10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2014
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from           to

Commission file number: 001-34601

Essex Rental Corp.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	20-5415048
(State of Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
1110 Lake Cook Road, Suite 220
Buffalo Grove, Illinois	60089
(Address of Principal Executive Offices)	(ZIP Code)

847-215-6500

(Registrant’s Telephone Number, Including Area Code)

None

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ                 No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ                 No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): 

Large accelerated filer o	Accelerated filer þ
Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨           No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

24,813,619 shares of common stock, par value $.0001 per share, were outstanding as of the close of business on November 1, 2014.

ESSEX RENTAL CORP.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013	4
Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2014 and 2013	5
Consolidated Statements of Comprehensive Loss (Unaudited) for the Three and Nine Months Ended September 30, 2014 and 2013	6
Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2014 and 2013	7
Notes to the Consolidated Financial Statements (Unaudited)	9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk	34
Item 4. Controls and Procedures	35
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	35
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3. Defaults Upon Senior Securities	36
Item 4. Mine Safety Disclosures	36
Item 5. Other Information	36
Item 6. Exhibits	37
Signatures	38

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements which are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent and belief or current expectations of Essex Rental Corp. (“Essex Rental”) and its management team and may be identified by the use of words like "anticipate", "believe", "estimate", "expect", "intend", "may", "plan", "will", "should", "seek", the negative of these terms or other comparable terminology. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from Essex Rental’s expectations include, without limitation, the continued ability of Essex Rental to successfully execute its business plan, the possibility of a change in demand for the products and services that Essex Rental provides (through its operating subsidiaries, Essex Crane Rental Corp., Coast Crane Company and Coast Crane Ltd.), intense competition which may require us to lower prices or offer more favorable terms of sale, our reliance on third party suppliers, our indebtedness which could limit our operational and financial flexibility, global economic factors including interest rates, general economic conditions, geopolitical events and regulatory changes, our dependence on our management team and key personnel, as well as other relevant risks detailed in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission and available on the investor relations section of our website, www.essexrentalcorp.com. The factors listed here are not exhaustive. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Essex Rental assumes no obligation to update or supplement forward-looking information in this Form 10-Q whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results or financial conditions, or otherwise.

3

ESSEX RENTAL CORP. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data)
	September 30, 2014			December 31, 2013
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,423		$	1,349
Accounts receivable, net of allowances for doubtful accounts and credit memos of $2,799 and $2,485, respectively	16,676			14,059
Other receivables	2,105			2,412
Deferred tax assets	3,313			2,878
Inventory
Retail equipment	8,213			3,416
Retail spare parts, net	1,727			1,598
Rental equipment, held for sale	3,339			—
Prepaid expenses and other assets	1,584			1,791
TOTAL CURRENT ASSETS	38,380			27,503
Rental equipment, net	271,718			287,860
Property and equipment, net	4,601			5,205
Spare parts inventory, net	3,728			3,248
Identifiable finite lived intangibles, net	819			1,069
Goodwill	1,796			1,796
Loan acquisition costs, net	5,489			6,095
TOTAL ASSETS	$	326,531		$	332,776
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	5,385		$	5,703
Accrued employee compensation and benefits	2,085			2,012
Accrued taxes	3,634			3,909
Accrued interest	1,081			655
Accrued other expenses	1,230			1,007
Unearned rental revenue	1,962			1,668
Customer deposits	238			293
Term loan - short-term	2,000			2,000
Purchase money security interest debt - short-term	1,365			959
Capital lease obligation - short-term	34			—
TOTAL CURRENT LIABILITIES	19,014			18,206
LONG-TERM LIABILITIES
Revolving credit facilities	143,235			165,482
Term loans	65,000			36,500
Promissory notes	1,655			3,655
Purchase money security interest debt	3,302			1,975
Deferred tax liabilities	35,910			40,869
Capital lease obligation	171			—
TOTAL LONG-TERM LIABILITIES	249,273			248,481
TOTAL LIABILITIES	268,287			266,687
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value, Authorized 1,000,000 shares, none issued	—			—
Common stock, $.0001 par value, Authorized 40,000,000 shares; issued and outstanding 24,813,619 shares at September 30, 2014 and 24,743,513 shares at December 31, 2013	2			2
Paid in capital	126,398			125,952
Accumulated deficit	(68,184		)	(59,876		)
Accumulated other comprehensive income	28			11
TOTAL STOCKHOLDERS' EQUITY	58,244			66,089
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	326,531		$	332,776

The accompanying notes are an integral part of these financial statements

4

ESSEX RENTAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except share and per share data)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
REVENUES
Equipment rentals	$	13,640		$	11,802		$	37,202		$	35,447
Retail equipment sales	2,760			3,772			6,938			8,337
Used rental equipment sales	6,024			1,265			10,089			9,922
Retail parts sales	2,165			1,827			6,707			5,778
Transportation	2,056			1,349			6,021			4,420
Equipment repairs and maintenance	2,936			2,793			8,219			9,182
TOTAL REVENUES	29,581			22,808			75,176			73,086
COST OF REVENUES
Salaries, payroll taxes and benefits	3,021			2,673			8,399			8,174
Depreciation	4,538			4,652			13,755			13,981
Retail equipment sales	2,425			3,250			6,117			7,059
Used rental equipment sales	5,074			829			8,253			7,439
Retail parts sales	1,691			1,475			5,287			4,456
Transportation	2,082			1,400			5,906			4,341
Equipment repairs and maintenance	3,234			2,283			8,886			7,762
Yard operating expenses	999			790			2,601			2,332
TOTAL COST OF REVENUES	23,064			17,352			59,204			55,544
GROSS PROFIT	6,517			5,456			15,972			17,542
Selling, general and administrative expenses	5,939			5,723			17,686			18,117
Impairment - rental equipment, held for sale	771			—			771			—
Other depreciation and amortization	195			251			708			793
LOSS FROM OPERATIONS	(388		)	(518		)	(3,193		)	(1,368		)
OTHER INCOME (EXPENSES)
Other income (expense)	(3		)	553			(1		)	559
Interest expense	(3,669		)	(3,075		)	(10,243		)	(8,576		)
Foreign currency exchange gains (losses)	(172		)	107			(225		)	(222		)
TOTAL OTHER INCOME (EXPENSES)	(3,844		)	(2,415		)	(10,469		)	(8,239		)
LOSS BEFORE INCOME TAXES	(4,232		)	(2,933		)	(13,662		)	(9,607		)
BENEFIT FOR INCOME TAXES	(1,834		)	(1,030		)	(5,354		)	(3,609		)
NET LOSS	$	(2,398	)	$	(1,903	)	$	(8,308	)	$	(5,998	)
Weighted average shares outstanding:
Basic	24,813,619			24,653,513			24,801,537			24,639,667
Diluted	24,813,619			24,653,513			24,801,537			24,639,667
Loss per share:
Basic	$	(0.10	)	$	(0.08	)	$	(0.33	)	$	(0.24	)
Diluted	$	(0.10	)	$	(0.08	)	$	(0.33	)	$	(0.24	)

The accompanying notes are an integral part of these financial statements

5

ESSEX RENTAL CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (Amounts in thousands)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net loss	$	(2,398	)	$	(1,903	)	$	(8,308	)	$	(5,998	)
Other comprehensive income (loss)
Foreign currency translation adjustments	21			(2		)	17			(6		)
Other comprehensive income (loss)	21			(2		)	17			(6		)
Comprehensive loss	$	(2,377	)	$	(1,905	)	$	(8,291	)	$	(6,004	)

The accompanying notes are an integral part of these financial statements

6

ESSEX RENTAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands)
	Nine Months Ended September 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(8,308	)	$	(5,998	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization of tangible assets	14,210			14,523
Amortization of loan acquisition costs and other intangibles	2,094			1,595
Amortization of promissory notes discount	—			72
Gain on sale of rental equipment	(1,836		)	(2,483		)
Gain on sale of property and equipment	—			(552		)
Impairment - rental equipment, held for sale	771			—
Deferred income taxes	(5,392		)	(3,942		)
Share based compensation expense	296			719
Changes in operating assets and liabilities:
Accounts receivable, net	(3,311		)	1,677
Other receivables	307			45
Prepaid expenses and other assets	207			67
Retail equipment inventory	(5,288		)	(1,989		)
Spare parts inventory	(621		)	(319		)
Accounts payable and accrued expenses	303			(1,179		)
Unearned rental revenue	294			172
Customer deposits	(55		)	106
Total change in operating assets and liabilities	(8,164		)	(1,420		)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	(6,329		)	2,514
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of rental equipment	(6,252		)	(5,510		)
Purchases of property and equipment	(554		)	(692		)
Accounts receivable from rental equipment sales	694			(1,012		)
Proceeds from sale of rental equipment	10,089			9,922
Proceeds from sale of property and equipment, net	—			1,752
NET CASH PROVIDED BY INVESTING ACTIVITIES	3,977			4,460
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from revolving credit facilities	83,168			74,818
Payments on revolving credit facilities	(105,415		)	(118,596		)
Proceeds from term loans	30,000			40,000
Payments on term loans	(1,500		)	(1,000		)
Payments on purchase money security interest debt	(847		)	(767		)
Payments on promissory notes	(2,000		)	—
Payments on capital lease obligation	(10		)	(3		)
Employer repurchase of shares to satisfy minimum tax withholding	(24		)	(103		)
Payments for loan acquisition costs	(1,238		)	(6,783		)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	2,134			(12,434		)
Effect of exchange rate changes on cash and cash equivalents	292			101
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	74			(5,359		)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	1,349			8,389
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,423		$	3,030

7

ESSEX RENTAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Unaudited) (Amounts in thousands)
	Nine Months Ended September 30,
	2014		2013
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING / FINANCING ACTIVITIES
Board of Directors fees paid in common stock	$	150	$	150
Equipment obtained through capital lease	$	215	$	—
Equipment purchased directly through short-term debt obligation	$	2,580	$	982
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	7,975	$	6,683
Cash paid for income taxes, net	$	127	$	27

The accompanying notes are an integral part of these financial statements

8

ESSEX RENTAL CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Business and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Essex Rental Corp. (“Essex Rental”) and its wholly owned subsidiaries Essex Holdings, LLC ("Holdings"), Essex Crane Rental Corp. ("Essex Crane"), Essex Finance Corp. (“Essex Finance”), CC Acquisition Holding Corp. (“CC Acquisition”), Coast Crane Company, formerly known as CC Bidding Corp. (“Coast Crane”) and Coast Crane Ltd. (“Coast Crane Ltd.") (collectively the "Company"). All intercompany accounts and transactions have been eliminated in consolidation. 

The Company is engaged primarily in renting lattice boom crawler cranes and attachments, tower cranes and attachments, rough terrain cranes, boom trucks and other related heavy lifting machinery and equipment to the construction industry throughout the United States of America, including Hawaii and Alaska, and Canada. The assets are rented for use in building and maintaining power plants, refineries, bridge and road construction, alternative energy, water treatment facilities and other industrial, commercial, residential and infrastructure related projects. The Company is also engaged in servicing and distributing heavy lifting machinery and other construction related equipment and parts.

The accompanying consolidated financial statements of the Company include all adjustments (consisting of normal recurring adjustments) which management considers necessary for the fair presentation of the Company’s operating results, financial position and cash flows as of and for all periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted from these unaudited financial statements in accordance with applicable rules.

The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the full year ending December 31, 2014. For further information, please refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. 

2. Significant Accounting Policies

Please refer to Note 2 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2013 for a complete description of our significant accounting policies.

Use of Estimates

The preparation of these financial statements requires management to make estimates and assumptions that affect certain reported amounts of assets, liabilities, revenues, expenses, contingent assets and liabilities, and the related disclosures.  Accordingly, actual results could materially differ from those estimates.  Significant estimates include the allowance for doubtful accounts and credit memos, spare parts inventory obsolescence reserve, useful lives for rental equipment and property and equipment, deferred income taxes, personal property tax receivable and accrual, loss contingencies and the fair value of financial instruments.

Fair Value of Financial Instruments

The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments on listed market prices and third party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

Segment Reporting

We have determined, in accordance with applicable accounting guidance regarding operating segments, that we have three reportable segments. We derive our revenues from three principal business activities: (1) equipment rentals; (2) equipment distribution; and (3) parts and service. These segments are based upon how we allocate resources and assess performance. See Note 11 to the consolidated financial statements regarding our segment information.

Long-lived Assets - Held for Use

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The criteria for determining impairment for such long-lived assets to be held and used is

9

ESSEX RENTAL CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

determined by comparing the carrying value of these long-lived assets to be held and used to management's best estimate of future undiscounted cash flows expected to result from the use of these assets. If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The estimated fair value of the assets is measured by estimating the present value of the future discounted cash flows to be generated.

During the nine months ended September 30, 2014 and as a result of continuing losses and depressed utilization rates, the Company determined that triggering event had occurred at Essex Crane, which caused the Company to determine if an impairment of these long-lived assets to be held and used was necessary.

Application of the long-lived asset to be held and used impairment test requires judgment, including the identification of the primary asset, identification of the lowest level of identifiable cash flows that are largely independent of the cash flows of other assets and liabilities and the future cash flows of the long-lived assets to be held and used. The Company identified its crawler crane rental equipment fleet as the primary asset as it is the basis of all revenue generating activities for Essex Crane, its replacement would require a significant level of investment and its remaining useful life significantly exceeds the remaining useful life of all other assets. The lowest level of identifiable cash flows within the rental equipment fleet is at the equipment model level. Each equipment model group is capable of producing cash flows without other complementary assets and each asset within the specific equipment model groups is interchangeable with any other asset within that equipment model group. The Company tested the recoverability of the rental equipment assets to be held and used by model using an undiscounted cash flow approach dependent primarily upon estimates of future rental income, orderly liquidation value and discount rates. Cash flows for each equipment model group considered the possibility of continuing to rent the assets and selling the assets in orderly transactions in the future or at the end of their remaining useful lives. The Company estimated that the future cash flows generated by each of the equipment model groups exceeded the carrying value of the assets and no impairment was recorded for assets to be held and used as of September 30, 2014.

The Company also assessed whether a triggering event for potential impairment of its other equipment assets existed, and it was determined that no such event occurred for these assets during the nine months ended September 30, 2014.

Long-lived Assets - Held for Sale

During the three months ended September 30, 2014, the Company agreed to terms to sell certain traditional crawler crane rental equipment assets. Under the agreed upon terms, the rental equipment assets, in their current condition, will be sold in three groups with the first group sale completed during the three months ended September 30, 2014 and the remaining group sales to be completed during each of the three months ended December 31, 2014 and March 31, 2015, respectively. As a result of the agreed upon sales terms, the Company has determined that these long-lived rental equipment assets shall be classified as held for sale. The held for sale assets are classified within the Company's equipment rentals segment.

As a result of the held for sale classification, the Company performed an impairment analysis of the long-lived rental equipment assets held for sale. Application of the long-lived asset held for sale impairment test requires comparing the carrying value of the the asset to its fair value less cost to sell. The Company determined that the fair value of the assets was equal to the agreed upon sales price. The carrying value of the assets exceeded the fair value of the assets less cost to sell resulting in the Company recording an impairment charge of approximately $0.8 million during the three months ended September 30, 2014.

Recently Issued and Adopted Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued guidance for reporting discontinued operations and disposals of components of an entity. The guidance raises the threshold for a disposal to qualify as a discontinued operation by requiring that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale be reported as such. The amendments also expand the disclosure requirements regarding the assets, liabilities, revenues and expenses of discontinued operations and add new disclosure requirements for individually significant dispositions that do not qualify as discontinued operations. The amendments are effective prospectively for fiscal years beginning after December 15, 2014, and interim reporting periods within those years (early adoption is permitted only for disposals that have not been previously reported). Adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial results.

In May 2014, FASB issued guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or

10

ESSEX RENTAL CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

services. This guidance is effective for fiscal years and interim periods beginning after December 15, 2016. Early adoption is not permitted. We expect to adopt this guidance when effective, and the impact on our financial statements is not currently estimable.

3. Intangible Assets

As of September 30, 2014 and December 31, 2013, goodwill related to the acquisition of Coast Crane's assets was approximately $1.8 million. Goodwill represents the excess of the total consideration transferred over the fair value of the identifiable assets acquired, net of liabilities assumed.

The following table presents the gross carrying amount, accumulated amortization and net carrying amount of the Company’s other identifiable finite lived intangible assets (amounts in thousands):

	September 30, 2014			December 31, 2013
Essex Crane customer relationship	$	785		$	785
Essex Crane trademark	804			804
Coast Crane customer relationship	1,500			1,500
Coast Crane trademark	600			600
Total intangible assets	3,689			3,689
Less: accumulated amortization	(2,870		)	(2,620		)
Intangible assets, net	$	819		$	1,069

The Company’s amortization expense associated with other intangible assets was approximately $0.1 million for each of the three months ended September 30, 2014 and 2013. The Company's amortization expense associated with other intangible assets was approximately $0.3 million for each of the nine months ended September 30, 2014 and 2013.

The following table presents the estimated future amortization expense related to intangible assets as of September 30, 2014 for the years ended December 31st (amounts in thousands):

2014	$	84
2015	324
2016	214
2017	197
Total	$	819

11

ESSEX RENTAL CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

4. Revolving Credit Facilities and Other Debt Obligations

The Company’s revolving credit facilities and other debt obligations consist of the following (amounts in thousands): 

	Principal Outstanding at				Weighted Average Interest Rate as of September 30, 2014
	September 30, 2014		December 31, 2013				Maturity Dates
Essex Crane revolving credit facility	$	121,459	$	148,149	3.91	%	October 2016
Coast Crane revolving credit facility	21,776		17,333		5.35	%	March 2017
Essex Crane term loan	30,000		—		11.50	%	May 2019
Coast Crane term loan	35,000		36,500		5.25	%	December 2015 to March 2017
Coast Crane term loan - short-term	2,000		2,000		5.25	%	within 1 year
Unsecured promissory notes (related party)	1,655		3,655		18.00	%	October 2016
Purchase money security interest debt	3,302		1,975		4.26	%	October 2015 to June 2019
Purchase money security interest debt - short-term	1,365		959		4.26	%	within 1 year
Total debt obligations outstanding	$	216,557	$	210,571

Aggregate payments of principal on debt obligations outstanding as of September 30, 2014 for each of the years ended December 31st based on contractual installment payment terms and maturities are as follows:

2014	$	868
2015	3,256
2016	125,905
2017	55,313
2018 and thereafter	31,215
Total	$	216,557

Essex Crane Revolving Credit Facility

On May 13, 2014, Essex Crane entered into the Fourth Amended and Restated Credit Agreement (the “Essex Crane Revolving Credit Facility”). The credit facility provides for a revolving loan in the amount of $145.0 million, with a $20.0 million aggregate sublimit for letters of credit, and a $30.0 million term loan. Essex Crane may borrow on the revolving loan an amount equal to the sum of 85% of eligible net receivables and 75% of the net orderly liquidation value of eligible rental equipment. The aggregate commitment will be reduced by: (i) on an individual transaction basis, 100% of the net cash proceeds from the sales of certain assets and (ii) on an annual basis, 60% of free cash flow, other than net cash proceeds from certain asset sales, as defined within the credit agreement. The maximum commitment under the Essex Crane Revolving Credit Facility may not exceed $130.0 million beginning on February 28, 2016. The revolving loan and term loan mature on October 31, 2016 and May 13, 2019, respectively. The Essex Crane Revolving Credit Facility is collateralized by a first priority security interest in substantially all of Essex Crane’s assets.

Under the terms of the Essex Crane Revolving Credit Facility, borrowings on the revolving loan accrue interest at the borrower’s option of either (a) the bank’s prime rate plus the applicable prime rate margin of 1.75% or (b) a Euro-dollar rate based on the rate the bank offers deposits of U.S. Dollars in the London interbank market (“LIBOR”) plus the applicable LIBOR margin of 3.75%. Borrowings on the term loan accrue interest at LIBOR plus the applicable LIBOR term loan margin of 10.50% with a LIBOR floor of 1.00%. Essex Crane is also required to pay a monthly commitment fee with respect to the undrawn commitments under the Essex Crane Revolving Credit Facility of 0.375%.

The Essex Crane Revolving Credit Facility requires Essex Crane to maintain a trailing twelve month fixed charge coverage ratio of not less than 1.10 to 1.00. Additionally, Essex Crane must generate net cash proceeds, through the sale of certain assets, of not less than $8.0 million by March 31, 2016 with not less than $3.0 million of net cash proceeds generated by March 31, 2015. The Essex Crane Revolving Credit Facility also provides for an annual limit on certain capital expenditures of $2.0 million and limits the ability of Essex Crane to make distributions to affiliates. Essex Crane is permitted to incur certain additional indebtedness,

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including secured purchase money indebtedness, of up to $1.5 million outstanding at any time, subject to certain provisions set forth in the Essex Crane Revolving Credit Facility.

On October 30, 2014, Essex Crane entered into a First Amendment to the Fourth Amended and Restated Credit Agreement to modify the calculation of the fixed charge coverage ratio to allow for the exclusion of severance expenses. Additionally, the amendment reduced the required fixed charge coverage ratio for September 2014 to not less than 1.08 to 1.00 and to waived an event of default that occurred as a result of the fixed charge coverage ratio falling below the required ratio of 1.10 to 1.00 in August 2014. All other terms of the May 13, 2014 Essex Crane Revolving Credit facility remained in effect following such amendment.

The maximum amount that could be borrowed under the revolving loan portion of the Essex Crane Revolving Credit Facility, net of letters of credit, interest rate swaps and other reserves was approximately $138.3 million and $170.1 million as of September 30, 2014 and December 31, 2013, respectively. Essex Crane’s available borrowing under its revolving credit facility was approximately $16.7 million and $21.9 million as of September 30, 2014 and December 31, 2013, respectively. After consideration of the 10% availability threshold covenant, the Company had available borrowings under its revolving credit facility of approximately $2.5 million and $4.4 million as of September 30, 2014 and December 31, 2013, respectively. As of September 30, 2014 and December 31, 2013, there was $3.1 million and $9.3 million, respectively, of available formulated collateral in excess of the maximum borrowing amounts of approximately $138.3 million and $170.1 million, respectively. As of September 30, 2014 and December 31, 2013, the outstanding balance on the term loan portion of the Essex Crane Revolving Credit Facility was $30.0 million and zero, respectively.

As of September 30, 2014, the applicable prime rate, LIBOR rate and undrawn commitment fee on the revolving loan were 3.25%, 0.15% and 0.375%, respectively. As of December 31, 2013, the applicable prime rate, LIBOR rate and undrawn commitment fee on the revolving loan were 3.25%, 0.15% and 0.375%, respectively. As of September 30, 2014, the LIBOR rate on the term loan was 0.15% with a LIBOR floor of 1.00%.

Essex Crane is currently in compliance with the covenants and other provisions set forth in the Essex Crane Revolving Credit Facility, as amended.  Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on the Company’s liquidity and operations.

Coast Crane Revolving Credit Facility

On November 24, 2010, Coast Crane entered into a new revolving credit facility in conjunction with the acquisition of Coast Crane's assets (the “Coast Crane Revolving Credit Facility”).  The Coast Crane Revolving Credit Facility provided for a revolving loan and letter of credit facility in the maximum aggregate principal amount of $75.0 million with a $2.0 million aggregate principal sublimit for letters of credit.   Coast Crane’s ability to borrow under the Coast Crane Revolving Credit Facility is subject to, among other things, a borrowing base calculated based on  the sum of (a) 85% of eligible accounts, (b) the lesser of 50% of eligible spare parts inventory and $5.0 million, (c) the lesser of 95% of the lesser of (x) the net orderly liquidation value and (y) the invoice cost, of eligible new equipment inventory and $15.0 million and (d) 85% of the net orderly liquidation value of eligible other equipment, less reserves established by the lenders and the liquidity reserve.

On November 14, 2011 the Coast Crane Revolving Credit Facility was amended and restated to include Coast Crane Ltd. as a signatory to the credit facility. The amendment provided that equipment owned by Coast Crane located in Canada may be included in the borrowing base calculation, which was previously prohibited. As amended, the Coast Crane Revolving Credit Facility agreement is collateralized by a first priority security interest in substantially all of Coast Crane’s and Coast Crane Ltd.’s assets.

Proceeds of the first borrowing under the amended Coast Crane Revolving Credit Facility in the amount of $1.5 million were used to pay off the remaining balance on the Coast Crane Ltd.'s revolving credit facility at the time of its termination in November 2011.

On May 7, 2012, the Coast Crane Revolving Credit Facility was amended to provide certain limitations on net capital expenditures and a $3.7 million “first amendment reserve” (as defined in the Coast Crane Revolving Credit Facility). The amendment also provides for a modified fixed charge coverage ratio of 1.20 to 1.00 as well as an obligation of Essex to contribute, or cause to be contributed, to Coast Crane up to $2.5 million to the extent that EBITDA for Coast Crane for the year ending December 31, 2012 was less than $6.0 million. Coast Crane EBITDA for the year ended December 31, 2012 exceeded the $6.0 million threshold and no contribution from Essex was required. The amendment also reduced the amount of certain additional indebtedness, including secured purchase money indebtedness, that Coast Crane may incur to $7.0 million for the year ending December 31, 2013 and

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$10.0 million thereafter. All other terms of the November 14, 2011 amendment and restatement remained in effect following such amendment.

