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 May ~~1, 2020~~3, 2021 was ~~19,760,120.~~19,900,790.

This Quarterly Report on Form 10-Q filed by Manitex International, Inc. speaks as of March 31, ~~2020~~2021 unless specifically noted otherwise. Unless otherwise indicated, Manitex International, Inc., together with its consolidated subsidiaries, is hereinafter referred to as “Manitex,” 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, ~~2019,~~2020, 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, ~~2019~~2020 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.

	March 31, 2020			December 31, 2019
	Unaudited			Unaudited			March 31, 2021			December 31, 2020
ASSETS
Current assets
Cash	$	22,101		$	23,327		$	15,839		$	17,161
Cash – restricted		219			217			236			240
Trade receivables (net)		34,897			34,725			33,565			30,418
Other receivables		2,648			1,033			1,289			179
Inventory (net)		64,360			57,818			58,853			56,055
Prepaid expense and other		5,050			4,706
Current assets of discontinued operations		1,597			1,591
Prepaid expense and other current assets								3,712			2,218
Total current assets		130,872			123,417			113,494			106,271
Total fixed assets, net of accumulated depreciation of $17,003 and $16,818 at March 31, 2020 and December 31, 2019, respectively		18,627			19,035
Total fixed assets, net of accumulated depreciation of $17,599 and $17,444 at March 31, 2021 and December 31, 2020, respectively								17,777			18,723
Operating lease assets		2,294			2,174			3,752			4,068
Intangible assets (net)		16,117			17,032			14,633			15,671
Goodwill		25,621			32,635			26,729			27,472
Other long-term assets		250			281			1,143			1,143
Deferred tax asset		395			441
Long-term assets of discontinued operations		331			413
Deferred tax assets								247			247
Total assets	$	194,507		$	195,428		$	177,775		$	173,595
LIABILITIES AND EQUITY
Current liabilities
Accounts payable							$	38,846		$	32,429
Accrued expenses								8,650			7,909
Related party payables								34			52
Notes payable	$	19,018		$	18,212			16,995			16,510
Convertible note - related party (net)		7,367			7,323
Convertible note (net)		7,927			—
Current portion of finance lease obligations		474			476			344			344
Current portion of operating lease liabilities		785			813
Accounts payable		37,944			29,593
Accounts payable related parties		112			228
Accrued expenses		8,963			9,138
Current portion of operating lease obligations								1,009			1,167
Customer deposits		1,209			1,493			1,771			2,363
Current liabilities of discontinued operations		558			800
Deferred income liability								3,747			3,747
Total current liabilities		84,357			68,076			71,396			64,521
Long-term liabilities
Revolving term credit facilities		6,000			—			12,644			12,606
Notes payable (net)		19,060			19,446			13,067			13,625
Finance lease obligations (net of current portion)		4,473			4,584			4,128			4,221
Non-current operating lease liabilities		1,508			1,361
Convertible note (net)		—			14,760
Non-current operating lease obligations								2,743			2,901
Deferred gain on sale of property		647			667			567			587
Deferred tax liability		592			721			1,317			1,333
Other long-term liabilities		5,745			5,913			4,723			4,892
Long-term liabilities of discontinued operations		350			350
Total long-term liabilities		38,375			47,802			39,189			40,165
Total liabilities		122,732			115,878			110,585			104,686
Commitments and contingencies
Equity
Preferred Stock—Authorized 150,000 shares, no shares issued or outstanding at March 31, 2020 and December 31, 2019		—			—
Common Stock—no par value 25,000,000 shares authorized, 19,760,120 and 19,713,185 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		131,049			130,710
Preferred Stock—Authorized 150,000 shares, 0 shares issued or outstanding at March 31, 2021 and December 31, 2020								—			—
Common Stock—no par value 25,000,000 shares authorized, 19,900,790 and 19,821,090 shares issued and outstanding at March 31, 2021, and December 31, 2020, respectively								131,991			131,455
Paid in capital		2,663			2,793			2,740			3,025
Retained deficit		(57,729	)		(50,253	)		(64,635	)		(63,863	)
Accumulated other comprehensive loss		(4,208	)		(3,700	)		(2,906	)		(1,708	)
Total equity		71,775			79,550			67,190			68,909
Total liabilities and equity	$	194,507		$	195,428		$	177,775		$	173,595

	Three Months Ended March 31,
	2020			2019			Three Months Ended March 31,
	Unaudited			Unaudited			2021			2020
Net revenues	$	48,733		$	54,425		$	47,168		$	48,733
Cost of sales		38,486			42,433			38,363			38,486
Gross profit		10,247			11,992			8,805			10,247
Operating expenses
Research and development costs		687			687			785			687
Selling, general and administrative expenses		8,039			9,116			7,744			8,039
Impairment of intangibles		6,722			—			—			6,722
Total operating expenses		15,448			9,803			8,529			15,448
Operating (loss) income		(5,201	)		2,189
Operating income (loss)								276			(5,201	)
Other (expense) income
Interest expense		(1,084	)		(1,108	)		(525	)		(1,084	)
Interest income		60			69			4			60
Change in fair value of securities held		—			810
Foreign currency transaction loss		(418	)		(433	)		(215	)		(418	)
Other income (expense)		3			(21	)
Total other expense		(1,439	)		(683	)
(Loss) income before income taxes from continuing operations		(6,640	)		1,506
Other (expense) income								(20	)		3
Total other (expense) income								(756	)		(1,439	)
Loss before income taxes from continuing operations								(480	)		(6,640	)
Income tax expense from continuing operations		404			197			292			404
Net (loss) income from continuing operations		(7,044	)		1,309
Net loss from continuing operations								(772	)		(7,044	)
Discontinued operations
Loss from operations of discontinued operations		(388	)		(446	)		—			(388	)
Income tax expense (benefit)		44			(47	)
Income tax expense								—			44
Loss from discontinued operations		(432	)		(399	)		—			(432	)
Net (loss) income		(7,476	)		910
(Loss) earnings Per Share
Net loss								(772	)		(7,476	)
Loss per share
Basic
(Loss) earnings from continuing operations	$	(0.36	)	$	0.07
Loss from continuing operations							$	(0.04	)	$	(0.36	)
Loss from discontinued operations	$	(0.02	)	$	(0.02	)	$	-		$	(0.02	)
Net (loss) earnings	$	(0.38	)	$	0.05
Net loss							$	(0.04	)	$	(0.38	)
Diluted
(Loss) earnings from continuing operations	$	(0.36	)	$	0.07
Loss from continuing operations							$	(0.04	)	$	(0.36	)
Loss from discontinued operations	$	(0.02	)	$	(0.02	)	$	-		$	(0.02	)
Net (loss) earnings	$	(0.38	)	$	0.05
Net loss							$	(0.04	)	$	(0.38	)
Weighted average common shares outstanding
Basic		19,733,772			19,678,081			19,845,064			19,733,772
Diluted		19,733,772			19,694,973			19,845,064			19,733,772

	Three Months Ended March 31,						Three Months Ended March 31,
	2020			2019			2021			2020
	Unaudited			Unaudited
Net (loss) income:	$	(7,476	)	$	910
Net loss:							$	(772	)	$	(7,476	)
Other comprehensive loss
Foreign currency translation adjustments		(508	)		(620	)		(1,198	)		(508	)
Total other comprehensive loss		(508	)		(620	)		(1,198	)		(508	)
Comprehensive loss		(7,984	)		290
Total comprehensive (loss) income	$	(7,984	)	$	290
Total comprehensive loss							$	(1,970	)	$	(7,984	)

For the three months ended

2020

2019

Unaudited

Unaudited

Number of common shares outstanding

Balance at December 31

19,713,185

19,645,773

Employee 2004 and 2019 incentive plan grant

49,884

39,822

Repurchase to satisfy withholding and cancelled

(2,949
)

(2,882
)
Balance at March 31

19,760,120

19,682,713

Common Stock

Balance at December 31

$
130,710

$
130,260

Employee 2004 and 2019 incentive plan grant

352

251

Repurchase to satisfy withholding and cancelled

(13
)

(19
)
Balance at March 31

$
131,049

$
130,492

Paid in Capital

Balance at December 31

$
2,793

$
2,674

Share-based compensation

222

159

Employee 2004 and 2019 incentive plan grant

(352
)

(251
)
Balance at March 31

$
2,663

$
2,582

Retained Deficit

Deficit at December 31

$
(50,253
)

$
(41,761
)
Net (loss) income

(7,476
)

910

Balance at March 31

$
(57,729
)

$
(40,851
)
Accumulated Other Comprehensive Loss

Deficit at December 31

$
(3,700
)

$
(3,169
)
Loss on foreign currency translation

(508
)

(620
)
Balance at March 31

$
(4,208
)

$
(3,789
)

	Outstanding shares			Common Stock			APIC			Retained Deficit			AOCI (Loss)			Total
Balance at December 31, 2020		19,821,090		$	131,455		$	3,025		$	(63,863	)	$	(1,708	)	$	68,909
Net loss		—			—			—			(772	)		—			(772	)
Loss on foreign currency translation		—			—			—			—			(1,198	)		(1,198	)
Employee 2004 and 2019 incentive plan grant		85,883			584			(584	)		—			—			—
Repurchase to satisfy withholding and cancelled		(6,183	)		(48	)		—			—			—			(48	)
Share-based compensation		—			—			299			—			—			299
Balance at March 31, 2021		19,900,790		$	131,991		$	2,740		$	(64,635	)	$	(2,906	)	$	67,190

	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 2004 and 2019 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

	Three months ended March 31,
	2020			2019			Three months ended March 31,
	Unaudited			Unaudited			2021			2020
Cash flows from operating activities:
Net (loss) income	$	(7,476	)	$	910
Adjustments to reconcile net (loss) income to cash used for operating activities:
Net loss							$	(772	)	$	(7,476	)
Adjustments to reconcile net loss to cash used for operating activities:
Depreciation and amortization		1,082			1,183			1,130			1,082
Changes in allowances for doubtful accounts		37			122			80			37
Changes in inventory reserves		270			264			106			270
Deferred income taxes		(70	)		(34	)		32			(70	)
Amortization of deferred debt issuance costs		104			50			38			104
Amortization of debt discount		167			104			33			167
Change in value of interest rate swaps		—			(1	)
Tradename impairment		137			—
Goodwill impairment		6,585			—
Change in value of securities held		—			(810	)
Write down of intangibles								—			137
Write down of goodwill								—			6,585
Share-based compensation		222			159			299			222
Adjustment to deferred gain on sales and lease back		—			(95	)		(20	)		—
Loss on disposal of assets		—			21
Reserves for uncertain tax provisions		(88	)		46			—			(88	)
Changes in operating assets and liabilities:
Increase in accounts receivable		(1,987	)		(2,480	)		(3,286	)		(356	)
Increase in other receivable								(1,139	)		(1,631	)
Increase in inventory		(7,283	)		(6,769	)		(3,967	)		(7,283	)
Increase in prepaid expenses		(399	)		(2,644	)		(1,586	)		(399	)
Decrease in other assets		—			208
Increase in accounts payable*		8,530			7,860
(Decrease) increase in accrued expense		(111	)		147
(Decrease) increase other current liabilities		(327	)		181
Decrease in other long-term liabilities		4			(19	)
Net cash used for operating activities		(603	)		(1,597	)
Increase in other assets								(47	)		—
Increase in accounts payables and related party payables								7,532			8,530
Increase (decrease) in accrued expenses								966			(111	)
Decrease in other current liabilities								(525	)		(327	)
(Decrease) increase in other long-term liabilities								(29	)		4
Net cash used in operating activities								(1,155	)		(603	)

Cash flows from investing activities:
Purchase of property and equipment		(406	)		(782	)		(157	)		(406	)
Investment in intangibles other than goodwill		—			(7	)
Net cash used for investing activities		(406	)		(789	)
Net cash used in investing activities								(157	)		(406	)
Cash flows from financing activities:
Borrowings on revolving term credit facility		6,000			—			—			6,000
Payments on convertible debt		(7,000	)		—			—			(7,000	)
Net borrowings working capital facilities (See Note 11)		1,201			1,200
Net borrowings on working capital facilities								713			1,201
New borrowings—other		—			481			748			—
Note payments		(109	)		(159	)		(369	)		(109	)
Shares repurchased for income tax withholding on share-based compensation		(13	)		(19	)		(48	)		(13	)
Payments on capital lease obligations		(114	)		(101	)		(92	)		(114	)
Net cash (used for) provided by financing activities		(35	)		1,402
Net cash provided by (used in) financing activities								952			(35	)
Net decrease in cash and cash equivalents		(1,044	)		(984	)		(360	)		(1,044	)
Effect of exchange rate changes on cash		(213	)		(241	)		(966	)		(213	)
Cash and cash equivalents at the beginning of the year**		23,577			22,348
Cash and cash equivalents at end of period**	$	22,320		$	21,123
Cash and cash equivalents at the beginning of the year								17,401			23,577
Cash and cash equivalents at end of period							$	16,075		$	22,320
See Note 1 for supplemental cash flow disclosures

The unaudited Condensed Consolidated Balance Sheets at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 and the related Condensed Consolidated Statements of Operations, Comprehensive Loss, Condensed Consolidated Statements of Shareholders’ Equity, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 have been prepared ~~without audit,~~ pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments ~~(consisting only of normal recurring 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, ~~2019.~~2020. The Condensed Consolidated Balance Sheet as of December 31, ~~2019~~2020 was derived from our audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”).

The Company is a leading provider of engineered lifting ~~solutions~~solutions. The Company reports in a single business segment and ~~operates as~~has 4 operating units. The Company designs, manufactures and distributes a ~~single reportable segment with five operating segments. Operating activities~~diverse group of products that serve different functions and are ~~conducted through the following wholly-owned subsidiaries:~~ used in a variety of industries.

Manitex, Inc. (“Manitex”), markets a comprehensive line of boom trucks, truck cranes and sign cranes. Manitex’s boom trucks and crane products are primarily used for industrial projects, energy exploration and infrastructure development, including roads, bridges and commercial construction.

Badger Equipment Company (“Badger”), is a manufacturer of specialized rough terrain cranes and material handling products. Badger primarily serves the needs of the construction, municipality and railroad industries.

PM Oil and Steel S.p.A. (“PM” or “PM Group”), formerly known as PM Group ~~S.p.A,~~S.p.A., 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” or “PM Group”),~~ PM Group has locations in Modena, Italy; Valencia, Spain; Arad, Romania; Chassieu, France; Buenos Aires, Argentina; Santiago, Chile; Singapore and Querétaro, Mexico.

Manitex Valla ~~S.r.l.~~S.r.L. (“Valla”)~~, Manitex Sabre, Inc. (“Sabre”),~~ 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”)~~, and~~ is a distributor of the Company’s products as well as other cranes. 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.

The ~~condensed consolidated~~Company is continuing to closely monitor the spread and impact of the COVID-19 pandemic and is continually assessing its potential effects on our business and our financial ~~statements include~~performance as well as the ~~accounts~~businesses of ~~Manitex International, Inc.~~our customers and ~~subsidiaries in which it has a greater than 50% voting interest (collectively,~~vendors, including the ~~“Company”). All~~impact that we may experience if and when the pandemic subsides. The Company cannot predict the duration or severity of the COVID-19 pandemic, and we cannot reasonably estimate the financial impact the COVID-19 outbreak will have on our results and significant ~~intercompany accounts, profits and transactions have been eliminated in consolidation.~~ estimates going forward.

