David Langevin - Chairman and Chief Executive Officer Andrew Rooke - President and Chief Operating Officer.

Jamie Goodfellow - Avondale Partners Shivangi Tipnis - Global Hunter Securities Alex Silverman - Special Situations Fund Brandon Hemmelgarn - Shaker Investments Peter von Schilling - Polar Les Sulewski - Sidoti & Company John Curti - Singular Research.

Good day, everyone, and welcome to the Manitex International Inc. third quarter 2014 results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Dave Langevin. Please go ahead, sir..

Thank you, Shannon. Good afternoon, ladies and gentlemen, and thank you for your interest in Manitex International. As usual, on the call with me today is Andrew Rooke, our President and COO. Please see our website or our release for replay instructions for this call, which will be available until November 13.

We will again be using slides in this presentation, which are available through the webcast or directly through the Investor Relations section of our website. Refer to the first Slide regarding the Safe Harbor statement. Please review this statement and refer to our SEC filings for further guidance on the risk associated with our company.

I will lead off by making a brief opening statement, followed by a review of our results by Andrew, and a closing statement by me. Andrew and I will then be happy to respond to any questions. So now please refer to Slide number 3.

We ran our third quarter production in line with our expectations, which resulted in revenues of $66 million with over $6 million in cash flow from operations for the quarter. Net income of just under $2 million was $0.13 a share. Our book-to-bill was basically 1.

And we saw a very good order flow for the month of October, as reflected in our announcement earlier this week, of $17 million in new orders, which represents a part of our October bookings. This was the best month for orders that we've seen since earlier in the year.

Some of these recently announced orders, of course are not in our September backlog numbers, will be produced in the fourth quarter, but the majority of these orders will be produced in the first two quarters of next year.

In announcing that we had a good order flow in October, we wanted to inform the marketplace that in spite of our operating in markets, which we believe will be down for second year in a row somewhere in the range of 10% to 15%, our niche diversified product strategy is working and we continue to gain market share, where we compete.

That is a real credit to our people and to our products. Looking out to the fourth quarter, we are expecting the fourth quarter production to look similar to the third, however, with one significant and positive difference.

In there we would expect to see a much improved mix in product sales, which will translate to an improvement in the margins and profitability for the fourth quarter. It has been broadly reported that we are experiencing a challenging market for many of our products, and has been difficult to predict when there will be an increase in overall markets.

With only slight improvements in new equipment commercial activity since 2006, other than the oil and gas boom for equipment, which occurred in '10 and '11. An increase in activity has to happen sooner rather than later.

All the old equipment sold during the last up cycle, which occurred from 2002 to 2006, in any market or activity to name, is showing real signs of aging. Our replacement cycle combined with our growth strategy, represents we believe a very positive outcome and future for Manitex and our shareholders.

However, with difficulty of predicting sales growth in the short run, we are placing even greater emphasis on cost control for our entire organization. Our specific emphasis will be in the cost of goods sold expenses and even more specifically with our material purchases and planned efficiencies.

Cost control is an area we believe is a real strength of our company. We have demonstrated through execution and implementation of stringent cost measures during prior soft demand periods, and we would expect no loss from ourselves in this area for the near term.

Regardless of what happens with the current markets, our stakeholders should be looking forward to the New Year with great anticipation, as a result of our expected closing of two significant additions in the fourth quarter.

With our most recent announcement of the joint venture with Terex and the acquisition of ASV, and the previously announced acquisition of the PM Group, we will be adding combined over $200 million in sales with significant increases in EBITDA and earnings for 2015.

We also believe that we put together these acquisitions on very favorable financing terms for Manitex. To refresh everyone on the respective financings, I'd like to review again the financings that we put together.

First, PM, it represents a refinancing of PM debt in Europe, with its existing banks at a blended rate of 4.5%, with a number of term loans approximating $62 million in total, with maturities and payment spread out through 2023. These term loans have no recourse to Manitex International.

Manitex will take out a $25 million seven-year term loan at 3.5% for the PM investment, fees and working capital, along with the issuance of approximately 1 million shares of Manitex stock.

Secondly, ASV is $25 million in investment, consisting of $12.5 million in stock sold to Terex, along with $7.5 million convertible sold to Terex, along with a $5 million cash infusion to Terex by drawing down our revolver, while we are paying a rate of 2.75%.

