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.

FORWARD-LOOKING STATEMENTS

When reading this section of this Annual Report on Form 10-K it is important that you also read the financial statements and related notes thereto. This Annual Report on Form 10-K and certain information incorporated herein by reference contain forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this Annual Report on Form 10-K, other than statements that are purely historical, are forward-looking statements and are based upon management's present expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future. We use words such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions to identify forward-looking statements. Forward-looking statements in this Annual Report on Form 10-K include, without limitation: (1) projections of revenue, earnings, capital structure and other financial items, (2) statements of our plans and objectives, (3) statements regarding the capabilities and capacities of our business operations, (4) statements of expected future economic performance and (5) assumptions underlying statements regarding us or our business.

It is important to note that our actual results could differ materially from those included in such forward-looking statements due to a variety of factors including: (1) substantial deterioration in economic conditions, especially in the United States and Europe; (2) our customers' diminished liquidity and credit availability; (3) difficulties in implementing new systems, integrating acquired businesses, managing anticipated growth, and responding to technological change;
(4) our ability to negotiate extensions of our credit agreements and to obtain additional debt or equity financing when needed; (5) the cyclical nature of the markets we operate in; (6) increases in interest rates; (7) government spending; fluctuations in the construction industry, and capital expenditures in the oil and gas industry; (8) the performance of our competitors; (9) shortages in supplies and raw materials or the increase in costs of materials; (10) our level of indebtedness and our ability to meet financial covenants required by our debt agreements; (11) product liability claims, intellectual property claims, and other liabilities; (12) the volatility of our stock price; (13) future sales of our common stock; (14) the willingness of our stockholders and directors to approve mergers, acquisitions, and other business transactions; (15) currency transactions (foreign exchange) risks and the risk related to forward currency contracts; and (16) certain provisions of the Michigan Business Corporation Act and the Company's Articles of Incorporation, as amended, Amended and Restated Bylaws, and the Company's Preferred Stock Purchase Rights may discourage or prevent a change in control of the Company; (17) NASDAQ Capital Markets may cease to list our Common Stock; (18) other risks described in the section entitled "Risk Factors" and elsewhere in our Annual Report on Form 10-K.

The risks described in our Annual Report on Form 10-K 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. We do not undertake, and expressly disclaim, any obligation to update this forward-looking information, except as required under applicable law.

OVERVIEW

Historically, the Company designed, developed, and built specialty Testing & Assembly Equipment for the automotive and heavy equipment industries that identifies defects through the use of signature analysis and in-process verification. In fiscal 2006, the Company completed two acquisitions that introduced Lifting Equipment into the Company operations as a second segment of activity. Effective July 3, 2006, the Company completed the purchase of Manitex, Inc. ("Manitex subsidiary) via an acquisition of all of the membership interests in Quantum Value Management, LLC (an entity owned by certain stockholders). A leading provider of

engineered lift solutions in North America, the Manitex subsidiary is based in Georgetown, Texas. The Manitex subsidiary designs, manufactures, and markets a comprehensive line of boom trucks, sign cranes and trolley boom unloaders. Manitex's boom trucks and crane products are primarily used for industrial projects, energy exploration, and infrastructure development including: roads, bridges and commercial construction. On November 30, 2006, the Company, through its wholly owned subsidiary, Manitex Liftking, ULC., an Alberta unlimited liability corporation ("Manitex Liftking") completed the acquisition (the "Liftking Acquisition") of all of the operating assets of Liftking Industries, Inc. an Ontario, Canada corporation ("Liftking"). Manitex Liftking is headquartered in Woodbridge (Toronto), Ontario and manufactures a complete line of rough terrain forklifts and special mission oriented vehicles, as well as other specialized carriers, heavy material handling transporters, and steel mill equipment. On July 31, 2007, the Company further expanded its Lifting Equipment segment by purchasing the Noble Forklift product line. The Noble product line is comprised of four rough terrain forklifts in several configurations, which are being produced in the Company's existing facilities located in Georgetown, Texas and Woodbridge, Ontario. Although the revenues for the Noble product were not significant in 2007 the Company believes that the acquisition will allow the Company to increase its market penetration in the future. On October 6, 2008, the Company completed the acquisition of substantially all of the assets of Schaeff Lift Truck Inc. ("Schaeff") and Crane & Machinery, Inc. ("Crane") from GT Distribution, LLC. Schaeff, which produces a line of stand-up electric forklifts, further expands the Lifting Equipment segment. Crane is a Chicago area based distributor of Terex and Manitex cranes and is a separate new segment, entitled Equipment Distribution.

