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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, no par, outstanding at November ~~5, 2021~~2, 2022 was ~~19,935,341.~~20,102,060.

This Quarterly Report on Form 10-Q filed by Manitex International, Inc. speaks as of September 30, ~~2021~~2022 unless specifically noted otherwise. Unless otherwise indicated, Manitex International, Inc., together with its consolidated subsidiaries, is hereinafter referred to as “Manitex, ~~Inc”~~” the “Registrant,” “us,” “we,” “our” or the “Company.”

Certain information in this Quarterly Report includes forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995). These statements relate to, among other things, the Company’s expectations, beliefs, intentions, future strategies, future events or future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In addition, when included in this Quarterly Report or in documents incorporated herein by reference the words “may,” “expects,” “should,” “intends,” “anticipates,” “believes,” “plans,” “projects,” “estimates” and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. We have based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. Such risks and uncertainties, many of which are beyond our control, include, without limitation, those described below and in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, in the section entitled “Item 1A. Risk Factors”:

The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 and in this Quarterly Report on Form 10-Q 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. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. We do not undertake, and expressly disclaim, any obligation to update this forward-looking information, except as required under applicable law.


																			Outstanding shares			Common Stock			APIC			Retained Deficit			AOCI (Loss)			Noncontrolling Interests		Total
Balance at December 31, 2021																				19,940,487		$	132,206		$	3,264		$	(68,436	)	$	(4,219	)	$	—	$	62,815
Net income																				—			—			—			230			—			—		230
Loss on foreign currency translation																				—			—			—			—			(635	)		—		(635	)
Employee incentive plan grant																				104,681			734			(734	)		—			—			—		—
Repurchase to satisfy withholding and cancelled shares																				(17,354	)		(137	)		—			—			—			—		(137	)
Share-based compensation																				—			—			232			—			—			—		232
Balance at March 31, 2022																				20,027,814		$	132,803		$	2,762		$	(68,206	)	$	(4,854	)	$	—	$	62,505
Net income (loss)																				—			—			—			(2,257	)		—			154		(2,103	)
Gain (loss) on foreign currency translation																				—			—			—			—			(1,754	)		—		(1,754	)
Employee incentive plan grant																				62,740			417			(417	)		—			—			—		—
Acquisition of noncontrolling interests																				—			—			—			—			—			8,964		8,964
Repurchase to satisfy withholding and cancelled shares																				(12,300	)		(91	)		—			—			—			—		(91	)
Share-based compensation																				—			—			728			—			—			—		728
Balance at June 30, 2022																				20,078,254		$	133,129		$	3,073		$	(70,463	)	$	(6,608	)	$	9,118	$	68,249
Net loss																				—			—			—			(3,372	)		—			—		(3,372	)
Gain (loss) on foreign currency translation																				—			—			—			—			(2,007	)		288		(1,719	)
Employee incentive plan grant																				26,320			148			(148	)		—			—			—		—
Repurchase to satisfy withholding and cancelled																				(4,725	)		(28	)													(28	)
Share-based compensation																				—			—			749			—			—			—		749
Balance at September 30, 2022																				20,099,849		$	133,249		$	3,674		$	(73,835	)	$	(8,615	)	$	9,406	$	63,879

	Outstanding shares			Common Stock			APIC			Retained Deficit			AOCI (Loss)			Total			Outstanding shares			Common Stock			APIC			Retained Deficit			AOCI (Loss)			Noncontrolling Interests		Total
Balance at December 31, 2020		19,821,090		$	131,455		$	3,025	��	$	(63,863	)	$	(1,708	)	$	68,909			19,821,090		$	131,455		$	3,025		$	(63,863	)	$	(1,708	)	$	—	$	68,909
Net loss		—			—			—			(772	)		—			(772	)		—			—			—			(772	)		—			—		(772	)
Loss on foreign currency translation		—			—			—			—			(1,198	)		(1,198	)		—			—			—			—			(1,198	)		—		(1,198	)
Employee incentive plan grant		85,883			584			(584	)		—			—			—			85,883			584			(584	)		—			—			—		—
Repurchase to satisfy withholding and cancelled		(6,183	)		(48	)		—			—			—			(48	)
Repurchase to satisfy withholding and cancelled shares																				(6,183	)		(48	)		—			—			—			—		(48	)
Share-based compensation		—			—			299			—			—			299			—			—			299			—			—			—		299
Balance at March 31, 2021		19,900,790		$	131,991		$	2,740		$	(64,635	)	$	(2,906	)	$	67,190			19,900,790		$	131,991		$	2,740		$	(64,635	)	$	(2,906	)	$	—	$	67,190
Net income		—			—			—			5,365			—			5,365			—			—			—			5,365			—			—		5,365
Gain (loss) on foreign currency translation		—			—			(26	)		—			222			196			—			—			(26	)		—			222			—		196
Employee incentive plan grant		5,940			44			(44	)		—			—			—			5,940			44			(44	)		—			—			—		—
Share-based compensation		—			—			278			—			—			278			—			—			278			—			—			—		278
Balance at June 30, 2021		19,906,730		$	132,035		$	2,948		$	(59,270	)	$	(2,684	)	$	73,029			19,906,730		$	132,035		$	2,948		$	(59,270	)	$	(2,684	)	$	—	$	73,029
Net loss		—			—			—			(1,101	)		—			(1,101	)		—			—			—			(1,101	)		—			—		(1,101	)
Gain (loss) on foreign currency translation		—			—			6			—			(766	)		(760	)		—			—			6			—			(766	)		—		(760	)
Employee incentive plan grant		26,400			136			(136	)		—			—			—			26,400			136			(136	)		—			—			—		—
Share-based compensation		—			—			239			—			—			239			—			—			239			—			—			—		239
Balance at September 30, 2021		19,933,130		$	132,171		$	3,057		$	(60,371	)	$	(3,450	)	$	71,407			19,933,130		$	132,171		$	3,057		$	(60,371	)	$	(3,450	)	$	-	$	71,407

	Outstanding shares			Common Stock			APIC			Retained Deficit			AOCI (Loss)			Total
Balance at December 31, 2019		19,713,185		$	130,710		$	2,793		$	(50,253	)	$	(3,700	)	$	79,550
Net loss		—			—			—			(7,476	)		—			(7,476	)
Loss on foreign currency translation		—			—			—			—			(508	)		(508	)
Employee incentive plan grant		49,884			352			(352	)		—			—			—
Repurchase to satisfy withholding and cancelled		(2,949	)		(13	)		—			—			—			(13	)
Share-based compensation		—			—			222			—			—			222
Balance at March 31, 2020		19,760,120		$	131,049		$	2,663		$	(57,729	)	$	(4,208	)	$	71,775
Net loss		—			—			—			(2,677	)		—			(2,677	)
Gain on foreign currency translation		—			—			—			—			319			319
Employee incentive plan grant		7,360			86			(86	)		—			—			—
Share-based compensation		—			—			203			—			—			203
Balance at June 30, 2020		19,767,480		$	131,135		$	2,780		$	(60,406	)	$	(3,889	)	$	69,620
Net loss		—			—			—			(1,571	)		—			(1,571	)
Gain on foreign currency translation		—			—			—			—			1,053			1,053
Employee incentive plan grant		27,068			142			(143	)		—			—			(1	)
Repurchase to satisfy withholding and cancelled		(232	)		(1	)		—			—			—			(1	)
Share-based compensation		—			—			233			—			—			233
Balance at September 30, 2020		19,794,316		$	131,276		$	2,870		$	(61,977	)	$	(2,836	)	$	69,333

1. Nature of Operations and Basis of Presentation

The unaudited Condensed Consolidated Balance Sheets at September 30, ~~2021~~2022 and December 31, ~~2020~~2021 and the related Condensed Consolidated Statements of Operations, Condensed Consolidated Statement of Comprehensive Income (Loss), Condensed Consolidated Statements of Shareholders’ Equity and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial condition, results of operations and cash flows of the Company for the interim periods. Interim results may not be indicative of results to be realized for the entire year. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021. The Condensed Consolidated Balance Sheet as of December 31, ~~2020~~2021 was derived from our audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”).

On April 11, 2022, Manitex International, Inc. (the “Company”) entered into a Membership Interest Purchase Agreement (the “Agreement”), with Rabern Rentals, LLC (“Rabern”) and Steven Berner, as owner of 100% of Rabern’s outstanding membership interests. Pursuant to the Agreement, the Company acquired a 70% membership interest in Rabern from Steven Berner for a purchase price of $26.7 million in cash. Rabern is a construction rental equipment provider, headquartered in Amarillo, Texas, primarily servicing business in the Texas panhandle.

The Company is a leading provider of engineered lifting ~~solutions. The~~solutions and equipment rentals. Following the completion of the Rabern acquisition noted above, the Company reports in a ~~single~~two business ~~segment~~segments and has 4five operating segments, under which there are 5six reporting units. The Company has integrated Manitex and Badger Equipment Company (“Badger”) reporting units into 1 operating segment as a substantial portion of the sales from Badger are intercompany sales to Manitex. While the Company continues to report Badger as a separate reporting unit, its results are combined with Manitex and reported at a combined Manitex level. The Company designs, manufactures and distributes a diverse group of products that serve different functions and are used in a variety of industries.

Lifting Equipment Segment

Manitex markets a comprehensive line of boom trucks, truck cranes and sign ~~cranes.~~cranes, including via its partially and wholly-owned subsidiaries and distributors, as described below. Manitex’s boom trucks and crane products are primarily used for industrial projects, energy exploration and infrastructure development, including roads, bridges and commercial construction.

The Company’s subsidiary, 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 Oil and Steel S.p.A. (“PM” or “PM Group”), ~~formerly known as PM Group S.p.A.,~~a subsidiary of the Company, 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. PM is also a manufacturer of truck-mounted aerial platforms with a diverse product line and an international client base. Through its consolidated subsidiaries, PM Group has locations in Modena, Italy; Valencia, Spain; Arad, Romania; Chassieu, France; Buenos Aires, Argentina; Santiago, Chile; Singapore and Querétaro, Mexico.

The Company’s subsidiary, Manitex Valla S.r.L. (“Valla”), produces a full range of precision pick and carry industrial 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. These products are sold internationally through dealers and into the rental distribution channel.

Crane and Machinery, Inc. (“C&M”) is a distributor of the Company’s ~~products as well as other cranes.~~products. Crane and Machinery Leasing, Inc. ~~(“C&M Leasing”)~~ rents equipment manufactured by the Company as well as a limited amount of equipment manufactured by third parties. ~~Although C&M is a distributor of Terex Corporation’s (“Terex”) cranes, C&M’s primary business is the distribution of products manufactured by the Company.~~

~~COVID-19 Pandemic~~Rental Equipment Segment

The Company is continuing to closely monitor the impact of the COVID-19 pandemic and is continually assessing its potential effects on our business and our financial performance as well as the businesses of our customers and vendors, including the impact that we may experience if and when the pandemic subsides. The Company’s ~~supply chain disruptions~~majority-owned subsidiary, Rabern, rents heavy duty and ~~related logistical bottlenecks that have impacted our ability~~light duty commercial construction equipment, mainly to meet strong industrial demand and have also increased costs related to shipping, warehousing, and working capital management. While the Company is doing everything it can to mitigate these expenses and the associated timing issues, certain segments – such as truck chassis – have been more impacted than others. Where appropriate and feasible, we have implemented pricing adjustments to protect margins and, in tandem, are building inventory to meet our customer requirements. In addition, the Company is actively managing costs and working to further streamline operations where needed. The Company cannot predict the duration or severity of the COVID-19 pandemic, and we cannot reasonably estimate the financial impact that the COVID-19 outbreak will havecommercial contractors on ~~our results and significant estimates going forward.~~

~~Supplemental Cash Flow Information~~

~~Transactions for the periods ended September 30, 2021 and 2020 are as follows:~~

Nine months ended September 30,

2021

2020

Interest received in cash

$
7

$
80

Interest paid in cash

1,369

3,027

Income tax payments in cash

925

577

~~Discontinued Operations~~

On August 21, 2020, the Company entered into an Asset Purchase Agreement to sell Manitex Sabre, Inc. to an affiliate of Super Steel, LLC for cash proceeds of $1.5 million, subject to certain adjustments based on closing date accounts receivable and inventory. Accordingly, Manitex Sabre, Inc. is reported as a ~~discontinued operation for 2020.~~

In addition to the cash proceeds from sale of $1.5 million in cash received, the Company may receive a maximum royalty and earnout payments of approximately $2.9 million for years 2021 thru 2023 if certain revenue criteria are met. The Company will account for the contingent consideration as a gain in accordance with ASC 450. Under this approach, we will recognize the contingent consideration in earnings after the contingency is resolved. See Note 17 for additional discussion related to the sale of Sabre’s business and assets.

~~2. Significant Accounting Policies and New Accounting Pronouncements~~

The summary of the Company’s significant accounting policies 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. The cash in the Company's U.S. banks (primarily CIBC) is not fully insured by the FDIC due to the statutory limit of $250.

~~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 $228 and $240 at September 30, 2021 and December 31, 2020, respectively.

~~Revenue Recognition~~

Revenue is recognized when obligations under the terms of the contract with our customer are satisfied; generally, this occurs with the transfer of control of our equipment, parts or installation services (typically completed within one day), which occurs at a point in time. Equipment can be redirected during the manufacturing phase such that over time revenue recognition is not appropriate. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Our contracts are non-cancellable and returns are only allowed in limited instances. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. The expected costs associated with our base warranties continue to be recognized as expense when the products are sold and do not constitute a separate performance obligation.

For instances where equipment and installation services are sold together, the Company accounts for the equipment and installation services separately. The consideration (including any discounts) is allocated between the equipment and installation services based on their stand-alone selling prices. The stand-alone selling prices are determined based on the prices at which the Company separately sells the equipment.

In some instances, the Company fulfills its obligations and bills the customer for the work performed but does not ship the goods until a later date. These arrangements are considered bill-and-hold transactions. In order to recognize revenue on the bill-and-hold transactions, the Company ensures the customer has requested the arrangement, the product is identified separately as belonging to the customer, the product is ready for shipment to the customer in its current form, and the Company does not have the ability to direct the product to a different customer. A portion of the transaction price is not allocated to the custodial services due to the immaterial value assigned to that performance obligation.

Payment terms offered to customers are defined in contracts and purchase orders and do not include a significant financing component. At times, the Company may offer discounts which are considered variable consideration however, the Company applies the constraint guidance when determining the transaction price to be allocated to the performance obligations.

~~Accounts Receivable and Allowance for Doubtful Accounts~~

Accounts receivable are stated at the amounts the Company’s customers are invoiced and do not bear interest. 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 $2.6 million at September 30, 2021 and December 31, 2020.rental basis. The Company also ~~has in some instances a security interest in its accounts receivable until payment is received.~~

~~Property, Equipment and Depreciation~~

~~Property and~~rents equipment ~~are stated at cost or the fair market value at the date of acquisition~~to homeowners for property and equipment acquired in connection with the acquisition of a company. 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 of property, and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Depreciation expense for the three and nine months ended September 30, 2021 were $518 and $1,614, respectively. Depreciation expense for the three and nine months ended September 30, 2020 were $487 and $1,500.do-it-yourself projects.

~~Other Intangible Assets~~

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. The Company recognized $0.1 million in impairment related to tradenames during the nine months ended September 30, 2020. NaN impairment expense was recognized for the three months ended September 30, 2020. NaN impairment expense was recognized for the three and nine months ended September 30, 2021.

~~Goodwill~~

The Company’s methodology for allocating the purchase price of acquisitions is based on established valuation techniques that reflect the consideration of a number of factors, including valuations performed by third-party appraisers when appropriate. Goodwill is measured as the excess of the cost of an acquired entity over the fair value assigned to identifiable assets acquired and liabilities assumed.

The Company annually tests goodwill for impairment on the first day of its fiscal fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company also performs an interim review for indicators of impairment each quarter to assess whether an interim impairment review is required for any reporting unit. As part of its interim reviews, management analyzes potential changes in the value of individual reporting units based on each reporting unit’s operating results for the period compared to expected results as of the prior year’s annual impairment test. In addition, management considers how other key assumptions, including discount rates and expected long-term growth rates, used in the last annual impairment test, could be impacted by changes in market conditions and economic events.

The Company recognized $6.6 million in impairment related to goodwill during the nine months ended September 30, 2020. NaN impairment expense was recognized for the three months ended September 30, 2020. NaN impairment expense was recognized for the three and nine months ended September 30, 2021.

~~Inventory, net~~

Inventory consists of stock materials and equipment stated at the lower of cost (first in, first out) or net realizable value. 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 and/or historical experience of excess or obsolete inventories. Selling, general and administrative expenses are expensed as incurred and are not capitalized as a component of inventory.

~~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.

A liability for estimated warranty claims is accrued at the time of sale. The liability is established using historical warranty claim experience. 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.

~~As of September 30, 2021 and December 31, 2020, accrued warranties were $1,421 and $1,292, respectively.~~

~~Accounting for Paycheck Protection Program Loan~~

During April 2020, the Company entered a loan transaction pursuant to which the Company received proceeds of $3.7 million under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying companies and is administered by the U.S. Small Business Administration (“SBA”).