ASV presently has no debt, but they will raise approximately $60 million, again with no recourse to Manitex.

Therefore upon completion of these two transactions, Manitex will have approximately $200 million in total debt, of which $80 million will be a direct obligation of Manitex, approximately $500 million in total sales and approximately $50 million in consolidated EBITDA by using the 2014 numbers for ASV and PM.

And now after those brief comments, I would like to turn it over to Andrew to review the quarter in more detail.

Andrew?.

Thanks, David. And good afternoon and welcome everyone. Following our usual format, I'll start out by providing an update about the state of the markets we serve and make some remarks relating that to our performance, and then I'll get on to the comparative financials. So let's start with Slide 4.

In the third quarter we had some very positive contributions, particularly coming from steady conditions in Europe, the CVS container handling equipment and steady activity for material handling equipment in North America.

Also during the quarter, and of course not reflected in the quarterly revenues, we saw a nice pick up in orders for higher capacity cranes that hit the order book. And as Dave has commented on, since the end of the quarter, we've also seen orders for higher capacity cranes continue with $17 million of bookings announced earlier this week.

Nevertheless, North America appears to be in a relatively slow growth mode. It's a long way from the peak years of 2007 and 2008, and the crane market is expected to be down year-over-year. Since December 31, 2013, our backlog has increased 32% and stood at $102 million at September 30, 2014.

Level with that for June 30, 2014, which reflects a book-to-bill ratio for the quarter of 99%. The order book remains broad-based, but this contain a higher level of military product than in recent periods at almost 18% of the total and a higher level of orders for container handling equipment.

Additionally, at September 30, 2014, the percentage of higher capacity cranes in the backlog was 33% higher than at June 30, 2014, with higher capacity remaining to be cranes with a tonnage of 40 tons or higher. Demand from the energy sector remained relatively flat, although there remain certain geographies where demand is stronger.

Rig counts as of October 31, 2014, showed a year-over-year increase of 10.4%, and an uptick from the end of the second quarter this year. But uncertainty remains in the marketplace with a recent decline in oil prices, as this relates to spending by the energy producers.

Our European markets have shown modest improvements year-over-year, which together with improvements in our distribution have had a sizable impact on container handling orders in 2014. Towards the end of the third quarter, we completed shipments of military units under existing contracts.

However, we are ramping up activity on military focus under the new contracts we received in the last 18 months, and expect to ship progressively during the fourth quarter and into 2015. As a reminder, these new military contracts, which I am referring, are three contracts with the U.S.

Navy awarded to our Liftking subsidiary, with total value depending on mix and options taken between of $75 million to $125 million with delivery over the next five years. Approximately $14 million of orders on these contracts are included in our backlog at September 30. Consequently, $61 million to $111 million is not in the backlog.

Now, turning to the financial results. Slide 5, shows key figures for quarter three of 2014 with comparatives with quarter three 2013 and quarter two 2014.

Third quarter 2014 revenues increased $8.7 million or 15.1% from the third quarter of 2013 to $66.2 million, with approximately 20% of the increase due to the Valla and Sabre acquisitions, and therefore organic growth represented the bulk of that increase.

Material handling product sales showed a 46% year-over-year increase, with contributions across each of those branded product lines, due to improved demand from the general construction market. At the end of the quarter, we also recorded a number of shipments of military focus under existing contracts with our Manitex Liftking subsidiary.

Container handling revenues at our Europe and CVS operation was sharply higher, increasing 50% from the prior-year quarter, resulting from increased demand from both Europe and international markets. While growth from lower tonnage crane products resulted in higher overall unit volumes, Manitex crane sales were flat.

Gross profit decreased $0.3 million compared to the third quarter of 2013.

The benefit from higher revenues, largely driven by increases in material handling equipment and including a higher proportion of lower capacity, lower margin boom truck cranes was offset by the significant sales mix change on margin, resulting in a 300 basis point decrease in gross profit percent to 16.5%.

Operating expenses of $7.5 million, including costs from Sabre and Valla, compared to $6.5 million in the year-ago period, which of course did not included those two subsidiaries. SG&A expenses held steady at 10.4% of sales compared to 10.2% in the third quarter of 2013.