Against the background of the operating losses generated in recent history by the Testing & Assembly Equipment segment operations based at Wixom, Michigan, the Company conducted a strategic review of these operations. In connection with the preparation of our 2006 year-end financial statements, the Board determined that certain assets used in connection with our Testing & Assembly Equipment segment were impaired. Accordingly, we recorded an impairment charge of $6.6 million.

On March 29, 2007, our Board of Directors approved a plan to sell our Testing & Assembly Equipment segment's operating assets including its inventory, machinery, equipments and patents. As a result, our Testing & Assembly Equipment segment has been accounted for as a discontinued operation starting with the first quarter of 2007 until its disposition. On July 5, 2007 the Company entered into an Asset Purchase Agreement with EuroMaint Industry, Inc., a Delaware corporation ("EuroMaint"). Under the terms of the Asset Purchase Agreement, the Company agreed to sell and EuroMaint agreed to purchase certain assets of the Company used in connection with the Company's diesel engine testing equipment business. EuroMaint also assumed and agreed to pay, perform and discharge when due certain obligations of the Company arising in connection with the operation of the Company's diesel engine testing equipment business. In addition to the assumption of those certain assumed liabilities, EuroMaint agreed to pay to the Company the aggregate purchase price of $1.1 million. This transaction was completed on August 1, 2007. As of August 31, 2007, all operations of the Company's Testing & Assembly Equipment segment had ceased. The Testing & Assembly Equipment segment operated from a leased facility. The lease termination date for this facility was August 31, 2007.

As a result of the Company's decision to sell the Testing & Assembly Equipment segment, the results of this operation have been reported as a discontinued operation for all periods presented in the Consolidated Financial Statements. As result of discontinuing our Testing & Assembly Equipment segment, the Company operated in only a single business segment, Lifting Equipment, until October 6, 2008 when the Company acquired Crane. As noted above, Crane is a Chicago area based distributor of Terex and Manitex cranes and is a separate new segment, entitled Equipment Distribution.

The Company, except for our Equipment Distribution segment, derives most of its revenue from purchase orders from dealers and distributors. Our Equipment Distribution segment is a distributor, who sells its products principally to the end user.

Historically, the demand for the Company's products has depended 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, has caused customers in the past to forego or postpone new purchases in favor of repairing existing machinery.

The distress in the financial markets that occurred in the later part of 2008 is unprecedented. The immediate impact was a dramatic decrease in liquidity and credit availability throughout the world. An incredibly rapid and significant deterioration in economic conditions, especially in the United States and Europe followed. The deterioration in economic conditions is ongoing and the ultimate extent of the current recession and the timing of the recovery is unknown. The actions of the United States and other world governments to stimulate the world economy are also unprecedented. The United States stimulus package includes very significant appropriations for improving the country's infrastructure, which could be a significant benefit to the Company. The ultimate success of governmental actions and the resulting benefits that the Company may see, however, remain unknown.

The above described events had an immediate significant adverse impact on the Company, including a very dramatic curtailment of new orders, as well as requests to delay delivery and, in some cases, the cancellation of existing orders. Some of our dealers were not able to access their existing credits lines which delayed their payments. It appears that our dealers currently have access to their existing credit lines or have been able to replace them with new lines. The Company does not currently expect the distress in the credit markets to result in the Company incurring any significant uncollectible accounts. The depth and length of the recession is unknown, however, and could result in dealers being unable to stay in business. The Company retains a security interest in the cranes it sells in the United States until payment is received, which the Company expects will mitigate the financial impact to it of dealers going out of business.

