HYSTER-YALE MATERIALS HANDLING ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 RESULTS
Hyster-Yale Materials Handling (HY) reported record consolidated revenues of $985.2 million for Q4 2022, an increase of 18.7% year-over-year. The company achieved a consolidated operating profit of $19.8 million and net income of $7.6 million, rebounding from losses in previous quarters.
The lift truck segment saw increased average sales prices and profitability despite ongoing component shortages. Looking ahead, a substantial increase in consolidated net income is anticipated for the full year 2023 as the company improves profitability across its Lift Truck and Bolzoni businesses.
- Record Q4 2022 revenues of $985.2 million, up 18.7% YoY.
- Returned to profitability with Q4 net income of $7.6 million, compared to a loss of $103.3 million in Q4 2021.
- Improved Lift Truck operating profit significantly ahead of expectations despite market challenges.
- Continued supply chain challenges and component shortages affecting production.
- Bolzoni recorded a loss on the sale of a subsidiary amounting to $2.4 million.
Q4 2022 Highlights:
- Record consolidated revenues of
$985.2 million 18.7% over the prior year quarter due to higher pricing and favorable sales mix across all lift truck segments - Consolidated operating profit of
$19.8 million $7.6 million - Lift Truck operating profit significantly ahead of Company expectations despite component shortages and unfavorable currency effects
- Average sales price per unit in backlog increased
33.6% over Q4 2021 and6.8% versus Q3 2022 as long-standing, lower-priced backlog orders were fulfilled Bolzoni returned to profitability despite a$2.4 million
Full- Year 2023 Outlook:
- Substantial consolidated net income expected for 2023 full year as a result of significantly improved profitability at the Lift Truck and
Bolzoni businesses versus 2022
Three Months Ended | Year Ended | ||||||||||
($ in millions except per share amounts) | Change | Change | |||||||||
Revenues | |||||||||||
Operating Profit (Loss) | |||||||||||
Net Income (Loss) | |||||||||||
Diluted Earnings (Loss) /share | |||||||||||
The fourth-quarter 2022 operating profit includes a
Lift Truck Business Results
Revenues and shipments by geographic segment were as follows:
($ in millions) | Q4 2022 | Q4 2021 | Change | |||
Revenues | ||||||
| ||||||
EMEA(1) | ||||||
JAPIC(1) |
(1) The |
(Rounded to nearest hundred) | Q4 2022 | Q4 2021 | Change | |||
Unit Shipments | 27,100 | 26,700 | 400 | |||
| 16,000 | 15,400 | 600 | |||
EMEA | 7,800 | 7,900 | (100) | |||
JAPIC | 3,300 | 3,400 | (100) | |||
Fourth-quarter 2022 lift truck revenues increased by
Unit shipments increased nearly
2022 full-year lift truck shipments were approximately 100,800 units. This compares with approximately 94,900 units in 2021. Despite significant supply chain challenges throughout 2022, the Company increased production by about 6,000 units year-over-year, achieving the second highest annual shipment level in its history.
Gross profit and operating profit (loss) by geographic segment were as follows:
($ in millions) | Q4 2022 | Q4 2021 | Change | |||
Gross Profit | ||||||
| ||||||
EMEA | ||||||
JAPIC | ||||||
Operating Profit (Loss) | ||||||
| ||||||
EMEA | ||||||
JAPIC | $— | |||||
The Lift Truck business returned to profitability in the fourth-quarter 2022, reporting higher-than-anticipated gross and operating profits. The improvements were led by pricing benefits of about
Geographically, the
EMEA operating results declined from the prior year as inflation and supply chain constraints caused by the
Operating results in JAPIC, excluding the prior year non-cash goodwill impairment charge of
Bolzoni Results
($ in millions) | Q4 2022 | Q4 2021 | Change | |||
Revenues | ||||||
Gross Profit | ||||||
Operating Profit (Loss) | ||||||
Nuvera Results
($ in millions) | Q4 2022 | Q4 2021 | Change | |||
Revenues | ||||||
Gross Profit (Loss) | ||||||
Operating Loss | ||||||
Nuvera's fourth-quarter 2022 revenues increased primarily as a result of after-market component and engine sales to the Lift Truck Business, as well as increased sales to third parties.
Nuvera's fourth-quarter 2022 operating loss was lower than the 2021 fourth quarter primarily due to the prior year's
Balance Sheet and Liquidity
For the full-year 2022, the Company generated consolidated cash flow before financing activities of
As of
The Company had unused borrowing capacity of approximately
Market Commentary
The global economic outlook remains constrained and economic activity appears to be decelerating in many parts of the world. This global downturn is due to several factors, including tight monetary policies in various countries designed to contain inflation, as well as uncertainties around
Looking ahead, the global lift truck market is expected to decline for the full-year 2023 compared with 2022 in all regions except JAPIC, which is anticipated to increase modestly year-over-year. However, 2023's global market unit volumes are expected to remain relatively strong and above pre-pandemic levels in all regions except EMEA.