A definitional interpretation resulted in Coast Crane's lenders determining that the springing fixed charge coverage ratio of 1.20 to 1.00 (which under the Coast Crane Revolving Credit Facility was triggered if Coast Crane's borrowing availability fell below $8.0 million) was triggered notwithstanding that Coast Crane and Coast Crane Ltd. had combined excess availability of $9.5 million, $8.4 million and $8.5 million as of January 31, 2012, February 29, 2012 and March 31, 2012, respectively. The modified fixed charge coverage ratio included in the May 7, 2012 amendment replaced the springing trailing twelve month fixed charge coverage ratio. The May 7, 2012 amendment also addressed and waived Coast Crane’s non-compliance (which existed as of March 31, 2012) with certain delivery and reporting requirements contained in the Coast Crane Revolving Credit Facility.

On March 12, 2013, the Coast Crane Revolving Credit Facility was amended and restated to extend the maturity date to March 12, 2017. The amendment also provides for a $40.0 million term loan and reduces the aggregate maximum principal amount of the revolving loan and letter of credit facility by a corresponding amount to $35.0 million. In addition, the amendment provides for scheduled quarterly term loan payments to reduce the term loan principal outstanding by $0.5 million beginning on June 30, 2013. The amounts borrowed under the term loan which are repaid or prepaid may not be reborrowed. All other terms of the May 7, 2012 amendment and restatement remained in effect following such amendment.

On February 21, 2014, Coast Crane and Coast Crane Ltd. entered into a First Amendment to the Second Amended and Restated Credit Agreement to amend the mandatory prepayment provision to exclude proceeds received from permitted equipment asset sales and to waive an event of default that occurred as a result of permitted equipment asset sales and the failure to apply proceeds to the term loan under the Coast Crane Credit Agreement. In addition, the First Amendment amends the borrowing base calculation as it relates to new equipment inventory, and creates a progressive new equipment inventory cap based on a leverage ratio.

Under the terms of the February 21, 2014 amendment, Coast Crane and Coast Crane Ltd. may borrow, repay and reborrow under the Coast Crane Facility. Coast Crane’s ability to borrow under the Coast Crane Facility is subject to, among other things, a borrowing base which is calculated as the sum of (a) 85% of eligible Coast Crane accounts, (b) the lesser of 50% of eligible Coast Crane inventory and $5.0 million, (c) the lesser of (i) 95% of the lesser of (x) the Net Orderly Liquidation Value and (y) the invoice cost, of U.S. Eligible New Sale Equipment Inventory and (ii) the U.S. Eligible New Sale Equipment Inventory Cap (as hereinafter defined) and (d) 85% of the net orderly liquidation value of eligible other equipment, less reserves established by the lenders and the liquidity reserve. Coast Crane Ltd.’s ability to borrow under the Coast Crane Facility is subject to among other things, a borrowing base which is calculated as the sum of (a) 85% of eligible Coast Crane Ltd. accounts, (b) the lesser of 50% of eligible Coast Crane Ltd. inventory and $0.8 million, (c) the lesser of (i) 95% of the lesser of (x) the net orderly liquidation value and (y) the invoice cost, of eligible new Coast Crane Ltd. equipment and (ii) $2.0 million and (d) 85% of the net orderly liquidation value of eligible other Coast Crane Ltd. equipment, less reserves established by the lenders and the liquidity reserve.

The U.S. Eligible New Sale Equipment Inventory Cap shall mean the U.S. Eligible New Sale Equipment Inventory Cap in effect from time to time determined based upon the applicable leverage ratio then in effect. The U.S. Eligible New Sale Equipment Inventory Cap is adjusted from $4.0 million to $15.0 million based on the applicable leverage ratio then in effect and also based on the amount of U.S. Eligible New Sale Equipment Inventory that is under a written agreement to be sold to a customer.

On April 29, 2014, Coast Crane entered into a Second Amendment (the “Second Amendment”) to the Second Amended and Restated Credit Agreement. The purpose of the Second Amendment is to adjust the minimum fixed charge coverage ratio requirement to 0.88 to 1.00, 1.00 to 1.00 and 1.10 to 1.00 from 1.20 to 1.00, for the trailing twelve month periods ended April 30, 2014, May 31, 2014 and June 30, 2014, respectively. The minimum required fixed charge coverage ratio for the trailing twelve month periods ending July 31, 2014 and thereafter will remain 1.20 to 1.00. In addition, the Second Amendment waives any event of default arising from Coast Crane’s breach of the minimum 1.20 to 1.00 fixed charge coverage ratio requirement for the trailing twelve month period ended March 31, 2014, so long as the fixed charge coverage ratio for such period is at least equal to 1.00 to 1.00. Further, under the amendment, Coast Crane is required to achieve a minimum trailing twelve month EBITDA threshold as of the last day of the month of $7.7 million for March 2014 through August 2014; $7.9 million for September 2014 through November 2014; $8.0 million for December 2014 through February 2015; $8.2 million for March 2015 through May 2015; and $8.3 million for June, 2015 and thereafter. All other terms of the February 21, 2014 amendment and restatement remained in effect following such amendment.

Interest accrues on Coast Crane's outstanding revolving loans and term loan under the revolving credit facility at either a per annum rate equal to (a) LIBOR plus 3.75%, with a 1.50% LIBOR floor or (b) the Base rate plus 2.75%, at Coast Crane’s election. Coast Crane will be obligated to pay a letter of credit fee on the outstanding letter of credit accommodations based on a per annum

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(Unaudited)

rate of 3.75%. Interest on the revolving loans and fees on the letter of credit accommodations is payable monthly in arrears. Coast Crane is also obligated to pay an unused line fee on the amount by which the maximum credit under the Coast Crane Revolving Credit Facility exceeds the aggregate amount of revolving loans and letter of credit accommodations based on a per annum rate of 0.50%. At September 30, 2014, the applicable LIBOR rate, Base rate, and unused line commitment fee were 0.23%, 3.25% and 0.50%, respectively. At December 31, 2013, the applicable LIBOR rate, Base rate, and unused line commitment fee were 0.24%, 3.25% and 0.50%, respectively.

The maximum amount that could be borrowed under the revolving loans under the Coast Crane Revolving Credit Facility was approximately $35.0 million and $34.4 million as of September 30, 2014 and December 31, 2013, respectively. Coast Crane’s available borrowing under the Coast Crane Revolving Credit Facility was approximately $7.6 million and $8.2 million, respectively, after certain lender reserves of $5.6 million and $8.9 million as of September 30, 2014 and December 31, 2013, respectively. Although the Coast Crane Revolving Credit Facility limits Coast Crane’s and Coast Crane Ltd.’s ability to incur additional indebtedness, Coast Crane and Coast Crane Ltd. are permitted to incur certain additional indebtedness, including secured purchase money indebtedness, subject to certain conditions set forth in the Coast Crane Revolving Credit Facility.

As of September 30, 2014 and December 31, 2013, the outstanding balance on the term loan portion of the Coast Crane Revolving Credit Facility was $37.0 million and $38.5 million, respectively. At September 30, 2014 and December 31, 2013, $2.0 million of the outstanding balance is classified as a current liability as a result of the scheduled quarterly term loan payments of $0.5 million that began on June 30, 2013.

Coast Crane was in compliance with the covenants and other provisions set forth in the Coast Crane Revolving Credit Facility as of September 30, 2014. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on the Company’s liquidity and operations.

Unsecured Promissory Notes

In November 2010, the Company entered into an agreement with the holders of certain Coast Crane indebtedness pursuant to which such holders agreed, in consideration of the assumption of such indebtedness by the Company, to exchange such indebtedness for one or more promissory notes issued by the Company in the aggregate principal amount of $5.2 million. As additional consideration under the agreement, the Company agreed to issue 90,000 warrants to the holders of such indebtedness entitling the holder thereof to purchase up to 90,000 shares of Essex Rental common stock at an exercise price of $0.01 per share, and to reimburse such holders for certain legal fees incurred in connection with the transaction. The warrants were exercised in full on October 24, 2013.

In accordance with accounting guidance related to debt issued with conversion or other options, the fair value of the detachable warrants of $0.3 million was recorded as a discount to the principal balance outstanding with an offset to additional paid-in capital on the consolidated statements of stockholders’ equity and was amortized on a straight-line basis over the 3 year life of the notes as additional interest expense on the consolidated statement of operations, which is not materially different than the effective interest method. As of June 30, 2014 and December 31, 2013, the discount related to the fair value of the detachable warrants was fully amortized.

On December 31, 2013, the unsecured promissory notes were amended and restated to extend the maturity date to the earlier of October 31, 2016 or the consummation of any Essex Crane Revolving Credit Facility refinancing to the extent that the terms and conditions of the refinancing permit the Company to use the proceeds from refinancing for the repayment of the outstanding principal balance on the unsecured promissory notes. In addition, beginning on January 1, 2014, interest accrues on the outstanding promissory notes at a per annum rate of 18.00% and is payable in arrears.

As of September 30, 2014 and December 31, 2013, the outstanding principal balance on the unsecured promissory notes was approximately $1.7 million and $3.7 million, respectively. Interest accrued on the outstanding promissory notes at a per annum rate of 18.00% and 10.00% at September 30, 2014 and December 31, 2013, respectively.

Purchase Money Security Interest Debt

As of September 30, 2014, the Company's purchase money security interest debt consisted of the financing of seventeen pieces of equipment. Ten of these debt obligations accrue interest at rates that range from LIBOR plus 3.25% to LIBOR plus 5.38% per annum with interest payable in arrears. Seven of the debt obligations accrue interest at rates that range from 3.59% to 8.29%. The obligations are secured by the equipment purchased and have maturity dates that range from September 2015 to June 2019. As

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(Unaudited)

these loans are amortizing, approximately $1.4 million of the total $4.7 million in principal payments is due prior to September 30, 2015 and as such, this amount is classified as a current liability in the accompanying consolidated balance sheets as of September 30, 2014.

As of December 31, 2013, the purchase money security interest debt consisted of the financing of eleven pieces of equipment with an outstanding balance of approximately $2.9 million. The interest rates at December 31, 2013 ranged from LIBOR plus 3.25% to LIBOR plus 5.38% for ten of the debt obligations.  One of the debt obligations accrued interest at a rate of 8.29% as of December 31, 2013. 

5. Fair Value

The FASB issued a statement on Fair Value Measurements which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis and clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 - Observable inputs such as quoted prices in active markets:

• Level 2- Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The fair value of the Company’s total debt obligations was approximately $217.5 million and $212.0 million as of September 30, 2014 and December 31, 2013, respectively, calculated using a discounted cash flows approach at a market rate of interest. The inputs used in the calculation are classified within Level 2 of the fair value hierarchy.

The fair values of the Company’s financial instruments, including cash and cash equivalents, approximate their carrying values. The Company bases its fair values on listed market prices or third party quotes when available. If not available, then the Company bases its estimates on instruments with similar terms and maturities. 

6. Accumulated Other Comprehensive Income Reclassifications

The following table presents the Company's changes in accumulated other comprehensive income related to foreign currency translation adjustments for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
Beginning balance	$	7	$	6		$	11	$	10
Other comprehensive income (loss) before reclassifications	21		(2		)	17		(6		)
Amounts reclassified from accumulated other comprehensive income	—		—			—		—
Net current period other comprehensive income (loss)	21		(2		)	17		(6		)
Ending balance	$	28	$	4		$	28	$	4

7. Earnings per Share

The following tables set forth the computation of basic and diluted earnings per share (amounts in thousands except per share data):

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(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net loss	$	(2,398	)	$	(1,903	)	$	(8,308	)	$	(5,998	)
Weighted average shares outstanding:
Basic	24,814			24,654			24,802			24,640
Effect of dilutive securities:
Warrants	—			—			—			—
Options	—			—			—			—
Restricted common stock	—			—			—			—
Diluted	24,814			24,654			24,802			24,640
Basic earnings (loss) per share	$	(0.10	)	$	(0.08	)	$	(0.33	)	$	(0.24	)
Diluted earnings (loss) per share	$	(0.10	)	$	(0.08	)	$	(0.33	)	$	(0.24	)

Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of common shares outstanding during the period. Included in the weighted average number of shares outstanding for the nine months ended September 30, 2014 and 2013 are 493,671 shares of common stock for the effective conversion of the retained interest in Holdings into common stock of the Company. The retained interests were converted to common stock on April 17, 2014. Diluted EPS adjusts basic EPS for the effects of Warrants, Units and Options; only in the periods in which such effect is dilutive.

The weighted average restricted stock outstanding that could be converted into 24,215 and 3,931 common shares for the three months ended September 30, 2014 and 2013, respectively, were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. Weighted average options outstanding that could be converted into zero and 74,259 common shares for the three months ended September 30, 2014 and 2013, respectively, were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. Weighted average warrants outstanding that could be converted into 89,779 common shares for the three months ended September 30, 2013 were outstanding but were not included in the computation of diluted earnings per share because the effects would be anti-dilutive.

The weighted average restricted stock outstanding that could be converted into 30,197 and 1,738 common shares for the nine months ended September 30, 2014 and 2013, respectively, were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. Weighted average options outstanding that could be converted into zero and 82,433 common shares for the nine months ended September 30, 2014 and 2013, respectively, were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. Weighted average warrants outstanding that could be converted into 89,783 common shares for the nine months ended September 30, 2013 were outstanding but were not included in the computation of diluted earnings per share because the effects would be anti-dilutive.

As of September 30, 2014 and 2013, there were 1,461,717 and 1,430,459 stock options outstanding, respectively, which are exercisable at weighted average exercise prices of $4.52 and $5.29, respectively. As of September 30, 2013, there were 90,000 privately issued warrants outstanding which were exercisable at a weighted average exercise price of $0.01. The warrants were exercised in full on October 24, 2013.

8. Income Taxes

The Company’s effective tax rate of 39.2% for the nine months ended September 30, 2014 was higher than the statutory federal rate due to discrete items including return to provision adjustments, state net operating loss true-ups, state valuation allowances and state income tax audit activity. The Company’s effective tax rate of 37.6% for the nine months ended September 30, 2013 was higher than the statutory federal rate due to state taxes.

As of September 30, 2014, the Company has unused federal net operating loss carry-forwards totaling approximately $151.0 million that begin expiring in 2022. As of September 30, 2014, the Company also has unused state net operating loss carry-forwards totaling approximately $83.8 million, which expire between 2014 and 2035. The net operating loss carry-forwards are primarily from the acquisition of Holdings and losses in recent years. The Company had unused federal and state net operating loss carry-forwards totaling approximately $143.8 million and $77.3 million, respectively, as of December 31, 2013.

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 The Company also has remaining excess tax goodwill of approximately $3.1 million as of September 30, 2014 associated with the acquisition of Holdings. The excess tax goodwill will be amortized and deducted for tax purposes over the remaining three year term. However, the excess tax goodwill has not been recorded for GAAP purposes and will not be realized as a benefit to the income tax provision until the amortization deductions are realized through the reduction of taxable income in future years. The Company had remaining excess tax goodwill of approximately $3.1 million as of December 31, 2013.

The Company is generally no longer subject to federal and state examinations for tax years prior to December 31, 2010.

The Company had unrecognized tax benefits of approximately $0.1 million as of September 30, 2014 primarily associated with tax positions taken in a prior years. The Company had unrecognized tax benefits of approximately $0.1 million as of December 31, 2013. The Company did not incur any interest expense related to uncertain tax positions for the nine months ended September 30, 2014 and 2013.

The Company utilizes a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement.

9. Stock Based Compensation

The Company may issue up to 1,500,000 shares of common stock pursuant to its 2011 Long-term Incentive Plan to employees, non-employee directors and consultants of the Company. The Company may issue up to 1,575,000 shares of common stock pursuant to its 2008 Long-term Incentive Plan to employees, non-employee directors and consultants of the Company. Options to purchase shares of common stock are granted at its market price on the grant date and expire at either seven or ten years from issuance.

Stock Options

The Company calculates stock option compensation expense based on the grant date fair value of the award and recognizes expense on a straight-line basis over the service period of the award. The Company has granted to certain key members of management options to purchase the following shares by grant date during the nine months ended September 30, 2014:

	Grant Date
	June 27, 2014		June 27, 2014		March 13, 2014
Options granted	49,814		98,024		100,000
Exercise price per share	$	2.51	$	2.51	$	3.26
Service period	3 years		3 years		3 years
Option life	7 years		10 years		10 years

The fair values of the stock options granted are estimated at the date of grant using the Black-Scholes option pricing model. The model is sensitive to changes in assumptions which can materially affect the fair value estimate. The Company’s method of estimating the expected volatility for the 2014 option grants was based on the volatility of its own common shares outstanding. The expected dividend yield was estimated based on the Company’s expected dividend rate over the term of the options. The expected term of the options was based on management’s estimate, and the risk-free rate is based on U.S. Treasuries with a term approximating the expected life of the options.

The following table presents the assumptions used in the Black-Scholes option pricing model and the resulting option fair values by grant date during the nine months ended September 30, 2014 (amounts in thousands, except per share data):

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(Unaudited)

	Grant Date
	June 27, 2014			June 27, 2014			March 13, 2014
Expected dividend yield	—		%	—		%	—		%
Risk-free interest rate	1.45		%	1.89		%	1.84		%
Expected volatility	69.94		%	69.94		%	71.12		%
Expected life of option	4.5 years			6 years			6 years
Grant date fair value per share	$	1.40		$	1.58		$	1.88
Grant date fair value	$	70		$	155		$	188

On November 11, 2013 and May 31, 2013, the Company entered into separation agreements with its former Chief Executive Officer and former Chief Financial Officer, respectively. In accordance with the terms of the separation agreements, and as permitted under the terms of the applicable option awards, the Company agreed that options awarded to the former executives of the Company on December 18, 2008 and January 14, 2011, to the extent vested, will remain exercisable until the ten year anniversary of the applicable grant date, instead of expiring 90 days following the date employment was terminated, as provided in the option award agreements. The separation agreements resulted in the forfeiture of 403,353 vested options issued under the March 18, 2010 option grant and 32,487 unvested options issued under the January 14, 2011 option grant.

Restricted Shares of Common Stock

On June 27, 2014, the Company granted to key members of management 51,640 shares of restricted common stock with an aggregate grant date fair value of approximately $0.1 million. One-third of the restricted shares are scheduled to vest on June 27, 2015, June 27, 2016 and June 27, 2017, respectively, and as such, no shares were vested as of September 30, 2014.

On November 15, 2013, the Company granted to a key member of management 50,000 shares of restricted common stock with an aggregate grant date fair value of $0.2 million. One-third of the restricted shares are scheduled to vest on November 15, 2014, November 15, 2015 and November 15, 2016, respectively, and as such, no shares were vested as of September 30, 2014.

On June 18, 2013, the Company granted to a key member of management 67,500 shares of restricted common stock with an aggregate grant date fair value of $0.3 million. One-third of the restricted shares vested on June 18, 2014 and an additional one-third of the restricted shares are scheduled to vest on June 18, 2015 and June 18, 2016, respectively, and as such, 22,500 shares were vested as of September 30, 2014.

On January 3, 2011, the Company granted to certain employees 166,943 shares of restricted common stock with an aggregate grant date fair value of $0.9 million. One half of these restricted shares vested on January 3, 2012 and the remainder vested on January 3, 2013, and as such, 166,943 were vested as of September 30, 2014 and 2013.

The Company recorded $0.1 million of non-cash compensation expense associated with stock options and restricted shares in selling, general and administrative expenses for each of the three months ended September 30, 2014 and 2013. The Company recorded $0.3 million and $0.7 million of non-cash compensation expense associated with stock options and restricted shares in selling, general and administrative expenses for the nine months ended September 30, 2014 and 2013, respectively. There was approximately $1.0 million and $0.7 million of total unrecognized compensation cost as of September 30, 2014 and December 31, 2013, respectively related to non-vested stock option and restricted share awards. The remaining cost is expected to be recognized ratably over the remaining respective vesting periods.

10. Common Stock and Warrants

In October 2008 our Board of Directors authorized a stock and warrant repurchase program, under which the Company may purchase, from time to time, in open market transactions at prevailing prices or through privately negotiated transactions as conditions permit, up to $12.0 million of the Company’s outstanding common stock and warrants. The Company’s stock repurchase program was suspended in May 2010 in conjunction with the launching of the cashless exercise warrant offer. Repurchases of our common stock and warrants were funded with cash flows of the business.

The Company issued 45,719 and 43,715 shares of common stock, respectively, for services provided by the members of the Strategic Planning and Finance Committee of the Board of Directors during the nine months ended September 30, 2014 and 2013, respectively. The Company issued 3,155 shares of common stock for services provided by one member of the Board of Directors

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ESSEX RENTAL CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

during the nine months ended September 30, 2014. The Company issued 8,352 shares of common stock to certain members of management in lieu of cash compensation during the nine months ended September 30, 2014. The Company issued 22,500 and 83,469 shares of common stock related to the vesting of restricted shares during the nine months ended September 30, 2014 and 2013, respectively, which were previously granted to certain employees. The Company withheld 9,621 and 29,489 common shares to cover the employee tax obligation related to the restricted shares issuance during the nine months ended September 30, 2014 and 2013, respectively.

11. Segment Information

We have identified three reportable segments: equipment rentals, equipment distribution, and parts and service. These segments are based upon how management of the Company allocates resources and assesses performance. The equipment rental segment includes rental, transportation and used rental equipment sales. There were no sales between segments for any of the periods presented. Selling, general, and administrative expenses as well as all other income and expense items below gross profit are not generally allocated to our reportable segments.

We do not compile discrete financial information by our segments other than the information presented below. The following table presents information about our reportable segments related to revenues and gross profit (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Segment revenues
Equipment rentals	$	21,720	$	14,416	$	53,312	$	49,789
Equipment distribution	2,760		3,772		6,938		8,337
Parts and service	5,101		4,620		14,926		14,960
Total revenues	$	29,581	$	22,808	$	75,176	$	73,086
Segment gross profit
Equipment rentals	$	5,150	$	3,805	$	11,825	$	12,554
Equipment distribution	161		368		335		807
Parts and service	1,206		1,283		3,812		4,181
Total gross profit	$	6,517	$	5,456	$	15,972	$	17,542

The following table presents information about our reportable segments related to total assets (amounts in thousands):

	September 30, 2014		December 31, 2013
Segment identified assets
Equipment rentals	$	295,990	$	307,372
Equipment distribution	9,195		5,150
Parts and service	6,910		5,261
Total segment identified assets	312,095		317,783
Non-segmented identified assets	14,436		14,993
Total assets	$	326,531	$	332,776

The Company operates primarily in the United States. Our sales to international customers for the three months ended September 30, 2014 were 5.8% of total revenues. Sales to customers in Canada represented 4.9% of total revenues. No customer accounted for more than 10% of our revenues on a consolidated basis. Within the equipment distribution segment for the three months ended September 30, 2014, four customers individually accounted for approximately 17.9%, 13.3%, 12.2% and 10.8% of revenues on a segmented basis. The concentration of revenues from these customers within the equipment distribution segment is directly attributable to the large dollar value of individual transactions and the small number of individual transactions.

Our sales to international customers for the three months ended September 30, 2013 were 8.3% of total revenues. Sales to customers in Canada represented 7.5% of total revenues. No customer accounted for more than 10% of our revenues on a consolidated basis. Within the equipment distribution segment for the three months ended September 30, 2013, four customers individually accounted for approximately 23.4%, 13.1%, 11.5% and 10.3% of revenues on a segmented basis. The concentration

20

ESSEX RENTAL CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

of revenues from these customers within the equipment distribution segment is directly attributable to the large dollar value of individual transactions and the small number of individual transactions.

Our sales to international customers for the nine months ended September 30, 2014 were 7.1% of total revenues. Sales to customers in Canada represented 5.3% of total revenues. No customer accounted for more than 10% of our revenues on a consolidated basis. Within the equipment rentals segment for the nine months ended September 30, 2014, one customer individually accounted for approximately 10.3% of revenues on a segmented basis. The concentration of revenues from this customer within the equipment rentals segment is directly attributable to the number of pieces of equipment on rent and the high average monthly rental rates for those pieces of equipment. Within the equipment distribution segment for the nine months ended September 30, 2014, one customer individually accounted for approximately 16.7% of revenues on a segmented basis. The concentration of revenues from this customer within the equipment distribution segment is directly attributable to the large dollar value of individual transactions and the small number of individual transactions.

Our sales to international customers for the nine months ended September 30, 2013 were 8.9% of total revenues. Sales to customers in Canada represented 8.2% of total revenues. No customer accounted for more than 10% of our revenues on a consolidated basis. Within the equipment distribution segment for the nine months ended September 30, 2013, two customers individually accounted for approximately 34.0% and 10.6% of revenues on a segmented basis. The concentration of revenues from these customer swithin the equipment distribution segment is directly attributable to the large dollar value of individual transactions and the small number of individual transactions.