Transactions for the periods ended March 31, ~~2020~~2021 and ~~2019~~2020 are as follows:

	Three Months Ended March 31,				Three months ended March 31,
	2020		2019		2021		2020
Interest received in cash	$	60	$	69	$	4	$	60
Interest paid in cash		1,693		1,528		553		1,693
Income tax payments (refunds) in cash		96		3
Income tax payments in cash						18		96

Prior to the quarter ended June 30, 2017, the Company owned a 51% interest in ASV Holdings, Inc., which was formerly known as A.S.V., LLC (“ASV”). On May 11, 2017, in anticipation of an initial public offering, ASV converted from an LLC to a C-Corporation and the Company’s 51% interest was converted to 4,080,000 common shares of ASV. On May 17, 2017, in connection with its initial public offering, ASV sold 1,800,000 of its own shares and the Company sold 2,000,000 shares of ASV common stock and reduced its investment in ASV to a 21.2% interest. ASV was deconsolidated and was recorded as an equity investment starting with the quarter ended June 30, 2017. In February 2018, the Company sold an additional 1,000,000 shares of ASV that it held which reduced the Company’s investment in ASV to approximately 11.0%. In September 2019, the Company received cash merger consideration for its remaining 1,080,000 shares of ASV and no longer has an investment in ASV.

Sabre is located in Knox, Indiana and manufactures a comprehensive line of specialized mobile tanks for liquid and solid storage and containment solutions with capacities from 8,000 to 21,000 gallons. Its mobile tanks are sold to specialized independent tank rental companies and through the Company’s existing dealer network. The tanks are used in a variety of end markets such as petrochemical, waste management and oil and gas drilling.

On ~~March 4,~~August 21, 2020, the ~~Company’s Board~~Company entered into an Asset Purchase Agreement to sell Manitex Sabre, Inc. to an affiliate of ~~Directors approved~~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 ~~exploration by management of various strategic alternatives for Sabre, including the possibility of a transaction involving the~~cash proceeds from sale of ~~all or part~~$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, to determine whether such a transaction would provide value to shareholders. The criterion of asset held for sale has been met and Sabre will be reported as discontinued operations. The Company at this time cannot be sure that any such transaction will occur, and if so, what impact such a transaction would have on the Company’s financial statements.assets.

The Company consolidates all entities that we control by ownership of a majority voting interest. Additionally, there are situations in which consolidation is required even though the usual condition of consolidation (ownership of a majority voting interest) does not apply. Generally, this occurs when an entity holds an interest in another business enterprise that was achieved through arrangements that do not involve voting interests, which results in a disproportionate relationship between such entity's voting interests in, and its exposure to the economic risks and potential rewardssummary of the ~~other business enterprise. This disproportionate relationship results~~Company’s significant accounting policies is presented to assist in what is known as a variable interest, and the entity in which we have this interest is referred to as a Variable Interest Entity (“VIE”). An enterprise must consolidate a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary has both (1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

~~The Company eliminates from~~understanding the Company’s financial ~~results~~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.

For purposes of the statement of cash flows, the Company considers all ~~significant intercompany transactions.~~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.

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 ~~$219~~$236 and ~~$217~~$240 at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

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 are stated at the amounts the Company’s customers are invoiced and do not bear interest. ~~Accounts receivable is reduced by an allowance for amounts that may become uncollectible in the future.~~ The Company ~~is exposed to credit losses through~~has adopted a policy consistent with U.S. GAAP for the ~~sale~~periodic review of ~~products and services. The Company’s expected loss allowance methodology for~~its accounts receivable ~~is developed using historical collection experience, current and future economic and market conditions, and a review~~to determine whether the establishment of the current status of customer trade accounts receivables. Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers’ financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company considered the current and future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted at this time. The Company’s estimate for thean allowance for doubtful accounts ~~related to trade receivables includes evaluation~~is warranted based on the Company’s assessment of ~~specific accounts where~~ the ~~Company has information that~~collectability of the ~~customer may have an inability to meet its financial obligations.~~accounts. The Company ~~had allowances~~established an allowance for ~~doubtful accounts~~bad debt of ~~$663 and $686~~$2.6 million at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. The Company also has in some instances a security interest in its accounts receivable until payment is received.

Property and equipment are stated at cost or the fair market value at the date of acquisition 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 years ended March 31, 2021 and 2020 was $551 and $498, respectively.

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 three months ended March 31, ~~2020, one customer, Rush Truck Center, accounted~~2020. NaN impairment expense was recognized for ~~approximately 10.0% of the Company’s revenue. For~~ the three months ended March 31, ~~2019, no customer accounted~~2021.

The Company’s methodology for ~~more than 10.0%~~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 ~~Company’s revenue.~~

~~Assets~~cost of an acquired entity over the fair value assigned to identifiable assets acquired and ~~Liabilities Classified as Held for Sale~~liabilities assumed.

The Company ~~classifies assets (or disposal groups comprised~~annually tests goodwill for impairment on the first day of ~~assets and liabilities) as held for sale when they are expected to be recovered primarily through sale rather~~its fiscal fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than ~~through continuing use. They are stated at~~not reduce the ~~lower of carrying amount or~~ fair value ~~less costs~~of a reporting unit below its carrying value. The Company also performs an interim review for indicators of impairment each quarter to ~~sell. Upon reclassification, we cease to depreciate or amortize non-current assets classified as held~~assess whether an interim impairment review is required for ~~sale.~~

A discontinued operation is a component of our business that represents a separate major line of business or geographical area of operation that has been disposed of or is held for sale and a strategic shift that will have a major effect on our operations and financial results. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income (loss) is revised as if the operation had been discontinued from the start of the comparative period. ~~We have elected to not revise the interim unaudited condensed consolidated statements of cash flows to split operating, investing and financing activities between~~

~~continuing and discontinued operations, but instead provide certain required cash flow information.~~ any reporting unit. As part of its interim reviews, management analyzes potential changes in the ~~discontinued operations classification, we review~~value of individual reporting units based on each reporting unit’s operating results for the ~~allocation~~period compared to expected results as of ~~corporate expenses, interest expense and entity-wide goodwill and intangible assets.~~the prior year’s annual impairment test. In addition, ~~income taxes are calculated on a stand-alone basis~~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 three months ended March 31, 2020. NaN impairment expense was recognized for ~~both continuing and discontinued operations.~~the three months ended March 31, 2021.

See Note 20 to the interim unaudited condensed consolidated financial statements included elsewhere in this quarterly report for a more detailed discussion of assets held for sale and discontinued operations.

The Company has issued partial residual guarantees to financial institutions related to a customer financing of equipment purchased by the customer. The Company must assess the probability of losses if the fair market value is less than the guaranteed residual value.

The Company has issued partially residual guarantees that have maximum exposure of approximately $1.6 million. The Company, however, does not have any reason to believe that any exposure from such a guarantee is either probable or estimable at this time, as such, no liability has been recorded. The Company’s ability to recover any losses incurred under the guarantees may be affected by economic conditions in used equipment markets at the time of loss.

The Company records a liability for the estimated fair value of guarantees issued pursuant to ASC 460. The Company recognizes a loss under a guarantee when its obligation to make payment under the guarantee is probable and the amount of the loss can be estimated. A loss would be recognized if the Company’s payment obligation under the guarantee exceeds the value it can expect to recover to offset such payment, primarily through the sale of the equipment underlying the guarantee.

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.

Warranty costs are accrued at the time revenue is recognized. The Company’s products are typically sold with a warranty covering defects that arise during a fixed period of time. The specific warranty offered is a function of customer expectations and competitive forces. ~~The Equipment Distribution division does not accrue for warranty costs at the time of sales, as they are reimbursed by the manufacturers for any warranty that they provide to their customers.~~

A liability for estimated warranty claims is accrued at the time of sale. The liability is established using historical warranty claim experience. ~~Historical warranty experience is, however, reviewed by management.~~ The current provision may be adjusted to take into account unusual or non-recurring events in the past or anticipated changes in future warranty claims. Adjustments to the initial warranty accrual are recorded if actual claim experience indicates that adjustments are necessary. ~~Warranty reserves are reviewed to ensure critical assumptions are updated for known events that may impact the potential warranty liability.~~

As of March 31, 2021 and December 31, 2020, accrued warranties were $1,241 and $1,292, respectively.

The Company ~~enters into derivative instruments~~has elected to ~~manage its exposure to interest rate risk related to certain foreign term loans. Derivatives are initially recognized at fair value at~~account for the ~~date the contract is entered into and are subsequently remeasured to their fair value at the end~~Paycheck Protection Program (PPP) loan of ~~each reporting period. The resulting gain or loss is recognized in current earnings immediately unless the derivative is designated and effective~~$3.7 million as a ~~hedging instrument, in which case~~government grant and as such, the ~~effective portion~~loan was recorded as a deferred income liability on the balance sheet. The Company has applied for forgiveness of the ~~gain or loss~~loan. The offset will be recorded against the related expense on the income statement, when it is ~~recognized~~probable that the grant income will be realized, likely after approval from the Small Business Administration (“SBA”).

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.

When the Company enters into forward currency exchange contracts it does so such that the exchange gains and ~~reclassified into earnings~~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 ~~same period or periods during which~~market value of the ~~hedged instrument affects earnings (date of sale).~~forward currency exchange contracts it holds. The ~~Company’s interest rate swap~~forward currency exchange contracts ~~are held by~~that the ~~PM Group~~Company has to offset existing assets and ~~are intended to manage~~liabilities denominated in other than the ~~exposure to interest rate risk related to certain term loans that PM Group has with certain financial institutions in Italy. These contracts~~reporting units’ functional currency have been determined not to be ~~hedge instruments under ASC 815-10.~~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.

The Company expenses research and development costs, as incurred. For the periods ended March 31, 2021 and 2020 expenses were $785 and $687, respectively.

Advertising costs are expensed as incurred and were $128 and $165 for the periods ended March 31, 2021 and 2020, respectively.

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 (SG&A or COGS) in the Condensed Consolidated Statements of Operations and the accrual is recorded in other long-term liabilities in the Condensed Consolidated Balance Sheets.

In determining whether liabilities should be recorded for pending litigation claims, the Company must assess the allegations and the likelihood that it will successfully defend itself. When the Company believes it is probable that it will not prevail in a particular matter, it will then ~~make~~record an estimate of the amount of liability based, in part, on ~~the~~ advice of legal counsel.

The ~~Company’s provision~~Company accounts for income taxes ~~consists~~under the provisions of ~~U.S.~~ASC 740 “Income Taxes,” which requires recognition of income taxes based on amounts payable with respect to the current year and ~~foreign~~the effects of deferred taxes for the expected future tax consequences of events that have been included in ~~amounts necessary to align~~ the Company’s ~~year-to-date~~financial statements or tax ~~provision with~~returns. Under this method, deferred tax assets and liabilities are determined based on the ~~effective rate that~~differences between the ~~Company expects to achieve~~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 ~~full year. Each quarter~~year in which the ~~Company updates its estimate of the annual effective~~differences are expected to reverse. Valuation allowances are recorded to reduce deferred tax ~~rate and records cumulative adjustments as necessary. The effective~~assets when it is more-likely-than-not a tax ~~rate is based upon the Company’s anticipated earnings both in the U.S. and in foreign jurisdictions.~~

benefit will not be realized. In assessing the realizability of deferred tax assets, ~~the Company evaluates~~management considers whether it is ~~more-likely-than-not (more~~more likely than ~~50%)~~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 ~~in those periods in which temporary differences become deductible and/or~~prior to the expiration of any net operating ~~losses can be utilized. We assess all positive and negative evidence when determining~~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 ~~net deferred~~GILTI inclusion upon reversal.

ASC 740 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax ~~assets that are more-likely-than-not~~position taken or expected to be ~~realized. This evidence includes, but is not limited~~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 ~~prior earnings history, schedule reversal of taxable temporary differences,~~income tax planning strategies and projected future taxable income. Significant weight is given to positive and negative evidence that is objectively verifiable. In circumstances where there is sufficient negative evidence indicating thatmatters in the ~~deferred tax assets are not more likely than not realizable, we establish a valuation allowance.~~provision for income taxes.

~~Reporting “Comprehensive Income” requires reporting and displaying comprehensive income and its components.~~ Comprehensive income includes, in addition to net earnings, other items that are reported as direct adjustments to ~~stockholder’s~~shareholders’ equity. Currently, the comprehensive income adjustment required for the Company ~~consists of~~is a foreign currency translation adjustment, ~~which is~~ the result of consolidating its foreign ~~subsidiaries.~~

Beginning with the quarter ended June 30, 2017, the Company accounted for its 21.2% investment in ASV under the equity method of accounting. Under the equity method, the Company’s share of the net income (loss) of ASV was recognized as income (loss) in the Company’s statement of operations and added to the investment account, and dividends received from ASV were treated as a reduction of the investment account. The Company reported ASV’s earnings on a one quarter lag as there was no assurance ASV would report earnings in time to be included in the Company’s financial statements for any given reporting period.

Between February 26 and 28, 2018, the Company sold 1,000,000 shares of ASV stock, reducing the Company’s investment in ASV to approximately 11.0%. During the quarter ended March 31, 2018, the Company:

~~In September 2019, the Company received cash merger consideration for its remaining 1,080,000 shares of ASV and no longer has an investment in ASV. See Notes 8 and 19.~~

Marketable equity securities are valued at fair market value based on the closing price of the stock on the date of the balance sheet. Gains and loss related fair value adjustments related to marketable equity securities are recorded into income each reporting period. In September 2019, the Company received cash merger consideration for its remaining 1,080,000 shares of ASV and no longer has marketable equity securities. subsidiary.

The Company records the amount of shipping and handling costs billed to customers as revenue. ~~Shipping~~The cost incurred for shipping and handling ~~costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment costs and are~~is included in the cost of sales.

Debt issuance costs incurred in securing the Company’s financing arrangements are capitalized and amortized over the term of the associated debt. Deferred financing costs associated with long-term debt are presented in the balance sheet as direct deduction from the carrying amount of that debt liability, consistent with debt discount. Deferred financing costs associated with revolving lines of credit are included with other long-term assets on the Company’s Condensed Consolidated Balance Sheets.

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 leases.

Basic Earnings per Share (“EPS”) was computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period.

The number of shares related to options, warrants, restricted stock, convertible debt and similar instruments included in diluted EPS (“EPS”) is based on the “Treasury Stock Method” prescribed in ASC 260-10, Earnings per Share. This method assumes 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, warrants, restricted stock, convertible debt, and similar instruments is dependent on this average stock price and will increase as the average stock price increases.

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).

GAAP guidance requires the use of highly inflationary accounting for countries whose cumulative three-year inflation exceeds 100 percent. In the second quarter of 2018, published inflation indices indicated that the three-year cumulative inflation in Argentina exceeded 100 percent, and as of July 1, 2018, we elected to adopt highly inflationary accounting for our subsidiary in Argentina (“PM Argentina”). 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 March 31, ~~2020,~~2021, PM Argentina had a small net peso monetary position. Net sales of PM Argentina were less than 5 percent of our consolidated net sales for the ~~three months~~years ended March 31, ~~2020~~2021 and ~~2019,~~December 31, 2020, respectively.

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 2021-01,1 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.