Several years of extraordinary lift truck market growth stretched supplier capacity to, and in some cases beyond, its limits. A moderate market slowdown could allow the lift truck component supply base to meet their supply requirements more effectively and allow the Company to work down its extended backlog.
Operational Perspectives - Lift Truck Business
Lift truck unit bookings and backlog were as follows:
($ in millions, except Avg. sales price) | Q4 2022 | Q4 2021 | Q4 '22 vs '21 | Q3 2022 | Q4 vs Q3 | |
Unit Bookings | 21,000 | 33,200 | (12,200) | 20,700 | 300 | |
Unit Bookings $ Value | ||||||
Average Sales Price/Unit booked | ||||||
Unit Backlog** | 102,100 | 105,300 | (3,200) | 108,200 | (6,100) | |
Unit Backlog $ Value** | ||||||
Average Sales Price/Unit of backlog |
** |
As a result of several factors, including the large but declining market, a focus on booking orders with solid margins and the Company's extended lead times, fourth-quarter 2022 lift truck bookings decreased significantly from robust prior-year levels. However, fourth-quarter 2022 bookings increased modestly from third-quarter 2022 largely due to a seasonal rebound in EMEA and better-than-expected fourth-quarter market conditions in the
Full-year 2023 production and shipment volumes are expected to increase versus 2022 helping to alleviate the substantial backlog level and reduce lead times as anticipated continued supply chain improvements are achieved. Despite these expected improvements, lengthy lead times are expected to remain. However, they should help mitigate the impact of a recessionary economic environment on the business.
Order selectivity has resulted in higher average prices and margins for both unit bookings and backlog. As the Company works through its backlog in 2023, lower-margin units are expected to ship during the 2023 first quarter and the majority of 2023 shipments are anticipated to be produced from the currently existing higher-margin backlog. As a result, average unit margins are expected to continue to improve, including into 2024 when new bookings with anticipated higher margins are expected to be produced.
The Company continues to experience material and labor cost increases, but the rate of increase has slowed. Forward economic indicators suggest inflationary pressures have begun to abate and cost inflation is expected to gradually moderate throughout 2023, absent any unanticipated effects from geopolitical events and public health crises. Due to the substantial inflationary pressure over the past two years, the Lift Truck business implemented several price increases. In 2023, the Company expects a positive price-to-current cost ratio, in part to address ongoing cost increases in certain areas. The Company will continue to monitor material and labor costs closely, as well as the impact of tariffs, and adjust pricing accordingly. As a result of abating cost increases and the current significant backlog level with its expected built-in margin increases over time, the Company believes unit margins should increase significantly in 2023 in aggregate versus 2022 and will lead to significant improvements in operating profit in 2023. Lift Truck operating profit in each of the 2023 quarters is expected to exceed 2022 fourth quarter results, with improvements following normal business seasonality patterns.
The above factors, as well as the benefits from the Company's ongoing strategic initiatives as they mature, are expected to lead to a significant increase in revenues and a substantial operating profit in 2023 at the Lift Truck business. These assumptions, however, are highly sensitive to the effect of various market forces, particularly those that impact global supply chains.
Strategic Perspectives - Lift Truck
From a broader perspective, the Lift Truck Business has three core strategies that are expected to transform the Company's competitiveness, market position and economic performance over time:
- To provide the lowest cost of ownership while enhancing customer productivity. This is expected to be achieved by further expanding a wide variety of vehicle innovations including: new modular and scalable product families, truck electrification projects and technology advancements in product automation, power options, telemetry and operator assist systems;
- Be the leader in the delivery of industry- and customer-focused solutions, by transforming the Company's sales approach to meet a wide variety of customer needs across a broad set of end markets; and
- Be the leader in independent distribution, by focusing on effectively coordinating dealer and major accounts coverage, dealer excellence and ensuring outstanding dealer ownership globally.
The Company continues to make progress on its high priority projects. Notably, in fourth-quarter 2022, the Company announced that its first hydrogen fuel cell-powered container handler, powered by Nuvera® fuel cell engines, began its testing pilot at the
Operational and Strategic Perspectives -
Over the course of 2023,
Operational and Strategic Perspectives - Nuvera
Nuvera's core strategy is to be a leader in the fuel cell business. Nuvera continues to focus on placing 45kW and 60kW fuel cell engines in niche, heavy-duty vehicle applications with expected significant fuel cell adoption potential. Nuvera announced several projects in 2022 with various third parties to test Nuvera® engines in heavy-duty applications, including the
In 2023, Nuvera expects continued focus on ramping up customer product demonstrations and customer bookings, which are expected to result in higher sales and moderately higher costs. Combined, this is expected to generate a loss comparable to 2022 but significantly enhance the foundation for future technology adoption and improved financial returns.
