Form 8-K Amendment No. 1

December 31,

Interest paid

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EKro1eutTDZ4RLzj4gQLTbndelNQlsWguCPyfeMd7jfUWcy2IFFTvSyA1PxdIEnS KAuZeIiidsG3mZgk4krxaA== 0001193125-10-055232.txt : 20100312 0001193125-10-055232.hdr.sgml : 20100312 20100312151447 ACCESSION NUMBER: 0001193125-10-055232 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20091231 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20100312 DATE AS OF CHANGE: 20100312 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Manitex International, Inc. CENTRAL INDEX KEY: 0001302028 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 421628978 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-32401 FILM NUMBER: 10677441 BUSINESS ADDRESS: STREET 1: 7402 W. 100TH PLACE CITY: BRIDGEVIEW STATE: IL ZIP: 60455 BUSINESS PHONE: 708-430-7500 MAIL ADDRESS: STREET 1: 7402 W. 100TH PLACE CITY: BRIDGEVIEW STATE: IL ZIP: 60455 FORMER COMPANY: FORMER CONFORMED NAME: Veri-Tek International, Corp. DATE OF NAME CHANGE: 20040831 8-K/A 1 d8ka.htm FORM 8-K AMENDMENT NO. 1 Form 8-K Amendment No. 1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: January 7, 2010

(Date of Earliest Event Reported: December 31, 2009)

MANITEX INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Charter)

Michigan

001-32401

42-1628978

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

7402 W. 100th Place, Bridgeview, Illinois 60455

(Address of Principal Executive Offices) (Zip Code)

(708) 430-7500

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01

Completion of Acquisition or Disposition of Assets

This Amendment No. 1 on Form 8-K/A amends and supplements the Current Report on Form 8-K of Manitex International, Inc., a Michigan corporation (the “Registrant”), filed with the Securities and Exchange Commission (the “Commission”) on January 7, 2010 (the “Initial Form 8-K”) to include financial statements and pro forma financial information permitted pursuant to Item 9.01 of Form 8-K to be excluded from the Initial Form 8-K and filed by amendment to the Initial Form 8-K no later than 71 days after the date on which the Initial Form 8-K was required to be filed. As previously reported in the Initial Form 8-K, effective as of December 31, 2009, the Registrant completed the acquisition of the certain assets and liabilities of Terex Load King pursuant to an Agreement dated as of December 31, 2009.

Item 9.01

Financial Statement Exhibits

(a) Financial Statements of Business Acquired

The following financial statements required by Item 9.01(a) of Form 8-K are attached hereto as Exhibits 99.1 and 99.2, respectively:

(i) Audited financial statements of Terex Load King for the fiscal years ended December 31, 2008 and 2007 and the related Independent Auditors Reports thereon.

(ii) Unaudited interim financial statements of Terex Load King for the nine-month periods ended September 30, 2009 and September 30, 2008.

(b) Pro Forma Financial Information

The following unaudited condensed consolidated pro forma financial information required by Item 9.01(b) of Form 8-K is attached hereto as Exhibit 99.3.

The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2009, the Unaudited Pro Forma Condensed Consolidated Statement of Income for the nine month period ended September 30, 2009, the Unaudited Pro Forma Condensed Consolidated Statement of Income for the year ended December 31, 2008 and the notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements of Manitex International, Inc. and its subsidiaries.

(c) Exhibit Index

See Exhibit Index.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


MANITEX INTERNATIONAL, INC.

By:		/S/ DAVID H. GRANSEE
Name:		David H. Gransee
Title:		Vice President and Chief Financial Officer

Date: March12, 2010

EXHIBIT INDEX


Exhibit Number		Description

23.1		Consent of Independent Accountants - UHY LLP

99.1		Audited financial statements of Terex Load King for the years ended December 31, 2008 and 2007.

99.2		Unaudited interim financial statements of Terex Load King for the periods ended September 30, 2009 and 2008.

99.3		The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2009, the Unaudited Pro Forma Condensed Consolidated Statement of Income for the nine month period ended September 30, 2009, the Unaudited Pro Forma Condensed Consolidated Statement of Income for the year ended December 31, 2008 and the notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements of Manitex International, Inc. and its subsidiaries

EX-23.1 2 dex231.htm CONSENT OF INDEPENDENT ACCOUNTANTS - UHY LLP Consent of Independent Accountants - UHY LLP

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-139576 and No. 333-146569) and Form S-8 (No. 333-126978) of Manitex International, Inc. of our report dated March 9, 2010 relating to the audited financial statements of Terex Load King for the fiscal years ended December 31, 2008 and 2007, which appears in this Current Report on Form 8-K/A of Manitex International, Inc.

/s/ UHY LLP

UHY LLP

Sterling Heights, Michigan

March 9, 2010

EX-99.1 3 dex991.htm AUDITED FINANCIAL STATEMENTS OF TEREX LOAD KING Audited financial statements of Terex Load King

Exhibit 99.1

TEREX LOAD KING

AUDITED FINANCIAL STATEMENTS

Years ended December 31, 2008 and 2007

TEREX LOAD KING

TABLE OF CONTENTS


		Page

Report of Independent Auditors		1

Financial Statements
Balance Sheets		2
Statements of Divisional Equity		3
Statements of Operations		4
Statements of Cash Flows		5
Notes to Financial Statements		6

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders

Terex Load King

We have audited the accompanying balance sheets of Terex Load King, as of December 31, 2008 and 2007, and the related statements of divisional equity, operations, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above presents fairly, in all material respects, the financial position of Terex Load King as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ UHY LLP

Sterling Heights, Michigan

March 9, 2010

TEREX LOAD KING

BALANCE SHEETS


	December 31,
	2008		2007
ASSETS

CURRENT ASSETS
Cash	$	2,096	$	2,293
Accounts receivable – trade, net of allowance for doubtful accounts of $15,188 and 33,163, for the years ended December 31, 2008 and 2007, respectively		3,485,226		2,997,820
Accounts receivable – related parties		200,613		981,010
Inventories		2,399,769		6,539,040
Prepaid expenses		1,746		—


Total current assets		6,089,450		10,520,163

PROPERTY, PLANT AND EQUIPMENT – net		3,854,890		4,095,706

INTANGIBLE ASSET – Goodwill		—		7,992,000


		9,944,340		22,607,869


LIABILITIES AND DIVISIONAL EQUITY

CURRENT LIABILITIES

Accounts payable – trade		1,096,118		2,267,166
Accounts payable – related parties		1,744,815		1,764,973
Accrued compensation and benefits		508,047		1,257,710
Accrued warranties		434,470		1,167,986
Customer advances		146,720		13,884
Other accrued liabilities		175,868		221,121


Total current liabilities		4,106,038		6,692,840

LONG-TERM DEBT – related party		91,704		977,611

DIVISIONAL EQUITY		5,746,598		14,937,418


	$	9,944,340	$	22,607,869

See notes to financial statements.

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TEREX LOAD KING

STATEMENTS OF DIVISIONAL EQUITY

Years ended December 31, 2007 and 2008


Balance at January 1, 2007	$	(13,405,681	)

Net loss		(2,404,043	)

Contributions		30,747,142


Balance at December 31, 2007		14,937,418

Net loss		(9,190,820	)


Balance at December 31, 2008	$	5,746,598

See notes to financial statements.