The PPP loan was evidenced by a promissory note between the Company and CIBC bank. The promissory note had a two-year term, accrued interest at the rate of 1.0% per annum, and was prepayable at any time without payment of any premium. NaN payments of principal or interest were due during the six-month period beginning on the date of the promissory note. Beginning on the seventh month following the date of the promissory note, we were required to make 18 monthly payments of principal and interest.

Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. However, at least 75 percent of the PPP loan proceeds must be used for eligible payroll costs. The terms of any forgiveness may also be subject to further requirements in any regulation and guidelines the SBA may adopt.

~~The Company applied for forgiveness on the PPP loan during November 2020~~. During June 2021, the Company received notice from the CIBC bank that CIBC had received confirmation from the SBA that the application for forgiveness of the PPP loan had been approved. The loan forgiveness request of $3.7 million was applied to the Company’s entire outstanding PPP loan balance from CIBC bank.

The Company recorded the forgiveness as Gain on Paycheck Protection Program loan forgiveness in Other Income (Expense) on the Condensed Consolidated Statement of Operations. The gain on loan forgiveness is not subject to U.S. taxation. This deductible permanent difference is offset by a change in the U.S. valuation allowance and therefore has no impact on the effective tax rate.

~~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 such that the exchange gains and losses on the assets and liabilities that are being hedged, which are denominated in a currency 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. The Company records 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 Condensed Consolidated Statements of Operations in the other income (expense) section on the line titled foreign currency transaction loss.

~~Advertising~~

Advertising costs are expensed as incurred and were $213 and $487 for the three and nine months ended September 30, 2021, respectively. Advertising costs were $120 and $354 for the three and nine months ended September 30, 2020, 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. 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 expense is recognized in the personnel costs, either in Selling, General, and Administrative expense or Cost of Goods Sold, in the Condensed Consolidated Statements of Operations and the accrual is recorded in other long-term liabilities in the Condensed Consolidated Balance Sheets.

~~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 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. 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 12, Income Taxes, for further details.

The Jobs Act also establishes Global Intangible Low-Taxed Income (“GILTI”) provisions that impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company has elected to recognize GILTI as a period cost as incurred, therefore there are no deferred taxes recognized for basis differences that are expected to impact the amount of the GILTI inclusion upon reversal.

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. The Company records interest and penalties related to income tax matters in the provision for income taxes.

~~Comprehensive Income~~

Comprehensive income includes, in addition to net earnings, other items that are reported as direct adjustments to shareholders’ equity. Currently, the comprehensive income adjustment required for the Company is a foreign currency translation adjustment, the result of consolidating its foreign subsidiary.

~~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.~~

~~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 a 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 Revolving term credit facilities on the Company’s Condensed Consolidated Balance Sheets.

~~Sale and Leaseback~~

In accordance with ASC 842-10 Sales-Leaseback Transactions, the Company has recorded a deferred gain in relationship to the sale and leaseback of one of the Company’s operating facilities. As such, the gains have been deferred and are being amortized on a straight- line basis over the life of the lease.

~~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 is based on the “Treasury Stock Method” prescribed in ASC 260-10, Earnings per Share. This method assumes the 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, restricted stock, 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 Condensed Consolidated Statements of Operation over the service period (generally the vesting period).

~~Adoption of Highly Inflationary Accounting in Argentina~~

GAAP guidance requires the use of highly inflationary accounting for countries whose cumulative three-year inflation exceeds 100 percent. Under highly inflationary accounting, PM Argentina’s functional currency became the Euro (its parent company’s reporting currency), and its income statement and balance sheet have been measured in Euros using both current and historical rates of exchange. The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in other (income) and expense, net and was not material. As of September 30, 2021, PM Argentina had an insignificant net peso monetary position. Net sales of PM Argentina were less than 5 percent of our consolidated net sales for the nine months ended September 30, 2021 and year ended December 31, 2020.

~~Recently Issued Pronouncements - Not Yet Adopted~~

In March 2020, the FASB issued guidance under ASC 848, Reference Rate Reform. This guidance provides optional expedients and exceptions to account for debt, leases, contracts, hedging relationships and other transactions that reference LIBOR or another reference rate if certain criteria are met. The guidance is effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We are currently evaluating the potential effects of the adoption of this guidance on our Consolidated Financial Statements.

In January 2021, the FASB issued ASU 2021-01, which refines the scope of ASC 848 and clarifies some of its guidance as part of the FASB’s monitoring of global reference rate reform activities. The ASU permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, for computing variation margin settlements, and for calculating price alignment interest (PAI) in connection with reference rate reform activities under way in global financial markets (the “discounting transition”). We are currently evaluating the potential effects of the adoption of this guidance on our Consolidated Financial Statements.

~~There have been no other accounting pronouncements issued, but not yet adopted by us, which are expected to have a material impact on our Condensed Consolidated Financial Statements.~~

~~Recently Adopted Accounting Guidance~~

In December 2019, the FASB issued ASU 2019-12, “Income Taxes Topic 740-Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740. The effective date for ASU 2019-12 was the first quarter of fiscal year 2021 and the Company adopted this guidance as of January 1, 2021. The adoption of this guidance did not have a significant impact on our operating results.

~~3. Revenue Recognition~~

~~The following table disaggregates our revenue for the three and nine months ended September 30, 2021 and 2020:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Equipment sales

$
43,740

$
29,017

$
134,172

$
100,782

Part sales

6,337

6,747

20,805

19,583

Installation services

858

702

3,171

1,949

Total Revenue

$
50,935

$
36,466

$
158,148

$
122,314

The Company attributes revenue to different geographic areas based on where items are shipped to or services are performed. The following table provides detail of revenues by geographic area for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

United States

19,078

$
14,754

$
60,900

$
55,746

Italy

7,984

5,932

24,536

15,713

Canada

5,982

1,976

14,307

5,789

Chile

3,339

1,968

9,677

5,315

United Kingdom

2,633

1,477

6,317

4,281

France

1,763

1,986

8,217

7,079

Other

10,156

8,373

34,194

28,391

Total Revenue

$
50,935

$
36,466

$
158,148

$
122,314

~~Total Company Revenues by Sources~~

~~The sources of the Company’s revenues are summarized below for the three and nine months ended September 30, 2021 and 2020:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Boom trucks, knuckle boom & truck cranes

$
30,376

$
19,325

$
92,211

$
67,056

Aerial platforms

8,047

4,278

24,091

18,490

Part sales

6,337

6,747

20,805

19,583

Rough terrain cranes

1,586

2,814

5,383

7,976

Other equipment and rentals

3,731

2,600

12,487

7,260

Installation services

858

702

3,171

1,949

Total Revenue

$
50,935

$
36,466

$
158,148

$
122,314

~~Customer Deposits~~

At times, the Company may require an upfront deposit related to its contracts. In instances where an upfront deposit has been received by the Company and the revenue recognition criteria have not yet been met, the Company records a contract liability in the form of a customer deposit, which is classified as a short-term liability on the balance sheet. That customer deposit is deferred until the revenue recognition criteria have been met, at which time, the customer deposit is recognized into revenue.

~~The following table summarizes changes in customer deposits for the nine months ended September 30 as follows:~~

September 30,
2021

September 30,
2020

Customer deposits

$
2,363

$
1,493

Additional customer deposits received where revenue has not yet been recognized

5,004

4,448

Revenue recognized from customer deposits

(4,106
)

(4,285
)
Effect of change in exchange rates

(160
)

13

$
3,101

$
1,669

~~4. Fair Value Measurements~~

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 by level within the fair value hierarchy. As required by ASC 820-10, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

~~The following is summary of items that the Company measures at fair value on a recurring basis:~~

Fair Value at September 30, 2021

Level 1

Level 2

Level 3

Total

Assets:

Forward currency exchange contracts

$
—

$
118

$
—

$
118

Total current assets at fair value

$
—

$
118

$
—

$
118

Liabilities:

Valla contingent consideration

$
—

$
—

$
212

$
212

Total recurring liabilities at fair value

$
—

$
—

$
212

$
212

Fair Value at December 31, 2020

Level 1

Level 2

Level 3

Total

Liabilities:

Valla contingent consideration

$
—

$
—

$
224

$
224

Forward currency exchange contracts

—

267

—

267

Total liabilities at fair value

$
—

$
267

$
224

$
491

Fair Value
Measurements
Using
Significant
Unobservable
Inputs
(Level 3)

Valla
Contingent
Consideration

Liabilities:

Balance at January 1, 2021

$
224

Effect of change in exchange rates

(12
)
Balance at September 30, 2021

$
212

~~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 is 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.

~~5. 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.

~~Forward Currency Contracts~~

The Company enters into 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 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 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 Condensed Consolidated Statements of Operations in the other income (expense) section on the line titled foreign currency transaction loss. 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 September 30, 2021, the Company had entered into a forward currency exchange contract that matures on October 29, 2021. Under the contract the Company is obligated to sell 2,600,000 Chilean pesos for 2,860 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.

~~The following table provides the location and fair value amounts of derivative instruments that are reported in the Condensed Consolidated Balance Sheet as of September 30, 2021:~~

~~Total derivatives NOT designated as a hedge instrument~~

Fair Value

Balance Sheet Location

September 30,
2021

December 31,
2020

Asset Derivatives

Foreign currency exchange contract

Prepaid expense and other current assets

$
118

$
—

Liabilities Derivatives

Foreign currency exchange contract

Accrued expenses

$
—

$
267

~~The following tables provide the effect of derivative instruments on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020:~~

Gain (loss)

Gain (loss)

Location of gain or (loss)
recognized in the
Statement of Operations

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Derivatives Not Designated
as Hedge Instruments

Forward currency contracts

Foreign currency
transaction gains (losses)

$
225

$
(236
)

$
226

$
—

$
225

$
(236
)

$
226

$
—

~~During the three and nine months ended~~ ~~September~~ ~~30, 2021 and 2020, there were 0 forward currency contracts designated as cash flow hedges. As such, all gains and loss related to forward currency contracts during the three and nine months ended~~ ~~September~~ ~~30, 2021 and 2020 were recorded in current earnings and did not impact other comprehensive income.~~

~~6. Inventory, net~~

~~The components of inventory are as follows:~~

September 30,
2021

December 31,
2020

Raw materials and purchased parts, net

$
43,465

$
33,172

Work in process, net

4,400

3,845

Finished goods, net

16,587

19,038

Inventory, net

$
64,452

$
56,055

~~The Company has established reserves for obsolete and excess inventory of $7,247 and $8,451 as of September 30, 2021 and December 31, 2020, respectively.~~

~~7. Goodwill and Intangible Assets~~

~~Intangible assets and accumulated amortization by category as ofSeptember 30, 2021 is as follows:~~

Weighted Average

Gross

Net

Amortization

Carrying

Accumulated

Carrying

Period (in years)

Amount

Amortization

Amount

Patented and unpatented technology

5

$
18,248

$
(14,933
)

$
3,315

Customer relationships

4

18,934

(13,371
)

5,563

Trade names and trademarks

10

4,829

(2,824
)

2,005

Indefinite lived trade names

2,524

2,524

Total intangible assets, net

$
13,407

~~Intangible assets and accumulated amortization by category as of December 31, 2020 is as follows:~~

Weighted Average

Gross

Net

Amortization

Carrying

Accumulated

Carrying

Period (in years)

Amount

Amortization

Amount

Patented and unpatented technology

6

$
18,643

$
(14,587
)

$
4,056

Customer relationships

5

19,552

(12,753
)

6,799

Trade names and trademarks

11

4,829

(2,677
)

2,152

Indefinite lived trade names

2,664

2,664

Total intangible assets, net

$
15,671

~~Amortization expense for intangible assets was $568 and $565, and $1,725 and $1,645 for the three and nine months ended September 30, 2021 and 2020, respectively.~~

~~Estimated amortization expense for the next five years for the period ending September 30 and subsequent is as follows:~~

Amount

2022

$
2,267

2023

2,267

2024

2,260

2025

2,220

2026

845

And subsequent

1,024

Total intangibles currently to be amortized

10,883

Intangibles with indefinite lives not amortized

2,524

Total intangible assets

$
13,407

~~Changes in goodwill for the nine months ended September 30, 2021 are as follows:~~

Total

Balance January 1, 2021

$
27,472

Effect of change in exchange rates

(996
)
Balance September 30, 2021

$
26,476

The Company performed an impairment assessment as of December 31, 2020. No additional triggers for an interim impairment test have been identified. While there was no additional impairment of goodwill recognized as a result of the 2020 annual impairment test, a reasonably possible unexpected deterioration in financial performance or adverse change in earnings may result in an impairment.

~~8. Accrued Expenses~~

September 30,
2021

December 31,
2020

Accrued payroll and employee benefits

$
1,914

$
2,216

Accrued vacation

1,532

1,398

Accrued warranty

1,421

1,292

Accrued income tax and other taxes

1,358

1,127

Accrued interest

448

244

Accrued expenses—other

2,047

1,632

Total accrued expenses

$
8,720

$
7,909

~~9. Accrued Warranty~~

A liability for estimated warranty claims is accrued at the time of sale and the expense is recorded in Statement of Operations in Cost of Sales. The liability is established using historical warranty claim experience. 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 warranty accrual are recorded if actual claim experience indicates that adjustments are necessary. Warranty reserves are reviewed to ensure critical assumptions are updated for known events that may impact the potential warranty liability.

~~The following table summarizes the changes in product warranty liability:~~

For the nine months ended

September 30,

2021

2020

Balance January 1,

$
1,292

$
1,604

Provision for warranties issued during the year

2,505

1,576

Warranty services provided

(2,343
)

(1,885
)
Changes in estimate

—

59

Foreign currency translation

(33
)

11

Balance September 30,

$
1,421

$
1,365

~~10.Credit Facilities and Debt~~

~~U.S. Credit Facilities~~

At September 30, 2021, the Company and its U.S. subsidiaries have a Loan and Security Agreement, as amended (the “Loan Agreement”) with CIBC Bank USA (“CIBC”). The Loan Agreement provides a revolving credit facility with a maturity date of July 20, 2023. The aggregate amount of the facility is $30 million.

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 net realizable value subject to a $20 million limit; plus (3) 80% of eligible used equipment, as defined, valued at the lower of cost or market subject to a $2 million limit; plus (4) 50% of eligible Mexico receivables (as defined) valued at the lower of cost or net realizable value subject to a $0.4 million limit. At September 30, 2021 and December 31, 2020, the maximum the Company could borrow based on available collateral was $23.5 million and $21.9 million, respectively. At September 30, 2021, the Company had $12.8 million in borrowings (less $0.1 million in debt issuance costs for a net debt of $12.7 million) with $10.7 million available to borrow under its revolving credit facility. At December 31, 2020, the Company had $12.8 million in borrowings (less $0.2 million in debt issuance costs for a net debt of $12.6 million) with $9.1 million available to borrow under its revolving credit facility. The indebtedness under the Loan Agreement is collateralized by substantially all of the Company’s assets, except for certain assets 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 and the LIBOR rate are subject to a floor of 0.50%. The LIBOR spread ranges from 1.75% to 2.25% depending on the Adjusted Excess Availability. Funds borrowed under the LIBOR option can be borrowed for periods of one, two, or three months and are limited to 4 LIBOR contracts outstanding at any time. In addition, a fee of 0.375% is applied for the unused portion of the revolving facility and is payable monthly. In March of 2021, the Company amended the Loan Agreement to include

~~a Hedging Agreement for interest rate protection with respect to LIBOR Loans.~~ ~~The Company was in compliance with its covenants as of September 30, 2021.~~

The Loan Agreement has a Letter of Credit facility of $3 million, which is fully reserved against availability. As of September 30, 2021, the outstanding Letters of Credit were $0.2 million which is offset against availability under the revolving facility.

~~Notes Payable—Bank~~

At September 30, 2021, the Company has a $207 term note payable to a bank. The note dated January 6, 2021 had an original principal amount of $748 and an annual interest rate of 3.49%. Proceeds from the note were used to pay annual premiums for certain insurance policies carried by the Company. The holder of the note has a security interest in the insurance policies it financed and has the right upon default to cancel these policies and receive any unearned premiums. There are 3 remaining monthly payments of $69 on this note.

The Company had a note dated November 13, 2020 with an original principal amount of $289 and an annual interest rate of 5.81%. Proceeds from the note were used to pay annual premiums for certain insurance policies carried by the Company. The holder of the note has a security interest in the insurance policies it financed and has the right upon default to cancel these policies and receive any unearned premiums. As of September 30, 2021, the outstanding principal balance of the note was $0.

~~Note Payable—Winona Facility Purchase~~

~~At September 30, 2021 and December 31, 2020, Badger has a balance on a note payable to Avis Industrial Corporation of $88 and~~$180, respectively. Badger is required to make 60 monthly payments of $10 that began on August 1, 2017. The note dated July 26, 2017, had an original principal amount of $500 and annual interest rate of 8.00%. The note matures on July 1, 2022 and is guaranteed by the Company.

~~PM Group Short-Term Working Capital Borrowings~~

At September 30, 2021 and December 31, 2020, respectively, PM Group had established demand credit and overdraft facilities with 5 banks in Italy, 1 bank in Spain and 11 banks in South America. Under the facilities, as of September 30, 2021 and December 31, 2020 respectively, PM Group can borrow up to €18,838 ($21,808) and €20,550 ($25,133) for advances against invoices, letter of credit and bank overdrafts with €4,300 ($4,978) and €2,000 ($2,440) available to borrow under these facilities. These facilities are divided into two types: working capital facilities and cash facilities. At September 30, 2021 and December 31, 2020, interest on the Italian working capital facilities is charged at the 3-month Euribor plus 175 or 200 basis points and 3-month Euribor plus 350 basis points, respectively. Interest on the South American facilities is charged at a flat rate of points for advances on invoices ranging from 8% - 55%. During June 2021, the loan agreement was renewed removing the existing expiration date.