Consolidated Outlook
On a consolidated basis, the Company is nearing completion on its efforts to build out the lower-priced, lower-margin backlog units held over from prior periods. As a result, continued margin expansion is expected to lead to substantial operating profit and net income for the 2023 full year. These expectations are based on the Company's ability to effectively manage ongoing component shortages, modestly increase production levels and see a reasonable stabilization of material and freight costs.
The Company's steps to improve profitability are producing tangible results. Efforts to reduce inventory and generate cash are expected to show substantial progress in the second half of 2023. The Company remains committed to enhancing its cash flows, with ongoing action plans to improve future results including continued discipline over capital expenditures and operating expenses. Capital expenditures are expected to be approximately
Working capital continues to be an area of intense focus for the Company. Inventory levels remain above historical pre-pandemic levels due to prior production delays because of parts and labor shortages. In the first half of 2023, reducing inventory levels will be a key focus area. Efforts to maximize use of on-hand inventory, coupled with material purchases below expected production rates, should help to reduce excess inventory levels around the Company significantly in both the first and second half of 2023. Supply constraints continue to be an issue sporadically around the globe, but the Company expects continued improvements as 2023 progresses. As a result of these actions, the Company expects a significant increase in cash flow before financing activities for the full-year 2023 compared with 2022.
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Conference Call
In conjunction with this news release, the management of
Annual Report on Form 10-K
Non-GAAP and Other Measures
This release contains non-GAAP financial measures. Included in this release are reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with
For purposes of this news release, discussions about net income (loss) refer to net income (loss) attributable to stockholders.
Forward-looking Statements Disclaimer
The statements contained in this news release that are not historical facts are "forward-looking statements." These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation: (1) delays in delivery and other supply chain disruptions, or increases in costs as a result of inflation or otherwise, including materials and transportation costs and shortages, the imposition of tariffs, or the renewal of tariff exclusions, on raw materials or sourced products, and labor, or changes in or unavailability of quality suppliers or transporters, including the impacts of the foregoing risks on the Company's liquidity, (2) delays in manufacturing and delivery schedules, (3) customer acceptance of pricing, (4) any preventive or protective actions taken by governmental authorities related to the COVID-19 pandemic, and any unfavorable effects of the COVID-19 pandemic on either the Company's or its suppliers plants' capabilities to produce and ship products, (5) unfavorable effects of geopolitical and legislative developments on global operations, including without limitation the entry into new trade agreements and the imposition of tariffs and/or economic sanctions, as well as armed conflicts, including the
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FINANCIAL HIGHLIGHTS | |||||||
Three Months Ended | Twelve Months Ended | ||||||
2022 | 2021 | 2022 | 2021 | ||||
(In millions, except per share data) | |||||||
Revenues | $ 985.2 | $ 829.7 | $ 3,548.3 | $ 3,075.7 | |||
Cost of sales | 838.5 | 766.2 | 3,114.4 | 2,712.3 | |||
Gross Profit | 146.7 | 63.5 | 433.9 | 363.4 | |||
Selling, general and administrative expenses | 126.9 | 114.9 | 473.0 | 450.1 | |||
Impairment loss | — | 55.6 | — | 65.6 | |||
Operating Profit (Loss) | 19.8 | (107.0) | (39.1) | (152.3) | |||
