Hyster-Yale Materials Handling Earnings 2019-09-30

HY 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

Comparables ($MM TTM)
Ticker	M Cap	Assets	Liab	Rev	G Profit	Net Inc	EBITDA	EV	G Margin	EV/EBITDA	ROA
CMCO	952	1,090	638	864	301	53	112	1,187	35%	10.6	5%
HY	903	1,921	1,351	3,312	504	34	97	1,208	15%	12.5	2%
WNC	874	1,375	873	2,322	291	62	152	1,229	13%	8.1	5%
PLOW	864	724	429	546	162	0	33	1,102	30%	33.1	0%
ASTE	710	849	228	1,204	217	-2	8	715	18%	95.1	-0%
MTW	599	1,653	1,033	1,888	345	-48	27	874	18%	32.0	-3%
BLBD	521	408	470	1,007	130	28	55	705	13%	12.8	7%
GENC	185	162	10	87	20	14	19	178	22%	9.4	9%
ASV	17	82	49	129	15	-33	-28	26	12%	-0.9	-40%
MLR

Document

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_______________________________________________________________________________________________________________________________________________________________________________________________________

FORM 10-Q



(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended:	September 30, 2019



☐		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 000-54799



HYSTER-YALE MATERIALS HANDLING, INC.
	(Exact name of registrant as specified in its charter)
Delaware		31-1637659
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

5875 LANDERBROOK DRIVE, SUITE 300
CLEVELAND	(440)
OH	449-9600	44124-4069
(Address of principal executive offices)	(Registrant's telephone number, including area code)	(Zip code)
	N/A
	(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 Par Value Per Share	HY	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 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 ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

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



Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☑

Number of shares of Class A Common Stock outstanding at October 25, 2019: 12,800,420

Number of shares of Class B Common Stock outstanding at October 25, 2019: 3,866,497

HYSTER-YALE MATERIALS HANDLING, INC.

TABLE OF CONTENTS



			Page Number
Part I.	FINANCIAL INFORMATION

	Item 1	Financial Statements

		Unaudited Condensed Consolidated Balance Sheets	2

		Unaudited Condensed Consolidated Statements of Operations	3

		Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)	4

		Unaudited Condensed Consolidated Statements of Cash Flows	5

		Unaudited Condensed Consolidated Statements of Changes in Equity	6

		Notes to Unaudited Condensed Consolidated Financial Statements	8

	Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	26

	Item 3	Quantitative and Qualitative Disclosures About Market Risk	38

	Item 4	Controls and Procedures	38

Part II.	OTHER INFORMATION

	Item 1	Legal Proceedings	38

	Item 1A	Risk Factors	38

	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38

	Item 3	Defaults Upon Senior Securities	38

	Item 4	Mine Safety Disclosures	38

	Item 5	Other Information	38

	Item 6	Exhibits	38

	Signatures		40

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS



	SEPTEMBER 30 2019			DECEMBER 31 2018
	(In millions, except share data)
ASSETS
Current Assets
Cash and cash equivalents	$	62.8		$	83.7
Accounts receivable, net	454.6			465.5
Inventories, net	591.8			533.6
Prepaid expenses and other	48.9			48.8
Total Current Assets	1,158.1			1,131.6
Property, Plant and Equipment, Net	295.1			296.2
Intangible Assets, Net	60.0			67.7
Goodwill	103.7			108.3
Deferred Income Taxes	31.2			26.3
Investment in Unconsolidated Affiliates	79.0			75.6
Other Non-current Assets	111.1			36.4
Total Assets	$	1,838.2		$	1,742.1
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	388.7		$	415.5
Accounts payable, affiliates	14.7			21.3
Revolving credit facilities	66.0			13.3
Current maturities of long-term debt	84.1			78.1
Accrued payroll	50.3			56.3
Deferred revenue	50.6			37.6
Other current liabilities	184.3			154.1
Total Current Liabilities	838.7			776.2
Long-term Debt	201.0			210.1
Self-insurance Liabilities	27.2			25.2
Pension Obligations	15.7			23.1
Deferred Income Taxes	15.6			17.8
Other Long-term Liabilities	197.5			130.2
Total Liabilities	1,295.7			1,182.6
Stockholders' Equity
Common stock:
Class A, par value $0.01 per share, 12,791,440 shares outstanding (2018 - 12,682,755 shares outstanding)	0.1			0.1
Class B, par value $0.01 per share, convertible into Class A on a one-for-one basis, 3,870,365 shares outstanding (2018 - 3,877,967 shares outstanding)	0.1			0.1
Capital in excess of par value	319.6			321.5
Treasury stock	(16.3		)	(24.1		)
Retained earnings	429.3			407.3
Accumulated other comprehensive loss	(222.7		)	(177.5		)
Total Stockholders' Equity	510.1			527.4
Noncontrolling Interests	32.4			32.1
Total Equity	542.5			559.5
Total Liabilities and Equity	$	1,838.2		$	1,742.1

