David Langevin - Chairman & CEO Andrew Rooke - President and COO.

Matt Koranda - Roth Capital Partners Mike Sulewski - Seaport Global Kristine Kubacki - Avondale Partners Jeffrey Long - Tuxedo Road Associates John Serafini - Private Investor.

Good day and welcome to the Manitex International Incorporated Fourth Quarter and Full Year 2015 Results Conference. Today's conference is being recorded. At this time, I would like to turn the conference over to David Langevin, Chairman & CEO. Please go ahead, sir..

Thank you, Derrick. Good afternoon, ladies and gentlemen, and thank you for your interest in Manitex International. 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 March 17, 2016.

Now please refer to the first slide regarding our Safe Harbor statement. We ask that you review this statement and also refer to our SEC filings for further guidance on the many risk associated with our company. I will start with a brief overview, followed by a quick review of our results by Andrew, and then we will welcome any questions.

Let's begin with Slide 3. As all are aware, the equipment markets are soft. This has been reported by every public company in the industrial and equipment area and as such our recent activities reflect the reality of the markets.

Also with the significant reductions in energy equipment purchases as a result of commodity decreases, we now have less than 5% exposure to the energy markets on a total company basis.

This is also principally as a result of the fall in energy market's impact this had on the new and used equipment markets, our sales and our straight mast crane category fell by approximately $60 million for the year 2015 when compared to 2014. And EBITDA was reduced by approximately $12 million over a similar period.

A significant portion of our EBITDA for 2015 was generated from acquisition companies. However, this EBITDA reduction at our non-acquisition companies was a little more complicated than just due to a decrease in energy business.

It resulted from a mix change in products produced and an increase in variances due to efficiency issues on the production lines when we produced more of a variety of products. Even with these issues we were able to report $0.04 in adjusted net income and approximately $26 million in adjusted EBITDA for the year.

However the fourth quarter loss was a very difficult one for us and the first significant quarterly loss we've ever reported. The adjustments we took in the fourth quarter were primarily in interest of cash generation to pay down debt plus restructurings to position the company to 2016 on a profitable level and not continue to report losses.

We believe we'll report a profit in the first quarter of 2016, resulting from restructuring charges already in effect and increases in production for the first quarter. Our goals for 2016 are to continue to significantly reduce our debt, execute on further cost reductions, which will include plant consolidations in the U.S.

and expansion of sales resulting from previously made acquisitions. Let's look more closely at where we are and where we're going. First, with the addition PM Cranes, we're now strategically one of the market leaders on a worldwide basis in the lower tonnage crane category when mounted on a commercial chassis.

With particular strength in the North American stick crane market where we have a market share in excess of 30% and with significant upside potential in the knuckle boom market within the North American arena with a share of less than 2%, our knuckle crane division of PM Cranes is based in Europe where we're seeing a reasonable increase in the markets of very low historical levels.

We complement our two leading models of stick and knuckle cranes with a family of industrial and electric cranes in order to drive expansion in our crane product group when the markets return, we need to make sure our working capital levels are adequate to fund the upside growth, which brings us to our second point of emphasis, debt reduction.

We reduced our debt in 2015 by $45 million, with $20 million of it coming in the fourth quarter. This is a very good start to our goal of returning our ratios back to pre-acquisitions low historical debt to EBITDA levels.

With the strategies we currently have implemented, we believe we will experience a similar overall debt reduction in the year 2016 than we had in 2015. Along with the potential for modest improvement in EBITDA we will return our debt to EBITDA range back to reasonable levels and should equate to higher stock price.

Further to this important point on the impact of debt reduction has on our stock price for our current and potential shareholders, continued debt reductions and the benefit it has in our company's leverage risk should equate to an improvement in our equity value.

To further repeat what I mentioned earlier, the final piece of our debt reduction plan is to reduce our current working capital lines, especially those in the United States. This will free up capital, which will allow us to drive the sales growth when we experience the eventual turn in the cycle for our products without using any equity at all.

Through assist and realizing our overall debt reduction goals, we will continue in 2016 the program we announced last year of concentrating our business model and the products which derive the greatest overall return to our shareholders. We began the execution of this program in the fourth quarter of 2015 with the sale of Load King.

Our last key point of operating execution for this year is the advancement of the cost reduction program, which we announced at the beginning of last year. As reported in our release today, we exceeded our stated goal of $4 million by reaching $5 million in primarily material cost savings in 2015.