At September 30, 2021, the Italian banks had advanced PM Group €9,096 ($10,531) (less (€135) ($157) in debt issuance costs for a net debt of (€8,961) (10,374). There were 0 advances to PM Group from the Spanish bank, and the South American banks had advanced PM Group €616 ($713). At December 31, 2020, the Italian banks had advanced PM Group €10,551 ($12,904). There were 0 advances to PM Group from the Spanish bank, and the South American banks had advanced PM Group €98 ($120).

~~PM Group Term Loans~~

~~At September 30, 2021 and December 31, 2020, PM Group has a €5,752 ($6,659)~~and €5,752 ($7,035) term loan with Davy Global Fund Management, an Irish fund that purchased the debt from BPER, an Italian bank. The term loan is split into a note and a balloon payment and is secured by PM Group’s common stock. The term loan is charged interest at a fixed rate of 3.5%. The note is payable in annual installments of principal, €513 for 2021, €531 for 2022, €549 for 2023, €569 for 2024, and €588 for 2025. The balloon payment is payable in a single payment of €3,002 in 2026.

An adjustment in the purchase accounting to value the non-interest- bearing debt at its fair market value was made. At March 6, 2018 it was determined that the fair value of the debt was €480 or $550 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 September 30, 2021 and December 31, 2020, the remaining balance was €29 ($34) and €114 ($140), respectively, and has been offset to the debt.

At September 30, 2021 and December 31, 2020, PM Group has unsecured borrowings with an Italian bank (MPS) and an Irish fund (Davy Global Fund Management) totaling €7,225 ($8,364) and €7,225 ($8,836), respectively. The borrowings have a fixed rate of interest of 3.5%.

~~Annual payments of €1,445 are payable ending in 2025.~~

PM Group is subject to certain financial covenants 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 as of June 30 and December 31 of each year. The Company was in compliance with the loan covenants at June 30, 2021.

~~At September 30, 2021 and December 31, 2020, Autogru PM had a term note with an outstanding principal balance of €0 ($0) and €116 ($142), respectively. The note was paid off in full in~~ ~~September 2021. The note was charged interest at the 1-month Euribor plus 250 basis points, for an effective rate of 2.50% at September 30, 2021 and December 31, 2020.~~

Autogru PM had another term note with an outstanding principal balance of €111 ($129) and €164 ($201) at September 30, 2021 and December 31, 2020, respectively. The note is divided in three parts: the first part is payable in 60 monthly installments of €1 ($1) plus interest at the 6-month Euribor plus 275 basis points, for an effective rate of 2.75% at September 30, 2021 and December 31, 2020, maturing in ~~February 2023~~; the second part is payable in 60 monthly installments of €4 ($5) plus interest at the 6-month Euribor plus 275 basis points, for an effective rate of 2.75% at September 30, 2021 and December 31, 2020, maturing in ~~April 2023~~; the third part is payable in 60 monthly installments of €1 ($1) plus interest at the 6-month Euribor plus 275 basis points, for an effective rate of 2.75% at September 30, 2021 and December 31, 2020, maturing in September 2023.

~~Valla Short-Term Working Capital Borrowings~~

At September 30, 2021 and December 31, 2020, Valla had established demand credit and overdraft facilities with 2 Italian banks. Under the facilities, Valla can borrow up to approximately €500 ($579) for advances against orders, invoices and bank overdrafts. Interest on the Italian working capital facilities is charged at a flat percentage rate for advances on invoices and orders ranging from 1.67% - 5.75% at September 30, 2021 and December 31, 2020. At September 30, 2021 and December 31, 2020, the Italian banks had advanced Valla €465 ($538) and €474 ($579).

~~Valla Term Loans~~

Valla had a term loan with Carisbo that was payable in quarterly principal installments beginning on October 30, 2017 of €8 ($10), plus interest at the 3-month Euribor plus 470 basis points, for an effective rate of 4.36% at December 31, 2020. The note matured on January 31, 2021. At September 30, 2021 and December 31, 2020, the outstanding principal balance of the note was €0 ($0) and €8 ($10), respectively.

Valla has a term loan with BPER that is payable in monthly principal installments beginning on July 10, 2022 of €0.5 ($1), plus interest at an effective rate of 1.46% at September 30, 2021 and December 31, 2020. The note matures in ~~December 2025. At September 30, 2021 and December 31, 2020, the outstanding principal balance of the note was €25 ($29) and €25 ($31), respectively.~~

~~11. Leases~~

The Company leases certain warehouses, office space, machinery, vehicles, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company is not aware of any variable lease payments, residual value guarantees, covenants or restrictions imposed by the leases. Most leases include one or more options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at our sole discretion. The depreciable life of assets is limited by the expected lease term for finance leases.

If there was a rate explicit in the lease, this was the discount rate used. For those leases with no explicit or implicit interest rate, an incremental borrowing rate was used. The weighted average remaining useful life for operating and finance leases was 5 and 7 years, respectively. The weighted average discount rate for operating and finance leases was 5.1% and 12.5% respectively.

Leases

Classification

September 30, 2021

December 31, 2020

Assets

Operating lease assets

Operating lease assets

$
3,484

$
4,068

Financing lease assets

Fixed assets, net

2,394

2,847

Total leased assets

$
5,878

$
6,915

Liabilities

Current

Operating

Current liabilities

$
998

$
1,167

Financing

Current liabilities

380

344

Non-current

Operating

Non-current liabilities

2,486

2,901

Financing

Non-current liabilities

3,931

4,221

Total lease liabilities

$
7,795

$
8,633

Three months ended September 30,

Nine months ended September 30,

Lease Cost

Classification

2021

2020

2021

2020

Operating lease costs

Operating lease assets

$
315

$
262

$
1,017

$
793

Finance lease cost

Amortization of
leased assets

Amortization

91

79

273

306

Interest on lease liabilities

Interest expense

136

145

416

444

Lease cost

$
542

$
486

$
1,706

$
1,543

Three months ended September 30,

Nine months ended September 30,

Other Information

2021

2020

2021

2020

Cash paid for amounts included in the
   measurement of lease liabilities:

Operating cash flows from operating
   leases

$
341

$
282

$
1,099

$
794

Operating cash flows from finance
   leases

$
136

$
79

$
416

$
306

Financing cash flows from finance
   leases

$
83

$
145

$
254

$
444

~~Future principal minimum lease payments period ending September 30 are:~~

Operating Leases

Capital Leases

2022

$
1,204

$
898

2023

925

925

2024

627

952

2025

431

981

2026

391

1,010

And subsequent

446

1,665

Total undiscounted lease payments

4,024

6,431

Less interest

(540
)

(2,120
)
Total liabilities

$
3,484

$
4,311

Less current maturities

(998
)

(380
)
Non-current lease liabilities

$
2,486

$
3,931

~~12. Income Taxes~~

On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was enacted. The CARES Act, among other things, includes provisions relating to net operating loss carrybacks, alternative minimum tax credit refunds, a modification to the net interest deduction limitations and a technical correction to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on the Company’s consolidated financial statements.

For the three months ended September 30, 2021, the Company recorded an income tax provision of $234, which includes a discrete income tax expense of $5. The calculation of the overall income tax provision for the three months ended September 30, 2021 primarily consists of foreign income taxes and a discrete income tax expense primarily for the accrual of interest related to unrecognized tax benefits. No tax benefit was provided on U.S. losses incurred during the quarter. For the three months ended September 30, 2020, the Company recorded an income tax provision of $62, which includes a discrete income tax benefit of $38. The calculation of the overall income tax provision for the three months ended September 30, 2020 primarily consists of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for a foreign jurisdiction partially offset by an accrual of interest related to unrecognized tax benefits.

The effective tax rate for the three months ended September 30, 2021 was an income tax provision of 27.0% on pretax loss of $867 compared to an income tax provision of 4.5% on a pretax loss of $1,385 in the comparable prior period. The effective tax rate for the three months ended September 30, 2021 differs from the U.S. statutory rate of 21% primarily due to a valuation allowance in the U.S. and partial valuation allowance in Italy, nondeductible foreign permanent differences, income taxed in foreign jurisdictions at varying tax rates, and an accrual of interest related to unrecognized tax benefits.

For the nine months ended September 30, 2021, the Company recorded an income tax provision of $843, which includes a discrete income tax benefit of $481. The calculation of the overall income tax provision for the nine months ended September 30, 2021 primarily consists of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for various state and foreign jurisdictions. For the nine months ended September 30, 2020, the Company recorded an income tax benefit of $191, which includes a discrete income tax benefit of $382. The calculation of the overall income tax benefit for the nine months ended September 30, 2020 primarily consist of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for various state and foreign jurisdictions, and the settlement of the Romanian tax audit for 2017 and 2018.

The effective tax rate for the nine months ended September 30, 2021 was an income tax provision of 19.5% on pretax income of $4,335 compared to an income tax benefit of 1.7% on a pretax loss of $11,083 in the comparable prior period. The effective tax rate for the nine months ended September 30, 2021 differs from the U.S. statutory rate of 21% primarily due to a valuation allowance in the U.S. and partial valuation allowance in Italy, nondeductible foreign permanent differences, income taxed in foreign jurisdictions at varying tax rates, and a decrease in unrecognized tax benefits related to the expiration of the statute of limitations for various state and foreign jurisdictions.

The Company’s total unrecognized tax benefits as of September 30, 2021 and 2020 were approximately $3.1 million and $4.0 million, respectively. Included in the unrecognized tax benefits is a liability for the disputed Romania income tax audit assessment for tax years 2012-2016. The Company settled the 2016 audit with the Italian taxing authorities. The impact of the settlement did not have a material impact on the financial statements. Depending on the final resolution of the audit, the uncertain tax position liability could be higher or lower than the amount recorded at September 30, 2021.

~~13. Net Earnings (Loss) 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. Details of the calculations are as follows:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Net income (loss) from continuing operations

$
(1,101
)

$
(1,447
)

$
3,492

$
(10,892
)
Loss from operations of discontinued operations,
   net of income taxes

—

(124
)

—

(832
)
Net income (loss)

$
(1,101
)

$
(1,571
)

$
3,492

$
(11,724
)

Income (loss) per share

Basic

Income (loss) from continuing operations

$
(0.06
)

$
(0.07
)

$
0.18

$
(0.55
)
   Loss from discontinued operations

$
—

$
(0.01
)

$
—

$
(0.04
)
Net income (loss)

$
(0.06
)

$
(0.08
)

$
0.18

$
(0.59
)
Diluted

Income (loss) from continuing operations

$
(0.06
)

$
(0.07
)

$
0.17

$
(0.55
)
         Loss from discontinued operations

$
—

$
(0.01
)

$
—

$
(0.04
)
Net income (loss)

$
(0.06
)

$
(0.08
)

$
0.17

$
(0.59
)

Weighted average common shares outstanding

Basic

19,917,276

19,778,225

19,888,319

19,758,241

Diluted

Basic

19,917,276

19,778,225

19,888,319

19,758,241

Dilutive effect of restricted stock units and stock options

—

—

82,362

—

Basic and Dilutive

19,917,276

19,778,225

19,970,681

19,758,241

Potential shares of common stock relating to stock options and restricted stock units excluded from the earnings per share calculation because their effect would be anti-dilutive were 274,595 and 1,906,735 for the three months ended September 30, 2021 and September 30, 2020, respectively, and 280,200 and 1,907,484 for the nine months ended September 30, 2021 and September 30, 2020, respectively.

COVID-19 Pandemic

As of September 30,

2021

2020

Unvested restricted stock units

265,125

260,970

Options to purchase common stock

97,437

97,437

Convertible subordinated notes

—

1,549,451

362,562

1,907,858

~~14. Equity~~

~~Stock Issued to Employees and Directors~~

The Company issued shares of common stock to employees and Directors 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 period:

Date of Issue

Employees or
Director

Shares Issued

Value of
Shares Issued

January 1, 2021

Employee

3,300

$
5.16

March 6, 2021

Directors

7,920

7.43

March 6, 2021

Employees

24,923

7.43

March 8, 2021

Directors

12,000

7.73

March 8, 2021

Employee

2,000

7.73

March 13, 2021

Directors

18,060

8.29

March 13, 2021

Employees

17,680

8.29

June 3, 2021

Directors

5,940

7.29

August 14, 2021

Directors

9,900

6.96

September 1, 2021

Employee

16,500

8.22

118,223

$
7.78

~~Stock Repurchase~~

The Company purchases shares of Common Stock from certain employees at the closing share price on the date of purchase. The stock is purchased from the employees to satisfy employees’ withholding tax obligations related to stock issuances described above. The below table summarizes shares repurchased from employees during the current year through September 30, 2021:

Date of Purchase

Shares
Purchased

Closing Price
on Date of
Purchase

March 6, 2021

2,779

$
7.43

March 8, 2021

692

$
7.73

March 13, 2021

2,712

$
8.29

6,183

~~Restricted Stock Awards~~

~~The following table contains information regarding restricted stock units:~~

	~~September 30,~~ ~~2021~~
~~Outstanding on January 1, 2021~~		~~242,586~~
~~Units granted during the period~~		~~147,800~~
~~Vested and issued~~		~~(112,040~~	)
~~Vested-issued and repurchased for income tax withholding~~		~~(6,183~~	)
~~Forfeited~~		~~(7,038~~	)
~~Outstanding on September 30, 2021~~		~~265,125~~

The value of the restricted stock is being charged to compensation expense over the vesting period. Compensation expense includes expense related to restricted stock units of $231 and $215, and $789 and $598 for the three and nine months ended September 30, 2021 and 2020, respectively. Additional compensation expense related to restricted stock units will be $229, $679, and $308 for the remainder of 2021, 2022, and 2023, respectively.

~~Stock Options~~

On September 1, 2019, 50,000 stock options were granted at $5.62 per share and vest ratably on each of the first three anniversary dates. Compensation expense related to stock options were $8 and $27 for the three and nine months ended September 30, 2021

~~compared to $17 and $59 for the comparable period. Additional compensation expense will be $4 and $10 for the remainder of 2021 and 2022, respectively.~~

~~15. 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 limits that range from $50 to $500.

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 claims.

For claims originated in 2020, the Company changed its insurance coverage for worker’s compensation and no longer has a deductible obligation. 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 workers’ 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 workers’ compensation claims in aggregate will have a material adverse effect on the Company.

On May 5, 2011, the Company entered into 2 separate settlement agreements with 2 plaintiffs. As of September 30, 2021, the Company has a remaining obligation under the agreements to pay the plaintiffs an aggregate of $950 without interest in 10 annual installments of $95 on or before May 22 of 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 the payment period.

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 to estimate the amount within the range that is most likely to occur. 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.

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.

~~SEC Settlement~~

The Company is continuing to work to resolve its two remaining material weaknesses in compliance with the previously-disclosed settlement between the Company and the SEC that was entered into in connection with the Company’s restatement of certain prior financial statements.

~~16. Transactions between the Company and Related Parties~~

~~In the course of conducting its business, the Company has entered into certain related party transactions.~~

C&M conducts business with RAM P&E LLC for the purposes of obtaining parts business as well as buying, selling, and renting equipment. In 2021, $0.1 million was invoiced by Crane and Machinery, Inc. through government parts contracts awarded to RAM P&E LLC.

~~C&M is a distributor of Terex rough terrain and truck cranes. As such, C&M purchases cranes and parts from Terex.~~

~~PM is a manufacturer of cranes. PM sold cranes, parts, and accessories to Tadano during 2020 and 2021.~~

~~As of September 30, 2021 and December 31, 2020, the Company had accounts receivable and payable with related parties as shown below:~~

September 30, 2021

December 31, 2020

Accounts Receivable

Tadano

$
1

$
62

Terex

1

—

RAM P&E (2)

11

13

$
13

$
75

Accounts Payable

Terex

127

47

Tadano

10

80

$
137

$
127

Net Related Party Accounts
Payable

$
124

$
52

~~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:~~

Three Months Ended
September 30, 2021

Three Months Ended
September 30, 2020

Nine Months Ended
September 30, 2021

Nine Months Ended
September 30, 2020

Rent paid:

Bridgeview Facility (1)

—

$
71

—

$
207

Sales to:

Terex

$
1

$
7

$
43

$
35

Tadano

13

—

153

612

RAM P&E (2)

23

—

110

—

Total Sales

$
37

$
7

$
306

$
647

Purchases from:

Terex

$
122

$
94

$
355

$
374

Tadano

34

11

130

11

Total Purchases

$
156

$
105

$
485

$
385

~~(1)~~

The Company leased its 40,000 sq. ft. Bridgeview facility from an entity controlled by Mr. David Langevin, the Company’s Executive Chairman and former CEO, through December 31, 2020. Pursuant to the terms of the lease, the Company makes monthly lease payments of $23. The Company is also responsible for all the associated operating expenses, including insurance, property taxes, and repairs. The entity controlled by Mr. David Langevin sold the building on December 31, 2020 to an unaffiliated third party. The new terms of the building lease are substantially the same in all material respects.