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 will be the first quarter of fiscal year 2021 and early adoption is permitted. ~~Adoption of Topic 740 is not expected to have a material effect on the Company’s consolidated financial statements.~~

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” (“ASU 2019-04”). ASU 2019-04 provides narrow scope amendments for Topics 326, 815 and 825. The effective date was the first quarter of fiscal year 2020 and early adoption was permitted. The Company adopted this guidance as of January 1, ~~2020. The adoption of this guidance did not have a significant impact on our operating results. There was no adjustment to retained earnings as a result of the adoption of this guidance.~~

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”). ASU 2016-13 sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. The guidance in this standard replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to certain off-balance sheet credit exposures. Subsequently, the FASB issued the following standards related to ASU 2016-13: ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” ASU 2019-05, “Financial Instruments-Credit Losses (Topic 326) Targeted Transition Relief,” and ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which provided additional guidance and clarity to ASU 2016-13 (collectively, the “Credit Loss Standard”). The effective date for these standards was the first quarter of fiscal year 2020 and early adoption was permitted. The Credit Loss Standard was applied using a modified retrospective approach. ~~The Company adopted this guidance as of January 1, 2020. The adoption of this guidance did not have a significant impact on our operating results.~~

In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-2”). ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from H.R. 1 “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (commonly known as the “Tax Cuts and Jobs Act” (the “Jobs Act”)). The Company has adopted this guidance as of January 1, 2019.2021. The adoption of this guidance did not have a significant impact on our operating results.

~~Except as noted above, the guidance issued by the FASB during the current year is not expected to have a material effect on the Company’s consolidated financial statements.~~

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 through Crane & Machinery, Inc. 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.

~~Manitex, Inc.~~ (“Manitex”) markets a comprehensive line of boom trucks, truck cranes and sign cranes. Manitex’s boom trucks and crane products are primarily used for industrial projects, energy exploration and infrastructure development, including, roads, bridges and commercial construction.

~~Badger Equipment Company~~ ~~(“Badger”) is a manufacturer of specialized rough terrain cranes and material handling products. Badger primarily serves the needs of the construction, municipality and railroad industries.~~

~~PM Oil and Steel S.p.A~~ (“PM” or “PM Group”), formerly known as PM Group S.p.A., 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.

~~Manitex Valla S.r.l.’s (“Valla”)~~ product line of industrial cranes is a full range of precision pick and carry cranes using electric, diesel, and hybrid power options. Its cranes offer wheeled or tracked, and fixed or swing boom configurations, with special applications designed specifically to meet the needs of its customers. These products are sold internationally through dealers and into the rental distribution channel.

~~Manitex Sabre, Inc. (“Sabre”)~~ manufactures a comprehensive line of specialized mobile tanks for liquid and solid storage and containment solutions with capacities from 8,000 to 21,000 gallons. Its mobile tanks are sold to specialized independent tank rental companies and through the Company’s existing dealer network. The tanks are used in a variety of end markets such as petrochemical, waste management and oil and gas drilling. This entity is included in discontinued operations.

~~Crane and Machinery, Inc. (“C&M”)~~ is a distributor of the Company’s products as well as Terex Corporation’s (“Terex”) rough terrain and truck cranes. Crane and Machinery Leasing, Inc.’s (“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 rough terrain and truck cranes, C&M’s primary business is the distribution of products manufactured by the Company.

For each of the subsidiaries, various products may be sold separately or together with installation services. Further, equipment sales come with a standard warranty that is not sold separately. Additionally, each of the subsidiaries sells parts to its customers.

The following table disaggregates our revenue for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	Three Months Ended March 31,				Three Months Ended March 31,
	2020		2019		2021		2020
Equipment sales	$	40,875	$	46,384	$	38,832	$	40,875
Part sales		7,168		7,302		7,203		7,168
Installation services		690		739		1,133		690
Total Revenue	$	48,733	$	54,425	$	47,168	$	48,733

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 months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

Three Months Ended
March 31,

2020

2019

United States

$
24,473

$
26,897

Canada

2,480

6,018

Italy

5,333

4,923

Chile

2,085

2,383

France

2,783

1,946

Other

1,925

1,874

Argentina

1,304

1,867

United Kingdom

1,552

1,590

Spain

1,166

1,059

Germany

1,113

1,347

Finland

1,034

1,178

Mexico

175

544

Romania

620

165

Peru

142

458

Hong Kong

32

446

Singapore

6

92

Israel

161

437

Czech Republic

254

333

Netherlands

234

236

Ireland

90

317

Martinique

156

12

China

244

2

Morocco

22

—

Denmark

45

62

Turkey

82

63

United Arab Emirates

599

17

Bahrain

35

52

Indonesia

—

28

Saudi Arabia

20

24

Russia

0

17

Puerto Rico

236

8

Belgium

103

26

South Africa

67

3

Kuwait

—

1

Malaysia

153

—

Ukraine

9

—

$
48,733

$
54,425

	Three Months Ended March 31,
	2021		2020
United States		17,438	$	24,473
Italy		6,713		5,333
France		3,766		2,783
Chile		3,220		2,085
Canada		2,875		2,480
Other		13,156		11,579
	$	47,168	$	48,733

The sources of the Company’s revenues are summarized below for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	Three Months Ended March 31,				Three Months Ended March 31,
	2020		2019		2021		2020
Boom trucks, knuckle boom & truck cranes	$	34,787	$	39,571	$	33,226	$	34,787
Part sales		7,168		7,302		7,203		7,168
Other equipment		2,954		5,400		3,568		2,954
Rough terrain cranes		3,134		1,413		2,038		3,134
Installation services		690		739		1,133		690
Total Revenue	$	48,733	$	54,425	$	47,168	$	48,733

Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses.

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 revenue that~~ is deferred until the revenue recognition criteria have been met, at which time, the customer deposit is recognized into revenue.

	March 31, 2020			December 31, 2019			March 31, 2021			March 31, 2020
Customer deposits	$	1,493		$	1,835		$	2,363		$	1,493
Additional customer deposits received where revenue has not yet been recognized								1,359			1,146
Revenue recognized from customer deposits		(1,388	)		(5,847	)		(1,874	)		(1,388	)
Additional customer deposits received where revenue has not yet been recognized		1,146			5,658
Effect of change in exchange rates		(42	)		(153	)		(77	)		(42	)
	$	1,209		$	1,493		$	1,771		$	1,209

4. ~~Financial Instruments—Marketable Securities, Forward Currency Exchange Contracts and Interest Rate Swap Contracts~~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 March 31, ~~2020~~2021 and December 31, ~~2019~~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 March 31, 2020								Fair Value at March 31, 2021
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Liabilities:
Valla contingent consideration									$	—	$	—	$	215	$	215
Forward currency exchange contracts	$	—	$	288	$	—	$	288		—		131		—		131
Total current assets at fair value	$	—	$	288	$	—	$	288
Liabilities:
PM contingent liabilities	$	—	$	—	$	308	$	308
Valla contingent consideration		—		—		202		202
Total recurring liabilities at fair value	$	—	$	—	$	510	$	510	$	—	$	131	$	215	$	346

	Fair Value at December 31, 2019								Fair Value at December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Liabilities:
PM contingent liabilities	$	—	$	—	$	314	$	314
Valla contingent consideration		—		—		205		205	$	—	$	—	$	224	$	224
Forward currency exchange contracts		—		99		—		99		—		267		—		267
Total liabilities at fair value	$	—	$	99	$	519	$	618	$	—	$	267	$	224	$	491

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)									Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	PM Contingent Consideration			Valla Contingent Consideration			Total				Valla Contingent Consideration
Liabilities:
Balance at January 1, 2020	$	314		$	205		$	519
Balance at January 1, 2021											$	224
Effect of change in exchange rates		(6	)		(3	)		(9	)			(9	)
Balance at March 31, 2020	$	308		$	202		$	510
Balance at March 31, 2021											$	215

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.

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.

When the Company receives a significant order in a currency other than the operating unit’s functional currency, management may evaluate different options that are available to mitigate future currency exchange risks. As of March 31, 2020, the Company had no outstanding forward currency contracts that were in place to hedge future sales. Therefore, there are currently no unrealized pre-tax gains or losses which will be reclassified from other comprehensive income into earnings during the next 12 months.

~~In addition, the~~The Company enters into forward currency exchange contracts ~~in relationship~~ such that the exchange gains and losses on ~~certain~~the assets and liabilities 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 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 gains (losses). Items denominated in other than a reporting unit functional currency include certain intercompany receivables due from the Company’s Italian subsidiaries and accounts receivable and accounts payable of our Italian subsidiaries and their subsidiaries.

PM Group has an intercompany receivable denominated in Euros from its Chilean subsidiary. At March 31, ~~2020,~~2021, the Company had entered into ~~two~~a forward currency exchange ~~contracts~~contract that ~~mature~~matures on May ~~29, 2020.~~5, 2021. Under the ~~first~~ contract the Company ~~was~~is obligated to sell ~~2,900,000~~2,290,000 Chilean pesos for ~~3,323~~2,598 euros. ~~The Company had a second contract which obligated the Company to sell 120,000 Chilean pesos for $151.~~ The purpose of the forward ~~contracts~~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.

A contract was signed by PM Group, for an original notional amount of € 482 (€ .01 at March 31, 2020), maturing on October 1, 2020 with interest paid monthly. PM pays interest at a rate of 3.90% and receives from the counterparties interest at the “Euribor” rate for the period in question if greater than 0.90%.

~~As of March 31, 2020, the Company had the following forward currency contracts and interest rate swaps:~~

The following table provides the location and fair value amounts of derivative instruments that are reported in the Condensed Consolidated Balance ~~Sheets~~Sheet as of March 31, ~~2020 and December 31, 2019:~~2021:

		Fair Value					Fair Value
	Balance Sheet Location	March 31, 2020		December 31, 2019
Asset Derivatives
Foreign currency exchange contract	Prepaid expense and other	$	288	$	—
						Balance Sheet Location	March 31, 2021		December 31, 2020
Liabilities Derivatives
Foreign currency exchange contract	Accrued expense	$	—	$	99	Accrued expense	$	131	$	267

The following tables provide the effect of derivative instruments on the Condensed Consolidated Statements of Operations for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

		Gain (loss)						Gain (loss)
	Location of gain or (loss) recognized in the Statement of Operations	Three Months Ended March 31,					Location of gain or (loss) recognized in the Statement of Operations	Three Months Ended March 31,
		2020		2019				2021		2020
Derivatives Not Designated as Hedge Instruments
Forward currency contracts	Foreign currency transaction gains (losses)	$	388	$	(45	)	Foreign currency transaction gains	$	136	$	388
Interest rate swap contracts	Interest expense		—		1
		$	388	$	(44	)		$	136	$	388

The counterparty to each of the currency exchange forward contracts is a major financial institution with credit ratings of investment grade or better and no collateral is required. Management continues to monitor counterparty risk and believes the risk of incurring losses on derivative contracts related to credit risk is unlikely.

During the three months ended March 31, 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 months ended March 31, 2021 and 2020 were recorded in current earnings and did not impact other comprehensive income.

	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Raw materials and purchased parts, net	$	42,908	$	35,406	$	35,608	$	33,172
Work in process, net		4,691		5,547		4,417		3,845
Finished goods, net		16,761		16,865		18,828		19,038
Inventory, net	$	64,360	$	57,818	$	58,853	$	56,055

The Company has established reserves for obsolete and excess inventory of ~~$8,231~~$8,475 and ~~$7,961~~$8,451 as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Intangible assets and accumulated amortization by category as of March 31, ~~2020~~2021 is as follows:

	Weighted Average	Gross					Net		Weighted Average	Gross					Net
	Amortization	Carrying		Accumulated			Carrying		Amortization	Carrying		Accumulated			Carrying
	Period (in years)	Amount		Amortization			Amount		Period (in years)	Amount		Amortization			Amount
Patented and unpatented technology	7	$	17,820	$	(13,621	)	$	4,199	6	$	18,313	$	(14,611	)	$	3,702
Customer relationships	6		18,402		(11,183	)		7,219	5		19,091		(12,820	)		6,271
Trade names and trademarks	12		4,829		(2,530	)		2,299	11		4,829		(2,726	)		2,103
Indefinite lived trade names			2,400					2,400			2,557					2,557
Total intangible assets, net							$	16,117							$	14,633

Intangible assets and accumulated amortization by category as of December 31, ~~2019~~2020 is as follows:

	Weighted Average	Gross					Net		Weighted Average	Gross					Net
	Amortization	Carrying		Accumulated			Carrying		Amortization	Carrying		Accumulated			Carrying
	Period (in years)	Amount		Amortization			Amount		Period (in years)	Amount		Amortization			Amount
Patented and unpatented technology	7	$	17,963	$	(13,499	)	$	4,464	6	$	18,643	$	(14,587	)	$	4,056
Customer relationships	6		18,602		(10,968	)		7,634	5		19,552		(12,753	)		6,799
Trade names and trademarks	12		4,829		(2,481	)		2,348	11		4,829		(2,677	)		2,152
Indefinite lived trade names			2,586					2,586			2,664					2,664
Total intangible assets, net							$	17,032							$	15,671

Amortization expense for intangible assets was ~~$540~~$579 and ~~$575~~$540 for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

Estimated amortization expense for the next five years for the period ending March 31 and subsequent is as follows:

	Amount		Amount
2021	$	2,073
2022		2,073	$	2,233
2023		2,073		2,233
2024		2,063		2,216
2025		2,013		2,169
2026				1,714
And subsequent		3,422		1,511
Total intangibles currently to be amortized		13,717		12,076
Intangibles with indefinite lives not amortized		2,400		2,557
Total intangible assets	$	16,117	$	14,633

Changes in goodwill for the three months ended March 31, ~~2020~~2021 are as follows:

	Total			Total
Balance January 1, 2020	$	32,635
Balance January 1, 2021				$	27,472
Effect of change in exchange rates		(447	)		(743	)
Goodwill impairment		(6,567	)		-
Balance March 31, 2020	$	25,621
Balance March 31, 2021				$	26,729

The Company performed an impairment assessment as of ~~March~~December 31, ~~2020, prior to its October 1,~~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 ~~measurement date. The Company’s policy is to assess the realizability of its intangible assets, and to evaluate such assets for~~ impairment ~~whenever events~~test, a reasonably possible unexpected deterioration in financial performance or ~~changes~~adverse change in ~~circumstances indicate that the carrying amount of such assets (or group of assets)~~earnings may not be recoverable. Impairment is determined to exist if the estimated future undiscounted cash flows are less than the carrying value. Future cash flow projections include assumptions for future sales levels, the impact of cost reduction programs, and the level of working capital needed to support each business. The amount of any impairment then recognized would be calculated as the difference between the estimated fair value and the carrying value of the asset. As of the valuation date, the global economy and the financial markets were experiencing severe adverse effects from the coronavirus disease (COVID-19) pandemic. While uncertainty remains as to its ultimate impact, the COVID-19 pandemic is causing tremendous hardships globally and adversely impacting global and financial market conditions. At March 31, 2020, the Company consideredresult in a decrease in its market capitalization to be a triggering event and as such a valuation analysis was performed and goodwill and intangible assets were determined to be impaired, and as such non-cash impairment charges were made to selling, general and administrative expense and shown separately on the income statement as impairment of intangibles. In order to more closely align the estimated fair values of our reporting units to our overall market capitalization, an increase to our risk premium utilized within our discounted cash flows analysis was applied, resulting in an impairment charge to goodwill and intangible assets at our PM reporting unit in the amount of $6,585 and $137, respectively.