See notes to unaudited condensed consolidated financial statements.

Table of Contents

HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



	THREE MONTHS ENDED						NINE MONTHS ENDED
	SEPTEMBER 30						SEPTEMBER 30
	2019			2018			2019			2018
	(In millions, except per share data)
Revenues	$	766.0		$	783.9		$	2,457.0		$	2,338.3
Cost of sales	631.0			666.2			2,056.4			1,963.2
Gross Profit	135.0			117.7			400.6			375.1
Operating Expenses
Selling, general and administrative expenses	115.5			105.5			354.8			332.9
Operating Profit	19.5			12.2			45.8			42.2
Other (income) expense
Interest expense	5.3			3.6			14.9			11.6
Income from unconsolidated affiliates	(2.1		)	(2.2		)	(7.9		)	(7.4		)
Other, net	(1.7		)	0.6			(5.2		)	(1.5		)
	1.5			2.0			1.8			2.7
Income Before Income Taxes	18.0			10.2			44.0			39.5
Income tax provision (benefit)	4.9			(4.7		)	10.8			4.0
Net Income	13.1			14.9			33.2			35.5
Net (income) loss attributable to noncontrolling interests	(0.3		)	0.5			(0.8		)	0.4
Net Income Attributable to Stockholders	$	12.8		$	15.4		$	32.4		$	35.9

Basic Earnings per Share	$	0.77		$	0.93		$	1.95		$	2.17
Diluted Earnings per Share	$	0.76		$	0.93		$	1.94		$	2.16

Dividends per Share	$	0.3175		$	0.3100		$	0.9450		$	0.9225

Basic Weighted Average Shares Outstanding	16.660			16.555			16.638			16.534
Diluted Weighted Average Shares Outstanding	16.735			16.601			16.709			16.586

See notes to unaudited condensed consolidated financial statements.

Table of Contents

HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)



	THREE MONTHS ENDED						NINE MONTHS ENDED
	SEPTEMBER 30						SEPTEMBER 30
	2019			2018			2019			2018
	(In millions)
Net Income	$	13.1		$	14.9		$	33.2		$	35.5
Other comprehensive income (loss)
Foreign currency translation adjustment	(23.3		)	(8.3		)	(23.1		)	(26.7		)
Current period cash flow hedging activity	(15.6		)	(3.3		)	(25.7		)	(6.8		)
Reclassification of hedging activities into earnings	1.8			(0.3		)	5.1			(1.5		)
Current period pension adjustment	—			0.5			—			1.2
Reclassification of pension into earnings	0.8			0.8			2.4			2.2
Comprehensive Income (Loss)	$	(23.2	)	$	4.3		$	(8.1	)	$	3.9
Other comprehensive (income) loss attributable to noncontrolling interests
Net (income) loss attributable to noncontrolling interests	(0.3		)	0.5			(0.8		)	0.4
Foreign currency translation adjustment attributable to noncontrolling interests	0.3			0.1			0.3			1.2
Comprehensive Income (Loss) Attributable to Stockholders	$	(23.2	)	$	4.9		$	(8.6	)	$	5.5

See notes to unaudited condensed consolidated financial statements.