Net income for the quarter of $1.8 million was a decrease of $0.8 million year-over-year. Earnings per share was $0.13 compared to $0.21 from a year-ago quarter, and included the impact of an increase of $1.5 million outstanding diluted shares in the third quarter of 2014 compared to the third quarter of 2013.

Adjusted EBITDA for the quarter was $4.5 million, equal to 6.8% of sales, down from $5.6 million or 9.8% of sales in the third quarter of 2013. Order intake in the quarter was well-balanced with current levels of output and resulted in a backlog at September 30, 2014, of $102.1 million.

This represents an increase of $24.8 million or 32.1% from December 31, 2013, and flat on a sequential quarterly basis. Order intake in the third quarter reflected an increase in demand for higher tonnage truck mounted cranes as compared to that seen in the previous quarter. Moving to Slide 6.

This is a bridge for the net income of $2.6 million from quarter three 2013 to the net income for quarter three of 2014 of $1.8 million. Moving to the reconciliation table.

Compared to the third quarter of 2013, higher revenues of $8.7 million combined with a decreasing gross profit percent from product mix generated a decreasing gross profit of $0.3 million. Operating expenses increased $0.9 million, including $0.7 million related to companies acquired since third quarter of 2013.

SG&A expenses were 10.4% of sales compared to 10.2% of sales for the third quarter of 2013, and remain controlled within management's target range.

The other principal factor influencing operating income was $0.3 million of reduced tax expense attributable to lower income, but also adversely impacted by an increase in the annual effective tax rate, excluding discrete items to 32% from 30%.

The principal factor accounting for the increase in the effective tax rate was the absence of R&D tax credits, and such provision expired as of December 31, 2013.

Slide 7 shows our working capital has increased from $74 million at December 31, 2013, to $84.1 million at September 30, 2014, with principal movements being an increase in receivables and inventory, partially offset by reduced cash and increased accounts payable and other short-term liabilities. Our working capital ratios remain relatively stable.

Days sales outstanding has increased by 9 days, reflecting a higher proportion of international sales and timing of payments of military shipments, and our current ratio improved to 2.7x compared to 2.5x at December 31, 2013.

Slide 8 shows our capitalization and liquidity position, with a net debt to capitalization ratio of 35.2% compared to 36.1% at December 31, 2013, at an interest coverage ratio of 7.4x compared to 7.3x.

During the third quarter of 2014, we generated $6.4 million of cash from operating activities, reflected in reduced utilization of our working capital facilities. Total debt at the end of the quarter shows a modest $0.5 million increase from December 31, 2013.

On the 12-month trailing adjusted EBITDA of $21.8 million, our debt to adjusted EBITDA ratio remained constant at 2.5x. I now would like to hand back to David for his final summary..

Thank you, Andrew. The last part of 2014 is a very important period for the growth of Manitex. We announced the acquisition of PM Group in the beginning of the third quarter. We believe PM will be a defining addition for our company, as it expands our sales and profits over the next several years.

PM's recent expansion has occurred on international front, in all the areas where our Manitex group does not participate. And conversely, Manitex's growth and strength is in North America, where the knuckle crane market is experiencing real advancements and acceptance and utilization, and where PM has minimal sales.

Further, we will now be able to offer product to our distribution with many possibilities of expansion for the PM Group in these markets. PM also represents a profit profile, which is very positive. Their products are specialized, which should represent a solid upside potential in our earnings. Simply stated, our strategy with PM is clear.

Leverage our two respective products and our distribution, and use our combined manufacturing strengths to produce and increase our earnings. Regarding closing of PM, while it's little more difficult to predict, because it is working with its way through the Italian courts, we do expect to close PM in the latter part of this quarter.

We are equally excited about the possibilities around the recently announced acquisition of ASV and a joint venture with Terex Corporation. ASV's products are in a sector, which we believe will show steady growth in the next several years.

The products are best-in-class with excellent management, distribution and we have a strong partner that has put a lot of effort into building ASV to be successful going forward. It will add over $100 million in sales to Manitex in 2015, with EBITDA and earnings equal to, if not better, than our historical numbers.

This will also close in latter part of the fourth quarter. We really look forward to welcoming both companies into the Manitex organization and to their benefit that they will add to our shareholders. With that, Shannon, we would like to open it up to questions..

