in a long-term
reserve related to a product liability claim that was sooner than expected.
Cash flows related to investing activities generated $18.4 million of cash for the year ended December 31, 2016. The Company
generated $19.1 million through the sale of non-core operations and another $0.7 million by discontinued operations offset by the
purchase of capital equipment of $1.5 million. Other investing activity in aggregate totaled $0.1 million. The amount spent for capital
equipment was spread throughout the organization and no expenditure individually was significant.
Financing activities consumed $16.7 million in cash for the year ended December 31, 2016. The principal sources of cash that in
aggregate total $43.8 million include new borrowing of $30.7 million, proceeds from sales and leasebacks of $4.1 million, an
additional investment in ASV of $2.5 million received from the noncontrolling investee, an increase in working capital borrowings of
$1.8 million and increase in debt of discontinued operations of $4.7 million (incurred before the sale of non-core operations). The
new borrowings include $30.0 million borrowed to refinance ASV debt.
The repayment of debt consumed $60.5 million of which $30.0 was for the repayment of ASV debt that was refinanced. The
remaining $30.5 million was used to reduce debt by $28.3 million and to pay bank fees and cost of $2.2 million incurred in connection
with new financing. The major debt reductions and payments include a reduction in borrowings million under the U.S. revolving
30
credit facility of $11.9 million, payments against ASV term debt of $8.0 million, a payment of $2.2 million to pay of the balance of
the 2014 term loan, and payments of $4.6 million against outstanding PM debt.
2015
Operating activities provided $6.4 million of cash for the year ended December 31, 2015, and is comprised of non-cash items of $14.7
million, which generated cash, offset by a net loss of $5.3 million and an increase in working capital of $3.0 million both of which
consumed cash. The following are principal non-cash items that generated cash: depreciation and amortization of $11.5 million, stock
based compensation of $1.5 million, an increase in inventory reserves of $0.8 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 aggregate generated a net $0.4 million of cash.
The change in assets and liabilities consumed $3.0 million in cash. The changes in assets and liabilities had the following impact on
cash flows: accounts receivable generated $18.8 million, inventory consumed $8.1 million, prepaid expenses consumed $3.3 million,
accounts payable generated $8.2 million, accrued expenses consumed $2.5 million, income tax payable on ASV conversion consumed
$16.2 million, other current liabilities consumed $0.7 million, other long-term liabilities generated $1.4 million and discontinued
operations consumed $0.8 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 $2.2 million is spread throughout 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. A substantial portion the decrease in accrued expenses and the increase in other long-term
liabilities is attributed to a reclassification of liability from accruals to other long-term liabilities.
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 $2.3 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. Other less significant
investing activities in aggregate consumed $0.4 million of cash. 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
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 the 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 $4.3 million decrease in working capital borrowings in Italy. Other financing activities in
aggregate consumed $2.9 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.
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
31
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.
Off Balance Sheet Arrangements
Private Bank has issued 2 standby letters of credit at December 31, 2016. The first standby letter of credit is $0.625 million 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. The second standby letter of credit is $20 thousand in favor of a
governmental agency to secure obligations which may arise in connection with workman compensation claims.
PNC Bank has issued 3 standby letters of credit at December 31, 2016. The first standby letter of credit is $0.245 million 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. The second and third standby letters of credit were $0.1 million each for
commercial purposes.
During the fourth quarter of 2015 and first quarter of 2016, the Company entered into four 60 month equipment operating leases in a
sales and lease back transactions. In connection with these transactions, the Company received $6.7 million, i.e., $2.6 million for the
one executed in 2015 and a total of $4.1 million for the three executed in 2016.
Contractual Obligations
The following is a schedule as of December 31, 2016 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 working capital borrowing (3)
Operating lease obligations
Capital lease obligations (3)
Legal Settlement (see Note 23) (3)
Service agreements
Purchase obligations (1)
Total
Total
141,529 $
18,870
8,535
11,485
1,425
3,854
9,932
195,630 $
$
$
Payments due by period
2018-
2019
47,796 $
—
3,973
2,496
190
2,605
—
57,060 $
2017
14,276 $
18,870
2,311
1,051
95
1,249
9,932
47,784 $
Thereafter
2020-
2021
76,290 $
—
1,978
1,731
190
—
—
80,189 $
3,167
—
273
6,207
950
—
—
10,597
(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, 2016, the Company had unrecognized tax benefits of $983 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) 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, 2016.
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
32
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 passes 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)
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.
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.
33
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 2016, 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 2016 and 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. 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 of the Lifting Equipment or ASV segments’ goodwill. 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
estimated fair values of the Lifting Equipment reporting segment exceeded its carrying value by approximately 5%. The fair value of
the ASV segment exceeded its carrying value by approximately 20%. Except for a possible impairment of the Equipment Distribution
segment goodwill in 2016, the aforementioned step one quantitative testing did not indicate any impairment. As there was an
indication of possible impairment in 2016, the Equipment Distribution segment’s goodwill was subject to additional step two testing,
which is described below.
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.
This further analysis indicated that the Equipment Distribution segment goodwill was impaired and a $275 impairment charge was
recognized in 2016 to fully write off the Equipment Distribution segment’s goodwill. The Company did not have any impairment for
the years ended December 31, 2015 and 2014.
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 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.
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, 2016, 2015 and 2014.
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
34
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
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.
35
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. In August 2015, the FASB issued ASU 2015-14, “Deferral of the Effective Date”, which
amends ASU 2014-09. As a result, the effective date is the first quarter of 2018, with early adoption permitted. The Company is
evaluating the impact that adoption of this guidance will have on the determination or reporting of its 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 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. The current requirement that deferred tax liabilities and assets of a tax paying component of an entity be offset and presented
as a single amount is not affected by the amendments in this update. 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 guidance can be applied either prospectively or
retrospectively. The Company has adopted the guidance for the year ended December 31, 2016 on a retrospective basis in order to
simplify balance sheet classifications. The main impact of adoption of the standard was the reclassification of current deferred tax
assets that resulted in a reduction in noncurrent deferred tax liabilities.
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.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” (“ASU 2016-02”), which requires lessees to recognize assets
and liabilities for leases with lease terms of more than 12 months and disclose key information about leasing arrangements. 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. The Company is in the process of evaluating the impact of this update on its
consolidated financial statements.
In March 2016, the FASB issued ASU 2016-05, “Derivatives and Hedging (Topic 815),” (“ASU 2016-05”). ASU 2016-05 provides
guidance clarifying that novation of a derivative contract (i.e. a change in counterparty) in a hedge accounting relationship does not, in
and of itself, require designation of that hedge accounting relationship. The effective date will be the first quarter of fiscal year 2017,
with early adoption permitted. Adoption is not expected to have a material effect on the Company’s consolidated financial statements.
In March 2016, the FASB issued ASU 2016-06, “Derivatives and Hedging (Topic 815),” (“ASU 2016-06”). ASU 2016-06 simplifies
the embedded derivative analysis for debt instruments containing contingent call or put options by clarifying that an exercise
contingency does not need to be evaluated to determine whether it relates to interest rates and credit risk in an embedded derivative
analysis. The effective date will be the first quarter of fiscal year 2017, with early adoption permitted. Adoption is not expected to
have a material effect on the Company’s consolidated financial statements.
36
In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606) Principal versus Agent
Considerations (Reporting Revenue Gross versus Net),” (“ASU 2016-08”). ASU 2016-08 further clarifies principal and agent
relationships within ASU 2014-09. Similar to ASU 2014-09, the effective date will be the first quarter of fiscal year 2018 with early
adoption permitted in the first quarter of fiscal year 2017. The Company is evaluating the impact that adoption of this new standard
will have on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (Topic 718), Improvements to Employee Share-
Based Payment Accounting,” (“ASU 2016-09”). ASU 2016-09 is intended to simplify several aspects of accounting for share-based
payment awards. The effective date will be the first quarter of fiscal year 2017, with early adoption permitted. The Company is
evaluating the impact that adoption of this new standard will have on its consolidated financial statements.
In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606), Identifying Performance
Obligations and Licensing,” (“ASU 2016-10”). The amendments in ASU 2016-10 are expected to reduce the cost and complexity of
applying the guidance on identifying promised goods or services in contracts with customers and to improve the operability and
understandability of licensing implementation guidance related to the entity's intellectual property. Similar to ASU 2014-09, the
effective date will be the first quarter of fiscal year 2018 with early adoption permitted in the first quarter of fiscal year 2017. The
Company is evaluating the impact that adoption of this new standard will have on its consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and
Cash Payments,” (“ASU 2016-15”). ASU 2016-15 reduces the existing diversity in practice in financial reporting by clarifying
existing principles in ASC 230, “Statement of Cash Flows,” and provides specific guidance on certain cash flow classification
issues. The effective date for ASU 2016-15 will be the first quarter of fiscal year 2018 with early adoption permitted. The Company
is evaluating the impact that adoption of this new standard will have on its consolidated financial statements.
In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740) - Intra-Entity Transfer of Assets Other than Inventory,”
(“ASU 2016-16”). ASU 2016-16 requires recognition of current and deferred income taxes resulting from an intra-entity transfer of
any asset (excluding inventory) when the transfer occurs. This is a change from existing GAAP which prohibits recognition of current
and deferred income taxes until the asset is sold to a third party. The effective date for ASU 2016-16 will be the first quarter of fiscal
year 2018 with early adoption permitted. The Company is evaluating the impact that adoption of this new standard will have on its
consolidated financial statements.
In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,”
(“ASU 2017-01”). ASU 2017-01 provides guidance in ascertaining whether a collection of assets and activities is considered a
business. The effective date will be the first quarter of fiscal year 2018, with prospective application. The Company is evaluating the
impact that adoption of this new standard will have on its consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill
Impairment,” (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 from the goodwill impairment test. Instead, an entity should perform
its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity
should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any.
The loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should
consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the
goodwill impairment. The effective date will be the first quarter of fiscal year 2020, with early adoption permitted in 2017. The
Company is evaluating the impact that adoption of this new standard will have on its 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
37
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, primarily the Euro. 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, 2016, the Company had no outstanding foreign currency exchange contracts being used to hedge future sale that would
qualify as cash flow hedges. The Company, however, has foreign currency exchange contract to sell 1.8 billion Chilean pesos. This
contract is intended to hedge an intercompany receivable that PM has from its Chilean subsidiary. This forward currency exchange
contract has been determined not to be considered a hedge under ASC 815-10, as such the Company’s earnings include changes in
market value of this hedge that occur during a reporting period.
At December 31, 2016, 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, 2016 would have $0.2 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 and EURIBOR. At December 31, 2016, the Company had
approximately $108.0 million of variable interest debt with average weighted average interest rate at year end of approximately
4.62%. The Company’s PM subsidiary had interest rate swaps on €20.4 million of its debt. The fair value of the interest rate swaps,
which represents the cost to settle these arrangements at December 31, 2016 was approximately $0.4 million. At December 31, 2016,
the Company performed a sensitivity analysis to determine the impact that an 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, 2016
would increase interest expense by approximately $0.5 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 to input costs did not have a significant effect on the Company’s operating performance in 2016.
During 2016, raw materials and components were generally available to meet our production schedules and had no significant impact
on 2016 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
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.
38
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, 2016 and 2015 ...........................................................................................
Consolidated Statements of Operations for the Years Ended December 31, 2016, 2015 and 2014 .........................................
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2016, 2015 and 2014 .........
Consolidated Statements of Shareholders’ Equity for Years Ended December 31, 2016, 2015 and 2014 ..............................
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014 .......................................
Page
Reference
40
41
42
43
44
45
Notes to Consolidated Financial Statements ............................................................................................................................