The Company accounted for its investment in ASV during the period (May 17, 2017 to February 26, 2018) that it owned 21.2% of ASV as an equity investment. Under the equity method, the Company’s share of the net income (loss) of ASV was recognized as income (loss) in the Company’s statement of operations added to the investment, and dividends received from ASV were treated as a reduction of the investment account. The Company reported ASV’s earnings on a one quarter lag as there was no assurance that ASV would report earnings in time to be included in the Company’s financial statements for any given reporting period. During the quarter ended March 31, 2018, the Company recorded its proportional share of ASV’s loss for the quarter ended December 31, 2017 and recorded amortization related temporary differences.

Between February 26 and 28, 2018, the Company sold 1,000,000 shares of ASV stock, reducing the Company’s investment to approximately 11.0%, and ceased accounting for its investment in ASV as an equity method ~~investment. In September 2019, the Company received cash merger consideration for its remaining 1,080,000 shares of ASV and no longer has an investment in ASV. See Note 19~~.

~~The~~A liability for estimated warranty claims is accrued ~~warranty~~at the time of sale. The liability is established using historical warranty claim ~~experience; however, the~~experience. The current provision may be adjusted to take into ~~consideration~~account unusual or non-recurring events in the past or anticipated changes in future ~~warrant~~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.

	For the three months ended						For the three months ended
	March 31,						March 31,
	2020			2019			2021			2020
Balance January 1,	$	1,604		$	2,004		$	1,292		$	1,604
Accrual for warranties issued during the period		538			625
Provision for warranties issued during the year								886			538
Warranty services provided		(462	)		(667	)		(917	)		(462	)
Changes in estimate		(133	)		(52	)		-			(133	)
Foreign currency translation		(8	)		(38	)		(20	)		(8	)
Balance March 31,	$	1,539		$	1,872		$	1,241		$	1,539

At March 31, ~~2020,~~2021, the Company and its U.S. subsidiaries have a Loan and Security Agreement, as amended (the “Loan Agreement”), with CIBC Bank USA (“CIBC”), formerly known as “The Private Bank and Trust Company”. The Loan Agreement provides a revolving credit facility ~~extending the~~with a maturity date ~~from July 20, 2021 to~~of July 20, 2023. The aggregate amount of the facility ~~increased from $25,000 to $30,000.~~is $30 million.

The maximum borrowing available to the Company under the Loan Agreement is limited to: (1) ~~up to~~ 85% of eligible receivables; plus (2) ~~up to~~ 50% of eligible inventory valued at the lower of cost or net realizable value subject to a ~~$20,000~~$20 million limit; plus (3) ~~up to~~ 80% of eligible used equipment, as defined, valued at the lower of cost or market subject to a ~~$2,000~~$2 million limit; plus (4) ~~85% of Eligible Bill and Hold Receivables (as defined in the Loan Agreement) subject to a $10,000 limit; plus (5)~~ 50% of eligible Mexico receivables (as ~~defined in the Loan Agreement)~~defined) valued at the lower of cost or net realizable value subject to a ~~$400~~$0.4 million limit. At March 31, 2021 and December 31, 2020, the maximum the Company could borrow based on available collateral was ~~$23,600.~~$22.8 million and $21.9 million, respectively. At March 31, 2021, the Company had $12.8 million in borrowings (less $0.2 million in debt issuance cost for a net debt of $12.6 million) with $10.0 million available to borrow under its revolving credit facility. At December 31, 2020, the Company had ~~$6,000~~$12.8 million in borrowings (less $0.2 million in debt issuance cost for a net debt of $12.6 million) with $9.1 million available to borrow under ~~this~~its revolving credit facility. ~~The Company had no borrowings at December 31, 2019.~~ 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 ~~spread ranges from 0.00%~~and the LIBOR rate are subject to a floor of 0.50% ~~depending on the Borrower’s Adjusted Excess Availability (as defined in the Loan Agreement)~~. The LIBOR spread ranges from 1.75% to 2.25% ~~also~~ 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 ~~four~~4 LIBOR contracts outstanding at any time. In addition, ~~CIBC assesses an~~a fee of 0.375% is applied for the unused ~~line fee that ranges from 0.25% to 0.375%~~portion of the revolving facility and is payable monthly.

~~The~~ In March of 2021, the Company amended the Loan Agreement ~~subjects the Company and its domestic subsidiaries~~ to include a ~~minimum quarterly EBITDA covenant (as defined in the Loan Agreement). The minimum quarterly EBITDA covenant (as defined in the Loan Agreement) is $2,000~~Hedging Agreement for ~~all fiscal years starting~~interest rate protection with ~~the fiscal year ended December 31, 2017 through the end of the agreement. Additionally, the Company and its domestic subsidiaries are subject~~respect to a Fixed Charge Coverage ratio of 1.10 to 1.00 measured on an annual basis beginning September 30, 2019 (based on a trailing twelve-month basis) through the term of the agreement. At the end of a quarter, if there is $15,000 or more of availability and outstanding borrowings of less than $5,000, covenant testing is waived. The Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company’s ability to, among other things, incur additional indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, pay dividends or make distributions, repurchase stock, in each case subject to customary exceptions for a credit facility of this size.LIBOR Loans. The Company was ~~not required to calculate covenant~~in compliance ~~calculations at~~with its covenants as of March 31, ~~2020 and December 31, 2019.~~2021.

The Loan Agreement has a Letter of Credit facility of ~~$3,000,~~$3 million, which is fully reserved against availability. As of March 31, 2021, the outstanding Letters of Credit were $0.2 million which is offset against availability under the revolving facility.

At March 31, 2021, the Company has a $547 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 8 remaining monthly payments of $69 on this note.

At March 31, 2021, the Company has a $159 term note payable to a bank. The note dated November 13, 2020 had 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. There are 6 remaining monthly payments of $26 on this note.

At March 31, 2021 and December 31, 2020, Badger has a balance on a note payable to Avis Industrial Corporation of ~~$258.~~$153 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.

On March 6, 2018, PM Group and Oil & Steel S.p.A. (PM Group’s subsidiary) entered into a Debt Restructuring Agreement (the “Restructuring Agreement”) with Banca Monte dei Paschi di Siena S.p.A., Banca Nazionale del Lavoro S.p.A., BPER Banca S.p.A., Cassa di Risparmio in Bologna S.p.A. and Unicredit S.p.A. (collectively the “Lenders”), and Loan Agency Services S.r.l. (the “Agent”). The Restructuring Agreement, which replaces the previous debt restructuring agreement with the Lenders entered into in 2014, provides for, among other things:

At March 31, ~~2020, PM Group has established demand credit~~2021 and overdraft facilities with five Italian banks, one Spanish bank and nine banks in South America. Under the facilities, PM Group can borrow up to approximately €20,795 ($22,908) for advances against invoices, and letter of credit and bank overdrafts. At December 31, ~~2019,~~2020, respectively, PM Group had established demand credit and overdraft facilities with ~~five Italian~~5 banks in Italy, 1 bank in Spain and ~~nine~~11 banks in South America. Under the facilities, as of March 31, 2021 and December 31, 2020 respectively, PM Group can borrow up to approximately ~~€21,337~~€21,377 ($~~23,955)~~25,103) and €20,550 ($25,133) for advances against invoices, ~~and~~ letter of credit and bank overdrafts. These facilities are divided into two types: working capital facilities and cash facilities. ~~Interest~~At March 31, 2021 and December 31, 2020, interest on the Italian working capital ~~facilities and cash~~ 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 the three months ended March 31, 2020 and 12 months ended December 31, 2019, respectively.~~ - 55%.

At March 31, ~~2020,~~2021, the Italian banks ~~has~~had advanced PM Group ~~€13,218~~€11,322 ($~~14,561), at variable interest rates, which currently range from 1.75% to 2.00%~~13,295). ~~At March 31, 2020, there~~There were no0 advances to PM Group from the Spanish ~~bank. At March 31, 2020,~~bank, and the South American banks had advanced PM Group ~~€551~~€89 ($~~607)~~104). At December 31, ~~2019,~~2020, the Italian banks had advanced PM Group ~~€11,877~~€10,551 ($~~13,334), at variable interest rates, which currently range from 1.75% to 2.00%~~12,904). ~~At December 31, 2019, there~~There were no0 advances to PM Group from the Spanish ~~bank. At December 31, 2019,~~bank, and the South American banks had advanced PM Group ~~€971~~€98 ($~~1,090)~~120). ~~Total short-term borrowings for PM Group were €13,769 ($15,168) and €12,848 ($14,424) at March 31, 2020 and December 31, 2019, respectively.~~

At March 31, 2021 and December 31, 2020, PM Group has a ~~€9,494~~€5,752 ($~~10,458)~~6,755) and €5,752 ($7,035) term loan with ~~two~~Davy Global Fund Management, an Irish fund that purchased the debt from BPER, an Italian ~~banks, BPER and Unicredit.~~bank. The term loan is split into a note and a balloon payment and is secured by PM Group’s common stock. ~~At March 31, 2020, the note and balloon payment have an outstanding principal balance of €6,492 ($7,152) and €3,002 ($3,306) respectively. Both are~~The term loan is charged interest at a fixed rate of 3.5%~~, with an effective rate of 3.5% at March 31, 2020.~~. The note is payable in annual installments of principal, ~~€991 for 2020, €1,026~~€513 for 2021, ~~€1,062~~€531 for 2022, ~~€1,099~~€549 for 2023, ~~€1,137~~€569 for 2024, and ~~€1,177~~€588 for 2025. The balloon payment is payable in a single payment of €3,002 in 2026. ~~See above for restructuring. At December 31, 2019, the note and balloon payment had an outstanding principal balance of €6,492 ($7,289) and €3,002 ($3,439), respectively.~~

An adjustment in the purchase accounting to value the ~~non-interest-bearing~~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 March 31, 2021 and December 31, 2020, the remaining balance was ~~€253 or $278~~€86 ($101) and €114 ($140), respectively, and has been offset to the debt.

At March 31, 2021 and December 31, 2020, PM Group has unsecured borrowings with ~~three~~an Italian ~~banks~~bank (MPS) and an Irish fund (Davy Global Fund Management) totaling ~~€10,385~~€7,225 ($~~11,440). At December 31, 2019, PM Group has unsecured~~8,485) and €7,225 ($8,836), respectively. The borrowings ~~with three Italian banks totaling €10,385 ($11,659). Interest on the unsecured notes is charged at~~have a ~~stated and effective~~fixed rate of interest of 3.5% ~~at March 31, 2020 and December 31, 2019.~~ .

Annual payments of ~~€1,731~~€1,445 are payable ~~beginning in 2019 and~~ ending in 2025.

PM Group is subject to certain financial covenants ~~as defined by the debt restructuring agreement~~ 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 ~~beginning on~~as of June 30 and December 31 ~~2018.~~of each year. The Company was in compliance with the loan covenants at ~~March~~December 31, 2020.

At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, Autogru PM ~~RO,~~had a ~~subsidiary of PM Group, had three notes. The first~~term note is payable in 60 monthly principal installments of €8 ($9), plus interest at the 1-month Euribor plus 300 basis points, effective rate of 3.00% at March 31, 2020 and December 31, 2019, maturing October 2020. At March 31, 2020 and December 31, 2019, thewith an outstanding principal balance of ~~the note was €59~~€90 ($~~65)~~106) and ~~€84~~€116 ($~~94).~~

142), respectively. The ~~second~~ note is payable in monthly installments ~~of €9 ($10) starting from September 2019~~ and ~~ending~~matures in ~~September 2020, and one final payment of €190 ($207) in September 2020.~~December 2021. The note is charged interest at the 1-month Euribor plus 250 basis points, for an effective rate of 2.50% at March 31, ~~2020~~2021 and December 31, ~~2019. At March 31, 2020, the outstanding balance was €192 ($212). At December 31, 2019, the~~2020.

Autogru PM had another term note with an outstanding principal balance of ~~the note was €218~~€146 ($~~245).~~

172) and €164 ($201) at March 31, 2021 and December 31, 2020, respectively. The ~~third~~ 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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, maturing in February ~~2023;~~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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, maturing in April ~~2023;~~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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, maturing ~~June~~in September 2023. ~~At March 31, 2020 and December 31, 2019, the outstanding principal balance of the note was €217 ($238) and €234 ($263).~~

~~PM has an interest rate swap with a fair market value at March 31, 2020 and December 31, 2019 of €- or $1 which has been included in debt.~~

At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, Valla had established demand credit and overdraft facilities with ~~two~~2 Italian banks. Under the facilities, Valla can borrow up to approximately €660 ($~~720) and €660 ($741) as of March 31, 2020 and December 31, 2019,~~775) for advances against orders, invoices and bank overdrafts. Interest on the Italian working capital facilities is charged at a flat percentage rate for advances on invoices and orders ranging from 1.67% - 4.75% at March 31, 2021 and ~~1.67% - 4.75%.~~December 31, 2020. At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Italian banks had advanced Valla ~~€437~~€305 ($~~482)~~358) and ~~€269~~€474 ($~~302)~~579).

~~At March 31, 2020 and December 31, 2019,~~ Valla ~~has~~had a term loan with ~~Carisbo. The note is~~Carisbo that was payable in quarterly principal installments beginning on October 30, 2017 of €8 ($9)10), plus interest at the 3-month Euribor plus 470 basis points, for an effective rate of 4.36% at ~~March 31, 2020 and~~ December 31, ~~2019.~~2020. The note ~~matures in~~matured on January 31, 2021. At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the outstanding principal balance of the note was ~~€31~~€0 ($~~35)~~0) and ~~€39~~€8 ($~~44).~~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 1.45% at March 31, 2021 and December 31, 2020. The Company leases its Georgetown facility under a capital lease that expires on April 30, 2028. The monthly rent is currently $66 and is increased by 3% annually on September 1 during the term of the lease.note matures in December 2025. At March 31, 2021 and December 31, 2020, the outstanding ~~capital lease obligation is $4,753.~~

~~The Company has entered into a lease agreement with a bank pursuant to which the Company is permitted to borrow 100%~~principal balance of the cost of new equipment with 29 month repayment periods. At the conclusion of the lease period, for each piece of equipment the Company is required to purchase that piece of leased equipment for one dollar.

~~The equipment, which is acquired in ordinary course of the Company’s business, is available for sale~~note was €25 ($29) and ~~rental prior to sale.~~

Under the lease agreement the Company can elect to exercise an early buyout option at any time, and pay the bank the present value of the remaining rental payments discounted by a specified Index Rate established at the time of leasing. The early buyout option results in a prepayment penalty which progressively decreases during the term of the lease. Alternatively, under the like-kind provisions in the agreement, the Company can elect to replace or substitute different equipment in place of equipment subject to the early buyout without incurring a penalty.

~~The following is a summary of amounts financed under equipment capital lease agreements:~~€25 ($31), respectively.

On December 19, 2014, the Company issued a subordinated convertible debenture with a $7,500 face amount payable to Terex, a related party. The convertible debenture, is subordinated, carries a 5% per annum coupon, and is convertible into Company common stock at a conversion price of $13.65 per share or a total of 549,451 shares, subject to customary adjustment provisions. The debenture has a December 19, 2020 maturity date.

From and after the third anniversary of the original issuance date, the Company may redeem the convertible debenture in full (but not in part) at any time that the last reported sale price of the Company’s common stock equals at least 130% of the Conversion Price (as defined in the debenture) for at least 20 of any 30 consecutive trading days. Following an election by the holder to convert the debenture into common stock of the Company in accordance with the terms of the debenture, the Company has the discretion to deliver to the holder either (i) shares of common stock, (ii) a cash payment, or (iii) a combination of cash and stock.