The Company maintains assets in Canada associated with our Coast Crane Ltd. subsidiary. Total assets located in Canada at September 30, 2014 totaled approximately $4.1 million, including long-lived assets totaling approximately $3.0 million. At December 31, 2013, total assets located in Canada totaled approximately $4.5 million, including long-lived assets totaling approximately $3.5 million.

12. Commitments, Contingencies and Related Party Transactions

Since December 2010, the Company has occupied office space at 500 Fifth Avenue, 50th Floor, New York, NY 10110, provided by Hyde Park Real Estate LLC, an affiliate of Laurence S. Levy, our chairman of the board. Such affiliate has agreed that it will make such office space, as well as certain office and administrative services, available to the Company, as may be required by the Company from time to time. Effective January 1, 2012, the Company has agreed to pay such entity $7,688 per month for such services based on reimbursement of actual costs with the terms of such arrangement being reconsidered from time to time. The Company’s statements of operations for the three months ended September 30, 2014 and 2013 and the nine months ended September 30, 2014 and 2013 include approximately $23,064 and $69,192, respectively of rent expense related to these agreements.

In November 2010, the Company entered into an agreement with the holders of certain Coast Crane indebtedness pursuant to which such holders agreed, in consideration of the assumption of such indebtedness by the Company, to exchange such indebtedness of $5.2 million for unsecured promissory notes issued by the Company in the aggregate principal amount of $5.2 million plus the receipt of up to 90,000 warrants to purchase Essex common stock at $0.01 per share. The warrants were exercised in full on October 24, 2013. The holders of the unsecured promissory notes are related parties to the Company as they owned a significant amount of the Company’s outstanding shares of common stock at the time of the transaction.

The Company maintains reserves for personal property taxes.  These reserves are based on a variety of factors including: duration of rental in each county jurisdiction, tax rates, rental contract terms, customer filings, tax-exempt nature of projects or jurisdictions, statutes of limitations and potential related penalties and interest.  Additionally, most customer rental contracts contain a provision that provides that personal property taxes are an obligation to be borne by the lessee. Where provided in the rental contract, management will invoice the customer for any personal property taxes paid by the Company. An estimated receivable has been recorded, net of an estimated allowance in connection with this liability.  This customer receivable has been presented as other receivables in current assets while the property tax reserve has been included in accrued taxes.

Management estimated the gross personal property taxes liability and related contractual customer receivable of the Company to be approximately $3.2 million and $1.7 million, respectively, as of September 30, 2014 and approximately $3.3 million and $2.0 million, respectively, as of December 31, 2013.

13. Subsequent Events

On October 30, 2014, Essex Crane entered into a First Amendment to the Fourth Amended and Restated Credit Agreement to modify the calculation of the fixed charge coverage ratio to allow for the exclusion of severance expenses. Additionally, the

21

ESSEX RENTAL CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

amendment reduced the required fixed charge coverage ratio for September 2014 to not less than 1.08 to 1.00 and to waive an event of default that occurred as a result of the fixed charge coverage ratio falling below the required ratio of 1.10 to 1.00 in August 2014. All other terms of the May 13, 2014 Essex Crane Revolving Credit facility remained in effect following such amendment.

On October 8, 2014, Coast Crane entered into an interest rate cap agreement to hedge its exposure to interest rate fluctuations.  The agreement has a notional principal amount of $40.0 million, a 90-day LIBOR cap of 2.50% and matures in June 2016. This interest rate cap was not designated for hedge accounting treatment.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion summarizes the financial position of Essex Rental Corp. and its subsidiaries as of September 30, 2014, and its results of operations for the three and nine months ended September 30, 2014 and should be read in conjunction with (i) the unaudited consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the year ended December 31, 2013.

As used in this Quarterly Report, references to “the Company” or “Essex” or to “we,” “us” or “our” refer to Essex Rental Corp., together with its consolidated subsidiaries, Essex Holdings, LLC, Essex Crane Rental Corp., Essex Finance Corp., Coast Crane Company and Coast Crane Ltd., unless the context otherwise requires. 

Business

Background

Essex Rental Corp. (formerly Hyde Park Acquisition Corp.) was incorporated in Delaware on August 21, 2006 as a blank check company whose objective was to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business. Our activities from our inception through October 31, 2008 were limited to completing our initial public offering and completing a business combination.

On October 31, 2008, we acquired Essex Crane Rental Corp., which we refer to as Essex Crane, through the acquisition of substantially all of the ownership interests of Essex Crane’s parent company, Essex Holdings, LLC, which we refer to as Holdings.

Essex Crane is a leading provider of lattice-boom crawler crane and attachment rental services and possesses one of the largest fleets of such equipment in the United States (U.S.). From October 31, 2008 until November 24, 2010, we conducted substantially all of our operations through Essex Crane.

On November 24, 2010 we acquired substantially all of the assets, and assumed certain liabilities (the “Coast Acquisition”) of Coast Crane Company (“Coast Liquidating Co.”), a leading provider of specialty lifting solutions and crane rental services on the West Coast of the United States. The assets acquired included all of the outstanding shares of capital stock of Coast Crane Ltd., a British Columbia corporation, through which Coast Liquidating Co. conducted its operations in Canada. References to “Coast Crane” mean Coast Crane Company, a Delaware corporation, formerly known as CC Bidding Corp. (“CCBC”), through which we operate the business and assets acquired in the Coast Acquisition.

We conduct substantially all of our operations through Essex Crane and Coast Crane.

Products and Services; Operating Segments

Our principal products and services, as grouped within the Company’s three defined operating segments, are described below.

Equipment Rental Segment    We offer crawler cranes and attachments, rough terrain cranes, boom trucks and tower cranes for rent. Most attachments are rented separately and increase either the lifting capacity or the reach capabilities of the base cranes.  In addition, we provide ancillary items for a fee that include, but are not limited to, accessory rentals, rental unit delivery charges, fuel charges, and in rare instances, third party contracted operator labor. We rent our large fleet of cranes and attachments and other lifting equipment to a variety of engineering and construction customers under contracts, most of which have rental periods of between four and eighteen months. Rough terrain cranes and boom trucks may be rented as frequently as daily. The contracts typically provide for an agreed upon rental rate and a specified rental period. The revenue from crane and attachment rentals is primarily driven by rental rates (which are typically higher for the more expensive cranes with heavier lifting capacities as compared to less expensive cranes with lower lifting capacities) charged to customers and the fleet utilization rate. Rental revenue is recognized as earned in accordance with the terms of the relevant rental agreement on a pro rata daily basis.

Transportation service revenue is derived from the management of the logistics process by which our rental equipment is transported to and from customers’ construction sites, including the contracting of third party trucking for such transportation. Transportation revenue is earned under equipment rental agreements on a gross basis representing both the third-party provider’s fee for transportation and our fee for managing these transportation services and they are matched with the associated costs for amounts paid to third party providers. The key drivers of transportation revenue are crane, attachment and other lifting equipment utilization rates and average contract lengths. Shorter average contract durations and high utilization rates generally result in higher

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requirements for transportation of equipment and resulting revenue. The distance that equipment has to move between different jobsites and the type of equipment being moved (number of truckloads) are also major drivers of transportation revenue and associated costs. Transportation revenue is recognized upon completion of the transportation of equipment.

In the ordinary course of business, we sell used rental cranes and attachments and other rental lifting equipment to optimize the combination of crane models and lifting capacities available in our rental fleet to match perceived market demands and opportunities. On average, we have historically achieved sale prices for equipment in excess of the appraised value. This is due to the long useful life of the crane and attachment fleet, the conditions prevailing in the secondary market and the high content of engineered high-strength steel included in these fleet assets. Used rental equipment sales are recognized at the time ownership transfers, which is generally based on delivery and/or inspection and acceptance of the equipment in accordance with the terms of the corresponding agreement. The rate at which we replace used equipment with new equipment depends on a number of factors, including changing general economic conditions, growth opportunities and the need to adjust fleet mix to meet customer requirements and demand. 

Equipment Distribution Segment We offer a variety of construction equipment products for retail sales including crawler cranes, tower cranes, boom trucks, all-terrain cranes, rough terrain cranes and other lifting equipment used in the construction industry. The revenue from retail equipment sales is primarily driven by the level of construction activity in a particular geographic region. Equipment sales revenue is recognized at the time ownership transfers, which is generally based on delivery and/or inspection and acceptance of the equipment in accordance with the terms of the corresponding agreement. Our equipment distribution operations are conducted through our Coast Crane subsidiary.

Parts and Service Segment We are a parts distributor for various lifting equipment manufacturers and routinely sell parts to our customers in the construction industry. While crawler cranes or attachments, tower cranes, rough terrain cranes, boom trucks or other equipment are on rent, much of the repair and maintenance work beyond normal wear is paid for by the customer. We perform a portion of the repair and maintenance work and recognize revenues for such services to the extent they are the customer’s responsibility. This category of revenues also includes providing certain services while erecting the equipment during initial assembly or disassembly of the equipment at the end of the rental. We also provide repair and maintenance services for customers that own their own equipment and request our services at one of our service center locations. Our target customers for these ancillary services are our current rental customers, customers that own their own equipment and those who purchase new and used equipment from us. Key drivers for repair and maintenance revenue are the general construction activity in a given geographic region and our skilled mechanics. Repair and maintenance revenue is recognized as such services are performed. Parts revenue is recognized at the time of sale.

In summary, for the three months ended September 30, 2014, 73.4% of total revenues were derived from our equipment rental segment, 9.3% from our equipment distribution segment and 17.3% from our parts and service segment. For the nine months ended September 30, 2014, 70.9% of total revenues were derived from our equipment rental segment, 9.2% from our equipment distribution segment and 19.9% from our parts and service segment.

Utilization Measurement

We measure utilization using the method referred to as the “days” method. Management believes that this method, while it may reflect lower utilization rates than other methods used in the industry, is the most accurate method for measuring equipment utilization and correlates most closely with rental revenue. Under this method, a real time report is generated from the ERP system for each piece of equipment on rent in a period. The report includes the number of days each piece of equipment was on rent on a particular lease and the base monthly rental rate (excluding any overtime revenues). The total number of days on rent of all pieces of rental equipment provides the numerator for determining utilization. The denominator is all rental equipment assets owned times the number of days in the month. The “days” method is the utilization measurement that we currently use, and we anticipate that the “days” method will be the primary basis for future disclosure of utilization rates for our cranes and other construction equipment offered for rent.

The following table provides a summary of utilization rates calculated using the “days” method for the three and nine months ended September 30, 2014 and 2013 for the equipment types owned during those periods:  

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Crawler Cranes - Hydraulic	79.6	%	70.9	%	67.4	%	66.3	%
Crawler Cranes - Traditional	30.0	%	31.4	%	27.8	%	31.0	%
Rough Terrain Cranes	65.9	%	50.5	%	64.1	%	56.4	%
Boom Trucks	49.8	%	52.0	%	47.1	%	51.9	%
Self-Erecting Tower Cranes	42.9	%	32.6	%	39.4	%	40.8	%
City & Other Tower Cranes	52.7	%	33.5	%	45.9	%	44.8	%

Fleet Overview

As of September 30, 2014 and December 31, 2013, the total orderly liquidation value of the rental equipment fleet was approximately $336.9 million and $345.6 million, respectively.

The Company remains focused on reshaping our asset portfolio and repositioning our fleet through the sale of rental equipment assets, which management believes will improve utilization and increase the return on invested capital. The Company intends to use the proceeds from the sale of rental equipment assets to rebalance the Company's rental fleet mix through the purchase of replacement assets or reduce debt. During the three months ended September 30, 2014, the Company agreed to terms on the sale of fifteen traditional crawler cranes with the sale to be completed in groups over the course of the nine month period ended March 31, 2015. A portion of the sale was completed during the three months ended September 30, 2014 and those assets were replaced with rough terrain cranes in specific tonnage capacities that are in high demand and whose utilization currently exceeds 80%.

Current Environment

Since 2012, the Company has experienced increasing demand from the end markets that it serves, but has yet to return to pre-recession levels of revenue that were experienced prior to 2009. During the nine months ended September 30, 2014, the Company has experienced a robust increase in rental demand, particularly for hydraulic crawler cranes and rough terrain cranes. Crawler crane quoting activity remains strong and has increased by approximately 20% in the nine months ended September 30, 2014 as compared to the prior year. This increase in demand occurred most significantly during the latter part of the quarter ended June 30, 2014. The expected revenue from signed crawler crane leases increased by approximately 32% as of September 30, 2014 as compared to September 30, 2013 and the backlog of expected rental revenues based on minimum lease terms for crawler cranes as of September 30, 2014 increased by approximately 19% as compared to the backlog as of September 30, 2013. Rental backlog is comprised of the expected revenue over the course of the succeeding 12 months for 1) the remaining minimum term, as per executed equipment rental agreements with customers of ongoing equipment rental agreements at year-end and 2) executed equipment rental agreements scheduled to begin within the next 12 months. The Company is also experiencing increasing utilization rates for city and other tower cranes. Despite increasing utilization rates, market forces continue to make it difficult for the Company to increase rental rates in a meaningful way. The Company is focused on increasing utilization by striving to create a more customer centric, service oriented culture with an emphasis on continuous quality improvement. The Company is also focused on selling underutilized rental assets, particularly traditional crawler cranes, in order to increase shareholders' return on invested capital.

Adjusted EBITDA to Net Income Reconciliation

Adjusted EBITDA represents the sum of net income, tax benefit, foreign currency exchange gains and losses, interest expense, other income, depreciation, amortization and impairment expense. Adjusted EBITDA is used internally when evaluating our operating performance and, we believe, allows investors to make a more meaningful comparison between our core business operating results over different periods of time, as well as with those of other similar companies. Management believes that Adjusted EBITDA, when viewed with the Company's results under GAAP and the accompanying reconciliation, provides useful information about operating performance and period-over-period growth, and provides additional information that is useful for evaluating the operating performance of our core business without regard to potential distortions. However, Adjusted EBITDA is not a measure of financial performance under GAAP and, accordingly, should not be considered as an alternative to net income (loss) as an indicator of operating performance.

The following table provides a summary of Adjusted EBITDA for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):  

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net loss	$	(2,398	)	$	(1,903	)	$	(8,308	)	$	(5,998	)
Benefit for income taxes	(1,834		)	(1,030		)	(5,354		)	(3,609		)
Foreign currency exchange (gains) losses	172			(107		)	225			222
Interest expense	3,669			3,075			10,243			8,576
Other (income) expense	3			(553		)	1			(559		)
Loss from operations	(388		)	(518		)	(3,193		)	(1,368		)
Depreciation	4,538			4,652			13,755			13,981
Impairment - rental equipment, held for sale	771			—			771			—
Other depreciation and amortization	195			251			708			793
Adjusted EBITDA	$	5,116		$	4,385		$	12,041		$	13,406

Results of Operations

Three months ended September 30, 2014 compared to the three months ended September 30, 2013

The Company had a net loss of $2.4 million for the three months ended September 30, 2014. Total revenue, cost of revenues and gross profit were $29.6 million, $23.1 million and $6.5 million, respectively, for the three months ended September 30, 2014. Total selling, general, administrative and other expenses of $6.1 million was composed primarily of salaries, payroll taxes benefits, sales and marketing, insurance, professional fees, rent, travel, depreciation and amortization expenses. Interest expense related to borrowings under our revolving credit facilities and other debt obligations was $3.7 million for the three months ended September 30, 2014. The Company had an income tax benefit of $1.8 million for the three months ended September 30, 2014 related to loss before income taxes of $4.2 million. Adjusted EBITDA, which includes the impact of $0.1 million of non-cash stock compensation and $0.1 million of non-recurring expenses, was $5.1 million for the three months ended September 30, 2014.

The Company had a net loss of $1.9 million for the three months ended September 30, 2013. Total revenue, cost of revenues and gross profit were $22.8 million, $17.4 million and $5.5 million, respectively, for the three months ended September 30, 2013. Total selling, general, administrative and other expenses of $6.0 million was composed primarily of salaries, payroll taxes benefits, sales and marketing, insurance, professional fees, rent, travel, depreciation and amortization expenses. Interest expense related to borrowings under our revolving credit facilities and other debt obligations was $3.1 million for the three months ended September 30, 2013. The Company had an income tax benefit of $1.0 million for the three months ended September 30, 2013 related to loss before income taxes of $2.9 million. Adjusted EBITDA, which includes the impact of $0.1 million of non-cash stock compensation expense, was $4.4 million for the three months ended September 30, 2013. 

Revenues

Revenues for the three months ended September 30, 2014 were $29.6 million, a 29.7% increase compared to revenues of $22.8 million for the three months ended September 30, 2013.   The following table provides a summary of the Company’s revenues by operating segment (amounts in thousands):

	Three Months Ended September 30,				Dollar			Percentage
	2014		2013		Change			Change
Segment revenues
Equipment rentals	$	21,720	$	14,416	$	7,304		50.7	%
Equipment distribution	2,760		3,772		(1,012		)	(26.8	)%
Parts and service	5,101		4,620		481			10.4	%
Total revenues	$	29,581	$	22,808	$	6,773		29.7	%

Equipment Rentals

Equipment rental segment revenues, which represent 73.4% of total revenues, was $21.7 million for the three months ended September 30, 2014, a 50.7% increase from $14.4 million for the three months ended September 30, 2013. The equipment rental segment includes rental, transportation and used rental equipment sales.

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Equipment rentals revenue, which represented 46.1% of total revenues, was $13.6 million for the three months ended September 30, 2014, a 15.6% increase from $11.8 million for the three months ended September 30, 2013. The two key drivers of equipment rental revenues are utilization and average rental rates.

The increase in equipment rentals revenue is primarily due to an increase in rental revenue generated from rough terrain cranes, tower cranes, and hydraulic crawler cranes and attachments. These increases in rental revenues were partially offset by a decrease in rental revenues for traditional crawler cranes and attachments and boom trucks.

There was an increase in average crawler crane rental rate of 4.5% to $18,297 (per crane per rental month) for the three months ended September 30, 2014 from $17,509 for the three months ended September 30, 2013. This increase in the overall average rental rate, which includes both traditional and hydraulic crawler cranes, is primarily the result of the mix of cranes on rent, with hydraulic crawler cranes contributing a larger portion of overall crawler crane revenue than they did in the three months ended September 30, 2013. Our crawler crane fleet has benefited from an increase in power and industrial marine related projects in the Gulf Coast and southeast region of the country. While average rental rates have increased for most subclasses within the hydraulic crawler crane fleet when compared to the three months ended September 30, 2013, management has not been able to significantly increase average rental rates due to competitive pressure.

Utilization for rough terrain cranes for the three months ended September 30, 2014 and 2013 was 65.9% and 50.5%, respectively. Rough terrain cranes benefit from the broad array of markets that they can serve. The increase in utilization was driven by an increase in demand from the power, petrochemical and transportation end markets along with the utilization improvement initiative that made these assets available to the entire sales force. Boom truck utilization decreased to 49.8% for the three months ended September 30, 2014 compared to 52.0% for the three months ended September 30, 2013. Weakening demand in the power and transportation end markets was the primary factor for the decreased boom truck utilization. Tower crane utilization was 42.9% and 52.7% for the self-erecting and city & other tower cranes, respectively, for the three months ended September 30, 2014 as compared to 32.6% and 33.5% for the self-erecting and city & other tower cranes, respectively, for the three months ended September 30, 2013. Our tower cranes are primarily impacted by the general building end market, and their utilization levels will reflect the strength of that end market.

Transportation revenue, which represents 6.9% of total revenues, was $2.1 million for the three months ended September 30, 2014, a 52.4% increase from $1.3 million for the three months ended September 30, 2013. The increase in transportation revenue is directly attributable to the number of equipment moves for our higher lifting capacity rental equipment.

Used rental equipment sales revenue was $6.0 million for the three months ended September 30, 2014; a $4.8 million or 376.2% increase compared to the three months ended September 30, 2013. The increase in total used rental equipment sales revenue is primarily attributable to the type and number of used rental equipment assets sold during the three months ended September 30, 2014 as compared to the three months ended September 30, 2013. The Company sold seven high lifting capacity crawler cranes during the three months ended September 30, 2014, which generated sales proceeds of approximately $2.6 million. In total, during the three months ended September 30, 2014, the Company sold twenty-one pieces of used rental equipment. During the three months ended September 30, 2013, the Company sold seven pieces of used rental equipment.

Equipment Distribution

Equipment distribution segment revenue, which represents 9.3% of total revenue, was $2.8 million for the three months ended September 30, 2014, a 26.8% decrease from $3.8 million for the three months ended September 30, 2013. The decrease in equipment distribution segment revenue is primarily attributable to the number sales transactions as compared to the prior year.

Parts and Service

Parts and service segment revenue, which represents 17.3% of total revenue, was $5.1 million for the three months ended September 30, 2014, a 10.4% increase from $4.6 million for the three months ended September 30, 2013. The increase is primarily attributable to an increase in over the counter parts sales and repair and maintenance revenue billed related to customer owned equipment.

Gross Profit

Gross Profit for the three months ended September 30, 2014 was $6.5 million, a 19.4% increase from gross profit of $5.5 million for the three months ended September 30, 2013. Gross profit margin was 22.0% for the three months ended September

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30, 2014 compared to 23.9% for the three months ended September 30, 2013.  The following table provides a summary of the Company’s gross profit by operating segment (amounts in thousands):

	Three Months Ended September 30,				Dollar			Percentage
	2014		2013		Change			Change
Segment gross profit
Equipment rentals	$	5,150	$	3,805	$	1,345		35.3	%
Equipment distribution	161		368		(207		)	(56.3	)%
Parts and service	1,206		1,283		(77		)	(6.0	)%
Total gross profit	$	6,517	$	5,456	$	1,061		19.4	%

Equipment rentals segment gross profit of $5.2 million for the three months ended September 30, 2014 increased $1.3 million or 35.3% as compared to the three months ended September 30, 2013. Within the equipment rentals segment, certain revenue streams have inherently higher margins. The gross margin achieved from the revenues provided by equipment rentals is typically higher than those achieved by gain on sale of used rental equipment and transportation. Furthermore, due to the operating leverage of our business model, the margin from equipment rentals improves as the revenue from this line of business increases. The gross profit margin percentage related to the equipment rentals segment excluding the impact of used rental equipment sales and transportation was 31.0% and 29.0% for the three months ended September 30, 2014 and 2013, respectively. The quality improvement initiatives and customer-centric service oriented strategies that the Company has adopted have resulted in an increase in equipment utilization, but have also resulted in increased costs related to higher quality of equipment when beginning rental contracts and a reduction in the amount of rental-end repair billing. Gain on the sale of used rental equipment was $1.0 million for the three months ended September 30, 2014, a 117.9% increase from $0.4 million for the three months ended September 30, 2013. The increase in the gain on the sale of used rental equipment was directly attributable to an increase in the number of rental assets sold during the three months ended September 30, 2014.

Equipment distribution segment gross profit of approximately $0.2 million (5.8% margin) for the three months ended September 30, 2014 decreased $0.2 million, or 56.3%, from approximately $0.4 million (9.8% margin) for the three months ended September 30, 2013. The decreased gross profit and margin are functions of higher profit margins on individual sale transactions and a larger number of sales transactions during the three months ended September 30, 2013.

Parts and service segment gross profit of $1.2 million (23.6% margin) for the three months ended September 30, 2014 decreased approximately $0.1 million or 6.0% from $1.3 million (27.8% margin) for the three months ended September 30, 2013. The parts and service segment gross profit decrease was driven by lower repair and maintenance revenue billed related to equipment on rent along with lower margin rigging work performed to generate long-term equipment rental revenues.

Total selling, general, administrative and other expenses for the three months ended September 30, 2014 and 2013 were $6.1 million and $6.0 million, respectively. The increase in selling, general, administrative and other expenses was due to increases in sales and marketing expense of $0.1 million, travel expense of $0.1 million, rent expense of $0.1 million and professional fees of $0.1 million. These increases were partially offset by decreases in bad debt expense and business taxes of $0.2 million. Selling, general and administrative expenses include, legal fees, professional fees, bad debt expense, employee benefits, insurance and selling and marketing expenses. Selling, general and administrative and other expenses include $0.1 million of non-cash stock based compensation expense for each of the three months ended September 30, 2014 and 2013.

Impairment expense related to rental equipment held for sale during three months ended September 30, 2014 was approximately $0.8 million. As a result of agreeing to terms on the sale of certain traditional crawler crane assets during the three months ended September 30, 2014, the Company compared they carrying value to the fair value of the assets. The fair value of the assets was determined to be the agreed upon sales price, which was less than the carrying value of the assets, resulting in the impairment charge recorded during the period.

Interest expense increased 19.3% to $3.7 million for the three months ended September 30, 2014 from $3.1 million for the three months ended September 30, 2013. The increase in interest expense is related primarily to a $0.5 million increase in loan cost amortization expense along with a higher overall interest rates primarily due to the new Essex Crane term loan.

Income tax benefit was $1.8 million for the three months ended September 30, 2014 compared to a $1.0 million for the three months ended September 30, 2013.  The increase in income tax benefit is due to an increase in the pre-tax loss. The effective tax rates were 43.3% and 35.1% for the three months ended September 30, 2014 and 2013, respectively. The effective tax rate increased

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from the prior year due to an increase in state tax rates resulting primarily from changes in apportionment and certain discrete items.

