Exhibit 99.2

UNAUDITED CONDENSED GROUP CONSOLIDATED FINANCIAL

STATEMENTS AS OF AND FOR THE NINE-MONTH ENDED

SEPTEMBER 30, 2014 AND 2013

 

PM GROUP

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Condensed Consolidated Statement of Financial Position (unaudited)

 

(in Euro)						30/09/2014				31/12/2013
NON-CURRENT ASSETS
Tangible assets			(1	)			18,614,976				19,256,205
Goodwill			(2	)			33,192,959				33,192,959
Other intangible assets			(3	)			3,825,746				3,715,926
Investments in other entities							1,560				1,560
Deferred tax assets			(4	)			5,988,051				5,703,493
Other non-current assets							140,870				161,832
Total non-current assets							61,764,162				62,031,975
CURRENT ASSETS
Inventory			(5	)			19,809,268				13,851,167
Trade receivables			(6	)			20,277,192				28,521,700
Current tax receivables							3,059,867				2,066,842
Dividends receivable							300,000				300,000
Cash and cash equivalents			(7	)			1,683,500				2,220,199
Other current assets							1,720,205				1,570,414
Total current assets							46,850,032				48,530,322
Assets held for sale			(26	)			46,798,757				44,640,884
TOTAL ASSETS							155,412,950				155,203,181
LIABILITIES AND SHAREHOLDERS’ EQUITY
Share capital							23,311,420				23,311,420
Reserves							-15,467				-34,324
Accumulated deficit							-50,760,044				-49,299,634
Shareholders’ equity—Group							-27,464,091				-26,022,538
Capital and reserves of non-controlling interests							935,717				905,756
Net profit (loss) attributable to non-controlling interests							-131,310				29,961
Shareholders’ equity attributable to non-controlling interests							804,407				935,717
TOTAL SHAREHOLDERS’ EQUITY							-26,659,684				-25,086,821
NON-CURRENT LIABILITIES
Non-current financial payables			(8	)			717,700				1,137,551
Employee benefits			(9	)			1,352,744				1,413,558
Provisions for risks and charges			(10	)			1,427,880				1,437,325
Deferred tax liabilities			(11	)			3,197,327				3,038,312
Total non-current liabilities							6,695,651				7,026,746
CURRENT LIABILITIES
Current financial payables			(12	)			99,853,416				100,162,961
Liabilities for financial instruments and derivatives			(13	)			1,728,343				2,141,069
Current tax payables							1,859,592				1,624,037
Current trade payables			(14	)			23,046,403				22,131,036
Other current liabilities							3,665,980				4,498,986
Total current liabilities							130,153,734				130,558,089
Liabilities held for sale			(26	)			45,223,248				42,705,167
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY							155,412,950				155,203,181

 

PM GROUP

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Condensed Consolidated Statement of income for the nine-month period ended September 30, 2014 and 2013 (unaudited)

 

(in Euro)						9 M 2014				9 M 2013
Revenue from operating activities			(15	)			53,541,589				50,775,349
Other revenue and income			(16	)			1,470,589				1,243,245
Change in inventories or finished goods and work in progress							2,249,274				-590,896
Increase in non-current assets due to capitalisation of internal costs			(17	)			886,388				1,557,402
Costs of raw material			(18	)			-30,206,923				-25,718,000
Services			(19	)			-9,649,637				-10,176,099
Personnel			(20	)			-12,402,311				-13,384,012
Other operating expenses			(21	)			-1,452,021				-1,968,510
Depreciation and amortisation			(22	)			-1,943,126				-2,526,532
Impairment of tangible assets			(22	)			0				-158,024
Provisions			(23	)			-45,374				-49,452
Operating profit /(loss)							2,448,447				-995,531
Financial income and exchange gains			(24	)			1,466,332				1,429,092
Financial expenses and exchange losses			(24	)			-4,376,074				-4,816,147
Loss before taxation							-461,295				-4,382,586
Taxes on income			(25	)			-770,222				468,422
Net Loss from continuing operations							-1,231,516				-3,914,164
Profit (Loss) from discontinued operations			(26	)			-360,204				364,152
Net Loss for the period							-1,591,720				-3,550,012
Profit (Loss) attributable to non-controlling interests							-131,310				43,978
Net Loss attributable to the Group							-1,460,410				-3,593,990

 

PM GROUP

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Condensed Consolidated statement of comprehensive income for the nine-month period ended September 30, 2014 and 2013 (unaudited)

 

(in Euro)		30/09/2014				30/09/2013
Net Loss for the period (A)			(1,591,720	)			(3,550,012	)
Gains/(losses) from translation into Euro of financial statements of foreign entities			18,857				(4,286	)
Total other items of comprehensive income that will be recycled through the income statement, net of tax effect (b1)			18,857				(4,286	)
Actuarial gains/(losses) from defined benefit plans			0				0
Total other items of comprehensive income that will not subsequently be recycled through the income statement, net of tax effect (b2)			0				0
Total other items of comprehensive income, net of tax effect (b1) + (b2) = (B)			18,857				(4,286	)
Total comprehensive (loss) for the period (A)+(B)			(1,572,863	)			(3,554,298	)
Total comprehensive income (loss) attributable to non-controlling interests			(131,310	)			43,978
TOTAL COMPREHENSIVE (LOSS) ATTRIBUTABLE TO THE GROUP			(1,441,553	)			(3,598,276	)