46-88
39
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, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), shareholders’
equity, and cash flows for each of the years in the three-year period ended December 31, 2016. We also have audited the Company’s
internal control over financial reporting as of December 31, 2016, 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, 2016 and 2015, and the results of their operations and their cash flows
for each of the years in the three-year period ended December 31, 2016, 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, 2016, 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 9, 2017
40
MANITEX INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
As of December 31,
2016
2015
$
$
$
$
5,110 $
1,308
47,267
501
1,332
90,901
4,745
—
151,164
37,241
56,809
70,248
1,978
545
—
—
317,985 $
27,408 $
—
338
45,778
4,373
16,658
2,150
—
96,705
35,562
49,986
6,004
6,862
14,098
1,058
3,242
4,906
—
121,718
218,423
—
94,324
2,918
(18,572 )
(4,272 )
74,398
25,164
99,562
317,985 $
5,918
—
50,101
388
1,743
99,846
4,393
37,360
199,749
41,381
63,675
71,337
3,003
216
5,752
16,310
401,423
27,212
—
1,004
53,601
1,611
17,708
2,030
16,870
120,036
38,872
64,174
5,850
6,737
13,923
1,288
1,790
7,198
11,255
151,087
271,123
—
93,186
2,630
16,588
(5,392)
107,012
23,288
130,300
401,423
ASSETS
Current assets
Cash
Cash - restricted
Trade receivables (net)
Accounts receivable from related party
Other receivables
Inventory (net)
Prepaid expense and other
Current assets of discontinued operations
Total current assets
Total fixed assets (net)
Intangible assets (net)
Goodwill
Other long-term assets
Deferred tax asset
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
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, 2016 and December 31, 2015
Common Stock—no par value 25,000,000 shares authorized, 16,200,294 and 16,072,100 shares
issued and outstanding at December 31, 2016 and December 31, 2015, 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
41
Net revenues
Cost of sales
Gross profit
Operating expenses
Research and development costs
Selling, general and administrative expenses
Total operating expenses
Operating (loss) income
Other income (expense)
Interest expense
Interest expense related to write off of debt issuance costs
Foreign currency transaction 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 $15,068 and $2,142 in 2016 and 2015, respectively)
Income tax expense
(Loss) income on discontinued operations
Net (loss) income
Net loss (income) attributable to noncontrolling interest
Net (loss) income attributable to shareholders of Manitex
International, Inc.
Earnings (loss) 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
MANITEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
For the years ended December 31,
$
2016
2015
2014
288,959 $
240,375
48,584
$
319,681
260,775
58,906
177,002
140,739
36,263
4,877
45,422
50,299
(1,715)
(11,000)
(3,635)
(1,115)
897
(14,853)
(16,568)
(545)
(5,752)
(21,775)
(13,922)
37
(13,959)
(35,734)
574
4,983
48,715
53,698
5,208
(11,842)
—
(293)
(43)
(12,178)
(6,970)
(1,908)
(199)
(5,261)
377
440
(63)
(5,324)
(48)
1,084
22,242
23,326
12,937
(1,854)
—
(423)
(101)
(2,378)
10,559
3,516
—
7,043
84
160
(76)
6,967
136
$
(35,160) $
(5,372) $
7,103
$
$
$
$
$
$
(1.31) $
(0.33) $
0.52
(0.87) $
— $
(0.01)
(2.18) $
(0.34) $
0.51
(1.31) $
(0.33) $
0.52
(0.87) $
— $
(0.01)
(2.18) $
(0.34) $
0.51
16,133,284
16,133,284
15,970,074
15,970,074
13,858,189
13,904,289
The accompanying notes are an integral part of these financial statements
42
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) for 2014
Total other comprehensive income (loss)
Comprehensive (loss) income
Comprehensive loss (income) attributable to noncontrolling interest
Total comprehensive (loss) income attributable to shareholders of
Manitex International, Inc.
For the Year Ended December 31,
2015
2014
2016
$
(35,734) $
(5,324) $
6,967
1,120
(4,369)
(1,419)
—
1,120
(34,614)
574
—
(4,369)
(9,693)
(48)
7
(1,412)
5,555
136
$
(34,040) $
(9,741) $
5,691
The accompanying notes are an integral part of these financial statements
43
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)
Shares issued to pay rent
Shares issued to repay debt
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)
Shares issued to pay rent
Shares issued to repay debt
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
Gain (loss) 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
Investment received from noncontrolling interest
Net (loss) income attributable to noncontrolling interest
Balance end of year
$
$
$
$
$
$
$
$
$
$
The accompanying notes are an integral part of these financial statements
2016
2015
2014
16,072,100
—
68,876
(13,055)
—
41,948
30,425
16,200,294
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
93,186 $
—
841
(80)
—
227
150
94,324 $
2,630 $
—
288
—
2,918 $
82,040
—
1,097
(75)
10,124
—
—
93,186
1,789
457
384
—
2,630
16,588 $
21,960
(35,160)
(18,572) $
(5,372)
16,588
$
$
$
$
$
$
(5,392) $
1,120
—
(4,272) $
23,288 $
—
2,450
(574)
25,164 $
(1,023) $
(4,369)
—
(5,392) $
23,240
—
—
48
23,288
$
$
68,554
12,500
1,100
(114)
—
—
—
82,040
1,191
572
3
23
1,789
14,857
7,103
21,960
389
(1,419)
7
(1,023)
—
23,376
—
(136)
23,240
44
MANITEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
For the years ended December 31,
2016
2015
2014
Cash flows from operating activities:
Net (loss) income
Adjustments to reconcile net income to cash (used) provide by for operating activities:
$
(35,734) $
(5,324 )
$
Depreciation and amortization
Changes in allowances for doubtful accounts
Acquisition expenses financed by seller
Loss (gain) on disposal of assets
Changes in inventory reserves
Deferred income taxes
Amortization of deferred financing cost
Revaluation of contingent acquisition liability
Write down of goodwill
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 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 (used) for provided by 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 provided by (used) for investing activities
Cash flows from financing activities:
Borrowings—2014 term loan
Repayment of 2014 term loan
Net proceeds from stock offering
New borrowings—convertible notes
(Payments) Borrowing on revolving term credit facilities
Net borrowings (repayments) on working capital facilities
Investment received from noncontrolling interest
New borrowings—except 2014 term loan
Note payments
Bank fees and cost related to new financing
Shares repurchased for income tax withholding on share-based compensation
Proceeds from sale and leaseback
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 (used) for provided by financing activities
Net (decrease) increase 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
45
11,241
(162)
—
44
1,655
1,178
4,336
(915)
275
528
(776)
5,752
1,129
(124)
54
14,515
1,119
2,174
(368)
189
(4,259)
(662)
—
171
(1,356)
(4,192)
(4,188)
—
206
(1,486)
(97)
19,074
746
18,443
—
(2,200)
—
—
(11,900)
1,828
2,450
30,701
(43,703)
(2,155)
(80)
4,080
—
—
(510)
4,735
(16,754)
(2,499)
2,999
5,918
6,418 $
11,506
(1)
—
(136)
792
(2,074 )
1,204
—
—
743
(706)
199
1,481
301
60
1,378
18,762
(8,095 )
(3,253 )
111
8,225
(2,475 )
(16,231)
(658)
1,403
(837)
6,375
(13,747)
518
(2,327 )
(233)
6,525
(138)
(9,402 )
14,000
(11,800)
—
15,000
1,045
(4,274 )
—
2,446
(8,119 )
(1,274 )
(75)
—
—
(1,446 )
437
5,940
2,913
(1,363 )
4,368
5,918
$
6,967
3,605
2
183
-
97
(254 )
259
—
—
—
—
—
1,104
—
(35 )
—
(4,671 )
(7,803 )
318
(123 )
485
(1,105 )
—
300
(30 )
(802 )
(1,503 )
(24,998)
—
(751 )
—
—
(173 )
(25,922)
—
—
12,500
7,500
3,957
294
—
677
(947 )
(519 )
(114 )
—
22
942
(1,397 )
3,731
26,646
(779 )
(944 )
6,091
4,368
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.
Our Valla product line of industrial cranes is a full range of precision pick and carry cranes 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.
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.
ASV Segment
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
independent dealers and the Terex distribution channels, as well as through the Company.
ASV’s financial results are included in the Company’s consolidated results beginning on December 20, 2014.
Equipment Distribution Segment
The Equipment Distribution segment consists of two of the Company’s subsidiaries, Crane and Machinery, Inc. (“C&M”) and Crane
and Machinery Leasing, Inc. (“C&M Leasing”). C&M is a distributor of Terex rough terrain and truck cranes products as well as
Manitex’s own products. C&M offers equipment repair services in the Chicago area and supplies repair parts for a wide variety of
medium to heavy duty construction equipment both domestically and internationally.
C&M Leasing rents equipment manufactured by the Company as well as a limited amount of equipment manufactured by third
parties.
Discontinued Operations
CVS Ferrari, srl (“CVS”) designed and manufactured a range of reach stackers and associated lifting equipment for the global
container handling market. CVS was sold on December 22, 2016 and is presented as a discontinued operation.
Manitex Liftking ULC (“Manitex Liftking” or “Liftking”) sold a complete line of rough terrain forklifts, a line of stand-up electric
forklifts, cushioned tiered 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. Liftking was sold on
September 30, 2016, and is presented as a discontinued operation.
46
Manitex Load King, LLC (“Load King”) manufactured specialized custom trailers and hauling systems typically used for transporting
heavy equipment. Load King trailers served niche markets in the commercial construction, railroad, military and equipment rental
industries through a dealer network. Load King was sold on December 28, 2015 and is presented as a discontinued operation.
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. ASV, PM and Columbia Tank have been included in the Company’s financial results from their respective effective
date of acquisition which are 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.
Restricted Cash—Certain of the Company’s lending arrangements require the Company to post collateral or maintain minimum cash
balances in escrow. These cash amounts are reported as current assets on the balance sheets based on when the cash will be
contractually released. Total restricted cash was $1,308 and $0 at December 31, 2016 and 2015, respectively.
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. In September 2016, the Company determined its investment in Lift Ventures was impaired and has recognized an
47
impairment charge to write off its entire investment in Lift Ventures (See Note 26). There was no impairment related to this
investment in prior periods.
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 $70 and $228 at
December 31, 2016 and 2015, 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
12 –33 years
3 – 15 years
3 – 7 years
1 – 33 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, 2016, 2015
and 2014 was $4,904, $4,776 and $1,081, 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 2016, 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 2016 and 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. 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 did not
indicate impairment of the Lifting Equipment or ASV segments’ goodwill. 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
estimated fair values of the Lifting Equipment reporting segment exceeded its carrying value by approximately 5%. The fair value of
the ASV segment exceeded its carrying value by approximately 20%. Except for a possible impairment of the Equipment Distribution
segment goodwill in 2016, the aforementioned step one quantitative testing did not indicate any impairment. As there was an
indication of possible impairment in 2016, the Equipment Distribution segment’s goodwill was subject to additional step two testing,
which is described below.
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
48
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.
This further analysis indicated that the Equipment Distribution segment goodwill was impaired and a $275 impairment charge was
recognized in 2016 to fully write off the equipment Distribution segment’s goodwill.
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.
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, 2016, 2015 and 2014.
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 —When the Company enters into forward currency exchange contracts it does
so in relationship such that the exchange gains and losses on the assets and liabilities that are being hedged which are 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 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.
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
49
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.
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 principally at banks located in Chicago,
Illinois and Pittsburg, Pennsylvania as well as several separate Italian banks. At December 31, 2016 and 2015, the Company had
uninsured balances of $3,755 and $4,978, respectively.
As of December 31, 2016 and 2015, no customers accounted for 10% or more of total Company’s accounts receivable.
In 2016, 2015 and 2014, no one customer accounted for 10% or more of total company’s revenues. For 2016, 2015 and 2014
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, 2016, 2015 and 2014 expenses were $4,877, $4,983 and $1,084, respectively.
Advertising —Advertising costs are expensed as incurred and were $1,083, $847 and $428 for the years ended December 31, 2016,
2015 and 2014, 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.
50
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 costs associated with long-term debt are presented in the balance sheet as
direct deduction from the carrying amount of that debt liability, consistent with debt discount. Deferred financing costs associated
with revolving lines of credit 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 are 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.
51
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.
Reclassifications —Certain reclassifications have been made to the 2015 and 2014 financial statements to conform to the 2016
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.
52
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:
2016
2015
2014
Net (loss) income attributable to shareholders of Manitex
International, Inc.
$
Net (loss) income from continuing operations
Less: loss (income) attributable to noncontrolling interest
(21,775) $
574
(5,261 ) $
(48 )
7,043
136
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.
(21,201)
(5,309 )
7,179
556
1,315
(14,515)
(1,378 )
(76)
—
$
(35,160) $
(5,372 ) $
7,103
(Loss) earnings per share
Basic
(Loss) earnings from continuing operations attributable
to shareholders' of Manitex International, Inc.
(Loss) earnings 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) earnings 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.
$
$
$
(1.31) $
(0.33 ) $
0.52
0.03 $
0.08 $
(0.01)
(0.90) $
(0.09 ) $
—
(2.18) $
(0.34 ) $
0.51
(1.31) $
(0.33 ) $
0.52
0.03 $
0.08 $
(0.01)
(0.90) $
(0.09 ) $
—
(2.18) $
(0.34 ) $
0.51
Weighted average common shares outstanding
Basic
Diluted
Basic
Dilutive effect of warrants
Dilutive effect of restricted stock units
16,133,284 15,970,074 13,858,189
16,133,284 15,970,074 13,858,189
—
46,100
16,133,284 15,970,074 13,904,289
—
—
—
—
There are 342,004 and 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, 2016 and 2015, respectively.