~~(2)~~

~~RAM P&E is owned by Mr. David Langevin’s daughter.~~

~~Note 17. Discontinued Operations~~

~~Assets and Liabilities Classified as Held for Sale~~

In addition to the proceeds from sale of $1.5 million in cash received, the Company may receive a maximum royalty and earnout payments of approximately $2.9 million for years 2021 thru 2023 if certain revenue criteria are met. The Company will account for the contingent consideration as a gain in accordance with ASC 450. Under this approach, we will recognize the contingent consideration in earnings after the contingency is resolved.

For the nine months ended September 30, 2020, cash flows provided by operating activities was $1,649, this consisted of depreciation expense of $45, 0 purchases of fixed assets and 0 amortization expense. Cash flows provided by investing activities consisted of proceeds from sale of assets was $1,610.

For the Three Months
Ended September 30,

For the Nine Months
Ended September 30,

2020

2020

Net revenues

$
391

$
3,276

Cost of sales

628

3,594

Selling, general and administrative expenses

246

839

Interest expense

14

62

Other income

377

388

Net loss of discontinued operations before income
tax

(120
)

(831
)
Income tax expense related to
discontinued operations

4

1

Net loss on discontinued operations

$
(124
)

$
(832
)

~~Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~Recent Developments~~

~~Impact of COVID-19~~

We are continuing to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, including how it is impacting our customers, employees, supply chain, and distribution network, as well as the demand for our products in the industries and markets that we serve. Our first priority is the health and safety of our employees, customers and business partners, and we believe that we have taken the necessary steps to keep our facilities clean and safe during the COVID-19 pandemic. While COVID-19 has had a material impact on our past financial results, we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows. The extent to which our operations may be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information ~~which~~that may emerge concerning the ultimate severity and duration of the ~~outbreak~~pandemic (including the spread and impact of new COVID-19 variants) and actions by government authorities to contain the ~~outbreak~~pandemic or treat its impact. Furthermore, the impacts of a potential worsening of global economic conditions and the continued disruptions to and volatility in the financial markets remain unknown.

The Company is ~~currently experiencing~~continuing to experience supply chain disruptions and related logistical bottlenecks that have impacted our ability to meet strong industrial demand and have also increased costs related to shipping, warehousing and working capital management. While the Company is ~~doing everything it can~~actively working to mitigate these expenses and the associated timing issues, certain segments – such as truck chassis – have been more impacted than others. Where appropriate and feasible, we have implemented pricing adjustments to protect margins and, in tandem, ~~are building~~continue to build inventory to meet our customer requirements. In addition, the Company is actively managing costs and working to further streamline operations where needed. Furthermore, the Company has modified its business practices to manage expenses (including practices regarding employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences). We continue to take steps intended to minimize the negative impact of the COVID-19 pandemic on our business and to protect the safety of our employees and ~~customers.~~customers, but we cannot predict the duration or severity of the ongoing COVID-19 pandemic or reasonably estimate the financial impact that it will have on our results and significant estimates going forward.

~~Business Overview~~

Supplemental Cash Flow Information

Transactions for the periods ended September 30, 2022 and 2021 are as follows:


	Nine months ended September 30,
	2022		2021
Interest received in cash	$	3	$	7
Interest paid in cash		2,308		1,369
Income tax payments in cash		536		925
Recognition of right-of-use asset and right-of-use liability		2,699		—

Reconciliation of cash, cash equivalents and restricted cash to consolidated balance sheets:
Cash and cash equivalents	$	11,677	$	17,336
Restricted cash		188		228
Cash, cash equivalents and restricted cash at the end of year	$	11,865	$	17,564

4. Fair Value Measurements

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 by level within the fair value hierarchy. As required by ASC 820-10, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The following is summary of items that the Company measures at fair value on a recurring basis:


	Fair Value at September 30, 2022
	Level 1		Level 2		Level 3		Total
Liabilities:
Forward currency exchange contracts	$	—	$	11	$	—	$	11
Total recurring liabilities at fair value	$	—	$	11	$	—	$	11

	Fair Value at December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Forward currency exchange contracts	$	—	$	75	$	—	$	75
Total current assets at fair value	$	—	$	75	$	—	$	75
Liabilities:
Valla contingent consideration	$	—	$	—	$	207	$	207
Total liabilities at fair value	$	—	$	—	$	207	$	207


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Valla Contingent Consideration
Liabilities:
Balance at January 1, 2022	$	207
Change in contingent liability consideration		(202	)
Effect of changes in exchange rates		(5	)
Balance at September 30, 2022	$	—

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).

The fair value of the forward currency contracts is 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.

6. Inventory, net

The components of inventory are as follows:


	September 30, 2022		December 31, 2021
Raw materials and purchased parts, net	$	52,732	$	42,983
Work in process, net		5,864		3,938
Finished goods, net		19,006		18,044
Inventory, net	$	77,602	$	64,965

The Company has established reserves for obsolete and excess inventory of $8,072 and $9,894 as of September 30, 2022 and December 31, 2021, respectively.

7. Goodwill and Intangible Assets

Intangible assets and accumulated amortization by category as of September 30, 2022 is as follows:


	Weighted Average	Gross					Net
	Amortization	Carrying		Accumulated			Carrying
	Period (in years)	Amount		Amortization			Amount
Patented and unpatented technology	2	$	15,847	$	(13,905	)	$	1,942
Customer relationships	9		21,154		(13,278	)		7,876
Trade names and trademarks	16		5,469		(2,747	)		2,722
Software	4		237		(44	)		193
Indefinite lived trade names			1,778					1,778
Total intangible assets, net							$	14,511

Intangible assets and accumulated amortization by category as of December 31, 2021 is as follows:


	Weighted Average	Gross					Net
	Amortization	Carrying		Accumulated			Carrying
	Period (in years)	Amount		Amortization			Amount
Patented and unpatented technology	3	$	16,848	$	(13,845	)	$	3,003
Customer relationships	3		18,077		(13,017	)		5,060
Trade names and trademarks	10		4,269		(2,595	)		1,674
Software	5		160		(8	)		152
Indefinite lived trade names			2,057					2,057
Total intangible assets, net							$	11,946

In connection with the Rabern acquisition, the Company recognized customer relationships intangible assets of $4.5 million with an estimated useful life of 15 years and trademark intangible assets of $1.2 million with an estimated useful life of 25 years. See Note 18 for additional information regarding the Rabern acquisition.

Amortization expense for intangible assets was $716 and $2,143 for the three and nine months ended September 30, 2022, respectively. Amortization expense for intangible assets was $568 and $1,725 for the three and nine months ended September 30, 2021, respectively.

Estimated amortization expense for the period ending September 30 for the next five years and subsequent is as follows:


	Amount
2023	$	2,804
2024		2,804
2025		1,346
2026		787
2027		524
And subsequent		4,468
Total intangible assets currently to be amortized		12,733
Intangible assets with indefinite lives not amortized		1,778
Total intangible assets	$	14,511

Changes in goodwill for the nine months ended September 30, 2022 are as follows:


	2022			2021
Balance January 1,	$	24,949		$	27,472
Goodwill for Rabern acquisition		13,252			—
Effect of change in exchange rates		(2,186	)		(996	)
Balance September 30,	$	36,015		$	26,476

The Company performed an impairment assessment as of December 31, 2021. No additional triggers for an interim impairment test have been identified as of September 30, 2022. While there was $1.1 million of goodwill impairment recognized as a result of the 2021 annual impairment test to fully impair the Valla business unit, a reasonably possible unexpected deterioration in financial performance or adverse change in earnings may result in a further impairment in the other business units.

8. Accrued Expenses


	September 30, 2022		December 31, 2021
Accrued payroll and benefits	$	5,576	$	3,524
Accrued legal settlement		2,900		-
Accrued expenses—other		1,860		1,263
Accrued warranty		1,784		1,578
Accrued vacation		1,380		1,701
Accrued income tax and other taxes		1,145		2,473
Total accrued expenses	$	14,645	$	10,539

9. Accrued Warranty

The liability for estimated warranty claims is accrued at the time of sale and the expense is recorded in the Condensed Consolidated Statement of Operations in Cost of Sales. The liability is established using historical warranty claim experience. 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 warranty accrual are recorded if actual claim experience indicates that adjustments are necessary. Warranty reserves are reviewed to ensure critical assumptions are updated for known events that may impact the potential warranty liability.

The following table summarizes the changes in product warranty liability:


	For the nine months ended
	September 30,
	2022			2021
Balance January 1,	$	1,578		$	1,292
Provision for warranties issued during the year		1,699			2,505
Warranty services provided		(1,421	)		(2,343	)
Foreign currency translation		(72	)		(33	)
Balance September 30,	$	1,784		$	1,421

12. Income Taxes

For the three months ended September 30, ~~2021,~~2022, the Company ~~had~~recorded an income tax provision of $206, which includes a ~~net loss~~discrete income tax benefit of ~~$1.1 million compared to a net loss~~$16. The calculation of ~~$1.4 million~~the overall income tax provision for the three months ended September 30, ~~2020.~~

~~Net revenues~~2022 primarily consists of US federal income taxes for Rabern which is a separate taxpayer for US federal tax purposes, foreign income taxes, a discrete income tax benefit for a reduction in the valuation allowance recorded against state tax credits in connection with the Rabern acquisition, and ~~gross profit~~ ~~—For the three months ended September 30, 2021, net revenues and gross profit were $50.9 million and $8.0 million, respectively. Gross profit as~~ a percent of revenues was 15.8% for the three months ended September 30, 2021. For the three months ended September 30, 2020, net revenues and gross profit were $36.5 million and $6.6 million, respectively. Gross profit as a percent of revenues was 18.3% for the three months ended September 30, 2020.

Net revenues increased $14.4 million or 39.7% to $50.9 million for the three months ended September 30, 2021 from $36.5 million for the comparable period in 2020. The increase in revenues is primarily due to increases in sales of straight mast cranes from the Company’s United States subsidiaries and knuckle boom cranes and aerial platforms from the Company’s foreign subsidiaries, primarily duediscrete income tax benefit related to the ~~partial recovery in the global market from the COVID-19 pandemic.~~

Our gross profit increased $1.4 million to $8.0 million for the three months ended September 30, 2021 from $6.6 million for the comparable period in 2020. The increase in gross profit is attributable to increases in revenues and product mix partially offset by higher material cost due to steel surcharges and higher other material costs. The decrease in gross profit percentage is primarily driven by product mix as lower margin products were sold and higher material cost for the three months ended September 30, 2021.

~~Research and development~~ —Research and development expense was $0.8 million for the three months ended September 30, 2021 consistent with $0.8 million for the same period in 2020. The Company’s research and development spending reflects our continued commitment to develop and introduce new products that give the Company a competitive advantage.

~~Selling, general and administrative expense~~ —SG&A expense for the three months ended September 30, 2021 was $7.4 million compared to $6.5 million for the comparable period in 2020, an increase of $0.9 million. The increases are primarily related to higher professional fees, advertising expenses, sales commissions, and software implementation upgrades.

~~Interest expense~~ —Interest expense was $0.5 million for the three months ended September 30, 2021 compared to $0.8 million for the comparable period in 2020. The decrease in interest expense is due to lower debt driven by the pay-offexpiration of the ~~convertible notes in December 2020 and principal payments made on the term debt in 2020.~~

~~Gain on extinguishment~~statutes of ~~debt~~ ~~—For the three months ended September 30, 2020, the Company paid off~~limitations for a ~~portion of the PM term and unsecured debt at a 15% discount to its face value which resulted in a gain of $0.6 million.~~

~~Foreign currency transaction losses~~ ~~—For the three months ended September 30, 2021, the Company had~~ foreign ~~currency losses of $0.1 million compared to $0.2 million for the comparable period in 2020. A substantial portion of the losses relate to changes in the Chilean peso.~~

~~Other expense~~ —Other expense was $0.1 million for the three months ended September 30, 2021 compared to ($0.3) million for the comparable period in 2020. The decrease in other expense is primarily due to a legal settlement in 2020.

~~Income tax~~ — On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was enacted. The CARES Act, among other things, includes provisions relating to net operating loss carrybacks, alternative minimum tax credit refunds, a modification to the net interest deduction limitations and a technical correction to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on the Company’s condensed consolidated financial statements.

jurisdiction. For the three months ended September 30, 2021, the Company recorded an income tax provision of ~~$0.2 million,~~$234, which includes a discrete income tax expense of ~~less than $0.01 million.~~$5. The calculation of the overall income tax provision for the three months ended September 30, 2021 primarily consists of foreign income taxes and a discrete income tax expense primarily for the accrual of interest related to unrecognized tax benefits. No

The effective tax ~~benefit was provided on U.S. losses incurred during the quarter. For~~rate for the three months ended September 30, ~~2020,~~2022 was an income tax provision of 7.2% on pretax loss of $2,878 compared to an income tax provision of 27.0% on a pretax loss of $867 in the comparable prior period. The effective tax rate for the three months ended September 30, 2022 differs from the U.S. statutory rate of 21% primarily due to a valuation allowance in the U.S., a reduction in the valuation allowance recorded against state tax credits in connection with the Rabern acquisition, a partial valuation allowance in Italy, nondeductible foreign permanent differences, income taxed in foreign jurisdictions at varying tax rates and a reduction in the uncertain tax position liability related to the expiration of the statutes of limitations for a foreign jurisdictions.

For the nine months ended September 30, 2022, the Company recorded an income tax provision of ~~$0.1 million,~~$570, which includes a discrete income tax benefit of ~~less than $0.1 million.~~$216. The calculation of the overall income tax provision for the ~~three~~nine months ended September 30, ~~2020~~2022 primarily consists of US federal income taxes for Rabern which is a separate taxpayer for US federal tax purposes, foreign income taxes, a discrete income tax benefit for a reduction in the valuation allowance recorded against state tax credits in connection with the Rabern acquisition, and a discrete income tax benefit related to the expiration of the statutes of limitations for various state and foreign jurisdictions. For the nine months ended September 30, 2021, the Company recorded an income tax provision of $843, which includes a discrete income tax benefit of $481, primarily consisting of foreign income taxes and a discrete income tax benefit related to the expiration of the ~~statute~~statutes of limitations for avarious state and foreign ~~jurisdiction partially offset by an accrual of interest related to unrecognized tax benefits.~~jurisdictions.

The effective tax rate for the ~~three~~nine months ended September 30, ~~2021~~2022 was an income tax provision of ~~27.0%~~13.0% on a pretax loss of ~~$0.9 million~~$4,387 compared to an income tax provision of ~~4.5%~~19.5% on a pretax ~~loss~~income of ~~$1.4 million~~$4,335 in the comparable prior period. The effective tax rate for the ~~three~~nine months ended September 30, ~~2021~~2022 differs from the U.S. statutory rate of ~~21%~~21% primarily due to ~~the~~a valuation allowance in the U.S. ~~and~~, a reduction in the valuation allowance recorded against state tax credits in connection with the Rabern acquisition, a partial

valuation allowance in Italy, nondeductible foreign permanent differences, income taxed in foreign jurisdictions at varying tax rates and ~~an accrual~~a reduction in the uncertain position liability for the expiration of ~~interest related to~~the statute of limitations for various state and foreign jurisdictions.

The Company’s total unrecognized tax ~~benefits.~~benefits as of September 30, 2022 and 2021 were approximately $2.9 million and $3.1 million, respectively. Included in the unrecognized tax benefits is a liability for the disputed Romania income tax audit assessment for tax years 2012-2016. Depending on the final resolution of the audit, the uncertain tax position liability could be higher or lower than the amount recorded at September 30, 2022.

13. Net Earnings (Loss) 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. Details of the calculations are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net income (loss)	$	(3,084	)	$	(1,101	)	$	(4,957	)	$	3,492
Net income attributable to noncontrolling interest		288			—			442			—
Net income (loss) attributable to shareholders of Manitex International, Inc.	$	(3,372	)	$	(1,101	)	$	(5,399	)	$	3,492

Income (loss) per share
Basic
Net income (loss)	$	(0.15	)	$	(0.06	)	$	(0.25	)	$	0.18
Net income (loss) attributable to shareholders of Manitex International, Inc.	$	(0.17	)	$	(0.06	)	$	(0.27	)	$	0.18
Diluted
Net income (loss)	$	(0.15	)	$	(0.06	)	$	(0.25	)	$	0.17
Net income (loss) attributable to shareholders of Manitex International, Inc.	$	(0.17	)	$	(0.06	)	$	(0.27	)	$	0.17

Weighted average common shares outstanding
Basic		20,094,475			19,917,276			20,039,981			19,888,319

Diluted
Basic		20,094,475			19,917,276			20,039,981			19,888,319
Dilutive effect of restricted stock units and stock options		—			—			—			82,362
Basic and Dilutive		20,094,475			19,917,276			20,039,981			19,970,681

Nine Months Ended
September 30,

2021

2020

$ Change

% Change

Net revenues

$
158,148

$
122,314

$
35,834

29.3
%
Cost of sales

129,867

99,877

29,990

30.0

Gross profit

28,281

22,437

5,844

26.0

Operating expenses

Research and development costs

2,357

2,246

111

4.9

Selling, general and administrative expenses

23,232

21,226

2,006

9.5

Impairment of intangibles

—

6,722

(6,722
)

(100.0
)
Total operating expenses

25,589

30,194

(4,605
)

(15.3
)
Operating income (loss)

2,692

(7,757
)

10,449

(134.7
)
Other income (expense)

Interest expense

(1,573
)

(2,833
)

1,260

(44.5
)
Interest income

7

80

(73
)

(91.3
)
Gain on Paycheck Protection Program loan forgiveness

3,747

—

3,747

100.0

Gain on extinguishment of debt

—

595

(595
)

(100.0
)
Foreign currency transaction loss

(421
)

(671
)

250

(37.3
)
Other expense

(117
)

(497
)

380

(76.5
)
Total other income (expense)

1,643

(3,326
)

4,969

(149.4
)
Income (loss) before income taxes from continuing operations

4,335

(11,083
)

15,418

(139.1
)
Income tax expense (benefit) from continuing operations

843

(191
)

1,034

(541.4
)
Net income (loss) from continuing operations

$
3,492

$
(10,892
)

$
14,384

(132.1
)%


	As of September 30,
	2022		2021
Unvested restricted stock units		296,725		265,125
Options to purchase common stock		197,437		97,437
		494,162		362,562

~~Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020~~

~~Net income (loss) from continuing operations~~21

14. Equity

Stock Issued to Employees and Directors

The Company issued shares of common stock to employees and Directors as restricted stock units issued under the Company’s 2004 and 2019 Incentive Plan vest. Upon issuance, entries were recorded to increase common stock and decrease paid in capital for the ~~nine-month periods ended September 30, 2021 and 2020~~amounts shown below.