 

PM GROUP

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Condensed Consolidated Statement of changes in equity (unaudited)

 

(in Euro)		Share capital				Translation reserve				Reserve under IAS 19				Total reserves				Accumulated Deficit				Shareholders’ equity - Group				Capital and reserves of non-controlling interests				Accumulated Profit/(Loss) attributable to non-controlling interests				Shareholders’ equity of non-controlling interests				TOTAL SHAREHOLDERS’ EQUITY
Shareholders’ equity at 01/01/2013			23,311,420				(185,689	)			0				(185,689	)			(12,360,008	)			10,765,723				983,204				(56,954	)			926,250				11,691,973
Movement on translation reserve			0				(4,286	)			0				(4,286	)			0				(4,286	)			1,891				0				1,891				(2,395	)
Effect of Acquisition of 41% of Air Service			0				0				0				0				0				0				(13,494	)			0				(13,494	)			(13,494	)
Loss for period ended September 30, 2013			0				0				0				0				(3,593,990	)			(3,593,990	)			0				43,978				43,978				(3,550,012	)
Shareholders’ equity at 30/09/2013			23,311,420				(189,975	)			0				(189,975	)			(15,953,998	)			7,167,447				971,601				(12,976	)			958,625				8,126,072
Shareholders’ equity at 01/01/2014			23,311,420				(16,889	)			(17,435	)			(34,324	)			(49,299,634	)			(26,022,538	)			962,710				(26,993	)			935,717				(25,086,821	)
Movement on translation reserve			0				18,857				0				18,857				0				18,857				0				0				0				18,857
Loss for period ended September 30, 2014			0				0				0				0				(1,460,410	)			(1,460,410	)			0				(131,310	)			(131,310	)			(1,591,720	)
Shareholders’ equity at 30/09/2014			23,311,420				1,968				(17,435	)			(15,467	)			(50,760,044	)			(27,464,091	)			962,710				(158,303	)			804,407				(26,659,684	)

 

PM GROUP

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Condensed Consolidated Statement of cash flows for the nine-month period ended September 30, 2014 and 2013 (unaudited)

 

(in Euro)		9 M 2014				9 M 2013
Cash flows generated by operating activities
Net Loss for period			(1,591,720	)			(3,550,012	)
Adjustments made in order to reconciile net loss with the cash flows generated by operating activities
- Depreciation and amortization			2,801,958				3,425,856
- Impairment			0				158,024
- Deferred tax/Deferred tax income			(261,454	)			(659,167	)
- Expenses on derivatives			(471,609	)			(968,618	)
- Financial income recognized in Statement of Income			(235,625	)			(399,484	)
- Finance costs recognised in Statement of Income			4,376,442				5,529,618
- Change in Employee Severance Indemnity Provision and other employee benefits			(55,083	)			(85,068	)
Operating profit before changes in working capital			4,562,909				3,451,149
Effect of changes in assets and liabilities in net working capital
- Trade receivables			5,946,029				(4,544,166	)
- Inventory			(6,230,700	)			(3,435,372	)
- Other current assets			(146,726	)			269,889
- Trade payables			1,805,405				7,932,634
- Other current liabilities			(59,976	)			638,771
- Tax receivables			(374,417	)			(965,155	)
- Tax payables			321,645				527,432
- Taxes paid during the period			(420,171	)			(230,892	)
- Other non current assets			5,673				10,851
- Provisions for risks and charges			418,624				(19,168	)
Cash generated by operating activities (A)			5,828,295				3,635,973
Cash flows generated (absorbed) by investing activities
- Payments for property, plant and equipment			(622,801	)			(749,127	)
- Proceeds from disposal of property, plant and equipment			57,501				393,948
- Payments for intangible assets			(1,379,740	)			(1,869,195	)
- Interest received			6,657				3,054
Change in cash absorbed by investing activities (B)			(1,938,383	)			(2,221,320	)
Cash flows generated by operating activities after cash flows absorbed by investing activities (A-B)			3,889,912				1,414,653
Cash flows (absorbed) generated by financing activities
Short term financial payables and derivatives arranged (repaid)			(2,202,430	)			3,003,998
Medium/long term financial payables and derivatives arranged (repaid)			(936,884	)			(438,481	)
Interest paid			(1,281,699	)			(3,842,894	)
Share capital increase and reserves paid in cash			0				(13,494	)
Change in cash absorbed by financing activities			(4,421,013	)			(1,290,871	)
Movement on translation reserve			18,857				(2,395	)
Increase (decrease) in cash and cash equivalents			(512,244	)			121,387
Cash and cash equivalents at start of period			2,220,199				2,217,357
Cash and cash equivalents classified as assets held for sale at beginning of the period			69,668
Cash and cash equivalents classified as assets held for sale at end of the period			94,123
Cash and cash equivalents at end of period			1,683,500				2,338,744

 

PM GROUP

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EXPLANATORY NOTES

General information

PM Group S.p.A. (the “Parent Company” or “Company” or “PM”) is a company which is subject to the laws of the Italian Republic. PM Group S.p.A. and its subsidiaries (“PM Group” or “Group”) operate primarily in Italy, France, Spain, Chile, Romania, Argentina and the United States of America. The Group manufactures: (i) truck mounted hydraulic knuckle boom cranes (“Business Unit PM”), (ii) truck mounted aerial platforms (“Business Unit Oil & Steel”) and (iii) structure, like scaffolding, formworks for walls and slabs (“Business Unit Pilosio”).