Our backlog as of December 31, 2008, was $15.7 million, a reduction of $29.4 million from the December 31, 2007 backlog of $45.1 million. Based on a significant reduction in our backlog and anticipating the impact of economic conditions and longer sales cycles, we determined that swift management action was necessary to ensure that we balance operating activity with current demand levels. Since the end of the third quarter 2008, we have implemented across the board cost reduction activities that we estimate will yield approximately $5 million in annual expense reductions. Our expense reductions associated with these actions are expected to range between $0.2 million and $0.3 million with $0.1 million recognized in the fourth quarter of 2008 and the remainder to be recognized in the first quarter of 2009. The specific actions we took to achieve these cost reductions comprise headcount reductions of salaried and hourly employees, virtual elimination of overtime, suspension of additional hires and merit increases, reduction in executive and salaried pay, bonus and benefits and the introduction of shortened work weeks. Management determined that these actions, although difficult, were required to enable the Company to adjust to current conditions and position us to respond quickly when the market recovers. We have increased our focus on several new North American and international sales initiatives and supply chain cost reductions, as we rigorously pursue continued market share gains, margin improvement and profitability.

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, special mission oriented vehicles, specialized carriers and heavy material transports.

The following table sets forth certain financial data for the three years ended December 31, 2008, 2007, and 2006:

Results of Consolidated Operations

MANITEX INTERNATIONAL, INC.

(Thousands of Dollars, except share data)



                                              Year Ended           Year Ended           Year Ended
                                             December 31,         December 31,         December 31,
                                               2008 (1)             2007 (1)             2006 (1)
Net revenues                                $      106,341       $      106,946       $       40,676
Cost of sales                                       88,876               87,027               34,903

Gross profit                                        17,465               19,919                5,773
Operating expenses
Research and development costs                         819                  808                  206
Restructuring expenses                                 329                   -                    -
Selling, general and administrative
expense, including corporate expense of
$3,042, $3,756; and $1,384 for 2008,
2007 and 2006, respectively                         12,909               12,758                4,408

Total operating expenses                            14,057               13,566                4,614

Income from continuing operations                    3,408                6,353                1,159
Other income (expense)
Interest income                                         -                     6                   39
Interest expense                                    (1,961 )             (3,438 )             (1,969 )
Foreign currency transaction losses                    (99 )               (751 )                 -
Other income (expense)                                  44                  119                  (15 )

Total other expense                                 (2,016 )             (4,064 )             (1,945 )

Earnings (loss) from continuing
operations before income taxes                       1,392                2,289                 (786 )

Provision for taxes on income (benefit)               (407 )                163                 (239 )

Net earnings (loss) from continuing
operations                                           1,799                2,126                 (547 )

Discontinued operations:
Earning (loss) from discontinued
operations, net of income taxes
(benefit) of $0, $0, and $(1,087) in
2008, 2007 and 2006, respectively                      199               (1,122 )             (8,342 )
Gain (loss) on sale or closure of
discontinued operations, net of income
tax $0 and $0 in 2008 and 2007,
respectively                                           200                  (48 )                 -

Net earning (loss)                          $        2,198       $          956       $       (8,889 )

(1) The financial data for all years presented reflects the former Testing & Assembly Equipment segment as a discontinued operation.

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

The results for acquisitions have been included in the accompanying consolidated statement of operations from the date of their respective acquisition, i.e., July 31, 2007 for the Noble product line acquisition and October 6, 2008 for the Crane and Schaeff acquisition. As a result 2008 includes a full year of results for the Noble product line and three months for the Crane and Schaeff acquisition. The results for 2007 include results for the Noble product line for five month, although these are not significant.