Essex had 257 full-time employees at September 30, 2014 compared to 253 full-time employees September 30, 2013. 

Results of Operations

Nine months ended September 30, 2014 compared to the nine months ended September 30, 2013

The Company had a net loss of $8.3 million for the nine months ended September 30, 2014. Total revenue, cost of revenues and gross profit were $75.2 million, $59.2 million and $16.0 million, respectively, for the nine months ended September 30, 2014. Total selling, general, administrative and other expenses of $18.4 million was composed primarily of salaries, payroll taxes benefits, sales and marketing, insurance, professional fees, rent, travel, depreciation and amortization expenses. Interest expense related to borrowings under our revolving credit facilities and other debt obligations was $10.2 million for the nine months ended September 30, 2014. The Company had an income tax benefit of $5.4 million for the nine months ended September 30, 2014 related to loss before income taxes of $13.7 million. Adjusted EBITDA, which includes the impact of $0.3 million of non-cash stock compensation and $0.8 million of non-recurring expenses, was $12.0 million for the nine months ended September 30, 2014.

The Company had a net loss of $6.0 million for the nine months ended September 30, 2013. Total revenue, cost of revenues and gross profit were $73.1 million, $55.5 million and $17.5 million, respectively, for the nine months ended September 30, 2013. Total selling, general, administrative and other expenses of $18.9 million was composed primarily of salaries, payroll taxes benefits, sales and marketing, insurance, professional fees, rent, travel, depreciation and amortization expenses. Interest expense related to borrowings under our revolving credit facilities and other debt obligations was $8.6 million for the nine months ended September 30, 2013. The Company had an income tax benefit of $3.6 million for the nine months ended September 30, 2013 related to loss before income taxes of $9.6 million. Adjusted EBITDA, which includes the impact of $0.7 million and $0.3 million of non-cash stock compensation and non-recurring expenses, respectively, was $13.4 million for the nine months ended September 30, 2013. 

Revenues

Revenues for the nine months ended September 30, 2014 were $75.2 million, a 2.9% decrease compared to revenues of $73.1 million for the nine months ended September 30, 2013.   The following table provides a summary of the Company’s revenues by operating segment (amounts in thousands):

	Nine Months Ended September 30,				Dollar			Percentage
	2014		2013		Change			Change
Segment revenues
Equipment rentals	$	53,312	$	49,789	$	3,523		7.1	%
Equipment distribution	6,938		8,337		(1,399		)	(16.8	)%
Parts and service	14,926		14,960		(34		)	(0.2	)%
Total revenues	$	75,176	$	73,086	$	2,090		2.9	%

Equipment Rentals

Equipment rental segment revenues, which represents 70.9% of total revenues, was $53.3 million for the nine months ended September 30, 2014, a 7.1% increase from $49.8 million for the nine months ended September 30, 2013. The equipment rental segment includes rental, transportation and used rental equipment sales.

Equipment rentals revenue, which represented 49.5% of total revenues, was $37.2 million for the nine months ended September 30, 2014, a 5.0% increase from $35.4 million for the nine months ended September 30, 2013. The two key drivers of equipment rental revenues are utilization and average rental rates.

The increase in equipment rentals revenue is primarily due to an increase in rental revenue generated from rough terrain cranes, tower cranes and hydraulic crawler cranes and attachments. The increase in rental revenue was partially offset by reductions in rental revenue from boom trucks and traditional crawler cranes and attachments. In addition to increased utilization for rough terrain cranes, tower cranes and hydraulic crawler cranes, each of these equipment categories realized increased average rental rates as compared to the nine months ended September 30, 2013.

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There was an increase in average crawler crane rental rate of 3.9% to $17,891 (per crane per rental month) for the nine months ended September 30, 2014 from $17,223 for the nine months ended September 30, 2013. This increase in the overall average rental rate, which includes both traditional and hydraulic crawler cranes, is primarily the result of the mix of cranes on rent, with hydraulic crawler cranes contributing a larger portion of overall crawler crane revenue than they did in the nine months ended September 30, 2013. Our crawler crane fleet has benefited from an increase in power and industrial marine related projects in the Gulf Coast and southeast region of the country. While average rental rates have increased for most subclasses within the hydraulic crawler crane fleet when compared to the nine months ended September, 2013, management has not been able to significantly increase average rental rates due to competitive pressure.

Utilization for rough terrain cranes for the nine months ended September 30, 2014 and 2013 was 64.1% and 56.4%, respectively. Rough terrain cranes benefit from the broad array of markets that they can serve. The increase in utilization was driven by an increase in demand for the general building, power, petrochemical and transportation end markets along with the utilization improvement initiative that made these assets available to the entire sales force. Boom truck utilization decreased to 47.1% for the nine months ended September 30, 2014 compared to 51.9% for the nine months ended September 30, 2013. Weakening demand in the general building, power and transportation end markets was the primary factor for decreased boom truck utilization. Tower crane utilization was 39.4% and 45.9% for the self-erecting and city & other tower cranes, respectively, for the nine months ended September 30, 2014 as compared to 40.8% and 44.8% for the self-erecting and city & other tower cranes, respectively, for the nine months ended September 30, 2013. Our tower cranes are primarily impacted by the general building end market, and their utilization levels will reflect the strength of that end market.

Transportation revenue, which represents 8.2% of total revenues, was $6.0 million for the nine months ended September 30, 2014, a 36.2% increase from $4.4 million for the nine months ended September 30, 2013. The increase in transportation revenue is directly attributable to the number of equipment moves for our higher lifting capacity rental equipment.

Used rental equipment sales revenue was $10.1 million for the nine months ended September 30, 2014; a $0.2 million or 1.7% increase compared to the nine months ended September 30, 2013. The increase in total used rental equipment sales revenue is primarily attributable an increase in the size of the individual sales transactions. During the nine months ended September 30, 2014, the Company sold thirty-eight pieces of used rental equipment, including eleven crawler cranes which generated $4.0 million in revenue. During the nine months ended September 30, 2013, the Company sold ninety-one pieces of used rental equipment with the majority of the sales related to aerial work platforms.

Equipment Distribution

Equipment distribution segment revenue, which represents 9.2% of total revenue, was $6.9 million for the nine months ended September 30, 2014, a 16.8% decrease from $8.3 million for the nine months ended September 30, 2013. The decrease in equipment distribution segment revenue is primarily attributable a decline in the number of sales transactions and to the size of sales transactions as compared to the prior year. During the nine months ended September 30, 2013, the Company sold thirteen more pieces of equipment than during the nine months ended September 30, 2014, and had a large individual sale transaction that generated sale proceeds of approximately $2.8 million.

Parts and Service

Parts and service segment revenue, which represents 19.9% of total revenue, was $14.9 million for the nine months ended September 30, 2014, a 0.2% decrease from $15.0 million for the nine months ended September 30, 2013. The decrease is primarily attributable to a decrease in repair and maintenance revenue billed related to equipment on rent.

Gross Profit

Gross Profit for the nine months ended September 30, 2014 was $16.0 million, an 8.9% decrease from gross profit of $17.5 million for the nine months ended September 30, 2013. Gross profit margin was 21.2% for the nine months ended September 30, 2014 compared to 24.0% for the nine months ended September 30, 2013.  The following table provides a summary of the Company’s gross profit by operating segment (amounts in thousands):

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	Nine Months Ended September 30,				Dollar			Percentage
	2014		2013		Change			Change
Segment gross profit
Equipment rentals	$	11,825	$	12,554	$	(729	)	(5.8	)%
Equipment distribution	335		807		(472		)	(58.5	)%
Parts and service	3,812		4,181		(369		)	(8.8	)%
Total gross profit	$	15,972	$	17,542	$	(1,570	)	(8.9	)%

Equipment rentals segment gross profit of $11.8 million for the nine months ended September 30, 2014 decreased $0.7 million or 5.8% as compared to the nine months ended September 30, 2013. Within the equipment rentals segment, certain revenue streams have inherently higher margins. The gross margin achieved from the revenues provided by equipment rentals is typically higher than those achieved by gain on sale of used rental equipment and transportation. Furthermore, due to the operating leverage of our business model, the margin from equipment rentals improves as the revenue from this line of business increases. The gross profit margin percentage related to the equipment rentals segment excluding the impact of used rental equipment sales and transportation was 26.5% and 28.2% for the nine months ended September 30, 2014 and 2013, respectively. The quality improvement initiatives and customer-centric service oriented strategies that the Company has adopted has resulted in an increase in equipment utilization, but has also resulted in increased costs related to higher quality of equipment when beginning rental contracts and a reduction in the amount of rental-end repair billing.Gain on the sale of used rental equipment was $1.8 million for the nine months ended September 30, 2014, a 26.1% decrease from $2.5 million for the nine months ended September 30, 2013. The decrease in the gain on the sale of used rental equipment was directly attributable to a decline in the number of assets sold.

Equipment distribution segment gross profit of approximately $0.3 million (4.8% margin) for the nine months ended September 30, 2014 decreased $0.5 million, or 58.5%, from approximately $0.8 million (9.7% margin) for the nine months ended September 30, 2013. The decreased gross profit and margin are functions of lower profit margins on individual sale transactions and lower sales volume during the nine months ended September 30, 2014. During the nine months ended September 30, 2013, the Company had a large sales transaction with a gross profit of $0.4 million.

Parts and service segment gross profit of $3.8 million (25.5% margin) for the nine months ended September 30, 2014 decreased approximately $0.4 million or 8.8% from $4.2 million (27.9% margin) for the nine months ended September 30, 2013. The parts and service segment gross profit decrease was driven by lower margin repair and maintenance and rigging revenue billed related to equipment currently on rent.

Total selling, general, administrative and other expenses for the nine months ended September 30, 2014 and 2013 were $18.4 million and $18.9 million, respectively. The decrease in selling, general, administrative and other expenses was primarily due to decreases in salary and tax expense of $0.4 million, benefits expense of $0.1 million and business tax expense of $0.4 million. These decreases were partially offset by increases in sales and marketing expense of $0.2 million, professional fees of $0.1 million, travel expense of $0.2 million and rent expense of $0.1 million. Selling, general and administrative expenses include, legal fees, professional fees, bad debt expense, employee benefits, insurance and selling and marketing expenses. Selling, general and administrative and other expenses include $0.3 million and $0.7 million of non-cash stock based compensation expense for the nine months ended September 30, 2014 and 2013, respectively.

Impairment expense related to rental equipment held for sale during nine months ended September 30, 2014 was approximately $0.8 million. As a result of agreeing to terms on the sale of certain traditional crawler crane assets during the nine months ended September 30, 2014, the Company compared they carrying value to the fair value of the assets. The fair value of the assets was determined to be the agreed upon sales price, which was less than the carrying value of the assets, resulting in the impairment charge recorded during the period.

Interest expense increased 19.4% to $10.2 million for the nine months ended September 30, 2014 from $8.6 million for the nine months ended September 30, 2013. The increase in interest expense is related primarily to additional loan costs of $0.2 million amortized to interest expense and $0.3 million of loan costs written off to interest expense of as a result of the Essex Crane Revolving Credit Facility amendment entered into in May 2014 along with a higher overall interest rate as a result of the new Essex Crane term loan.

Income tax benefit was $5.4 million for the nine months ended September 30, 2014 compared to $3.6 million for the nine months ended September 30, 2013.  The increase in income tax benefit is due to an increase in the pre-tax loss. The effective tax rates were 39.2% and 37.6% for the nine months ended September, 2014 and 2013, respectively. The effective tax rate increased from the prior year due to discrete items including changes in state valuation allowances and state income tax audit activity.

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Liquidity and Capital Resources

Cash flow from operating activities. The Company’s cash used in operating activities for the nine months ended September 30, 2014 was $6.3 million. This was primarily the result of a net loss of $8.3 million, which, when adjusted for non-cash expense items, such as depreciation and amortization, gains on the sale of rental equipment, rental equipment impairment charges, deferred income taxes and stock-based compensation expense, provided cash flows of approximately $1.8 million. The positive cash flows from operating activities were decreased by a total change in operating assets and liabilities of $8.2 million, which was comprised of a $3.3 million increase in accounts receivable, a $5.2 million increase in retail equipment inventory, a $0.6 million increase in spare parts inventory and a $0.1 million decrease in customer deposits. These uses of cash were partially offset by a $0.3 million decrease in other receivables a $0.2 million decrease in prepaid expenses, a $0.3 million increase in accounts payable and accrued expenses and a $0.3 million increase in unearned rental revenue.

The Company’s cash provided by operating activities for the nine months ended September 30, 2013 was approximately $2.5 million. This was primarily the result of net loss of $6.0 million, which, when adjusted for non-cash expense items, such as depreciation and amortization, including amortization of the promissory note discount, gains on the sale of rental equipment, deferred income taxes and stock-based compensation expense, provided cash flows of approximately $3.9 million. The cash flows from operating activities were decreased by a total change in operating assets and liabilities of $1.4 million, which was comprised of a $2.0 million increase in retail equipment, a $0.3 million increase in spare parts inventory, and a $1.2 decrease in accounts payable and accrued expenses. These uses of cash were partially offset by a $1.7 million decrease in accounts receivable, a $0.2 increase in unearned rental revenue and a $0.1 million increase in customer deposits.

Cash flow from investing activities. The Company's cash provided by investing activities for the nine months ended September 30, 2014 was $4.0 million. This was primarily the result of proceeds from the sale of rental equipment of $10.1 million and a decrease in accounts receivable from rental equipment sales of $0.7 million. These sources of cash were partially offset by purchases of rental equipment of $6.2 million and purchases of property and equipment of $0.6 million.

The Company's cash provided by investing activities for the nine months ended September 30, 2013 was approximately $2.5 million. This was primarily the result of proceeds from the sale of rental equipment of $9.9 million and proceeds from the sale of property and equipment of $1.8 million. These sources of cash were partially offset by purchases of rental equipment of $5.5 million, purchases of property and equipment of $0.7 million and an increase in accounts receivable related rental equipment sales of $1.0 million. During the nine months ended September 30, 2013, the Company sold ninety-one pieces of used rental equipment.

Cash flow from financing activities. The Company's cash provided by financing activities for the nine months ended September 30, 2014 was $2.1 million. This was primarily the result of net borrowings made on the revolving credit facilities and term loans of $6.3 million. These sources of cash were partially offset by payments on the purchase money security interest debt of $0.8 million, payments on promissory notes of $2.0 million and payments for loan acquisition costs of $1.2 million. Gross borrowings and payments on the revolving credit facilities were $83.2 million and $105.4 million, respectively, for the period. Gross borrowings and payments on the term loans were $30.0 million and $1.5 million, respectively. Gross borrowings and payments on the purchase money security interest debt for the period were $2.6 million and $0.8 million, respectively.

The Company's cash used in financing activities for the nine months ended September 30, 2013 was approximately $12.4 million. This was primarily the result of payments made for loan acquisition costs of $6.8 million as a result of refinancing the Essex Crane Revolving Credit Facility and the Coast Crane Revolving Credit Facility. This financing activity use of cash was increased by the payments on purchase money security interest debt of $0.8 million, employer repurchase of shares to satisfy minimum tax withholdings of $0.1 million and net payments on the revolving credit facilities and term loan of $4.8 million. Gross borrowings and payments on the revolving credit facilities were $74.8 million and $118.6 million, respectively, for the period. Gross proceeds and payments on the term loan were $40.0 million and $1.0 million, respectively. Gross borrowings and payments on the purchase money security interest debt for the period were $1.0 million and $0.8 million, respectively.

Cash Requirements Related to Operations

Our principal sources of liquidity have been from cash provided by operating activities and the sales of used rental fleet equipment, proceeds from the issuance of debt, and borrowings available under our revolving credit facilities. Our principal uses of cash have been to fund operating activities and working capital and purchases of rental fleet equipment and property and equipment. We anticipate that the above described uses will be the principal demands on our cash in the future.

The amount of our future capital expenditures will depend on a number of factors including general economic conditions, growth prospects and the Company’s overall strategy. Proceeds from the sale of used rental equipment of $6.0 million and $10.1 million, respectively, during the three and nine months ended September 30, 2014 were used primarily to pay down our outstanding

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debt balance or to reinvest in new rental equipment assets. In response to changing economic conditions, we believe we have the flexibility to increase or decrease our capital expenditures to match our actual performance and needs. As of September 30, 2014, we had approximately $10.1 million of available borrowings under our revolving credit facilities, net of outstanding letters of credit and other reserves, and additionally, approximately $1.4 million of cash on hand; providing the company with $11.5 million of potential liquidity.

To service our debt, we will require a significant amount of cash.  Our ability to pay interest and principal on our indebtedness will depend upon our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, some of which are beyond our control. Based on our current level of operations, we believe our cash flow from operations, available cash and available borrowings under the revolving credit facilities will be adequate to meet our future liquidity needs for the foreseeable future. The Essex Crane Revolving Credit Facility and Coast Crane Credit Facility mature in October 2016 and March 2017, respectively. No assurance can be given that we will be able to refinance our credit facilities prior to their respective maturity dates upon terms acceptable to us.

We cannot provide absolute assurance that our future cash flow from operating activities will be sufficient to meet our long-term obligations and commitments. If we are unable to generate sufficient cash flow from operating activities in the future to service our indebtedness and to meet our other commitments, we will be required to adopt one or more alternatives, such as refinancing or restructuring our indebtedness, selling material assets or operations or seeking to raise additional debt or equity capital. Given current economic and market conditions, including the significant disruptions in the global capital markets, we cannot assure investors that any of these actions could be affected on a timely basis or on satisfactory terms or at all, or that these actions would enable us to continue to satisfy our capital requirements. In addition, our existing or future debt agreements, including the indenture governing the revolving credit facilities, contain certain restrictive covenants, which may prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the accelerations of all of our debt.

On April 29, 2014, Coast Crane entered into a Second Amendment (the “Second Amendment”) to the Second Amended and Restated Credit Agreement. The purpose of the Second Amendment is to adjust the minimum fixed charge coverage ratio requirement to 0.88 to 1.00, 1.00 to 1.00 and 1.10 to 1.00 from 1.20 to 1.00, for the trailing twelve month periods ended April 30, 2014, May 31, 2014 and June 30, 2014, respectively. The minimum required fixed charge coverage ratio for the trailing twelve month periods ending July 31, 2014 and thereafter will remain 1.20 to 1.00. In addition, the Second Amendment waives any event of default arising from Coast Crane’s breach of the minimum 1.20 to 1.00 fixed charge coverage ratio requirement for the trailing twelve month period ended March 31, 2014, so long as the fixed charge coverage ratio for such period is at least equal to 1.00 to 1.00. Further, under the amendment, Coast Crane is required to achieve a minimum trailing twelve month EBITDA threshold as of the last day of the month of $7.7 million for March 2014 through August 2014; $7.9 million for September 2014 through November 2014; $8.0 million for December 2014 through February 2015; $8.2 million for March 2015 through May 2015; and $8.3 million for June, 2015 and thereafter. All other terms of the February 21, 2014 amendment and restatement remained in effect following such amendment.

On May 13, 2014, Essex Crane entered into the Fourth Amended and Restated Credit Agreement (the “Essex Crane Revolving Credit Facility”). The credit facility provides for a revolving loan in the amount of $145.0 million, with a $20.0 million aggregate sublimit for letters of credit, and a $30.0 million term loan. Essex Crane may borrow on the revolving loan an amount equal to the sum of 85% of eligible net receivables and 75% of the net orderly liquidation value of eligible rental equipment. The aggregate commitment will be reduced by: (i) on an individual transaction basis, 100% of the net cash proceeds from the sales of certain assets and (ii) on an annual basis, 60% of free cash flow, other than net cash proceeds from certain asset sales, as defined within the credit agreement. The maximum commitment under the Essex Crane Revolving Credit Facility may not exceed $130.0 million beginning on February 28, 2016. Essex Crane must generate net cash proceeds, through the sale of certain assets, of not less than $8.0 million by March 31, 2016 with not less than $3.0 million of net cash proceeds generated by March 31, 2015.The revolving loan and term loan mature on October 31, 2016 and May 13, 2019, respectively. The Essex Crane Revolving Credit Facility is collateralized by a first priority security interest in substantially all of Essex Crane’s assets.

On October 30, 2014, Essex Crane entered into a First Amendment (the “First Amendment”) to the Essex Crane Revolving Credit Facility. The purpose of the First Amendment is to amend the definition of earnings before interest, taxes, depreciation and amortization ("EBITDA"), solely for the purpose of calculating EBITDA when determining compliance with the fixed charge coverage ratio covenant, to exclude certain severance expenses. The amendment also adjusts the minimum fixed charge coverage ratio requirement to 1.08 to 1.00 for the trailing twelve month period ended September 30, 2014 and 1.10 to 1.00 for the trailing twelve months ended October 31, 2014 and each month ending thereafter. In addition, the amendment waives any event of default arising from Essex Crane’s breach of the minimum 1.10 to 1.00 fixed charge coverage ratio requirement for the trailing twelve month period ended August 31, 2014.

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Seasonality

Although we believe our business traditionally is not materially impacted by seasonality, the demand for our rental equipment tends to be lower in the winter months. The level of equipment rental activities are directly related to infrastructure, commercial, residential and industrial construction and maintenance activities. Therefore, equipment rental performance will be correlated to the levels of current construction activities. The severity of weather conditions can have a temporary impact on the level of construction activities.

Equipment sales cycles are also subject to some seasonality with the peak selling period during the spring season and extending through the summer. Parts and service activities are traditionally affected to a lesser extent by changes in demand caused by seasonality. 

Contractual Obligations

During the three and nine months ended September 30, 2014, there were no material changes outside the ordinary course of our business in our long-term debt, capital lease or purchase obligations or in other long-term liabilities disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013 with the exception of the Fourth Amended and Restated Credit Agreement at Essex Crane.

On May 13, 2014, Essex Crane entered into the Fourth Amended and Restated Credit Agreement (the “Essex Crane Revolving Credit Facility”). The credit facility provides for a revolving loan in the amount of $145.0 million, with a $20.0 million aggregate sublimit for letters of credit, and a $30.0 million term loan. Essex Crane may borrow on the revolving loan an amount equal to the sum of 85% of eligible net receivables and 75% of the net orderly liquidation value of eligible rental equipment. The aggregate commitment will be reduced by: (i) on an individual transaction basis, 100% of the net cash proceeds from the sales of certain assets and (ii) on an annual basis, 60% of free cash flow, other than net cash proceeds from certain asset sales, as defined within the credit agreement. The maximum commitment under the Essex Crane Revolving Credit Facility may not exceed $130.0 million beginning on February 28, 2016. Essex Crane must generate net cash proceeds, through the sale of certain assets, of not less than $8.0 million by March 31, 2016 with not less than $3.0 million of net cash proceeds generated by March 31, 2015.The revolving loan and term loan mature on October 31, 2016 and May 13, 2019, respectively. The Essex Crane Revolving Credit Facility is collateralized by a first priority security interest in substantially all of Essex Crane’s assets.

Off-Balance Sheet Arrangements

During the three and nine months ended September 30, 2014, there were no material changes in the off-balance sheet arrangements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013.

Critical Accounting Policies

Item 7, included in Part II of our Annual Report on Form 10-K for the year ended December 31, 2013, presents the accounting policies and related estimates that we believe are the most critical to understanding our consolidated financial statements, financial condition, and results of operations and cash flows, and which require complex management judgment and assumptions, or involve uncertainties. These include, among other things, revenue recognition, the propriety of our estimated useful life of rental equipment and property and equipment, the adequacy of the allowance for doubtful accounts, income taxes, the potential impairment of long-lived assets including intangible assets and derivative financial instruments.

Information regarding our other significant accounting policies is included in Note 2 to our consolidated financial statements in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2013.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Our earnings are affected by changes in interest rates due to the fact that interest on our revolving credit facilities is calculated based upon either LIBOR or Prime Rate plus an applicable margin as of September 30, 2014. The weighted average interest rate in effect on all of the Company’s borrowings at September 30, 2014 was 5.45%. A 1.0% increase in the effective interest rate on our total outstanding borrowings (including our short-term debt obligations) at September 30, 2014 would increase our interest expense by approximately $1.4 million on an annualized basis.

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Item 4. Controls and Procedures

Management’s Quarterly Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure.

Our management, with participation of our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(f) promulgated under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of September 30, 2014, our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required financial disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f)) that occurred during the nine months ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company is party to various legal actions in the normal course of our business.  We cannot estimate with certainty our ultimate legal and financial liability with respect to such pending matters.  Management believes that the Company is not party to any litigation that, if adversely determined, would have a material adverse effect on our business, financial condition, result of operations or cash flows.

Item 1A. Risk Factors

Part I, Item 1A — “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2013, describes important factors that could materially affect our business, financial condition and/or future results and cause our operating results to differ materially from those indicated, projected or implied by forward-looking statements made in this Quarterly Report or presented elsewhere by management from time to time. 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 and/or operating results and cause our operating results to differ materially from those indicated, projected or implied by forward-looking statements made in this Quarterly Report or presented elsewhere by management from time to time.