Structure and content of the condensed consolidated financial statements

The unaudited interim group condensed consolidated financial statements to which these explanatory notes relate (hereinafter: the “Interim Group Condensed Consolidated Financial Statements”) include: (i) the statements of income, comprehensive income, changes in equity and cash flows for the period ended September 30, 2014 and 2013 and (ii) the statements of financial position as of September 30, 2014 and December 31, 2013. The Interim Group Condensed Consolidated Financial Statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting”, as issued by the International Accounting Standard Board (“IASB”). The financial statements were authorized and approved on February 13, 2014 by Board of Directors. This basis of preparation was considered best to represent the balance sheet, income statement and financial situation of the Company and the Group:

 

•

Statement of financial position prepared with current assets/liabilities classified separately from non-current assets/liabilities;

 

•

Statement of income costs classified based on their nature;

 

•

Statement of cash flows prepared under the indirect method.

 

PM GROUP

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Group organizational structure

The chart below shows the Group’s organizational structure as at September 30, 2014:

 

Significant Accounting Policies

Basis of preparation

Our interim Condensed Consolidated Financial Statements are unaudited. In the opinion of Group management, the financial statements include all known adjustments (which consist primarily of normal, recurring accruals, estimates and assumptions that impact the financial statements) necessary to present fairly the financial position at the balance sheet dates and the results of operations for the nine-month period then ended. The Condensed Consolidated Balance Sheet at December 31, 2013, presented herein, has been derived from our audited balance sheet included in our Group Consolidated Financial Statements for the fiscal year ended December 31, 2013, but does not include all disclosures required by IFRS. These financial statements should be read in conjunction with the Group consolidated financial statements and the related notes at December 31, 2013, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The designation “IFRS” also includes all valid International Accounting Standards (“IAS”), as well as all interpretations of the IFRS Interpretation Committee, previously known as the International Financial Reporting Interpretations Committee (“IFRIC”), and before that the Standing Interpretations Committee (“SIC”). The results of operations for the nine-months ended September 30, 2014 are not necessarily indicative of operating results for the full year.

 

PM GROUP

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These condensed consolidated financial statements have been presented in Euro which is the main currency in the countries where the PM Group companies conduct their business. A summary of the Group’s significant accounting policies is identified in the explanatory notes to the Group Consolidated Financial Statements at December 31, 2013. There have been no changes to the Group’s significant accounting policiies in the nine-month period ended September 30, 2014.

Foreign currencies

Financial statements expressed in currencies other than the Euro are translated into Euro. The exchange rates applied for 2014 and 2013 are shown below:

 

30/09/2014
Currency		Closing				Average
US Dollar			1.26				1.36
Romanian Lei			4.41				4.45
GB Pound			0.78				0.81
Chilean Peso			755.46				760.32
Argentinean Peso			10.65				10.82
Brazilian Real			3.08				3.10
Mexican Peso			17.00				17.78
30/09/2013
Currency		Closing				Average
US Dollar			1.35				1.32
Romanian Lei			4.46				4.41
GB Pound			0.84				0.85
Chilean Peso			682.17				643.17
Argentinean Peso			7.82				6.95
Brazilian Real			3.04				2.79

A full list of the investments included in the scope of consolidation at September 30, 2014 with details of shareholders’ equity and profit/loss for the period calculated in accordance with the applicable accounting standards is shown in the following table:

 

PM GROUP

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Consolidated companies:

 

Name				Location		Country				Share Capital (local currency/000)		Shareholders’ equity (Euro/000)		Including profit (loss) for 2013 (Euro/000)		% interest held
1		PM Group		San Cesario sul Panaro		Italy		EUR		23,311		(25,921)		557
2		Autogru PM RO		Arad		Romania		RON		8,482		2,194		1		100.00%
3		PM North America		Rolling Meadows, Ill		USA		USD		25		112		(1)		100.00%
4		PM France		Chassieu		France		EUR		150		(374)		(6)		100.00%
5		PM Argentina		Buenos Aires		Argentina		ARS		60		238		25		100.00%
6		PM Deutschland		Ulm		Germany		EUR		25		34		1		100.00%
7		PM Chile		Santiago		Chile		CLP		19,742		(749)		(603)		100.00%
8		Oil & Steel		San Cesario sul Panaro		Italy		EUR		362		(6,529)		(917)		100.00%
9		PM Oil & Steel UK		London		UK		GBP		300		(9)		2		100.00%
10		PM Oil & Steel France		Chassieu		France		EUR		35		(193)		(80)		100.00%
11		PM Oil & Steel Iberica		Valencia		Spain		EUR		200		61		(42)		100.00%
12		Air Service		Modena		Italy		EUR		115		31		(46)		100.00%
13		Pilosio		Feletto Umberto		Italy		EUR		5,000		1,154		(32)		100.00%
14		Electroelsa		Poggibonsi		Italy		EUR		400		2,011		(328)		60.00%
15		PM Oil & Steel do Brasil		Sao Paulo		Brazil		BRL		600		183		(5)		100.00%
16		PM Oil & Steel Mexico		Mexico City		Mexico		MXN		350		(51)		(63)		100.00%

All Group companies are consolidated on a line-by-line basis.