-3-

TEREX LOAD KING

STATEMENTS OF OPERATIONS


	Years ended December 31,
	2008					2007
	Amount			Percent of Net Sales		Amount			Percent of Net Sales

Net sales	$	33,435,994		100.0	%	$	31,174,925		100.0	%

Cost of sales		30,916,758		92.5			28,193,494		90.4


Gross profit		2,519,236		7.5			2,981,431		9.6

Selling, general and administrative expenses		3,594,750		10.8			4,562,217		14.6

Impairment of goodwill		7,992,000		23.9			—		—


		(9,067,514	)	(27.2	)		(1,580,786	)	(5.0	)

Other income (expense)		(123,306	)	(0.4	)		(823,257	)	(2.6	)


Net loss	$	(9,190,820	)	(27.6	)%	$	(2,404,043	)	(7.6	)%

See notes to financial statements.

-4-

TEREX LOAD KING

STATEMENTS OF CASH FLOWS


	Years ended December 31,
	2008			2007
OPERATING ACTIVITIES
Net loss	$	(9,190,820	)	$	(2,404,043	)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation		395,117			229,202
Allowance for doubtful accounts		(17,975	)		5,997
(Gain) loss on sale of assets		35,985			(6,100	)
Impairment of goodwill		7,992,000			—
Changes in:
Accounts receivable – trade		(469,431	)		(586,518	)
Accounts receivable – related parties		780,397			(981,010	)
Inventories		4,139,271			(1,459,173	)
Prepaid expenses		(1,746	)		8,924
Accounts payable		(1,171,277	)		148,652
Accounts payable – related parties		(20,158	)		1,752,455
Accrued compensation and benefits		(749,663	)		(216,236	)
Accrued warranties		(733,516	)		914,783
Customer advances		132,836			(4,130	)
Other accrued liabilities		(45,253	)		41,221


Net cash provided by (used in) operating activities		1,075,767			(2,555,976	)


INVESTING ACTIVITIES
Expenditures for property, plant and equipment		(251,578	)		(2,991,983	)
Proceeds from sale of property, plant and equipment		61,521			6,100


Net cash used in investing activities		(190,057	)		(2,985,883	)


FINANCING ACTIVITIES –
Net activity under related party note payable		(885,907	)		5,542,861


NET CHANGE IN CASH		(197	)		1,002

CASH, beginning		2,293			1,291


CASH, ending	$	2,096		$	2,293

See notes to financial statements.

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TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES

The following is a summary of certain accounting policies followed in the preparation of these financial statements. The policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Company Operations

As of and for the years ended December 31, 2008 and 2007, Terex Load King (the “Company”) was a wholly-owned operation within Terex Corporation (“Terex”). The Company designs, manufactures and markets construction trailers used in the construction and rental industries to haul materials and equipment. The Company also produces trailers used by the United States military for critical hauling applications as well as bottom dump material trailers used to transport raw aggregates, crushed aggregates and finished hot mix asphalt paving material. The Company’s low bed trailers are used primarily to transport construction equipment.

Basis of Presentation

The Company’s financial statements reflect the historical financial position, results of operations and cash flows as owned by Terex for the periods presented. Prior to the sale of the Company as described in Note 12, Terex has not accounted for the Company as a stand-alone company for the periods presented. The Company’s historical financial statements have been “carved out” from the Terex consolidated financial statements and reflect assumptions and allocations made by Terex. The Company’s historical financial statements were prepared using the Terex historical basis in the assets and liabilities of the business.

The Company’s historical financial statements include all revenues, costs, assets and liabilities directly attributable to its business. In addition, certain expenses reflected in the financial statements include allocations of corporate expenses from Terex which, in the opinion of management, are reasonable. All such costs and expenses have been either paid by the Company to Terex in the period in which the costs were recorded or accrued in notes and accounts payable to related parties. Amounts due to or from Terex, related to a variety of intercompany transactions including the collection of trade receivables, payment of accounts payable and accrued liabilities, charges of allocated corporate expenses, and payments of taxes paid by Terex on behalf of the Company, have been classified within notes and accounts payable related parties.

-6-

TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (Continued)

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 the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentration of Credit Risk

The Company, from time to time during the years covered by these financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk.

Cash Equivalents

As described in Note 2 – “Related Parties”, the Company has historically participated in a cash pooling arrangement with Terex; accordingly, substantially all cash derived from or required for the Company’s operations is applied to or against notes and accounts payable to related parties. Amounts reflected in cash on the balance sheets relate to demand accounts operated directly by the Company to execute decentralized local transactions. For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents.

Revenue Recognition

Revenues from sales of the Company’s products are recognized upon shipment of such products to its customers provided that an agreement exists, revenue is fixed and determinable, collection is reasonably assured and no significant obligations to the customer exist.

Accounts Receivable and Allowance for Doubtful Accounts

The Company carries its accounts receivable at cost less an allowance for doubtful accounts which at December 31, 2008 and 2007 was $15,188 and $33,163, respectively. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts. Management accounts for bad debts on the reserve method computed based on prior years’ experience and management’s estimate of the collectability of each account.

-7-

TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (Continued)

The Company’s policy is to contact customers with outstanding balances that are approximately 30 days old via telephone to determine if such receivables are collectible and write off amounts deemed uncollectible through communication with individual customers. The Company does not accrue interest on past due receivables. Generally, the Company does not require collateral for its accounts receivable.

Inventories

Inventories are stated at the lower of cost or market (“LCM”) value. Cost is determined by the first-in, first-out method. Selling, general and administrative expenses are not inventoried, but are charged to expense when purchased.

Property, Plant and Equipment

Management capitalizes expenditures for property and equipment. Expenditures for maintenance and repairs are charged to operating expenses. Property and equipment are carried at cost. Adjustments of the asset and the related accumulated depreciation accounts are made for property and equipment retirements and disposals, with the resulting gain or loss included in the statements of operations.

Depreciation

Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of assets at acquisition.

Advertising and Promotional Costs

Advertising and promotional costs are expensed as incurred. Advertising and promotional expenses were $58,665 and $105,611 for the years ended December 31, 2008 and 2007, respectively.

Accrued Warranties

The Company records accruals for potential warranty claims based on its claim experience. The Company’s products are typically sold with a standard warranty covering defects that arise during a fixed period, the terms of which are a function of customer expectations and competitive forces. The length of warranty is a fixed period of time.

-8-

TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (Continued)

A liability for estimated warranty claims is accrued at the time of sale. The liability is established using historical warranty claim experience for each product sold. Historical claim experience may be adjusted for known design improvements or for the impact of unusual product quality issues. Warranty reserves are reviewed annually to ensure critical assumptions are updated for known events that may affect the potential warranty liability. Prior to closing the books for 2007, the Company identified a potential design problem on one of its products. Due to the potential design problem, an additional warranty reserve of approximately $850,000 was recorded. Subsequent to 2007, based on new information, the majority of the reserve was reversed during 2008.

The following table summarizes the changes in the warranty liability:


Balance as of January 1, 2007	$	253,203
Accruals for warranties issued during the year		1,265,318
Settlements during the year		(350,535	)


Balance as of December 31, 2007		1,167,986

Accruals for warranties issued during the year		310,985
Change in estimates		(723,105	)
Settlements during the year		(321,396	)


Balance as of December 31, 2008	$	434,470

Stock-Based Compensation

Certain employees of the Company participate in various share-based incentive plans of Terex under which stock options awards or restricted shares of Terex may be granted to certain executives and management. The Company accounts for those plans pursuant to FASB 123R, “Accounting for Stock Options and Other Stock Based Compensation.” This guidance requires that expense resulting from all share-based payment transactions be recognized in the financial statements at fair value. See Note 10 – “Equity.”

Environmental Policies

Environmental expenditures that relate to current operations are either expensed or capitalized depending on the nature of the expenditure. Expenditures relating to conditions caused by past operations that do not contribute to current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or remedial actions are probable and the costs can be reasonably estimated. The Company has no accruals for environmental liabilities as of December 31, 2008 or 2007.