(Operator Instructions) And our first question will come from Matt Koranda of ROTH Capital Partners..

This is actually [indiscernible] on for Matt Koranda. So you've mentioned you've gotten a lot more demand in the recent months for your higher tonnage crane.

And I was just wondering if you could give us a little more color on how demand is shaping up for your 70-ton crane?.

70-ton similar to what we have experienced, when we introduced the 50-ton several years ago, it has a lot of interest. We've produced more in the third quarter, not a lot, but a couple of month. We have orders for 60 level now at this point.

And obviously, it goes for a sales price, which is significantly higher than any of our other cranes because of the size. And I am sure as it gets out in the marketplace and gains acceptance, we will continue to build and grow just like we experienced in the past..

Then, I wanted to ask about, so recently you've had a dip in oil prices below $80..

Right..

And I'm wondering what you're hearing from your dealers that feel into the oil and gas market about the boom truck demand currently? And then about how CapEx spending could change going forward?.

It's obviously very difficult to predict that. I mean it's a question that's being asked everyday. Certainly, it's a topic of conversation. As you say, as we discussed this on a daily basis with customers and dealers.

And at this point, it seems that everything is staying status quo, but again obviously it's an item of concern that everybody is watching. So some people think that its bottom and it's going to go up from here, some people feel it has more room on the downside. I think it's very hard to predict..

Our next question will come from Kristine Kubacki of Avondale Partners..

This is Jamie jumping on for Kristine. So we have been hearing a lot about truck backlog, and obviously tracking those numbers pretty closely.

And wanted to feel you guys out on what you're seeing from a supply side, on the chassis side, if you're having any difficulty there?.

Chassis market is as tight as it's been in years. We experienced this right after we came out of the 2009 recovery in 2010 and 2011, but that was because they had taken so much capacity out of the marketplace. But my understanding is that capacity is back and just demand is very high, seems like trucks and autos are the only thing in the U.S.

presently showing big demand. But anyway, it is causing some issues. We have to occasionally shift, because our customer who want the crane, but may not have the chassis on a timely basis, so we have to modify production on a monthly basis, which obviously isn't efficient.

But we understand it's not just unique with us, but all over in the sector right now. And I'm sure that as this works its way through, it will correct for 2015..

One other quick one, I know guys have a lot of runway left in your five years military contracts.

Has production ramped up as you expected to and how do you see that going forward?.

The answer to your question, yes.

And how we see it going forward is somewhat determined on how the orders come in from the contracts, but it's ramping up as Andrew referred to, we did some orders in the third quarter relating to old contracts, which still have some room to run on those, but then on a new ones, we start that in the latter part of the fourth quarter and then run into next year.

So I guess, I would say it's unplanned as expected..

Do you foresee those being, expect it up or bottom end of the range or do you have any read on that?.

I expect to be on the upper end of the range, because pure speculation is based on conversation, it's not based on orders at this point yet..

And our next question will come from Shivangi Tipnis of Global Hunter Securities..

So you called out how much sales is expected in total from the PM as well as the ASV deal.

Can you just provide some breakup of how much is expected out of the sales and some [ph] attrition? Then just give us some color on the 2015?.

Let me make sure, I heard that correctly, so I could answer it properly.

You were talking about PM and ASV sales, is that correct?.

That is correct. And then I just wanted a bifurcation, because you gave it in total, $500 million in total spend.

So I'm just looking for some bifurcation of breakup of ASV?.

So what has been reported, and that's what I'll obviously comment on is ASV trailing 12 months is a $128 million, as I recall has been reported and a $106 million is what I recall being reported on PM..

But then is it difficult to give us some idea on what's going to be the breakup for 2015? The total sales that you're expecting is $500 million, right?.

Right.

And that is obviously based on, at this point, expected plans, which we've received and to break them down into detail, I would prefer to wait until all that information is public, so that we're not getting into an issue here, but it's launching off of the numbers that I gave you, which are public, and then slight expansion into 2015; although not that much, just slight expansion is I guess the best way to describe it for the all the entities..

And then one last question on the military contracts.

You said that most of the new contract, forklifts would be sent out by Q4 and some of it in Q1 and Q2 of 2015 or was that the other way around?.