Note 5. Fair Value Measurements
The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value by level with 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. Except as noted the below assets and liabilities are valued at fair market on a
recurring basis,
53
The following is a summary of items that the Company measured at fair value during the periods:
Liabilities:
Forward currency exchange contracts
Interest rate swap contracts
PM contingent liabilities
Valla contingent consideration
Total liabilities at fair value
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
Fair Value at December 31, 2016
Level 1
Level 2
Level 3
Total
— $
—
—
—
— $
159 $
405
—
—
564 $
— $
—
316
193
509 $
159
405
316
193
1,073
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
$
$
$
$
$
$
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 $58,123 and $58,123 for the year ended December 31, 2016, and $75,446
and $75,446 for the year ending December 31, 2015. The book and fair value of the Company’s capital leases was $6,342 and $8,386
for the year ended December 31, 2016 and $6,854 and $9,214 for the year ending December 31, 2015. 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 $926 and $960 for
the periods ending December 31, 2016 and 2015, 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.
Note 6. Derivative Financial Instruments
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 Euro, Chilean Peso and the U.S.
dollar.
54
Forward Currency Contracts
When the Company receives a significant order in other than the operating unit’s functional currency, management may evaluate
different options that are available to mitigate future currency exchange risks. The decision to hedge future sales is not automatic and
is decided case by case. The Company only uses hedge instruments to hedge firm existing sales orders and not estimated exposure,
when management determines that exchange risks exceed 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. 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, 2016, 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.
At times , 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 Income in the other income
expense section on the line titled foreign currency transaction gains (losses). Items denominated in other than a reporting unit
functional currency include certain intercompany receivables due from the Company’s Italian subsidiaries and accounts receivable and
accounts payable of our Italian subsidiaries and their subsidiaries
PM Group has an intercompany receivable denominated in Euros from its Chilean subsidiary. At December 31, 2016, the Company
had entered into a forward currency exchange contract that matures on January 27, 2017. Under the contract the Company is
obligated to sell 1,800,000 Chilean pesos for 2,392 euros. The purpose of the forward contract 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.
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 contracts in order to hedge the interest rate risk related to its term loans. The remaining contract signed by PM Group,
with an original notional amount of € 20,000 (€ 20,000 at December 31, 2016, 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.
An additional contract was signed by PM Group, for an original notional amount of € 482 (€ 389 at December 31, 2016), maturing on
October 1, 2020 with interest paid monthly. PM pays interest at a rate of 3.90% and receives from the counterparties interest at the
“Euribor” rate for the period in question if greater than 0.90%.
As of December 31, 2016, the Company had the following forward currency contracts and interest rate swaps:
Nature of Derivative
Forward currency sales
contracts
Interest rate swap contracts
Currency
Amount
Type
Chilean peso
Euro
1,800,000 Not designated as hedge instrument
20,414 Not designated as hedge instrument
55
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, 2016 and 2015
Total derivatives not designated as a hedge instrument
Asset Derivatives
Foreign currency exchange contracts
Foreign currency exchange contracts
Total derivative assets
Liabilities Derivatives
Foreign currency Exchange Contracts
Foreign currency Exchange Contracts
Interest rate swap contracts
Total derivative liabilities
Balance Sheet Location
Prepaid expense and other
Current assets of discontinued operations
Fair Value
Years Ended
December 31,
2016
2015
$ — $ 595
—
5
$ — $ 600
Accrued expense
Current liabilities of discontinued operations —
Notes payable-Short term
$ 159 $ —
74
405 1,177
$ 564 $ 1,251
The following tables provide the effect of derivative instruments on the Consolidated Statement of Income for 2016, 2015 and 2014:
Derivatives not designated as Hedge Instrument
Forward currency contracts
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) $
Loss from operations of
discontinued operations
Interest expense
$
Location of gain or (loss)
recognized
in Income Statement
Gain or (loss)
2015
2014
2016
(483 ) $
395 $
235
54
(41 )
(470 ) $
(430 )
(56 )
(91 ) $
(125)
—
110
Gain or (loss)
2015
2014
2016
Forward currency contracts
Net revenue
$
— $
— $
(26)
During 2015 and 2016, there were no forward currency contracts designated as cash flow hedges. As such, all gains and loss related
to forward currency contracts during 2016 and 2015 were recorded in current earnings and did not impact other comprehensive
income.
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
2016
2015
62,252 $
4,396 $
24,253 $
90,901 $
72,179
5,017
22,650
99,846
$
$
The Company has established reserves for obsolete and excess inventory of $2,515 and $1,003 as of December 31, 2016 and 2015,
respectively.
56
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
2016
2015
$
$
4,359 $
21,980
20,248
483
1,834
1,246
444
54
50,648
(13,407)
37,241 $
4,458
22,040
19,583
580
1,708
1,066
527
326
50,288
(8,907 )
41,381
Depreciation expense was $4,904 (net of $106 amortization of deferred gain on building), $4,776 (net of $281 amortization of
deferred gain on building), and $1,081 (net of $380 amortization of deferred gain on building) in 2016, 2015 and 2014, 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.
Intangible assets were comprised of the following as of December 31, 2016 and 2015:
2016
2015
Patented and unpatented technology
Amortization
Customer relationships
Amortization
Trade names and trademarks
Amortization
Non-competition agreements
Amortization
Customer backlog
Amortization
Total Intangible assets
$
$
25,409 $
(12,630)
38,444
(10,851)
18,892
(2,463)
50
(42)
370
(370)
56,809 $
25,559
(10,406 )
38,786
(7,383 )
19,086
(1,979 )
50
(38 )
371
(371 )
63,675
Useful Lives
10 years
5-20 years
25 years -
Indefinite
2-5 years
< 1 year
Amortization expense was $6,337, $6,730 and $2,524 for the periods ended December 31, 2016, 2015 and 2014, respectively.
Estimated amortization expense for the next five years and subsequent is as follows:
2017
2018
2019
2020
2021
And subsequent
Total intangibles currently to be amortized
$
57
Amount
6,268
6,232
6,060
6,027
4,059
21,100
49,746
Changes in the Company’s goodwill by business segment were as follows:
Balance December 31, 2014
Goodwill for PM Group Acquisition
Effects of change in exchange rate
Balance December 31, 2015
Goodwill write-off
Effects of change in exchange rate
Balance December 31, 2016
Note 10. Accounts Payable and Accrual Detail
Equipment
Lifting
Segment
Equipment
Distribution
Segment
ASV
Segment
$
$
$
12,887 $
30,173
(2,577)
40,483 $
—
(814)
39,669 $
$
275
—
—
275
$
(275)
—
$
—
30,579 $
—
—
30,579 $
—
—
30,579 $
Total
43,741
30,173
(2,577)
71,337
(275)
(814)
70,248
Accounts payable:
Trade
Bank overdraft
Total accounts payable
Accrued expenses:
Accrued payroll
Accrued employee benefits
Accrued bonuses
Accrued vacation expense
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
Total accrued expenses
As of December 31,
2016
2015
44,308
1,470
45,778
1,241 $
1,279
741
1,344
1,831
391
2,223
3,438
—
1,950
2,220
16,658 $
52,406
1,195
53,601
1,960
1,109
871
1,460
924
491
1,407
3,508
451
3,138
2,389
17,708
$
$
$
$
Note 11. Revolving Term Credit Facilities and Debt
U.S. Credit Facilities
At December 31, 2016, the Company and its U.S. subsidiaries have a Loan and Security Agreement, as amended, (the “Loan
Agreement”) with The Private Bank and Trust Company (“Private Bank”). The Loan Agreement provides a revolving credit facility
with a maturity date of July 20, 2019. The aggregate amount of the facility is $25,000.
The maximum borrowing available to the Company under the Loan Agreement is limited to: (1) 85% of eligible receivables; plus (2)
50% of eligible inventory valued at the lower of cost or market subject to a $17,500 limit; plus (3) 80% of eligible used equipment, as
defined, valued at the lower of cost or market subject to a $2,000 limit. At December 31, 2016, the maximum the Company could
borrow based on available collateral was capped at $22,296. At December 31, 2016, the Company had borrowed $19,957 under this
facility. Effective April 30, 2017 the Company’s collateral is subject to a $5,000 reserve until the Fixed Charge Coverage ratio
exceeds 1.10 to 1.00. The indebtedness under the Loan Agreement is collateralized by substantially all of the Company’s assets,
except for the assets of certain of the Company’s subsidiaries.
The Loan Agreement provides that the Company can opt to pay interest on the revolving credit at either a base rate plus a spread, or a
LIBOR rate plus a spread. The base rate spread ranges from 0.25% to 1.00% depending on the Senior Leverage Ratio (as defined in the
Loan Agreement), but is fixed at 1.00% until January 20, 2017. The LIBOR spread ranges from 2.25% to 3.00% also depending on the
Senior Leverage Ratio, but is fixed at 3.00% until January 20, 2017. Funds borrowed under the LIBOR option can be borrowed for
periods of one, two, or three months and are limited to four LIBOR contracts outstanding at any time.
58
The underlying reference rate for our base rated borrowings at December 31, 2016 was 3.75%. At December 31, 2016, the Company had
two outstanding advances with interest tied to LIBOR. The contracts had underlying LIBOR rates of 0.566% and .0749%. In addition,
Private Bank assesses a 0.50% unused line fee that is payable monthly.
The Loan Agreement subjects the Company and its domestic subsidiaries to an Adjusted EBITDA covenant (as defined) of $1,200 at
December 31, 2016. Effective March 31, 2017, the Company is subjected to a quarterly EBITDA covenant (as defined) of $(1,000),
$0 at June 30, 2017, and $2,000 for all quarters starting September 30, 2017 through the end of the agreement. Additionally, the
Company and its domestic subsidiaries are subject to a Fixed Charge Coverage ratio of 1.05 to 1.00 measured on an annual basis
beginning December 31, 2017, followed by a Fixed Charge Coverage ratio of 1.15 to 1.00 measured quarterly starting March 31, 2018
(based on a trailing twelve month basis) through the term of the agreement. The Loan Agreement contains customary affirmative and
negative covenants, including covenants that limit or restrict the Company’s ability to, among other things, incur additional
indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, pay dividends or make
distributions, repurchase stock, in each case subject to customary exceptions for a credit facility of this size.
The Loan Agreement has a Letter of Credit facility of $3,000, which is fully reserved against availability.
Note Payables—Terex
December 19, 2014, the Company executed a note payable to Terex Corporation for $1,594. The note matures on June 19, 2017 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,
2016.
ASV Loan Facilities
On December 23, 2016, ASV completed a new unitranche credit agreement with PNC Bank, National Association (“PNC”), and
White Oak Global Advisors, LLC (“White Oak”) to provide a $65,000, 5-year credit facility. This new facility replaces the ASV’s
previous revolving credit and term loan facilities with JPMorgan Chase Bank, N.A., and Garrison Loan Agency Services LLC. The
new facility consists of a $35,000 revolving credit facility (which is subject to availability based primarily on eligible accounts
receivable and eligible inventory), a Term Loan A facility of $8,500 and a Term Loan B facility of $21,500.
Revolving Loan Facility with PNC
On December 23, 2016, ASV entered into a $35,000 revolving loan facility with PNC as the administrative agent, which loan facility
includes two sub-facilities: (i) a $2,000 letter of credit sub-facility, and (ii) a $3,500 swing loan sub-facility, each of which is fully
reserved against availability under the revolving loan facility. The facility matures on December 23, 2021.
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 (i) the sum of (a) 85% of Eligible Receivables, plus (b)
90% of Eligible Insured Foreign Receivables, plus (c) the lesser of (I) 95% of Eligible CAT Receivables, or $8,600 plus (ii) the
lesser of (A) the sum of (I) up to 65% of the value of the Eligible Inventory (other than Eligible Inventory consisting of finished goods
machines and service parts that are current), plus (II) 80% of the value of Eligible Inventory consisting of finished goods machines,
plus (III) 75% of the value of Eligible Inventory consisting of service parts that are current) or, (B) up to 90% of the appraised net
orderly liquidation value of Eligible Inventory. Inventory collateral is capped at $15,000 less outstanding letters of credit and any
reasonable reserves as established by the bank. At December 31, 2016, the maximum ASV could borrow based on available collateral
was capped at $19,154.