At September 30, 2014, there were no changes to the scope of consolidation or to the percentage interests held in subsidiaries at December 31, 2013.

Going Concern

As disclosed in the Group Consolidated Financial Statements at December 31, 2013, in 2014, Management finalized an operation (the “Operation”) intended to restructure the financial indebtedness of the Group and restore the equity level. The Operation was to be implemented in accordance with Article 182 bis of the Bankruptcy Act and finalized on July 2014.

The main terms of the Operation have been included in Commitment Letters signed by Columna and Manitex, as well as in the PM Group and Oil & Steel Debt Restructuring Agreement signed by the creditor banks (collectively the “Agreement”). On November 18, 2014, the Courts in Modena approved the Agreement.

On January 15, 2015 Manitex completed the acquisition of PM Group and made a capital contribution of Euro 44.5 million in accordance with the terms of the Operation. On January 15, 2015, the sale of Pilosio was completed.

In view of the expected impact of the Operation and taking into account the difficult conditions in some of its main markets, the Group has prepared a new Business Plan for the period 2014 – 2017, which was approved by the holding company Board of Directors on June 10, 2014. The new Business Plan forecasts sufficient cash flows to meet the Group’s remaining obligations following the completion of the Operation.

After having evaluated the uncertainty regarding the economic environment, and the resulting uncertainty which inevitably affects the forecasts reflected in the Business Plan in relation to the Group’s future operating performance (in terms of both revenue and profitability), given the progress of the Operation, Management considers it probable that the Group’s economics and financial situation will be improved. For these reasons, Management reasonably believes that the Group has sufficient resources to continue to operate in the near future and, therefore, have prepared these condensed consolidated financial statements on a going concern basis.

 

PM GROUP

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Recently Adopted Accounting Standards and Amendments

The Group has adopted the new standards and amendments, that are applicable from January 1, 2014, in the preparation of its unaudited interim condensed consolidated financial statements; their application did not have any effect on the unaudited interim condensed consolidated financial statements.

Comments on items in the Statement of Financial Position

ASSETS

Note 1—Tangible assets

The following tables show the opening balances, movements during the period ended September 30, 2014 and the closing balances for tangible assets:

 

(in Euro)		01/01/14				Exchange difference				Additions				Disposals				Reclassification				Depreciation				30/09/14
Cost
Land			4,683,525				5,246				0				0				0				0				4,688,771
Buildings			18,595,512				21,771				24,835				0				0				0				18,642,118
Plant and machinery			9,119,979				36,433				155,700				47,336				3,257				0				9,268,033
Industrial and commercial equipment			8,241,562				11,515				129,463				84,031				10,388				0				8,308,897
Other assets			4,225,103				-14,672				92,055				472,352				-1,124				0				3,829,010
Assets under construction and payments on advance			13,667				203				59,462				0				-13,645				0				59,687
Total Cost of Tangible Assets			44,879,348				60,496				461,515				603,719				-1,124				0				44,796,516
(in Euro)		01/01/14				Exchange difference				Additions				Disposals				Reclass.				Depreciation				30/09/14
Accumulated depreciation and impairment
Land			0				0				0				0				0				0				0
Buildings			6,479,062				38				0				0				0				447,653				6,926,753
Plant and machinery			7,540,939				25,940				0				45,029				0				312,582				7,834,432
Industrial and commercial equipment			7,947,233				9,292				0				84,031				0				149,606				8,022,100
Other assets			3,655,909				-1,106				0				444,452				-1,124				189,028				3,398,255
Total accumulated depreciation and impairment of tangible asset			25,623,143				34,164				0				573,512				-1,124				1,098,869				26,181,540
Net Book Value			19,256,205				26,332				461,515				30,207				0				-1,098,869				18,614,976

 

PM GROUP

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Note 2—Goodwill

 

(in Euro)		30/09/14		31/12/13
Beginning balance		33,192,959			68,142,670
Reclassification of Asset held for sale		0			-20,078,655
Impairment		0			-14,871,056
Ending balance		33,192,959			33,192,959

As there were no indicators of a possible loss in value at September 30, 2014, compared with the previous evaluation, it was not necessary to carry out a new impairment test.