Net income (loss)

The net income of $2.2 million reported for the year ended December 31, 2008 consists of net income from continuing operations of $1.8 million, earnings from discontinued operations of $0.2 million and a gain on sale of discontinued operations of $0.2 million. The net income of $1.0 million reported for the year ended December 31, 2007 consists of net income from continuing operations of $2.1 million offset by a loss from discontinued operations of $1.1 million and an expected loss on sale of discontinued operations of $0.05 million.

Results of continuing operations

For the year ended December 31, 2008, net income from continuing operations was $1.8 million, which consists of revenue of $106.3 million, cost of sales of $88.9 million, research and development costs of $0.8 million, SG&A costs excluding corporate expenses of $9.9 million, corporate SG&A expenses of $3.0 million, restructuring expenses of $0.3 million, interest expense of $2.0 million and other expense and foreign currency transaction expense of $0.1 million and income tax benefit of $0.4 million.

For the year ended December 31, 2007, net income from continuing operations was $2.1 million, which consists of revenue of $106.9 million, cost of sales of $87.0 million, research and development costs of $0.8 million, SG&A costs excluding corporate expenses of $9.0 million, corporate SG&A expenses of $3.8 million, net interest expense of $3.4 million, and other expense and foreign currency transactions expense of $0.6 million and income taxes of $0.2 million.

Net revenue and gross profit-For the year ended December 31, 2008, net revenue and gross profit were $106.3 million and $17.5 million, respectively. Gross profit as a percent of sales was 16.4% for the year ended December 31, 2008. For the year ended December 31, 2007 net revenue and gross profit were $106.9 million and $19.9 million, respectively. Gross profit as a percent of revenues was 18.6% for the year ended December 31, 2007.

Net revenues decreased $0.6 million to $106.3 million for the year ended December 31, 2008 from $106.9 million for the comparable year period in 2007. Revenue for 2008 was increased by approximately $6.2 million by having a full year of Noble product line revenues in 2008 and having three months of Crane and Schaeff revenues. Noble product line revenues increased approximately $2.5 million while Crane and Schaeff contributed an additional $3.7 million. Revenues would have decreased approximately $6.8 million without the additional revenues generated by the Noble product line, Crane and Schaeff. The decrease is the result of a decrease in sales of forklifts and specialized carriers, which was partially offset by $1.7 million increase in crane sales. The increase in crane sales is attributed to an increase in chassis sales. The Company builds cranes on chassis supplied by the customer or by the Company. The increase in chassis sales is the result of a substantial sales increase to a particular distributor, who has elected to have the Manitex subsidiary supply the chassis. The majority of the decrease in forklift/specialized carrier sales is due to decrease in the sales of military forklifts. A decrease in the sale of commercial rough terrain forklifts, the result of the slowing North American economy, and a decrease in special carriers also contributed to the sales decline. The decrease in military forklifts sales is attributed to the timing of governmental orders.

Gross profit as a percent of net revenues decreased to 16.4% for the year ended December 31, 2008 from 18.6% for the comparable 2007 period, an erosion of 2.2%. The decrease in margin percent is due to a decrease in the gross margin percent for crane products which was offset by a modest increase in the gross margin for forklifts and specialized carriers. The decrease in crane product margins was caused by a significant increase in the cost of raw materials and components. Although we experienced material price increases over the first half of the year, these were not nearly of the magnitude that we experienced starting late in the second quarter and into the third quarter. Through the second quarter of 2008, increases in material prices were largely offset by increases in the sale of cranes with higher lifting capacity (which have higher gross margins), the benefit of sourcing materials from lower cost countries, a price increase that was instituted in mid year 2007 and an improvement in

production efficiencies. It became clear during the third quarter of 2008 that these rapidly accelerating material price increases were going to continue and would adversely impact the Company's margins. In June, 2008, the Company announced its annual price increases for all new orders received on or after July 1st. The Company continued to honor old prices on its existing backlog. As such, the benefit from the price increase did not occur until late this year or will not occur until early next. To further offset the effect of price increases, the Company instituted a 4 to 5% surcharge on cranes shipped in the later part of the fourth quarter 2008.