At December 31, 2016, ASV had drawn $15,605 under the $35,000 PNC Credit Agreement. ASV can opt to pay interest at either a
domestic rate plus a spread, or a LIBOR rate plus a spread. The initial spread for domestic and LIBOR is fixed at 1.5% and 2.5% until
delivery of certain reporting documents with respect to the fiscal quarter ending March 31, 2017, respectively. At which point the
spread for domestic rate will range from 1% to 1.5% and LIBOR spread from 2% to 2.5% depending on the average undrawn
availability (as defined in the loan agreement). Funds borrowed under the LIBOR options can be borrowed for periods of one, two,
or three months. The weighted average interest rate for the period ending December 31, 2016, was 3.6%. Additionally, the bank
assesses a 0.375% unused line fee that is payable monthly.
59
Term Loan A with PNC
On December 23, 2016 ASV entered into a $8,500 term loan (“Term Loan A”) facility with PNC as the administrative agent.
At December 31, 2016, ASV had an outstanding balance of $8,500 (less $90 debt issuance cost, for net debt of $8,410). ASV can opt
to pay interest at either a domestic rate plus a spread, or a LIBOR rate plus a spread. The initial spread for domestic and LIBOR rates
are initially fixed at 2% and 3% until delivery of certain reporting documents with respect to the fiscal quarter ending March 31, 2017,
respectively. At which point the spread for domestic rate will range from 1% to 1.5% and LIBOR spread from 2% to 2.5% depending
on the average undrawn availability (as defined in the loan agreement). Funds borrowed under the LIBOR options can be borrowed
for periods of one, two, or three months. The weighted average interest rate for the period ending December 31, 2016, was 4.76%.
ASV is obligated to make quarterly principal payments of $212 commencing on March 31, 2017. Any unpaid principal is due on
maturity, which is December 23, 2021. Interest is payable monthly beginning on December 31, 2016.
Term Loan B with White Oak
On December 23, 2016 ASV entered into a $21,500 term loan (“Term Loan B”) facility with White Oak as the administrative agent.
At December 31, 2016, ASV had an outstanding balance of $21,500 (less $648 debt issuance cost, for net debt of $20,852). The
interest rate is fixed at a LIBOR rate plus 10% until delivery of the same reporting documents referenced above. After delivery of the
reporting documents, ASV will pay interest at the LIBOR rate plus a spread of either 9% or 10% depending on the leverage ratio,
provided that at no time will the LIBOR rate be less than 1%. The interest rate for the year ended December 31, 2016 was 11%.
ASV is obligated to make quarterly principal payments of $538 commencing on March 31, 2017. Any unpaid principal is due on
maturity, which is December 23, 2021. Interest is payable monthly beginning on December 31, 2016.
ASV Covenants
ASV indebtedness is collateralized by substantially all of ASV’s assets and the respective equity interests of ASV’s members. The
facilities contain 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 Credit Agreements. The revolving
credit facility and the term loans require ASV to maintain a Minimum Fixed Charge Coverage ratio of not less than 1.20 to 1.0.
Additionally, the term loans require ASV not exceed a Leverage Ratio of 5.00 to 1.00 which shall step down to 2.85 to 1.00 on March
31, 2021 and also limits capital expenditures to $1,300 in any fiscal year.
PM Group Short-Term Working Capital Borrowings
At December 31, 2016, PM Group had established demand credit and overdraft facilities with seven Italian banks and six banks in
South America. Under the facilities, PM Group can borrow up to approximately €23,409 ($24,701) 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% - 30%.
At December 31, 2016, the Italian banks had advanced PM Group €17,491 ($18,456), at variable interest rates, which currently range
from 1.43% to 1.78%. At December 31, 2016, the South American banks had advanced PM Group €772 ($815). Total short-term
borrowings for PM Group were €18,263 (19,271) at December 31, 2016.
PM Group Term Loans
At December 31, 2016, PM Group has a €12,041 ($12,706) 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. Debt issuance costs offset against these term loans
totaled €408 ($431) at December 31, 2016.
The first note has an outstanding principal balance of €3,970 ($4,189), is charged interest at the 6-month Euribor plus 236 basis points,
effective rate of 2.14% at December 31, 2016. 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 ($5,134), is charged interest at the 6-month Euribor
plus 286 basis points, effective rate of 2.64% at December 31, 2016. The note is payable in semi-annual installments beginning June
2017 and ending December 2021. The third note has an outstanding principal balance of €3,206 ($3,383) and is non-interest bearing.
60
The note is payable in semi-annual installments beginning June 2016 and ending December 2017 and a final balloon payment in
December 2022.
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 $1,641 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, 2016 the remaining balance was €792 or $836 and has been offset to the debt.
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.
At December 31, 2016 PM Group has unsecured borrowings with four Italian banks totaling €13,015 ($13,733). Interest on the
unsecured notes is charged at the 3-month Euribor plus 250 basis points, effective rate of 2.18% at December 31, 2016. 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 ($378) and is payable in semi-annual installments beginning June
2019 and ending December 2019.
At December 31, 2016 Autogru PM RO, a subsidiary of PM Group, has two notes. 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, 2016,
maturing October 2020. At December 31, 2016, the outstanding principal balance of the note was €389 ($410). The second new note
is payable in one instalment in June 2017 is charged interest at the 1-month Euribor plus 250 basis points, effective rate of 2.50% at
December 31, 2016. At December 31, 2016, the outstanding principal balance of the note was €440 ($464).
PM has interest rate swaps with a fair market value at December 31, 2016 of €384 or $405 which has been included in debt.
Schedule of Debt Maturities
Scheduled annual maturities of the principal portion of debt outstanding at December 31, 2016 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.
$
North
American
except ASV
1,180 $
19,949
—
7,500
15,001
—
43,630
(392)
(1,148)
42,090 $
$
ASV
3,000 $
3,006
3,000
2,999
33,604
—
45,609
(738)
Italy
22,895 $
4,863
5,539
5,241
6,641
2,637
47,816
405
(835 )
(431 )
44,871 $
46,955 $
Total
27,075
27,818
8,539
15,740
55,246
2,637
137,055
405
(835)
(1,561)
(1,148)
133,916
2017
2018
2019
2020
2021
Thereafter
Interest rate swaps
Debt discount related to non-interest bearing debt
Debt issuance cost
Debt discounts related to convertible notes
Total
Note 12. Leases
Capital leases
Georgetown facility
The Company leases its Georgetown facility under capital lease that was amended and extended on September 1, 2015. The amended
lease expires on April 28, 2028. The monthly rent is currently $64 and is increased by 3% annually on September 1 during the term of
the lease.
61
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). At December 31, 2016, the outstanding capital
lease obligation is $5,311.
Winona facility
The Company has a lease which expires on February 1, 2017, that includes a one year extension through February 1, 2018, at the
option of the Company. The lease provides for monthly lease payments of $2 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. At December 31, 2016, the Company has outstanding capital lease
obligation of $500 which is the amount of the purchase option.
Equipment
The Company has entered into lease agreements with banks pursuant to which the Company is permitted to borrow 100% of the cost
of new equipment with 60 month 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 sale 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 amounts financed under equipment capital lease agreements:
New equipment
$
1,166
60 $
22 $
518
Amount
Borrowed
Repayment
Period
Amount of
Monthly
Payment
Balance
As of
December 31,
2016
Future Minimum Lease Payments are:
Operating
Leases
2,331 $
2,031
2,030
976
976
71
8,415
Capital Leases
1,051
1,248
1,248
866
865
6,207
11,485
(5,143 )
6,342
(338 )
6,004
$
$
Years
2017
2018
2019
2020
2021
Subsequent
Total Minimum Lease Payments
Less: imputed interest
Present value of minimum lease payment
Less: current portion
Long-term capital lease obligations
$
$
62
Capital Item—as of or for the year ended December 31, 2016
Building—Georgetown, TX
Land & Building—Winona, MN
Other Capitalized leases
Totals
Capital Item—as of or for the year ended December 31, 2015
Building—Georgetown, TX
Land & Building—Winona, MN
Other Capitalized leases
Totals
Cost
Accumulated
Depreciation
Depreciation
Expense
Interest
Expense
4,881 $
1,700
1,166
7,747 $
512 $
424
—
936 $
385 $
57
—
442 $
670
—
33
703
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
$
$
$
$
Sales and Leaseback—In accordance with ASC 840-40 Sales- Leaseback Transaction, at December 31, 2016 and 2015, the Company
has deferred gain of $1,058 and $1,288, 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 $37 for the next four years.
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 $259, $256 and $256 for the years ended December 31, 2016, 2015 and 2014, respectively.
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, $163 and $181 for the year ended December 31, 2016, 2015 and 2014,
respectively.
The Company leases a number of boom trucks and other equipment under five year operating leases. The Company entered into the
leases to provide financing for equipment some of which was manufactured by our Manitex subsidiary that will be in Equipment
Distribution’s rental fleet. The Company has the option to purchase the equipment at the end of the lease for the higher residual value
or then fair market value of the equipment. The following table provides additional information:
Lease
Inception
December 29, 2015
January 19, 2016
February 15, 2016
March 3, 2016
Lease
Term
Monthly
Payment
Residual
Value
15 $
37
24
24
100 $
173
639
320
322
1,454
60 months $
60 months
60 months
60 months
$
63
At December 31, 2016, 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 $4 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 2017 and 2021.
Currently, the aggregate monthly rent is approximately $21. 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 $4 to $5 with various expiration
dates through 2019. Total rent expense under these additional leases was $154, $125 and $125 for the years ended December 31,
2016, 2015 and 2014.
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
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, 2016, the note had remaining principal balance of $6,862 and an unamortized discount of $638. The difference
between this amount and the amount initially recorded represents $255 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
64
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, 2016, the note had remaining principal balance of $14,490 (less debt $392 issuance for an debt $14,098) and an
unamortized discount of $510. The difference between this amount and the amount initially recorded represents $204 of discount
amortization.
Note 14. Income Taxes
Information pertaining to the Company’s income before income taxes is as follows:
Income (loss) before income taxes:
Domestic
Foreign
Total net income before income taxes
Years ended December 31,
2015
2014
2016
$
$
(23,360) $
1,040
(22,320) $
(6,973 ) $
(196 )
(7,169 ) $
10,764
(205)
10,559
65
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 (benefit) for income taxes
Years ended December 31,
2015
2014
2016
$
$
(2,033) $
(6)
(310)
(2,349)
(136)
1,163
777
1,804
(545) $
(1,776 ) $
104
687
(985 )
(240 )
(96 )
(587 )
(923 )
(1,908 ) $
3,730
172
(96)
3,806
(334)
44
—
(290)
3,516
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:
Intangibles
Discount on convertible notes
Deferred State Income Tax
Deferred financing fees
Total deferred tax liability
Valuation allowance
Net deferred tax liability
Year ended December 31,
2016
2015
1,084 $
2,830
641
464
4,017
1,434
317
262
1,625
736
948
14,358
8,266
418
592
—
9,276
(7,779)
(2,697) $
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 )
$
$
In assessing the realizability of deferred tax assets, we evaluate whether it is more likely than not (more than 50%) 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 in those periods in which temporary differences become deductible and/or net operating losses can be utilized.
We assess all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not
to be realized. This evidence includes, but is not limited to, prior earnings history, scheduled reversal of taxable temporary differences,
tax planning strategies and projected future taxable income. Significant weight is given to positive and negative evidence that is
objectively verifiable. We have cumulative domestic losses for the three year period ending December 31, 2016, which is considered
to be a significant piece of negative evidence.
Based on these factors, most notably the projected three year cumulative loss, the Company established a full valuation allowance
against the portion of its U.S. net deferred tax asset that could not be realized by carrying back the 2016 tax loss for a refund of taxes
66
paid in prior years. Accordingly, the Company recorded a tax receivable of approximately $2.3 million, related to the carry back of
2016 net operating loss for a refund of taxes paid in 2014.
As of December 31, 2016, the Company had federal net operating loss carryforwards of approximately $9.1 million which are set to
expire in 2036 if not utilized. The Company also had state net operating losses of approximately 0.3 million that are set to expire at
varying periods between 2025 and 2036 if not utilized. U.S. federal research and development tax credit carryforwards of
approximately $186 expire between 2034 and 2036 if not utilized.
As of December 31, 2016, the Company has approximately $1,217 of Texas Temporary Margin Tax Credit that may be utilized
through 2026. The Company has reflected a deferred tax asset for this credit in the table above.
The Company has not provided for the United States income or the foreign withholding taxes on the $12.6 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.
