Manitex International, Inc. - FORM 8-K - EX-99.1 - May 22, 2017

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Exhibit 99.1

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

On May 17, 2017, Manitex International, Inc. (the “Company”) and ASV Holdings, Inc. (“ASV”) completed the previously announced underwritten initial public offering (the “Offering”) of 3,800,000 shares of ASV’s common stock, including 2,000,000 shares sold by the Company. The Company received net proceeds of approximately $13 million from the Offering.

Prior to the Offering, the Company owned 51.0% of the outstanding shares of ASV’s common stock. As a result of the Offering, as of May 17, 2017, the Company owns 21.2% of the outstanding shares of ASV’s common stock. Because the Company’s ownership interest has decreased below 50%, it no longer has a controlling financial interest in ASV and will deconsolidate ASV from the financial statements and results of operations of the Company, effective May 17, 2017, in accordance with Accounting Standard Codification, or ASC, 810-10-40, Derecognition.

The unaudited pro forma consolidated financial statements were prepared utilizing our historical financial data derived from the interim consolidated financial statements included in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on May 4, 2017 and from the audited consolidated financial statements for the year ended December 31, 2016 included in our Annual Report on Form 10-K filed with the SEC on March 10, 2017. Consistent with the requirements of Article 11 of Regulation S-X, the unaudited pro forma consolidated statements of operations have been presented on a continuing operations basis. The pro forma adjustments are described in the notes to the unaudited pro forma financial information and are based upon available information and assumptions that we believe are reasonable.

The unaudited pro forma financial information included herein is for informational purposes only and is not necessarily indicative of what our financial performance and financial position would have been had the Offering been completed on the dates assumed nor is such unaudited pro forma financial information necessarily indicative of the results to be expected in any future period. Actual results may differ significantly from those reflected here in the unaudited pro forma consolidated financial statements for various reasons, including but not limited to, the differences between the assumptions used to prepare the unaudited pro forma consolidated financial statements and actual results.

MANITEX INTERNATIONAL, INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share amounts)

 

     As of March 31, 2017  
     As Reported     Pro Forma
Adjustments		           Pro Forma  
     Unaudited     Unaudited (a)           Unaudited  
ASSETS         

Current assets

         

Cash

    $ 2,930     $ —         $ 2,930  

Cash-restricted

      772       —           772  

Trade receivables (net)

      49,837       (14,996 )        34,841  

Accounts receivable from related party

      89       (89 )        —    

Other receivables

      2,254       —           2,254  

Inventory (net)

      88,196       (28,543 )        59,653  

Prepaid expense and other

      5,057       (864 )        4,193  
  

 

 

    

 

 

      

 

 

  

Total current assets

      149,135       (44,492 )        104,643  
  

 

 

    

 

 

      

 

 

  

Total fixed assets (net)

      36,550       (14,877 )        21,673  

Intangible assets (net)

      55,546       (25,187 )        30,359  

Goodwill

      70,635       (30,579 )        40,056  

Investment in ASV

      —         14,560       (b )      14,560  

Other long-term assets

      1,990       (355 )        1,635  

Deferred tax asset

      545       —           545  
  

 

 

    

 

 

      

 

 

  

Total assets

    $ 314,401     $ (100,930 )      $ 213,471  
  

 

 

    

 

 

      

 

 

  
LIABILITIES AND EQUITY     

Current liabilities

     

Notes payable—short term

    $ 30,456     $ (3,000 )      (c )    $ 27,456  

Current portion of capital lease obligations

      815       —           815  

Accounts payable

      43,946       (11,538 )        32,408  

Accounts payable related parties

      1,915       (1,311 )        604  

Accrued expenses

      14,806       (5,066 )        9,740  

Other current liabilities

      2,733       —           2,733  
  

 

 

    

 

 

      

 

 

  

Total current liabilities

      94,671       (20,915 )        73,756  
  

 

 

    

 

 

      

 

 

  

Long-term liabilities

     

Revolving term credit facilities

      35,236       (26,979 )      (c )      8,257  

Notes payable (net)

      49,938       (25,758 )      (c )      24,180  

Capital lease obligations

      5,390       —           5,390  

Convertible note related party (net)

