Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

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Related Party Transactions
6 Months Ended
Jun. 30, 2017
Related Party Transactions [Abstract]  
Related Party Transactions

Note 5. Related Party Transactions

Effective December 19, 2014, the Company entered into a Distribution and Cross Marketing Agreement with Terex that sets forth the terms under which ASV will manufacture and sell ASV Products, certain services Terex will provide in assisting in the sales and marketing of ASV products and the costs to be paid by ASV in exchange for such services. The agreement defines dealers and territories and customers that Terex shall have the exclusive right on behalf of ASV to market and sell Terex branded ASV products. The agreement defines the compensation to Terex for its machine sales selling expense, part sales selling expense and general and administrative costs associated with such sales. In addition, for the provision of marketing services by Terex, ASV shall pay an annual fee of $250, subject to annual escalation of 3% plus 0.2% of net incremental sales. Unless terminated, the term of the agreement is five years, and the parties may agree to renew for additional one year terms. ASV expensed $296 and $465 for services for the three months and $592 and $980 for the six months ended June 30, 2017 and 2016, respectively.

Effective December 19, 2014, the Company entered into a Services Agreement with Terex that sets forth the terms under which Terex will provide certain services to ASV and ASV will retain access to certain services provided by Terex and the compensation related thereto. The scope of the agreement covers amongst other items, temporary transition services arising from the transfer of majority ownership to Manitex, third party logistics services for parts fulfillment, warranty and field service and Information Technology services for both transitional and ongoing services. Unless terminated, the term of the agreement is specific to each service provided, and the parties may agree to renew for additional one year terms. ASV expensed $337 and $315 for services provided for the three months and $690 and $649 for the six months ended June 30, 2017 and 2016, respectively.  

 

Effective March 27, 2017, the Company entered into a Winddown and Termination of Distribution and Cross Marketing Agreement and Services Agreement. Terex no longer markets our ASV machines under the Terex Cross Marketing Agreement and ASV is responsible for marketing all ASV machines to all distribution channels, but Terex continues to market ASV parts. Following

the LLC Conversion and after the completion of the IPO, Terex will continue to market ASV parts and ASV will be permitted to produce and sell Terex-branded ASV products to existing Terex dealers and continue to use applicable Terex trademarks, in each case pursuant to the Terex Cross Marketing Agreement and the Winddown Agreement.  Terex will continue to perform services under the Terex Services Agreement during a transitional period, including parts sales, shipment and purchases and parts planning, customer parts phone support, and administrative services, including IT support and accounting input information for parts cost and pricing, after which we will perform the functions under the Terex Services Agreement by using a combination of internal resources and purchased services.

 

Included in the Company’s Statements of Income are sales to Terex of $48 and $404  for the three months and $179 and $1,270 for the six months ended June 30, 2017 and 2016, respectively.  Also included are sales to Manitex of $33 and $1,085 for the three months and $24 and $1,145 for the six months ended June 30, 2017 and 2016, respectively.   The Company recorded purchases from Terex of $1,573 and $1,823 for the three months and $3,705 and $3,915 for the six months ended June 30, 2017 and 2016, respectively.  The Company also recorded charges for insurance and employee benefit costs from Manitex of $618 and $392 for the three months and $1,586 and $1,086 for the six months ended June 30, 2017 and 2016, respectively.

 

Receivables from affiliates include $45 due from Terex and $47 due from Manitex (total $92) at June 30, 2017, and $501 due from Terex and $912 due from Manitex (total $1,413) at December 31, 2016.  

 

Payables from affiliates includes $1,327 due to Terex and $177 due to Manitex (total $1,504) at June 30, 2017 and $2,275 due to Terex and $23 due to Manitex (total $2,298) at December 31, 2016.