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
Valuation allowance
Other
Years ended December 31,
2016
2015
35.00%
1.01%
-2.40%
1.03%
-0.34%
-0.26%
-29.01%
-2.59%
2.44%
35.00 %
-0.53 %
-2.34 %
1.00 %
-5.86 %
-0.69 %
—
0.27 %
26.85 %
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,
2016
2015
935 $
48
—
—
983 $
215
40
(18 )
698
935
$
$
Of the amounts reflected in the above table at December 31, 2016, the entire amount would reduce the Company’s annual effective tax
rate if recognized. The Company accrued interest of $40 during 2016 and in total, as of December 31, 2016, recognized a liability for
interest of $77. 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, 2016. As of December 31, 2016,
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, 2016, we are no longer subject to U.S. federal, state or
foreign examinations by tax authorities for years before 2013.
67
Note 15. Supplemental Cash Flow Disclosures
Interest received and paid, income taxes paid and non-cash transactions incurred during the years ended December 31, 2016, 2015 and
2014 were as follows:
Interest paid in cash
Income tax (refunds) payments in cash
Non-Cash Transactions:
2016
2015
2014
10,248
(1,322)
11,040
2,059
2,380
4,773
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)
Terex note payment paid in stock (see Note20)
Rent paid in stock (see Note 20)
—
—
—
—
150
227
—
—
3,607
10,124
—
—
5,951
1,594
—
—
—
—
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 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 2016, 2015 and 2014 were $375, $386 and $309, 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, 2016 is $837, of which, $64 and $773 is reflected in “Accrued Other” and “Other Long-Term Liabilities”,
respectively, on the balance sheet. The balance at December 31, 2015 was $871, of which, $64 and $807 was reflected in “Accrued
Other” and “Other Long-Term Liabilities”, respectively. The Company expects to make annual benefit payments of $64 per year over
the next five years.
Movements on the PM Group’s employee severance indemnity / TFR provision during the periods, including the effects of the
actuarial valuation of the TFR, were as follows:
Employee severance indemnity/TFR
$
1,487 $
668 $
778 $
1,377
Balance
As of
December 31,
2015
Increases
Decreases
Balance
As of
December 31,
2016
Employee severance indemnity/TFR
$
1,552 $
698 $
763 $
1,487
Balance
As of
January 15,
2015
Increases
Decreases
Balance
As of
December 31,
2015
68
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
1.00 %
1.50%
2.63%
10.00%
3.00%
The amount allocated to the Employee severance indemnity provision in 2016 and 2015 were $668 and $698.
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
Actuarial gains and losses arising from changes in financial
assumptions
Actuarial gains and losses arising from experience
assumptions
Actuarial (Gain)/Loss
Years ended December 31,
2015
2016
1,487 $
8
(1 )
(117 )
1,377 $
1,552
13
(37)
(41)
1,487
Years ended December 31,
2015
2016
17 $
(18 )
(1 ) $
(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.
69
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,
2016
2015
3,508 $
—
3,037
(2,956)
(126)
(25)
3,438 $
3,058
843
3,959
(4,446 )
101
(7 )
3,508
$
$
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.
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. Manitex and PM are the Lifting Equipment
segment’s two largest operations. Manitex markets a comprehensive line of boom trucks, truck cranes and sign cranes. 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.
The segment also sells specialized rough terrain cranes and material handling products through its Badger subsidiary, a comprehensive
line of specialized mobile tanks for liquid and solid storage and containment solutions with capacities from 8,000 to 21,000 through its
Sabre subsidiary and a full range of pick and carry cranes from 2 to 90 tons, using electric, diesel, and hybrid power options through its
Valla subsidiary.
Boom trucks and knuckle boom cranes are primarily used for industrial projects, power distribution, energy exploration and ground
extraction, and infrastructure development, including, roads, bridges and commercial and residential construction. Badger primarily
serves the needs of the construction, municipality, railroad and oil refining industries. Sabre tanks are used in a variety of end markets
such as petrochemical, waste management and oil and gas drilling. Valla pick and carry cranes are primarily used in industrial
applications.
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 independent dealers, Terex Corporation (“Terex”) distribution channels as well as through the Company. This
independent dealer network has over 150 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 consists of two of the Company’s subsidiaries, Crane and Machinery, Inc. (“C&M”) and Crane
and Machinery Leasing, Inc. (“C&M Leasing”). C&M is a distributor of Terex rough terrain and truck cranes products as well as
Manitex’s own products. C&M offers equipment repair services in the Chicago area and supplies repair parts for a wide variety of
medium to heavy duty construction equipment both domestically and internationally.
C&M Leasing rents equipment manufactured by the Company as well as a limited amount of equipment manufactured by third
parties. C&M Leasing has recently expanded its rental fleet.
ASV and PM Group results are included in the Company’s results from their respective effective dates of acquisition on December 20,
2014 and January 15, 2015.
70
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 (loss) 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,
2015
2014
2016
172,405 $
103,803
16,404
(3,653)
288,959 $
193,436 $
116,935
13,216
(3,906 )
319,681 $
158,319
2,264
21,104
(4,685)
177,002
2,301 $
6,009
(2,893)
(7,406)
274
(1,715) $
8,557 $
5,496
(136 )
(8,522 )
(187 )
5,208 $
20,641
(121)
374
(7,968)
11
12,937
188,791 $
119,732
8,742
720
—
317,985 $
208,734 $
122,672
14,585
2,175
53,257
401,423 $
98,680
124,146
15,612
1,262
74,567
314,267
$
$
$
$
$
$
Total foreign source net revenue was approximately $118,946, $128,387 and $36,691 for the years ended December 31, 2016, 2015
and 2014, respectively. Total long-lived assets related to the Company’s foreign operations were approximately $74,463 and $79,916
for the years ended December 31, 2016 and 2015, 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,
Goodwill impairment charge
$
2016
2015
40,483 $
—
(814)
39,669
30,579
—
30,579
275
(275)
—
12,887
30,173
(2,577 )
40,483
30,579
—
30,579
275
—
275
Total goodwill at December 31,
$
70,248 $
71,337
71
Net Revenues
United States
Italy
Canada
Australia
United Kingdom
Argentina
France
Chile
Finland
Spain
Mexico
Germany
Netherlands
Hong Kong
South Africa
Malaysia
Israel
United Arab Emirates
Saudi Arabia
Czech Republic
Korea
Kuwait
Ukraine
Columbia
Norway
Singapore
Ireland
Bahrain
Turkey
Denmark
Indonesia
Switzerland
New Zealand
Peru
Morocco
Romania
Algeria
Poland
Brazil
Iraq
Qatar
Kenya
Russia
Lebanon
Egypt
Venezuela
Slovakia
Japan
Other
2016
170,013 $
24,984
16,752
13,397
9,410
7,662
5,760
5,692
3,513
2,630
2,499
2,243
1,659
1,339
1,282
1,173
1,069
969
860
818
785
721
693
686
650
564
535
530
476
471
359
340
276
170
123
97
89
83
1
—
—
—
—
—
—
—
—
—
7,586
288,959 $
2015
191,294 $
23,174
21,375
13,333
8,590
9,617
3,926
5,323
1,802
3,143
1,461
1,539
570
2,532
411
688
2,333
943
1,748
1,875
—
—
—
—
1,112
—
418
—
5,003
—
—
439
687
1
740
2,209
—
347
1
5,302
1,944
1,903
262
682
—
128
93
6
2,727
319,681 $
2014
135,988
367
26,374
—
2,345
—
—
592
—
—
3,635
—
—
—
—
—
527
265
—
3,426
—
—
—
—
—
—
—
—
20
—
—
—
—
474
—
—
—
—
—
—
—
—
—
—
—
—
1,369
1,620
—
177,002
$
$
Company attributes revenue to different geographic areas based on where items are shipped or services are performed.
72
Long Lived Assets
United States
Italy
Long-term assets of discontinued operations
Total Long-Lived Assets
2016
92,358 $
74,463
—
166,821 $
2015
105,628
79,933
16,310
201,871
$
$
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
(60,702)
Adjustment
to purchase
price allocation
Revised amount
recorded as of
January 15, 2015
30,173
22,215
16,952
10,867
(60,358)
(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.
73
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
2
(22,020)
(7,343)
(1,188)
(11,595)
(2,973)
(51,067)
25,852 $
6,965
22,215
23,743
4,428
16,952
12,813
6,914
9,050
30,173
10,867
2
(26,026 )
(8,679 )
(1,404 )
(13,705 )
(3,514 )
(60,358 )
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
Debt issuance costs
Total assumed non-recourse debt
€
€
22,956 $
10,289
(1,460)
18,827
1,720
(1,265)
51,067 $
27,133
12,161
(1,726 )
22,252
2,033
(1,495 )
60,358
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.
74
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 Equipment segment for segment reporting purposes.
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 was 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 at December 31, 2015. In 2016, the Company determined its investment in Lift
Ventures was impaired and has recognized an impairment charge to write off its entire investment in Lift Ventures LLC (See Note
26),
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
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.
75
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
$
$
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
76
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
On October 14, 2016 the Company issued 41,948 shares of common stock with a value of $227 to Avis Industrial Corporation as
payment for rent of the Company’s Winona, Minnesota facility. The shares were valued based on closing price on October 14, 2016
of $5.41.
77
Shares issued to Terex Corporation
On March 1, 2016, the Company issued 30,425 shares of common stock to Terex Corporation as the Company elected to pay $150 of
the final principal payment due March 1, 2016 in shares of the Company’s common stock. The share price for the transaction was
$4.93 which was determined based upon the average closing price for the twenty trading days ending the day before the payment was
due.
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 2016, 2015 and 2014 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
January 1, 2016
January 1, 2016
June 5, 2016
September 15, 2016
September 30, 2016
December 31, 2016
December 31, 2016
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
Employees or
Director
Shares Issued
Directors
Employees
Employees
Directors
Employees
Directors
Employees
Value of
Shares Issued
55
329
7
36
68
128
218
841
4,290 $
25,920
642
6,800
7,511
9,915
13,798
68,876 $
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 $
Employees or
Director
Directors
Employees
Employees
Employees
Directors
Employees or
Director
Directors
Employees
Employees
Employees
Directors
78
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 2016, 2015 and 2014 :
Date of Purchase
January 1, 2016
June 5, 2016
September 30, 2016
December 31, 2016
June 5, 2015
December 31, 2015
June 5, 2014
December 31, 2014
Shares
Purchased
Closing Price
on Date of
Purchase
7,074 $
197 $
2,254 $
3,530 $
13,055
393 $
12,125 $
12,518
392 $
8,461 $
8,853
5.95
6.75
5.51
6.86
8.54
5.95
16.75
12.71
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, June 5, 2013 and June 2, 2016. The maximum number of shares of common stock reserved for issuance under
the plan is 1,329,364 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 329,325; 145,979; and 34,292
restricted stock units to employees and directors during 2016, 2015 and 2014, 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 2016, 2015 and 2014 includes $1,129, $1,270 and $875 related to restricted stock units, respectively.
Compensation expense related to restricted stock units will be $916, $565 and $215 for 2017, 2018 and 2019, respectively.
79
The following is a summary of restricted stock units that were awarded during 2016, 2015 and 2014:
2016 Grants
January 4, 2016
September 15, 2016
December 14, 2016
2015 Grants
January 1, 2015
March 4, 2015
Vesting Date
January 4, 2017 60,671 units;
January 4, 2018 60,671 units and
62,508 units January 4, 2019
September 15, 2016 6,800 units;
September 15, 2017 6,600 units and
September 15, 2018 6,600 units
December 14, 2017 41,407 units;
December14, 2018 41,407 units and
December 14, 2019 42,661 units
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
Number of
Restricted
Stock Units
Closing Price
on
Date of Grant
Value of
Restricted
Stock
Units Issued
183,850 $
6.07 $
1,116
20,000 $
5.32 $
106
125,475 $
329,325
5.60 $
$
703
1,925
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
The following table contains information regarding restricted stock units for the years ended December 31, 2016, 2015 and 2014,
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
2015
85,384
145,979
(87,923 )
(12,518 )
(12,149 )
118,773
2016
118,773
329,325
(55,821)
(13,055)
(37,218)
342,004
2014
142,851
34,292
(80,261)
(8,853)
(2,645)
85,384
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-
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
80
exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, “Deferral of the Effective Date”, which
amends ASU 2014-09. As a result, the effective date is the first quarter of 2018, with early adoption permitted. The Company is
evaluating the impact that adoption of this guidance will have on the determination or reporting of its 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 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. The current requirement that deferred tax liabilities and assets of a tax paying component of an entity be offset and presented
as a single amount is not affected by the amendments in this update. 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 guidance can be applied either prospectively or
retrospectively. The Company has adopted the guidance for the year ended December 31, 2016 on a retrospective basis in order to
simplify balance sheet classifications. The main impact of adoption of the standard was the reclassification of current deferred tax
assets that resulted in a reduction in noncurrent deferred tax liabilities.