Note 3—Other intangible assets

The following tables show the opening balances, movements during the period ended September 30, 2014 and the closing balances for other intangible assets:

 

(in Euro)		01/01/14				Exchange difference				Additions				Reclassification				Amortization				30/09/14
Cost
Development costs			13,108,394				20				0				89,147				0				13,197,561
Patents and intellectual property rights			1,932,970				1				78,893				0				0				2,011,864
Concessions, licences, trademarks and similar			89,024				611				465				0				0				90,100
Assets in progress and payments on advance			983,629				0				874,213				-89,147				0				1,768,695
Other			280				0				90				0				0				370
Total			16,114,297				632				953,661				0				0				17,068,590
(in Euro)		01/01/14				Exchange difference				Additions				Reclassification				Amortization				30/09/14
Accumulated amortisation and impairment
Development costs			10,231,479				21				0				0				713,525				10,945,025
Patents and intellectual property rights			1,461,690				0				0				0				129,560				1,591,250
Concessions, licences, trademarks and similar			57,094				195				0				0				1,116				58,405
Assets in progress and payments on advance			648,052				0				0				0				0				648,052
Other			56				0				0				0				56				112
Total			12,398,371				216				0				0				844,257				13,242,844
Net Book Value			3,715,926				416				953,661				0				-844,257				3,825,746

Capitalized development costs relate to new products, as described in Note 17 below.

Assets in progress, at their completion, are amortized over five years, being the estimated useful life of the Group’s new products without any significant restyling processes.

 

PM GROUP

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Note 4—Deferred tax assets

Management consider these deferred tax assets recoverable on the basis of the future profits contained in the Business Plan.

 

(in Euro)		31/12/2013				Statement of Income				30/09/2014
Provisions for risks and charges			135,962				5,047				141,009
Inventory			706,031				68,338				774,369
Provision for bad debts			273,354				4,400				277,754
Provision for losses on derivatives			576,023				-106,424				469,599
Tax losses			509,534				80,069				589,603
Interest expenses			3,495,267				228,028				3,723,295
Other			7,322				5,100				12,422
Deferred tax assets			5,703,493				284,558				5,988,051

Note 5—Inventory

For details of changes in each inventory category, see the figures highlighted in the Income Statement.

The following tables contain a breakdown of net inventory by category and movements on the inventory obsolescence provision (deducted directly from inventory):

 

(in Euro)		30/09/2014				31/12/2013
Raw, ancillary and consumable materials			14,067,616				10,162,235
Work in progress			635,845				680,084
Semi-finished goods			816,443				744,358
Finished goods			6,711,446				4,862,442
Inventory obsolescence provision			-2,422,084				-2,597,952
Inventory			19,809,268				13,851,167

Note 6—Current trade receivables

Current trade receivables are analyzed as follows:

 

(in Euro)		30/09/14				31/12/13
Current trade receivables			22,493,251				30,924,832
Other receivables			182,293				118,950
Provision for bad debts			-2,398,353				-2,522,082
Trade receivables			20,277,192				28,521,700

 

PM GROUP

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Note 7—Cash and cash equivalents

Cash and cash equivalents are analyzed as follows:

 

(in Euro)		30/09/14				31/12/13
Cash on hand			16,442				20,704
Cheques			163,000				5,857
Bank and post office accounts			1,504,057				2,193,638
Cash and cash equivalents			1,683,500				2,220,199

LIABILITIES

Note 8—Non-current financial payables

Non-current financial payables are analyzed as follows:

 

(in Euro)		30/09/2014				31/12/2013
Non-current portion of loans payable			676,784				802,451
Payables to other lenders			40,916				335,100
Non-current financial payables			717,700				1,137,551

Payables to other lenders are broken down by due date as follows:

 

(in Euro)		within a year				between one and five years				Balance 30/09/2014				within a year				between one and five years				Balance 31/12/2013
Minimum payments due under finance leases			411,035				43,462				454,497				535,253				344,729				879,981
Interest element			-10,669				-2,547				-13,216				-27,481				-9,629				-37,110
Present value of minimum payments due under finance leases			400,366				40,916				441,282				507,772				335,100				842,872

The portion of these payables due within a year is classified under Current financial payables, as analyzed in Note 12.

Non current portion of loans payable are due within one and five years, as shown in the table below:

 

(in Euro)		30/09/2014				31/12/13
Loans Payable due after between 1 and 5 years			676,784				802,451
Non-current portion of loans payable			676,784				802,451

 

PM GROUP

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A detailed breakdown of loans payable is shown in the following table:

 