      6,897       —           6,897  

Convertible note (net)

      14,151       —           14,151  

Deferred gain on sale of property

      991       —           991  

Deferred tax liability

      3,427       —           3,427  

Other long-term liabilities

      4,566       (1,192 )        3,374  
  

 

 

    

 

 

      

 

 

  

Total long-term liabilities

      120,596       (53,929 )        66,667  
  

 

 

    

 

 

      

 

 

  

Total liabilities

      215,267       (74,844 )        140,423  
  

 

 

    

 

 

      

 

 

  

Commitments and contingencies Equity

     

Preferred Stock—Authorized 150,000 shares, no shares issued or outstanding at March 31, 2017 and December 31, 2016

      —         —           —    

Common Stock—no par value 25,000,000 shares authorized, 16,552,186 and 16,200,294 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively

      97,247       —           97,247  

Paid in capital

      2,522       —           2,522  

Retained earnings

      (21,983 )      (809 )      (d )      (22,792 ) 

Accumulated other comprehensive loss

      (3,929 )      —           (3,929 ) 
  

 

 

    

 

 

      

 

 

  

Equity attributable to shareholders of Manitex International, Inc.

      73,857       (809 )        73,048  
    

 

 

      

 

 

  

Equity attributable to noncontrolling interest

      25,277       (25,277 )        —    
  

 

 

    

 

 

      

 

 

  

Total equity

      99,134       (26,086 )        73,048  
  

 

 

    

 

 

      

 

 

  

Total liabilities and equity

    $ 314,401     $ (100,930 )      $ 213,471  
  

 

 

    

 

 

      

 

 

  

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

MANITEX INTERNATIONAL, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share amounts)

 

     Three Months Ended March 31, 2017  
     As Reported     Pro Forma
Adjustments		     Pro Forma  
     Unaudited     Unaudited (e)     Unaudited  

Net revenues

    $ 67,852     $ (28,010 )    $ 39,842  

Cost of sales

      56,059       (23,719 )      32,340  
  

 

 

    

 

 

    

 

 

  

Gross profit

      11,793       (4,291 )      7,502  

Operating expenses

       

Research and development costs

      1,207       (520 )      687  

Selling, general and administrative expenses

      12,099       (2,623 )      9,476  
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      13,306       (3,143 )      10,163  
  

 

 

    

 

 

    

 

 

  

Operating loss

      (1,513 )      (1,148 )      (2,661 ) 

Other income (expense)

       

Interest expense

      (1,845 )      878       (967 ) 

Foreign currency transaction loss

      (83 )      —         (83 ) 

Other income

      234       87       321  
  

 

 

    

 

 

    

 

 

  

Total other expense

      (1,694 )      965       (729 ) 
  

 

 

    

 

 

    

 

 

  

Loss before income taxes and loss in non-marketable equity interest from continuing operations

      (3,207 )      (183 )      (3,390 ) 

Income tax expense from continuing operations

      90       —         90  
  

 

 

    

 

 

    

 

 

  

Net loss from continuing operations

      (3,297 )      (183 )      (3,480 ) 

Net (income) loss attributable to noncontrolling interest

      (114 )      114       —    
  

 

 

    

 

 

    

 

 

  

Net loss from continuing operations attributable to shareholders of Manitex International, Inc.

    $ (3,411 )      314 259 2485     $ (3,480 ) 
  

 

 

    

 

 

    

 

 

  

Loss Per Share

       

Basic

       

Loss from continuing operations attributable to shareholders of Manitex International, Inc.

    $ (0.21 )      $ (0.21 ) 

Diluted

       

Loss from continuing operations attributable to shareholders of Manitex International, Inc.