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.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to recognize assets
and liabilities for leases with lease terms of more than 12 months and disclose key information about leasing arrangements. 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. The Company is in the process of evaluating the impact of this update on its
consolidated financial statements.
In March 2016, the FASB issued ASU 2016-05, “Derivatives and Hedging (Topic 815)” (“ASU 2016-05”). ASU 2016-05 provides
guidance clarifying that novation of a derivative contract (i.e. a change in counterparty) in a hedge accounting relationship does not, in
and of itself, require designation of that hedge accounting relationship. The effective date will be the first quarter of fiscal year 2017,
with early adoption permitted. Adoption is not expected to have a material effect on the Company’s consolidated financial statements.
In March 2016, the FASB issued ASU 2016-06, “Derivatives and Hedging (Topic 815)” (“ASU 2016-06”). ASU 2016-06 simplifies
the embedded derivative analysis for debt instruments containing contingent call or put options by clarifying that an exercise
contingency does not need to be evaluated to determine whether it relates to interest rates and credit risk in an embedded derivative
analysis. The effective date will be the first quarter of fiscal year 2017, with early adoption permitted. Adoption is not expected to
have a material effect on the Company’s consolidated financial statements.
In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606) Principal versus Agent
Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”). ASU 2016-08 further clarifies principal and agent
relationships within ASU 2014-09. Similar to ASU 2014-09, the effective date will be the first quarter of fiscal year 2018 with early
adoption permitted in the first quarter of fiscal year 2017. The Company is evaluating the impact that adoption of this new standard
will have on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (Topic 718), Improvements to Employee Share-
Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 is intended to simplify several aspects of accounting for share-based
81
payment awards. The effective date will be the first quarter of fiscal year 2017, with early adoption permitted. The Company is
evaluating the impact that adoption of this new standard will have on its consolidated financial statements.
In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606), Identifying Performance
Obligations and Licensing” (“ASU 2016-10”). The amendments in ASU 2016-10 are expected to reduce the cost and complexity of
applying the guidance on identifying promised goods or services in contracts with customers and to improve the operability and
understandability of licensing implementation guidance related to the entity's intellectual property. Similar to ASU 2014-09, the
effective date will be the first quarter of fiscal year 2018 with early adoption permitted in the first quarter of fiscal year 2017. The
Company is evaluating the impact that adoption of this new standard will have on its consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and
Cash Payments,” (“ASU 2016-15”). ASU 2016-15 reduces the existing diversity in practice in financial reporting by clarifying
existing principles in ASC 230, “Statement of Cash Flows,” and provides specific guidance on certain cash flow classification
issues. The effective date for ASU 2016-15 will be the first quarter of fiscal year 2018 with early adoption permitted. The Company
is evaluating the impact that adoption of this new standard will have on its consolidated financial statements.
In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740) - Intra-Entity Transfer of Assets Other than Inventory,”
(“ASU 2016-16”). ASU 2016-16 requires recognition of current and deferred income taxes resulting from an intra-entity transfer of
any asset (excluding inventory) when the transfer occurs. This is a change from existing GAAP which prohibits recognition of current
and deferred income taxes until the asset is sold to a third party. The effective date for ASU 2016-16 will be the first quarter of fiscal
year 2018 with early adoption permitted. The Company is evaluating the impact that adoption of this new standard will have on its
consolidated financial statements.
In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,”
(“ASU 2017-01”). ASU 2017-01 provides guidance in ascertaining whether a collection of assets and activities is considered a
business. The effective date will be the first quarter of fiscal year 2018, with prospective application. The Company is evaluating the
impact that adoption of this new standard will have on its consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill
Impairment,” (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 from the goodwill impairment test. Instead, an entity should perform
its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity
should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any.
The loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should
consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the
goodwill impairment. The effective date will be the first quarter of fiscal year 2020, with early adoption permitted in 2017. The
Company is evaluating the impact that adoption of this new standard will have on its 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.
As a result of the sale, in the third quarter, of the Company's Liftking subsidiary, Lift Ventures LLC will no longer have the right to
sell Schaeff and Liftking products in the future. Additionally, as a result of certain financial difficulties experienced by the partner,
who was to contribute design services, it will not be able to provide such services. As a result of these events, the Company has
determined that its investment in the Lift Ventures has become impaired and has recognized an impairment charge of $5,647 to write
off its entire investment in Lift Ventures LLC.
82
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 former 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, 2016 the Company had an accounts receivable of $47 and $22 from SL and Lift Ventures, respectively and
accounts payable of $471, $749, $7 and $940 to SL, Lift Ventures, BGI and Terex, respectively. 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.
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
Lift Ventures
LiftMaster (2)
Total Sales
Inventory Purchases from:
SL Industries, Ltd
Lift Ventures
LiftMaster (2)
BGI
Total Inventory Purchases
2016
2015
2014
$
259 $
256 $
256
1
—
14
—
15
4
3
—
1
8
15
1,985
—
—
2,000 $
1,872
524
—
7
2,403 $
$
3
—
—
—
3
3,730
—
—
5
3,735
(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 provided 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, before it was sold on September 30,
2016.
Transactions with Terex
On December 19, 2014, Terex became a related party.
At December 31, 2016 and 2015, ASV has accounts receivable due from Terex for $501 and $388 which is shown on the balance
sheet on the line titled “accounts receivable from related party” and accounts payable of $2,275 and $1,413 on the line titled “accounts
payable related parties”.
83
At December 31, 2016 and 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
Years Ended
December 31,
2016
2015
$
$
$
— $
1,594 $
6,862 $
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
2016
2015
1,653
10,268
2,472
9,495
In addition to the above referenced purchases, ASV expensed $1,648 and $1,960 for the years ended December 31, 2016 and 2015 in
connection with the Distribution and Cross Marketing Agreement with Terex. For the years ended December 31, 2016 and 2015,
ASV expensed $1,418 and $1,472, respectively in connection with the Service Agreement with Terex.
On March 4, 2016, CVS and Terex Operations Italy S.R.L. (“TOI”) entered into an agreement whereby TOI acquired certain
inventories and intellectual property related to CVS’ terminal tractor line. The transaction totaled €2,839 ($3,119) inclusive of VAT
taxes and resulted in a gain of €1,987 ($2,212), which is included in loss on sale of discontinued operations. The transaction also
contained a contract manufacturing requirement for CVS to continue production of the terminal tractor line for TOI for a period of
nine months. After this period of time CVS will have the access to terminal tractor equipment directly from TOI under a private label
agreement.
On March 11, 2016, Terex made an additional $2,450 equity contribution to ASV.
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 $1,575 and $1,575 for 2012, 2013, 2014, 2015, 2016 and 2017 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.
84
On May 5, 2011, Company entered into two separate settlement agreements with two plaintiffs. As of December 31, 2016, the
Company has a remaining obligation under the agreements to pay the plaintiffs $1,425 without interest in 15 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.
Note 24. Quarterly Financial Data (Unaudited)
Unaudited Quarterly Financial Data
Summarized quarterly financial data for 2016 and 2015 are as follows (in thousands, except per share amounts).
Net revenues
Gross Profit
Net (loss) income from
continuing operations
attributable to shareholders of
Manitex International,Inc.
Net income (loss) from
discontinued operations
Net income (loss) attributable to
shareholders of Manitex
International, Inc.
Earnings (Loss) 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.
Earnings (Loss)
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 of Manitex
International, Inc.
Earnings (Loss)
attributable to
shareholders
of Manitex International,
Inc.
Shares outstanding
2016
2015
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
$
85,386 $
14,838
75,958 $
13,440
62,636 $
10,294
64,979 $
10,012
84,864 $
15,563
80,426 $
16,346
78,252 $
14,500
76,139
12,497
(980 )
(4,151)
(9,030)
(7,040)
(963)
(3,150 )
2,636
(3,832)
2,440
2,365
(11,527)
(7,237)
455
3,122
(1,977)
(1,663)
$
1,460 $
(1,786) $
(20,557) $
(14,277) $
(508) $
(28 ) $
659 $
(5,495)
$
(0.06 ) $
(0.26) $
(0.56 ) $
(0.44 ) $
(0.06) $
(0.20 ) $
0.16 $
(0.24 )
$
0.15 $
0.15 $
(0.71 ) $
(0.45 ) $
0.03 $
0.19 $
(0.12 ) $
(0.10 )
$
0.09 $
(0.11) $
(1.27 ) $
(0.88 ) $
(0.03) $
(0.00 ) $
0.04 $
(0.34 )
$
(0.06 ) $
(0.26) $
(0.56 ) $
(0.44 ) $
(0.06) $
(0.20 ) $
0.16 $
(0.24 )
$
0.15 $
0.15 $
(0.71 ) $
(0.45 ) $
0.03 $
0.19 $
(0.12 ) $
(0.10 )
$
0.09 $
(0.11) $
(1.27 ) $
(0.88 ) $
(0.03) $
(0.00 ) $
0.04 $
(0.34 )
Basic
Diluted
16,105,601 16,125,788 16,127,346 16,174,403 15,836,423 16,014,059 16,014,594 16,015,219
16,105,601 16,125,788 16,127,346 16,174,403 15,836,423 16,014,059 16,039,361 16,015,219
85
Results for Lift Ventures, ASV, PM and Columbia Tank are included in the Company’s results from their respective effective dates of
acquisition which are December 16, 2014, December 20, 2014, January 15, 2015 and March 12, 2015, respectively.
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
$2,142 on the sale including transaction expenses of $720, with a corresponding tax benefit of $764.
Company Sells Liftking
On September 30, 2016, the Company completed the sale of Manitex Liftking, ULC, an Alberta unlimited liability corporation
pursuant to a Share Purchase Agreement (the “Liftking Purchase Agreement”) with Mi-Jack Products, Inc. and its wholly-owned
subsidiary Liftking Acquisition ULC.
The Company received cash consideration of $14 million. The Company recognized a pre-tax loss of $9,296 on the sale including
transaction expenses of $551. The pre-tax loss includes a non-cash portion related to intangible assets and goodwill write-offs of
$2,710 and $3,686, respectively. The aforementioned intangible and goodwill represents an allocation of a portion of the Lifting
Equipment segment’s intangibles and goodwill that existed on the date of sale. The allocation percentage was arrived at by computing
the full value of the Lifting Equipment segment and subtracting the value of the cash consideration that the Company received related
to the Liftking disposition. The Company did record an income tax benefit of $453 attributable to this transaction.
Company Sells CVS
On December 22, 2016, Manitex International, Inc. (the “Company”) completed the sale of its CVS Ferrari srl (“CVS”) subsidiary to
two Italian companies BP S.r.l. and NEIP III S.p.A. (collectively the “Purchasers”) for $5 million in cash, less $1.3 million payable for
inventory due in 2017, and the assumption of $14 million of net CVS debt (the “Transaction”). The Transaction was consummated
pursuant to a Sale and Purchase Agreement between the Company and the Purchasers (the “Purchase Agreement”). The Purchasers
are privately-held manufacturers and service providers for terminal handling equipment provided around the world. As part of the
transaction, the Company retained the operations of CVS’s Valla division, which offers a full range of electric precision pick and carry
cranes.
The Company recognized a pre-tax loss of $7,984 on the sale including transaction expenses of $650. The pre-tax loss includes a non-
cash portion related to intangible assets and goodwill write-offs of $2,649 and $4,358, respectively. The aforementioned intangible
and goodwill represents an allocation of a portion of CVS’s segment’s intangibles and goodwill that existed on the date of sale. The
allocation percentage was arrived at by computing the full value of the Lifting Equipment segment and subtracting the value of the
cash consideration that the Company received related to the CVS disposition. The Company did record an income tax benefit of $100
attributable to this transaction.
As disclosed in Note 22, in March 2016 the Company recognized a gain of $2,212 from the sale of inventory and intellectual property
related to CVS’s terminal tractor line.