What it is, is we have contracts going out for five years from various military and quasi-military operations and we recently announced in several different releases some large orders with the navy, and what Andrew reported on was how much we have in exact orders at this point that are in our backlog on a percentage basis and then how much is left to be received, but again it's a contract, and then we have to build against orders that come in against that contract.

So it's still up in air as to when they will order those, but as I said on the last question it appears that it might be on the high end and it maybe accelerating it faster than -- usually what happens is they accelerate it faster in a long-term period of the contract or they expand the contract over the period.

So we're just giving in the information of what we have at this point..

And we'll take the next question from Alex Silverman of Special Situations Fund..

You guys had a very busy quarter..

Yes, it was really busy. That's right..

Just to bounce around a little bit, the $17 million in orders, was that a single customer or was that an aggregate of a bunch?.

It was a multiple customers. And just so we had a good book in October, and we haven't seen than the while, so we got a little excited..

The $12.5 million in stock that was issued for ASV, can you tell us at what price that was issued?.

Well, we filed an 8-K on that earlier this week, and it's on our band, it's a price to be determined, but it's based on 30-days moving average, there's an up and down ceiling and floors, so it has a little bit of range to that..

And then finally, can you tell us how PM has done since this is announced in July? I mean, not necessarily absolute numbers, but general trends?.

Yes. We just returned back from or I just returned back from a trip there, and Andrew was there as well during this past quarter, and they are right on plan. Now, they later we will have a good year this year and we expect them to have a good start going into next year. So everything is on plan there..

And our next question will come from Brandon Hemmelgarn of Shaker Investments..

Just wanted to talk a little bit more on ASV, just hear a little bit more about their products, their end markets, all that that's into the broader Manitex portfolio.

And what sort of benefits do you see having ASV in Manitex's control in terms of the cross-sell opportunity? Is it manufacturing efficiencies? What are the opportunities going forward?.

It's really interesting. Obviously, as you kind of move up, I mean we started this company roughly 10 years ago; very, very small $20 million in sales and then had been adding small pieces, pretty much low entry points.

And then as you get larger, you look for opportunities like this, which are just phenomenal for us, because it clearly gets us into a place where we don't have experience in the housing area or we don't have a lot of exposure in the housing area. Clearly, some of our equipment goes into that market, but not to a great extent.

And it seems like a market that has been beat up pretty bad.

Obviously, it was a public company at one point, so you can go back and look at its history, how we're teaming up with a great partner, it expands and gives us exposure to a lot of different management, a lot of distribution, possibilities to put the products into our distribution that can help distribute it to a large base in some of the areas where right now they might not have distribution and we may, and then conversely obviously areas where they have distribution and we don't, and they help us on the other side.

So it's a wonderful opportunity, a profitable company, and very low entry point for us. Hopefully, I had answered to some of the questions..

Our next question will come from Peter von Schilling of Polar..

Two quick questions. I'll ask the first one.

Can you give us some color on the current quarter results by product line?.

In what regard, what area do you want?.

Just as you've gotten bigger now, you've got different sort of groups of product lines. And so I was just looking for a little bit of color; revenues were up 15% year-over-year.

Just a little bit color in terms of which product lines would have been up year-over-year versus down year-over-year?.

Ones that were flat as, Andrew mentioned, Manitex is relatively flat. Lifting is probably up a little bit. Badger is up. Load King is certainly up. CVS is up quite a bit, I can't remember if he mentioned at this quarter, how much it's up..

Yes, it's up 50%..

And Sabre is down, but that's really dependent on, when we acquired Sabre, we had one major customer, that customer has not been adding volume this year. But as we said when we did it, when we did the acquisition, we've been diversifying that customer base, so we expect that company and it's a very good profitable company to expand as we go forward.

The margins for the quarter, specifically 90 days is a tough period to try to measure anything, but we mentioned last quarter that there was a very high percentage of low margin equipment in our main driver, which was Manitex.

And so the Manitex margins on a quarterly basis, on an annual basis, however we want to look out, we're down significantly, and that clearly had an impact within that rebounds in the fourth quarter, so we should a nice improvement. And over nine month basis compared to a year ago, we were at 18.8% on gross margin.