We also announced last year a goal of $15 million in cost reduction over three years. To realize a portion of that number this year, we will go beyond primarily material cost reductions, although we believe we have more to achieve in this area to minor plant closures and further labor cost reductions.

We do not expect any of these measures to result in significant quarterly charges, but in a consistent trimming of expenses and some less than significant adjustments to our operating results for 2016. In summary, we are well positioned as a company for 2016 and beyond with the diversity of our markets and our geographic footprint.

We believe 2016 will be a smoother operating year for us because of the acquisitions we made in early years and the clarity of modest market expectations for 2016. This will allow us to execute on our plans of driving down our debt and further strengthening of our balance sheet. With that overview, I would like to turn over to Andrew..

Thanks David and good afternoon and welcome everybody. Let’s start with the market conditions on Slide 4. Quarter four of 2015 market conditions in North America continued the trend from the earlier part of the year with very low demand from new straight mast and industrial cranes created by the downturn in the energy sector.

As we have noted before, this sector has been responsible for significant purchases of higher capacity straight mast cranes with above average margins in the last few years, helping to drive profitable growth for us, but this has seen a major curtailment during 2015 as the industry slashed capital expenditures.

Also during the fourth quarter, as for much of the year, we continue to see the additional effect of the redeployments of equipment from energy markets absorbing much of the modest demand from the rest of the economy.

We estimate that overall demand for straight mast truck cranes in 2015 fell 45% compared to 2014 with the fourth quarter of 2015 down 54%.

In addition to the overall lower volume, shipments of our higher tonnage cranes that carry higher gross profit, which were widely used in the energy sector, declined 56% in the year and 78% in the fourth quarter of 2015.

We believe the overhang of equipment will work its way through the market during 2016 and that will translate into new crane demand from other sectors of the economy such as residential and commercial construction, power line and electric grid work and general highway and construction activity where there seem to be more positive trends.

Our Knuckle Boom crane acquired with the PM acquisition has very little exposure to the energy sector and is a growing market as it increasingly gains wider acceptance to many applications particularly here in North America.

With PM's international presence provided not only by export, but also from sales and distribution locations in 10 countries across the world is also benefiting from gradual improvements in several world economies. In quarter four 2015, Western Eastern Europe and the Middle East were the strongest contributors for PM sales.

In North America in the second half of 2015 we made progress with establishing the network of service and daily support that will provide the foundation for expanding our Knuckle Boom crane presence in North America supported by our Texas manufacturing operations.

For our ASV segment, comprising compact truck loaders and skid steer loaders, focused more on North American and Australasian construction, market conditions again were softer in the fourth quarter with an increasingly competitive pricing environment in North America and significant foreign exchange pressure from key Canadian and Australasian markets.

Our focus has been to reintroduce the ASV branded product and its unique features as well as establish new distribution in previously unserved geographies. The expansion of ASV brand distribution progressed well from a starting point of zero and over 100 locations and as signed up when we expect this to double in 2016.

ASV branded product comprised 20% of machine shipments in quarter four 2015 and ASV now controls approximately 41% of its revenue distribution that's calculated excluding parts.

The strength of the dollar for much of 2015 continued throughout quarter four 2015 as well as negatively impacting our top and bottom lines as we translate sales and foreign earnings to U.S. dollars that has provided challenges for exports from the U.S.

Demand and product profitability, particularly in Canada where all our business segments have significant market presence has been affected. For the full year of 2015 we estimate a negative $28 million of foreign currency translation effect on sales.

With regard to orders in our backlog, at the end of the year our continuing operations backlog was $82.5 million, a decrease of 15.9% from the $98.2 million that we entered the year with. The backlog remains broadly based and comprise 65% to Manitex products comparable with 2014, 22% of PM product and 13% of ASV product.

For quarter four of 2015, our booked orders ratio to sales or book-to-bill ratio was 91%. Moving to financial results as David had discussed, there was significant cost from the actions we took in 2015 that we've identified and which we've adjusted 2015 results for.

These costs are acquisitions transaction related expense of $2.1 million from EPS effect of $0.13 per share, restructuring related expense of $1.9 million with an EPS effect of $0.12 and foreign exchange and other costs of $0.6 million and EPS effect of $0.4.

These items together with discontinued operation of Load King and its loss on sale are excluded from the adjusted results from continuing operations as is shown in the following slides. So turning to Slide 5, this shows the key figures for continuing operations adjusted results for 2015 with comparatives for 2014.