-9-

TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (Continued)

Research and Development Costs

Research and development costs are expensed as incurred. Such costs incurred in the development of new products or significant improvements to existing products are included in selling, general and administrative expenses. Research and development costs were $43,581 and $11,548 during 2008 and 2007, respectively.

Interest

The Company paid $87,321 and $907,943 of interest during the years ended December 31, 2008 and 2007, respectively.

Income Taxes

The Company accounts for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. For financial reporting purposes, the provision for income taxes is calculated on a separate company income tax return basis.

The Company is a division of Terex Corporation which files as a member of a consolidated federal return. In addition, the Company does not have a tax sharing agreement with Terex Corporation or any other consolidated return parent company. As such, the Company has provided for taxes on a separate return basis and neither pays taxes to nor is compensated for tax losses used by other members of these consolidated return filings.

On a separate return basis, the Company would have federal (“NOL”) carry forwards. However, the Company is a division of Terex Corporation which files a consolidated U.S. return. As such, it is impractical to determine the actual separate return basis NOLs. The valuation allowance is deemed sufficient to cover the amount of any NOL’s as of December 31, 2008 and 2007 and therefore no deferred tax asset has been recorded.

The Company’s provision for income taxes is different from the amount that would be provided by applying the statutory federal income tax rate to the Company’s loss before income taxes. The significant differences include valuation on NOL’s, amortization of goodwill, and accrued warranties and product liability. Losses before income taxes were $9,190,820 and $2,404,043 in 2008 and 2007, respectively. All losses were generated in the United States.

There was no provision for income taxes for the years ended December 31, 2008 and 2007. The Company did not provide a tax benefit or liability for the income or losses incurred during the years as the Company does not believe it is more likely than not that the benefits or losses will be utilized in future periods.

-10-

TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (Continued)

Deferred income taxes provide for timing differences between financial reporting and income tax purposes under the provisions of SFAS No. 109, Accounting for Income Taxes, which requires deferred income taxes be computed on the liability method and deferred tax assets are recognized only when realization is certain. The primary temporary differences between financial and tax reporting are amortization of goodwill, accrued warranties and product liability, and net operating loss carry-forwards.

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 have been included in cost of sales.

Subsequent Events

The Company has performed a review of events subsequent to the balance sheet date through March 9, 2010, the date the financial statements were available to be used. See Note 12 for subsequent events.

NOTE 2 – RELATED PARTY TRANSACTIONS

As discussed in Note 1 – “Basis of Presentation,” the Company was a wholly-owned operation within Terex Corporation. These financial statements reflect allocated expenses associated with centralized Terex support functions including legal, accounting, tax, treasury, internal audit, information technology, human resources and other services. These expenses have been allocated to the Company primarily based on its relative sales to Terex. All of the allocations are based on assumptions that management believes are reasonable; however, these allocations are not necessarily indicative of the costs and expenses that would have resulted if the Company had operated as a stand-alone entity.

Concentration of risk

During the year ended December 31, 2008, the Company sold a substantial portion of its product to two customers, one of which was a related party. Sales to the outside third party customer approximated 14% of total sales during the year ended December 31, 2008. Accounts receivable from this customer was $1,181,288 at December 31, 2008.

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TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 2 – RELATED PARTY TRANSACTIONS (Continued)

During the years ended December 31, 2008 and 2007, the Company sold a substantial portion of its product a related party. During the years ended December 31, 2008 and 2007, sales to this related party approximated 13% and 24% of total sales, respectively. There were no accounts receivable to this customer in 2008 and in 2007 there was $978,102 owed from this related party, which has been included in related party accounts receivables.

In addition to the related party sales above, the Company sold an additional $256,000 and $68,000 of its product to other related parties during the years ended December 31, 2008 and 2007, respectively. Receivables in the amount of $200,613 and $2,908 were owed from these related parties at December 31, 2008 and 2007, respectively.

Accounts receivable and payable

Amounts due to or from Terex and its affiliates, are related to a variety of intercompany transactions between the Company and Terex affiliates. Receivables from Terex and its affiliates amounted to $200,613 and $981,010 at December 31, 2008 and 2007, respectively. These receivables relate primarily to cash generated from operations that is swept into a cash pool. Current payables to Terex and its affiliates amounted to $1,744,815 and $1,764,973 at December 31, 2008 and 2007, respectively. These payables relate primarily to cash used in operations.

Long-term debt

A note payable in the amount of $91,704 and $977,611 was due to Terex at December 31, 2008 and 2007, respectively. The note payable relates to expense allocations as well as treasury cash pooling activities that represent amounts owed for operations. The note bears interest at 0.75% per month, is unsecured and due on demand. The amount is not expected to be paid off within one year and has therefore been classified as long term on the balance sheet. Interest in the amount of $84,878 and $904,679 was paid on this note during the years ended December 31, 2008 and 2007, respectively.

Related party expenses

The Company paid $394,817 in salaries and wages and other management expenses allocated to them from Terex in 2008 and $240,000 in 2007. These expenses are recorded as selling, general, and administrative expenses on the statements of operations.

-12-

TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 3 – INVENTORIES

Inventories consist of the following:


	December 31,
	2008			2007

Raw materials	$	2,133,816		$	5,113,141
Work in progress		137,461			460,057
Finished goods		349,256			1,227,560
Reserve		(220,764	)		(261,718	)


	$	2,399,769		$	6,539,040

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:


	December 31,
	2008		2007

Machinery and equipment	$	2,265,919	$	1,025,754
Buildings		1,841,826		505,195
Land		133,000		133,000
Furniture and fixtures		206,264		188,945
Autos and trucks		59,856		59,856
Leasehold improvements		8,614		8,614
Construction in progress		97,349		2,603,507


		4,612,828		4,524,871
Less accumulated depreciation		757,938		429,165


	$	3,854,890	$	4,095,706

Depreciation expense was $395,117 in 2008 and $229,202 in 2007.

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TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 5 – GOODWILL

In accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, goodwill cannot be amortized; however, it must be tested annually for impairment. This impairment test is calculated at the reporting unit level. The goodwill impairment test has two steps. The first identifies potential impairments by comparing the fair value of the reporting unit with its book value, including goodwill. If the fair value of the reporting unit exceeds the carrying amount, goodwill is not impaired and the second step is not necessary. If the carrying value exceeds the fair value, the second step calculates the possible impairment loss by comparing the implied fair value of goodwill with the carrying amount. If the implied goodwill is less than the carrying amount, a write-down is recorded. The Company performed the required impairment test under SFAS 142 and determined that an impairment charge was not required during the year ended December 31, 2007.

Due to continued losses, management determined that the carrying amount of goodwill exceeds fair value computed using the Income Approach – Discounted Cash Flow Method during the year ended December 31, 2008. As a result, goodwill in the amount of $7,992,000 was deemed to be impaired during the year ended December 31, 2008. The impairment has been included in the statements of operations.

NOTE 6 – OTHER ACCRUED LIABILITIES

Other accrued liabilities consist of the following:


	December 31,
	2008		2007

Federal excise tax	$	65,980	$	113,319
Property tax		51,062		50,268
Tax savings thrift plan		33,000		32,691
Accrued group insurance		6,778		—
Accrued product liabilities		18,998		24,843
Garnishments withheld		50		—


	$	175,868	$	221,121

-14-

TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 7 – LEASE COMMITMENTS

The Company leases certain machinery, equipment and vehicles under various operating lease arrangements expiring at various dates through October 2012. The monthly rental payments range from $155 to $519. Under most leasing arrangements, the Company pays the property taxes, insurance, maintenance and expenses related to the leased property.