The forklift/specialized carrier product line margin as percentage of net revenue increased modestly. Although the cost of materials for forklifts specialized carriers also increased, the effect was more than offset by a restructuring initiative that occurred early in the third quarter of 2008, the elimination of start-up of inefficiencies for the Noble product line and the weakening of the Canadian dollar, which positively impact margins on US dollar sales.

Restructuring expenses-During the third quarter of 2008, the Company began to restructure the manufacturing processes at its Manitex Liftking facility with the objective of improving production efficiencies and lowering our costs. The Company began to experience the benefits of the staffing reductions in the fourth quarter of 2008. An evaluation of the current staffing has been completed and as a result, the workforce was reduced by 26 employees to align the size of our workforce to our current production requirements. In connection with the reduction in force, the Company was required to pay terminated employees $0.2 million in severance, which has been included in operating expense and is shown in the income statement on a line entitled "restructuring expenses."

Beginning in September of 2008, the United States and world financial markets came under unprecedented stress. The immediate impact was a dramatic decrease in liquidity and credit availability throughout the world. An incredibly rapid and significant deterioration in economic conditions, especially in the United States and Europe followed. These events had an immediate significant adverse impact on the Company, including a very dramatic curtailment of new orders, request to delay deliveries and, in some cases to cancel existing orders.

In response to the impact of economic conditions and longer sales cycles, it was determined that swift management action was necessary to ensure that operating activity was balanced with current demand levels. Since the end of the third quarter 2008, we have implemented across the board cost reduction activities that we estimate will yield approximately $5 million in annual expense reductions. The specific actions taken to achieve these cost reductions comprise headcount reductions of salaried and hourly employees, virtual elimination of overtime, suspension of additional hires and merit increases, reduction in executive and salaried pay, bonus and benefits and the introduction of shortened workweeks. These actions, although difficult, are required to enable the Company to adjust to current conditions and position it to respond quickly when the market recovers. Certain of the aforementioned actions were implemented before December 31, 2008. Significant additional steps were implemented shortly after year end. Restructuring expense (severance payments) related to actions taken before year end was approximately $0.1 million. Additional, restructuring expense related to steps taken after December 31, 2008 will result in additional restructuring expense of approximately $0.2 million being recorded during the first quarter of 2009.

Additionally, the Company is focused on several new North American and international sales initiatives and supply chain cost reduction initiatives which are designed to continue market share gains, and to improve margins and profitability.

Selling, general and administrative expense-Selling, general and administrative expense for the year ended December 31, 2008 was $12.9 million compared to $12.8 million for the comparable period in 2007. Selling, general and administrative expense for the year ended December 31, 2008 is comprised of corporate expense of $3.0 million and $9.9 million related to operating companies. Selling, general and administrative expenses for the year ended December 31, 2007 were comprised of corporate expense of $3.8 million and $9.0 million related to operating companies.

Selling, general and administrative, excluding corporate expenses, increased $0.9 million to $9.9 million (including $0.6 million for Crane and Schaeff) for the year ended December 31, 2008 from $9.0 million for the comparable year period in 2007. Without the additional costs from the Crane and Schaeff acquisition, selling, general & administrative expenses would have increased $0.3 million. The increase is principally due to an increase in selling expenses for our Manitex subsidiary and an increase in management resources for our Manitex Liftking subsidiary. The increase in selling expense at our Manitex subsidiary is related to costs of approximately $0.3 million associated with participating in the Con Expo trade show in March 2008. The Con Expo show, which is held every three years, was held in Las Vegas from March 11 to March 15, 2008. This show is an international gathering place for the construction industries. It is estimated that 125,000 professionals from around the world attended the show. The increase in Manitex Liftking management is principally related to hiring additional management personnel. Modest offsetting variances in a number of other lines resulted in a small net decrease in expense.

Corporate expenses decreased $0.8 million to $3.0 million for the year ended December 31, 2008 from $3.8 million for the comparable period in 2007. The decrease is principally attributed to a decrease in management bonuses, . . .