Bank		Interest rate		Original Maturity				Type		Loan amount €/1000				O/S Princ. 30/09/14				current				non- current				security
CARISBO		Eur 3M + 2,50			12/31/2014			unsecured loan			1,000				259,338				259,338				—			none
BPER (ex B.ca CRV)		Eur 3M + 2,50			12/31/2014			unsecured loan			1,000				923,105				923,105				—			none
BPER		Eur 3M + 2,50			12/31/2014			unsecured loan			1,500				1,500,000				1,500,000				—			none
BNL		Eur 3M + 2,50			12/31/2014			unsecured loan			600				600,000				600,000				—			none
MPS		Eur 3M + 2,50			12/31/2014			unsecured loan			5,500				5,500,000				5,500,000				—			none
UNICREDIT		Eur 3M + 2,50			12/31/2014			unsecured loan			2,000				2,000,000				2,000,000				—			none
BPER / UNICREDIT		-			12/31/2015			deferred interest—Senior loan			2,862				2,862,200				2,862,200				—			none
BPER / UNICREDIT		Eur 6M + 2,36			1/30/2017			Secured loan—Senior loan			26,993				26,993,000				26,993,000				—			mortgage + pledge on shares
BPER / UNICREDIT		Eur 6M + 2,86			1/30/2017			Secured loan—Senior loan			30,000				30,000,000				30,000,000				—			mortgage + pledge on shares
CARISBO		Eur 3M + 2,50			12/31/2014			unsecured loan			500				129,354				129,354				—			none
BPER (ex B.ca CRV)		Eur 3M + 2,51			12/31/2014			unsecured loan			750				692,329				692,329				—			none
BPER		Eur 3M + 2,52			12/31/2014			unsecured loan			1,000				1,000,000				1,000,000				—			none
BNL		Eur 3M + 2,53			12/31/2014			unsecured loan			300				300,000				300,000				—			none
MPS		Eur 3M + 2,54			12/31/2014			unsecured loan			500				500,000				500,000				—			none
BPER / UNICREDIT		-			12/31/2015			deferred interest—Senior loan			270				269,977				269,977				—			none
BPER / UNICREDIT		Eur 6M + 2,36			1/30/2017			Secured loan—Senior loan			5,807				5,807,000				5,807,000				—			pledge on shares
BANCA ITALO ROMENA		Eur 3M + 5%			6/30/2015			Secured loan			800				680,185								680,185			mortgage
DEBT ISSUANCE COSTS																			-339,346
TOTAL															80,016,488				78,996,957				680,185

At September 30, 2014, the Group was not in compliance with covenants set out by the loan agreements, and resulted in the Group defaulting on its loans payable to the creditor banks totaling Euro 78,997 thousand. Consequently, the balance in default has been reclassified to current financial payables in the consolidated financial statements.

The mortgage refers to the Oil & Steel S.p.A. factory located in S. Cesario sul Panaro (MO). The pledge refers to the 100% Oil & Steel S.p.A. and Pilosio S.p.A. shares, held by PM Group S.p.A.

Note 9—Employee benefits

Movements on the employee severance indemnity / TFR provision during the period, including the effects of the actuarial valuation of the TFR, were as follows:

 

(in Euro)		31/12/13				Increases				Decreases				30/09/14
Employee severance indemnity / TFR			1,413,558				459,227				520,041				1,352,744

Note 10—Provisions for risks and charges

Movements on provisions for risks and charges in 2014 were as follows:

 

(in Euro)		31/12/13				Increases				Decreases				30/09/14
Product warranty provision			851,000				16,074				0				867,074
Prov. for retirement benefits & similar obligations			80,806				0				0				80,806
Other provisions			505,519				0				25,519				480,000
Provisions for risks and charges			1,437,325				16,074				25,519				1,427,880

 

PM GROUP

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The “Provision for retirement benefits and similar obligations” represents the potential liability towards agents in the event that the agency relationship is terminated by the Group companies or if the agents retire.

The “Provision for product warranty risks” has been updated based on estimated requirements.

Note 11—Provision for deferred taxes

 

(in Euro)		31/12/2013				Statement of Income				30/09/2014
Accelerated depreciation			83,264				0				83,264
Goodwill			1,696,163				159,015				1,855,178
Amortization from merger			704,460				0				704,460
TFR under IAS			66,058				0				66,058
Out of period income due to change of rate			-228,888				0				-228,888
Leasehold improvements			140,683				0				140,683
Finance leases (IAS 17)			505,574				0				505,574
Reversal of depreciation of land/building O&S			57,999				0				57,999
Other			12,999				0				12,999
Total			3,038,312				159,015				3,197,327

The deferred tax provision (Euro 3,197 thousand at September 30, 2014) largely relates to the deferral of gains realized on disposal of tangible assets held for more than three years, accelerated depreciation charged for tax purposes only until 2007 and the tax effects of the transition to IAS/IFRS.

Note 12—Current financial payables

 

(in Euro)		30/09/2014				31/12/2013
Bank overdrafts, loans, advance on invoice and notes			20,456,093				20,734,487
Current portion of loans payable			78,996,957				78,920,702
Payables to other lenders			400,366				507,772
Current financial payables			99,853,416				100,162,961

Payables to other lenders represents the amount due within a year and mainly relates to the current portion of Euro 349 thousand payable to Medioleasing (formerly Banca Marche) under the real estate finance lease entered into for the Oil & Steel factory in San Cesario sul Panaro (MO), Via Verdi 22 at September 30, 2014. As further described in Note 8, the Group defaulted on its loans payable to the creditor banks totaling Euro 78,997 thousand at September 30, 2014. Consequently, the balance in default has been reclassified to current financial liabilities in the financial statements.

 

PM GROUP

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The fair value of the current portion of loans payable is assumed to be equal to Euro 40,420 thousand plus 860 thousand of Manitex shares. The fair value was determined to be the residual value of current portion of loans payable at September 30, 2014 (Euro 78,997 thousand) resulting from the restructuring of the financial indebtedness of the Group upon completion of the Operation. Please refer to the note related to the going concern assumption for more details on terms of the Operation.