Minimum future lease payments under the non-cancelable operating leases described above for each of the next five years and in the aggregate are as follows:


Years ended December 31,	Amount
2009	$	41,096
2010		36,126
2011		28,501
2012		7,539


	$	113,262

The Company’s operating leases provide the Company with the option to renew the leases for varying periods after the initial lease terms. These renewal options enable the Company to renew the leases based upon the fair rental values at the date of expiration of the initial lease. Total rental expense under operating leases was $129,506 in 2008 and $107,703 in 2007.

NOTE 8 – SAVINGS PLANS

The Company participates in various tax deferred savings plans sponsored by Terex into which eligible employees may elect to contribute a portion of their compensation. The Plan is open substantially to all full-time employees of the Company. The Company matches 100% of participant contributions up to 4% of compensation. Charges recognized for these savings plans were $115,656 and $78,810 for the years ended December 31, 2008 and 2007, respectively. The Company has funded or accrued all calculated contributions as of the balance sheet date.

-15-

TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 9 – RESTRUCTURING AND OTHER CHARGES

The Company continually evaluates its cost structure to ensure that it is appropriately positioned to respond to changing market conditions. Given recent economic trends, in 2008 the Company initiated a restructuring program to better utilize its workforce to match the decreased demand for its products. The restructuring activities reduced the number of team members and caused the Company to incur costs for employee termination benefits related to the team member reductions. The total amount expected to be incurred under this program is $43,000. During 2009, the Company initiated additional restructuring. These activities included additional planned headcount reductions. The following table provides a roll-forward of the restructuring reserve and the line items in the statement of operations, costs of goods sold (“COGS”) or selling, general and administrative expense (“SG&A”), in which these activities were recorded (in thousands, except headcount):


	Number of headcount reductions (1)	Restructuring reserve at January 1, 2008		Restructuring charges - COGS		Restructuring charges - SG&A		Cash expenditures			Restructuring reserve at December 31, 2008
2008 Restructuring Activity	9	$	—	$	16,000	$	27,000	$	(43,000	)	$	—

(1)	(Unaudited)

NOTE 10 – EQUITY

Long-term incentive plans

Terex provides a long-term incentive plan (“the Plan”) to assist in attracting and retaining selected team members, including certain team members of the Company, who will contribute to the achievement of long-term objectives of Terex. The Plan authorizes the granting of (i) options to purchase shares of common stock of Terex, (ii) stock appreciation rights, (iii) stock purchase awards, (iv) restricted stock awards and (v) performance awards.

As of December 31, 2007, 900 options on shares of Terex common stock were outstanding at a weighted average exercise price of $17.35 per share. These options were exercised during the year ended December 31, 2008 with an intrinsic value of approximately $2,000. There were no options on shares of Terex common stock outstanding as of December 31, 2008.

-16-

TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 10 – EQUITY (Continued)

As of December 31, 2007, 3,231 restricted stock awards of Terex common stock were outstanding with a weighted average grant date fair value of $46.45 per share. During the year ended December 31, 2008, 1,593 shares of these awards vested with a weighted average grant date fair value of $47.21 per share and 1,778 shares of these awards were forfeited with a weighted average grate date fair value of $46,75 per share. There were no outstanding restricted stock awards of Terex common stock as of December 31, 2008.

Cash received by Terex Corporation from option exercises under all stock-based compensation arrangements totaled approximately $16,000. There was no excess tax benefit related to the stock-based compensation arrangements.

NOTE 11 – LITIGATION AND CONTINGENCIES

In the normal course of business, lawsuits alleging damages for accidents that have occurred during the use or operation of the Company’s products may be filed. The Company is insured for product liability, general liability, worker’s compensation, employer’s liability, property damage and other insurable risk required by law or contract with retained liability to the Company or deductibles. Should the Company become involved in a lawsuit, a liability in the amount of management’s estimate of the Company’s aggregate exposure for such retained liabilities and deductibles would be recorded. For such retained liabilities and deductibles, the Company determines its exposure based on probable loss estimations, which requires such losses to be both probable and the amount of range of possible loss to be estimable. Management does not believe that the final outcome of such matters will have a material adverse effect on the Company’s financial position.

From time-to-time the Company is involved in various other legal proceedings, including workers’ compensation liability and intellectual property litigation, which have arisen in the normal course of its operations. The Company records provisions for estimated losses in circumstances where a loss is probable and the amount or range of possible amounts of the loss is estimable.

NOTE 12 – SUBSEQUENT EVENTS

On December 31, 2009, Terex sold the wholly-owned Terex Load King operation to Manitex International, Inc.

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TEREX LOAD KING

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

NOTE 13 – CASH FLOWS

Financing Activity – Non Cash

During the year ended December 31, 2007 there was a noncash financing transaction in the amount of $30,747,142. This was the result of a reclass of related party notes payable to equity. This transaction is shown as a contribution on the statements of stockholder’s equity.

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EX-99.2 4 dex992.htm UNAUDITED INTERIM FINANCIAL STATEMENTS OF TEREX LOAD KING Unaudited interim financial statements of Terex Load King

Exhibit 99.2

TEREX LOAD KING

CONDENSED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2009

AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (unaudited)

INDEX TO FINANCIAL STATEMENTS


		Page
Condensed Statement of Operations		2
Condensed Balance Sheet		3
Condensed Statement of Cash Flows		4
Notes to Condensed Financial Statements		5

TEREX LOAD KING

CONDENSED STATEMENT OF OPERATIONS

(unaudited)

(in thousands)


	Nine Months Ended September 30, 2009			Nine Months Ended September 30, 2008

Net sales to third parties	$	5,217		$	21,324
Net sales to related parties		382			4,444

Total net sales		5,599			25,768

Cost of goods sold to third parties		(5,792	)		(19,827	)
Cost of goods sold to related parties		(307	)		(3,074	)

Total cost of goods sold		(6,099	)		(22,901	)

Gross profit (loss)		(500	)		2,867

Selling, general and administrative expenses		(1,860	)		(2,726	)

Income (loss) from operations		(2,360	)		141

Other income (expense):
Interest income (expense) to related parties – net		(21	)		(86	)
Other income (expense)		4			(11	)

Income (loss) before income taxes		(2,377	)		44
Provision for income taxes		—			—

Net income (loss)	$	(2,377	)	$	44

The accompanying notes are an integral part of these condensed financial statements.

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TEREX LOAD KING

CONDENSED BALANCE SHEET

(unaudited)

(in thousands)


	September 30, 2009
Assets
Current assets
Cash	$	2
Trade receivables (net of allowance of $3)		573
Receivables from related parties		160
Inventories		2,195
Other current assets		7

Total current assets		2,937
Non-current assets
Property, plant and equipment – net		3,453

Total assets	$	6,390


Liabilities and Equity
Current liabilities
Trade accounts payable	$	292
Payables to related parties		695
Accrued compensation and benefits		556
Accrued warranties		76
Other current liabilities		92

Total current liabilities		1,711
Non-current liabilities
Notes payable to related parties		1,309

Total liabilities		3,020


Commitments and contingencies

Equity
Divisional equity		5,747
Accumulated deficit		(2,377	)

Total equity		3,370

Total liabilities and equity	$	6,390

The accompanying notes are an integral part of these condensed financial statements.