Results for 2015 -- revenues for 2015 were $396.7 million up 56.5% and included a negative impact of $28.3 million from currency translation. PM and ASV acquisitions added approximately $203 million and underlying revenues was down $63.4 million or almost 26% largely from reduced crane sales.

Gross margin was marginally down at 18.5% compared to 19.2% in 2014 with the adverse impact of lower volume and mix being partially offset by higher margin PM product and the impact of our cost reduction activities. Adjusted EPS was $0.04 per share and adjusted EBITDA $25.8 million or 6.7% of sales.

Working capital despite a much higher level of sales was down $3.2 million and total debt at December 31, 2015 was $175.9 million, a reduction of $45 million from 2014 adjusted for the PM acquisition and the ASV conversion liability, both of these will be discussed later.

Moving to the fourth quarter on Slide 6, again these are adjusted results from continuing operations, where we have excluded the impact of the cost of restructuring related expense of $1.5 million with an EPS effect of $0.09 and foreign exchange and other costs of $0.6 million with an EPS effect of $0.04.

Net revenues for the three months ended December 31, 2015, increased $31.2 million or 50.1% year-over-year. In total the PM and ASV acquisitions contributed $50.8 million of additional revenue net of currency impact in the quarter. The impact of currency translation is a result of a stronger U.S.

dollar, lower total net revenues excluding those of acquisitions by $2.9 million and underlying volume was down $16.7 million again principally in the largest straight mast and industrial crane businesses. Gross profit of $16.3 million or 17.4% of sales increased $4 million compared to $12.3 million or 19.8% of sales in quarter four 2014.

The adverse impacts of volume on absorption, crane product mix and margins at both the Lifting and ASV segments adversely impacted by the competitive pricing environment resulted in a decrease in gross profit and margin percent.

Adjusted net loss for the quarter was $1.7 million or $0.11 a share compared to adjusted net income of $2.3 million or $0.16 a share in quarter four 2014.

The lower gross margin from straight mast and industrial crane sides and approximately $0.5 million adverse effect from exchange rate translation and increased interest expense from the high levels of debt were largely responsible for the decrease in adjusted net income quarter-over-quarter.

Slide 7 is a bridge movement in sales and adjusted net income from continuing operations for the full year and the fourth quarter of 2015, compared with 2014.

I’ll concentrate on the full year, where in the sales reconciliation we show the build-up of $135.5 million increase in revenues year-over-year with acquisition revenues net of currency impact of $202.9 million, a volume reduction of $49.6 million and a negative currency translation impact of $13.8 million.

On the adjusted income reconciliation, a sales volume reduction from the core crane business offset much of the benefit from the revenue increase in the PM and ASV sales, resulting in gross margin increase of $24.2 million. Underlying operating expenses were reduced $3.7 million.

The benefit from taxes resulted from the reported loss for the year and the effective tax rate for 2015 was 15.4% compared to 35.5% in 2014, the result of income tax expense and rate differences in foreign jurisdictions.

Slide 8 shows our working capital has decreased from $85.9 million at December 31, 2014, to $82.7 million at December 31, 2015, which includes the addition of PM working capital following its acquisition.

This reduction of $3.2 million in addition to the reduction of operating working capital as a percentage of last quarter sales has helped generate cash to repay term debt and contributed to the total debt reduction in the year.

Our current ratio of 1.7 times for the current quarter is lower than product comparisons due to the addition of PM working capital facilities and current liabilities since these are transactional based. This compares to the North American term lines that achieved for this long-term finance.

Adjusting for this would give a current ratio of two times at December 31, 2015. Slide 9 provides a breakout of the $175.9 million of total debt at December 31, 2015, which includes the addition of $3.6 million from the extension by 11 years of our lease of Georgetown, Texas facility.

After adjusting December 31, 2014, the effective assumed debt from the PM acquisition and the debt associated vis-à-vis conversion tax liability we were able to reduce total debt by $45 million in the year and nearly $20 million in the quarter. These actions taken to lower levels of debt, will contribute to earnings in 2016 by lowering interest cost.

Of the total debt, a $107.4 million is non-recourse to Manitex. Additionally, in total $68 million is related to working capital financing. These are the transactional or collateral based and a further $21 million is in the form of convertible notes.