Note 13—Liabilities for financial instruments and derivatives

 

(in Euro)		30/09/2014				31/12/2013
Interest rate hedges			1,728,343				2,141,069
Liabilities for financial instruments and derivatives			1,728,343				2,141,069

The Group uses financial instruments available on the market (including derivatives) solely in order to minimize its cost of borrowing and hedge the risk of interest rate and exchange rate fluctuations.

In accordance with IAS 32, IAS 39 and IFRS 7, these contracts have been recorded under “Liabilities for financial instruments and derivatives” (with a contra-entry to the Income Statement) in the amount of Euro 1,728 thousand which represents the fair value of the contracts at the reporting date. The change in fair value of these contracts is recorded in the financial income/expenses and exchange gains/losses captions of the Interim Condensed Consolidated Statement of Income.

At September 30, 2014, there were no transactions for the forward sale or purchase of currency.

Note 14—Current trade payables

Current trade payables (including invoices to be received from suppliers) are analyzed as follows:

 

(in Euro)		30/09/2014				31/12/2013
Trade payables			23,046,403				22,131,036
Current trade payables			23,046,403				22,131,036

 

PM GROUP

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Comments on main Income Statement items

Note 15—Revenue from operating activities

Revenue from operating activities is analyzed below:

 

(in Euro)		9M 2014				9M 2013
Revenue from operating activities			52,137,327				49,039,645
Revenue from services			1,167,565				1,471,649
Rental income			101,193				114,702
Other revenue from operating activities			135,505				149,353
Revenue from operating activities			53,541,589				50,775,349

Note 16—Other revenue and income

Other revenue and income are analyzed as follows:

 

(in Euro)		9M 2014				9M 2013
Compensation for damages			58,014				2,080
Gains on disposal			7,656				16,088
Freight services			789,820				870,841
Other			615,099				354,236
Other revenue and income			1,470,589				1,243,245

“Freight Services” mainly includes revenues related to organization of freight service to customers. “Other” primarily includes sundry charges to customers.

Note 17—Increases in non-current assets due to capitalization of internal costs

This caption regards the capitalization of materials, services and labor costs incurred for the internal construction of equipment and the development of new products, as shown in the following table:

 

(in Euro)		9M 2014				9M 2013
Increases in industrial equipment			12,174				23,850
Increases in development costs			874,213				1,533,552
Increases in non-current assets due to capitalisation of internal costs			886,388				1,557,402

PM’s research and development activities focus on the introduction into the product range new series of light weight high performance cranes.

 

PM GROUP

20

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Note 18—Costs of raw materials

Costs of raw materials are analyzed as follows:

 

(in Euro)		9M 2014				9M 2013
Finished goods			4,637,379				3,600,513
Raw materials			28,975,463				22,551,672
Packaging and consumable materials			372,720				406,504
Change in inventory of raw materials and goods			-3,778,640				-840,688
Total Costs of raw material			30,206,923				25,718,000

Note 19—Costs for services

Costs for services are analyzed as follows:

 

(in Euro)		9M 2014				9M 2013
Outsourced production			3,037,617				3,088,466
Transport/freight			1,439,896				1,507,329
Agents’ commission			376,282				343,002
Legal and consulting costs			1,387,357				1,505,860
Utilities and other industrial services			617,734				648,891
Insurance			353,670				358,440
Repairs and maintenance			196,389				194,888
Marketing, trade fairs and advertising			358,127				597,455
Board of Statutory Auditors’ fees			68,687				73,932
Other costs for services			1,432,911				1,462,712
Technical assistance			380,967				395,123
Costs for services			9,649,637				10,176,099

Note 20—Personnel costs

 

(in Euro)		9M 2014				9M 2013
Wages and salaries			8,659,470				9,681,131
Directors’ remuneration and benefits			215,062				196,101
Social contributions			2,640,837				2,653,973
TFR, retirement benefits and similar			459,227				503,983
Other costs			427,714				348,824
Personnel costs			12,402,311				13,384,012

 

PM GROUP

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The Group’s average headcount, by employee category, is shown in the following table:

 

		9M 2014				9M 2013
Managers			13				12
Staff			552				566
Total			565				578

Figures for the Pilosio BU are included for the sake of completeness. The related costs are included in the operating expenses detailed in Note 26.

Note 21—Other operating expenses

Other operating expenses are analyzed as follows:

 

(in Euro)		9M 2014				9M 2013
Rental of industrial and office buildings			523,636				540,479
Operating leases			238,656				337,396
Losses on disposals			238				0
Taxes other than income taxes			334,619				287,651
Bad debts			16,910				-6,350
Other operating expenses			337,964				809,334
Other operating expenses			1,452,021				1,968,510

Note 22—Depreciation, amortization and impairment of non-current assets

 

(in Euro)		9M 2014				9M 2013
Amortization of intangible assets			844,257				1,306,094
Depreciation of tangible assets			1,098,869				1,220,438
Impairment of tangible assets			0				158,024
Depreciation, amortization and impairment of non-current assets			1,943,126				2,684,556

Certain tangible assets have been impaired as the related fair value resulting from their sale was lower that their carrying amount.