~~For~~The following is a summary of stock issuances that occurred during the nine months ended September 30, ~~2021~~2022:


Date of Issue	Employees or Director	Shares Issued		Value of Shares Issued
January 1, 2022	Employee		3,300	$	6.36
March 6, 2022	Directors		8,160		8.06
March 6, 2022	Employees		23,866		8.06
March 8, 2022	Directors		12,000		7.82
March 8, 2022	Employee		29,262		7.82
March 13, 2022	Directors		10,200		7.71
March 13, 2022	Employees		17,893		7.71
April 11, 2022	Employee		38,800		7.39
June 2, 2022	Directors		18,000		7.07
June 3, 2022	Directors		5,940		7.02
July 5, 2022	Employee		16,120		6.27
August 14, 2022	Directors		10,200		5.80
			193,741	$	7.46

Stock Repurchases

The Company purchases shares of Common Stock from certain employees at the ~~Company had a net income~~closing share price on the date of ~~$3.5 million compared~~purchase. The stock is purchased from the employees to ~~a net loss~~satisfy employees’ withholding tax obligations related to stock issuances described above. The below table summarizes shares repurchased from employees during the current year through September 30, 2022:


Date of Purchase	Shares Purchased		Closing Price on Date of Purchase
March 6, 2022		6,035	$	8.06
March 8, 2022		7,395	$	7.82
March 13, 2022		3,924	$	7.71
April 11, 2022		12,300	$	7.39
July 5, 2022		4,725	$	6.27
		34,379

Restricted Stock Awards

The following table contains information regarding restricted stock units during the current year through September 30, 2022:


	September 30, 2022
Outstanding on January 1, 2022		286,227
Units granted during the period		226,000
Vested and issued		(159,362	)
Vested-issued and repurchased for income tax withholding		(34,379	)
Forfeited		(21,761	)
Outstanding on September 30, 2022		296,725

The value of ~~$10.9 million~~the restricted stock is being charged to compensation expense over the vesting period. Compensation expense includes expense related to restricted stock units of $298 and $1,026 for the three and nine months ended September 30, ~~2020.~~

~~Net revenues~~2022 and ~~gross profit~~$231 ~~—For~~and $789 for the three and nine months ended September 30, 2021 ~~net revenues~~respectively. Additional compensation expense related to restricted stock units will be $228, $769 and ~~gross profit were $158.1~~$509 for the remainder of 2022, 2023 and 2024, respectively.

Restricted Stock Award with Market Conditions

On May 3, 2022, in connection with J. Michael Coffey’s appointment as the Company’s Chief Executive Officer as of April 11, 2022, he was granted 490,000 restricted stock units that vest upon attainment of certain stock price hurdles of the Company’s stock. The restricted stock units can only be received on an annual basis from the vesting start date. The fair value of the market conditions award was $2.2 million calculated by using the Monte Carlo Simulation based on the average of 20,000 simulation runs. The requisite service period used was three years, expected volatility was 60% and ~~$28.3 million, respectively. Gross profit as a percent~~the risk-free rate of ~~revenues~~return was ~~17.9%~~2.94%. The value of the restricted stock units granted to Mr. Coffey is being charged to compensation expense over the requisite service period. Under ASC 718-10-35-2, compensation cost for the award of share-based compensation is recognized over the derived service periods (the time from the service inception date to the expected date of satisfaction) of either 12 or 24 months depending on the particular tranche based on the median number of days it takes for the award to vest in scenarios where they meet their threshold. Compensation expense related to restricted stock units was $386 and $566 for the three and nine months ended September 30, ~~2021. For~~2022, respectively. Additional compensation expense related to Mr. Coffey’s restricted stock units will be $340, $990 and $269 for the remainder of 2022, 2023 and 2024, respectively.

Restricted Stock Award with Market and Performance Conditions

On May 3, 2022, in connection with his appointment, Mr. Coffey was also granted 100,000 restricted stock units that vest upon a change in control in which the per share consideration for the Company’s common stock exceeds $10.00. The fair value of the market and performance conditions award was $481, calculated by using the Black-Scholes Option Pricing Model. The requisite service period used for the calculation was three years, expected volatility was 60% and the risk-free rate of return was 2.95%. The fair value of stock-based compensation for market and performance conditions will be recognized in the Company’s financial statements only if it is probable that the conditions will be satisfied.

Stock Options

On May 3, 2022, in connection with his appointment, Mr. Coffey was also granted 100,000 stock options with an exercise price of $4.13 per share. The options vest ratably on each of the first three anniversary dates of Mr. Coffey’s appointment date, subject to his continued service with the Company on each vesting date. Compensation expense related to the Company’s stock options was $66 and $118 for the three and nine months ended September 30, ~~2020, net revenues~~2022, respectively, compared to $8 and ~~gross profit were $122.3 million~~$27 for the comparable prior periods. Additional compensation expense related to Mr. Coffey’s options will be $66, $159 and ~~$22.4 million,~~$66 for the remainder of 2022, 2023 and 2024, respectively. ~~Gross profit~~


	Grant date 5/3/2022
Dividend yields		—
Expected volatility		55.0	%
Risk free interest rate		3.02	%
Expected life (in years)		6
Fair value of the option granted	$	4.13

15. Legal Proceedings and Other Contingencies

The Company is involved in various legal proceedings, including product liability, employment related issues, and workers’ compensation matters that have arisen in the normal course of operations. The Company has product liability insurance with self-insurance retentions that range from $50 to $500.

When it is probable that a loss has been incurred and it is 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 that is most likely to occur. Certain legal proceedings are at a preliminary stage, and it is not possible to estimate the amount or timing of any cost, if any, to the Company for these cases. However, the Company does not believe that these contingencies, in the aggregate, will have a material adverse effect on the Company.

The Company has been named as a ~~percent~~defendant in several multi-defendant asbestos-related product liability lawsuits. In certain instances, the Company is indemnified by a former owner of ~~revenues~~the product line involved. 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 claims.

On May 5, 2011, Company entered into two separate settlement agreements with two plaintiffs. As of September 30, 2022, the Company has a remaining obligation under these agreements to pay the plaintiffs $855 without interest in 9 annual installments of $95 on or before May 22 of 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 the payment period.

16. Transactions between the Company and Related Parties

In the course of conducting its business, the Company has entered into certain related party transactions.

C&M conducts business with RAM P&E LLC for the purposes of obtaining parts business as well as buying, selling and renting equipment. In 2022, less than $0.1 million was ~~18.3%~~invoiced by C&M through government parts contracts awarded to RAM P&E LLC.

C&M is a distributor of Terex rough terrain and truck cranes. As such, C&M purchases cranes and parts from Terex.

PM is a manufacturer of cranes. PM sold cranes, parts, and accessories to Tadano during 2022 and 2021.

Rabern rents heavy duty and light duty commercial construction equipment, mainly to commercial contractors on a short-term rental basis. Rabern sold a fixed asset to Steven Berner the general manager of Rabern in April 2022, in connection with the Rabern acquisition.

In addition, the Company became the lessee of two buildings from HTS Management LLC (“HTS”), an entity controlled by Mr. Berner, who is a key member of Rabern management. HTS operates as a holding company for property and as a single lessee leasing company for business use property for Rabern. HTS’s ongoing activities preceding and succeeding the Rabern acquisition relate to financing, purchasing, leasing and holding property leased to Rabern. Based on these activities, HTS would be subject to interest rate risk and real estate investment pricing risk related to holding the real estate as an investment. These risks represent the potential variability to be considered as passed to interest holders. Although we have a variable interest through our relationship with Mr. Berner, such variability is not passed on to Rabern in connection with the arrangement, and therefore Rabern is not the primary beneficiary of the VIE. Furthermore, all risks and benefits of the significant activities of HTS are passed to Mr. Berner directly and do not represent a direct or an indirect obligation for Rabern.

As of September 30, 2022 and December 31, 2021, the Company had accounts receivable and payable with related parties as shown below:


		September 30, 2022		December 31, 2021
Accounts Receivable	Terex (1)	$	63	$	—
	RAM P&E (3)		—		—
		$	63	$	—

Accounts Payable	Terex (1)	$	47	$	23
	Tadano (2)		7		180
		$	54	$	203
Net Related Party Accounts Receivable/(Payable)		$	9	$	(203	)

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:


		Three Months Ended September 30, 2022		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
Rent paid:	Rabern Facility (4)	$	160	$	—	$	302	$	—

Sales to:	Terex (1)	$	75	$	1	$	165	$	43
	Tadano (2)		10		13		34		153
	RAM P&E (3)		—		23		27		110
	Steven Berner (5)		—		—		80		—
Total Sales		$	85	$	37	$	306	$	306


Purchases from:	Terex (1)	$	64	$	122	$	203	$	355
	Tadano (2)		—		34		137		130
Total Purchases		$	64	$	156	$	340	$	485

(1)

Terex is a significant shareholder of the Company and conducts business with the Company in the ordinary course of business.

(2)

Tadano is a significant shareholder of the Company and conducts business with the Company in the ordinary course of business.

(3)

RAM P&E is owned by the Company’s Executive Chairman’s daughter.

(4)

The Company leases its four Rabern facilities from an entity controlled by Steven Berner, the General Manager of Rabern. Pursuant to the terms of the lease, the Company makes monthly lease payments of $49. The Company is also responsible for all the associated operations expenses, including insurance, property taxes, and repairs. The leases contain five additional renewal options of five years each.

(5)

The Company sold an automobile to Steven Berner, the General Manager of Rabern, for approximately $80 in April 2022, in connection with the Rabern acquisition.

Note 17. Restructuring

On January 12, 2022, the Company announced a restructuring plan (the “Restructuring”) that will result in the closure of its Badger facility in Winona, Minnesota. As part of the Restructuring, the Company intends to move the manufacturing of its straight mast boom cranes and aerial platforms now produced in Winona, Minnesota, to its Georgetown, Texas, facility. The Restructuring is expected to be completed during 2023.

Restructuring

During the three and nine months ended September 30, ~~2020.~~ 2022, the Company recorded less than $0.1 million of restructuring expense related to severance and travel expenses.

The following is a summary of the Company’s restructuring activities as of September 30, 2022:


	For the Nine Months Ended September 30,
	2022
Balance at beginning of period	$	—
Restructuring expense		61
Balance at end of period	$	61

~~Net revenues increased $35.8~~

Assets held for sale

As of September 30, 2022, the Company had $0.1 million ~~or 29.3%~~classified as assets held for sale in the Condensed Consolidated Balance Sheets. These amounts relate to ~~$158.1~~machinery & equipment in Winona, Minnesota, that are held for sale in connection with the Restructuring. The land and building were sold during April 2022 for approximately $1.8 million.

Note 18. Business Combination

On April 11, 2022, Manitex entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”), with Rabern and Steven Berner. Pursuant to the Purchase Agreement, the Company acquired a 70% membership interest in Rabern for a purchase price of $26.7 million, subject to the various adjustments, escrows and other provisions of the Purchase Agreement. The Rabern acquisition closed on April 11, 2022. A total of $5 million of the purchase price was held in escrow for various purposes, as described in the Purchase Agreement. Rabern is a construction equipment rental provider established in 1984 and primarily serves Northern Texas. The president and founder of Rabern, Steven Berner, retained a 30% ownership interest and continues to run the operation as a stand-alone division of the Company. The purchase price is subject to adjustments based on the final calculation of working capital and the net book value of the rental fleet as of the date of the acquisition. The Company financed the acquisition by borrowings on the Company’s line of credit and a term loan.

The acquisition of Rabern was accounted for as a business combination in accordance with Accounting Standards Codification ASC 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of assets acquired and liabilities assumed in the transaction. The preliminary fair value of the consideration transferred at the acquisition date was $41.3 million. Given the timing of the closing of the acquisition and the time necessary to complete the allocation of the purchase price to the identified assets, the initial accounting for the business combination was not finalized at the time the third quarter 2022 financial statements were issued. Adjustments to the valuation of Rabern’s assets and liabilities may be materially different due to possible changes as the purchase price allocation is completed.

The financial results of Rabern beginning on April 11, 2022 are included in the Company's condensed consolidated financial statements and are reported in the Rental Equipment segment for the periods ended September 30, 2022. The amount of revenue and income from operations associated with the Rabern acquisition from the acquisition date to September 30, 2022 are included in the Company’s condensed consolidated financial statements for the periods ended September 30, 2022.

The following table summarizes the purchase price allocations for the Rabern acquisition as of September 30, 2022:



Total purchase consideration:
Consideration	$	26,737
Revolving loan payoff		14,604
Net purchase consideration		41,341
Allocation of consideration to assets acquired and liabilities assumed:
Cash		2,975
Net working capital		3,723
Other current assets		419
Fixed assets		27,658
Customer relationships		4,500
Trade name and trademarks		1,200
Goodwill		13,252
Deferred tax liability		(2,496	)
Other current liabilities		(926	)
Total fair value of assets acquired		50,305
Less: noncontrolling interests, net of taxes		8,964
Net assets acquired	$	41,341

The fair value of identifiable intangible assets is determined primarily using the relief from royalty approach and multi-period excess earnings method for trademarks and customer relationships, respectively. Fixed asset values were estimated using either the cost or market approach. Goodwill represents the amount by which the purchase price exceeds the estimated fair value of the net assets acquired. The Rabern acquisition was structured as a taxable purchase of 70% of a partnership interest whereby Manitex and Mr. Berner subsequently contributed their respective membership interest in Rabern to a newly formed Delaware corporation. The partnership will

make an IRC Section 754 Election which will give Manitex Section 743(b) step-up in the tax basis in the partnership assets for its acquired membership interest.

The following table summarizes, on an unaudited pro forma basis, the combined results of operations of Rabern as though the acquisition had occurred as of January 1, 2021. The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the acquisition occurred as of January 1, 2021 or of future consolidated operating results.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net revenues	$	65,037		$	56,691		$	200,888		$	173,885
Income before income taxes		(2,878	)		310			(4,938	)		6,719
Net income (loss)		(3,084	)		(912	)		(5,605	)		5,123
Net income (loss) attributable to shareholders of Manitex International, Inc.		(3,372	)		(1,394	)		(5,975	)		4,023
Basic
Net income (loss)		(0.15	)		(0.05	)		(0.28	)		0.26
Net income (loss) attributable to shareholders of Manitex International, Inc.		(0.17	)		(0.07	)		(0.30	)		0.20
Diluted
Net income (loss)		(0.15	)		(0.05	)		(0.28	)		0.26
Net income (loss) attributable to shareholders of Manitex International, Inc.		(0.17	)		(0.07	)		(0.30	)		0.20

Pro forma results presented above primarily reflect the following adjustments:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Amortization	$	—	$	87	$	87	$	261
Depreciation		—		455		455		1,365
Interest expense		—		427		415		1,281
Transaction cost		37		2,236		2,236		2,236
Income tax expense of above items		—		990		97		753

The amortization adjustment for the three and nine months ended September 30, 2022 and 2021 reflects the amortization resulting from ~~$122.3~~the recognition of intangible assets at their fair values. The depreciation adjustment for the three and nine months ended September 30, 2022 and 2021 reflects the incremental depreciation resulting from the measurement of fixed assets at their fair values. The interest expense adjustment for the three and nine months ended September 30, 2022 and 2021 reflects the new revolving credit facility and term debt in connection with the acquisition of Rabern. For the three and nine months ended September 30 2022, the Company recorded less than $0.1 million and $2.2 million of acquisition-related expenses associated with the Rabern acquisition.

Note 19. Segment Information

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by the Chief Executive Officer, who is also the Company’s Chief Operating Decision Maker, for making decisions about the allocation of resources and assessing performance as the source of the Company’s reportable operating segments.

The Company is a leading provider of engineered lifting solutions and equipment rentals. The Company operates in two business segments: the Lifting Equipment segment and the Rental Equipment segment.