Also shown on the slide for reference is the total cash and availability of $36.9 million at December 31, 2015. Our objective is to continue to tie up debt through cash flow and restructuring activities during 2016 and beyond with the objective of returning our balance sheet ratios in time back to our normalized levels.

Slide 10 shows our capitalization and liquidity position and of course shows significant change from the year ended 2014, substantially driven by the PM acquisition in January 2015.

As just discussed, total debt of $175.9 million has increased $65.5 million with the assumed non-recourse debt to PM and the acquisition financing debt in the form of term loan and convertible notes. Net debt in total at December 31, 2015 was $167.3 million.

During the fourth quarter of 2015, we generated cash from operations of $3.3 million and for the year 2015 adjusting from the conversion tax payment and related $25.3 million. We anticipate continued cash generation to enable further debt reduction at similar levels to 2015 and 2016.

And now I would like to hand back to Derrick and we'll start questions and answers..

[Operator Instructions] And our first question comes from Matt Koranda with Roth Capital Partners. Please go ahead sir..

Good afternoon, guys..

Hey Matt..

Hey guys. So just wanted to start off with potentially the margin outlook for 2016. I know that you guys had mentioned the extraordinary circumstances here where you're trying to reduce working capital to pay down debt and some margins are obviously running at a depressed rate this last quarter.

But just wanted to see if you could try to give us directionally what the cadence of margins looks like through 2016 and do we expect some improvement throughout the year? Are we kind of -- are we going to spike back up right away since you've gotten some of that inventory? Just help us understand where that kind of goes over 2016?.

Okay. Matt. Thank you for the question. In fact that is obviously very easy to totally predict, but I think we'll start out in the first quarter we have some production of low margin inventory that we're still producing. So I don't think we'll have -- will come out of the box with a -- with significant increase in margin for the first quarter.

But I do believe as we -- as every -- all the cost flow through and we continue to reduce cost throughout this year that we will have an improvement and the margins, although historically, obviously when we go on through these cycles, our margins have dipped significantly below where they are now, but I think what's happened is during that past year with our cost reduction programs that we had in place, we were running in the 18s for the whole year on a gross margin basis and that’s very good because if you go back to historical dips that we've had, we’ve got into the '16 as far as a gross margin level.

But I don’t think we'll see that this time around because we've been attacking cost steadily and that effort has expanded in the fourth quarter and it will continue at greater level in the first, although we do have some inventory going through the first quarter that is not in high margin levels, but it’s the mix.

We have some lower margin, lower tonnage cranes going through in the first quarter..

Got it. Okay. That’s helpful. I did notice in the release and I think you guys may have alluded in the prepared remarks in terms of the backlog it does look like in January you guys did add roughly $16 million to the backlog, can you just talk about where that strength is coming from and clarify that for us..

Sure, that was as I recall Andrew that increase in the first month of the quarter was CVS and Lift King, is that right?.

That’s correct..

Okay. All right.

Wanted to really quickly cover the cross-selling opportunity with PM and just get an update on that front as well, I know we had I think in the last call maybe discussed that we should see some sales left during 2016, but just wanted to get your latest thinking around the cross-selling and in particularly the progress in selling the PM product through your North American distribution..

Yeah, Matt I think -- I think what we’ll see and I’m glad you asked that, thanks a lot, I think what you'll see is we wouldn’t have obviously without PM and ASV, this would be very difficult because we have significant amount of our EBITDA begin generated from the acquisition companies and the steadiness of especially the PM because of the fact that those markets are broadly based throughout the world.

And for North America there is slowly growing rather than the precipitous decline that we saw on the stick crane market, which as you know the degree of the cycles can be very large as Andrew alluded to when he gave the percentages of drop off in the straight cranes. So we expect continued improvement. We saw improvement last year.

We got into the teams last year as far as sales into North America. We're hopeful that this year we advance that by another significant percentage, but again off of a very small base and there obviously is a much larger market for us to attack, but also around the world. Europe is doing better as we all know.

Those are coming off a very low levels but it's doing better.

And so as Andrew mentioned in his remarks, the growth that we had last year, we did have growth in North America, but we saw better growth in the European markets, very good growth in Middle East for us and there was one other market that you mentioned that I can't recall right now Andrew, but I do remember North, East Europe, West Europe and the Middle East is what I recall..

Okay.

Great and then maybe you can tackle what I think is may be something that we haven’t really talked about before that I can recall, but the universe of selling PM products through your North American distribution, but are there opportunities to sell the straight mast boom truck product through PM's distribution internationally and maybe that was what you were alluding to just in that answer, but maybe you could just clarify that for as well..