Note 23—Provisions

These may be analyzed as follows:

 

(in Euro)		9M 2014				9M 2013
Provision for bad debts			54,818				45,490
Provions for risks			16,074				0
Other provisions			-25,519				3,962
Total			45,374				49,452

 

PM GROUP

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“Provisions for risks” primarily relate to amounts allocated to the product warranty provision. “Other provisions” relate to favorable adjustments to provisions accrued in previous periods settled by the Group during 2014 amounting to approximately Euro 20 thousand. Amounts were recorded in “Other operating expenses”.

Note 24—Financial income and expenses

 

(in Euro)		9M 2014				9M 2013
Interest income on bank accounts			2,829				4,150
Interest income from customers			5,832				2,438
Income from derivatives			412,932				878,094
Other financial income			10,204				14,312
Financial income			431,797				898,993
Financial expenses on loans and finance leases			1,630,853				1,686,483
Financial expenses on current liabilities			489,364				490,700
Financial expenses on derivatives			552,766				609,493
Other interest and expenses			68,390				68,865
Bank charges			377,499				471,573
Financial expenses			3,118,872				3,327,114
Exchange gains—realized			359,943				256,052
Exchange gains—unrealized			674,592				274,047
Exchange losses—realized			635,852				429,795
Exchange losses—unrealized			621,350				1,059,238
Net exchange losses			-222,667				-958,934
Financial income and expenses			-2,909,742				-3,387,056

Note 25—Taxes on income

Tax for the nine month period is charged on the base of the best estimate of the average annual effective tax rate expected for the full year, applied to the pre-tax loss of the nine month period.

Note 26—Assets and liabilities held for sale. Profit/Loss from discontinued operations

The Interim Condensed Consolidated Financial Statements, include the assets and liabilities of Pilosio S.p.A. and its subsidiaries. On January 15, 2015 Pilosio was sold to a company owned by Columna at a price of Euro 1,000 thousand as previously described in the Group Consolidated Financial Statements at December 31, 2013.

As a result of the above, the Condesed Consolidated Statement of Income includes “Profit/Loss from discontinued operations” related to Pilosio, representing the loss of the discontinued operations, net of tax effects.

In accordance with IFRS 5, we provide below details of (i) the assets held for sale and the related liabilities at September 30, 2014, (ii) the items forming part of the discontinued operations/activities for the period ended September 30, 2014, and September 30, 2013, and (iii) cash flow information related to the discontinued operations for the period ended September 30, 2014 and 2013.

 

PM GROUP

23

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Note 27—Fair Value measurement

IFRS 13 establishes a fair value hierarchy which classifies on three levels the inputs of the valuation techniques adopted to measure fair value. The fair value hierarchy gives highest priority to the quoted prices (unadjusted) on active markets for identical assets or liabilities (Level 1 inputs) and lowest priority to unobservable inputs (Level 3 inputs). In some cases, the inputs used to measure the fair value of an asset or liability could be classified on several levels of the fair value hierarchy. In such cases, the fair value measurement is classified entirely on the same hierarchy level where the lowest level input that has a significant impact o the valuation.

 

PM GROUP

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The levels used in the hierarchy are:

 

•

Level 1 inputs are quoted prices (unadjusted) on active markets for identical assets or liabilities that the entity can access at the measurement date;

 

•

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;

 

•

Level 3 inputs are unobservable inputs for the asset or liability.

The following table shows the fair value hierarchy of Assets and Liabilities measured at fair value at September 30, 2014:

 

(in Euro)		Level 1				Level 2				Level 3				Total 30/09/2014
Liabilities for derivative financial instruments			0				-1.728.343				0				-1.728.343
Total			0				-1.728.343				0				-1.728.343

Liabilities for derivative financial instruments did not change fair value hierarchy between December 31, 2013 and September 30, 2014.

The fair value of Liabilities for derivative financial Instruments is included in Level 2 of the fair value hierarchy and has been estimated with discounted cash flows models. The main inputs used are forward interest rates (from observable yield curves at the end of the reporting period), and contract interest rates, discounted at a rate that reflects the credit risk of various counterparties.

At December 31, 2013 assets and liabilities held for sale, related to the Business Unit Pilosio, were valued at fair value and disclosed in Level 3 of the fair value hierarchy. At September 30, 2014 assets and liabilities held for sale are no longer valued at fair value because at that date, as consequence of the loss incurred by Pilosio during the first nine month of 2014, their carrying amounts are lower of their fair value less costs to sell.

For financial instruments represented by short-term receivables, payables, and financial payables for which the present value of future cash flows does not differ significantly from carrying value, the carrying value is a reasonable approximation of the fair value. In particular, the carrying amount of Current receivables, Other current assets, Trade payables and Other current liabilities, approximates their fair value. The fair value of the financial payables has been disclosed in Note 12.

For other Statement of Financial Position items the carrying amount represents a reasonable approximation of fair value at September 30, 2014.

San Cesario sul Panaro, February 13, 2015

 

 

PM GROUP

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