There have been no material changes with respect to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.Issuer Purchases of Equity Securities

In October 2008, the Company's board of directors authorized a stock repurchase program, under which from time to time, in open market transactions at prevailing prices or through privately negotiated transactions as conditions permit. The Company may purchase up to $12.0 million of the Company's common stock and publicly-traded warrants of which approximately $9.0 million remained available at September 30, 2014.  Such repurchase plan was publicly announced on October 22, 2008. The Company’s stock repurchase program was suspended in May 2010 in conjunction with the launching of the cashless exercise warrant offer. 

35

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

On October 30, 2014, Essex Crane and Holdings, a wholly-owned subsidiary of Essex and the direct parent of Essex Crane, entered into a First Amendment (the “First Amendment”) to the Essex Crane Revolving Credit Facility by and among Essex Crane, Holdings, Wells Fargo Capital Finance, LLC, as Agent for the several financial institutions from time to time party to the Essex Crane Credit Agreement and for itself as a lender, PNC Bank, National Association, Alostar Bank of Commerce, Kayne Senior Credit Fund (QP), L.P., Kayne Senior Credit Fund, L.P., 1492 Capital, LLC, and Medley Capital Corporation, as lenders.

The purpose of the First Amendment is to amend the definition of EBITDA, solely for the purpose of calculating EBITDA when determining compliance with the fixed charge coverage ratio covenant, to exclude certain severance expenses. The amendment also adjusts the minimum fixed charge coverage ratio requirement to 1.08 to 1.00 for the trailing twelve month period ended September 30, 2014 and 1.10 to 1.00 for the trailing twelve months ended October 31, 2014 and each month ending thereafter. In addition, the amendment waives any event of default arising from Essex Crane’s breach of the minimum 1.10 to 1.00 fixed charge coverage ratio requirement for the trailing twelve month period ended August 31, 2014.

36

Item 6. Exhibits

A. Exhibits

10.1	First Amendment to the Fourth Amended and Restated Credit Agreement (the “First Amendment”), dated October 30, 2014, by and among Essex Crane Rental Corp., Essex Holdings, LLC, Wells Fargo Capital Finance, LLC, as Agent for the several financial institutions from time to time party to the Essex Crane Credit Agreement and for itself as a lender, PNC Bank, National Association, Alostar Bank of Commerce, Kayne Senior Credit Fund (QP), L.P., Kayne Senior Credit Fund, L.P., 1492 Capital, LLC, and Medley Capital Corporation, as lenders.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

37

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ESSEX RENTAL CORP.
Dated:	November 5, 2014	By:	/s/ Nicholas J. Matthews
			Nicholas J. Matthews Chief Executive Officer (Principal Executive Officer)

Dated:	November 5, 2014	By:	/s/ Kory M. Glen
			Kory M. Glen Chief Financial Officer (Principal Financial and Accounting Officer)

EX-10.1

Exhibit 10.1

WAIVER AND FIRST AMENDMENT TO

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THIS WAIVER AND FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment") is entered into as of October 30, 2014, by and among Essex Crane Rental Corp., a Delaware corporation ("Borrower"), Essex Holdings, LLC, a Delaware limited liability company ("Guarantor"; Borrower and Guarantor are collectively referred to herein as "Loan Parties" and each individually as a "Loan Party"), Wells Fargo Capital Finance, LLC, as Agent for Lenders ("Agent"), and the financial institutions named as lenders on the signature pages hereto ("Lenders").

WHEREAS, Loan Parties, Agent and Lenders are parties to that certain Fourth Amended and Restated Credit Agreement dated as of May 13, 2014 (as heretofore or hereinafter amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement");

WHEREAS, Borrower has notified Agent and Lenders that an Event of Default exists as a result of Borrower's Fixed Charge Coverage Ratio being less than 1.10:1.00 for the trailing twelve month period ended August 31, 2014, constituting a breach of Section 7(a) of the Credit Agreement and an Event of Default under Section 8.2(a)(iii) of the Credit Agreement (the "Existing Event of Default"); and

WHEREAS, the Loan Parties have requested that Agent and Required Lenders waive the Existing Event of Default and amend the Credit Agreement in certain respects as set forth herein, and Agent and Required Lenders have agreed to the foregoing subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties hereto agree as follows:

1.    Waiver. Subject to the satisfaction of the conditions to effectiveness set forth in Section 3 below, and in reliance upon the representations and warranties contained in Section 4 below, the undersigned Lenders, constituting Required Lenders pursuant to the Credit Agreement, hereby waive the Existing Event of Default. This is a limited waiver and shall not be deemed to constitute (i) a waiver of any other Event of Default or any other existing or future breach of the Credit Agreement or any of the Loan Documents or of any other covenant or provision of the Credit Agreement or the Loan Documents or (ii) a modification or alteration of the terms, conditions or covenants of the Credit Agreement or any other Loan Document.

2.    Amendments. Subject to the satisfaction of the conditions to effectiveness set forth in Section 3 below, and in reliance upon the representations and warranties contained in Section 4 below, the Credit Agreement is hereby amended as follows:

(a)    Section 7(a) of the Credit Agreement is hereby amended and restated in its entirety as follows:

(a)    Fixed Charge Coverage Ratio. Have a Fixed Charge Coverage Ratio, measured on a month-end basis for the trailing twelve month period ending on such date, of at least (i) 1.08:1.00 for the month ended September 30, 2014 and (ii) 1.10:1.00 for the month ending October 31, 2014 and each month ending thereafter.

(b)    The definition of "EBITDA" set forth in Schedule 1.1 to the Credit Agreement is hereby amended by deleting the word "and" at the end of clause (c)(iv) thereto, replacing the "," at the end of clause (c)(v) thereto with ", and" and adding a new clause (c)(vi) thereto as follows:

(vi) solely for the purpose of calculating EBITDA when determining compliance with the Fixed Charge Coverage Ratio covenant set forth in Section 7(a), the severance expenses listed on Schedule S to the Agreement for the periods indicated on such Schedule S.

(c)    Schedule 4 to Exhibit C-1 (Compliance Certificate) to the Credit Agreement is hereby amended and restated in its entirety as set forth on Annex A attached hereto.

(d)    A new Schedule S (Severance Expenses) is hereby attached to the Credit Agreement as set forth on Annex B attached hereto.

Exhibit 10.1

3.    Conditions to Effectiveness of Amendment. This Amendment shall become effective upon the satisfaction of each of the following conditions precedent in a manner satisfactory to Agent:

(a)    Agent shall have received counterparts of this Amendment, duly authorized, executed and delivered by Borrower, Guarantor, Agent and Required Lenders;

(b)    Agent shall have received counterparts of a letter agreement dated as of the date hereof (the "Amendment Fee Letter"), duly authorized, executed and delivered by Borrower and Agent;

(c)    Agent shall have received the fees set forth in the Amendment Fee Letter; and

(d)    no Default or Event of Default (other than the Existing Event of Default) shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment.

4.    Representations and Warranties. In order to induce Agent and Required Lenders to enter into this Amendment, each Loan Party hereby represents and warrants to Agent and Lenders, after giving effect to this Amendment:

(a)    all representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects (except that any representations and warranties already qualified by materiality shall be true and correct in all respects) as of the date of this Amendment, with the same effect as though made on such date, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and correct on and as of such earlier date);

(b)    neither Loan Party is required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority or any other Person in connection with or as a condition to the execution, delivery or performance of this Amendment;

(c)    no Default or Event of Default has occurred and is continuing other than the Existing Event of Default; and

(d)    this Amendment constitutes a legal, valid and binding obligation of such Loan Party and is enforceable against such Loan Party in accordance with its terms.

5.    Reaffirmation. Except as expressly set forth in this Amendment, each Loan Party affirms that nothing contained in this Amendment shall modify in any respect whatsoever any Loan Document to which it is a party and reaffirms its obligations under each of the other Loan Documents to which it is a party.

6.    Reservation of Rights. Except as expressly set forth in this Amendment, each of the parties hereto acknowledges and agrees that nothing contained in this Amendment shall be deemed to constitute or shall be construed as (i) a waiver of any Default or Event of Default that may exist (other than the Existing Event of Default), (ii) a waiver or release of any of Agent's or any Lenders' rights or remedies against either Loan Party or any other party to the Credit Agreement, the other Loan Documents or pursuant to applicable law or (iii) a course of dealing obligating Agent or any Lender to provide any accommodations, financial or otherwise, to either Loan Party at any time. Agent and Lenders hereby expressly reserve and preserve all of their rights and remedies under the Credit Agreement, the other Loan Documents and applicable law.

7.    Release.

(a)    In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Loan Party, on behalf of itself and its successors, assigns, and other legal representatives (each Loan Party and all such other Persons being hereinafter referred to collectively as the "Releasors" and individually as a "Releasor"), hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and Lenders, and their successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other Persons being hereinafter referred to collectively as the "Releasees" and individually as a "Releasee"), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set‑off, demands and liabilities whatsoever (individually, a "Claim" and collectively, "Claims") of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which any Releasor may now own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to

Exhibit 10.1

the day and date of this Amendment, in any way related to or in connection with the Credit Agreement, or any of the other Loan Documents or transactions thereunder or related thereto.

(b)    Each Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

(c)    Each Loan Party agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

8.    Miscellaneous.

(a)    Expenses. Loan Parties, jointly and severally, agree to pay on demand all costs and expenses of Agent (including the reasonable fees and expenses of outside counsel for Agent) in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith.

(b)    Governing Law. This Amendment shall be a contract made under and governed by the internal laws of the State of Illinois.

(c)    Counterparts. This Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment. Delivery of a counterpart of this Amendment delivered via facsimile, portable document format ("pdf") or other electronic transmission shall have the same effect as the delivery of a manually executed original counterpart of this Amendment, but each party delivering this Amendment via facsimile, pdf or other electronic transmission shall also deliver an original of this Amendment.

(d)    References. Any reference to the Credit Agreement contained in any document, instrument or agreement executed in connection with the Credit Agreement shall be deemed to be a reference to the Credit Agreement as modified by this Amendment.

[Signature pages follow]

Exhibit 10.1

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized and delivered as of the date first above written.

	ESSEX CRANE RENTAL CORP., a Delaware corporation
By:	/s/ Kory M. Glen
Name:	Kory M. Glen
Title:	Chief Financial Officer
	ESSEX HOLDINGS, LLC, a Delaware limited liability company
By:	/s/ Kory M. Glen
Name:	Kory M. Glen
Title:	Chief Financial Officer
	WELLS FARGO CAPITAL FINANCE, LLC, as Agent and as a Lender
By:	/s/ Laura Nickas
Name:	Laura Nickas
	PNC BANK, NATIONAL ASSOCIATION, as a Lender
By:	/s/ James Simpson
Name:	James Simpson
	ALOSTAR BANK OF COMMERCE, as a Lender
By:	/s/ Daryn Venéy
Name:	Daryn Venéy
	KAYNE SENIOR CREDIT FUND (QP), L.P., as a Lender
By:	/s/ Albert M. Ricchio
Name:	Albert M. Ricchio
	KAYNE SENIOR CREDIT FUND, L.P., as a Lender
By:	/s/ Albert M. Ricchio
Name:	Albert M. Ricchio

Exhibit 10.1

	1492 CAPITAL, LLC, as a Lender
By:	/s/ Thomas A. Shanklin
Name:	Thomas A. Shanklin

Exhibit 10.1

ANNEX A

Schedule 4 to Exhibit C-1

SCHEDULE 4

Financial Covenants

1.    Fixed Charge Coverage Ratio.

Borrower's and its Subsidiaries' Fixed Charge Coverage Ratio, measured on a month-end basis, for the __ month period ending __________, 20___, is ___:1.0, which ratio [is/is not] greater than or equal to [1.08:1.0]¹/[1.10:1.0] for the corresponding period, as required in Section 7(a) of the Credit Agreement.

2.    Capital Expenditures.

Borrower's and its Subsidiaries' Capital Expenditures (excluding the amount, if any, of Capital Expenditures made with Net Cash Proceeds reinvested pursuant to the proviso in Section 2.4(e)(ii) and the amount, if any, of Capital Expenditures incurred in connection with a Permitted Disposition requested by a customer), measured on a fiscal year to date basis, as of the last day of the month ending __________, 20___, is ___:1.0, which [is/is not] less than or equal to $2,000,000 as required in Section 7(b) of the Credit Agreement.

3.    Excess Availability.

Borrower's Excess Availability on each date during the prior month [was/was not] at least 10% of the aggregate Revolving Loan Commitments Amount, as required in Section 7(c) of the Credit Agreement.

¹ For the month ending September 30, 2014 only.

Exhibit 10.1

ANNEX B

Schedule S

Severance Expenses

Essex Crane Rental Corp.
Trailing Twelve Month Impact
Severance Expenses
	Total			TTM Impact
Beginning Balance	$	(912,606	)
July 2013	25,000			25,000
August 2013	25,000			50,000
September 2013	25,000			75,000
October 2013	25,000			100,000
November 2013	25,000			125,000
December 2013	25,000			150,000
January 2014	25,000			175,000
February 2014	25,000			200,000
March 2014	25,000			225,000
April 2014	25,000			250,000
May 2014	56,619			306,619
June 2014	75,333			381,952
July 2014	50,333			407,284
August 2014	50,333			432,617
September 2014	50,333			457,950
October 2014	50,333			483,282
November 2014	50,333			508,615
December 2014	50,333			533,948
January 2015	50,333			559,280
February 2015	50,333			584,613
March 2015	50,333			609,946
April 2015	50,333			635,278
May 2015	18,714			597,372
June 2015	8,614			530,654
July 2015	—			480,321
August 2015	—			429,989
September 2015	—			379,656
October 2015	—			329,323
November 2015	—			278,991
December 2015	—			228,658
January 2016	—			178,325
February 2016	—			127,993
March 2016	—			77,660
April 2016	—			27,328
May 2016	—			8,614
Ending Balance	$	—

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Nicholas J. Matthews certify that:

1. I have reviewed this quarterly report on Form 10-Q of Essex Rental Corp.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such internal control and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent function):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 5, 2014	By:	/s/ Nicholas J. Matthews
			Nicholas J. Matthews Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Kory M. Glen certify that:

1. I have reviewed this quarterly report on Form 10-Q of Essex Rental Corp.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such internal control and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent function):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 5, 2014	By:	/s/ Kory M. Glen
			Kory M. Glen Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Essex Rental Corp. (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Nicholas J. Matthews, Chief Executive Officer of the Company, and Kory M. Glen, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	November 5, 2014	By:	/s/ Nicholas J. Matthews
			Nicholas J. Matthews Chief Executive Officer (Principal Executive Officer)

Dated:	November 5, 2014	By:	/s/ Kory M. Glen
			Kory M. Glen Chief Financial Officer (Principal Financial Officer)

XML

Income Taxes (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Operating Loss Carryforwards [Line Items]
Effective income tax rate, percent	39.20%	37.60%
Business acquisition, goodwill, expected tax deductible amount	$ 3.1		$ 3.1
Tax goodwill amortization period	3 years
Unrecognized tax benefits	0.1		0.1
Federal
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	151.0		143.8
State
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 83.8		$ 77.3

XML

Stock Based Compensation (Tables)

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The Company has granted to certain key members of management options to purchase the following shares by grant date during the nine months ended September 30, 2014:

	Grant Date
	June 27, 2014		June 27, 2014		March 13, 2014
Options granted	49,814		98,024		100,000
Exercise price per share	$	2.51	$	2.51	$	3.26
Service period	3 years		3 years		3 years
Option life	7 years		10 years		10 years

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following table presents the assumptions used in the Black-Scholes option pricing model and the resulting option fair values by grant date during the nine months ended September 30, 2014 (amounts in thousands, except per share data):

	Grant Date
	June 27, 2014			June 27, 2014			March 13, 2014
Expected dividend yield	—		%	—		%	—		%
Risk-free interest rate	1.45		%	1.89		%	1.84		%
Expected volatility	69.94		%	69.94		%	71.12		%
Expected life of option	4.5 years			6 years			6 years
Grant date fair value per share	$	1.40		$	1.58		$	1.88
Grant date fair value	$	70		$	155		$	188

XML

Commitments, Contingencies and Related Party Transactions (Details) (USD $)	1 Months Ended			0 Months Ended	3 Months Ended		9 Months Ended
	Nov. 30, 2010	Sep. 30, 2014	Dec. 31, 2013	Jan. 02, 2012 Hyde Park Real Estate LLC	Sep. 30, 2014 Hyde Park Real Estate LLC	Sep. 30, 2013 Hyde Park Real Estate LLC	Sep. 30, 2014 Hyde Park Real Estate LLC	Sep. 30, 2013 Hyde Park Real Estate LLC
Related Party Transaction [Line Items]
Operating Leases, Monthly Rent Expense				$ 7,688
Operating Leases, Rent Expense, Net					23,064	23,064	69,192	69,192
Debt Conversion, Converted Instrument, Amount	5,200,000
Promissory Notes	5,200,000	1,655,000	3,655,000
Common Stock Warrants Issued	90,000
Share Price	$ 0.01
Personal Property Tax Liability		3,200,000	3,300,000
Personal Property Tax Receivable		$ 1,700,000	$ 2,000,000

XML

Intangible Assets

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

As of September 30, 2014 and December 31, 2013, goodwill related to the acquisition of Coast Crane's assets was approximately $1.8 million. Goodwill represents the excess of the total consideration transferred over the fair value of the identifiable assets acquired, net of liabilities assumed.

The following table presents the gross carrying amount, accumulated amortization and net carrying amount of the Company’s other identifiable finite lived intangible assets (amounts in thousands):

	September 30, 2014			December 31, 2013
Essex Crane customer relationship	$	785		$	785
Essex Crane trademark	804			804
Coast Crane customer relationship	1,500			1,500
Coast Crane trademark	600			600
Total intangible assets	3,689			3,689
Less: accumulated amortization	(2,870		)	(2,620		)
Intangible assets, net	$	819		$	1,069

The Company’s amortization expense associated with other intangible assets was approximately $0.1 million for each of the three months ended September 30, 2014 and 2013. The Company's amortization expense associated with other intangible assets was approximately $0.3 million for each of the nine months ended September 30, 2014 and 2013.

The following table presents the estimated future amortization expense related to intangible assets as of September 30, 2014 for the years ended December 31st (amounts in thousands):

2014	$	84
2015	324
2016	214
2017	197
Total	$	819

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Revolving Credit Facilities and Other Debt Obligations (Details) (USD $)	9 Months Ended				0 Months Ended	9 Months Ended			0 Months Ended			9 Months Ended	12 Months Ended								0 Months Ended	9 Months Ended			9 Months Ended				1 Months Ended	9 Months Ended			9 Months Ended				9 Months Ended			9 Months Ended		0 Months Ended			0 Months Ended			0 Months Ended	9 Months Ended		0 Months Ended			0 Months Ended			9 Months Ended																	0 Months Ended										0 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Nov. 30, 2010	May 13, 2014 Essex Crane Revolving Credit Facility	Sep. 30, 2014 Essex Crane Revolving Credit Facility	May 13, 2014 Essex Crane Revolving Credit Facility	Dec. 31, 2013 Essex Crane Revolving Credit Facility	Apr. 29, 2014 Coast Crane Revolving Credit Facility	May 07, 2012 Coast Crane Revolving Credit Facility	Nov. 14, 2011 Coast Crane Revolving Credit Facility	Sep. 30, 2014 Coast Crane Revolving Credit Facility	Dec. 31, 2013 Coast Crane Revolving Credit Facility	Dec. 31, 2012 Coast Crane Revolving Credit Facility	Feb. 21, 2014 Coast Crane Revolving Credit Facility	Mar. 12, 2013 Coast Crane Revolving Credit Facility	Mar. 31, 2012 Coast Crane Revolving Credit Facility	Feb. 29, 2012 Coast Crane Revolving Credit Facility	Jan. 31, 2012 Coast Crane Revolving Credit Facility	Nov. 24, 2010 Coast Crane Revolving Credit Facility	May 13, 2014 Essex Crane Term Loan	Sep. 30, 2014 Essex Crane Term Loan	May 13, 2014 Essex Crane Term Loan	Dec. 31, 2013 Essex Crane Term Loan	Sep. 30, 2014 Coast Crane Term Loan	Dec. 31, 2013 Coast Crane Term Loan	Jun. 30, 2013 Coast Crane Term Loan	Mar. 12, 2013 Coast Crane Term Loan	Nov. 30, 2010 Unsecured Promissory Notes	Sep. 30, 2014 Unsecured Promissory Notes	Jan. 01, 2014 Unsecured Promissory Notes	Dec. 31, 2013 Unsecured Promissory Notes	Sep. 30, 2014 Purchase Money Security Interest Debt equipment	Dec. 31, 2013 Purchase Money Security Interest Debt equipment	Feb. 21, 2014 Coast Crane Revolving Credit Facility, Coast LTD Portion	Feb. 21, 2014 Minimum Coast Crane Revolving Credit Facility	Sep. 30, 2014 Minimum Coast Crane Term Loan	Sep. 30, 2014 Minimum Purchase Money Security Interest Debt	Feb. 21, 2014 Maximum Coast Crane Revolving Credit Facility	Sep. 30, 2014 Maximum Coast Crane Term Loan	Sep. 30, 2014 Maximum Purchase Money Security Interest Debt	May 13, 2014 Prime Rate Essex Crane Revolving Credit Facility	Sep. 30, 2014 Prime Rate Essex Crane Revolving Credit Facility	Dec. 31, 2013 Prime Rate Essex Crane Revolving Credit Facility	Apr. 29, 2014 Prime Rate Coast Crane Revolving Credit Facility	Sep. 30, 2014 Prime Rate Coast Crane Revolving Credit Facility	Dec. 31, 2013 Prime Rate Coast Crane Revolving Credit Facility	May 13, 2014 London Interbank Offered Rate (LIBOR) Essex Crane Revolving Credit Facility	Sep. 30, 2014 London Interbank Offered Rate (LIBOR) Essex Crane Revolving Credit Facility	Sep. 30, 2013 London Interbank Offered Rate (LIBOR) Essex Crane Revolving Credit Facility	Apr. 29, 2014 London Interbank Offered Rate (LIBOR) Coast Crane Revolving Credit Facility	Sep. 30, 2014 London Interbank Offered Rate (LIBOR) Coast Crane Revolving Credit Facility	Dec. 31, 2013 London Interbank Offered Rate (LIBOR) Coast Crane Revolving Credit Facility	May 13, 2014 London Interbank Offered Rate (LIBOR) Essex Crane Term Loan	Sep. 30, 2014 London Interbank Offered Rate (LIBOR) Purchase Money Security Interest Debt debt_obligation	Dec. 31, 2013 London Interbank Offered Rate (LIBOR) Purchase Money Security Interest Debt debt_obligation	Sep. 30, 2014 London Interbank Offered Rate (LIBOR) Minimum Purchase Money Security Interest Debt	Sep. 30, 2014 London Interbank Offered Rate (LIBOR) Maximum Purchase Money Security Interest Debt	Sep. 30, 2014 Stated Interest Rate [Member] Purchase Money Security Interest Debt debt_obligation	Sep. 30, 2014 Stated Interest Rate [Member] Maximum Purchase Money Security Interest Debt	Dec. 31, 2013 Stated Interest Rate 8.29% Purchase Money Security Interest Debt debt_obligation	May 13, 2014 February 28 2016 Essex Crane Revolving Credit Facility	May 13, 2014 March 31 2016 Essex Crane Revolving Credit Facility	May 13, 2014 March 31 2015 Essex Crane Revolving Credit Facility	Feb. 21, 2014 Option Two Coast Crane Revolving Credit Facility	Nov. 24, 2010 Option Two Coast Crane Revolving Credit Facility	Feb. 21, 2014 Option Two Coast Crane Revolving Credit Facility, Coast LTD Portion	Feb. 21, 2014 Option Three Coast Crane Revolving Credit Facility	Nov. 24, 2010 Option Three Coast Crane Revolving Credit Facility	Feb. 21, 2014 Option Three Coast Crane Revolving Credit Facility, Coast LTD Portion	Feb. 21, 2014 Option Four Coast Crane Revolving Credit Facility	Nov. 24, 2010 Option Four Coast Crane Revolving Credit Facility	Feb. 21, 2014 Option Four Coast Crane Revolving Credit Facility, Coast LTD Portion	Apr. 29, 2014 April 30 2014 Coast Crane Revolving Credit Facility	Apr. 29, 2014 May 31 2014 Coast Crane Revolving Credit Facility	Apr. 29, 2014 June 30 2014 Coast Crane Revolving Credit Facility	Apr. 29, 2014 July 31 2014 and Thereafter Coast Crane Revolving Credit Facility	Apr. 29, 2014 March 31 2014 Coast Crane Revolving Credit Facility	Apr. 29, 2014 March 2014 to August 2014 Coast Crane Revolving Credit Facility	Apr. 29, 2014 September 2014 to November 2014 Coast Crane Revolving Credit Facility	Apr. 29, 2014 December 2014 to February 2015 Coast Crane Revolving Credit Facility	Apr. 29, 2014 March 2015 to May 2015 Coast Crane Revolving Credit Facility	Apr. 29, 2014 June 2015 and Thereafter Coast Crane Revolving Credit Facility	May 07, 2012 2013 Coast Crane Revolving Credit Facility	May 07, 2012 2014 and Thereafter Coast Crane Revolving Credit Facility	Oct. 27, 2014 Subsequent Event [Member] September 2014 [Member] Essex Crane Revolving Credit Facility	Oct. 27, 2014 Subsequent Event [Member] October 2014 and Thereafter [Member] Essex Crane Revolving Credit Facility
Debt Instrument [Line Items]
Revolving credit facilities	$ 143,235,000		$ 165,482,000			$ 121,459,000		$ 148,149,000				$ 21,776,000	$ 17,333,000
Term loans	65,000,000		36,500,000																			30,000,000	30,000,000	0	35,000,000	36,500,000		40,000,000
Term loan - short-term	2,000,000		2,000,000																						2,000,000	2,000,000
Promissory notes	1,655,000		3,655,000	5,200,000																									5,200,000	1,655,000		3,655,000
Purchase money security interest debt	3,302,000		1,975,000																														3,302,000	1,975,000
Purchase money security interest debt - short-term	1,365,000		959,000																														1,365,000	959,000
Total debt obligations outstanding	216,557,000		210,571,000
Debt, Weighted Average Interest Rate						3.91%						5.35%										11.50%			5.25%					18.00%			4.26%
Debt Instrument, Maturity Date, Description						October 2016						March 2017										May 2019			within 1 year					October 2016			within 1 year				December 2015	October 2015		March 2017	June 2019
2014	868,000
2015	3,256,000
2016	125,905,000
2017	55,313,000
2018 and thereafter	31,215,000
Line of Credit Facility, Maximum Borrowing Capacity							145,000,000									35,000,000				75,000,000							500,000																																			130,000,000
Maximum Amount Of Letters Of Credit Sublimit Under Credit Facility							20,000,000													2,000,000
Line Of Credit Facility Borrowing Base Percentage Of Eligible Accounts							85.00%								85.00%																				85.00%																															85.00%
Percentage Of Net Orderly Liquidation Value Eligible Asset							75.00%
Line of Credit Facility, Future Reduction in Aggregate Commitment, Percentage of Proceeds on Sale of Assets							100.00%
Line of Credit Facility, Future Reduction in Aggregate Commitment, Percentage of Free Cash Flow							60.00%
Debt Instrument, Basis Spread on Variable Rate																																										1.75%			2.75%			3.75%	0.375%	0.375%	3.75%			10.50%			3.25%	5.38%
London Interbank Offered Rate Interest Rate Floor									1.50%												1.00%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage					0.375%				0.50%			0.50%	0.50%
Line of Credit Facility, Fixed Charge Coverage Ratio					1.1					1.20																																																																0.88	1.0	1.1	1.2	1.0								1.08	1.10
Required Rental Equipment Sales Proceeds																																																															8,000,000	3,000,000
Line of Credit Facility, Limit on Certain Capital Expenditures					2,000,000
Debt Instrument Covenant Maximum Indebtedness					1,500,000																																																																															7,000,000	10,000,000
Line of Credit Facility, Current Borrowing Capacity						138,300,000		170,100,000				35,000,000	34,400,000
Line of Credit Facility, Remaining Borrowing Capacity						16,700,000		21,900,000				7,600,000	8,200,000
Line of Credit Facility, Remaining Borrowing Capacity After 10 Percent Availability Covenant Threshold						2,500,000		4,400,000
Line Of Credit Facility Excess Availability						3,100,000		9,300,000									8,500,000	8,400,000	9,500,000
Line of Credit Facility Prime Rate																																											3.25%	3.25%		3.25%	3.25%
Line of Credit Facility London Interbank Offer Rate (LIBOR)						0.15%		0.15%														0.1524%																														0.23%	0.24%
Line of Credit Facility Borrowing Base, Percentage of Inventory																																																																	50.00%	50.00%	50.00%
Line of Credit Facility Borrowing Base																																																																	5,000,000	5,000,000	800,000		15,000,000	2,000,000
Line of Credit Facility Borrowing Base, Percentage of Net Orderly Liquidation Value and Invoice Cost of New Equipment																																																																				95.00%	95.00%	95.00%	85.00%		85.00%
Line of Credit Facility Borrowing Base, Percentage of Net Orderly Liquidation Value Less Reserves																																																																								85.00%
Proceeds from revolving credit facilities	83,168,000	74,818,000									1,500,000
Reserves on Revolving Credit Facility										3,700,000
Payment Of Contributions By Subsidiary														2,500,000
Earnings Before Interest Taxes Depreciation And Amortization														6,000,000
Minimum Availability Level Of Borrowings To Avoid Fixed Charge Coverage Ratio Test										8,000,000
US Eligible New Sale Inventory Cap																																				4,000,000			15,000,000
Required Trailing Twelve Month EBITDA																																																																															7,700,000	7,900,000	8,000,000	8,200,000	8,300,000
Line of Credit Facility, Letter of Credit Fee									3.75%
Line Of Credit Facility Maximum Borrowing Capacity Reserve												5,600,000	8,900,000
Loans Payable to Bank																									37,000,000	38,500,000
Class of Warrant or Right Issued																													90,000
Common Stock Issuable Upon Exercise of Warrants																													90,000
Warrant Exercise Price per Share																													$ 0.01
Class of Warrant or Right Fair Value																													300,000
Debt Instrument, Convertible, Remaining Discount Amortization Period																													3 years
Debt Instrument, Interest Rate, Stated Percentage																														18.00%	18.00%	10.00%		8.29%				3.59%																						8.29%
Pieces of Equipment Financed																																	17	11																					10	10			7		1
Long-term Debt																																	$ 4,700,000	$ 2,900,000