Other (income) expense | |||||||
Interest expense | 9.5 | 4.8 | 28.4 | 15.5 | |||
Income from unconsolidated affiliates | (1.4) | (3.5) | (11.0) | (11.7) | |||
Other, net | (1.4) | (1.3) | 5.9 | (1.2) | |||
Income (Loss) before Income Taxes | 13.1 | (107.0) | (62.4) | (154.9) | |||
Income tax expense | 5.2 | 7.8 | 9.2 | 28.3 | |||
Net (income) loss attributable to noncontrolling interests | 0.1 | 11.5 | (1.5) | 10.2 | |||
Net income attributable to redeemable noncontrolling interests | (0.2) | — | (0.5) | — | |||
Accrued dividend to redeemable noncontrolling interests | (0.2) | — | (0.5) | — | |||
Net Income (Loss) Attributable to Stockholders | $ 7.6 | $ (103.3) | $ (74.1) | $ (173.0) | |||
Basic Earnings (Loss) per Share | $ 0.45 | $ (6.14) | $ (4.38) | $ (10.29) | |||
Diluted Earnings (Loss) per Share | $ 0.44 | $ (6.14) | $ (4.38) | $ (10.29) | |||
Basic Weighted Average Shares Outstanding | 16.936 | 16.825 | 16.901 | 16.818 | |||
Diluted Weighted Average Shares Outstanding | 17.137 | 16.825 | 16.901 | 16.818 | |||
EBITDA RECONCILIATION | |||||||||
Quarter Ended | |||||||||
Year | |||||||||
(In millions) | |||||||||
Net Income (Loss) Attributable to Stockholders | $ (25.0) | $ (19.4) | $ (37.3) | $ 7.6 | $ (74.1) | ||||
Noncontrolling interest income and dividends | 0.8 | 0.7 | 0.7 | 0.3 | 2.5 | ||||
Income tax expense (benefit) | 2.9 | (3.1) | 4.2 | 5.2 | 9.2 | ||||
Interest expense | 5.1 | 6.1 | 7.7 | 9.5 | 28.4 | ||||
Interest income | (0.2) | (0.2) | (0.4) | (0.3) | (1.1) | ||||
Depreciation and amortization expense | 11.1 | 11.0 | 10.9 | 10.4 | 43.4 | ||||
EBITDA* | $ (5.3) | $ (4.9) | $ (14.2) | $ 32.7 | $ 8.3 | ||||
*EBITDA in this press release is provided solely as a supplemental disclosure. EBITDA does not represent net income (loss), as defined by
FINANCIAL HIGHLIGHTS | |||||||
Three Months Ended | Twelve Months Ended | ||||||
2022 | 2021 | 2022 | 2021 | ||||
(In millions) | |||||||
Revenues | |||||||
| $ 679.8 | $ 551.5 | $ 2,405.4 | $ 1,984.6 | |||
EMEA | 190.3 | 179.7 | 704.2 | 678.9 | |||
JAPIC | 67.9 | 52.3 | 250.0 | 233.9 | |||
Lift Truck Business | $ 938.0 | $ 783.5 | $ 3,359.6 | $ 2,897.4 | |||
92.0 | 93.5 | 355.7 | 347.8 | ||||
Nuvera | 1.3 | 0.2 | 3.4 | 0.7 | |||
Eliminations | (46.1) | (47.5) | (170.4) | (170.2) | |||
Total | $ 985.2 | $ 829.7 | $ 3,548.3 | $ 3,075.7 | |||
Gross profit (loss) | |||||||
| $ 110.1 | $ 31.6 | $ 303.4 | $ 221.8 | |||
EMEA | 11.0 | 18.3 | 45.0 | 86.9 | |||
JAPIC | 8.1 | 4.5 | 22.6 | 21.2 | |||
Lift Truck Business | $ 129.2 | $ 54.4 | $ 371.0 | $ 329.9 | |||
19.3 | 14.1 | 70.7 | 61.5 | ||||
Nuvera | (1.7) | (4.4) | (7.2) | (26.7) | |||
Eliminations | (0.1) | (0.6) | (0.6) | (1.3) | |||
Total | $ 146.7 | $ 63.5 | $ 433.9 | $ 363.4 | |||
Operating profit (loss) | |||||||
| $ 38.4 | $ (31.0) | $ 46.8 | $ (19.7) | |||
EMEA | (11.2) | (2.6) | (46.6) | 0.3 | |||
JAPIC | — | (59.6) | (10.6) | (67.5) | |||
Lift Truck Business | $ 27.2 | $ (93.2) | $ (10.4) | $ (86.9) | |||
2.0 | (2.2) | 6.2 | (1.8) | ||||
Nuvera | (9.3) | (11.0) | (34.3) | (62.3) | |||
Eliminations | (0.1) | (0.6) | (0.6) | (1.3) | |||
Total | $ 19.8 | $ (107.0) | $ (39.1) | $ (152.3) | |||
FINANCIAL HIGHLIGHTS | |||||||
CASH FLOW, CAPITAL STRUCTURE AND WORKING CAPITAL | |||||||
Twelve Months Ended | |||||||
2022 | 2021 | ||||||
(In millions) | |||||||
Net cash provided by (used for) operating activities | $ 40.6 | $ (253.5) | |||||
Net cash used for investing activities | (35.4) | (24.5) | |||||
Cash Flow Before Financing Activities | $ 5.2 | $ (278.0) | |||||
(In millions) | |||||||
Debt | $ 552.9 | $ 545.0 | $ 580.6 | $ 518.5 | |||
Cash | 59.0 | 68.6 | 75.6 | 65.5 | |||
Net Debt | $ 493.9 | $ 476.4 | $ 505.0 | $ 453.0 | |||
(In millions) | |||||||
Accounts Receivable | $ 523.6 | $ 460.1 | $ 531.2 | $ 457.4 | |||
Inventory | 799.5 | 779.0 | 790.2 | 781.0 | |||
Accounts Payable | 607.4 | 552.9 | 569.5 | 541.4 | |||
Working Capital | $ 715.7 | $ 686.2 | $ 751.9 | $ 697.0 | |||
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