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TEREX LOAD KING

CONDENSED STATEMENT OF CASH FLOWS

(unaudited)

(in thousands)


	Nine Months Ended September 30, 2009			Nine Months Ended September 30, 2008
OPERATING ACTIVITIES
Net income (loss)	$	(2,377	)	$	44
Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities:
Depreciation		402			271
(Gain) loss on sale of assets		(4	)		11
Stock-based compensation expense		2			2
Changes in operating assets and liabilities
Trade receivables		2,912			811
Receivables from related parties		41			550
Inventories		205			1,807
Trade accounts payable		(804	)		(838	)
Payables to related parties		168			(1,014	)
Accrued compensation and benefits		11			(911	)
Accrued warranties		(358	)		(752	)
Customer advances		(147	)		102
Other		(55	)		229

Net cash (used in) provided by operating activities		(4	)		312


INVESTING ACTIVITIES
Capital expenditures		—			(367	)
Proceeds from sale of assets		4			55

Net cash provided by (used in) investing activities		4			(312	)


FINANCING ACTIVITIES
Net cash provided by financing activities		—			—


Net change in Cash		—			—

Cash at Beginning of Period		2			2

Cash at End of Period	$	2		$	2

The accompanying notes are an integral part of these condensed financial statements.

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TEREX LOAD KING

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2009

(unaudited)

NOTE A – BASIS OF PRESENTATION

Nature of Operations. Terex Load King (the “Company”) is a wholly-owned operation within Terex Corporation (“Terex”).

The Company designs, manufactures and markets construction trailers used in the construction and rental industries to haul materials and equipment. The Company also produces trailers used by the United States military for critical hauling applications as well as bottom dump material trailers used to transport raw aggregates, crushed aggregates and finished hot mix asphalt paving material. The Company’s lowbed trailers are used primarily to transport construction equipment.

Going Concern. Due to the sharp decline in customer demand experienced during 2009 and the resulting decline in net sales and financial performance of the Company, Terex determined that it will exit the trailer business as part of its strategic plan and therefore cease the Company’s operations. The Company is currently subject to a potential transaction that would separate it from Terex. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of Presentation. The Company is subject to a potential transaction that would separate it from Terex. The Company’s financial statements reflect the historical financial position, results of operations and cash flows as owned by Terex for all periods presented. Prior to the potential separation transaction, Terex has not accounted for the Company as, and the Company has not been operated as, a stand-alone company for the periods presented. The Company’s historical financial statements have been “carved out” from the Terex consolidated financial statements and reflect assumptions and allocations made by Terex. The condensed financial statements do not fully reflect what the Company’s financial position, results of operations and cash flows would have been had the Company been a stand-alone company during the periods presented. As a result, historical financial information is not necessarily indicative of what the Company’s results of operations, financial position and cash flows will be in the future. The Company’s historical financial statements were prepared using the Terex historical basis in the assets and liabilities of the business.

The Company’s historical financial statements include all revenues, costs, assets and liabilities directly attributable to its business. In addition, certain expenses reflected in the condensed financial statements include allocations of corporate expenses from Terex, which in the opinion of management are reasonable. All such costs and expenses have been either paid by the Company to Terex in the period in which the costs were recorded or accrued in Notes payable to related parties. Amounts due to or from Terex, related to a variety of intercompany transactions including the collection of trade receivables, payment of accounts payable and accrued liabilities, charges of allocated corporate expenses, and payments of taxes paid by Terex on behalf of the Company, have been classified within Notes payable to related parties.

In the opinion of management, all adjustments considered necessary for the fair statement of these interim financial statements have been made. Except as otherwise disclosed, all such adjustments consist only of those of a normal recurring nature. Operating results for the nine months ended September 30, 2009 are not necessarily indicative of results that may be reported for the year ending December 31, 2009.

Use of Estimates. The preparation of condensed financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates.

Cash and Cash Equivalents. As described in Note J – “Related Parties,” the Company has historically participated in a cash pooling arrangement with Terex; accordingly, substantially all cash derived from or required for the Company’s operations is applied to or against Notes payable to related parties. Amounts reflected in cash on the balance sheet relate to demand accounts operated directly by the Company to execute decentralized local transactions. Cash equivalents consist of liquid investments with original maturities of three months or less. The carrying amount of cash approximates its fair value.

Concentration of Risk. During the nine months ended September 30, 2009, the Company generated sales to a customer that exceeded 10% of total sales. This customer individually accounted for 13.3% of total sales.

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 selected October 1 as the date for the required annual impairment test.

- 5 -

Goodwill is tested for impairment at the reporting unit level, which is defined as an operating entity that constitutes a business for which discrete financial information with similar economic characteristics is available and the operating results are regularly reviewed by the Company’s management. The Company has one reporting unit for goodwill impairment testing purposes.

The goodwill impairment analysis is a two-step process. The first step used to identify potential impairment involves comparing the reporting unit’s estimated fair value to its carrying value, including goodwill. The Company uses an income approach derived from a discounted cash flow model to estimate the fair value of its reporting unit. The initial recognition of goodwill, as well as the annual review of the carrying value of goodwill, requires that the Company develop estimates of future business performance. These estimates are used to derive expected cash flow and include assumptions regarding future sales levels, the impact of cost reduction programs, and the level of working capital needed to support the business. The Company relies on data developed by management as well as macroeconomic data in making these calculations. The discounted cash flow model also includes a determination of the Company’s weighted average cost of capital. The cost of capital is based on assumptions about interest rates as well as a risk-adjusted rate of return required by the Company’s hypothetical equity investors. Changes in these estimates can affect the present value of the expected cash flow that is used in determining the fair value of acquired intangible assets as well as the overall expected value of a given business.

The second step of the process involves the calculation of an implied fair value of goodwill for the reporting unit if 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, then there is no impairment. If the carrying value of goodwill assigned to the reporting unit exceeds the implied fair value of the goodwill, then 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.

As a result of the Company’s annual impairment test performed as of October 1, 2008, the Company recorded a non-cash charge of $7,992 thousand to reflect impairment of all of its goodwill in the fourth quarter of 2008.

Accounts Receivable and Allowance for Doubtful Accounts. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company determines the allowance based on historical customer review and current financial conditions. The Company reviews its allowance for doubtful accounts at least quarterly. Past due balances are reviewed on a pooled basis by type of receivable. Account balances are charged off against the allowance when the Company determines it is probable the receivable will not be recovered. Given current economic conditions, there can be no assurance that the Company’s historical accounts receivable collection experience will be indicative of future results. All receivables were trade receivables at September 30, 2009.

Accrued Warranties. The Company records accruals for potential warranty claims based on its claim experience. The Company’s products are typically sold with a standard warranty covering defects that arise during a fixed period the terms of which is a function of customer expectations and competitive forces. The length of warranty is a fixed period of time.

The following table summarizes the changes in the warranty liability (in thousands):


Balance as of January 1, 2009	$	434
Accruals for warranties issued during the year		73
Changes in estimates		(331	)
Settlements during the year		(100	)

Balance as of September 30, 2009	$	76

Income Taxes. The Company accounts for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. For financial reporting purposes, the provision for income taxes is calculated on a separate company income tax return basis.

The Company is a division of Terex Corporation which files as a member of the consolidated federal return. In addition, the Company does not have a tax sharing agreement with Terex Corporation or any other consolidated return parent company. As such, the Company has provided for taxes on a separate return basis and neither pays taxes to nor is compensated for tax losses used by other members of these consolidated return filings. See Note B – “Income Taxes.”

- 6 -

Subsequent Events. The Company assessed events occurring subsequent to September 30, 2009 through December 29, 2009 for potential recognition and disclosure in the condensed financial statements. As a result of heavy snowstorms during December, a portion of the Company’s operating facility roof has collapsed. The Company is in the process of assessing damages and insurance coverage.