And now we're at 18.1% for the nine month period. So on a nine month period it's not nearly as volatile as what you see on a 90-day period, because of the mix going through the facilities..

And as partly to address my second question which is, from here in terms of going forward, you think in terms of additive to the margins are going to be the better mix at Manitex.

And then likely in terms of Load King, began to ship under the new contract, would there be anything else that you'd put in the plus or minus column in terms of margin mix as we look forward in the next quarter?.

All of our businesses expect for Manitex have been improving on their margins from this year versus last year. So while we've seen a significant reduction in margin at Manitex, we've seen a nice increase in margin at all our other companies.

So all the other companies, and including Manitex, of course, they had such a nice mix coming out of 2013, because our backlog was much bigger at the end of 2012, and so that really flowed through in 2013. So they just had several years of very nice mix of business, so now it's a little bit, very reflective of what's happening in the marketplace.

But overall the margins seem to and the business mix seems to be improving. So I would expect steady improvement as we go. And then, of course next year you have PM, which has a very good margin profile and product profile.

ASV has a little bit less gross margin, but because they run with somebody's shared services from Terex, they have a higher EBITDA margins and higher operating margin, because they have lower SG&A, also they have a higher parts percentage, and so a higher parts percentage allows for a lower SG&A, because obviously they don't take as much selling or general administrative cost to sell parts through the distribution facility..

And then, if I have missed it in the opening remarks, but did you comment about production plans for Q4?.

I did. I've said in the remarks that we would expect production in the fourth quarter to be similar to the third, book-to-bill in the third was 1 to 1 roughly, and we'd expect to maintain that in the fourth quarter.

So we're run our plans at an efficient level and we'll have higher margins with higher profits in the fourth quarter is what our expectations are..

And our next question will come from Les Sulewski of Sidoti & Company..

Were there any NOLs from the ASV partnership that have come in, that perhaps benefited Terex or yourself?.

No. ASV is a C Corp will convert to a LLC and it will have taxes, which will be paid from cash that they would put on their balance sheet. So it does not, to answer your question, no..

Do you have an idea of what the order flow has been from ASV, in say 2012 to 2013?.

I don't know what's public. Obviously, we have that information. I don't know. Andrew, if you have any knowledge of what's public in the marketplace? The only number I know that we've quoted on is $128 million, is that correct? Or do you know of any other number that's been put out there to my knowledge; $128 million was like a trailing 12 months..

I know you can't really give much out, be it prior to that..

As I said earlier, I will prefer to let all that information, but the audits are being done on ASV now. All the information will be included in the 8-K when we file the acquisition, because we'll in-time put together the audits, have those filed, so you'll have all the information in the short order..

And then looking at just overall operations in the company, do you have I mean ERP system in place that's capable of managing your business with added acquisitions, any perhaps reorganization in the way you report your segments looking forward, any idea there, if you could?.

I think that we may have some -- we haven't finalized this yet, but I believe, and Andrew, correct me if I'm wrong, we'll probably have some segment review, because of ASV. We have that equipped systems. We obviously will be sharing whatever is necessary with Terex. So Terex will be heavily involved.

We'll have service agreements, sales agreements, parts agreements, so I expect a very smooth transition, because of the fact that we have such a strong partner that we're partnering with..

And as far as headcount, do you have a current number handy? If not, it's okay..

We were around 500 people at the end of the year. We're down slightly from that for full time employees at the end of September..

And then for looking at, let's say, at the end of 2015, do you have a rough idea, what it could be?.

Les, there is approximately 160 at ASV. I think it will be somewhere slightly north of a 1,000, when you add all the businesses together. We will be basically doubling the business. We will be doubling the employees for different spots obviously, in different parts of the world..

So in terms of revenue, I mean if you're looking over $500 million, 2015.

Is it going to be, kind of like a step up of each quarter or perhaps first quarter will have a little bit lower and then third preceding?.

Generally speaking, first quarter is always a toughest quarter, because it's the first quarters, its winters, it's all the things that occur in first quarter after you close the yearend.

And then generally speaking your second quarter is a stronger quarter, and the third and fourth are sometimes harder to handicap, because of, as you start to look out that gets beyond the -- but I would expect a slow steady improvement next year.