86
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,
2015
ASSETS
Current assets
Cash
Trade receivables (net)
Other receivables
Inventory, net
Prepaid expense and other
Total current assets of discontinued operations
Long-term assets
Total fixed assets (net)
Intangible assets (net)
Other long-term assets
Total long-term assets of discontinued operations
Total assets of discontinued operations
Current liabilities
Notes payable—short-term
Revolving credit facilities
Accounts payable
Accrued expenses
Other current liabilities
$
$
$
Total current liabilities of discontinued operations
Long-term liabilities
Notes payable - long-term
Revolving credit facilities
Other long-term liabilities
Total long-term liabilities of discontinued operations
Total liabilities of discontinued operations
$
2,660
13,286
1,511
19,425
478
37,360
604
6,954
8,752
16,310
53,670
3,111
1,795
8,536
3,345
83
16,870
3,466
7,225
564
11,255
28,125
The following is the detail of major line items that constitute the loss from discontinued operations:
Net revenues
Cost of sales
Research and development costs
Selling, general and administrative expenses
Interest expense
Other (income) expense
Income from discontinued operations before income taxes
Loss on sale of discontinued operations including
transactions expense of $1,201 and $720, in 2016 and
2015 respectively
For the Year Ended December 31,
2015
2014
2016
$
66,538 $
56,043
729
7,823
934
(137)
1,146
67,056 $
56,456
846
5,739
1,141
355
2,519
70,162
58,976
1,009
7,640
923
1,530
84
(15,068)
(2,142 )
Total (loss) gain on discontinued operations before
income taxes
Income tax expense related to discontinued operations
Net loss on discontinued operations
(13,922)
37
(13,959) $
$
377
440
(63 ) $
87
—
84
160
(76)
26. Impairment of Lift Venture Investment
In December 2014, the Company entered into a joint venture agreement pursuant to which Lift Ventures LLC was formed. The joint
venture was formed to manufacture and sell certain products and components, including the Company's Schaeff electric forklift
business, which was operated by the Company's Liftking subsidiary and certain other Liftking products. One of the other partners in
the joint venture contributed design services which were to be used to develop additional new products for the joint venture.
As a result of the sale, in the third quarter, of the Company's Liftking subsidiary, Lift Ventures LLC will no longer have the right to
sell Schaeff and Liftking products in the future. Additionally, as a result of certain financial difficulties experienced by the partner,
who was to contribute design services, it will not be able to provide such services. As a result of these events, the Company has
determined that its investment in the Lift Ventures has become impaired and has recognized an impairment charge of $5,647 to write
off its entire investment in Lift Ventures LLC.
27. Subsequent Events
On January 23, 2017, Manitex International Inc. entered into a Controlled Equity Offering Sales Agreement (“Sales Agreement”) with
Cantor Fitzgerald & Co. (“Cantor”) pursuant to which the Company may offer and sell shares of its common stock, no par value per
share, having an aggregate offering price up to $20,000 through Cantor. The Company thought it prudent to put a mechanism in place
by which supplemental liquidity can be provided to address working capital requirements or other capital requirements that may arise
in conjunction with production requirements. Funds provided through the Sales Agreement totaled $2,608 in January 2017 from the
sale of 294,524 shares of the Company's common stock.
Manitex International, Inc. and its U.S. subsidiaries currently have a Loan Agreement, as amended, with Private Bank. On February
10, 2017 the Company and Private Bank entered into Amendment No. 4 to the Loan Agreement (the “Amendment”). The principal
modification to the Loan Agreement resulting from the Amendment is adjusting the financial covenants for the quarters ending
December 31, 2016 through the maturity date. See Note 11.
88
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, 2016. 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, 2016.
The effectiveness of the company’s internal control over financial reporting as of December 31, 2016, 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 2016, 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.
89
ITEM 9B. OTHER INFORMATION
Company and Private Bank Amend Loan Agreement
Manitex International, Inc. (the “Company”) and its U.S. subsidiaries currently have a Loan and Security Agreement , as amended,
(the “Loan Agreement”) with The Private Bank and Trust Company (“Private Bank”). On February 20, 2017, the Company and the
Private Bank entered into Amendment No. 4 to the Loan Agreement (the “Amendment”). The principal modification to the Loan
Agreement resulting from the Amendment is adjusting the financial covenants for the fiscal quarters ending December 31, 2016
through the maturity date.
The above summary of the Amendment is qualified in its entirety by reference to the copy of such Amendment, which is attached as
Exhibit 10.28 to this Annual Report on Form 10-K and is incorporated by reference herein.
90
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, 2016.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information under the headings “Nominees to Serve Until the 2018 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 2017 Proxy Statement is incorporated herein by reference.
Our directors, executive officers and stockholders with ownership of 10% or greater are required, under Section 16(a) of the Securities
Exchange Act of 1934, to file reports of their ownership and changes to their ownership of our securities with the SEC. Based solely
on our review of the reports and any written representations we received that no other reports were required, we believe that, during
the year ended December 31, 2016, all of our officers, directors and stockholders with ownership of 10% or greater complied with all
Section 16(a) filing requirements applicable to them, except David H. Gransee, an executive officer, filed a Form 4 on January 20,
2017 reporting a transaction that occurred on December 31, 2016.
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” on Executive Compensation “COMPENSATION DISCUSSION AND ANALYSIS” “EXECUTIVE COMPENSATION,”
and “DIRECTOR COMPENSATION” in our 2017 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 2017
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 2017 Proxy Statement is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information under the heading “Audit Committee” in our 2017 Proxy Statement is incorporated herein by reference.
91
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 39.
(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.
92
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 9, 2017
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 9, 2017
March 9, 2017
March 9, 2017
March 9, 2017
March 9, 2017
March 9, 2017
March 9, 2017
93
Exhibit No.
Description
Exhibit Index
1.1
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
Controlled Equity OfferingSM Sales Agreement, dated January 23, 2017, by and between Manitex International, Inc.
and Cantor Fitzgerald & Co. (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed on
January 23, 2017).
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).
Share Purchase Agreement, dated as of September 30, 2016, by and among Manitex International, Inc., Liftking,
Inc., Mi-Jack Products, Inc. and Liftking Acquisition ULC (incorporated by reference to Exhibit 2.1 to the Current
Report on Form 8-K filed on October 3, 2016).
Sale and Purchase Agreement by and among Manitex International, Inc., BP S.r.l. and NEIP III S.p.A.
(incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on December 28, 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 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).
94
Exhibit No.
Description
10.8
10.9
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
10.25
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).
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).
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).
Second Amendment to Manitex International, Inc.’s Second Amended and Restated 2004 Equity Incentive Plan
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 3, 2016).
Loan and Security Agreement, dated as of July 20, 2016, by and among The PrivateBank and Trust Company, as
administrative agent and sole lead arranger, Manitex International, Inc., Manitex Inc., Manitex Sabre, Inc., Badger
Equipment Company, Crane and Machinery, Inc., Crane and Machinery Leasing, Inc., Lifking, Inc. and Manitex,
LLC (as the US Borrowers) and Manitex Liftking, ULC (as the Canadian Borrower) (incorporated by reference to
Exhibit 10.1 to the Current Report on Form 8-K filed July 25, 2016).
First Amendment to Loan and Security Agreement, dated as of August 4, 2016, by and among Manitex
International, Inc., Manitex Inc., Manitex Sabre, Inc., Badger Equipment Company, Crane and Machinery, Inc.,
Crane and Machinery Leasing, Inc., Liftking, Inc., Manitex, LLC and Manitex Liftking, ULC, The Private Bank
and Trust Company and the lenders party thereto.
95
Exhibit No.
Description
10.26
10.27
10.28 (1)
10.29
10.30
10.31
10.32
10.33
10.34
10.35
10.36
10.37
10.35
10.38
10.39
Consent and Second Amendment to Loan and Security Agreement, dated as of September 30, 2016, by and among
Manitex International, Inc., Manitex Inc., Manitex Sabre, Inc., Badger Equipment Company, Crane and Machinery,
Inc., Crane and Machinery Leasing, Inc., Liftking, Inc. and Manitex, LLC, The Private Bank and Trust Company
and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on
October 3, 2016).
Third Amendment to Loan and Security Agreement, dated as of November 8, 2016, by and among Manitex
International, Inc., Manitex Inc., Manitex Sabre, Inc., Badger Equipment Company, Crane and Machinery, Inc.,
Crane and Machinery Leasing, Inc., and Manitex, LLC, The Private Bank and Trust Company and the lenders party
thereto (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed November 9, 2016).
Fourth Amendment to Loan and Security Agreement, dated as of February 10, 2017, by and among Manitex
International, Inc., Manitex Inc., Manitex Sabre, Inc., Badger Equipment Company, Crane and Machinery, Inc.,
Crane and Machinery Leasing, Inc., and Manitex, LLC, The Private Bank and Trust Company and the lenders party
thereto.
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).
96
Exhibit No.
Description
10.40
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
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).
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).
97
Exhibit No.
Description
10.57
10.58
10.59
10.60
10.61
10.62
10.63
10.64
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).
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).
10.65*
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).
10.66
10.67
10.68
10.69
10.70
10.71
10.72
10.73
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).
98
Exhibit No.
Description
10.74
10.75
10.76
10.77
10.78
10.79
10.80
10.81
10.82
21.1 (1)
23.1 (1)
24.1 (1)
31.1 (1)
31.2 (1)
32.1(1)
101(1)
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).
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).
First Amendment, dated March 15, 2016, to 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 March 17, 2017).
Revolving Credit, Term Loan and Security Agreement dated as of December 23, 2016 among A.S.V., LLC, the
Loan Parties thereto, the Lenders and PNC Bank, National Association, as agent for Lenders (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 29, 2016).
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).
Subsidiaries of the Company.
Consent of UHY LLP.
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, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of
Income for the fiscal years ended December 31, 2016, 2015 and 2014, (ii) Consolidated Balance Sheets as of
December 31, 2016 and 2015, (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.
99
FOURTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT
Exhibit 10.28
THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
“Amendment”) entered into as of this 10th day of February, 2017 is by and among MANITEX
INTERNATIONAL, INC., a Michigan corporation (“Manitex International”), MANITEX, INC.,
a Texas corporation (“Manitex”), MANITEX SABRE, INC., a Michigan corporation (“Sabre”),
BADGER EQUIPMENT COMPANY, a Minnesota corporation (“Badger”), CRANE AND
MACHINERY, INC., an Illinois corporation (“Crane and Machinery”), CRANE AND
MACHINERY LEASING, INC., an Illinois corporation (“Crane and Machinery Leasing”), and
MANITEX, LLC, a Delaware limited liability company (“Manitex LLC”; together with Manitex
International, Manitex, Sabre, Badger, Crane and Machinery, and Crane and Machinery Leasing,
collectively, the “Borrowers”), THE PRIVATEBANK AND TRUST COMPANY (in its
individual capacity, “PrivateBank”), as administrative agent and sole lead arranger (in such
capacity, “Administrative Agent”), and the lenders party thereto (the “Lenders”).
W I T N E S S E T H:
WHEREAS, Administrative Agent, Lenders, and Borrowers are party to that certain Loan
and Security Agreement dated as of July 20, 2016, as amended by that certain First Amendment
to Loan and Security Agreement dated as of August 4, 2016, that certain Consent and Second
Amendment to Loan and Security Agreement dated as of September 30, 2016 and that certain
Third Amendment to Loan and Security Agreement dated as of November 8, 2016 (as amended
hereby and as the same may be from time to time further amended, supplemented or otherwise
modified, the “Agreement”); and
WHEREAS, Administrative Agent, Lenders and Borrowers desire to enter into this
Amendment to, among other items, (i) amend certain financial and reporting covenants, and
(ii) otherwise amend the Agreement in accordance with the terms herein.
NOW, THEREFORE, for and in consideration of the premises and mutual agreements
herein contained and for the purposes of setting forth the terms and conditions of this
Amendment, the parties, intending to be bound, hereby agree as follows:
1.
Incorporation of the Agreement. All capitalized terms which are not defined
hereunder shall have the same meanings as set forth in the Agreement, and the Agreement, to the
extent not inconsistent with this Amendment, is incorporated herein by this reference as though
the same were set forth in its entirety. To the extent any terms and provisions of the Agreement
are inconsistent with the amendments set forth in Section 2 below, such terms and provisions
shall be deemed superseded hereby. Except as specifically set forth herein, the Agreement shall
remain in full force and effect and its provisions shall be binding on the parties hereto.
CHICAGO/#2943746.4
2.
Amendment of the Agreement.
(a)
The definition of “Fourth Amendment Effective Date” is hereby added to
Section 1.1 of the Agreement to read in its entirety as follows:
Fourth Amendment Effective Date shall mean February 10, 2017.