~~As of March 31, 2020, and December 31, 2019, the note had a remaining principal balance of $7,367 and $7,323 and an unamortized discount of $134 and $177, respectively.~~

The Terex agreements included obligations on the part of the Company to timely file with the SEC its reports that are required to be filed pursuant to the Exchange Act. Effective March 29, 2018, the Company obtained waivers from the holders with respect to any breaches, defaults or events of default that may have been or may be triggered in connection with the Company’s failure to timely file its reports with the SEC due to the previously completed restatement of the Company’s financial statements.

On January 7, 2015, the Company entered into a Note Purchase Agreement (the “Perella Note Purchase Agreement”) with MI Convert Holdings LLC (which is owned by investment funds constituting part of the Perella Weinberg Partners Asset Based Value Strategy) and Invemed Associates LLC (together, the “Investors”), pursuant to which the Company agreed to issue $15,000 in aggregate principal amount of convertible notes due January 7, 2021 (the “Perella Notes”) to the Investors. The Perella Notes are subordinated, carry a 6.50% per annum coupon, and are convertible, at the holder’s option, into shares of Company common stock, based on an initial conversion price of $15.00 per share, subject to customary adjustments. Following an election by the holder to convert the debenture into common stock of the Company in accordance with the terms of the debenture, the Company has the discretion to deliver to the holder either (i) shares of common stock, (ii) a cash payment, or (iii) a combination of cash and stock. Upon the occurrence of certain fundamental corporate changes, the Perella Notes are redeemable at the option of the holders of the Perella Notes. The Perella Notes are not redeemable at the Company’s option prior to the maturity date, and the payment of principal is subject to acceleration upon an event of default. The issuance of the Perella Notes by the Company was made in reliance upon the exemptions from registration provided by Rule 506 and Section 4(a)(2) of the Securities Act of 1933.

In accordance with a Registration Rights Agreement with the Investors dated January 7, 2015, the Company agreed to register the resale of the shares of common stock issuable upon conversion of the Perella Notes. The Registration Statement on Form S-3 filed by the Company was declared effective by the SEC on February 23, 2015.

As of March 31, 2020, the note had a remaining principal balance of $8,000 (less $73 debt issuance cost for a net debt of $7,927) and an unamortized discount of $0, compared to a remaining balance of $14,858 (less $98 debt issuance cost for a net debt of $14,760) and an unamortized discount of $142 at December 31, 2019.

In January 2020, the Company obtained consent from the Noteholders to make prepayments on the Notes in accordance with the terms of the Note Purchase Agreement. As of March 31, 2020, the Company has paid $7,000 in principal prepayments on the Notes.

The Perella agreements included obligations on the part of the Company to timely file with the SEC its reports that are required to be filed pursuant to the Exchange Act. Effective March 28, 2018, the Company obtained waivers from the holders with respect to any breaches, defaults or events of default that may have been or may be triggered in connection with the Company’s failure to timely file its reports with the SEC due to the previously completed restatement of the Company’s financial statements.

~~We lease~~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; ~~we recognize~~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 45 and 7 years, respectively. The weighted average discount rate for operating and finance leases was ~~3.92%~~5.2% and 12.5% respectively.

Leases (thousands)	Classification	March 31, 2020		December 31, 2019		Classification	March 31, 2021		December 31, 2020
Assets
Operating lease assets	Operating lease assets	$	2,294	$	2,174	Operating lease assets	$	3,752	$	4,068
Finance lease assets	Fixed assets, net		3,721		3,906
Financing lease assets						Fixed assets, net		2,576		2,847
Total leased assets		$	6,015	$	6,080		$	6,328	$	6,915

Liabilities
Current
Operating	Current liabilities	$	785	$	813	Current liabilities	$	1,009	$	1,167
Finance	Current liabilities		474		476
Financing						Current liabilities		344		344

Non-current
Operating	Non-current liabilities		1,508		1,361	Non-current liabilities		2,743		2,901
Finance	Non-current liabilities		4,473		4,584
Financing						Non-current liabilities		4,128		4,221
Total lease liabilities		$	7,240	$	7,234		$	8,224	$	8,633

							Three months ended March 31,
Lease Cost (thousands)	Classification	For the three months ended March 31, 2020		For the three months ended March 31, 2019		Classification	2021		2020
Operating lease costs	Operating lease assets	$	262	$	227	Operating lease assets	$	304	$	262
Finance lease cost
Depreciation/Amortization of leased assets	Depreciation or Inventory reserve		114		143
Depreciation/amortization of leased assets						Depreciation		91		114
Interest on lease liabilities	Interest expense		151		145	Interest expense		141		151
Lease cost		$	527	$	515		$	536	$	527

					Three months ended March 31,
Other Information (thousands)	For the three months ended March 31, 2020		For the three months ended March 31, 2019		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	253	$	248	$	332	$	253
Operating cash flows from finance leases	$	113	$	125	$	76	$	113
Financing cash flows from finance leases	$	151	$	145	$	141	$	151

	Operating Leases			Capital Leases			Operating Leases			Capital Leases
2021	$	856		$	1,054
2022		561			885		$	1,176		$	872
2023		362			911			917			897
2024		184			939			683			925
2025		116			967			487			952
2026								392			981
And subsequent		410			3,167			713			2,675
Total undiscounted lease payments		2,489			7,923			4,368			7,302
Less interest		(196	)		(2,976	)		(616	)		(2,830	)
Total liabilities	$	2,293		$	4,947		$	3,752		$	4,472
Less current maturities		(785	)		(474	)		(1,009	)		(344	)
Non-current lease liabilities	$	1,508		$	4,473		$	2,743		$	4,128

Beginning on January 1, 2021, the Company leases its 40,000 sq. ft. Bridgeview facility from an unaffiliated third party. Until December 31, 2020 the property was owned by an entity controlled by Mr. David J. Langevin, the Company’s Executive Chairman.

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 March 31, 2020.~~statements.

For the three months ended March 31, ~~2020,~~2021, the Company recorded an income tax provision ~~from continuing operations~~ of ~~$404,~~$292, which includes a discrete income tax benefit of ~~$316.~~$45. The calculation of the overall income tax provision for the three months ended March 31, ~~2020~~2021 primarily consists of foreign income taxes ~~offset by~~and a discrete income tax benefit related to the expiration of the statute of limitations for various state and foreign jurisdictions, ~~and the settlement~~partially offset by an accrual of ~~the Romanian~~interest related to unrecognized tax audit for 2017 and 2018, which includes a partial reduction in the valuation allowance at PM Italy caused by the indirect effects of uncertain tax positions embedded in foreign net operating loss carryforwards..benefits. For the three months ended March 31, ~~2019,~~2020, the Company recorded an income tax provision of ~~$197,~~$404, which includes a discrete income tax ~~provision~~benefit of ~~$46~~$316 related to a decrease in the valuation allowance, an expiration of the statute of limitations for ~~the~~various state and foreign jurisdictions partially offset by an accrual of ~~taxes and~~ interest related to unrecognized tax benefits.

The effective tax rate for the three months ended March 31, ~~2020~~2021 was an income tax provision of ~~-6.08%~~60.9% on pretax loss of ~~$6,640~~$480 compared to an income tax provision of ~~13.10%~~6.1% on a pretax ~~income~~loss of ~~$1,506~~$6,640 in the comparable prior period. The effective tax rate for the three months ended March 31, ~~2019~~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, anincome 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, and the tax effects of settling the Romanian tax audit for 2017 and 2018.~~

The Company’s total unrecognized tax benefits as of March 31, ~~2020~~2021 and ~~2019~~2020 were approximately $3.5 million and $4.0 million, ~~and $4.3 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 Romanian~~2012-2016 and the disputed Italy audit assessment for tax ~~years 2017 and 2018 was settled during the quarter ended March 31, 2020.~~year 2016. Depending ~~upon~~on the final resolution of the ~~Italy audit and disputed Romanian income tax assessment,~~audits, the uncertain tax position liability could be higher or lower than the amount recorded at March 31, 2020. A favorable resolution of an unrecognized tax benefit could be recognized as a reduction in the tax provision and effective rate in the period of resolution. An unfavorable settlement of an unrecognized tax benefit could increase the tax provision and effective tax rate and may require the use of cash in the period of resolution. We believe it is reasonably possible that a decrease of up to $0.3 million in unrecognized tax benefits will be realized within 12 months of the reporting date as a result of a lapse of the statute of limitations and for the anticipated resolution of the Italy tax audit.

Basic net earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. ~~Diluted earnings per share reflects the potential dilution of convertible debt, restricted stock units and stock options.~~ Details of the calculations are as follows:

Three Months Ended
March 31,

2020

2019

Net (loss) income from continuing

$
(7,044
)

$
1,309

Loss from operations of discontinued operations, net of income taxes

(432
)

(399
)
Net (loss) income

$
(7,476
)

$
910

(Loss) earnings per share

Basic

Net (loss) income from continuing operations

$
(0.36
)

$
0.07

Loss from operations of discontinued operations, net of income taxes

$
(0.02
)

$
(0.02
)
Net (loss) income

$
(0.38
)

$
0.05

Diluted

Net (loss) income from continuing operations

$
(0.36
)

$
0.07

Loss from operations of discontinued operations, net of income taxes

$
(0.02
)

$
(0.02
)
Net (loss) income

$
(0.38
)

$
0.05

Weighted average common shares outstanding

Basic

19,733,772

19,678,081

Diluted

Basic

19,733,772

19,678,081

Dilutive effect of restricted stock units and stock options

-

16,892

19,733,772

19,694,973

	Three Months Ended March 31,
	2021			2020
Net loss from continuing operations	$	(772	)	$	(7,044	)
Loss from operations of discontinued operations, net of income taxes		—			(432	)
Net loss	$	(772	)	$	(7,476	)

Loss per share
Basic
Net loss from continuing operations	$	(0.04	)	$	(0.36	)
Loss from operations of discontinued operations, net of income taxes	$	—		$	(0.02	)
Net loss	$	(0.04	)	$	(0.38	)
Diluted
Net loss from continuing operations	$	(0.04	)	$	(0.36	)
Loss from operations of discontinued operations, net of income taxes	$	—		$	(0.02	)
Net loss	$	(0.04	)	$	(0.38	)

Weighted average common shares outstanding
Basic and Dilutive		19,845,064			19,733,772

The following securities were not included in the computation of diluted earnings per share as their effect would have been antidilutive:

	As of March 31,				As of March 31,
	2020		2019		2021		2020
Unvested restricted stock units		266,383		169,960		285,658		266,383
Options to purchase common stock		97,437		47,437		97,437		97,437
Convertible subordinated notes		1,549,451		1,549,451		—		1,549,451
		1,913,271		1,766,848		383,095		1,913,271

On May 24, 2018, the Company entered into a (a) Securities Purchase Agreement (the “Purchase Agreement”) and (b) Registration Rights Agreement (the “Registration Rights Agreement”) with Tadano Ltd., a Japanese company (“Tadano”).

Pursuant to the Purchase Agreement, the Company agreed to issue and sell to Tadano, and Tadano agreed to purchase from the Company, 2,918,542 shares of the Company’s common stock, no par value (the “Shares”), representing approximately 14.9% of the outstanding shares of common stock of the Company (based on the number of outstanding shares as of the date of the Purchase Agreement), at a purchase price of $11.19 per share and for an aggregate purchase price of $32,658. The transaction closed on May 29, 2018 (the “Closing Date”). The Shares were issued in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).

The Purchase Agreement also provides for certain rights of Tadano and certain limitations on the Company, subject in each case to Tadano continuing to meet certain minimum ownership requirements. Specifically, so long as Tadano owns at least a majority of the Shares, Tadano has certain preemptive rights to purchase its pro rata share of specified equity securities (including certain derivative and convertible securities) issued by the Company after the Closing Date. Additionally, so long as Tadano owns at least 10% of the Company’s issued and outstanding shares of common stock, the Company is prohibited, absent Tadano’s consent, from, among other items: (i) increasing the number of directors on the Company’s board of directors to a number greater than ten; (ii) entering into certain related person or affiliated transactions, subject to certain exceptions; and (iii) authorizing or approving any plan of dissolution of the Company, any liquidating distribution of the Company’s assets or other action relating to the dissolution or liquidation of the Company. The Purchase Agreement also contains certain restrictions on asset sales by the Company. In addition, so long as it owns at least 10% of the Company’s issued and outstanding shares of common stock, Tadano shall have the right to nominate one individual to serve on the Company’s board of directors.

~~See the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 31, 2018 for additional information regarding this transaction.~~

~~In connection with this transaction, the Company incurred legal, investment banking and consulting fees that in aggregate that totaled $875. These fees are recorded net of common stock.~~

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:

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 March 31, ~~2020:~~2021:

Date of Purchase	Shares Purchased		Closing Price on Date of Purchase		Shares Purchased		Closing Price on Date of Purchase
March 13, 2020		2,949	$	4.34
March 6, 2021						2,779	$	7.43
March 8, 2021						692	$	7.73
March 13, 2021						2,712	$	8.29
						6,183

~~Equity was decreased by $13, the aggregated value of the shares reflected in the table above.~~

In 2019, the Company adopted the Manitex International, Inc. 2019 Equity Incentive Plan. The maximum number of shares of common stock reserved for issuance under the plan is 1,329,364 shares. The total number of shares reserved for issuance however, can be adjusted to reflect certain corporate transactions or changes in the Company’s capital structure. The Company’s employees and members of the board of directors who are not our employees or employees of our affiliates are eligible to participate in the plan. The plan is administered by a committee of the board comprised of members who are outside directors. The plan provides that the committee has the authority to, among other things, select plan participants, determine the type and amount of awards, determine award terms, fix all other conditions of any awards, interpret the plan and any plan awards. Under the plan, the committee can grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units, except Directors may not be granted stock appreciation rights, performance shares and performance units. During any calendar year, participants are limited in the number of grants they may receive under the plan. In any year, an individual may not receive options for more than 15,000 shares, stock appreciation rights with respect to more than 20,000 shares, more than 20,000 shares of restricted stock and/or an award for more than 10,000 performance shares or restricted stock units or performance units. The plan requires that the exercise price for stock options and stock appreciation rights be not less than fair market value of the Company’s common stock on date of grant.

Restricted stock units are subject to the same conditions as the restricted stock awards except the restricted stock units will not have voting rights and the common stock will not be issued until the vesting criteria are satisfied.

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 ~~$201~~$290 and ~~$159~~$ 201 for the three months ended March 31, 2021 and 2020 ~~and 2019,~~, respectively. Additional compensation expense related to restricted stock units will be ~~$519, $627~~$667, $654 and ~~$347~~$306 for the remainder of ~~2020,~~ 2021, 2022 and ~~2022,~~2023, respectively.

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 ~~$21~~$10 for the three months ended March 31, ~~2020~~2021 compared to $0$21 for the comparable period. Additional compensation expense will be ~~$48, $31~~$21 and $10 for the remainder of ~~2020,~~ 2021 and 2022, respectively. ~~The following table illustrates the various assumptions used to calculate the Black-Scholes option pricing model for stock options granted on September 1, 2019:~~

On May 23, 2018, the Company issued options under the predecessor 2004 Equity Plan to purchase 47,437 shares of the Company’s common stock at $11.08 per share (the closing price of the Company’s common stock on the date before the Tadano Purchase Agreement was executed) to a consultant in connection with his services related to Tadano’s investment in the Company. The options expire on May 23, 2028. The Company determined that the fair market value of the options was $130 on date of grant. The value of options is one component of the expenses related to the Tadano transactions discussed above.