Lifting Equipment Segment

The Lifting Equipment segment is a leading provider of engineered lifting solutions. The Company manufactures a comprehensive line of boom trucks, articulating cranes, truck cranes and sign cranes. The Company is also a manufacturer of specialized rough terrain cranes and material handling products. Through PM and Valla, two of the Company's Italian subsidiaries, the Company manufacturers truck- mounted hydraulic knuckle boom cranes and a full range of precision pick and carry industrial cranes using electric, diesel and hybrid power options.

Rental Equipment Segment

Through its recently acquired Rabern subsidiary, the Company’s Rental Equipment segment rents heavy duty and light duty commercial construction equipment, mainly to commercial contractors on a short-term rental basis. The Company also rents equipment to homeowners for do-it-yourself projects.

The following is financial information for our two operating segments: Lifting Equipment and Rental Equipment:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net revenues
Lifting Equipment	$	57,433		$	50,935		$	181,190		$	158,148
Rental Equipment		7,604			—			13,844			—
Total revenue	$	65,037		$	50,935		$	195,034		$	158,148
Operating income (loss)
Lifting Equipment	$	(394	)	$	(155	)	$	(1,925	)	$	2,692
Rental Equipment		1,602			—			2,113			—
Total operating income (loss)	$	1,208		$	(155	)	$	188		$	2,692
Depreciation and amortization
Lifting Equipment	$	1,042		$	1,086		$	3,288		$	3,339
Rental Equipment		1,573			—			3,243			—
Total depreciation and amortization	$	2,615		$	1,086		$	6,531		$	3,339
Capital expenditures
Lifting Equipment	$	189		$	105		$	1,039		$	666
Rental Equipment		3,663			—			12,623			—
Total capital expenditures	$	3,852		$	105		$	13,662		$	666


	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
	Lifting Equipment		Rental Equipment		Total		Lifting Equipment		Rental Equipment		Total
Net sales by country
United States	$	28,283	$	7,604	$	35,887	$	19,078	$	—	$	19,078
Italy		7,983		—		7,983		7,984		—		7,984
Canada		6,129		—		6,129		5,982		—		5,982
Chile		3,057		—		3,057		3,339		—		3,339
France		1,617		—		1,617		1,763		—		1,763
Other		10,364		—		10,364		12,789		—		12,789
Total	$	57,433	$	7,604	$	65,037	$	50,935	$	—	$	50,935

	Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
	Lifting Equipment		Rental Equipment		Total		Lifting Equipment		Rental Equipment		Total
Net sales by country
United States	$	89,974	$	13,844	$	103,818	$	60,900	$	—	$	60,900
Italy		22,649		—		22,649		24,536		—		24,536
Canada		15,872		—		15,872		14,307		—		14,307
Chile		8,601		—		8,601		9,677		—		9,677
France		8,003		—		8,003		8,217		—		8,217
Other		36,091		—		36,091		40,511		—		40,511
Total	$	181,190	$	13,844	$	195,034	$	158,148	$	—	$	158,148


	September 30, 2022						December 31, 2021
	Lifting Equipment		Rental Equipment		Total		Lifting Equipment		Rental Equipment		Total
Assets by country
United States	$	92,237	$	65,511	$	157,748	$	85,244	$	—	$	85,244
Foreign Subsidiaries		81,794		—		81,794		94,531		—		94,531
Total	$	174,031	$	65,511	$	239,542	$	179,775	$	—	$	179,775

Note 20. Subsequent Events

On October 19, 2022, the Company agreed to settle various claims made by Custom Truck One Source, L.P. (“Custom Truck”) in connection with the sale of our Load King business to Custom Truck in 2015. In connection with this settlement, the Company agreed to pay Custom Truck an aggregate sum of $2.9 million, payable in ten equal quarterly installments, without interest.

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Recent Developments

Impact of COVID-19

The COVID-19 pandemic has significantly impacted our ability to meet demand for the Company’s products. While these impacts began to subside in 2021 and continue to decrease in 2022, the Company experienced, and is still experiencing, supply chain and logistic constraints and increased costs that negatively impact its ability to manufacture and ship products to meet customer requirements.

Business Overview

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 Quarterly Report on Form 10-Q.

Backlog

The Company’s backlog was approximately $207 million and $189 million at September 30, 2022 and December 31, 2021, respectively.

Acquisition of Rabern Rentals

On April 11, 2022, the Company entered into a Membership Interest Purchase Agreement to acquire a 70% membership interest in Rabern Rentals, LLC (“Rabern”), which acquisition also closed on April 11, 2022. Rabern rents heavy duty and light duty commercial construction equipment, mainly to commercial contractors on a short-term rental basis. Rabern also rents equipment to homeowners for do-it-yourself projects.

Amarillo National Bank Financing

Also on April 11, 2022, the Company entered into a Commercial Credit Agreement (the “Credit Agreement”), by and among the Company, the Company’s domestic subsidiaries and Amarillo National Bank, which provides for a $40 million revolving credit facility that matures on April 11, 2024, a $30 million revolving credit facility that matures on April 11, 2024 and a $15 million term loan that matures on October 11, 2029. This new banking facility provided the funds for the Rabern acquisition and working capital facilities for both the Manitex and Rabern businesses.

CIBC Loan Agreement Payoff

In connection with the Rabern acquisition and the entry by the Company into the Credit Agreement, on April 11, 2022, the Company repaid in full all outstanding indebtedness and other amounts outstanding of approximately $12.8 million, and terminated all commitments and obligations under, its prior Loan and Security Agreement with CIBC Bank USA (the “Prior Loan Agreement”), which satisfied all of the Company’s debt obligations under the Prior Loan Agreement. The Company was not required to pay any pre-payment premiums as a result of the repayment of indebtedness under the Prior Loan Agreement. In connection with the repayment of such outstanding indebtedness by the Company, all security interests, mortgages, liens and encumbrances granted to the lenders under the Prior Loan Agreement were terminated and released.

Results of Condensed Consolidated Operations

MANITEX INTERNATIONAL, INC.

(In thousands)



	Three Months Ended September 30,
	2022			2021			$ Change			% Change
Net revenues	$	65,037		$	50,935		$	14,102			27.7	%
Cost of sales		52,693			42,899			9,794			17.7
Gross profit		12,344			8,036			4,308			8.1
Operating expenses
Research and development costs		659			772			(113	)		(10.0	)
Selling, general and administrative expenses		10,440			7,419			3,021			41.7
Transaction costs		37			—			37			100.0
Total operating expenses		11,136			8,191			2,945			58.3
Operating income (loss)		1,208			(155	)		1,363			(165.0	)
Other income (expense)
Interest expense		(1,409	)		(490	)		(919	)		91.4
Interest income		-			1			(1	)		(50.0	)
Foreign currency transaction gain (loss)		175			(121	)		296			(267.1	)
Other income (expense)		(2,852	)		(102	)		(2,750	)		14,380.0
Total other income (expense)		(4,086	)		(712	)		(3,374	)		(106.5	)
Income (loss) before income taxes		(2,878	)		(867	)		(2,011	)		(132.9	)
Income tax expense		206			234			(28	)		(26.8	)
Net income (loss)		(3,084	)		(1,101	)		(1,983	)		(139.2	)
Net income attributable to noncontrolling interest		288			—			288			100.0	%
Net income (loss) attributable to shareholders of Manitex International, Inc.	$	(3,372	)	$	(1,101	)	$	(2,271	)		206.3	%

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Net revenues and gross profit

Net revenues increased $14.1 million or 27.7% to $65.0 million for the three months ended September 30, 2022 from $50.9 million for the comparable period in ~~2020.~~2021. The increase in revenues is primarily due to the acquisition of Rabern and increases in sales of straight mast cranes ~~from~~by the Company’s ~~United States subsidiaries and increases~~U.S. subsidiaries. Increases in sales of ~~knuckle boom cranes and aerial platforms from the Company’s~~PM Cranes were offset by foreign ~~subsidiaries, primarily due to the partial recovery in the global market from the COVID-19 pandemic and a favorable impact by a stronger Euro, which accounted for approximately $5.6~~currency changes of $4.6 million.

Our gross profit increased ~~$5.8~~$4.3 million to ~~$28.3~~$12.3 million for the ~~nine~~three months ended September 30, ~~2021 compared to~~2022 from $8.0 million for the ~~prior~~comparable period in ~~2020.~~2021. The increase in gross profit is attributable to increases in revenues due to the Rabern acquisition and ~~product mix~~increases in sales of straight mast cranes partially offset by higher material ~~cost due to steel surcharges and higher other material~~ costs. The ~~decrease~~increase in gross profit percentage is primarily driven by ~~product mix as lower margin products were sold~~the Rabern acquisition and ~~higher~~price surcharges on Manitex Cranes offset by material cost inflation due to disruptions in the supply chain.

Research and development — Research and development expense was $0.7 million for the ~~nine~~three months ended September 30, ~~2021.~~

~~Research and development~~ ~~—Research and development expense was $2.4 million for the nine months ended September 30, 2021~~2022 compared ~~with $2.2~~to $0.8 million for the same period in ~~2020.~~2021. The Company’s research and development spending reflects our continued commitment to develop and introduce new products that give the Company a competitive advantage.

Selling, general and administrative expense ~~—SG~~— SG&A expense for the three months ended September 30, 2022 was $10.4million compared to $7.4 million for the comparable period in 2021, an increase of $3.0 million. The increases are primarily related to SG&A expense of $1.3 million related to the Rabern acquisition, increased wages and benefits of $0.6 million, stock compensation of $0.5 million, severance charges of $0.3 million, increased professional fees of $0.2 million and building maintenance cost of $0.2 million.

Transaction costs — Transaction costs for the three months ended September 30, 2022 was less than $0.1 million related to deal costs in connection with the Rabern acquisition.

Interest expense —Interest expense was $1.4 million for the three months ended September 30, 2022 compared to $0.5 million for the comparable period in 2021. The increase in interest expense are due to higher debt and interest rates due to the new credit facilities and term debt added in connection with the Rabern acquisition.

Foreign currency transaction losses — For the three months ended September 30, 2022, the Company had foreign currency gain of $0.2 million compared to a loss of $0.1 million for the comparable period in 2021. A substantial portion of the gain relate to changes in the Chilean peso.

Other income (expense) — Other expense was $2.9 million for the three months ended September 30, 2022 driven by the proposed settlement with Custom Truck One Source, L.P. in connection with the sale of our Load King business in 2015 compared to other expense of $0.1 million for the comparable period in 2021.

Income taxes — For the three months ended September 30, 2022, the Company recorded an income tax provision of $0.2 million. The calculation of the overall income tax provision for the three months ended September 30, 2022 primarily consists of US federal income taxes for Rabern which is a separate taxpayer for US federal tax purposes, foreign income taxes, a discrete income tax benefit for a reduction in the valuation allowance recorded against state tax credits in connection with the Rabern acquisition, and a discrete income tax benefit related to the expiration of the statutes of limitations for a foreign jurisdiction. For the three months ended September 30, 2021, the Company recorded an income tax provision of $0.2 million, which includes a discrete income tax expense of $0.01 million. The calculation of the overall income tax provision for the three months ended September 30, 2021 primarily consists of foreign income taxes and a discrete tax expense primarily for the accrual of interest related to unrecognized tax benefits.

The effective tax rate for the three months ended September 30, 2022 was an income tax provision of 7.2% on pretax loss of $2.9 million compared to an income tax provision of 27.0% on a pretax loss of $0.9 million in the comparable prior period. The effective tax rate for the three months ended September 30, 2022 differs from the U.S. statutory rate of 21% primarily due to a valuation allowance in the U.S., a reduction in the valuation allowance recorded against state tax credits in connection with the Rabern acquisition, a partial valuation allowance in Italy, nondeductible foreign permanent differences, income taxed in foreign jurisdictions at varying tax rates and a reduction in the uncertain position liability for the expiration of the statutes of limitations for a foreign jurisdiction.


	Nine Months Ended September 30,
	2022			2021			$ Change			% Change

Net revenues	$	195,034		$	158,148		$	36,886			23.3	%
Cost of sales		160,198			129,867			30,331			23.6
Gross profit		34,836			28,281			6,555			11.1
Operating expenses
Research and development costs		2,095			2,357			(262	)		(9.4	)
Selling, general and administrative expenses		30,317			23,232			7,085			25.7
Transaction costs		2,236			—			2,236			100.0
Total operating expenses		34,648			25,589			9,059			35.1
Operating income (loss)		188			2,692			(2,504	)		(135.8	)
Other income (expense)
Interest expense		(2,982	)		(1,573	)		(1,409	)		45.2
Interest income		3			7			(4	)		(50.0	)
Gain on Paycheck Protection Program loan forgiveness		-			3,747			(3,747	)		(100.0	)
Foreign currency transaction gain (loss)		268			(421	)		689			(131.0	)
Other income (expense)		(1,864	)		(117	)		(1,747	)		(6,686.7	)
Total other income (expense)		(4,575	)		1,643			(6,218	)		(120.8	)
Income (loss) before income taxes		(4,387	)		4,335			(8,722	)		(129.0	)
Income tax expense		570			843			(273	)		(40.2	)
Net income (loss)		(4,957	)		3,492			(8,449	)		(140.8	)
Net income attributable to noncontrolling interest		442			—			442			100.0	%
Net income (loss) attributable to shareholders of Manitex International, Inc.	$	(5,399	)	$	3,492		$	(8,891	)		-254.6	%

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Net revenues and gross profit

Net revenues increased $36.8 million or 23.3% to $195.0 million for the nine months ended September 30, 2022 from $158.1 million for the comparable period in 2021. The increase in revenues is primarily due to increases in sales of straight mast cranes by the Company’s U.S. subsidiaries and the acquisition of Rabern. Increases in sales of PM Cranes were offset by foreign currency changes of $11.1 million.

Our gross profit increased $6.6 million to $34.8 million for the nine months ended September 30, 2022 from $28.3 million for the comparable period in 2021. The increase in gross profit is attributable to increases in revenues due to increases in sales of straight mast cranes and the acquisition of Rabern and partially offset by higher material costs. The increase in gross profit percentage is primarily driven by the Rabern acquisition and price surcharges from the Manitex business offset by material cost inflation due to disruptions in the supply chain.

Research and development — Research and development expense was $2.1 million for the nine months ended September 30, 2022 compared to $2.4 million for the same period in 2021. The Company’s research and development spending reflects our continued commitment to develop and introduce new products that give the Company a competitive advantage.

Selling, general and administrative expense — SG&A expense for the nine months ended September 30, ~~2021~~2022 was ~~$23.2~~$30.3 million compared to ~~$21.2~~$23.2 million for the comparable period in ~~2020,~~2021, an increase of ~~$2.0~~$7.1 million.The increases are primarily related to ~~higher bonus accrual in 2021, higher~~additional SG&A expense of $2.3 million related to the Rabern acquisition, severance charges of $1.2 million, stock compensation ~~expense, higher~~of $0.9 million, increased wages and benefits of $0.9, increased professional fees ~~higher advertising, higher sales commissions, aided by an unfavorable impact~~ of ~~a stronger euro, which accounted for approximately~~ $0.7 million ~~offset by trade show expenses that did not recur in 2021.~~and higher amortization expense of $0.4 million.

~~Impairment of goodwill and intangibles-~~ Transaction costs~~For~~ — Transaction costs for the nine months ended September 30, ~~2021,~~2022 were $2.2 million related to deal costs in connection with the ~~Company had no impairment of goodwill or intangibles compared to $6.7~~Rabern acquisition.

Interest expense — Interest expense was $3.0 million for the nine months ended September 30, 2020. The impairment in 2020 was driven by the COVID-19 pandemic which caused a decrease in the Company’s market capitalization causing a triggering event which resulted in a $6.6 million goodwill impairment charge and a $0.1 million tradename impairment charge during 2020.

~~Interest expense~~ ~~—Interest expense was $1.6 million for the nine months ended September 30, 2021~~2022 compared to ~~$2.8~~$1.6 million for the comparable period in ~~2020.~~2021. The ~~decrease~~increase in interest expense isare due to ~~lower~~higher debt ~~driven by~~and interest rates due to the ~~pay-off of the convertible notes in December 2020~~new credit facilities and ~~principal payments made on the~~ term debt added in ~~2020.~~connection with the Rabern acquisition.

Gain on Paycheck Protection Program loan forgiveness ~~—Gain~~— Gain on loan forgiveness was $3.7 million for the nine months ended September 30, 2021, due to the paycheck protection program loan forgiveness by the SBA. The gain on loan forgiveness is not subject to U.S. taxation. This deductible permanent difference is offset by a change in the U.S. valuation allowance and therefore has no impact on the effective tax rate.Small Business Administration.

~~Gain on extinguishment of debt~~Foreign currency transaction losses ~~—For~~— For the nine months ended September 30, ~~2020, the Company paid off a portion of the PM term and unsecured debt at a 15% discount to its face value which resulted in a gain of $0.6 million.~~

~~Foreign currency transaction losses~~ ~~—For the nine months ended September 30, 2021,~~2022, the Company had foreign currency ~~losses~~gains of ~~$0.4~~$0.3 million compared to ~~$0.7~~currency losses of $0.4 million for the comparable period in ~~2020.~~2021. A substantial portion of the losses relate to changes in the ~~Argentinian peso and British pound.~~Chilean peso.