(b)
The definition of the terms “2016 EBITDA” and “Eligible Mexico Receivable”
are hereby added to Section 1.1 of the Agreement to read in their entirety as follows:
2016 EBITDA shall mean, without duplication, with respect to any
period, Borrowers’ (i) net income after Taxes for such period
(excluding any after-tax gains or losses on the sale of assets (other
than the sale of Inventory in the ordinary course of business) and
excluding other after-tax extraordinary gains or losses), plus
(ii) tax refunds paid to Borrowers with respect to any Fiscal Year
before and including Fiscal Year 2015, plus (iii) Interest Expense
(whether paid or accrued), plus (iv) income tax expense (whether
paid or accrued), plus (v) depreciation and plus (vi) amortization
(including amortization of goodwill, debt issuance costs and
amortization and any non-cash impairment of intangibles) for such
period, plus (vii) upon approval by Administrative Agent, any fees,
expenses or other costs incurred in connection with the sale of any
Subsidiary, plus (viii) any other non-cash charges or gains which
have been subtracted in calculating net income after Taxes for such
period
plus
(ix) management fees that are charged but unpaid by non-Borrower
Subsidiaries not to exceed $500,000 per Fiscal Year.
compensation),
stock-based
(including
Eligible Mexico Receivable shall mean, account receivables
owing to the Borrowers by Maquinaria Ucha which otherwise meet
all requirement of Eligible Receivables (other than the fact that the
Account Debtor is not located in the United States).
(c)
The definition of the terms “Adjusted EBITDA”, “EBITDA” and “US
Revolving Loan Availability” appearing in Section 1.1 of the Agreement are hereby amended
and restated to read in its entirety as follows:
Adjusted EBITDA means 2016 EBITDA plus actual management
fees received by Borrowers in cash during such period from non-
Borrower Affiliates. Notwithstanding the foregoing, Adjusted
EBITDA for the year to date period ending (i) March 31, 2016
shall be $2,746,000, (ii) June 30, 2016 shall be $2,964,000 and
(iii) September 30, 2016 shall be $1,632,000, all as determined in
accordance with Schedule I hereto.
EBITDA shall mean, without duplication, with respect to any
period, Borrowers’ (i) net income after Taxes for such period
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(excluding any after-tax gains or losses on the sale of assets (other
than the sale of Inventory in the ordinary course of business) and
excluding other after-tax extraordinary gains or losses), plus
(ii) taxes, plus (iii) Interest Expense (whether paid or accrued),
plus (iv) income tax expense (whether paid or accrued), plus
(v) depreciation, plus (vi) amortization (including amortization of
goodwill, debt issuance costs and amortization and any non-cash
impairment of intangibles) for such period, plus (vii) upon
approval by Administrative Agent, any fees, expenses or other
costs incurred in connection with the sale of any Subsidiary, plus
(viii) any other non-cash charges or gains which have been
subtracted in calculating net income after Taxes for such period
(including stock-based compensation), plus (ix) management fees
received in cash not to exceed $500,000 per Fiscal Year.
US Revolving Loan Availability shall mean with respect to
Borrowers an amount up to the lesser of the sum of the following
sublimits: (i) up to eighty-five percent (85%) of the face amount
(less maximum discounts, credits and allowances which may be
taken by or granted to Account Debtors in connection therewith in
the ordinary course of Borrowers’ business) of US Borrowers’
Eligible US Accounts (it being understood and agreed that such
advance rate shall be reduced by one (1) percentage point for each
whole or partial percentage point by which Dilution (as determined
by Administrative Agent in good faith based on the results of the
most recent twelve (12) month period for which Administrative
Agent has conducted a field audit of Borrowers) exceeds five
percent (5%)), plus (ii) up to fifty percent (50%) of the lower of
cost or market value of US Borrowers’ Eligible US Inventory and
Eligible Chassis Inventory up to a maximum aggregate amount of
Seventeen Million Five Hundred Thousand Dollars ($17,500,000),
plus (iii) up to eighty percent (80%) of the lower of cost or market
value of US Borrowers’ Used Equipment Purchased for Resale or
Rent up to a maximum aggregate amount of Two Million
Dollars ($2,000,000), plus (iv) lesser of (x) eighty-five percent
(85%) of Eligible Bill and Hold Receivables of the US Borrowers
and (y) $10,000,000, plus (v) fifty percent (50%) of Eligible
Mexico Receivables, provided, however, that the amount of such
Eligible Mexico Receivables shall not exceed $400,000 in the
aggregate at any time, minus (vi) such reserves as Administrative
Agent elects, in its Permitted Discretion, determined in good faith,
to establish from time to time, including, without limitation, (x)
reserves with respect to Bank Products Obligations and Hedging
Obligations and (y) a reserve in the amount of $5,000,000 to be in
effect upon the earlier of (a) the date of receipt of the proceeds
from the sale of the Borrowers’ interest in the ASV joint venture
and (b) April 30, 2017 to be in effect until the Borrowers report
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Fixed Charge Coverage of 1.10:1.0 or better as measured on
September 30, 2017 or at any quarter ended thereafter.
(d)
read as follows:
Section 9.3 of the Agreement is hereby amended and restated in its entirety to
Financial Statements.
Borrowers shall deliver
9.3
to
Administrative Agent the following financial information, all of
which shall be prepared in accordance with generally accepted
accounting principles consistently applied, and
shall be
accompanied by a compliance certificate in the form of Exhibit C
hereto: (i) no later than thirty (30) days after each month which is
not a calendar quarter end (except for the month of January) and
forty-five (45) days after the month of January and each quarter
ending calendar month, copies of internally prepared financial
statements, including, without limitation, (A) balance sheets and
statements of income of Borrowers, on a consolidating basis,
(B) cash flow and statements of equity on a consolidated basis
certified by the Chief Financial Officer of each Borrower; (ii) no
later than forty-five (45) days after each calendar quarter, a
calculation of all financial covenants contained in this Agreement;
and (iii) no later than one hundred twenty (120) days after the end
of each of Borrowers’ Fiscal Years, audited annual financial
statements with an unqualified opinion by independent certified
public accountants selected by Borrowers and
reasonably
satisfactory to Administrative Agent, which financial statements
shall be accompanied by copies of any management letters sent to
a Borrower by such accountants.
(e)
The Fixed Charge Coverage ratio set forth in Section 14.1 of the Agreement will
not be tested for the quarters ending March 31, 2017, June 30, 2017 or September 30, 2017.
Such covenant shall resume testing on December 31, 2017 as set forth below.
(f)
read as follows:
Section 14.1 of the Agreement is hereby amended and restated in its entirety to
14.1 Fixed Charge Coverage. Borrowers shall not permit the
ratio of (i) EBITDA minus (ii) all unfinanced Capital Expenditures
of Borrowers during the applicable period to (iii) Fixed Charges to
be less than the ratio for such period set forth below:
Period
Twelve (12) month period ended
December 31, 2017
Twelve (12) month period ended March 31,
2018 and each Computation Period ended
thereafter
4
Ratio
1.05:1.0
1.15:1.0
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(g)
read as follows:
Section 14.2 of the Agreement is hereby amended and restated in its entirety to
14.2 Adjusted EBITDA. Borrowers shall maintain Adjusted
EBITDA of not less than $1,200,000 for the twelve (12) month
period ended December 31, 2016.
(h)
A new Section 14.3 is hereby added to the Agreement to read as follows:
14.3 EBITDA. Borrowers shall maintain EBITDA of not less
than the amounts set forth below measured at the end of each
period set forth below:
Period
Three (3) month period ended March 31, 2017
Six (6) month period ended June 30, 2017
Nine (9) month period ended September 30,
2017 and each Computation Period ended
thereafter
Amount
($1,000,000)
$0
$2,000,000
3.
Delivery of Documents. The following documents and other items shall be
delivered concurrently with this Amendment:
(i)
this Amendment;
(ii)
such other documents and certificates as Administrative Agent shall
reasonably request; and
(iii)
payment of an amendment fee of $50,000, which amount shall be fully
earned, payable and non-refundable as of the date hereof.
4.
Representations, Covenants and Warranties; No Default. Borrowers hereby
represent and warrant to Administrative Agent as of the date hereof as follows:
(a)
The execution and delivery of this Amendment and the performance by
Borrowers of their obligations hereunder are within Borrowers’ powers and authority, have been
duly authorized by all necessary corporate action and do not and will not contravene or conflict
with the organizational documents of Borrowers;
(b)
The Agreement (as amended by this Amendment) and the other Loan Documents
constitute legal, valid and binding obligations enforceable in accordance with their terms by
Administrative Agent against Borrowers, and Borrowers expressly reaffirm and confirm each of
their obligations under the Agreement (as amended by this Amendment) and each of the other
Loan Documents. Borrowers further expressly acknowledge and agree that Administrative
Agent has a valid, duly perfected, first priority and fully enforceable security interest in and lien
against each item of Collateral except as otherwise set forth in the Agreement. Borrowers agree
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5
that they shall not dispute the validity or enforceability of the Agreement (as it was stated before
and after this Amendment) or any of the other Loan Documents or any of its respective
obligations thereunder, or the validity, priority, enforceability or extent of Administrative
Agent’s security interest in or lien against any item of Collateral, in any judicial, administrative
or other proceeding;
(c)
No consent, order, qualification, validation, license, approval or authorization of,
or filing, recording, registration or declaration with, or other action in respect of, any
governmental body, authority, bureau or agency or other Person is required in connection with
the execution, delivery or performance of, or the legality, validity, binding effect or
enforceability of, this Amendment;
(d)
The execution, delivery and performance of this Amendment by Borrowers does
not and will not violate any law, governmental regulation, judgment, order or decree applicable
to Borrowers and does not and will not violate the provisions of, or constitute a default or any
event of default under, or result in the creation of any security interest or lien upon any property
of Borrowers pursuant to, any indenture, mortgage, instrument, contract, agreement or other
undertaking to which any Borrower is a party or is subject or by which any Borrower or any of
its real or personal property may be bound; and
(e)
The representations, covenants and warranties set forth in Section 11 of the
Agreement shall be deemed remade as of the date hereof by Borrowers, except that any and all
references to the Agreement in such representations and warranties shall be deemed to include
this Amendment. No Event of Default has occurred and is continuing and no event has occurred
and is continuing which, with the lapse of time, the giving of notice, or both, would constitute
such an Event of Default under the Agreement.
5.
Fees and Expenses. The Borrowers agree to pay on demand all costs and
expenses of or incurred by Administrative Agent, including, but not limited to, legal fees and
expenses, in connection with the evaluation, negotiation, preparation, execution and delivery of
this Amendment.
6.
Effectuation.
The amendments to the Agreement contemplated by this
Amendment shall be deemed effective immediately upon the full execution of this Amendment
and without any further action required by the parties hereto. There are no conditions precedent
or subsequent to the effectiveness of this Amendment.
7.
Counterparts. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, and all of which together shall constitute one and the
same instrument. A facsimile or other electronic signature to this Amendment shall be deemed
an original signature hereunder.
[SIGNATURE PAGES FOLLOW]
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6
(Signature Page to Fourth Amendment to Loan and Security Agreement)
IN WITNESS WHEREOF, the parties hereto have duly executed this Fourth Amendment
to Loan and Security Agreement as of the date first above written.
BORROWERS:
MANITEX INTERNATIONAL, INC., a Michigan
corporation
MANITEX, INC., a Texas corporation
MANITEX SABRE, INC., a Michigan corporation
BADGER EQUIPMENT COMPANY, a
Minnesota corporation
CRANE AND MACHINERY, INC., an Illinois
corporation
CRANE AND MACHINERY LEASING, INC.,
an Illinois corporation
MANITEX, LLC, a Delaware limited liability
company
/s/ DAVID H. GRANSEE
By:
Name:David H. Gransee
Title: Vice President or Secretary
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(Signature Page to Fourth Amendment to Loan and Security Agreement)
ADMINISTRATIVE AGENT:
THE PRIVATEBANK AND TRUST
COMPANY, as Administrative Agent and a
Lender
By: /s/TODD BERNIER
Todd Bernier, Managing Director
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Exhibit 21.1
1.
Quantum Value Management LLC—a Michigan limited liability company
Subsidiaries of Manitex International, Inc.
2.
Manitex, LLC—a Delaware limited liability company
3.
Manitex, Inc.—a Texas corporation
4
Badger Equipment Company—a Minnesota corporation
5.
Manitex Sabre, Inc.—a Michigan corporation
6.
A.S.V., LLC – Minnesota limited liability company
7.
PM Group S.p.A. – an Italian corporation
8.
Crane and Machinery, Inc.- an Illinois corporation
9.
Crane and Machinery Leasing, Inc.-an Illinois corporation
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-213808 and 333-202103)
and Form S-8 (No. 333-215781) of Manitex International, Inc. and Subsidiaries of our report dated March 9, 2017, relating to our
audits of the consolidated financial statements and effectiveness of internal control over financial reporting, which appear in this Form
10-K for the year ended December 31, 2016.
Exhibit 23.1
/s/ UHY LLP
UHY LLP
Sterling Heights, Michigan
March 9, 2017
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 9, 2017
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 9, 2017
/ 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, 2016 (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 9, 2017
/ 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 9, 2017