Recent Accounting Pronouncements. In September 2006, the Financial Accounting Standards Board (“FASB”) issued fair value measurement guidance, which was later codified under ASC 820, “Fair Value Measurements and Disclosures.” This guidance was effective for fiscal years beginning after November 15, 2007 and for interim periods within those years. It defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. This guidance applies under other accounting pronouncements that require or permit fair value measurements. The guidance indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. This guidance defines fair value based upon an exit price model. In February 2008, the FASB issued further guidance to exclude accounting for leases from fair value measurement and to delay the effective date of fair value measurement for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) until the beginning of the first quarter of 2009. Effective January 1, 2009, fair value measurement was applied to nonfinancial assets and nonfinancial liabilities. The adoption of fair value measurements did not have a significant impact on the determination or reporting of the Company’s financial results.

In December 2007, the FASB issued a revision of business combinations guidance, which was later codified under ASC 805, “Business Combinations” (“ASC 805”). The revised guidance retains the underlying concepts that all business combinations are still required to be accounted for at fair value under the acquisition method of accounting, but changes the application of the acquisition method in a number of significant aspects. Acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value at the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. In April 2009, the FASB issued further guidance, which clarifies the initial and subsequent recognition, subsequent accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. This requires that such contingencies be recognized at fair value on the acquisition date if fair value can be reasonably estimated during the allocation period. If the acquisition date fair value of an asset or liability cannot be reasonably estimated, the asset or liability would be measured at the amount that would be recognized based on guidance in ASC 450, “Contingencies,” which provides thresholds for recognition based on probability and the ability to reasonably estimate an amount or range of amounts. This guidance was effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, which, for the Company, was January 1, 2009. Adoption of this guidance did not have an impact on the determination or reporting of the Company’s financial results.

In April 2009, the FASB issued guidance related to interim disclosures about the fair value of financial instruments later codified under ASC 825, “Financial Instruments.” This guidance enhances consistency in financial reporting by increasing the frequency of fair value disclosures. It relates to fair value disclosures for any financial instruments that are not currently reflected on a company’s balance sheet at fair value. Prior to the effective date, fair values for these assets and liabilities have only been disclosed once a year. This guidance will now require these disclosures on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. This guidance is effective for interim and annual periods ending after June 15, 2009, with early application permitted for periods ending after March 15, 2009. Adoption of this guidance did not have a significant impact on the determination or reporting of the Company’s financial results.

In May 2009, the FASB issued guidance related to subsequent events, which was later codified under ASC 855, “Subsequent Events.” This guidance was effective for interim or annual financial periods ending after June 15, 2009. This guidance establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It also requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date—that is, whether that date represents the date the financial statements were issued or were available to be issued. This disclosure should alert all readers of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. Adoption of this guidance did not have a significant impact on the determination or reporting of the Company’s financial results.

In June 2009, the FASB issued guidance to establish the FASB Accounting Standards Codification™ (“Codification”). The Codification will be the single source of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in

- 7 -

the United States. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative generally accepted accounting principles for SEC registrants. All existing accounting standards are superseded as described in the guidance. All other accounting literature not included in the Codification is nonauthoritative. This statement is effective for interim and annual periods ending after September 15, 2009. The adoption of this guidance did not have a significant impact on the determination or reporting of the Company’s financial results.

NOTE B – INCOME TAXES

During the nine months ended September 30, 2009, the Company recognized no income tax provision on a pre-tax loss of $2,377 thousand, an effective tax rate of 0%, as compared to no income tax expense on pre-tax income of $44 thousand, also an effective tax rate of 0%, for the nine months ended September 30, 2008. The Company does not believe the realization of its deferred tax assets, including its net operating loss carry forward, is more likely than not and the Company has sufficient net operating loss carry forwards to offset its income for the nine months ended September 30, 2008. Therefore, no income tax expense or benefit was recorded for either period.

The Company conducts business principally in the United States and is included in its parent’s consolidated tax returns. In the normal course of business, Terex is subject to examination by taxing authorities. Various Terex entities are currently under audit. It is not expected that the results of any of the examinations would have a material impact on the Company.

The Company is a division of a legal entity included in the filing of consolidated income tax returns by Terex. Terex evaluates the realizability of its deferred tax assets each reporting period. The Company must consider all available evidence, both positive and negative, in evaluating the future realizability of its deferred tax assets, including tax loss carryforwards. Realization requires sufficient taxable income to utilize deferred tax assets. The Company records a valuation allowance for each deferred tax asset for which realization is assessed as being not more likely than not. The Company’s assessment that deferred tax assets will not be realized is based on historical results from operations and estimates of future tax losses. This assessment could change, however, if estimates of future taxable income or loss are significantly different than anticipated. During the nine months ended September 30, 2009, there was no significant change in the Company’s assessment of the realizability of its deferred tax assets.

NOTE C – INVENTORIES

Inventories consist of the following (in thousands):


	September 30, 2009
Finished equipment	$	465
Work-in-process		74
Raw materials and supplies		1,656

Inventories	$	2,195

At September 30, 2009, the Company had inventory reserves of $288 thousand for lower of cost or market adjustments, excess and obsolete inventory.

NOTE D – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following (in thousands):


	September 30, 2009
Property	$	133
Plant		1,898
Equipment		2,582

		4,613
Less: Accumulated depreciation		(1,160	)

Net property, plant and equipment	$	3,453

NOTE E – 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 is written

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down only in the period in which the recorded value of such assets exceed their fair value. The Company performed its most recent annual review of the carrying value of its goodwill as of October 1, 2008. As a result of the Company’s annual impairment test, the Company recorded non-cash charges totaling $7,992 thousand to reflect impairment of all of its goodwill in the fourth quarter of 2008. As part of the Company’s impairment analysis for its reporting unit, management determined the fair value of its reporting unit based on estimates of its future cash flows. The fair value reflected reductions in the estimated future cash flows based on lower expectations for growth and profitability resulting primarily from the downturn in the economy. The implied fair value of the reporting unit’s goodwill was compared to the actual carrying amount of goodwill to determine the amount of the impairment charge.

NOTE F – RESTRUCTURING AND OTHER CHARGES

The Company continually evaluates its cost structure to ensure that it is appropriately positioned to respond to changing market conditions. Given recent economic trends, in 2008 the Company initiated a restructuring program to better utilize its workforce to match the decreased demand for its products. The restructuring activities reduced the number of team members and caused the Company to incur costs for employee termination benefits related to the team member reductions. During 2009, the Company again entered into a restructuring program designed to further reduce its workforce to match the decrease in demand for its products. The following table provides a rollforward of the restructuring reserve and the line items in the Statement of Operations, Cost of goods sold to third parties (“COGS”) or Selling, general and administrative expense (“SG&A”), in which these activities were recorded (in thousands, except headcount):


	Number of headcount reductions (1)	Restructuring reserve at January 1, 2009		Restructuring charges				Cash expenditures			Restructuring reserve at September 30, 2009
	Number of headcount reductions (1)	Restructuring reserve at January 1, 2009		COGS		SG&A		Cash expenditures			Restructuring reserve at September 30, 2009
2009 Restructuring Activity	4	$	—	$	25	$	—	$	(25	)	$	—

(1)	Headcount data not in thousands

The total amount expected to be incurred under this program is $25 thousand. For the nine months ended September 30, 2008, the Company incurred $2 thousand of restructuring charges related to headcount reductions which were recorded in SG&A.

NOTE G – SAVINGS PLANS

The Company participates in various tax deferred savings plans sponsored by Terex into which eligible employees may elect to contribute a portion of their compensation. The Company may, but is not obligated to, contribute to certain of these plans. During the nine months ended September 30, 2009, the Company contributed $75 thousand to these savings plans.