Table of Contents

HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



	NINE MONTHS ENDED
	SEPTEMBER 30
	2019			2018
	(In millions)
Operating Activities
Net income	$	33.2		$	35.5
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization	32.3			32.4
Amortization of deferred financing fees	1.4			1.3
Deferred income taxes	(1.3		)	1.1
Stock-based compensation	6.1			2.5
Dividends from unconsolidated affiliates	5.1			22.2
Other non-current liabilities	(3.7		)	(7.7		)
Other	2.6			6.9
Working capital changes, excluding the effect of business acquisitions:
Accounts receivable	(3.5		)	56.3
Inventories	(73.6		)	(87.4		)
Other current assets	(4.2		)	(6.0		)
Accounts payable	(18.3		)	35.7
Other current liabilities	6.6			(0.5		)
Net cash provided by (used for) operating activities	(17.3		)	92.3
Investing Activities
Expenditures for property, plant and equipment	(31.4		)	(24.7		)
Proceeds from the sale of assets	6.9			5.4
Business acquisitions, net of cash acquired	—			(78.0		)
Net cash used for investing activities	(24.5		)	(97.3		)
Financing Activities
Additions to long-term debt	52.1			43.7
Reductions of long-term debt	(63.5		)	(110.6		)
Net change to revolving credit agreements	52.9			(4.6		)
Cash dividends paid	(15.7		)	(15.3		)
Cash dividends paid to noncontrolling interest	(0.2		)	(0.3		)
Financing fees paid	(0.4		)	(0.6		)
Purchase of treasury stock	(0.2		)	(0.6		)
Net cash provided by (used for) financing activities	25.0			(88.3		)
Effect of exchange rate changes on cash	(4.1		)	(4.9		)
Cash and Cash Equivalents
Decrease for the period	(20.9		)	(98.2		)
Balance at the beginning of the period	83.7			220.1
Balance at the end of the period	$	62.8		$	121.9

See notes to unaudited condensed consolidated financial statements.

Table of Contents

HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



															Accumulated Other Comprehensive Income (Loss)
	Class A Common Stock		Class B Common Stock		Treasury Stock			Capital in Excess of Par Value			Retained Earnings			Foreign Currency Translation Adjustment				Deferred Gain on AFS Securities		Deferred Gain (Loss) on Cash Flow Hedging				Pension Adjustment				Total Stockholders' Equity				Noncontrolling Interests				Total Equity
	(In millions)
Balance, June 30, 2018	$	0.1	$	0.1	$	(24.8	)	$	318.4		$	403.4			$	(76.9	)	$	—		$	(6.2	)		$	(56.8	)		$	557.3			$	32.6			$	589.9
Stock-based compensation	—		—		—			0.6			—				—			—			—				—				0.6				—				0.6
Stock issued under stock compensation plans	—		—		0.3			(0.3		)	—				—			—			—				—				—				—				—
Net income (loss)	—		—		—			—			15.4				—			—			—				—				15.4				(0.5		)		14.9
Cash dividends	—		—		—			—			(5.2		)		—			—			—				—				(5.2		)		—				(5.2		)
Current period other comprehensive income	—		—		—			—			—				(8.3		)	—			(3.3		)		0.5				(11.1		)		—				(11.1		)
Reclassification adjustment to net income	—		—		—			—			—				—			—			(0.3		)		0.8				0.5				—				0.5
Acquisition of a business	—		—		—			—			—				—			—			—				—				—				0.2				0.2
Foreign currency translation on noncontrolling interest	—		—		—			—			—				—			—			—				—				—				(0.1		)		(0.1		)
Balance, September 30, 2018	$	0.1	$	0.1	$	(24.5	)	$	318.7		$	413.6			$	(85.2	)	$	—		$	(9.8	)		$	(55.5	)		$	557.5			$	32.2			$	589.7