Yeah we haven’t attacked that. We have more energy in that area of going into 2016, but in 2015 we concentrated on bringing because the opportunity was greater to come into this market than it is to spread it around, but obviously we will now expand and move again around all the branches that we have around the world.

So I think you'll see some more of that in '16 and beyond, but again in '16, even though we don’t expect the improvement anywhere, we’re still going to hold up well from a total sales standpoint and as I mentioned in my remarks, it should be a much smoother year because we don’t have really expectations of large deviations in our sales and in our profits as we go through 2016..

Okay. Got it and then I’ll just one more here regarding debt repayment plans.

I think you alluded to a similar amount in 2016 relative to 2015, but was just wondering if you could help us understand how does that -- how is that going to flow during the year? Is it going to be similar to this past year where the bulk of the debt repayment happened in the fourth quarter maybe just help us understand the cadence of debt repayment during 2016.

And then as dovetailing with that maybe, you could just talk about what conversations with your lenders are currently like in terms of waivers on covenants and that sort of stuff?.

Sure, of course, I’ll take the second question first. We have covenants in three different bank groups. We have European covenants on our PM Group. We have covenants at ASV on the ASV Group and we have the Manitex covenants, which basically represents North American businesses. PM obviously did not have any issues this year not any amendments.

We had amendments with our covenants here in the U.S., but it really is and -- we've been with this institution, our institution in the U.S. for over 14 years I believe. So it’s a longstanding relationship and we just modify the covenants and move on. We did that a couple of times last year.

We’re not expecting -- we’re not and we didn’t have anything at ASV and then on the -- what was the first question?.

Just about the cadence of debt repayment in the year?.

Yes the debt repayments during the year, I would expect -- I would say we mentioned in our remarks that we’ll have asset sales again this year. So we might have -- might move that up sooner than the fourth quarter because it’s been ongoing since we started this year ago but I think we’ll have a little bit in the first quarter.

I don’t think, I know we’ll have some in the first quarter and might be a little more steadier this year than last year, but I wouldn’t be surprised if we have because of the asset sales through the second or third quarter some significant paydowns again..

Okay. Great..

We are locating sales in the fourth quarter last year. So it ended up along with being much more aggressive on moving out inventory in the fourth quarter..

Sure. Understood. Okay. I will jump back in queue here. Thanks David..

Thank you, Matt..

Our next question comes from Mike Sulewski with Seaport Global..

Hey Mike..

Hey guys, how are you doing?.

Okay..

So wanted to ask first, I think if you maybe give a little bit of refresher on where we stand in the oil and gas inventory clear out here, it kind of sounded like in the press release that you virtually cleared here in the fourth quarter, but then you kind of mentioned in your comments and maybe you didn’t. So….

Yes I probably should have, I’m glad you brought that up Mike because I don’t think I said it properly.

We clearly cleared -- as say in the fourth quarter as it relates to energy, but we had -- we took a fairly significant order in the fourth quarter for delivery partially in the fourth, but more so in the first and the second and those are lower tonnage cranes. So that's the issue that I have with the margin in the first quarter.

The mix is still not going to be conducive to high margins, but I don’t expect margins that are disastrous, but I do expect that we'll have decent margins for 2016 because of all the efforts that we put to reduce cost. But I don’t expect that there will be pricing improvements in our mix in the first quarter.

Right now it is geared towards lower tonnage cranes. So that sounds really referring to not energy related cranes..

Maybe just a bit more clarity Dave, so you've got -- there is two major crane manufacturers that I've heard from recently.

Both are involved a little bit more higher tonnage cranes in than what you may have been not booked on it, but wanted one has said that there has been kind of a flat yearend '15 and the other one is saying, they're saying down double-digits if not into mid teens. Where do you stand, I know that….

We're a little bit of a different animal because as you know, we're so specialized and we're not as broad based. So you really just -- we just really look at the lower tonnage cranes mounted on commercial chasses both stick and knuckles. The knuckles seems to be holding up very steadily.

Last year the knuckle market was up slightly and obviously it's too early to tell this year, but it doesn’t seem like it's -- it seems like they had a good first quarter as far as orders on the knuckle side, is that correct Andrew?.

Yes correct..