Other ~~expense~~income (expense) —Other expense was ~~$0.1~~$1.9 million for the nine months ended September 30, ~~2021~~2022 compared to ~~$0.5~~$0.1 million for the comparable period in ~~2020.~~2021. The ~~decrease~~increase in other expense ~~is primarily~~was driven by the proposed settlement of $2.9 million with Custom Truck One Source, L.P. in connection with the sale of our Load King business in 2015 partially offset by other income due to a ~~legal settlement in 2020.~~gain on sale of a building associated with the Badger restructuring and the reversal of a previously recorded contingent liability consideration.

Income ~~tax~~taxes — ~~On March 27, 2020,~~For the ~~“Coronavirus Aid, Relief~~nine months ended September 30, 2022, the Company recorded an income tax provision of $0.6 million, which includes a discrete income tax benefit of $0.2 million. The calculation of the overall income tax provision for the nine months ended September 30, 2022 primarily consists of US federal income taxes for Rabern which is a separate taxpayer for US federal tax purposes, foreign income taxes, a discrete income tax benefit for a reduction in the valuation allowance recorded against state tax credits in connection with the Rabern acquisition, and ~~Economic Security (CARES) Act” was enacted. The CARES Act, among other things, includes provisions relating to net operating loss carrybacks, alternative minimum~~a discrete income tax ~~credit refunds, a modification~~benefit related to the ~~net interest deduction~~expiration of the statutes of limitations for various state and ~~a technical correction to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on the Company’s condensed consolidated financial statements.~~

foreign jurisdictions. For the nine months ended September 30, 2021, the Company recorded an income tax provision of ~~$0.9~~$0.8 million, which includes a discrete income tax benefit of $0.5 million. The calculation of the overall income tax provision for the nine months ended September 30, 2021 primarily consists of foreign income taxes and a discrete income tax benefit related to the expiration of the ~~statute~~statutes of limitations for various state and foreign jurisdictions. For the nine months ended September 30, 2020, the Company recorded an income tax benefit of $0.2 million, which includes a discrete income tax benefit of $0.4 million. The calculation of the overall income tax benefit for the nine months ended September 30, 2020 primarily consist of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for various state and foreign jurisdictions, and the settlement of the Romanian tax audit for 2017 and 2018.

The effective tax rate for the nine months ended September 30, ~~2021~~2022 was an income tax provision of ~~19.5%~~13.0% on pretax ~~income~~loss of ~~$4.3~~$4.4 million compared to an income tax ~~benefit~~provision of ~~1.7%~~19.4% on a pretax ~~loss~~income of ~~$11.1~~$4.3 million in the comparable prior period. The effective tax rate for the nine months ended September 30, ~~2021~~2022 differs from the U.S. statutory rate of 21% primarily due to a valuation allowance in the U.S. ~~and~~, a reduction in the valuation allowance recorded against state tax credits in connection with the Rabern acquisition, a partial valuation allowance in Italy, nondeductible foreign permanent differences, income taxed in foreign jurisdictions at varying tax rates, and a ~~decrease~~reduction in ~~unrecognized tax benefits related to~~the uncertain position liability for the expiration of the statute of limitations for various state and foreign ~~jurisdictions, and the tax effects of settling the Romanian tax audit for 2017 and 2018.~~jurisdictions.

Liquidity and Capital Resources

The ultimate duration and severity of the COVID-19 pandemic remains highly uncertain at this time. Accordingly, its impact on the global economy generally and our customers and suppliers specifically, as well as the potential negative financial impact to our results of operations and liquidity position cannot be reasonably estimated at this time, but could be material. In the context of these uncertain conditions, we are actively managing the business to maintain cash flow and ensure that we have sufficient liquidity for a variety of scenarios. We believe that such strategy will allow us to meet our anticipated funding requirements.

~~Cash, cash equivalents and restricted cash were $17.6 millionand $17.4 million~~ ~~at September 30, 2021 and December 31, 2020. In addition,~~On April 11, 2022, the Company ~~has a U.S. revolving~~entered into an $85 million credit facility with Amarillo National Bank consisting of a ~~maturity date~~working capital facility of ~~July 20, 2023.~~$40 million, working capital facility of $30 million, and $15 million term loan facility. This new banking facility provided

the funds for the Rabern acquisition and working capital facilities for both the Manitex and Rabern businesses. At September 30, ~~2021, the Company had approximately $10.7 million available to borrow under its U.S. revolving credit facility.~~

~~At September 30, 2021,~~2022, the PM Group had established working capital facilities with five Italian, one Spanish, ~~and eleven~~twelve South American ~~banks.~~banks and one Romanian bank, which was added in August 2022. Under these facilities, the PM Group can borrow ~~$21.8~~$19.2 million against orders, invoices and letters of credit. At

Cash, cash equivalents and restricted cash were $11.9 millionand $21.6 million at September 30, ~~2021,~~2022 and December 31, 2021. At September 30, 2022, the ~~PM Group~~Company had global liquidity of approximately $32 million based on the cash balance and availability under ~~these facilities of $5.0 million.~~its working capital facilities. Future advances are dependent on having available collateral.

If our revenues were to increase significantly in the future, the provision limiting borrowing against accounts receivable and inventory would limit future borrowings. If this were to occur, we would attempt to negotiate higher inventory caps with our banks. There is, however, no assurance that the banks would agree to increase the caps.

The Company expects cash flows from operations and existing availability under the current revolving credit and working capital facilities will be adequate to fund future operations. If, in the future, we were to determine that additional funding is necessary, we believe that it would be available. There is, however, no assurance that such financing will be available or, if available, on acceptable terms.

At September 30, 2022 and December 31, 2021, no customer accounted for 10% or more of the Company’s accounts receivable.

Cash flows for the nine-month period ended September 30, ~~2021~~2022 compared to the nine-month period ended September 30, ~~2020~~2021

Operating Activities - For the nine months ended September 30, ~~2021,~~ 2022, cash flow used in operating activities was $11.3 million compared to cash provided by operating activities ~~was~~of $4.3 ~~million compared to $6.6~~ million for the same period in the prior year. Cash ~~provided~~used by working capital was ~~$0.4~~$13.0 million for the nine months ended September 30, ~~2021~~2022 compared to ~~$4.8~~cash provided by working capital of $0.4 million for the same period in the prior year. The ~~change in accounts receivable used $1.6 million in cash for the nine months ended September 30, 2021 compared~~increase is primarily related to ~~$5.8 million cash provided for the same period in the prior year. Effective accounts payable management generated $10.9 million in cash for the first nine months of 2021 compared~~inventory to $1.8 million used in cash for the same period in the prior year. Inventory represented a cash outflow of $8.9 million for the first nine months of 2021 compared to $0.7 million cash inflow for the same period in the prior year. During April 2020, the Company was granted $3.7 million from a bank under the Paycheck Protection Program. During June 2021, the Company’s loan was forgiven for the entire $3.7 million balance.meet increasing demand and backlog.

Investing Activities - Cash used in investing activities was ~~$0.7~~$50.2 million in the first nine months of ~~2021,~~2022, compared to ~~$1.0~~$0.7 million ~~provided by~~used in investing activities in the same period a year ago. Cash used in the ~~nine-month~~nine month period ended September 30, 2022 was primarily related to cash payments for the Rabern acquisition of $38.4 million, property and equipment purchases of $13.7 million, offset by $1.9 million in proceeds from the sale of the Badger facility and other equipment. Cash used in the nine month period ended September 30, 2021 was related to cash payments for property and equipment and investment in ~~intangibles.~~ intangible assets.

Financing Activities - Cash provided by ~~investing~~financing activities inwas an inflow of $55.5 million for the ~~nine-month period~~nine months ended September 30, ~~2020 related to proceeds from~~2022 which included an increase in borrowings on the ~~sale~~revolving credit facility in connection with the Rabern acquisition of ~~Sabre~~$46.7 million, borrowings on the term loan in connection with the Rabern acquisition of $15.0 million, additional borrowings on the revolving credit facility of $6.7 million, working capital borrowing of $0.9 million and borrowings for insurance agreements and finance leases of $0.9 million, offset by ~~cash payments property~~repayment of previous revolving credit facility of $12.8 million and ~~equipment.~~

~~Financing Activities -~~ notes of $1.1 million. Cash used in financing activities was an outflow of $1.9 million for the nine months ended September 30, 2021 which included a decrease in working capital borrowing of $1.3 million, ~~and~~ repayments of notes of $1.1 million and payments on capital lease obligations of $0.3 million, offset by borrowings for insurance agreements of $0.7 million. ~~Cash used in financing activities was an outflow of $8.4 million~~

Critical Accounting Policies

The Company’s critical accounting policies have not materially changed since the Company’s Annual Report on Form 10-K for the ~~nine months~~fiscal year ended September 30, 2020, which included repayments of the convertible debt of $7.0 million, note payments of $5.9 million, and repayments on the revolving credit facility of $3.5 million offset borrowings on the revolving credit facility of $8.5 million.

~~Off-Balance Sheet Arrangements~~

CIBC has issued 2 standby letters of credit at September 30, 2021. The first standby letter of credit is $0.2 million in favor of an insurance carrier to secure obligations which may arise in connection with future deductible payments that may be incurred under the Company’s worker’s compensation insurance policies. The second standby letter of credit is less than $0.1 million in favor of a governmental agency to secure obligations which may arise in connection with worker’s compensation claims.

~~Related Party Transactions~~

~~See Note 16, Transactions between the Company and Related Parties, in the accompanying Condensed Consolidated Financial Statements for a description of the Company’s related party transactions.~~

~~Critical Accounting Policies~~

December 31, 2021 was filed. See Item 7, Management’s Discussion and Analysis of Results of Operations and Financial Condition, in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 for a discussion of the Company’s critical accounting policies.

~~Impact of Recently Issued Accounting Standards~~

~~See Note 2, in the accompanying Condensed Consolidated Financial Statements for a summary of recently issued accounting standards.~~

Item 3—Quantitative and Qualitative Disclosures about Market Risk

~~The Company’s market risk disclosures have not materially changed since the Annual Report on Form 10-K~~Not required for the fiscal year ended December 31, 2020 was filed. The Company’s quantitative and qualitative disclosures about market risk are incorporated by reference from Part II, Item 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.Smaller Reporting Companies.

Item 4—Controls and Procedures

Disclosure Controls and Procedures

With the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) and under the supervision of the Audit Committee of the Board of Directors, our management conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of September 30, 2021. Our management’s evaluation has identified certain material weaknesses in its internal control over financial reporting as further described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.2022. Based on ~~the~~that evaluation, ~~of these material weaknesses,~~ our Chief Executive Officer and Chief Financial Officer ~~have~~ concluded that ~~the Company’s~~our disclosure controls and procedures, ~~were not effective~~ as of September 30, ~~2021 to ensure~~2022, were effective and provided reasonable assurance that the information required to be disclosed ~~by the Company~~ in the reports that ~~it files~~we file or ~~submits~~submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and ~~forms. Despite the existence of these material weaknesses, our Chief Executive Officer~~forms, and ~~Chief Financial Officer have concluded~~ that ~~the condensed consolidated financial statements in this Quarterly Report fairly present, in all material respects, our financial position, results of operations~~such information is accumulated and ~~cash flows~~communicated to management as ~~of the dates, and for the periods, presented, in conformity with GAAP.~~appropriate to allow timely decisions regarding required disclosure.

~~Internal Control over Financial Reporting~~

Our Chief Executive Officer and Chief Financial Officer have determined that there were deficiencies in our internal control over financial reporting that constitute material weaknesses, as defined by SEC regulations, at September 30, 2021, with respect to procedures for:

We did not maintain an effective control environment over information technology general controls, based on the criteria established in the COSO framework, to enable identification and mitigation of risks of material accounting errors.

The Company historically has acquired a number of non-public companies. In the course of integrating these companies’ financial reporting methods and systems with those of the Company, the Company has not effectively designed and implemented effective internal control activities, based on the criteria established in the COSO framework, across the organization in connection with such acquisitions. We have identified deficiencies in the principles associated with the control activities component of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to (i) our ability to attract, develop, and retain sufficient personnel to perform control activities, (ii) selecting and developing control activities that contribute to the mitigation of risks and support achievement of objectives, (iii) deploying control activities through consistent policies that establish what is expected and procedures that put policies into action, and (iv) holding individuals accountable for their internal control related responsibilities.

Accordingly, our Chief Executive Officer and Chief Financial Officer have concluded that our internal control over financial reporting and disclosure controls and procedures, as defined by SEC regulations, were not effective at September 30, 2021.

~~Management’s Remediation Activities~~

During 2021, management continued to invest significant time and effort to remediate the remaining two material weaknesses identified in 2018. The Company continued to progress on implementing Enterprise Resource Planning (“ERP”) software in the Company’s U.S. subsidiaries. In Italy, the Company is working towards the implementation of a new ERP system. In addition, the Company continued to progress on the remediation of the remaining control deficiencies, as discussed further below.

Other than the changes disclosed above, there were no changes in internal control over financial reporting (as defined by Rules 13a-15 and 15d-15) that occurred during the nine months ended September 30, 2021, that have materially affected, or are likely to materially affect, the Company's internal control over financial reporting.

~~Plan for Remediation of the Material Weaknesses~~Changes in Internal Control Over Financial Reporting

~~Management has been actively engaged in the planning~~The Company's management is responsible for establishing and implementation of, remediation efforts to address the remaining material weaknesses, as well as other identified areas of risk. These remediation efforts, outlined below, are intended both to address the identified material weaknesses and to enhance the Company’s overall financial control environment. Management’s ongoing actions and planned actions for fiscal year 2021 to further address these issues include:

•

During 2021, the Company continues to work toward completion of the Company’s U.S planned ERP implementation and is progressing with the implementation of the ERP software at our remaining United States subsidiaries. In July 2021, one of the U.S subsidiaries implemented the new ERP software;

•

During 2021, the Company is progressing with the implementation of a new ERP system in certain international locations, including Italy. The Company has hired a new senior IT employee to manage the implementation of the new system;

•

The Company continues to strengthen its control environment to reduce or eliminate our control deficiencies. Considerable progress has been made to implement additional controls to remediate control deficiencies. Certain manual controls have been implemented to address IT control deficiencies until an automated solution can be developed; and

•

~~Executive oversight will continue to be improved through additional reporting requirements, reviews and meetings.~~

Management continues to execute on the plan that has been provided to the audit committee for the implementation of the foregoing remedial measures (to the extent not already completed) and the audit committee will continue to monitor the anticipated timetable. Management continues to monitor completion of actions as outlined in the plan and have been providing updates to the audit committee on a periodic basis.In addition, under the direction of the audit committee, management will continue to review and make necessary changes to the overall design of the Company’s internal control environment, as well as policies and procedures to improve the overall effectiveness ofmaintaining adequate internal control over financial ~~reporting.~~

~~Management believes~~reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). During the ~~measures described above will remediate the control deficiencies~~period covered by this report, the Company ~~has identified and strengthen~~made no changes that have materially affected, or that are reasonably likely to materially affect, its internal control over financial reporting. Management is committed to continuous improvement of the Company’s internal control processes and will continue to diligently review the Company’s financial reporting controls and procedures. As management continues to evaluate and work to improve internal control over financial reporting, the Company may determine to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures described above.

PART II—OTHER INFORMATION

Item 1—Legal Proceedings

The information set forth in Note 15 (Legal Proceedings and Other Contingencies) to the accompanying Condensed Consolidated Financial Statements included in Part I. Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q is incorporated herein by reference.

Item 1A—Risk Factors

AsExcept as set forth below, as of the date of this filing, there have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K filed for the fiscal year ended December 31, ~~2020.~~2021.

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 continue to do so in the future;

•

cash requirements to finance business growth;

•

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;

•

general economic and political conditions internationally, including the ongoing war between Russia and Ukraine; and

•

public health concerns, including the ongoing COVID-19 pandemic.

Additionally, changes to the United States’ participation in, withdrawal from, renegotiation of certain international trade agreements or other major trade related issues including the non-renewal of expiring favorable tariffs granted to developing countries, tariff quotas and retaliatory tariffs, trade sanctions, new or onerous trade restrictions, embargoes and other stringent government controls could have a material adverse effect on our business, results of operations and financial condition.

The reporting currency for our consolidated financial statements is the U.S. Dollar. Certain of our assets, liabilities, expenses, revenues and earnings are denominated in other countries’ currencies, including the Euro, Chilean Peso and Argentinean Peso. Those assets, liabilities, expenses, revenues and earnings are translated into U.S. Dollars at the applicable exchange rates to prepare our consolidated financial statements. Therefore, increases or decreases in exchange rates between the U.S. Dollar and those other currencies affect the value of those items as reflected in our consolidated financial statements, even if their value remains unchanged in their original currency.

In connection with the ongoing war between Russia and Ukraine, the U.S. government has imposed enhanced export controls on certain products and sanctions on certain industry sectors and parties in Russia. The Company is not accepting orders from Russia at this time. This region does not represent a material portion of our international operations, and we do not rely on any material goods from suppliers in the region. However, the fluidity and continuation of the conflict may result in additional economic sanctions and other impacts which could have a negative impact on the Company’s financial condition, results of operations and cash flows. These include decreased sales; supply chain and logistics disruptions; volatility in foreign exchange rates and interest rates; inflationary pressures on raw materials and energy and heightened cybersecurity threats.

The risks that the Company faces in its international operations may continue to intensify if the Company further develops and expands its international operations.

Item 2—Unregistered Sales of Equity Securities and Use of Proceeds.