NOTE H – EQUITY

Long-Term Incentive Plans.

During the nine months ended September 30, 2009, 1,000 restricted stock awards of Terex common stock were granted with a weighted average grant date fair value of $7.89 per share.

Compensation expense recognized under stock-based compensation arrangements was $2 thousand for each of the nine months ended September 30, 2009 and 2008. The stock-based compensation expense was included in SG&A expense in the Condensed Statement of Operations.

Changes in Equity

The following table presents the changes in the equity accounts for the nine months ended September 30, 2009:


	Accumulated Deficit			Divisional Equity		Total Equity
Balance at January 1, 2009	$	(2,421	)	$	5,747	$	3.326
Net income		44			—		44

Balance at September 30, 2009	$	(2,377	)	$	5,747	$	3,370

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NOTE I – LITIGATION AND CONTINGENCIES

In the normal course of business, lawsuits alleging damages for accidents that have occurred during the use or operation of the Company’s products may be filed. The Company is insured for product liability, general liability, workers’ compensation, employer’s liability, property damage and other insurable risk required by law or contract with retained liability to the Company or deductibles. Should the Company become involved in a lawsuit, a liability in the amount of management’s estimate of the Company’s aggregate exposure for such retained liabilities and deductibles would be recorded. For such retained liabilities and deductibles, the Company determines its exposure based on probable loss estimations, which requires such losses to be both probable and the amount or range of possible loss to be estimable. Management does not believe that the final outcome of such matters will have a material adverse effect on the Company’s financial position.

From time to time, the Company is involved in various other legal proceedings, including workers’ compensation liability and intellectual property litigation, which have arisen in the normal course of its operations. The Company records provisions for estimated losses in circumstances where a loss is probable and the amount or range of possible amounts of the loss is estimable.

NOTE J – RELATED PARTIES

As discussed in Note A – “Basis of Presentation,” the Company is a wholly-owned operation within Terex Corporation. These condensed financial statements reflect allocated expenses associated with centralized Terex support functions including legal, accounting, tax, treasury, internal audit, information technology, human resources and other services. These expenses have been allocated to the Company primarily based on its relative sales to Terex. All of the allocations are based on assumptions that management believes are reasonable; however, these allocations are not necessarily indicative of the costs and expenses that would have resulted if the Company had operated as a stand-alone entity.

Amounts due to or from Terex and its affiliates, are related to a variety of intercompany transactions between the Company and Terex affiliates. Receivables from Terex and its affiliates relate primarily to cash generated from operations that is swept into a cash pool. Current payables to Terex and its affiliates relate primarily to cash used in operations. Notes payable to related parties relates to expense allocations discussed above as well as treasury cash pooling activities that represent amounts owed for operations. The Company also has amounts recorded in divisional equity that represent contributions related to the historical purchase of the operating business.

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EX-99.3 5 dex993.htm UNAUDITED: BALANCE SHEET, STATEMENT OF INCOME AND NOTES TO FINANCIAL STATMENTS Unaudited: Balance Sheet, Statement of Income and Notes to Financial Statments

Exhibit 99.3

Manitex International, Inc. and Subsidiaries

Unaudited Pro Forma Condensed Consolidating Financial Statements

On January 4, 2010, Manitex International, Inc. (“Manitex” or the “Company”), a Michigan corporation, announced that effective December 31, 2009, it had purchased the assets and certain liabilities of Terex Load King Trailers, (“Load King”) an Elk Point, South Dakota-based manufacturer of specialized custom trailers and hauling systems typically used for transporting heavy equipment, from Genie Industries, Inc., a subsidiary of Terex Corporation for total consideration of $2,960. The consideration paid was comprised of (1) $100 of cash, (2) a 6% promissory note with face amount of $2,750 which was recorded at is fair market value of $2,580 (see Note A), (3) stock note for $250 and (4) contingent consideration which was determine to have fair market value of $30. See note A below for additional details regarding fair market valuation of the promissory note and the contingent consideration.

The acquisition has been accounted for using purchase accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. In accordance with ASC 805, any excess of fair value of acquired net assets over the acquisition consideration results in a bargain purchase. Under ASC 805, goodwill is excluded from the fair market value of assets acquired

The following Unaudited Pro Forma Condensed Consolidated Statement of Income for the fiscal year ended December 31, 2008 gives effect to the Company’s purchase of Load King, which assumes that this transaction was consummated on January 1, 2008. The Pro Forma Condensed Consolidated Balance Sheet presents the financial position of the Company as if the acquisition of Load King occurred on September 30, 2009. The pro forma adjustments, which are based on available information and certain assumptions that the Company believes are reasonable under the circumstances, are applied to the historical financial statements of the Company. The pro forma allocation of the purchase price to the acquired assets and liabilities is based on an independent appraisal and other studies completed subsequent to the Load King acquisition.

The Pro Forma Condensed Consolidated Financial Statements, which have been prepared in accordance with rules prescribed by Article 11 of Regulation S-X, are provided for informational purposes only and are not necessarily indicative of the past or future results of operations or financial position of the Company.

This information should be read in conjunction with the Company’s previously filed Current Report on Form 8-K, dated January 7, 2010, the Company’s previously filed Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and the historical financial statements and accompanying notes of Terex Load King included in this Current Report on Form 8-K/A.

Manitex International, Inc.

Unaudited Pro Forma Condensed Consolidating Balance Sheet

(in 000’s except for per share data)


	Manitex September 30, 2009			Load King September 30, 2009		Adjustments			Pro Forma September 30, 2009
ASSETS
Cash	$	90		$	2	$	(102	) (B)	$	(10	)
Trade receivables, net		9,361			733		—			10,094
Other receivables		112			—		—			112
Inventory (net)		26,035			2,195		(18	) (E)		28,212
Deferred tax assets		817			—					817
Prepaid expense and other		577			7		—			584

Total current assets		36,992			2,937		(120	)	$	39,809

Total fixed assets (net)		7,728			3,453		873	(F)		12,054

Trade names and trademarks		5,568			—		420	(G)		5,988
Patented and unpatented technology		11,464			—		670	(G)		12,134
Customer relationships		10,062			—					10,062
Customer backlog		468			—					468
In process research and development		100			—					100
Accumulated amortization – intangibles		(5,864	)		—					(5,864	)
										—
Deferred tax asset		4,596			—					4,596
Goodwill		14,452			—					14,452
Other long-term assets		94			—		—			94

Total assets	$	85,660		$	6,390	$	1,843		$	93,893


LIABILITIES
Notes payable – short term	$	2,229			—	$	—		$	2,229
Current portion of capital lease obligations		508			—		—			508
Accounts payable		8,273			292		—			8,565
Payable to related parties					695		(695	) (H)		—
Accrued expenses		2,117			632					2,749
Other current liabilities		211			92		—			303

Total current liabilities		13,338			1,711		(695	)		14,354

Deferred tax liabilities		4,869			—		1,525	(A)		6,394
Notes payable to related parties		—			1,309		(1,309	) (H)		—
Long term debt		22,164			—		2,580	(D)		24,744
Capital lease obligations		5,393			—		—			5,393
Deferred gain on sale of building		3,264			—		—			3,264
Other		170			—		30	(A)		200

Total liabilities		49,198			3,020		2,131			54,349

EQUITY
Total shareholders equity		36,462			3,370		(3,370	)
Common stock issued							250	(C)		36,712
Retained earnings – gain on bargain purchase							2,832	(A)		2,832

Total equity		36,462			3,370		(288	)		39,544


Total liabilities and equity	$	85,660		$	6,390	$	1,843		$	93,893

Manitex International, Inc.