Balance, June 30, 2019	$	0.1	$	0.1	$	(16.7	)	$	318.7		$	421.8			$	(85.7	)	$	—		$	(21.4	)		$	(79.3	)		$	537.6			$	32.5			$	570.1
Stock-based compensation	—		—		—			1.3			—				—			—			—				—				1.3				—				1.3
Stock issued under stock compensation plans	—		—		0.4			(0.4		)	—				—			—			—				—				—				—				—
Net income	—		—		—			—			12.8				—			—			—				—				12.8				0.3				13.1
Cash dividends	—		—		—			—			(5.3		)		—			—			—				—				(5.3		)		(0.1		)		(5.4		)
Current period other comprehensive income (loss)	—		—		—			—			—				(23.3		)	—			(15.6		)		—				(38.9		)		—				(38.9		)
Reclassification adjustment to net income	—		—		—			—			—				—			—			1.8				0.8				2.6				—				2.6
Foreign currency translation on noncontrolling interest	—		—		—			—			—				—			—			—				—				—				(0.3		)		(0.3		)
Balance, September 30, 2019	$	0.1	$	0.1	$	(16.3	)	$	319.6		$	429.3			$	(109.0	)	$	—		$	(35.2	)		$	(78.5	)		$	510.1			$	32.4			$	542.5

See notes to unaudited condensed consolidated financial statements.

Table of Contents

HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



															Accumulated Other Comprehensive Income (Loss)
	Class A Common Stock		Class B Common Stock		Treasury Stock			Capital in Excess of Par Value			Retained Earnings			Foreign Currency Translation Adjustment				Deferred Gain on AFS Securities			Deferred Gain (Loss) on Cash Flow Hedging				Pension Adjustment				Total Stockholders' Equity				Noncontrolling Interests				Total Equity
	(In millions)
Balance, December 31, 2017	$	0.1	$	0.1	$	(31.5	)	$	323.8		$	389.1			$	(58.5	)	$	2.8			$	(1.5	)		$	(58.9	)		$	565.5			$	6.9			$	572.4
Cumulative effect of change in accounting	—		—		—			—			3.9				—			(2.8		)		—				—				1.1				—				1.1
Stock-based compensation	—		—		—			2.5			—				—			—				—				—				2.5				—				2.5
Stock issued under stock compensation plans	—		—		7.6			(7.6		)	—				—			—				—				—				—				—				—
Purchase of treasury stock	—		—		(0.6		)	—			—				—							—				—				(0.6		)		—				(0.6		)
Net income (loss)	—		—		—			—			35.9				—			—				—				—				35.9				(0.4		)		35.5
Cash dividends	—		—		—			—			(15.3		)		—			—				—				—				(15.3		)		(0.3		)		(15.6		)
Current period other comprehensive income (loss)	—		—		—			—			—				(26.7		)	—				(6.8		)		1.2				(32.3		)		—				(32.3		)
Reclassification adjustment to net income	—		—		—			—			—				—			—				(1.5		)		2.2				0.7				—				0.7
Acquisition of a business	—		—		—			—			—				—			—				—				—				—				27.2				27.2
Foreign currency translation on noncontrolling interest	—		—		—			—			—				—			—				—				—				—				(1.2		)		(1.2		)
Balance, September 30, 2018	$	0.1	$	0.1	$	(24.5	)	$	318.7		$	413.6			$	(85.2	)	$	—			$	(9.8	)		$	(55.5	)		$	557.5			$	32.2			$	589.7