The Company’s ~~credit agreement~~Credit Agreement with ~~CIBC~~Amarillo National Bank directly restricts the Company’s ability to declare or pay dividends without ~~CIBC’s~~Amarillo’s consent. In addition, pursuant to the Company’s ~~credit agreement~~Credit Agreement with ~~CIBC and other lenders,~~Amarillo National Bank, the ~~Company~~Company’s U.S. subsidiaries must maintain a debt service coverage ratio of at least 1.25:1.00 and a net worth for U.S. entities of at least $80 million, each as ~~specified in~~measured on the ~~agreements certain fixed coverage ratios and debt to EBITDA ratios.~~last date of each calendar quarter, beginning June 30, 2022.

ISSUER PURCHASES OF EQUITY SECURITIES

~~Period~~

~~(a) Total~~

~~Number of~~

~~Shares~~

~~(or Units)~~

~~Purchased~~

~~(b) Average~~

~~Price Paid~~

~~per Share~~

~~(or Unit)~~

~~(c) Total~~

~~Number of~~

~~Shares~~

~~(or Units)~~

~~Purchased as~~

~~Part of~~

~~Publicly~~

~~Announced~~

~~Plans or~~

~~Programs~~

~~(d) Maximum~~

~~Number (or~~

~~Approximate~~

~~Dollar Value)~~

~~of Shares~~

~~(or Units) that~~

~~May Yet Be~~

~~Purchased~~

~~Under the~~

~~Plans or~~

~~Programs~~

~~July 1—July 31, 2021~~

—

~~August 1—August 31, 2021~~

—

~~September 1—September 30, 2021~~

—


Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1—July 31, 2022		4,725	$	6.27		—		—
August 1—August 31, 2022		—		—		—		—
September 1—September 30, 2022		—		—		—		—
		—	$	—		—		—

Item 3—Defaults Upon Senior Securities

~~None~~None.

Item 4—Mine Safety Disclosures

Not applicable.

Item 5—Other Information

None.

Item 6—Exhibits

See the Exhibit Index set forth below for a list of exhibits included with this Quarterly Report on Form 10-Q.

EXHIBIT INDEX


Exhibit Number		Exhibit Description

31.1*10.1		Third Amendment to Rights Agreement dates as of September 19, 2022, by and between the Company and American Stock Transfer and Trust Company, LLC, as Rights Agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on September 20, 2022).

31.1*		Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification by the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

104		Cover Page Interactive Data File-The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

*	~~Filed herewith~~

* Filed herewith

** Furnished herewith

SIGNATURES

~~Furnished herewith~~

~~SIGNATURES~~

Pursuant to the requirements 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.

November ~~8, 2021~~3, 2022


		By:		/s/ ~~STEVE FILIPOV~~MICHAEL COFFEY
				~~Steve Filipov~~Michael Coffey
				Chief Executive Officer ~~and Director~~
				(Principal Executive Officer)

November ~~8, 2021~~3, 2022


		By:		/s/ JOSEPH DOOLAN
				Joseph Doolan
				Chief Financial Officer (Principal Financial and Accounting Officer)

4039


Michigan		42-1628978
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

9725 Industrial Drive, Bridgeview, Illinois		60455
(Address of Principal Executive Offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	MNTX	The NASDAQ Stock Market LLC
Preferred Share Purchase Rights	N/A	The NASDAQ Stock Market LLC


PART I:		FINANCIAL INFORMATION		4

ITEM 1: Financial Statements (Unaudited)				4

		Condensed Consolidated Balance Sheets as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021	4

	��	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021		5

		Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021		6

		Condensed Consolidated Statement of Shareholders’ Equity for the Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021		7

		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021		8

		Notes to Condensed Consolidated Financial Statements		9

ITEM 2: Management’s Discussion And Analysis Of Financial Condition And Results Of Operations				30

ITEM 3: Quantitative And Qualitative Disclosures About Market Risk				3635

ITEM 4: Controls And Procedures				3635

PART II:		OTHER INFORMATION		3836

ITEM 1: Legal Proceedings				3836

ITEM 1A: Risk Factors				3836

ITEM 2: Unregistered Sales Of Equity Securities And Use Of Proceeds				3837

ITEM 3: Defaults Upon Senior Securities				3837

ITEM 4: Mine Safety Disclosures				3837

ITEM 5: Other Information				3837

ITEM 6: Exhibits				3837


	September 30, 2021			December 31, 2020			September 30, 2022			December 31, 2021
ASSETS
Current assets
Cash	$	17,336		$	17,161		$	11,677		$	21,359
Cash – restricted		228			240			188			222
Trade receivables (net)		31,831			30,418			38,638			30,515
Other receivables		192			179			736			2,039
Related party receivable (net)								9			—
Inventory (net)		64,452			56,055			77,602			64,965
Prepaid expense and other current assets		2,976			2,218			2,552			2,436
Assets held for sale								75			—
Total current assets		117,015			106,271			131,477			121,536
Total fixed assets, net of accumulated depreciation of $18,499 and $17,444 at September 30, 2021 and December 31, 2020, respectively		17,026			18,723
Total fixed assets, net of accumulated depreciation of $19,661 and $18,662 at September 30, 2022 and December 31, 2021, respectively								50,589			16,460
Operating lease assets		3,484			4,068			5,474			3,563
Intangible assets (net)		13,407			15,671			14,511			11,946
Goodwill		26,476			27,472			36,015			24,949
Other long-term assets		1,143			1,143			1,143			1,143
Deferred tax assets		247			247			333			178
Total assets	$	178,798		$	173,595		$	239,542		$	179,775
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	41,666		$	32,429		$	46,967		$	44,136
Accrued expenses		8,720			7,909			14,645			10,539
Related party payables, net		124			52
Related party payables (net)								—			203
Notes payable		14,383			16,510			16,486			18,401
Current portion of finance lease obligations		380			344			487			399
Current portion of operating lease obligations		998			1,167			1,613			1,064
Customer deposits		3,101			2,363			3,435			7,121
Deferred income liability		—			3,747
Total current liabilities		69,372			64,521			83,633			81,863
Long-term liabilities
Revolving term credit facilities, net		12,704			12,606
Notes payable, net		12,684			13,625
Revolving term credit facilities (net)								53,152			12,717
Notes payable (net)								23,829			10,089
Finance lease obligations (net of current portion)		3,931			4,221			3,518			3,822
Non-current operating lease obligations		2,486			2,901
Non-current operating lease obligations (net of current portion)								3,861			2,499
Deferred gain on sale of property		527			587			447			507
Deferred tax liability		1,497			1,333			3,648			1,074
Other long-term liabilities		4,190			4,892			3,575			4,389
Total long-term liabilities		38,019			40,165			92,030			35,097
Total liabilities		107,391			104,686			175,663			116,960
Commitments and contingencies
Equity
Preferred Stock—Authorized 150,000 shares, 0 shares issued or outstanding at September 30, 2021 and December 31, 2020		—			—
Common Stock—no par value 25,000,000 shares authorized, 19,933,130 and 19,821,090 shares issued and outstanding at September 30, 2021, and December 31, 2020, respectively		132,171			131,455
Preferred Stock—Authorized 150,000 shares, no shares issued or outstanding at September 30, 2022 and December 31, 2021								—			—
Common Stock—no par value 25,000,000 shares authorized, 20,099,849 and 19,940,487 shares issued and outstanding at September 30, 2022, and December 31, 2021, respectively								133,249			132,206
Paid in capital		3,057			3,025			3,674			3,264
Retained deficit		(60,371	)		(63,863	)		(73,835	)		(68,436	)
Accumulated other comprehensive loss		(3,450	)		(1,708	)		(8,615	)		(4,219	)
Equity attributable to shareholders of Manitex International, Inc.								54,473			62,815
Equity attributed to noncontrolling interest								9,406			—
Total equity		71,407			68,909			63,879			62,815
Total liabilities and equity	$	178,798		$	173,595		$	239,542		$	179,775


	Nine months ended September 30,						Nine months ended September 30,
	2021			2020			2022			2021
Cash flows from operating activities:
Net income (loss)	$	3,492		$	(11,724	)	$	(4,957	)	$	3,492
Adjustments to reconcile net income (loss) to cash used for operating activities:
Depreciation and amortization		3,339			3,190			6,531			3,339
Gain on sale of discontinued operations		—			(376	)
Gain on Paycheck Protection Program loan forgiveness		(3,747	)		—			—			(3,747	)
Changes in allowances for doubtful accounts		135			18			(678	)		135
Changes in inventory reserves		(1,089	)		(578	)		(1,733	)		(1,089	)
Deferred income taxes		223			(21	)		25			223
Amortization of deferred debt issuance costs		98			161			95			98
Amortization of debt discount		111			454			55			111
Gain on forward currency contract		(385	)		—			(267	)		(385	)
Write down of intangibles		—			137
Write down of goodwill		—			6,585
Gain on extinguishment of debt		—			(595	)
Share-based compensation		816			657			1,710			816
Adjustment to deferred gain on sales and lease back		(60	)		—			(60	)		(60	)
Reserves for uncertain tax provisions		—			(131	)
Gain on disposal of assets								(764	)		—
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(1,550	)		5,775
(Increase) decrease in other receivable		(16	)		70
(Increase) decrease in inventory		(8,921	)		742
(Increase) decrease in prepaid expenses		(738	)		536
(Increase) decrease in other assets		(63	)		1
Increase (decrease) in accounts payables and related party payables		10,872			(1,764	)
Increase in deferred income		—			3,747
Increase (decrease) in accrued expenses		1,385			(216	)
Increase in other current liabilities		871			123
(Decrease) in other long-term liabilities		(515	)		(176	)
Net cash provided by operating activities		4,258			6,615
Increase in accounts receivable								(4,826	)		(1,550	)
Decrease (increase) in other receivables								1,131			(16	)
Increase in inventory								(14,607	)		(8,921	)
Increase in prepaid expenses								(150	)		(738	)
Increase in other assets								(168	)		(63	)
Increase in accounts payables and related party payables								6,475			10,872
Increase in accrued expenses								4,510			1,385
(Decrease) increase in other current liabilities								(3,218	)		871
Decrease in other long-term liabilities								(357	)		(515	)
Net cash (used in) provided by operating activities								(11,253	)		4,258

Cash flows from investing activities:

Proceeds from the sale of discontinued operations		—			1,610
Payments for acquisition, net of cash acquired								(38,366	)		—
Proceeds from the sale of fixed assets								1,909			—
Purchase of property and equipment		(666	)		(619	)		(13,662	)		(666	)
Investment in intangible assets		(51	)		—			(64	)		(51	)
Net cash (used in) provided for investing activities		(717	)		991
Net cash used in investing activities								(50,183	)		(717	)
Cash flows from financing activities:
Borrowings on revolving term credit facility		—			8,500			53,357			—
Payments on revolving credit facility		—			(3,500	)
Payments on convertible debt		—			(7,000	)
Net borrowings on working capital facilities		(1,303	)		(136	)
Payments on revolving term credit facility								(12,800	)		—
Borrowings on term debt								15,000			—
Net borrowings (repayments) on working capital facilities								864			(1,303	)
New borrowings—other		748			—			903			748
Debt issuance costs incurred								(125	)		—
Note payments		(1,083	)		(5,882	)		(1,096	)		(1,083	)
Shares repurchased for income tax withholding on share-based compensation		(48	)		(14	)		(257	)		(48	)
Payments on capital lease obligations		(254	)		(397	)		(313	)		(254	)
Net cash used in financing activities		(1,940	)		(8,429	)
Net increase in cash and cash equivalents		1,601			(823	)
Net cash provided by (used in) financing activities								55,533			(1,940	)
Net (decrease) increase in cash and cash equivalents								(5,903	)		1,601
Effect of exchange rate changes on cash		(1,438	)		806			(3,813	)		(1,438	)
Cash and cash equivalents at the beginning of the year		17,401			23,579
Cash and cash equivalents at end of period	$	17,564		$	23,562
Cash, cash equivalents and restricted cash at the beginning of the year								21,581			17,401
Cash, cash equivalents and restricted cash at end of period							$	11,865		$	17,564
See Note 1 for supplemental cash flow disclosures


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☒

		Emerging growth company	☐

	September 30, 2021			September 30, 2020
Customer deposits	$	2,363		$	1,493
Additional customer deposits received where revenue has not yet been recognized		5,004			4,448
Revenue recognized from customer deposits		(4,106	)		(4,285	)
Effect of change in exchange rates		(160	)		13
	$	3,101		$	1,669

	Fair Value at September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Forward currency exchange contracts	$	—	$	118	$	—	$	118
Total current assets at fair value	$	—	$	118	$	—	$	118
Liabilities:
Valla contingent consideration	$	—	$	—	$	212	$	212
Total recurring liabilities at fair value	$	—	$	—	$	212	$	212

	Fair Value at December 31, 2020
	Level 1		Level 2		Level 3		Total
Liabilities:
Valla contingent consideration	$	—	$	—	$	224	$	224
Forward currency exchange contracts		—		267		—		267
Total liabilities at fair value	$	—	$	267	$	224	$	491

		Fair Value
	Balance Sheet Location	September 30, 2021		December 31, 2020
Asset Derivatives
Foreign currency exchange contract	Prepaid expense and other current assets	$	118	$	—

Liabilities Derivatives
Foreign currency exchange contract	Accrued expenses	$	—	$	267

		Gain (loss)					Gain (loss)
	Location of gain or (loss) recognized in the Statement of Operations	Three Months Ended September 30,					Nine Months Ended September 30,
		2021		2020			2021		2020
Derivatives Not Designated as Hedge Instruments
Forward currency contracts	Foreign currency transaction gains (losses)	$	225	$	(236	)	$	226	$	—
		$	225	$	(236	)	$	226	$	—

	Amount
2022	$	2,267
2023		2,267
2024		2,260
2025		2,220
2026		845
And subsequent		1,024
Total intangibles currently to be amortized		10,883
Intangibles with indefinite lives not amortized		2,524
Total intangible assets	$	13,407

	Total
Balance January 1, 2021	$	27,472
Effect of change in exchange rates		(996	)
Balance September 30, 2021	$	26,476

	September 30, 2021		December 31, 2020
Accrued payroll and employee benefits	$	1,914	$	2,216
Accrued vacation		1,532		1,398
Accrued warranty		1,421		1,292
Accrued income tax and other taxes		1,358		1,127
Accrued interest		448		244
Accrued expenses—other		2,047		1,632
Total accrued expenses	$	8,720	$	7,909

Leases	Classification	September 30, 2021		December 31, 2020
Assets
Operating lease assets	Operating lease assets	$	3,484	$	4,068
Financing lease assets	Fixed assets, net		2,394		2,847
Total leased assets		$	5,878	$	6,915

Liabilities
Current
Operating	Current liabilities	$	998	$	1,167
Financing	Current liabilities		380		344

Non-current
Operating	Non-current liabilities		2,486		2,901
Financing	Non-current liabilities		3,931		4,221
Total lease liabilities		$	7,795	$	8,633

		Three months ended September 30,				Nine months ended September 30,
Lease Cost	Classification	2021		2020		2021		2020
Operating lease costs	Operating lease assets	$	315	$	262	$	1,017	$	793
Finance lease cost
Amortization of leased assets	Amortization		91		79		273		306
Interest on lease liabilities	Interest expense		136		145		416		444
Lease cost		$	542	$	486	$	1,706	$	1,543

	Operating Leases			Capital Leases
2022	$	1,204		$	898
2023		925			925
2024		627			952
2025		431			981
2026		391			1,010
And subsequent		446			1,665
Total undiscounted lease payments		4,024			6,431
Less interest		(540	)		(2,120	)
Total liabilities	$	3,484		$	4,311
Less current maturities		(998	)		(380	)
Non-current lease liabilities	$	2,486		$	3,931

		Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
Rent paid:	Bridgeview Facility (1)		—	$	71		—	$	207

Sales to:	Terex	$	1	$	7	$	43	$	35
	Tadano		13		—		153		612
	RAM P&E (2)		23		—		110		—
Total Sales		$	37	$	7	$	306	$	647


Purchases from:	Terex	$	122	$	94	$	355	$	374
	Tadano		34		11		130		11
Total Purchases		$	156	$	105	$	485	$	385

	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
	2020			2020
Net revenues	$	391		$	3,276
Cost of sales		628			3,594
Selling, general and administrative expenses		246			839
Interest expense		14			62
Other income		377			388
Net loss of discontinued operations before income tax		(120	)		(831	)
Income tax expense related to discontinued operations		4			1
Net loss on discontinued operations	$	(124	)	$	(832	)


		Gain (loss)					Gain (loss)
	Location of gain or (loss) recognized in Statement of Operations	Three Months Ended September 30,					Nine Months Ended September 30,
		2022			2021		2022			2021
Derivatives Not Designated as Hedge Instruments
Forward currency contract	Foreign currency transaction gains (losses)	$	(107	)	$	225	$	(267	)	$	226
		$	(107	)	$	225	$	(267	)	$	226


	September 30, 2022			December 31, 2021
U.S. Credit Facilities	$	53,200		$	12,800
U.S Term Loan		15,000			—
PM Group Short-Term Working Capital Borrowings		14,344			15,676
PM Group Term Loan		10,780			12,472
Other		252			342
Total debt		93,576			41,290
Less: Debt issuance costs		(109	)		(83	)
Debt, net of issuance costs	$	93,467		$	41,207