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Intangible Assets (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 1,796,000		$ 1,796,000		$ 1,796,000
Intangible assets	3,689,000		3,689,000		3,689,000
Less: accumulated amortization	(2,870,000)		(2,870,000)		(2,620,000)
Intangible assets, net	819,000		819,000		1,069,000
Amortization Expense of Intangible Assets	100,000	100,000	300,000	300,000
2014	84,000		84,000
2015	324,000		324,000
2016	214,000		214,000
2017	197,000		197,000
Essex Crane Customer Relationship Intangible
Finite-Lived Intangible Assets [Line Items]
Intangible assets	785,000		785,000		785,000
Essex Crane Trademark Intangible
Finite-Lived Intangible Assets [Line Items]
Intangible assets	804,000		804,000		804,000
Coast Crane Customer Relationship Intangible
Finite-Lived Intangible Assets [Line Items]
Intangible assets	1,500,000		1,500,000		1,500,000
Coast Crane Trademark Intangible
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 600,000		$ 600,000		$ 600,000

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Fair Value (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Fair Value Disclosures [Abstract]
Debt instrument, fair value disclosure	$ 217.5	$ 212.0

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Accumulated Other Comprehensive Income Reclassifications (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ 7	$ 6	$ 11	$ 10
Other comprehensive income (loss) before reclassifications	21	(2)	17	(6)
Amounts reclassified from accumulated other comprehensive income	0	0	0	0
Other comprehensive income (loss)	21	(2)	17	(6)
Ending balance	$ 28	$ 4	$ 28	$ 4

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Please refer to Note 2 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2013 for a complete description of our significant accounting policies.

Use of Estimates

The preparation of these financial statements requires management to make estimates and assumptions that affect certain reported amounts of assets, liabilities, revenues, expenses, contingent assets and liabilities, and the related disclosures.  Accordingly, actual results could materially differ from those estimates.  Significant estimates include the allowance for doubtful accounts and credit memos, spare parts inventory obsolescence reserve, useful lives for rental equipment and property and equipment, deferred income taxes, personal property tax receivable and accrual, loss contingencies and the fair value of financial instruments.

Fair Value of Financial Instruments

The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments on listed market prices and third party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

Segment Reporting

We have determined, in accordance with applicable accounting guidance regarding operating segments, that we have three reportable segments. We derive our revenues from three principal business activities: (1) equipment rentals; (2) equipment distribution; and (3) parts and service. These segments are based upon how we allocate resources and assess performance. See Note 11 to the consolidated financial statements regarding our segment information.

Long-lived Assets - Held for Use

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The criteria for determining impairment for such long-lived assets to be held and used is determined by comparing the carrying value of these long-lived assets to be held and used to management's best estimate of future undiscounted cash flows expected to result from the use of these assets. If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The estimated fair value of the assets is measured by estimating the present value of the future discounted cash flows to be generated.

During the nine months ended September 30, 2014 and as a result of continuing losses and depressed utilization rates, the Company determined that triggering event had occurred at Essex Crane, which caused the Company to determine if an impairment of these long-lived assets to be held and used was necessary.

Application of the long-lived asset to be held and used impairment test requires judgment, including the identification of the primary asset, identification of the lowest level of identifiable cash flows that are largely independent of the cash flows of other assets and liabilities and the future cash flows of the long-lived assets to be held and used. The Company identified its crawler crane rental equipment fleet as the primary asset as it is the basis of all revenue generating activities for Essex Crane, its replacement would require a significant level of investment and its remaining useful life significantly exceeds the remaining useful life of all other assets. The lowest level of identifiable cash flows within the rental equipment fleet is at the equipment model level. Each equipment model group is capable of producing cash flows without other complementary assets and each asset within the specific equipment model groups is interchangeable with any other asset within that equipment model group. The Company tested the recoverability of the rental equipment assets to be held and used by model using an undiscounted cash flow approach dependent primarily upon estimates of future rental income, orderly liquidation value and discount rates. Cash flows for each equipment model group considered the possibility of continuing to rent the assets and selling the assets in orderly transactions in the future or at the end of their remaining useful lives. The Company estimated that the future cash flows generated by each of the equipment model groups exceeded the carrying value of the assets and no impairment was recorded for assets to be held and used as of September 30, 2014.

The Company also assessed whether a triggering event for potential impairment of its other equipment assets existed, and it was determined that no such event occurred for these assets during the nine months ended September 30, 2014.

Long-lived Assets - Held for Sale

During the three months ended September 30, 2014, the Company agreed to terms to sell certain traditional crawler crane rental equipment assets. Under the agreed upon terms, the rental equipment assets, in their current condition, will be sold in three groups with the first group sale completed during the three months ended September 30, 2014 and the remaining group sales to be completed during each of the three months ended December 31, 2014 and March 31, 2015, respectively. As a result of the agreed upon sales terms, the Company has determined that these long-lived rental equipment assets shall be classified as held for sale. The held for sale assets are classified within the Company's equipment rentals segment.

As a result of the held for sale classification, the Company performed an impairment analysis of the long-lived rental equipment assets held for sale. Application of the long-lived asset held for sale impairment test requires comparing the carrying value of the the asset to its fair value less cost to sell. The Company determined that the fair value of the assets was equal to the agreed upon sales price. The carrying value of the assets exceeded the fair value of the assets less cost to sell resulting in the Company recording an impairment charge of approximately $0.8 million during the three months ended September 30, 2014.

Recently Issued and Adopted Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued guidance for reporting discontinued operations and disposals of components of an entity. The guidance raises the threshold for a disposal to qualify as a discontinued operation by requiring that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale be reported as such. The amendments also expand the disclosure requirements regarding the assets, liabilities, revenues and expenses of discontinued operations and add new disclosure requirements for individually significant dispositions that do not qualify as discontinued operations. The amendments are effective prospectively for fiscal years beginning after December 15, 2014, and interim reporting periods within those years (early adoption is permitted only for disposals that have not been previously reported). Adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial results.

In May 2014, FASB issued guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for fiscal years and interim periods beginning after December 15, 2016. Early adoption is not permitted. We expect to adopt this guidance when effective, and the impact on our financial statements is not currently estimable.

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net loss	$ (2,398)	$ (1,903)	$ (8,308)	$ (5,998)
Basic (shares)	24,813,619	24,653,513	24,801,537	24,639,667
Diluted (shares)	24,813,619	24,653,513	24,801,537	24,639,667
Basic earnings (loss) per share	$ (0.10)	$ (0.08)	$ (0.33)	$ (0.24)
Diluted earnings (loss) per share	$ (0.10)	$ (0.08)	$ (0.33)	$ (0.24)
Weighted average number of shares, retained interests			493,671	493,671
Stock options outstanding, number	1,461,717	1,430,459	1,461,717	1,430,459
Stock options outstanding, weighted average exercise price	$ 4.52	$ 5.29	$ 4.52	$ 5.29
Class of warrant or rights, outstanding (shares)		90,000		90,000
Class of warrants or rights, exercise price of warrants or rights		$ 0.01		$ 0.01
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities (shares)	0	0	0	0
Antidilutive securities excluded from computation of earnings per share, amount		89,779		89,783
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities (shares)	0	0	0	0
Antidilutive securities excluded from computation of earnings per share, amount	0	74,259	0	82,433
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities (shares)	0	0	0	0
Antidilutive securities excluded from computation of earnings per share, amount	24,215	3,931	30,197	1,738

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Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Cash and cash equivalents	$ 1,423	$ 1,349
Accounts receivable, net of allowances for doubtful accounts and credit memos of $2,799 and $2,485, respectively	16,676	14,059
Other receivables	2,105	2,412
Deferred tax assets	3,313	2,878
Prepaid expenses and other assets	1,584	1,791
TOTAL CURRENT ASSETS	38,380	27,503
Property and equipment, net	4,601	5,205
Spare parts inventory, net	3,728	3,248
Identifiable finite lived intangibles, net	819	1,069
Goodwill	1,796	1,796
Loan acquisition costs, net	5,489	6,095
TOTAL ASSETS	326,531	332,776
Accounts payable	5,385	5,703
Accrued employee compensation and benefits	2,085	2,012
Accrued taxes	3,634	3,909
Accrued interest	1,081	655
Accrued other expenses	1,230	1,007
Unearned rental revenue	1,962	1,668
Customer deposits	238	293
Term loan - short-term	2,000	2,000
Purchase money security interest debt - short-term	1,365	959
Capital lease obligation - short-term	34	0
TOTAL CURRENT LIABILITIES	19,014	18,206
Revolving credit facilities	143,235	165,482
Term loans	65,000	36,500
Promissory notes	1,655	3,655
Purchase money security interest debt	3,302	1,975
Deferred tax liabilities	35,910	40,869
Capital lease obligation	171	0
TOTAL LONG-TERM LIABILITIES	249,273	248,481
TOTAL LIABILITIES	268,287	266,687
Commitments and contingencies
Preferred stock, $.0001 par value, Authorized 1,000,000 shares, none issued	0	0
Common stock, $.0001 par value, Authorized 40,000,000 shares; issued and outstanding 24,813,619 shares at September 30, 2014 and 24,743,513 shares at December 31, 2013	2	2
Paid in capital	126,398	125,952
Accumulated deficit	(68,184)	(59,876)
Accumulated other comprehensive income	28	11
TOTAL STOCKHOLDERS' EQUITY	58,244	66,089
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	326,531	332,776
Property Subject to Operating Lease
Rental equipment, held for sale	3,339	0
Property and equipment, net	271,718	287,860
Retail Spare Parts Inventory, Net
Retail equipment	1,727	1,598
Retail Equipment Inventory
Retail equipment	$ 8,213	$ 3,416

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Consolidated Statements of Comprehensive Income (Unaudited) Statement (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net loss	$ (2,398)	$ (1,903)	$ (8,308)	$ (5,998)
Foreign currency translation adjustments	21	(2)	17	(6)
Other comprehensive income (loss)	21	(2)	17	(6)
Comprehensive loss	$ (2,377)	$ (1,905)	$ (8,291)	$ (6,004)

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Common Stock and Warrants (Details) (USD $) In Millions, except Share data, unless otherwise specified		9 Months Ended
	Oct. 31, 2008	Sep. 30, 2014 Strategic Planning and Finance Committee [Member]	Sep. 30, 2013 Strategic Planning and Finance Committee [Member]	Sep. 30, 2014 Board of Directors [Member]	Sep. 30, 2014 Management [Member]	Sep. 30, 2014 June 18 2013 Restricted Share Grant [Member]	Sep. 30, 2013 January 3 2011 Restricted Share Grant [Member]
Class of Stock [Line Items]
Stock Repurchase Program, Authorized Value	$ 12.0
Stock Issued During Period, Shares, Issued for Services		45,719	43,715	3,155	8,352
Stock Issued During Period, Shares, Restricted Stock Award, Gross						22,500	83,469
Shares Paid for Tax Withholding for Share Based Compensation						9,621	29,489

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Revolving Credit Facilities and Other Debt Obligations (Tables)

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Schedule of Debt

The Company’s revolving credit facilities and other debt obligations consist of the following (amounts in thousands): 

	Principal Outstanding at				Weighted Average Interest Rate as of September 30, 2014
	September 30, 2014		December 31, 2013				Maturity Dates
Essex Crane revolving credit facility	$	121,459	$	148,149	3.91	%	October 2016
Coast Crane revolving credit facility	21,776		17,333		5.35	%	March 2017
Essex Crane term loan	30,000		—		11.50	%	May 2019
Coast Crane term loan	35,000		36,500		5.25	%	December 2015 to March 2017
Coast Crane term loan - short-term	2,000		2,000		5.25	%	within 1 year
Unsecured promissory notes (related party)	1,655		3,655		18.00	%	October 2016
Purchase money security interest debt	3,302		1,975		4.26	%	October 2015 to June 2019
Purchase money security interest debt - short-term	1,365		959		4.26	%	within 1 year
Total debt obligations outstanding	$	216,557	$	210,571

Schedule of Maturities of Long-term Debt

Aggregate payments of principal on debt obligations outstanding as of September 30, 2014 for each of the years ended December 31st based on contractual installment payment terms and maturities are as follows:

2014	$	868
2015	3,256
2016	125,905
2017	55,313
2018 and thereafter	31,215
Total	$	216,557

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Segment Information (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Segment	Sep. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Number of Reportable Segments			3
Revenues	$ 29,581,000	$ 22,808,000	$ 75,176,000	$ 73,086,000
Gross Profit	6,517,000	5,456,000	15,972,000	17,542,000
Assets	326,531,000		326,531,000		332,776,000
Equipment Rental
Segment Reporting Information [Line Items]
Revenues	21,720,000	14,416,000	53,312,000	49,789,000
Gross Profit	5,150,000	3,805,000	11,825,000	12,554,000
Assets	295,990,000		295,990,000		307,372,000
Equipment Distribution
Segment Reporting Information [Line Items]
Revenues	2,760,000	3,772,000	6,938,000	8,337,000
Gross Profit	161,000	368,000	335,000	807,000
Assets	9,195,000		9,195,000		5,150,000
Parts and Service
Segment Reporting Information [Line Items]
Revenues	5,101,000	4,620,000	14,926,000	14,960,000
Gross Profit	1,206,000	1,283,000	3,812,000	4,181,000
Assets	6,910,000		6,910,000		5,261,000
Segmented Assets Total
Segment Reporting Information [Line Items]
Assets	312,095,000		312,095,000		317,783,000
Total Non-Segmented Assets
Segment Reporting Information [Line Items]
Assets	14,436,000		14,436,000		14,993,000
CANADA
Segment Reporting Information [Line Items]
Assets	4,100,000		4,100,000		4,500,000
Long-Lived Assets	$ 3,000,000		$ 3,000,000		$ 3,500,000
Sales Revenue, Net
Segment Reporting Information [Line Items]
Segment Reporting, Number of Major Customers	0	0	0	0
Sales Revenue, Net | Equipment Rental
Segment Reporting Information [Line Items]
Segment Reporting, Number of Major Customers			1
Sales Revenue, Net | Equipment Distribution
Segment Reporting Information [Line Items]
Segment Reporting, Number of Major Customers	4	4	1	2
Geographic Concentration Risk | Sales Revenue, Net | Foreign
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	5.80%	8.30%	7.10%	8.90%
Geographic Concentration Risk | Sales Revenue, Net | CANADA
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	4.90%	7.50%	5.30%	8.20%
Customer One | Customer Concentration Risk | Sales Revenue, Net | Equipment Rental
Segment Reporting Information [Line Items]
Concentration Risk, Percentage			10.30%
Customer One | Customer Concentration Risk | Sales Revenue, Net | Equipment Distribution
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	17.90%	23.40%	16.70%	34.00%
Customer Two | Customer Concentration Risk | Sales Revenue, Net | Equipment Distribution
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	13.30%	13.10%		10.60%
Customer Three | Customer Concentration Risk | Sales Revenue, Net | Equipment Distribution
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	12.20%	11.50%
Customer Four | Customer Concentration Risk | Sales Revenue, Net | Equipment Distribution
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	10.80%	10.30%

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following tables set forth the computation of basic and diluted earnings per share (amounts in thousands except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net loss	$	(2,398	)	$	(1,903	)	$	(8,308	)	$	(5,998	)
Weighted average shares outstanding:
Basic	24,814			24,654			24,802			24,640
Effect of dilutive securities:
Warrants	—			—			—			—
Options	—			—			—			—
Restricted common stock	—			—			—			—
Diluted	24,814			24,654			24,802			24,640
Basic earnings (loss) per share	$	(0.10	)	$	(0.08	)	$	(0.33	)	$	(0.24	)
Diluted earnings (loss) per share	$	(0.10	)	$	(0.08	)	$	(0.33	)	$	(0.24	)

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Business and Principles of Consolidation

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Principles of Consolidation

Business and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Essex Rental Corp. (“Essex Rental”) and its wholly owned subsidiaries Essex Holdings, LLC ("Holdings"), Essex Crane Rental Corp. ("Essex Crane"), Essex Finance Corp. (“Essex Finance”), CC Acquisition Holding Corp. (“CC Acquisition”), Coast Crane Company, formerly known as CC Bidding Corp. (“Coast Crane”) and Coast Crane Ltd. (“Coast Crane Ltd.") (collectively the "Company"). All intercompany accounts and transactions have been eliminated in consolidation. 

The Company is engaged primarily in renting lattice boom crawler cranes and attachments, tower cranes and attachments, rough terrain cranes, boom trucks and other related heavy lifting machinery and equipment to the construction industry throughout the United States of America, including Hawaii and Alaska, and Canada. The assets are rented for use in building and maintaining power plants, refineries, bridge and road construction, alternative energy, water treatment facilities and other industrial, commercial, residential and infrastructure related projects. The Company is also engaged in servicing and distributing heavy lifting machinery and other construction related equipment and parts.

The accompanying consolidated financial statements of the Company include all adjustments (consisting of normal recurring adjustments) which management considers necessary for the fair presentation of the Company’s operating results, financial position and cash flows as of and for all periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted from these unaudited financial statements in accordance with applicable rules.

The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the full year ending December 31, 2014. For further information, please refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

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Consolidated Balance Sheets (Unaudited) Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Accounts receivable, allowances for doubtful accounts and credit memos	$ 2,799	$ 2,485
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	1,000,000	1,000,000
Preferred stock, issued	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	40,000,000	40,000,000
Common stock, issued	24,813,619	24,743,513
Common stock, outstanding	24,813,619	24,743,513

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Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure

Segment Information

We have identified three reportable segments: equipment rentals, equipment distribution, and parts and service. These segments are based upon how management of the Company allocates resources and assesses performance. The equipment rental segment includes rental, transportation and used rental equipment sales. There were no sales between segments for any of the periods presented. Selling, general, and administrative expenses as well as all other income and expense items below gross profit are not generally allocated to our reportable segments.

We do not compile discrete financial information by our segments other than the information presented below. The following table presents information about our reportable segments related to revenues and gross profit (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Segment revenues
Equipment rentals	$	21,720	$	14,416	$	53,312	$	49,789
Equipment distribution	2,760		3,772		6,938		8,337
Parts and service	5,101		4,620		14,926		14,960
Total revenues	$	29,581	$	22,808	$	75,176	$	73,086
Segment gross profit
Equipment rentals	$	5,150	$	3,805	$	11,825	$	12,554
Equipment distribution	161		368		335		807
Parts and service	1,206		1,283		3,812		4,181
Total gross profit	$	6,517	$	5,456	$	15,972	$	17,542

The following table presents information about our reportable segments related to total assets (amounts in thousands):

	September 30, 2014		December 31, 2013
Segment identified assets
Equipment rentals	$	295,990	$	307,372
Equipment distribution	9,195		5,150
Parts and service	6,910		5,261
Total segment identified assets	312,095		317,783
Non-segmented identified assets	14,436		14,993
Total assets	$	326,531	$	332,776

The Company operates primarily in the United States. Our sales to international customers for the three months ended September 30, 2014 were 5.8% of total revenues. Sales to customers in Canada represented 4.9% of total revenues. No customer accounted for more than 10% of our revenues on a consolidated basis. Within the equipment distribution segment for the three months ended September 30, 2014, four customers individually accounted for approximately 17.9%, 13.3%, 12.2% and 10.8% of revenues on a segmented basis. The concentration of revenues from these customers within the equipment distribution segment is directly attributable to the large dollar value of individual transactions and the small number of individual transactions.

Our sales to international customers for the three months ended September 30, 2013 were 8.3% of total revenues. Sales to customers in Canada represented 7.5% of total revenues. No customer accounted for more than 10% of our revenues on a consolidated basis. Within the equipment distribution segment for the three months ended September 30, 2013, four customers individually accounted for approximately 23.4%, 13.1%, 11.5% and 10.3% of revenues on a segmented basis. The concentration of revenues from these customers within the equipment distribution segment is directly attributable to the large dollar value of individual transactions and the small number of individual transactions.