So I don't think we're going to see a significant fall off. Now on the straight crane side, we did see obviously a very significant decrease last year as Andrew reported in his remarks. Now have we reached bottom there? I don't know the answer to that, but you don't have that far to go.

You're getting close to 2009 levels which we know where it's been in 30 years. So I don't think that we have a long way to fall on the straight math side..

Okay. Okay.

Can we -- can you also just give us some thoughts given that, there could actually be a little bit further downside on the stick crane business, could you cut more cost going forward? Do you have more you can prove?.

Oh yes. So what we're doing -- what we're doing this year is we're going to -- what we mentioned was we're going to continue with our price reduction program what we announced last year. We announced last year we do $4 million in cost reductions last year we did $5 million.

And then we announced a three year program of '15, but on top of that, or included in with that this year is we'll do some plant consolidations in the U.S. not major plants, but smaller plants. So we're going to -- but again, I don't expect those to have big charges.

We noted those because they're not very large plants, but that will help, that will be in the $2 million range as far as helping us from a cost reduction standpoint because we're trying to do everything we can to get ourselves in a position where we're on solid footing from a cost standpoint,.

So then perhaps from -- it sound like you've got something of a flash outlook here for '16 for your revenues, but you may be able to get some additional cost that are going to bump you up on the margin side..

That's right, yes..

And kind of ballpark there..

Yes, that's exactly right. We're going to try to continue to reduce -- we don't have obviously the levels of inventory that we had, but we're hoping we get little improvement in our EBITDA for this year. We get continuous cost reductions for our margins hold steady or slight improvement.

Our sales down to crash or fall, they continue to -- we see very modest growth in our sales and so for the year, we strengthened our balance sheet and put ourselves in a position where we're in a stronger position as we start to come out because as you know, the cycles for our products is extreme and so if you get -- a couple years are down, you usually get two or three years of up..

Okay. Got it. Thanks guys. I'll hop back in queue..

Thanks Mike..

And Kristine Kubacki with Avondale Partners, your line is open..

Hi Kristine..

Good afternoon, guys..

Hi Kristine..

I was just wondering if you could talk a bit about the used equipment out there in the channel, I guess the levels and the pricing and are we anywhere near close if that's being flushed out particularly in the energy side?.

Well of course as we've talked in other times and our margin rested and would you Mike and Matt and other analysts have because you have people that are looking at this stuff very carefully as well, it seems to us that a lot of the good equipment from the energy side and I know from looking at auctions this year, it seems that the quality of the used equipment is not the same as it was a year ago and that the higher quality in some cases you had energy equipment that wasn’t used at all or very few hours on and that was coming into the market and replacing any demand that you had on non-energy markets.

Well that seems to have slacked off for this year and again based on the options that we’ve looked at through January and February and so the amount of cranes that are coming into the auctions and the quality of the cranes do not seem now I referred that’s really the -- I can say our inventory dealers is still a level where every -- we have dealers who are now ordering.

We didn’t order last year, but are they ordering quantities? No, they're ordering very small quantities and some are starting to at least talk about some future orders, but I still think there is inventory in our dealer network..

That’s really helpful and then I guess a follow up to that would be both the two larger crane manufactures out there in North America and there are some sort of transition or another.

Are you seeing any behavior that has changed there? Is there a potential that you could possibly take share as they refocus in North America?.

Well, we think that that might be an opportunity, but up to this point, we have not seen any dramatic change in their behavior from before the noise that’s going around in the arena now, but we certainly think that in the small categories that we're in, we may have that opportunity as we go forward..

Okay. Very good, well I appreciate the time. Thank you, guys. .

Thank you, Kristine..

We’ll take question from Jeffrey Long with Tuxedo Road Associates..

Hi Dave..

Hey Jeff..

I've got a couple questions. Let me do one at a time if I can..

Sure..

With Terex potentially changing hands, have you had discussions with them about their interest in ASV on a going forward basis?.

We’ve had meetings with Terex in the normal course and obviously those issues comes up, but it's really difficult for them to -- it’s a little premature because they're in the middle of a couple different issues. So no one’s been very conclusive at this point as you would expect..

Okay. So that’s -- that is an issue still up in the air..

Right..

The other thing is I may have missed it, I heard you say that CVS did well in January.

How did CVS do in calendar '15?.

There a good year. They're a very steady company. So they had a good year in -- it's a reasonably good year in 2015. They made money. They’ve always made money. They had some orders that they're working on that probably would have been they could have gone into '15 or the first part of '16, but they ended up got being in the first part of '16.