Unaudited Pro Forma Condensed Consolidating Statement of Income

(in 000’s except for per share data)


	Manitex Nine Months Ended September 30, 2009			Load King Nine Months Ended September 30, 2009			Adjustments			Pro Forma Nine Months Ended September 30, 2009

Net revenues	$	40,953		$	5,599		$	—		$	46,552
Cost of sales		33,240			6,099			(76	) (I)		39,263

Gross profit		7,713			(500	)		76			7,289

Research and development costs		495			—						495
Selling, general and administrative expenses		7,262			1,860			63	(K)		9,185
Restructuring expense		180			—			—			180

Operating income (loss)		(224	)		(2,360	)		13			(2,571	)

Other income (expense)
Gain on bargain purchase		900			—			—			900
Interest expense		(1,308	)		(21	)		(158	) (J)		(1,487	)
Foreign currency transaction gains (losses)		72			—			—			72
Other income		4			4			—			8

Total other income (expense)		(332	)		(17	)		(158	)		(507	)


Loss income before taxes		(556	)		(2,377	)		(145	)		(3,078	)
Income tax (benefit)		(353	)		—			—			(353	)

Net loss	$	(203	)	$	(2,377	)	$	(145	)	$	(2,725	)


(Loss) per share
Basic	$	(0.02	)							$	(0.25	)
Diluted	$	(0.02	)							$	(0.25	)

Weighted Average Common Shares
Basic		10,893,396						130,890	(M)		11,024,286
Diluted		10,893,396						130,890	(M)		11,024,286

Manitex International, Inc.

Unaudited Pro Forma Condensed Consolidating Statement of Income

(in 000’s except for per share data)


	Manitex Year Ended December 31, 2008			Load King Year Ended December 31, 2008			Adjustments			Pro Forma Year Ended December 31, 2008

Net revenues	$	106,341		$	33,436		$	—		$139,777
Cost of sales		88,876			30,524			41	(I)	119,441

Gross profit		17,465			2,912			(41	)	20,336

Research and development costs		819			—			—		819
Selling, general and administrative expenses		12,909			3,510			84	(K)	16,503
Goodwill impairment		—			7,992			(7,992	) (L)	—
Restructuring expense		329			—			—		329

Operating income (loss)		3,408			(8,590	)		7,867		2,685

Other income (expense)
Gain on bargain purchase		—						2,832	(A)	2,832
Interest expense		(1,961	)		(87	)		(208	) (J)	(2,256)
Foreign currency transaction gains (losses)		(99	)					—		(99)
Other income		44			(36	)		—		8

Total other income (expense)		(2,016	)		(123	)		2,624		485


Income before taxes		1,392			(8,713	)		10,491		3,170
Income tax (benefit)		(407	)		—			(1,535	)	(1,942)

Net Income (loss)	$	1,799		$	(8,713	)	$	12,026		$5,112


Income per share
Basic	$	0.18								$0.50
Diluted	$	0.17								$0.50

Weighted Average Common Shares
Basic		10,071,585						130,890	(M)	10,202,475
Diluted		10,375,062						130,890	(M)	10,202,475

Manitex International, Inc. and Subsidiaries

Notes to Unaudited Pro Forma Condensed Consolidating Financial Statements

(amounts in 000’s)

Balance Sheet

A.	Pro forma adjustments to give effect to the purchase of Load King for $2,960 as if the acquisition occurred on the date of the balance sheet, or in the case of pro forma income statement, the first day of the period.

A.1	Fair Value of Consideration Exchanged


Cash	$	100
Promissory note at fair market value		2,580
Stock note		250
Contingent consideration at fair market value		30

Fair value of consideration exchanged	$	2,960

A.2	Bargain purchase gain (excess of fair market value assets acquired over purchase price)


Fair value of assets acquired	$	7,317
Fair value of consideration exchanged		(2,960	)

Differential	$	4,357

A.3	Gain on Bargain Purchase


Excess of fair market value over purchase price	$	4,357
Less: deferred tax liability (Excess of FMV x 35%)		(1,525	)

Gain on bargain purchase	$	2,832

Fair market value adjustment of promissory note: The note was recorded at its fair value on date of issuance at $2,580. The fair value of the promissory note was calculated to be equal to the present value of the 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 interest of 8% was determined to be the appropriate rate following an assessment of the risk inherent in the debt issue and the market rate for debt of this nature using corporate credit ratings criteria adjusted for the lack of public markets for this Note. The difference between face amount of the note and its fair value is being amortized over the life of the note, and is being charged to interest expense

Fair market value adjustment of contingent consideration: In accordance with ASC 805, the acquirer is to recognize the acquisition date fair value of contingent consideration. The agreement has a contingent consideration provision which provides for a one time of $750 if net revenues are equal to or greater than $30,000 in any of the next three years, i.e., 2010, 2011 or 2012. Given the disparity between the revenue 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 earnout payment is $30. Based thereon, we determined the fair value of the contingent consideration to be $30.

Gain on bargain purchase: In accordance with ASC 805, any excess of fair value of acquired net assets over the acquisition consideration results in a bargain purchase. Under ASC 805, goodwill is excluded from the fair market value of assets acquired.

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. The Company, together with its advisors, underwent such a reassessment, and as a result, has recorded a gain on bargain purchase of $2,832. In accordance with the acquisition method of accounting, any resulting gain

on bargain purchase must be recognized in earnings on the acquisition date. The Company believes that the gain on bargain purchase resulted as the transaction was completed with a motivated seller as Terex Corporation (Terex.) desired to restructure its operations and focus on core competencies. Although Terex employed an investment banker to solicit potential buyers, Manitex was the only bidder identified willing to consummate a transaction with terms attractive to Terex (i.e. the only bidder who was willing to purchase substantially all the assets of Load King).

Stock note: In connection with the Load King acquisition, the Purchaser executed the Share Promissory Note on December 31, 2009 (the “Manitex Stock Note”) in the amount of $250 to ensure the delivery to the Seller of 130,890 shares of the Company’s Common Stock as provided for in the Purchase Agreement. The Manitex Stock Note was settled by the delivery of the above referenced shares.

B.	Pro forma adjustment to give effect to cash paid to the seller by Manitex and cash not acquired in the transaction.

C.	Pro forma adjustment to give effect to the value of common stock issued to settle the stock note.

D.	Pro forma adjustment to give effect to promissory note issued to the seller in the acquisition transaction.

E.	Pro forma adjustment to give effect to the write down to fair market value of finished goods inventory.

F.	Pro forma adjustment to give effect to recording fixed assets acquired by Manitex at fair market value. Land and building were written up on an appraisal by an independent appraiser. Machinery and Equipment was written up based on appraisals by an independent appraiser and management.

G.	Pro forma adjustment to record intangible assets per valuation study.

H.	Pro forma adjustment to eliminate intercompany payables and note not acquired in the transaction.

Income Statement

Pro forma adjustment to give effect on depreciation of adjusting fixed assets to fair market value as a result of the acquisition. Depreciation was calculated based on the useful lives of each asset acquired employing the straight line method of depreciation. A full year’s depreciation was recognized for the year ended December 31, 2008.

J.	Pro forma adjustment to give effect to the additional interest expense related to $2,580 promissory note issued to the sellers.

K.	Pro forma adjustment to give effect to the additional amortization expense related to intangible assets recorded as a result of the transaction.

L.	Pro forma adjustment to eliminate the impairment of goodwill. No goodwill was recorded for the transaction as such there was no goodwill to impair.

M.	Pro forma adjustment to give effect to record 130,890 common shares issued to settle the stock note.

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