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$0.00	17	$903

10-Q	2019-10-30	Quarter: 2019-09-30
10-Q	2019-07-30	Quarter: 2019-06-30
10-Q	2019-04-30	Quarter: 2019-03-31
10-K	2019-02-26	Annual: 2018-12-31
10-Q	2018-10-30	Quarter: 2018-09-30
10-Q	2018-07-31	Quarter: 2018-06-30
10-Q	2018-05-01	Quarter: 2018-03-31
10-K	2018-02-27	Annual: 2017-12-31
10-Q	2017-11-03	Quarter: 2017-09-30
10-Q	2017-08-01	Quarter: 2017-06-30
10-Q	2017-05-02	Quarter: 2017-03-31
10-K	2017-02-28	Annual: 2016-12-31
10-Q	2016-11-01	Quarter: 2016-09-30
10-Q	2016-08-08	Quarter: 2016-06-30
10-Q	2016-04-27	Quarter: 2016-03-31
10-K	2016-02-17	Annual: 2015-12-31
10-Q	2015-10-28	Quarter: 2015-09-30
10-Q	2015-07-29	Quarter: 2015-06-30
10-Q	2015-04-29	Quarter: 2015-03-31
10-K	2015-02-19	Annual: 2014-12-31
10-Q	2014-10-29	Quarter: 2014-09-30
10-Q	2014-07-30	Quarter: 2014-06-30
10-Q	2014-04-30	Quarter: 2014-03-31
10-K	2014-02-19	Annual: 2013-12-31
10-Q	2013-10-30	Quarter: 2013-09-30
10-Q	2013-07-31	Quarter: 2013-06-30
10-Q	2013-05-01	Quarter: 2013-03-31
10-K	2013-02-19	Annual: 2012-12-31
10-Q	2012-11-01	Quarter: 2012-09-30

8-K	2019-11-24	Officers, Exhibits
8-K	2019-11-19	Earnings, Regulation FD, Exhibits
8-K	2019-11-04	Earnings, Regulation FD, Exhibits
8-K	2019-10-29	Earnings, Exhibits
8-K	2019-10-29	Earnings, Regulation FD, Exhibits
8-K	2019-10-03	Officers
8-K	2019-07-31	Earnings, Regulation FD, Exhibits
8-K	2019-07-30	Earnings, Exhibits
8-K	2019-07-30	Earnings, Regulation FD, Exhibits
8-K	2019-05-17	Earnings, Regulation FD, Exhibits
8-K	2019-05-17	Shareholder Vote
8-K	2019-04-30	Earnings, Regulation FD, Exhibits
8-K	2019-04-30	Earnings, Exhibits
8-K	2019-04-03	Enter Agreement, Off-BS Arrangement
8-K	2019-03-26	Earnings, Regulation FD, Exhibits
8-K	2019-02-28	Earnings, Regulation FD, Exhibits
8-K	2019-02-26	Earnings, Exhibits
8-K	2019-02-26	Earnings, Regulation FD, Exhibits
8-K	2018-11-07	Earnings, Regulation FD, Exhibits
8-K	2018-10-30	Earnings, Exhibits
8-K	2018-10-30	Earnings, Regulation FD, Exhibits
8-K	2018-09-17	Enter Agreement
8-K	2018-08-24	Earnings, Regulation FD, Exhibits
8-K	2018-07-31	Earnings, Exhibits
8-K	2018-07-31	Earnings, Regulation FD, Exhibits
8-K	2018-05-24	Earnings, Regulation FD, Exhibits
8-K	2018-05-09	Shareholder Vote
8-K	2018-05-01	Earnings, Exhibits
8-K	2018-05-01	Earnings, Regulation FD, Exhibits
8-K	2018-03-23	Earnings, Regulation FD, Exhibits
8-K	2018-03-14	Enter Agreement, Off-BS Arrangement
8-K	2018-03-01	Earnings, Regulation FD, Exhibits
8-K	2018-02-27	Earnings, Regulation FD, Exhibits
8-K	2018-02-27	Earnings, Exhibits

EX-31.1	hyex311q32019.htm
EX-31.2	hyex312q32019.htm
EX-32	hyex32q32019.htm