    $ (0.21 )      $ (0.21 ) 

Weighted average common shares outstanding

       

Basic

      16,559,343         16,559,343  

Diluted

      16,559,343         16,559,343  

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

MANITEX INTERNATIONAL, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share amounts)

 

     For the Year Ended December 31, 2016  
     As Reported     Pro Forma Adjustments     Pro Forma  
           Unaudited (e)     Unaudited  

Net revenues

    $ 288,959     $ (103,803 )    $ 185,156  

Cost of sales

      240,375       (87,614 )      152,761  
  

 

 

    

 

 

    

 

 

  

Gross profit

      48,584       (16,189 )      32,395  

Operating expenses

       

Research and development costs

      4,877       (1,938 )      2,939  

Selling, general and administrative expenses

      45,422       (8,241 )      37,181  
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      50,299       (10,179 )      40,120  
  

 

 

    

 

 

    

 

 

  

Operating loss

      (1,715 )      (6,010 )      (7,725 ) 

Other income (expense)

       

Interest expense

      (11,000 )      4,963       (6,037 ) 

Interest expense related to write off of debt issuance costs

      (3,635 )      2,196       (1,439 ) 

Foreign currency transaction loss

      (1,115 )      —         (1,115 ) 

Other income (loss)

      897       (226 )      671  
  

 

 

    

 

 

    

 

 

  

Total other income (expense)

      (14,853 )      6,933       (7,920 ) 
  

 

 

    

 

 

    

 

 

  

(Loss) income before income taxes and loss in non-marketable equity interest from continuing operations

      (16,568 )      923       (15,645 ) 

Income tax benefit from continuing operations

      (545 )      (4 )      (549 ) 

Loss in non-marketable equity interest, net of taxes

      (5,752 )      —         (5,752 ) 
  

 

 

    

 

 

    

 

 

  

Net (loss) income from continuing operations

    $ (21,775 )      919     $ (20,848 ) 
  

 

 

    

 

 

    

 

 

  

Net loss (income) from continuing operations attributable to noncontrolling interest

      574       (574 )      —    
  

 

 

    

 

 

    

 

 

  

Net (loss) income attributable to shareholders of Manitex International, Inc.

    $ (21,201 )    $ 345     $ (20,848 ) 
  

 

 

    

 

 

    

 

 

  

Earnings (loss) Per Share

       

Basic

       

(Loss) earnings from continuing operations attributable to shareholders of Manitex International, Inc.

    $ (1.31 )      $ (1.29 ) 

Diluted

       

(Loss) earnings from continuing operations attributable to shareholders of Manitex International, Inc.

    $ (1.31 )      $ (1.29 ) 

Weighted average common shares outstanding

       

Basic

      16,133,284         16,133,284  

Diluted

      16,133,284         16,133,284  

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

MANITEX INTERNATIONAL, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

(In thousands, except share and per share data)

Note 1 – Description of Disposition of Assets

On May 17, 2017, Manitex International, Inc. (the “Company”) and ASV Holdings, Inc. (“ASV”) completed the previously announced underwritten initial public offering (the “Offering”) of 3,800,000 shares of ASV’s common stock, including 2,000,000 shares sold by the Company. The Company received net proceeds of approximately $1,300 from the Offering.

Prior to the Offering, the Company owned 51.0% of the outstanding shares of ASV’s common stock. As a result of the Offering, as of May 17, 2017, the Company owns 21.2% of the outstanding shares of ASV’s common stock. Because the Company’s ownership interest has decreased below 50%, it no longer has a controlling financial interest in ASV and will deconsolidate ASV from the financial statements and results of operations of the Company, effective May 17, 2017, in accordance with Accounting Standard Codification, or ASC, 810-10-40, Derecognition.

Note 2 – Pro Forma Adjustments

 

(a)

Represents adjustments to reflect the disposition of assets and liabilities associated with the transaction described above.

 

(b)

Represents adjustments to show the retention of 2,080,000 shares of ASV’s common stock following the Offering.

 

(c)

Represents adjustments to reflect the reduction of debt as a result of the deconsolidation of ASV’s debt and the Company’s use of the net proceeds from the Offering to pay down approximately $1,300 of the amounts outstanding under the Company’s revolving term credit facility.

 

(d)

Represents adjustments primarily related to the transaction expenses in connection with the Company’s sale of 2,000,000 shares of ASV’s common stock in the Offering.

 

(e)

Represents adjustments to eliminate the direct operating results of ASV for the periods presented.

Manitex International, Inc. Reports