We were hoping this year it would be a solid steady quarter-over-quarter improvement, but it's been similar to 2013 when we just didn't come to fruition; we've had a lot of up and down from quarter-to-quarter. And hopefully next year, we'll have a steadier flow..

I guess one last one from me.

And the most recent acquisitions of CVS, Sabre and Valla, are these performing up to your expectations?.

Well, they are performing in line with what we thought. I mean Valla is a very small company, but we're integrating it and it has shown on a percentage basis a huge increase this year over last year, but again, it's very small.

And as I mentioned earlier, Sabre is from a percentage standpoint is second very profitable piece of our business, but it did as we expected, it is transitioning from a one customer company to multi-customers and we're confident it's going to build back to a very solid business, because it's running off of a very profitable base..

And our next question comes from John Curti of Singular Research..

On the acquisition of PM with your stock price down a little bit, do you anticipate having to issue more shares or might you have just pay a little more cash?.

On the acquisition of PM with your stock price down a little bit, do you anticipate having to issue more shares or might you have just pay a little more cash?.

No. That transaction was not based on a set price, but based on just a number of shares. So the reality is unfortunately our stock price is down from the time that we announced the acquisition, but on the positive side, you're paying less for the company..

Then just drilling down a little bit more on your outlook in 2015.

Obviously, kind of under represented in North America, I guess my concern is how are things shaping up in Europe versus rest of the world excluding North America?.

Then just drilling down a little bit more on your outlook in 2015.

Obviously, kind of under represented in North America, I guess my concern is how are things shaping up in Europe versus rest of the world excluding North America?.

It's very interesting, John. We put a slide together in our investor deck, where we looked at where PM had transitioned from just kind of the 2008 period, when obviously it was a European-centered company and then it's done an excellent job of moving away from 50% business in Europe to now 20%.

So you're down to a level where -- if it goes down another 1% or 2% it doesn't really matter. And they had minimal business in North America. They are now about 10% in North America, but that's insignificant when you think, that they do many times on in South America, for example.

And so you just really see the opportunity, because the knuckle crane market, while our straight boom cranes has seen a deterioration in markets over the last couple of years, the knuckle boom crane has accelerated an increased in the markets over the last couple of years. So we're getting into a product that is in more demand.

And they have very little exposure and presence in that market, so that's why we're really excited about and we think we can significantly grow their North American market. And they have less exposure in Europe, but Europe is a big market that's going to come back.

So it's not some place where you want to just ignore, but we're not really expecting much from the European markets over the next couple of years either..

Then with respect to the ASV operation, are there some benefits on the material side in hooking up with this joint venture with Terex that somehow might flow through the rest of the Manitex side in terms of costs?.

Then with respect to the ASV operation, are there some benefits on the material side in hooking up with this joint venture with Terex that somehow might flow through the rest of the Manitex side in terms of costs?.

We are clearly addressing, what I mentioned in my remarks is, we're really going to focus and we have over the years, but when you're in a flat period like this, it's really time to double up on the year. So we put together a team to really go after our material cost at Manitex on a global basis.

And clearly as we learned and develop and gain access to more information at ASV, I'm sure it's going to have a positive impact to us. Although, as you know, the products there are different than the products that we have in some of the other businesses, but all these products have a certain commonality..

And as a result of these two acquisitions coming on board, why it should be moving some production around the various facilities?.

And as a result of these two acquisitions coming on board, why it should be moving some production around the various facilities?.

We will be, as we develop more likely between PM and Manitex, because Manitex has several Manitex straight-mast crane, which is all North American based has multiple production facilities where we manufacture the product now. PM has multiple manufacturing facilities where they manufacture the product, but those are eastern and western European based.

And so we move it into the North American market, I'm sure we'll be addressing some of those issues.

And on the other side, as we try to move some of the Manitex products outside of North America, which we also have during minimal sales on, I'm sure there will be some that we will address in their products as well in their facilities as well, so to answer your question, yes..

Shannon, if there is nothing else, we'll wrap it up. I don't want to, not have anybody not asked..

And it does appear there are no questions at this time. So I'll turn it back over to you for any additional or closing comments..

Thank you, Shannon. Thank you, again everyone for your interest in Manitex. We look forward to our yearend call and the developments of our activity for the fourth quarter. Thank you very much..

And that does conclude today's teleconference. Thank you all for your participation..