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.

~~When it is probable that a loss has been incurred~~For claims originated in 2020, the Company changed its insurance coverage for worker’s compensation and possible to make a reasonable estimate of the Company’s liability with respect to such matters, a provision is recorded for the amount of such estimate or the minimum amount of a range of estimates when it is not possible to estimate the amount within the range that is most likely to occur. The Company established reserves for several PM lawsuits in conjunction with the accounting for our acquisition of PM.

~~Additionally, beginning on December 31, 2011, the Company’s workmen’s compensation insurance policy~~no longer has a ~~per claim~~ deductible ~~of $250 and annual aggregates that range from $1,000 to $1,875 depending on the policy year.~~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 ~~two~~2 separate settlement agreements with ~~two~~2 plaintiffs. As of March 31, ~~2020,~~2021, the Company has a remaining obligation under the agreements to pay the plaintiffs an aggregate of ~~$1,140~~$1,045 without interest in 1211 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.

As described in Note 14, Income Taxes, included in the unrecognized tax benefits is a liability for the disputed Romania income tax audit assessment for tax years 2012-2016. Depending upon the final resolution of the income tax assessment, the liability could be higher or lower than the amount recorded at March 31, 2020.

The Company issues residual value guarantees to support a customer’s financing of equipment purchased from the Company. A residual value guarantee involves a guarantee that a piece of equipment will have a minimum fair market value at a future date if certain conditions are met by the customer. The Company has issued partial residual guarantees that have maximum exposure of approximately $1.6 million. The Company does not have any reason to believe that any exposure from such a guarantee is either probable or estimable at this time, as such no liability has been recorded. The Company’s ability to recover losses experienced from its guarantees may be affected by economic conditions in used equipment markets at the time of loss.

~~The Company continues to comply with the SEC investigation regarding the Company’s restatement of prior financial statements, which was completed in April 2018.~~

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, less than $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. C&M purchases cranes~~Tadano during 2020 and ~~parts from Terex. Additionally, the Company has a convertible note with a face amount of $7,500 payable to Terex. See Note 12 for additional details.~~ 2021.

During the quarter ended March 31, 2017, the Company was the majority owner of ASV and, therefore, ASV was not a related party during that period. In May 2017, the Company reduced is its ownership interest in ASV to 21.2% and in February 2018 further reduced its ownership to approximately 11%. As such, ASV became a related party beginning in the quarter ended June 30, 2017. The Company sold its remaining interest in ASV in September 2019 and is no longer a related party at September 30, 2019.

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had accounts receivable and payable with related parties as shown below:

		March 31, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Accounts Receivable	Tadano	$	205	$	88	Tadano	$	113	$	62
	Terex	1			9	RAM P&E (2)	54			13
		$	206	$	97		$	167	$	75

Accounts Payable	Terex		318		325	Terex	$	65	$	47
						Tadano		136		80
							$	201	$	127
Net Related Party Accounts Payable		$	112	$	228		$	34	$	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 March 31, 2020		Three Months Ended March 31, 2019			Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
Rent paid:	Bridgeview Facility (1)	$	69	$	68	Bridgeview Facility (1)	$	—	$	69

Sales to:	Terex	$	14	$	3	Terex	$	13	$	14
	Tadano		550		—	Tadano		128		550
						RAM P&E (2)		54		—
Total Sales		$	564	$	3		$	195	$	564


Purchases from:	Terex	$	147	$	624	Terex	$	116	$	147
						Tadano		61		—
Total Purchases							$	177	$	147

In addition to the ~~exploration by management of various strategic alternatives for Sabre, including the possibility of a transaction involving the~~proceeds from sale of ~~all or part~~$1.5 million in cash received, the Company may receive a maximum royalty and earnout payments of ~~Sabre’s business and assets, to determine whether such a transaction would provide value to shareholders. The criterion of asset held~~approximately $2.9 million for ~~sale has been met and Sabre will be reported as discontinued operations.~~years 2021 thru 2023 if certain revenue criteria are met. The Company atwill account for the contingent consideration as a gain in accordance with ASC 450. Under this ~~time cannot be sure that any such transaction~~approach, we will ~~occur, and if so, what impact such a transaction would have on~~recognize the ~~Company’s financial statements.~~contingent consideration in earnings after the contingency is resolved.

For the three months ended March 31, 2020, cash flows used in operating activities was $125, this consisted of depreciation expense of $45, no0 purchases of fixed assets and no0 amortization expense. For the three months ended March 31, 2019, cash flows provided by operating activities were $67, this consisted of depreciation expense of $42, amortization expense of $74 and purchases of fixed assets of $7.

As of

March 31,
2020

December 31,
2019

ASSETS

Current assets

Cash

$
-

$
33

Trade receivables (net)

524

507

Inventory (net)

939

916

Prepaid expense and other

134

135

Total current assets of discontinued operations

1,597

1,591

Long-term assets

Total fixed assets (net)

269

314

Operating lease assets

62

99

Total long-term assets of discontinued operations

331

413

Total assets of discontinued operations

$
1,928

$
2,004

LIABILITIES

Current liabilities

Current operating lease liability

$
67

$
106

Accounts payable

248

381

Accrued expenses

183

187

Customer deposits

60

126

Total current liabilities of discontinued operations

558

800

Long-term liabilities

Other long-term liabilities

350

350

Total long-term liabilities of discontinued operations

350

350

Total liabilities of discontinued operations

$
908

$
1,150

	For the Three Months Ended March 31,
	2020
Net revenues	$	1,499
Cost of sales		1,555
Selling, general and administrative expenses		313
Interest expense		24
Other income		5
Net loss of discontinued operations before income tax		(388	)
Income tax expense related to discontinued operations		44
Net loss on discontinued operations	$	(432	)

On April 14, 2020, the Company and its United States subsidiaries received funds under notes and related documents (the “PPP Loans”) with CIBC Bank, USA under the Paycheck Protection Program (the “PPP”) which is part of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) administered by the U.S. Small Business Administration. The Company received total proceeds of $3.7 million from the PPP Loans. In accordance with the requirements of the PPP, the Company intends to use proceeds from the PPP Loans primarily for payroll costs. The PPP Loans are scheduled to mature starting on ~~April 8, 2022~~, have a 1.00% interest rate and are subject to the terms and conditions applicable to loans administered by the U.S. Small Business Administration under the PPP. Under the terms of the PPP, certain amounts of the PPP Loans may be forgiven if they are used for qualifying expenses as described in the CARES Act.

We are closely monitoring the spread and impact of the COVID-19 pandemic and are continually assessing its potential effects on our business and our financial performance as well as the businesses of our customers and vendors. The Company cannot predict the duration or severity of the COVID-19 pandemic, and we cannot reasonably estimate the financial impact the COVID-19 outbreak will have on our results and significant estimates going forward.

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

Manitex International, Inc., through its wholly owned subsidiaries: Manitex, Badger, PM Group, Valla, Sabre, C&M and C&M Leasing, designs, manufactures and distributes a diverse group of products that serve different functions and are used in a variety of industries.

~~Manitex is located in Georgetown, Texas and markets a comprehensive line of boom trucks, truck cranes and sign cranes.~~

~~Badger is located in Winona, Minnesota and manufactures specialized rough terrain cranes and material handling products.~~

PM Group is a leading Italian manufacturer of truck mounted hydraulic knuckle boom cranes and a product range spanning more than 50 models. Through its consolidated subsidiaries, PM Group has locations in Modena, Italy; Iberica, Spain; Arad, Romania; Chassieu, France; Buenos Aires, Argentina; Santiago, Chile; London, UK and Mexico City, Mexico.

~~Valla is located in Piacenza, Italy and produces a line of industrial pick and carry cranes using electric, diesel and hybrid power options with lifting capacity that ranges from 2 to 90 tons.~~

Sabre, which is located in Knox, Indiana, manufactures a comprehensive line of specialized mobile tanks for liquid and solid storage and containment solutions with capacities from 8,000 to 21,000 gallons.

C&M and C&M Leasing are located in Bridgeview, Illinois. C&M is a distributor of new and used Manitex branded products as well as Terex rough terrain and truck cranes. C&M also provides repair services in Chicago and supplies repair parts for a wide variety of medium to heavy duty construction equipment. C&M Leasing rents equipment that is manufactured by the Company as well as a limited amount of equipment manufactured by third parties.

We are continuing to closely ~~monitoring~~monitor the impact of the ~~outbreak of~~ COVID-19 pandemic on all aspects of our business, including how it ~~will impact~~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 to the health and safety of our employees, customers, and business partners and we believe that we have taken every necessary step to keep our facilities clean and safe during the COVID-19 pandemic. While COVID-19 ~~did not have~~has had a material ~~adverse effect~~impact on our ~~reported~~past financial results, ~~for our first quarter,~~ 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 may emerge concerning the ultimate severity and duration of the outbreak and actions by government authorities to contain the outbreak 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. ~~See Part II, Item 1A, Risk Factors, for an additional discussion of risks related to COVD-19.~~

In the first quarter of 2020, the Company experienced a temporary reduction of its manufacturing and operating capacity in Italy as a result of government-mandated actions to control the spread of COVID-19 which impacted revenues by approximately $3 million. Further, theThe Company has experienced and may continue to experience disruptions or delays in its supply chain, ~~as a~~which would result ~~of such actions, which has resulted~~ in higher supply chain costs to the Company in order to maintain the supply of materials and components for its products. In addition, the Company has modified its business practices (including practices regarding employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences). We continue to take steps to minimize the negative impact of the COVID-19 pandemic on our business and to protect the safety of our employees and customers.

The following management’s discussion and analysis of financial condition and results of continuing operations should be read in conjunction with the Company’s financial statements and notes, and other information included elsewhere in this Report.

The Company has experienced a recent decline in demand and volumes in its global businesses as a result of the impact of efforts to contain the spread of COVID-19. In addition, the Company’s customers may choose to delay or abandon projects on which the Company provides products and/or services.

On May 17, 2017, the Company began accounting for its investment in ASV under the equity method as the Company sold shares of ASV that reduced its ownership percentage from 51% to 21.2%. From February 26 to 28, 2018, the Company sold an additional 1,000,000 shares of ASV stock, which reduced its ownership percentage to approximately 11.0%. In September 2019, the Company received cash merger consideration for its remaining 1,080,000 shares of ASV and no longer has an investment in ASV.

The Company derives most of its revenue from purchase orders from dealers and distributors. The demand for the Company’s products depends upon the general economic conditions of the markets in which the Company competes. The Company’s sales depend in part upon its customers’ replacement or repair cycles. Adverse economic conditions, including a decrease in commodity prices, may cause customers to forego or postpone new purchases in favor of repairing existing machinery.

Gross profit varies from period to period. Factors that affect gross profit include product mix, production levels and cost of raw materials. Margins tend to increase when production is skewed towards larger capacity cranes.

PM Group remains a very bright spot in our portfolio, and we have made notable progress towards our goal of achieving higher levels of penetration in the global articulating cranes market. As we announced in our annual update in March, we started 2020 with robust demand for PM products, but unfortunately with the outbreak of COVID-19 in Italy, we were forced to temporarily halt production at our Italian facilities on March 21, 2020, with employees being told to stay home. After a 30-day hiatus, we reopened and resumed production on April 21, 2020. Even with these limitations, we delivered higher revenues and improved Adjusted EBITDA, both sequentially and year over year, and the backlog, at approximately $28 million, gives us visibility, all things equal, for a year of solid growth for PM, with healthy double-digit Adjusted EBITDA margins that approach our long-term targets.

In our North American operations, we had a slower start to the year and were able to make up some of the shortfall in March. Our North American operations have thus far remained opened during the pandemic, which has allowed us to deliver on our backlog. Thus far, we have not experienced any COVID-19 cases in our North American facilities. Manitex straight mast crane delivered during the quarter March 31, 2020 in line with our expectations, despite being tempered by lower unit volume/shipments that have trended throughout the industry, and we do see some slowing in orders in stick boom cranes and industrial products, as we look into 2020.Backlog

The Company’s backlog ~~is $57.0~~was approximately $84 million and ~~$65.3~~$68 million at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.


	Three Months Ended March 31,
	2021			2020			$ Change			% Change
Net revenues	$	47,168		$	48,733		$	(1,565	)		(3.2	)%
Cost of sales		38,363			38,486			(123	)		(0.3	)%
Gross profit		8,805			10,247			(1,442	)		(14.1	)%
Operating expenses
Research and development costs		785			687			98			14.3	%
Selling, general and administrative expenses		7,744			8,039			(295	)		(3.7	)%
Impairment of intangibles		—			6,722			(6,722	)		(100.0	)%
Total operating expenses		8,529			15,448			(6,919	)		(44.8	)%
Operating income (loss)		276			(5,201	)		5,477			(105.3	)%
Other (expense) income
Interest expense		(525	)		(1,084	)		559			(51.6	)%
Interest income		4			60			(56	)		(93.3	)%
Foreign currency transaction loss		(215	)		(418	)		203			(48.6	)%
Other (expense) income		(20	)		3			(23	)		(766.7	)%
Total other (expense) income		(756	)		(1,439	)		683			(47.5	)%
Loss before income taxes from continuing operations		(480	)		(6,640	)		6,160			(92.8	)%
Income tax expense from continuing operations		292			404			(112	)		(27.7	)%
Net loss from continuing operations		(772	)		(7,044	)		6,272			(89.0	)%

Three Months Ended March 31, ~~2020~~2021 Compared to Three Months Ended March 31, ~~2019~~2020

Net ~~(loss) income~~loss from continuing operations for the three-month periods ended March 31, ~~2020~~2021 and ~~2019~~2020

For the three months ended March 31, 2021 and 2020 the Company had net ~~loss~~losses of ~~$7.0~~$0.8 million compared to ~~net income of $1.3~~$7.0 million, respectively.

~~For~~Net revenues and gross profit —For the three months ended March 31, ~~2020, the~~2021, net ~~loss of $7.0 million consisted of revenue of $48.7 million, cost of sales of $38.5 million, research~~revenues and development costs of $0.7 million, selling, general and administrative (“SG&A”) expenses of $8.0 million, impairment charges of $6.7 million, interest expense of $1.1 million, interest income of $0.1 million, a foreign currency loss of $0.4gross profit were $47.2 million and ~~income tax expense~~$8.8 million, respectively. Gross profit as a percent of ~~$0.4 million.~~

~~For~~revenues was 18.7% for the three months ended March 31, 2019, the net income of $1.3 million consisted of revenue of $54.4 million, cost of sales of $42.4 million, research and development costs of $0.7 million, SG&A expenses of $9.1 million, interest expense of $1.1 million, interest income of $0.1 million, a gain in change in fair value of securities held of $0.8 million, a foreign currency loss of $0.4 million, and income tax expense of $0.2 million.

~~Net revenues and gross profit~~ ~~—For~~2021. For the three months ended March 31, 2020, net revenues and gross profit were $48.7 million and $10.2 million, respectively. Gross profit as a percent of revenues was 21.0% for the three months ended March 31, 2020. For the three months ended March 31, 2019, net revenues and gross profit were $54.4 million and $12.0 million, respectively. Gross profit as a percent of revenues was 22.0% for the three months ended March 31, 2019.