So as you know sometimes their orders are projects that go on and on, on for a long time..

Yes and that’s a great thing.

The final question is having been through a couple of cycles in different industries, thinking back to construction in the '08 or '09 or '010 period and then recently with energy as you look at your product mix going forward, where would you speculate with the capital S the lift off might be in late '16, '17 in terms of industry starting to really gear up..

Well, you hope that with the break in that the consumer has received that we could have a transition back into further expansion in the residential and non-residential, obviously there is infrastructure spending now the bills that we didn’t have before. So we need to see that yet into the market.

So you're hopeful that you see a lot of that and also around the world. Europe continues to bounce along off the bottom, which is good because as I said in other calls, we obviously have a fairly substantial European exposure now.

And other than that, I don’t see South America doing too much although we do have some South American exposure, but its flat year-over-year for us especially in the Knuckle area. Australia, you’re more experienced with that Andrew because ASV has exposure there, but I don’t know if there is great expectation there or not..

I think relatively steady Dave. We're certainly seeing some good initial orders from Australia, which were above levels of 2015 equipment take. So I would hope that that will continue through 2016..

But as we said Jeff, we’re not expecting anything awful for '16 and we just expect a modest year. So that would give us a chance to make sure we continue to execute, implement and strengthen our balance sheet..

We're operating in a very difficult environment and you guys have done a great job. So just keep that..

Thanks Jeff. Thank you very much..

Thanks Jeff..

[Operator Instructions] And it appears we have no further questions at this time. Pardon me, we just -- one just queued up. We have John Serafini, a Private Investor..

Hey John..

Yes hi David, it's John Serafini..

Yes John.

Good to speak to you again, how are you doing?.

Nice to speak with u as well. Good quarter and good year end through a tough year..

Thank you..

Glad that you're paying down some debt and trimming expense and so forth. Sounds like a good idea. How are you -- what are you seeing on the Knuckle Boom crane penetration in North America? Is that starting to take off? I know that was a big hope for the company and you see….

We’re making -- thanks John, thanks for your questions. We’re making inroads there and as Andrew alluded to, we have a lot of our present dealers and other -- and new dealers that are now service centers for Knuckles, they handle the parts for knuckles.

The big thing is we want to be able to differentiate ourselves from the other European manufacturers by having as much service in parts and responsibility of the product in the U.S. so that they can become comfortable that if an issue arises there is somebody in the U.S. that can take care of it for them.

And that developed in 2015 as well as an increase on our new equipment sales and part sales in 2015. So I think all the significant work and hard work was done in '15 and we’re hopeful that we'll see further growth because the market is very broad and diverse on the Knuckle side and not obviously any energy exposure there.

So we’re hopeful that as these markets grow in 2016 we participate not only here but also in Europe..

And just a follow-up maybe, have you seen the large European players try to come here to establish any dealer or other service networks so that they can attack you in your own home base here or are they pretty much staying in Europe and wanting people to come to them for parts and service?.

The other principal manufacturers Palfinger, Fassi, Hiab and then PM are all European based and all have some type of activity in North America, BUT again the differential is we're an North American business, North American based and so over time we should certainly clearly have the advantage over anybody from coming from outside, because we understand the North American market.

A lot of times, it’s difficult for outsiders to understand the degree of quality not that the competitors are not quality. They're all very quality from a production standpoint. But the extent that you have to service and maintain and stay on top of your U.S. customers is hard from the European arena.

So that’s what we're hopeful is as we take ownership in the product here in the U.S. we are able to make further inroads beyond what we've already started..

Okay. Well thank you again for all your hard work and good luck going forward. It's been a lot of years and it's another climb up the hill, but it sounds you're well positioned. Well, thank you again..

We have a great organization of people and we really are excited about the opportunities that we have because of the -- and if you think about over the years, we've expanded the company. We've gone through these cycles. So we know that each time we go through the bottom, you want to go and exceed the top of what you had before.

We did that from 2008 to 2013. Since then we've been going -- our stock has been going back down and we want to finish that trend down the road and then back up the hill and see off how high we can get at this time. So again John, we appreciate your input.

Derrick, are we done with calls -- with questions?.

There are no further questions. I would like to turn the conference back over to David Langevin..

Okay. Thanks Derrick. Thanks everyone for your participation. We look forward to next quarterly call. Thank you..

That does conclude today's conference. We thank you all for your participation..