Our sales to international customers for the nine months ended September 30, 2014 were 7.1% of total revenues. Sales to customers in Canada represented 5.3% of total revenues. No customer accounted for more than 10% of our revenues on a consolidated basis. Within the equipment rentals segment for the nine months ended September 30, 2014, one customer individually accounted for approximately 10.3% of revenues on a segmented basis. The concentration of revenues from this customer within the equipment rentals segment is directly attributable to the number of pieces of equipment on rent and the high average monthly rental rates for those pieces of equipment. Within the equipment distribution segment for the nine months ended September 30, 2014, one customer individually accounted for approximately 16.7% of revenues on a segmented basis. The concentration of revenues from this customer within the equipment distribution segment is directly attributable to the large dollar value of individual transactions and the small number of individual transactions.

Our sales to international customers for the nine months ended September 30, 2013 were 8.9% of total revenues. Sales to customers in Canada represented 8.2% of total revenues. No customer accounted for more than 10% of our revenues on a consolidated basis. Within the equipment distribution segment for the nine months ended September 30, 2013, two customers individually accounted for approximately 34.0% and 10.6% of revenues on a segmented basis. The concentration of revenues from these customer swithin the equipment distribution segment is directly attributable to the large dollar value of individual transactions and the small number of individual transactions.

The Company maintains assets in Canada associated with our Coast Crane Ltd. subsidiary. Total assets located in Canada at September 30, 2014 totaled approximately $4.1 million, including long-lived assets totaling approximately $3.0 million. At December 31, 2013, total assets located in Canada totaled approximately $4.5 million, including long-lived assets totaling approximately $3.5 million.

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Document and Entity Information Document	9 Months Ended
	Sep. 30, 2014	Nov. 01, 2014
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Trading Symbol	ESSX
Entity Registrant Name	Essex Rental Corp.
Entity Central Index Key	0001373988
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		24,813,619

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Commitments, Contingencies and Related Party Transactions

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies and Related Party Transactions

Commitments, Contingencies and Related Party Transactions

Since December 2010, the Company has occupied office space at 500 Fifth Avenue, 50th Floor, New York, NY 10110, provided by Hyde Park Real Estate LLC, an affiliate of Laurence S. Levy, our chairman of the board. Such affiliate has agreed that it will make such office space, as well as certain office and administrative services, available to the Company, as may be required by the Company from time to time. Effective January 1, 2012, the Company has agreed to pay such entity $7,688 per month for such services based on reimbursement of actual costs with the terms of such arrangement being reconsidered from time to time. The Company’s statements of operations for the three months ended September 30, 2014 and 2013 and the nine months ended September 30, 2014 and 2013 include approximately $23,064 and $69,192, respectively of rent expense related to these agreements.

In November 2010, the Company entered into an agreement with the holders of certain Coast Crane indebtedness pursuant to which such holders agreed, in consideration of the assumption of such indebtedness by the Company, to exchange such indebtedness of $5.2 million for unsecured promissory notes issued by the Company in the aggregate principal amount of $5.2 million plus the receipt of up to 90,000 warrants to purchase Essex common stock at $0.01 per share. The warrants were exercised in full on October 24, 2013. The holders of the unsecured promissory notes are related parties to the Company as they owned a significant amount of the Company’s outstanding shares of common stock at the time of the transaction.

The Company maintains reserves for personal property taxes.  These reserves are based on a variety of factors including: duration of rental in each county jurisdiction, tax rates, rental contract terms, customer filings, tax-exempt nature of projects or jurisdictions, statutes of limitations and potential related penalties and interest.  Additionally, most customer rental contracts contain a provision that provides that personal property taxes are an obligation to be borne by the lessee. Where provided in the rental contract, management will invoice the customer for any personal property taxes paid by the Company. An estimated receivable has been recorded, net of an estimated allowance in connection with this liability.  This customer receivable has been presented as other receivables in current assets while the property tax reserve has been included in accrued taxes.

Management estimated the gross personal property taxes liability and related contractual customer receivable of the Company to be approximately $3.2 million and $1.7 million, respectively, as of September 30, 2014 and approximately $3.3 million and $2.0 million, respectively, as of December 31, 2013.

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Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Equipment rentals	$ 13,640	$ 11,802	$ 37,202	$ 35,447
Transportation	2,056	1,349	6,021	4,420
Equipment repairs and maintenance	2,936	2,793	8,219	9,182
TOTAL REVENUES	29,581	22,808	75,176	73,086
Salaries, payroll taxes and benefits	3,021	2,673	8,399	8,174
Depreciation	4,538	4,652	13,755	13,981
Transportation	2,082	1,400	5,906	4,341
Equipment repairs and maintenance	3,234	2,283	8,886	7,762
Yard operating expenses	999	790	2,601	2,332
TOTAL COST OF REVENUES	23,064	17,352	59,204	55,544
GROSS PROFIT	6,517	5,456	15,972	17,542
Selling, general and administrative expenses	5,939	5,723	17,686	18,117
Impairment - rental equipment, held for sale	771	0	771	0
Other depreciation and amortization	195	251	708	793
LOSS FROM OPERATIONS	(388)	(518)	(3,193)	(1,368)
Other income (expense)	(3)	553	(1)	559
Interest expense	(3,669)	(3,075)	(10,243)	(8,576)
Foreign currency exchange gains (losses)	(172)	107	(225)	(222)
TOTAL OTHER INCOME (EXPENSES)	(3,844)	(2,415)	(10,469)	(8,239)
LOSS BEFORE INCOME TAXES	(4,232)	(2,933)	(13,662)	(9,607)
BENEFIT FOR INCOME TAXES	(1,834)	(1,030)	(5,354)	(3,609)
NET LOSS	(2,398)	(1,903)	(8,308)	(5,998)
Basic (shares)	24,813,619	24,653,513	24,801,537	24,639,667
Diluted (shares)	24,813,619	24,653,513	24,801,537	24,639,667
Basic earnings (loss) per share	$ (0.10)	$ (0.08)	$ (0.33)	$ (0.24)
Diluted earnings (loss) per share	$ (0.10)	$ (0.08)	$ (0.33)	$ (0.24)
Retail Spare Parts Inventory, Net
Sales Revenue, Goods, Net	2,165	1,827	6,707	5,778
Cost of Goods Sold	1,691	1,475	5,287	4,456
Property Subject to Operating Lease
Sales Revenue, Goods, Net	6,024	1,265	10,089	9,922
Cost of Goods Sold	5,074	829	8,253	7,439
Retail Equipment Inventory
Sales Revenue, Goods, Net	2,760	3,772	6,938	8,337
Cost of Goods Sold	$ 2,425	$ 3,250	$ 6,117	$ 7,059

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Accumulated Other Comprehensive Income Reclassifications

9 Months Ended

Sep. 30, 2014

Accumulated Other Comprehensive Income Reclassifications [Abstract]

Accumulated Other Comprehensive Income Reclassifications

Accumulated Other Comprehensive Income Reclassifications

The following table presents the Company's changes in accumulated other comprehensive income related to foreign currency translation adjustments for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
Beginning balance	$	7	$	6		$	11	$	10
Other comprehensive income (loss) before reclassifications	21		(2		)	17		(6		)
Amounts reclassified from accumulated other comprehensive income	—		—			—		—
Net current period other comprehensive income (loss)	21		(2		)	17		(6		)
Ending balance	$	28	$	4		$	28	$	4

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Fair Value

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

The FASB issued a statement on Fair Value Measurements which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis and clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 - Observable inputs such as quoted prices in active markets:

• Level 2- Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The fair value of the Company’s total debt obligations was approximately $217.5 million and $212.0 million as of September 30, 2014 and December 31, 2013, respectively, calculated using a discounted cash flows approach at a market rate of interest. The inputs used in the calculation are classified within Level 2 of the fair value hierarchy.

The fair values of the Company’s financial instruments, including cash and cash equivalents, approximate their carrying values. The Company bases its fair values on listed market prices or third party quotes when available. If not available, then the Company bases its estimates on instruments with similar terms and maturities.

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Accumulated Other Comprehensive Income Reclassifications (Tables)

9 Months Ended

Sep. 30, 2014

Accumulated Other Comprehensive Income Reclassifications [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table presents the Company's changes in accumulated other comprehensive income related to foreign currency translation adjustments for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
Beginning balance	$	7	$	6		$	11	$	10
Other comprehensive income (loss) before reclassifications	21		(2		)	17		(6		)
Amounts reclassified from accumulated other comprehensive income	—		—			—		—
Net current period other comprehensive income (loss)	21		(2		)	17		(6		)
Ending balance	$	28	$	4		$	28	$	4

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Subsequent Events

9 Months Ended

Sep. 30, 2014

Subsequent Event [Line Items]

Subsequent Events [Text Block]

Subsequent Events

On October 30, 2014, Essex Crane entered into a First Amendment to the Fourth Amended and Restated Credit Agreement to modify the calculation of the fixed charge coverage ratio to allow for the exclusion of severance expenses. Additionally, the amendment reduced the required fixed charge coverage ratio for September 2014 to not less than 1.08 to 1.00 and to waive an event of default that occurred as a result of the fixed charge coverage ratio falling below the required ratio of 1.10 to 1.00 in August 2014. All other terms of the May 13, 2014 Essex Crane Revolving Credit facility remained in effect following such amendment.

On October 8, 2014, Coast Crane entered into an interest rate cap agreement to hedge its exposure to interest rate fluctuations.  The agreement has a notional principal amount of $40.0 million, a 90-day LIBOR cap of 2.50% and matures in June 2016. This interest rate cap was not designated for hedge accounting treatment.

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Stock Based Compensation

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Based Compensation

Stock Based Compensation

The Company may issue up to 1,500,000 shares of common stock pursuant to its 2011 Long-term Incentive Plan to employees, non-employee directors and consultants of the Company. The Company may issue up to 1,575,000 shares of common stock pursuant to its 2008 Long-term Incentive Plan to employees, non-employee directors and consultants of the Company. Options to purchase shares of common stock are granted at its market price on the grant date and expire at either seven or ten years from issuance.

Stock Options

The Company calculates stock option compensation expense based on the grant date fair value of the award and recognizes expense on a straight-line basis over the service period of the award. The Company has granted to certain key members of management options to purchase the following shares by grant date during the nine months ended September 30, 2014:

	Grant Date
	June 27, 2014		June 27, 2014		March 13, 2014
Options granted	49,814		98,024		100,000
Exercise price per share	$	2.51	$	2.51	$	3.26
Service period	3 years		3 years		3 years
Option life	7 years		10 years		10 years

The fair values of the stock options granted are estimated at the date of grant using the Black-Scholes option pricing model. The model is sensitive to changes in assumptions which can materially affect the fair value estimate. The Company’s method of estimating the expected volatility for the 2014 option grants was based on the volatility of its own common shares outstanding. The expected dividend yield was estimated based on the Company’s expected dividend rate over the term of the options. The expected term of the options was based on management’s estimate, and the risk-free rate is based on U.S. Treasuries with a term approximating the expected life of the options.

The following table presents the assumptions used in the Black-Scholes option pricing model and the resulting option fair values by grant date during the nine months ended September 30, 2014 (amounts in thousands, except per share data):

	Grant Date
	June 27, 2014			June 27, 2014			March 13, 2014
Expected dividend yield	—		%	—		%	—		%
Risk-free interest rate	1.45		%	1.89		%	1.84		%
Expected volatility	69.94		%	69.94		%	71.12		%
Expected life of option	4.5 years			6 years			6 years
Grant date fair value per share	$	1.40		$	1.58		$	1.88
Grant date fair value	$	70		$	155		$	188

On November 11, 2013 and May 31, 2013, the Company entered into separation agreements with its former Chief Executive Officer and former Chief Financial Officer, respectively. In accordance with the terms of the separation agreements, and as permitted under the terms of the applicable option awards, the Company agreed that options awarded to the former executives of the Company on December 18, 2008 and January 14, 2011, to the extent vested, will remain exercisable until the ten year anniversary of the applicable grant date, instead of expiring 90 days following the date employment was terminated, as provided in the option award agreements. The separation agreements resulted in the forfeiture of 403,353 vested options issued under the March 18, 2010 option grant and 32,487 unvested options issued under the January 14, 2011 option grant.

Restricted Shares of Common Stock

On June 27, 2014, the Company granted to key members of management 51,640 shares of restricted common stock with an aggregate grant date fair value of approximately $0.1 million. One-third of the restricted shares are scheduled to vest on June 27, 2015, June 27, 2016 and June 27, 2017, respectively, and as such, no shares were vested as of September 30, 2014.

On November 15, 2013, the Company granted to a key member of management 50,000 shares of restricted common stock with an aggregate grant date fair value of $0.2 million. One-third of the restricted shares are scheduled to vest on November 15, 2014, November 15, 2015 and November 15, 2016, respectively, and as such, no shares were vested as of September 30, 2014.

On June 18, 2013, the Company granted to a key member of management 67,500 shares of restricted common stock with an aggregate grant date fair value of $0.3 million. One-third of the restricted shares vested on June 18, 2014 and an additional one-third of the restricted shares are scheduled to vest on June 18, 2015 and June 18, 2016, respectively, and as such, 22,500 shares were vested as of September 30, 2014.

On January 3, 2011, the Company granted to certain employees 166,943 shares of restricted common stock with an aggregate grant date fair value of $0.9 million. One half of these restricted shares vested on January 3, 2012 and the remainder vested on January 3, 2013, and as such, 166,943 were vested as of September 30, 2014 and 2013.

The Company recorded $0.1 million of non-cash compensation expense associated with stock options and restricted shares in selling, general and administrative expenses for each of the three months ended September 30, 2014 and 2013. The Company recorded $0.3 million and $0.7 million of non-cash compensation expense associated with stock options and restricted shares in selling, general and administrative expenses for the nine months ended September 30, 2014 and 2013, respectively. There was approximately $1.0 million and $0.7 million of total unrecognized compensation cost as of September 30, 2014 and December 31, 2013, respectively related to non-vested stock option and restricted share awards. The remaining cost is expected to be recognized ratably over the remaining respective vesting periods.

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Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings per Share

The following tables set forth the computation of basic and diluted earnings per share (amounts in thousands except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net loss	$	(2,398	)	$	(1,903	)	$	(8,308	)	$	(5,998	)
Weighted average shares outstanding:
Basic	24,814			24,654			24,802			24,640
Effect of dilutive securities:
Warrants	—			—			—			—
Options	—			—			—			—
Restricted common stock	—			—			—			—
Diluted	24,814			24,654			24,802			24,640
Basic earnings (loss) per share	$	(0.10	)	$	(0.08	)	$	(0.33	)	$	(0.24	)
Diluted earnings (loss) per share	$	(0.10	)	$	(0.08	)	$	(0.33	)	$	(0.24	)

Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of common shares outstanding during the period. Included in the weighted average number of shares outstanding for the nine months ended September 30, 2014 and 2013 are 493,671 shares of common stock for the effective conversion of the retained interest in Holdings into common stock of the Company. The retained interests were converted to common stock on April 17, 2014. Diluted EPS adjusts basic EPS for the effects of Warrants, Units and Options; only in the periods in which such effect is dilutive.

The weighted average restricted stock outstanding that could be converted into 24,215 and 3,931 common shares for the three months ended September 30, 2014 and 2013, respectively, were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. Weighted average options outstanding that could be converted into zero and 74,259 common shares for the three months ended September 30, 2014 and 2013, respectively, were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. Weighted average warrants outstanding that could be converted into 89,779 common shares for the three months ended September 30, 2013 were outstanding but were not included in the computation of diluted earnings per share because the effects would be anti-dilutive.

The weighted average restricted stock outstanding that could be converted into 30,197 and 1,738 common shares for the nine months ended September 30, 2014 and 2013, respectively, were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. Weighted average options outstanding that could be converted into zero and 82,433 common shares for the nine months ended September 30, 2014 and 2013, respectively, were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. Weighted average warrants outstanding that could be converted into 89,783 common shares for the nine months ended September 30, 2013 were outstanding but were not included in the computation of diluted earnings per share because the effects would be anti-dilutive.

As of September 30, 2014 and 2013, there were 1,461,717 and 1,430,459 stock options outstanding, respectively, which are exercisable at weighted average exercise prices of $4.52 and $5.29, respectively. As of September 30, 2013, there were 90,000 privately issued warrants outstanding which were exercisable at a weighted average exercise price of $0.01. The warrants were exercised in full on October 24, 2013.

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s effective tax rate of 39.2% for the nine months ended September 30, 2014 was higher than the statutory federal rate due to discrete items including return to provision adjustments, state net operating loss true-ups, state valuation allowances and state income tax audit activity. The Company’s effective tax rate of 37.6% for the nine months ended September 30, 2013 was higher than the statutory federal rate due to state taxes.

As of September 30, 2014, the Company has unused federal net operating loss carry-forwards totaling approximately $151.0 million that begin expiring in 2022. As of September 30, 2014, the Company also has unused state net operating loss carry-forwards totaling approximately $83.8 million, which expire between 2014 and 2035. The net operating loss carry-forwards are primarily from the acquisition of Holdings and losses in recent years. The Company had unused federal and state net operating loss carry-forwards totaling approximately $143.8 million and $77.3 million, respectively, as of December 31, 2013.

 The Company also has remaining excess tax goodwill of approximately $3.1 million as of September 30, 2014 associated with the acquisition of Holdings. The excess tax goodwill will be amortized and deducted for tax purposes over the remaining three year term. However, the excess tax goodwill has not been recorded for GAAP purposes and will not be realized as a benefit to the income tax provision until the amortization deductions are realized through the reduction of taxable income in future years. The Company had remaining excess tax goodwill of approximately $3.1 million as of December 31, 2013.

The Company is generally no longer subject to federal and state examinations for tax years prior to December 31, 2010.

The Company had unrecognized tax benefits of approximately $0.1 million as of September 30, 2014 primarily associated with tax positions taken in a prior years. The Company had unrecognized tax benefits of approximately $0.1 million as of December 31, 2013. The Company did not incur any interest expense related to uncertain tax positions for the nine months ended September 30, 2014 and 2013.

The Company utilizes a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement.

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Common Stock and Warrants

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Common Stock and Warrants

Common Stock and Warrants

In October 2008 our Board of Directors authorized a stock and warrant repurchase program, under which the Company may purchase, from time to time, in open market transactions at prevailing prices or through privately negotiated transactions as conditions permit, up to $12.0 million of the Company’s outstanding common stock and warrants. The Company’s stock repurchase program was suspended in May 2010 in conjunction with the launching of the cashless exercise warrant offer. Repurchases of our common stock and warrants were funded with cash flows of the business.

The Company issued 45,719 and 43,715 shares of common stock, respectively, for services provided by the members of the Strategic Planning and Finance Committee of the Board of Directors during the nine months ended September 30, 2014 and 2013, respectively. The Company issued 3,155 shares of common stock for services provided by one member of the Board of Directors during the nine months ended September 30, 2014. The Company issued 8,352 shares of common stock to certain members of management in lieu of cash compensation during the nine months ended September 30, 2014. The Company issued 22,500 and 83,469 shares of common stock related to the vesting of restricted shares during the nine months ended September 30, 2014 and 2013, respectively, which were previously granted to certain employees. The Company withheld 9,621 and 29,489 common shares to cover the employee tax obligation related to the restricted shares issuance during the nine months ended September 30, 2014 and 2013, respectively.

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Stock Based Compensation (Details) (USD $)	3 Months Ended		9 Months Ended			0 Months Ended			9 Months Ended	0 Months Ended			9 Months Ended	0 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	May 31, 2013 March 18 2010	Nov. 11, 2013 January 14 2011	Jun. 27, 2014 June 27 2014	Sep. 30, 2014 June 27 2014	Jun. 27, 2014 June 27 2014 Executives	Mar. 13, 2014 March 13 2014	Nov. 15, 2013 November 15 2013	Sep. 30, 2014 November 15 2013	Jun. 18, 2013 June 18 2013	Sep. 30, 2014 June 18 2013	Jan. 03, 2011 January 3 2011	Sep. 30, 2013 January 3 2011	Sep. 30, 2014 2011 Long Term Incentive Plan	Sep. 30, 2014 2008 Long Term Incentive Plan	Jan. 03, 2011 January 3 2012 January 3 2011 Restricted Stock	Jan. 03, 2011 January 3 2013 January 3 2011 Restricted Stock	Nov. 15, 2013 November 15 2014 November 15 2013 Restricted Stock	Nov. 15, 2013 November 15 2015 November 15 2013 Restricted Stock	Nov. 15, 2013 November 15 2016 November 15 2013 Restricted Stock	Jun. 18, 2013 June 18 2014 June 18 2013 Restricted Stock	Jun. 18, 2013 June 18 2015 June 18 2013 Restricted Stock	Jun. 18, 2013 June 18 2016 June 18 2013 Restricted Stock	Jun. 27, 2014 June 27 2015 June 27 2014 Restricted Stock	Jun. 27, 2014 June 27 2016 June 27 2014 Restricted Stock	Jun. 27, 2014 June 27 2017 June 27 2014 Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted								49,814		98,024	100,000
Exercise price per share								$ 2.51		$ 2.51	$ 3.26
Service period								3 years		3 years	3 years
Option life								7 years		10 years	10 years
Expected dividend yield								0.00%		0.00%	0.00%
Risk-free interest rate								1.45%		1.89%	1.84%
Expected volatility								69.94%		69.94%	71.12%
Expected life of option								4 years 6 months		6 years	6 years
Grant date fair value per share								$ 1.40		$ 1.58	$ 1.88
Grant date fair value								$ 70,000		$ 155,000	$ 188,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized																		1,500,000	1,575,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period						403,353	32,487
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period								51,640				50,000		67,500		166,943
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Total Grant Date Fair Value								100,000				200,000		300,000		900,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period									0				0		22,500		166,943
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost	100,000	100,000	300,000	700,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 1,000,000		$ 1,000,000		$ 700,000
Share Based Compensation, Options, Annual Vesting Percentage	33.33%		33.33%
Share Based Compensation, Restricted Common Stock, Percentage Vesting By Date																				50.00%	50.00%	33.33%	33.33%	33.33%	33.33%	33.33%	33.33%	33.33%	33.33%	33.33%

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The following table presents the gross carrying amount, accumulated amortization and net carrying amount of the Company’s other identifiable finite lived intangible assets (amounts in thousands):

	September 30, 2014			December 31, 2013
Essex Crane customer relationship	$	785		$	785
Essex Crane trademark	804			804
Coast Crane customer relationship	1,500			1,500
Coast Crane trademark	600			600
Total intangible assets	3,689			3,689
Less: accumulated amortization	(2,870		)	(2,620		)
Intangible assets, net	$	819		$	1,069

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table presents the estimated future amortization expense related to intangible assets as of September 30, 2014 for the years ended December 31st (amounts in thousands):

2014	$	84
2015	324
2016	214
2017	197
Total	$	819

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule Of Segment Revenues And Segment Gross Profit Table

The following table presents information about our reportable segments related to revenues and gross profit (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Segment revenues
Equipment rentals	$	21,720	$	14,416	$	53,312	$	49,789
Equipment distribution	2,760		3,772		6,938		8,337
Parts and service	5,101		4,620		14,926		14,960
Total revenues	$	29,581	$	22,808	$	75,176	$	73,086
Segment gross profit
Equipment rentals	$	5,150	$	3,805	$	11,825	$	12,554
Equipment distribution	161		368		335		807
Parts and service	1,206		1,283		3,812		4,181
Total gross profit	$	6,517	$	5,456	$	15,972	$	17,542

Reconciliation of Assets from Segment to Consolidated

The following table presents information about our reportable segments related to total assets (amounts in thousands):

	September 30, 2014		December 31, 2013
Segment identified assets
Equipment rentals	$	295,990	$	307,372
Equipment distribution	9,195		5,150
Parts and service	6,910		5,261
Total segment identified assets	312,095		317,783
Non-segmented identified assets	14,436		14,993
Total assets	$	326,531	$	332,776

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Net loss	$ (8,308)	$ (5,998)
Depreciation and amortization of tangible assets	14,210	14,523
Amortization of loan acquisition costs and other intangibles	2,094	1,595
Amortization of promissory notes discount	0	72
Gain on sale of rental equipment	0	(552)
Impairment - rental equipment, held for sale	771	0
Deferred income taxes	(5,392)	(3,942)
Share based compensation expense	296	719
Accounts receivable, net	(3,311)	1,677
Other receivables	307	45
Prepaid expenses and other assets	207	67
Spare parts inventory	(621)	(319)
Accounts payable and accrued expenses	303	(1,179)
Unearned rental revenue	294	172
Customer deposits	(55)	106
Total change in operating assets and liabilities	(8,164)	(1,420)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	(6,329)	2,514
Purchases of property and equipment	(554)	(692)
Accounts receivable from rental equipment sales	694	(1,012)
Proceeds from sale of property, plant, and equipment	0	1,752
NET CASH PROVIDED BY INVESTING ACTIVITIES	3,977	4,460
Proceeds from revolving credit facilities	83,168	74,818
Payments on revolving credit facilities	(105,415)	(118,596)
Proceeds from term loans	30,000	40,000
Payments on term loans	(1,500)	(1,000)
Payments on purchase money security interest debt	(847)	(767)
Payments on promissory notes	(2,000)	0
Payments on capital lease obligation	(10)	(3)
Employer repurchase of shares to satisfy minimum tax withholding	(24)	(103)
Payments for loan acquisition costs	(1,238)	(6,783)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	2,134	(12,434)
Effect of exchange rate changes on cash and cash equivalents	292	101
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	74	(5,359)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	1,349	8,389
CASH AND CASH EQUIVALENTS, END OF PERIOD	1,423	3,030
Board of Directors fees paid in common stock	150	150
Equipment obtained through capital lease	215	0
Equipment purchased directly through short-term debt obligation	2,580	982
Cash paid for interest	7,975	6,683
Cash paid for income taxes, net	127	27
Retail Equipment Inventory
Retail equipment inventory	(5,288)	(1,989)
Property Subject to Operating Lease
Gain on sale of rental equipment	(1,836)	(2,483)
Purchases of property and equipment	(6,252)	(5,510)
Proceeds from sale of property, plant, and equipment	$ 10,089	$ 9,922

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Revolving Credit Facilities and Other Debt Obligations

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Revolving Credit Facilities and Other Debt Obligations

Revolving Credit Facilities and Other Debt Obligations

The Company’s revolving credit facilities and other debt obligations consist of the following (amounts in thousands): 

	Principal Outstanding at				Weighted Average Interest Rate as of September 30, 2014
	September 30, 2014		December 31, 2013				Maturity Dates
Essex Crane revolving credit facility	$	121,459	$	148,149	3.91	%	October 2016
Coast Crane revolving credit facility	21,776		17,333		5.35	%	March 2017
Essex Crane term loan	30,000		—		11.50	%	May 2019
Coast Crane term loan	35,000		36,500		5.25	%	December 2015 to March 2017
Coast Crane term loan - short-term	2,000		2,000		5.25	%	within 1 year
Unsecured promissory notes (related party)	1,655		3,655		18.00	%	October 2016
Purchase money security interest debt	3,302		1,975		4.26	%	October 2015 to June 2019
Purchase money security interest debt - short-term	1,365		959		4.26	%	within 1 year
Total debt obligations outstanding	$	216,557	$	210,571

Aggregate payments of principal on debt obligations outstanding as of September 30, 2014 for each of the years ended December 31st based on contractual installment payment terms and maturities are as follows:

2014	$	868
2015	3,256
2016	125,905
2017	55,313
2018 and thereafter	31,215
Total	$	216,557

Essex Crane Revolving Credit Facility

On May 13, 2014, Essex Crane entered into the Fourth Amended and Restated Credit Agreement (the “Essex Crane Revolving Credit Facility”). The credit facility provides for a revolving loan in the amount of $145.0 million, with a $20.0 million aggregate sublimit for letters of credit, and a $30.0 million term loan. Essex Crane may borrow on the revolving loan an amount equal to the sum of 85% of eligible net receivables and 75% of the net orderly liquidation value of eligible rental equipment. The aggregate commitment will be reduced by: (i) on an individual transaction basis, 100% of the net cash proceeds from the sales of certain assets and (ii) on an annual basis, 60% of free cash flow, other than net cash proceeds from certain asset sales, as defined within the credit agreement. The maximum commitment under the Essex Crane Revolving Credit Facility may not exceed $130.0 million beginning on February 28, 2016. The revolving loan and term loan mature on October 31, 2016 and May 13, 2019, respectively. The Essex Crane Revolving Credit Facility is collateralized by a first priority security interest in substantially all of Essex Crane’s assets.