Net revenues decreased ~~$5.7~~$1.6 million or ~~10.5%~~3.2% to ~~$48.7~~$47.2 million for the three months ended March 31, ~~2020~~2021 from ~~$54.4~~$48.7 million for the comparable period in ~~2019.~~2020. The decrease in revenues is primarily due to decreases in sales of straight mast cranes and rough terrain cranes from the Company’s United States subsidiaries, primarily due to the impact of the ongoing of COVID-19 pandemic partially offset by ~~increases~~an increase in ~~knuckle boom cranes. The~~ revenues due to a favorable impact by a stronger Euro, which accounted for ~~the three months ended March 31, 2020 were also unfavorably impacted by $0.7 million in foreign currency translation adjustments resulting from a weaker Euro.~~ approximately $2.5 million.

Our gross profit decreased ~~$1.8~~$1.4 million to ~~$10.2~~$8.8 million for the three months ended March 31, ~~2020~~2021 from ~~$12.0~~$10.2 million for the comparable period in ~~2019.~~2020. The decrease in gross profit is attributable to decreases in revenues, ~~and~~ product mix ~~which caused a 1.0% decline in gross profit percentage.~~and higher material cost. The decline in ~~the~~ gross profit percentage is primarily ~~due to a decrease in~~driven by product mix as lower margin products were sold and higher material cost for the ~~gross margin percentage generated on the sale of straight mast offset by increases in gross margin on knuckle boom cranes.~~three months ended March 31, 2021.

Research and development —Research and development expense was ~~$0.7~~$0.8 million for the three months ended March 31, ~~2020~~2021 compared with $0.7 million for the same period in ~~2019.~~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 March 31, ~~2020~~2021 was ~~$14.8~~$7.7 million compared to ~~$9.1~~$8.0 million for the comparable period in ~~2019, an increase~~2020, a decrease of ~~$5.7~~$0.3 million. The ~~increases~~decreases are primarily related to ~~impairment charges~~cost savings initiatives implemented during the second quarter of ~~$6.7 million~~ 2020 at our U.S. facilities resulting in permanent and temporary layoffs

of ~~intangibles during~~employees and trade show expenses for the three months ended March 31, 2020 ~~and $0.5 million incurred to participate~~that did not recur in the Conexpo held in March 2020. The Conexpo show, which is held every three years, was held in Las Vegas in March of this year. This show is an international gathering place for the construction industries. It is estimated that 130,000 professionals, from around the world, attended the show. These increases were partially2021, offset by ~~cost savings from various cost reduction initiatives~~an unfavorable impact of a stronger euro, which accounted for approximately $0.4 million.

~~Operating (loss) income~~—intangibles- For the three months ended March 31, ~~2020 and 2019,~~2021, the Company had ~~operating loss~~no impairment of ~~$5.2 million~~goodwill or intangibles compared to ~~operating income of $2.2 million for the comparable period in 2019. Operating income decreased due to changes in revenue, cost of sales and operating expenses as explained above.~~

~~Interest expense~~ ~~—Interest expense was $1.1~~$6.7 million for the three months ended March 31, 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 ~~2019.~~a $0.1 million tradename impairment charge during 2020.

Interest expense —Interest expense was $0.5 million for the three months ended March 31, 2021 compared to $1.1 million for the comparable period in 2020. The decrease in interest expense is due to lower debt ~~partially offset~~driven by ~~higher interest rates resulted~~the pay-off of the convertible notes in ~~no change to interest expense.~~December 2020 and principal payments made on the term debt in 2020.

Foreign currency transaction losses —For the three months ended March 31, ~~2020,~~2021, the Company had foreign currency ~~loss~~losses of ~~$0.4~~$0.2 million compared to ~~loss of~~ $0.4 million for the comparable period in ~~2019. As previously stated,~~2020. A substantial portion of the ~~Company attempts~~losses relate to purchase forward currency exchange contracts such that the exchange gains and losses on the assets and liabilities denominated in a currency other than the reporting units’ functional currency will be offset by the changes in the market value of the forward currency exchange contracts it holds. Currency risks can be reduced but not eliminated in part because the Company has not been able to identify a strategy to effectively hedge the currency risks related to the ArgentinianChilean peso. The Company records at the balance sheet date the forward currency exchange contracts at their market value with any associated gain or loss being recorded in current earnings as a currency gain or loss.

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~~statements.

For the three months ended March 31, 2021, the Company recorded an income tax provision of $0.3 million, which includes a discrete income tax benefit of less than $0.1 million. The calculation of the overall income tax provision for the three months ended March 31, ~~2020.~~

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 partially offset by an accrual of interest related to unrecognized tax benefits. For the three months ended March 31, 2020, the Company recorded an income tax provision of $0.4 million, which includes a discrete income tax benefit of $0.3 ~~million. The calculation of the overall income tax provision for the three months ended March 31, 2020 primarily consists of foreign income taxes offset by a discrete income tax benefit~~million related to a decrease in the valuation allowance, an expiration of the statute of limitations for various state and foreign jurisdictions ~~and the settlement of the Romanian tax audit for 2017 and 2018, which includes a partial reduction in the valuation allowance caused~~partially offset by ~~the indirect effects of uncertain tax positions embedded in foreign net operating loss carryforwards. For the three months ended March 31, 2019, the Company recorded~~ an ~~income tax provision of $0.2 million, which includes a discrete income tax provision of $0.01 million for the~~ accrual of ~~taxes and~~ interest related to unrecognized tax benefits.

The effective tax rate for the three months ended March 31, ~~2020~~2021 was an income tax provision of ~~-6.08%~~60.9% on pretax loss of ~~$6.6~~$0.5 million compared to an income tax provision of ~~13.10%~~6.1% on a pretax ~~income~~loss of ~~$1.5~~$6.6 million in the comparable prior period. The effective tax rate for the three months ended March 31, ~~2020~~2021 differs from the U.S. statutory rate of 21% primarily due to the ~~mix of domestic~~valuation allowance in the U.S. and ~~foreign earnings,~~a 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, and the tax effects of settling the Romanian tax audit for 2017 and 2018.~~jurisdictions.

~~Change in fair value of securities held~~— For the three months ended March 31, 2020, the Company held no marketable securities. For the three months ended March 31, 2019 the Company had a gain of $0.8 million. The gain for the three months ended March 31, 2019 was due to a change in the fair value of securities held in ASV (see Notes 2 and 8).

~~Net (loss) income from continuing operations— For the three months ended March 31, 2020 and 2019, the Company had a net loss of $7.0 million compared to a net income of $1.3 million, respectively. The change is explained above.~~

The ultimate duration and severity of the COVID-19 pandemic isremains 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.

On April 14, 2020, the Company and its United States subsidiaries received the PPP Loans under the PPP which is part of the recently enacted CARES Act administered by the U.S. Small Business Administration. The Company received total proceeds of $3.7 million from the PPP Loans. In accordance with the requirements of the PPP, the Company intends to use proceeds from the PPP Loans primarily for payroll costs.

Cash, cash equivalents and restricted cash were ~~$22.3~~$16.1 million at March 31, ~~2020 compared to $23.6~~2021 and $17.4 million at December 31, ~~2019.~~2020. In addition, the Company has a U.S. revolving credit facility with a maturity date of July 20, 2023. At March 31, ~~2020,~~2021, the Company had approximately ~~$23.6~~$10.0 million available to borrow under its U.S. revolving credit facility.

At March 31, ~~2020,~~2021, the PM Group had established working capital facilities with five Italian, one Spanish and ~~nine~~eleven South American banks. Under these facilities, the PM Group can borrow ~~$22.9~~$25.1 million against orders, invoices and letters of credit. At March 31, ~~2020,~~2021, the PM Group had ~~received advances~~availability under these facilities of ~~$15.2~~$1.6 million. Future advances are dependent on having available collateral.

Our subsidiary in Argentina (“PM Argentina”) began accounting for their operations as highly inflationary effective July 1, 2018, as required by GAAP. Under highly inflationary accounting, PM Argentina’s functional currency became the Euro (its parent company 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 March 31, 2020, PM Argentina had a small net peso monetary position. Net sales of PM Argentina were less than 5 percent of our consolidated net sales for the three months ended March 31, 2020 and 2019.

On June 26, 2019, ASV entered into an Agreement and Plan of Merger. The Company’s investment in ASV common stock was converted into $7.05 per share in cash. The Company received approximately $7.6 million in cash in September of 2019.

~~During the three months ended March 31, 2020, total debt decreased by $0.5 million to $64.3 million at March 31, 2020 from $64.8 million at December 31, 2019.~~

~~The following is a summary of the net decrease in our indebtedness from December 31, 2019 to March 31, 2020:~~

The total change on the above tables differs significantly from the amounts that appear in the financing section of the Company’s Statement of Cash Flow. This occurs as the changes for Cash Flow statements are calculated in local currency and then converted to dollars at an average exchange rate. The impact of exchange rate fluctuations is, therefore, isolated and is included in separate line on the cash flow statement.

Outstanding
Balance

Interest Rate

Interest
Paid

Principal Payment
U.S. Revolver

$
6.0

N/A

Monthly

July 20, 2023 maturity
Convertible note—Terex

7.4

7.5%

Semi-Annual

January 1, 2021 maturity
Convertible note—Perella

8.0

7.5%

Semi-Annual

January 7, 2021 maturity
Capital lease—cranes for sale

0.1

5.5%

Monthly

January 13, 2021 maturity
Capital lease—Georgetown
   facility

4.8

12.5%

Monthly

$0.06 million monthly payment includes
interest. April 30, 2028 maturity
Note payable—Winona
   Facility

0.3

8.0%

Monthly

$0.01 million monthly
PM unsecured borrowings

11.3

3.5%

Semi-Annual

Variable semi-annual starting December
2019 through December 2025
PM Autogru term loan #1

0.1

3.00%

Monthly

$0.01 million monthly through
October 2020
PM Autogru term loan #2

0.2

2.50%

Monthly

$0.01 monthly through
September 2020
PM Autogru term loan #3

0.2

2.75%

Monthly

Monthly through June 2023
PM term loans with related
   accrued interest, interest
   rate swaps and FMV
   adjustments

10.2

0 to 3.5%

Semi-Annual

Annual installments starting December
2019 and a balloon payment in December
2026
PM short-term working
   capital borrowings

15.2

1.75 to 65.0%

Monthly

Upon payment of invoice
Valla note payable

0.1

4.38%

Quarterly

Over 14 quarterly payments
Valla short-term working
   capital borrowings

0.5

4.50 to 4.75%

Monthly

Upon payment of invoice or letter of credit

$
64.4

Debt issuance costs

(0.1
)

Debt net of issuance costs

$
64.3

~~As stated above, the Company had cash of $22.3 million and approximately $23.6 million available to borrow under its credit facility at March 31, 2020.~~

PM Group has its own working capital facilities. As stated above, any future advances against the Italian facilities are dependent on having available collateral. Additionally, the Company is permitted to make limited advances to the Italian operations under the Company’s credit facilities. Additional funds can be advanced to the Italian operations provided that the funds come from the sales of the marketable equity security referenced above.

The Company needs cash to fund normal working capital needs and to make scheduled debt payments as shown in the above table. The U.S. credit facilities are asset based. The maximum the Company may borrow under either facility is the lower of the credit line or the available collateral, as defined in the credit agreements. Collateral under the agreements consists of stated percentages of eligible accounts receivable and inventory.

Under the collateral formulas in the credit facilities accounts receivable collateral is equal to a stated percent of eligible accounts receivable (generally 85%), while inventory collateral is equal to a stated percent of eligible inventory (generally 50%) and caps total borrowing against our inventory. 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. With the current cash position and additional borrowing capacity, this presently is not viewed to be a significant concern.

The Company expects cash flows from operations and existing availability under the current revolving credit 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.

We will likely need to raise additional capital through debt or equity financings to fund any future significant acquisitions. There is no assurance that such financing will be available or, if available, on acceptable terms.

Cash flows for the three-month ~~periods~~period ended March 31, ~~2020~~2021 compared to ~~three-months~~the three-month period ended March 31, ~~2019~~2020

Operating Activities - For the ~~first~~ three months ~~of 2020,~~ended March 31, 2021, cash flow used ~~for~~in operating activities ~~decreased by $1.0~~was $1.2 million compared to $0.6 million used for the same period in the prior year. ~~The decrease reflected a decrease of $1.9 million in cash consumed for~~Cash provided by working capital ~~primarily driven by effective accounts receivable and accounts payable management in~~was $0.3 million for the ~~first~~ three months ~~of 2020~~ended March 31, 2021 compared to $0.9 million for the same period in the prior year. Accounts receivable management used $3.3 million in cash for the three months ended March 31, 2021 compared to $0.4 million used in cash for the same period in the prior year. Effective accounts payable management generated $7.5 million in cash for the first three months of 2021 compared to $8.5 million for the same period in the prior year. Inventory represented a cash outflow of $4.0 million for the first three months of 2021 compared to $7.3 million for the same period in the prior year.

Investing Activities - Cash used byin investing activities was ~~$0.4~~$0.2 million in the first three months of ~~2020,~~2021, compared to ~~$0.8~~$0.4 million in the same period a year ago. Cash used in both the three-month periods ~~were~~was related to cash payments for ~~plant,~~ property and equipment.

Financing Activities - Cash provided by financing activities was an inflow of $1.0 million for the three months ended March 31, 2021 which included an increase in working capital borrowing of $0.7 million and borrowings for insurance agreements of $0.7 million partially offset by repayments of notes of $0.4 million. Cash used by financing activities was ~~a slight~~an outflow of less than $0.1 million for the three months ended March 31, 2020, which included an increase in working capital borrowing of $1.2 million, repayments of the convertible debt of $7.0 million and borrowings on the revolving credit facility of $6.0 million. ~~Cash from financing activities was an inflow of $1.4 million for the three months ended March 31, 2019, which included working capital borrowing of $1.2 million.~~

~~See Note 18, Transactions between the Company and Related Parties, in the accompanying Condensed Consolidated Financial Statements for a description of the Company’s related party transactions.~~

The existing guidance related to marketable equity securities first became relevant to the Company during the quarter ended March 31, 2018. See Note 2 in the accompanying Condensed Consolidated Financial Statements which describes the Company’s policy related to marketable equity securities.

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, 2019 for a discussion of the Company’s other critical accounting policies.

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

CIBC has issued 2 standby letters of credit at March 31, ~~2020.~~2021. The first standby letter of credit is ~~$0.4~~$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 ~~$20 thousand~~less than $0.1 million in favor of a governmental agency to secure obligations which may arise in connection with worker’s compensation claims.

The Company has issued residual value guarantees to support a customer’s financing. A residual value guarantee involves a guarantee that a piece of equipment will have a minimum fair market value at a future date if certain conditions are met by the customer. The Company has issued partially residual guarantees that have a maximum exposure of approximately $1.6 million. The Company, however, does not have any reason to believe that any exposure from such a guarantee is either probable or estimable at this time, as such no liability has been recorded.

See Note 1716, Transactions between the Company and Related Parties, in the accompanying Condensed Consolidated Financial Statements for ~~further information regarding our guarantees.~~a description of the Company’s related party transactions.

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 for a discussion of the Company’s critical accounting policies.

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

The Company’s market risk disclosures have not materially changed since the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019~~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, ~~2019.~~2020.