Under the terms of the Essex Crane Revolving Credit Facility, borrowings on the revolving loan accrue interest at the borrower’s option of either (a) the bank’s prime rate plus the applicable prime rate margin of 1.75% or (b) a Euro-dollar rate based on the rate the bank offers deposits of U.S. Dollars in the London interbank market (“LIBOR”) plus the applicable LIBOR margin of 3.75%. Borrowings on the term loan accrue interest at LIBOR plus the applicable LIBOR term loan margin of 10.50% with a LIBOR floor of 1.00%. Essex Crane is also required to pay a monthly commitment fee with respect to the undrawn commitments under the Essex Crane Revolving Credit Facility of 0.375%.

The Essex Crane Revolving Credit Facility requires Essex Crane to maintain a trailing twelve month fixed charge coverage ratio of not less than 1.10 to 1.00. Additionally, Essex Crane must generate net cash proceeds, through the sale of certain assets, of not less than $8.0 million by March 31, 2016 with not less than $3.0 million of net cash proceeds generated by March 31, 2015. The Essex Crane Revolving Credit Facility also provides for an annual limit on certain capital expenditures of $2.0 million and limits the ability of Essex Crane to make distributions to affiliates. Essex Crane is permitted to incur certain additional indebtedness, including secured purchase money indebtedness, of up to $1.5 million outstanding at any time, subject to certain provisions set forth in the Essex Crane Revolving Credit Facility.

On October 30, 2014, Essex Crane entered into a First Amendment to the Fourth Amended and Restated Credit Agreement to modify the calculation of the fixed charge coverage ratio to allow for the exclusion of severance expenses. Additionally, the amendment reduced the required fixed charge coverage ratio for September 2014 to not less than 1.08 to 1.00 and to waived an event of default that occurred as a result of the fixed charge coverage ratio falling below the required ratio of 1.10 to 1.00 in August 2014. All other terms of the May 13, 2014 Essex Crane Revolving Credit facility remained in effect following such amendment.

The maximum amount that could be borrowed under the revolving loan portion of the Essex Crane Revolving Credit Facility, net of letters of credit, interest rate swaps and other reserves was approximately $138.3 million and $170.1 million as of September 30, 2014 and December 31, 2013, respectively. Essex Crane’s available borrowing under its revolving credit facility was approximately $16.7 million and $21.9 million as of September 30, 2014 and December 31, 2013, respectively. After consideration of the 10% availability threshold covenant, the Company had available borrowings under its revolving credit facility of approximately $2.5 million and $4.4 million as of September 30, 2014 and December 31, 2013, respectively. As of September 30, 2014 and December 31, 2013, there was $3.1 million and $9.3 million, respectively, of available formulated collateral in excess of the maximum borrowing amounts of approximately $138.3 million and $170.1 million, respectively. As of September 30, 2014 and December 31, 2013, the outstanding balance on the term loan portion of the Essex Crane Revolving Credit Facility was $30.0 million and zero, respectively.

As of September 30, 2014, the applicable prime rate, LIBOR rate and undrawn commitment fee on the revolving loan were 3.25%, 0.15% and 0.375%, respectively. As of December 31, 2013, the applicable prime rate, LIBOR rate and undrawn commitment fee on the revolving loan were 3.25%, 0.15% and 0.375%, respectively. As of September 30, 2014, the LIBOR rate on the term loan was 0.15% with a LIBOR floor of 1.00%.

Essex Crane is currently in compliance with the covenants and other provisions set forth in the Essex Crane Revolving Credit Facility, as amended.  Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on the Company’s liquidity and operations.

Coast Crane Revolving Credit Facility

On November 24, 2010, Coast Crane entered into a new revolving credit facility in conjunction with the acquisition of Coast Crane's assets (the “Coast Crane Revolving Credit Facility”).  The Coast Crane Revolving Credit Facility provided for a revolving loan and letter of credit facility in the maximum aggregate principal amount of $75.0 million with a $2.0 million aggregate principal sublimit for letters of credit.   Coast Crane’s ability to borrow under the Coast Crane Revolving Credit Facility is subject to, among other things, a borrowing base calculated based on  the sum of (a) 85% of eligible accounts, (b) the lesser of 50% of eligible spare parts inventory and $5.0 million, (c) the lesser of 95% of the lesser of (x) the net orderly liquidation value and (y) the invoice cost, of eligible new equipment inventory and $15.0 million and (d) 85% of the net orderly liquidation value of eligible other equipment, less reserves established by the lenders and the liquidity reserve.

On November 14, 2011 the Coast Crane Revolving Credit Facility was amended and restated to include Coast Crane Ltd. as a signatory to the credit facility. The amendment provided that equipment owned by Coast Crane located in Canada may be included in the borrowing base calculation, which was previously prohibited. As amended, the Coast Crane Revolving Credit Facility agreement is collateralized by a first priority security interest in substantially all of Coast Crane’s and Coast Crane Ltd.’s assets.

Proceeds of the first borrowing under the amended Coast Crane Revolving Credit Facility in the amount of $1.5 million were used to pay off the remaining balance on the Coast Crane Ltd.'s revolving credit facility at the time of its termination in November 2011.

On May 7, 2012, the Coast Crane Revolving Credit Facility was amended to provide certain limitations on net capital expenditures and a $3.7 million “first amendment reserve” (as defined in the Coast Crane Revolving Credit Facility). The amendment also provides for a modified fixed charge coverage ratio of 1.20 to 1.00 as well as an obligation of Essex to contribute, or cause to be contributed, to Coast Crane up to $2.5 million to the extent that EBITDA for Coast Crane for the year ending December 31, 2012 was less than $6.0 million. Coast Crane EBITDA for the year ended December 31, 2012 exceeded the $6.0 million threshold and no contribution from Essex was required. The amendment also reduced the amount of certain additional indebtedness, including secured purchase money indebtedness, that Coast Crane may incur to $7.0 million for the year ending December 31, 2013 and $10.0 million thereafter. All other terms of the November 14, 2011 amendment and restatement remained in effect following such amendment.

A definitional interpretation resulted in Coast Crane's lenders determining that the springing fixed charge coverage ratio of 1.20 to 1.00 (which under the Coast Crane Revolving Credit Facility was triggered if Coast Crane's borrowing availability fell below $8.0 million) was triggered notwithstanding that Coast Crane and Coast Crane Ltd. had combined excess availability of $9.5 million, $8.4 million and $8.5 million as of January 31, 2012, February 29, 2012 and March 31, 2012, respectively. The modified fixed charge coverage ratio included in the May 7, 2012 amendment replaced the springing trailing twelve month fixed charge coverage ratio. The May 7, 2012 amendment also addressed and waived Coast Crane’s non-compliance (which existed as of March 31, 2012) with certain delivery and reporting requirements contained in the Coast Crane Revolving Credit Facility.

On March 12, 2013, the Coast Crane Revolving Credit Facility was amended and restated to extend the maturity date to March 12, 2017. The amendment also provides for a $40.0 million term loan and reduces the aggregate maximum principal amount of the revolving loan and letter of credit facility by a corresponding amount to $35.0 million. In addition, the amendment provides for scheduled quarterly term loan payments to reduce the term loan principal outstanding by $0.5 million beginning on June 30, 2013. The amounts borrowed under the term loan which are repaid or prepaid may not be reborrowed. All other terms of the May 7, 2012 amendment and restatement remained in effect following such amendment.

On February 21, 2014, Coast Crane and Coast Crane Ltd. entered into a First Amendment to the Second Amended and Restated Credit Agreement to amend the mandatory prepayment provision to exclude proceeds received from permitted equipment asset sales and to waive an event of default that occurred as a result of permitted equipment asset sales and the failure to apply proceeds to the term loan under the Coast Crane Credit Agreement. In addition, the First Amendment amends the borrowing base calculation as it relates to new equipment inventory, and creates a progressive new equipment inventory cap based on a leverage ratio.

Under the terms of the February 21, 2014 amendment, Coast Crane and Coast Crane Ltd. may borrow, repay and reborrow under the Coast Crane Facility. Coast Crane’s ability to borrow under the Coast Crane Facility is subject to, among other things, a borrowing base which is calculated as the sum of (a) 85% of eligible Coast Crane accounts, (b) the lesser of 50% of eligible Coast Crane inventory and $5.0 million, (c) the lesser of (i) 95% of the lesser of (x) the Net Orderly Liquidation Value and (y) the invoice cost, of U.S. Eligible New Sale Equipment Inventory and (ii) the U.S. Eligible New Sale Equipment Inventory Cap (as hereinafter defined) and (d) 85% of the net orderly liquidation value of eligible other equipment, less reserves established by the lenders and the liquidity reserve. Coast Crane Ltd.’s ability to borrow under the Coast Crane Facility is subject to among other things, a borrowing base which is calculated as the sum of (a) 85% of eligible Coast Crane Ltd. accounts, (b) the lesser of 50% of eligible Coast Crane Ltd. inventory and $0.8 million, (c) the lesser of (i) 95% of the lesser of (x) the net orderly liquidation value and (y) the invoice cost, of eligible new Coast Crane Ltd. equipment and (ii) $2.0 million and (d) 85% of the net orderly liquidation value of eligible other Coast Crane Ltd. equipment, less reserves established by the lenders and the liquidity reserve.

The U.S. Eligible New Sale Equipment Inventory Cap shall mean the U.S. Eligible New Sale Equipment Inventory Cap in effect from time to time determined based upon the applicable leverage ratio then in effect. The U.S. Eligible New Sale Equipment Inventory Cap is adjusted from $4.0 million to $15.0 million based on the applicable leverage ratio then in effect and also based on the amount of U.S. Eligible New Sale Equipment Inventory that is under a written agreement to be sold to a customer.

On April 29, 2014, Coast Crane entered into a Second Amendment (the “Second Amendment”) to the Second Amended and Restated Credit Agreement. The purpose of the Second Amendment is to adjust the minimum fixed charge coverage ratio requirement to 0.88 to 1.00, 1.00 to 1.00 and 1.10 to 1.00 from 1.20 to 1.00, for the trailing twelve month periods ended April 30, 2014, May 31, 2014 and June 30, 2014, respectively. The minimum required fixed charge coverage ratio for the trailing twelve month periods ending July 31, 2014 and thereafter will remain 1.20 to 1.00. In addition, the Second Amendment waives any event of default arising from Coast Crane’s breach of the minimum 1.20 to 1.00 fixed charge coverage ratio requirement for the trailing twelve month period ended March 31, 2014, so long as the fixed charge coverage ratio for such period is at least equal to 1.00 to 1.00. Further, under the amendment, Coast Crane is required to achieve a minimum trailing twelve month EBITDA threshold as of the last day of the month of $7.7 million for March 2014 through August 2014; $7.9 million for September 2014 through November 2014; $8.0 million for December 2014 through February 2015; $8.2 million for March 2015 through May 2015; and $8.3 million for June, 2015 and thereafter. All other terms of the February 21, 2014 amendment and restatement remained in effect following such amendment.

Interest accrues on Coast Crane's outstanding revolving loans and term loan under the revolving credit facility at either a per annum rate equal to (a) LIBOR plus 3.75%, with a 1.50% LIBOR floor or (b) the Base rate plus 2.75%, at Coast Crane’s election. Coast Crane will be obligated to pay a letter of credit fee on the outstanding letter of credit accommodations based on a per annum rate of 3.75%. Interest on the revolving loans and fees on the letter of credit accommodations is payable monthly in arrears. Coast Crane is also obligated to pay an unused line fee on the amount by which the maximum credit under the Coast Crane Revolving Credit Facility exceeds the aggregate amount of revolving loans and letter of credit accommodations based on a per annum rate of 0.50%. At September 30, 2014, the applicable LIBOR rate, Base rate, and unused line commitment fee were 0.23%, 3.25% and 0.50%, respectively. At December 31, 2013, the applicable LIBOR rate, Base rate, and unused line commitment fee were 0.24%, 3.25% and 0.50%, respectively.

The maximum amount that could be borrowed under the revolving loans under the Coast Crane Revolving Credit Facility was approximately $35.0 million and $34.4 million as of September 30, 2014 and December 31, 2013, respectively. Coast Crane’s available borrowing under the Coast Crane Revolving Credit Facility was approximately $7.6 million and $8.2 million, respectively, after certain lender reserves of $5.6 million and $8.9 million as of September 30, 2014 and December 31, 2013, respectively. Although the Coast Crane Revolving Credit Facility limits Coast Crane’s and Coast Crane Ltd.’s ability to incur additional indebtedness, Coast Crane and Coast Crane Ltd. are permitted to incur certain additional indebtedness, including secured purchase money indebtedness, subject to certain conditions set forth in the Coast Crane Revolving Credit Facility.

As of September 30, 2014 and December 31, 2013, the outstanding balance on the term loan portion of the Coast Crane Revolving Credit Facility was $37.0 million and $38.5 million, respectively. At September 30, 2014 and December 31, 2013, $2.0 million of the outstanding balance is classified as a current liability as a result of the scheduled quarterly term loan payments of $0.5 million that began on June 30, 2013.

Coast Crane was in compliance with the covenants and other provisions set forth in the Coast Crane Revolving Credit Facility as of September 30, 2014. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on the Company’s liquidity and operations.

Unsecured Promissory Notes

In November 2010, the Company entered into an agreement with the holders of certain Coast Crane indebtedness pursuant to which such holders agreed, in consideration of the assumption of such indebtedness by the Company, to exchange such indebtedness for one or more promissory notes issued by the Company in the aggregate principal amount of $5.2 million. As additional consideration under the agreement, the Company agreed to issue 90,000 warrants to the holders of such indebtedness entitling the holder thereof to purchase up to 90,000 shares of Essex Rental common stock at an exercise price of $0.01 per share, and to reimburse such holders for certain legal fees incurred in connection with the transaction. The warrants were exercised in full on October 24, 2013.

In accordance with accounting guidance related to debt issued with conversion or other options, the fair value of the detachable warrants of $0.3 million was recorded as a discount to the principal balance outstanding with an offset to additional paid-in capital on the consolidated statements of stockholders’ equity and was amortized on a straight-line basis over the 3 year life of the notes as additional interest expense on the consolidated statement of operations, which is not materially different than the effective interest method. As of June 30, 2014 and December 31, 2013, the discount related to the fair value of the detachable warrants was fully amortized.

On December 31, 2013, the unsecured promissory notes were amended and restated to extend the maturity date to the earlier of October 31, 2016 or the consummation of any Essex Crane Revolving Credit Facility refinancing to the extent that the terms and conditions of the refinancing permit the Company to use the proceeds from refinancing for the repayment of the outstanding principal balance on the unsecured promissory notes. In addition, beginning on January 1, 2014, interest accrues on the outstanding promissory notes at a per annum rate of 18.00% and is payable in arrears.

As of September 30, 2014 and December 31, 2013, the outstanding principal balance on the unsecured promissory notes was approximately $1.7 million and $3.7 million, respectively. Interest accrued on the outstanding promissory notes at a per annum rate of 18.00% and 10.00% at September 30, 2014 and December 31, 2013, respectively.

Purchase Money Security Interest Debt

As of September 30, 2014, the Company's purchase money security interest debt consisted of the financing of seventeen pieces of equipment. Ten of these debt obligations accrue interest at rates that range from LIBOR plus 3.25% to LIBOR plus 5.38% per annum with interest payable in arrears. Seven of the debt obligations accrue interest at rates that range from 3.59% to 8.29%. The obligations are secured by the equipment purchased and have maturity dates that range from September 2015 to June 2019. As these loans are amortizing, approximately $1.4 million of the total $4.7 million in principal payments is due prior to September 30, 2015 and as such, this amount is classified as a current liability in the accompanying consolidated balance sheets as of September 30, 2014.

As of December 31, 2013, the purchase money security interest debt consisted of the financing of eleven pieces of equipment with an outstanding balance of approximately $2.9 million. The interest rates at December 31, 2013 ranged from LIBOR plus 3.25% to LIBOR plus 5.38% for ten of the debt obligations.  One of the debt obligations accrued interest at a rate of 8.29% as of December 31, 2013.

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Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Segment	Sep. 30, 2013
Accounting Policies [Abstract]
Number of Reportable Segments			3
Impairment - rental equipment, held for sale	$ 771	$ 0	$ 771	$ 0

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Subsequent Events (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended
	May 13, 2014 Essex Crane Revolving Credit Facility	Oct. 27, 2014 Essex Crane Revolving Credit Facility September 2014 [Member] Subsequent Event [Member]	Oct. 27, 2014 Essex Crane Revolving Credit Facility October 2014 and Thereafter [Member] Subsequent Event [Member]	Oct. 08, 2014 Coast Crane Interest Rate Cap [Member] Subsequent Event [Member]	Oct. 08, 2014 Coast Crane Interest Rate Cap [Member] Subsequent Event [Member]
Subsequent Event [Line Items]
Line of Credit Facility, Fixed Charge Coverage Ratio	1.1	1.08	1.10
Derivative, Notional Amount					$ 40.0
Derivative, Cap Interest Rate					2.50%
Derivative, Maturity Date				Jun. 17, 2016

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of these financial statements requires management to make estimates and assumptions that affect certain reported amounts of assets, liabilities, revenues, expenses, contingent assets and liabilities, and the related disclosures.  Accordingly, actual results could materially differ from those estimates.  Significant estimates include the allowance for doubtful accounts and credit memos, spare parts inventory obsolescence reserve, useful lives for rental equipment and property and equipment, deferred income taxes, personal property tax receivable and accrual, loss contingencies and the fair value of financial instruments.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments on listed market prices and third party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

Segment Reporting

Segment Reporting

We have determined, in accordance with applicable accounting guidance regarding operating segments, that we have three reportable segments. We derive our revenues from three principal business activities: (1) equipment rentals; (2) equipment distribution; and (3) parts and service. These segments are based upon how we allocate resources and assess performance. See Note 11 to the consolidated financial statements regarding our segment information.

Long-lived Assets

Long-lived Assets - Held for Use

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The criteria for determining impairment for such long-lived assets to be held and used is determined by comparing the carrying value of these long-lived assets to be held and used to management's best estimate of future undiscounted cash flows expected to result from the use of these assets. If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The estimated fair value of the assets is measured by estimating the present value of the future discounted cash flows to be generated.

During the nine months ended September 30, 2014 and as a result of continuing losses and depressed utilization rates, the Company determined that triggering event had occurred at Essex Crane, which caused the Company to determine if an impairment of these long-lived assets to be held and used was necessary.

Application of the long-lived asset to be held and used impairment test requires judgment, including the identification of the primary asset, identification of the lowest level of identifiable cash flows that are largely independent of the cash flows of other assets and liabilities and the future cash flows of the long-lived assets to be held and used. The Company identified its crawler crane rental equipment fleet as the primary asset as it is the basis of all revenue generating activities for Essex Crane, its replacement would require a significant level of investment and its remaining useful life significantly exceeds the remaining useful life of all other assets. The lowest level of identifiable cash flows within the rental equipment fleet is at the equipment model level. Each equipment model group is capable of producing cash flows without other complementary assets and each asset within the specific equipment model groups is interchangeable with any other asset within that equipment model group. The Company tested the recoverability of the rental equipment assets to be held and used by model using an undiscounted cash flow approach dependent primarily upon estimates of future rental income, orderly liquidation value and discount rates. Cash flows for each equipment model group considered the possibility of continuing to rent the assets and selling the assets in orderly transactions in the future or at the end of their remaining useful lives. The Company estimated that the future cash flows generated by each of the equipment model groups exceeded the carrying value of the assets and no impairment was recorded for assets to be held and used as of September 30, 2014.

The Company also assessed whether a triggering event for potential impairment of its other equipment assets existed, and it was determined that no such event occurred for these assets during the nine months ended September 30, 2014.

Long-lived Assets - Held for Sale

During the three months ended September 30, 2014, the Company agreed to terms to sell certain traditional crawler crane rental equipment assets. Under the agreed upon terms, the rental equipment assets, in their current condition, will be sold in three groups with the first group sale completed during the three months ended September 30, 2014 and the remaining group sales to be completed during each of the three months ended December 31, 2014 and March 31, 2015, respectively. As a result of the agreed upon sales terms, the Company has determined that these long-lived rental equipment assets shall be classified as held for sale. The held for sale assets are classified within the Company's equipment rentals segment.

As a result of the held for sale classification, the Company performed an impairment analysis of the long-lived rental equipment assets held for sale. Application of the long-lived asset held for sale impairment test requires comparing the carrying value of the the asset to its fair value less cost to sell. The Company determined that the fair value of the assets was equal to the agreed upon sales price. The carrying value of the assets exceeded the fair value of the assets less cost to sell resulting in the Company recording an impairment charge of approximately $0.8 million during the three months ended September 30, 2014.

Recently Issued and Adopted Accounting Pronouncements

Recently Issued and Adopted Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued guidance for reporting discontinued operations and disposals of components of an entity. The guidance raises the threshold for a disposal to qualify as a discontinued operation by requiring that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale be reported as such. The amendments also expand the disclosure requirements regarding the assets, liabilities, revenues and expenses of discontinued operations and add new disclosure requirements for individually significant dispositions that do not qualify as discontinued operations. The amendments are effective prospectively for fiscal years beginning after December 15, 2014, and interim reporting periods within those years (early adoption is permitted only for disposals that have not been previously reported). Adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial results.

In May 2014, FASB issued guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for fiscal years and interim periods beginning after December 15, 2016. Early adoption is not permitted. We expect to adopt this guidance when effective, and the impact on our financial statements is not currently estimable.