Under the supervision of and with the participation of management ~~including the Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer),~~ and the Audit Committee of the Board of Directors, the Company 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 ~~Securities and~~ Exchange Act, ~~of 1934,~~ as of March 31, ~~2020.~~2021. The Company’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, ~~2019.~~2020. Based on the evaluation of these material weaknesses, the Company has concluded that the Company’s disclosure controls and procedures were not effective as of March 31, ~~2020~~2021 to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. ~~Based on a number~~Despite the existence of factors, including the completion of the Audit Committee’s internal investigation, our internal review that identified revisions to our previously issued financial statements, and efforts to remediate thethese material weaknesses, ~~in internal control over financial reporting described below~~ we ~~believe~~have concluded that the condensed consolidated financial statements in this ~~Quarterly~~Annual Report fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods, presented, in conformity with GAAP.

The effectiveness of any system of controls and procedures is subject to certain limitations, and, as a result, there can be no assurance that our controls and procedures will detect all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be attained.

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 March 31, ~~2020,~~2021, with respect to procedures for:

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 March 31, ~~2020.~~2021.

During ~~2019,~~2021, management ~~invested~~continued to invest significant time and effort to remediate the remaining two ~~of the~~ material weaknesses identified in 2018. ~~Specifically,~~The Company continued to progress on implementing Enterprise Resource Planning (“ERP”) software in the ~~following remediation actions were taken and completed:~~

~~During 2019,~~U.S. subsidiary. In Italy, we hired a consultant to help with the implementation of a new ERP system. In addition, the Company ~~implemented a~~continued to progress on the remediation of the remaining control ~~that all initial sales orders are documented and reviewed to ensure proper accounting treatments are applied to any unique terms in the agreements.~~deficiencies.

During 2019, the Company enhanced its control environment and implemented controls regarding revenue recognition, specifically tailored to bill and hold transactions. Management has implemented additional controls to address this material weakness.

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 ~~fourth quarter~~three months ended ~~December~~March 31, ~~2019,~~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 in Internal Control Over Financial Reporting

Management has been actively engaged in the planning for, 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 ~~in fiscal year 2020~~ include:

~~The~~Management continues to execute on the plan that has been provided to the audit committee ~~has directed management to develop a detailed plan and timetable~~ for the implementation of the foregoing remedial measures (to the extent not already completed) and the audit committee will continue to monitor ~~their implementation.~~the anticipated timetable. Management ~~completed development/implementation~~continues to monitor completion of actions as outlined in the ~~detail~~ plan ~~during the third quarter of 2019~~ and ~~has~~have been providing updates to the audit committee on a periodic basis. As part of the plan, during the third quarter of 2019, the Company hired an information technology director to evaluate and improve the information technology controls at our U.S. operations so as to enable us to identify and mitigate risks of material accounting errors. During the second quarter of 2019, the Company engaged a top ten accounting firm to help with remediating its material weaknesses. 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 of internal control over financial reporting.

Management believes the measures described above ~~and others that will be implemented~~ will remediate the control deficiencies the Company has identified and strengthen 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.

The information set forth in Note 1715 (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.

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, ~~2019.~~ ~~Other than as described in this Item 1A, there have been no other material changes to our risk factors from the risk factors previously disclosed in the 2019 Annual Report.~~2020.

~~The recent~~ ~~COVID-19 pandemic could have an adverse effect on our business, financial condition, results of operations and cash flows.~~

The global outbreak of COVID-19 has severely restricted the level of economic activity around the world. In response to this outbreak, the governments of many countries, states, cities and other geographic regions have taken a variety of preventative or protective actions, such as imposing restrictions on travel and business operations. Temporary closures of businesses have been ordered in many jurisdictions and numerous other businesses have temporarily closed voluntarily. These measures, while intended to curtail the spread of COVID-19, have and are expected to continue to have significant adverse impacts on domestic and foreign economies of uncertain severity and duration. The current outbreak and continued spread of COVID-19 have resulted in an economic slowdown, and it is possible that it could cause a global recession. Currently, the effectiveness of economic stabilization efforts and other measures being taken to mitigate the effects of these actions and the spread of COVID-19 is uncertain.

As a result of the COVID-19 pandemic, we and our affiliates, employees, suppliers, customers and others have been and may continue to be restricted or prevented from conducting normal business activities, including as a result of shutdowns, travel restrictions and other actions that may be requested or mandated by governmental authorities. Such actions have prevented, and may in the future prevent us from accessing the facilities of our customers to provide services. While a substantial portion of our businesses have been classified as an essential business in jurisdictions in which facility closures have been mandated, some of our facilities have nevertheless been ordered to close in certain jurisdictions and we can give no assurance that there will not be additional closures in the future or that our businesses will be classified as essential in each of the jurisdictions in which we operate.

The COVID-19 outbreak has impacted, and may continue to impact, our office locations and manufacturing facilities, as well as those of our third-party vendors, including the effects of facility closures, reductions in operating hours and other social distancing efforts. For example, we have experienced and are experiencing a temporary reduction of our manufacturing and operating capacity in Italy as a result of government-mandated actions to control the spread of COVID-19. In addition, we have modified our business practices (including practices regarding employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, suppliers and other partners. These modifications to our business practices, including any future actions we take, may cause us to experience reductions in productivity and disruptions to our business routines. Further, we have experienced, and may continue to experience, disruptions or delays in our supply chain as a result of such actions, which has resulted in higher supply chain costs to us in order to maintain the supply of materials and components for our products.

Our management of the impact of COVID-19 has and will continue to require significant investment of time from our management and employees, as well as resources across our global enterprise. The focus on managing and mitigating the impacts of COVID-19 on our business may cause us to divert or delay the application of our resources toward new initiatives or investments, which may adversely impact our future results of operations. In addition, issues relating to the COVID-19 pandemic may result in legal claims or litigation against us.

We may also experience impacts from market downturns and changes in consumer behavior related to pandemic fears as a result of COVID-19. For example, we have experienced a recent decline in demand in our global businesses as a result of the impact of efforts to contain the spread of COVID-19. In addition, our customers may choose to delay or abandon projects on which we provide products. We may also experience adverse impacts on demand and sales volumes from industries that are sensitive to economic downturns and volatility in commodity prices. If these adverse impacts continue, our stock price and the operating performances of our businesses could be adversely affected, which could require us to incur material impairment, restructuring or other charges. For example, in the quarter ended March 31, 2020, we were required to record impairment charges to goodwill and indefinite-lived intangible assets related to PM Group.

The impact of COVID-19 has caused significant uncertainty and volatility in the credit markets. We rely on the credit markets to provide us with liquidity to operate and grow our businesses beyond the liquidity that our operating cash flows provide. If our access to capital were to become significantly constrained or if costs of capital increased significantly due the impact of COVID-19, including volatility in the capital markets, or other factors, then our financial condition, results of operations and cash flows could be adversely affected.

If the COVID-19 pandemic becomes more pronounced in our global markets, resurges in markets recovering from the spread of COVID-19, or if another significant natural disaster or pandemic were to occur in the future, our operations in areas impacted by such events could experience further adverse financial impacts due to market changes and other resulting events and circumstances. The extent to which the COVID-19 outbreak impacts our financial condition will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19, the longevity of COVID-19, the impact of COVID-19 on economic activity, and the actions to contain its impacts on public health and the global economy. The impact of COVID-19 may also exacerbate other risks discussed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019, any of which could have a material effect on our financial condition, results of operations and cash flows.

~~The potential insolvency or financial distress of third parties could adversely impact our business and results of operations.~~

We are exposed to the risk that various third parties with whom we conduct business will not be able to perform their obligations or continue to place orders due to insolvency or financial distress. The global COVID-19 pandemic has created heightened risk that third parties may be unable to perform their obligations due to suffering financial distress as a result of the pandemic and corresponding measures that have been enacted by governments to contain the spread of the virus. However, we are unable predict the ultimate impact that COVID-19 will have on any of our customers, suppliers, vendors, and other business partners, and each of their financial conditions or their ability to perform their obligations. If third parties fail to perform their obligations under arrangements with us, we may be forced to replace the underlying commitment at current or above market prices or on other terms that are less favorable to us. In such events, we may incur losses, or our results of operations, financial condition or liquidity could otherwise be adversely affected.

The Company’s credit agreement with CIBC directly restricts the Company’s ability to declare or pay dividends without CIBC’s consent. In addition, pursuant to the Company’s credit agreement with CIBC and other lenders, the Company must maintain as specified in the agreements certain fixed coverage ratios and debt to EBITDA ratios.

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

January 1— January 31, 2020

—

$
—

—

—

February 1—February 29, 2020

—

—

—

—

March 1—March 31, 2020

2,994

4.34

—

—

2,994

$
4.34

—

—

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
January 1— January 31, 2021		—	$	—		—		—
February 1—February 28, 2021		—		—		—		—
March 1—March 31, 2021		6,183		7.86		—		—
		6,183	$	7.86		—		—

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

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.

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

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐☒

~~Emerging growth company~~	☐		Emerging growth company	☐

PART I:	FINANCIAL INFORMATION		4

ITEM 1: Financial Statements (Unaudited)			4

	Condensed Consolidated Balance Sheets as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020	4

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020		5

	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020		6

	Condensed Consolidated Statement of ~~Stockholders’~~Shareholders’ Equity for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020		7

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020		8

	Notes to Condensed Consolidated Financial Statements		9

ITEM 2: Management’s Discussion And Analysis Of Financial Condition And Results Of Operations			3428

ITEM 3: Quantitative And Qualitative Disclosures About Market Risk			4032

ITEM 4: Controls And Procedures			4032

PART II:	OTHER INFORMATION		4234

ITEM 1: Legal Proceedings			4234

ITEM 1A: Risk Factors			4234

ITEM 2: Unregistered Sales Of Equity Securities And Use Of Proceeds			4334

ITEM 3: Defaults Upon Senior Securities			4434

ITEM 4: Mine Safety Disclosures			4434

ITEM 5: Other Information			4434

ITEM 6: Exhibits			4434

	March 31, 2021		December 31, 2020
Accrued income tax and other taxes		1,623		1,127
Accrued vacation		1,516		1,398
Accrued payroll		1,390		1,306
Accrued warranty		1,241		1,292
Accrued employee benefits		947		910
Accrued interest		216		244
Accrued expenses—other		1,717		1,632
Total accrued expenses	$	8,650	$	7,909

Date of Issue	Employees or Director	Shares Issued		Value of Shares Issued
January 1, 2020	Employee		2,250	$	13
March 6, 2020	Directors		7,920		47
March 13, 2020	Employee		39,714		292
			49,884	$	352

	March 31, ~~2020~~2021
Outstanding on January 1, ~~2020~~2021		~~198,717~~242,586
Units granted during the period		~~125,000~~129,800
Vested and issued		(~~46,935~~79,700	)
Vested-issued and repurchased for income tax withholding		(~~2,949~~6,183	)
Forfeited		(~~7,450~~845	)
Outstanding on March 31, ~~2020~~2021		~~266,383~~285,658

	Grant date 9/1/2019
Dividend yields		—
Expected volatility		51.0	%
Risk free interest rate		1.42	%
Expected life (in years)		6
Fair value of the option granted	$	2.76

	As of
	March 31, 2020		December 31, 2019
ASSETS
Current assets
Cash	$	-	$	33
Trade receivables (net)		524		507
Inventory (net)		939		916
Prepaid expense and other		134		135
Total current assets of discontinued operations		1,597		1,591
Long-term assets
Total fixed assets (net)		269		314
Operating lease assets		62		99
Total long-term assets of discontinued operations		331		413
Total assets of discontinued operations	$	1,928	$	2,004
LIABILITIES
Current liabilities
Current operating lease liability	$	67	$	106
Accounts payable		248		381
Accrued expenses		183		187
Customer deposits		60		126
Total current liabilities of discontinued operations		558		800
Long-term liabilities
Other long-term liabilities		350		350
Total long-term liabilities of discontinued operations		350		350
Total liabilities of discontinued operations	$	908	$	1,150

Facility	Increase/(decrease)
U.S. Revolver	$	6.0		million
Note payable—bank (insurance premiums)		0.1		million
Capital leases-equipment		(0.2	)	million
Convertible note-Terex		0.1		million
Convertible note-Perella		(6.9	)	million
PM		0.3		million
Valla note payable		(0.1	)	million
Valla working capital borrowings		0.1		million
	$	(0.6	)	million
Debt issuance costs		0.1		million
	$	(0.5	)	million

	Outstanding Balance			Interest Rate	Interest Paid	Principal Payment
U.S. Revolver	$	6.0		N/A	Monthly	July 20, 2023 maturity
Convertible note—Terex		7.4		7.5%	Semi-Annual	January 1, 2021 maturity
Convertible note—Perella		8.0		7.5%	Semi-Annual	January 7, 2021 maturity
Capital lease—cranes for sale		0.1		5.5%	Monthly	January 13, 2021 maturity
Capital lease—Georgetown facility		4.8		12.5%	Monthly	$0.06 million monthly payment includes interest. April 30, 2028 maturity
Note payable—Winona Facility		0.3		8.0%	Monthly	$0.01 million monthly
PM unsecured borrowings		11.3		3.5%	Semi-Annual	Variable semi-annual starting December 2019 through December 2025
PM Autogru term loan #1		0.1		3.00%	Monthly	$0.01 million monthly through October 2020
PM Autogru term loan #2		0.2		2.50%	Monthly	$0.01 monthly through September 2020
PM Autogru term loan #3		0.2		2.75%	Monthly	Monthly through June 2023
PM term loans with related accrued interest, interest rate swaps and FMV adjustments		10.2		0 to 3.5%	Semi-Annual	Annual installments starting December 2019 and a balloon payment in December 2026
PM short-term working capital borrowings		15.2		1.75 to 65.0%	Monthly	Upon payment of invoice
Valla note payable		0.1		4.38%	Quarterly	Over 14 quarterly payments
Valla short-term working capital borrowings		0.5		4.50 to 4.75%	Monthly	Upon payment of invoice or letter of credit
	$	64.4
Debt issuance costs		(0.1	)

Debt net of issuance costs	$	64.3

Exhibit Number		Exhibit Description

10.1		Lease Amendment, dated December 31, 2020, between the Company and KB Building, LLC (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on January 6, 2021).

10.2*		Tenth Amendment to Loan and Security Agreement, dated as of March 16, 2021, by and among Manitex International, Inc., Manitex Inc., Manitex Sabre, Inc., Badger Equipment Company, Crane and Machinery, Inc., Crane and Machinery Leasing, Inc., Manitex, LLC, and CIBC Bank USA (f/k/a The PrivateBank and Trust Company) and the lenders party thereto.

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.

101101.INS		~~The following financial information from Manitex International, Inc.’s Quarterly Report on Form 10-Q for~~Inline XBRL Instance Document- the ~~quarter ended~~ ~~March 31, 2020, formatted~~instance document does not appear in the Interactive Data File because its XBRL ~~(eXtensible Business Reporting Language): (i) Statements of Operations for~~tags are embedded within the three months ended March 31, 2020 and 2019 (ii) Statements of Comprehensive Income (Loss) for three months ended March 31, 2020 and 2019, (iii) Balance Sheets as of March 31, 2020 and December 31, 2019, (iv) Statement of Shareholders’ Equity forInline 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 ~~three months ended March 31, 2020 and 2019; (v) Statements of Cash Flows for~~Interactive Data File because its XBRL tags are embedded within the ~~three months ended March 31, 2020 and 2019 and (vi) Notes to Unaudited Interim Financial Statements.~~Inline XBRL document.

		By:		/s/ STEVE FILIPOV
				Steve Filipov
				Chief Executive Officer and Director
				(Principal Executive Officer)