HYSTER-YALE MATERIALS HANDLING, INC. [HY] Filings

10-Q 1 hy-20220331.htm 10-Q hy-20220331

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:	March 31, 2022


☐						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)

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 April 29, 2022: 13,116,712

Number of shares of Class B Common Stock outstanding at April 29, 2022: 3,792,665

HYSTER-YALE MATERIALS HANDLING, INC.

TABLE OF CONTENTS

Page Number

Part I.

FINANCIAL INFORMATION

Item 1

Financial Statements

Unaudited Condensed Consolidated Balance Sheets

Unaudited Condensed Consolidated Statements of Operations

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

Unaudited Condensed Consolidated Statements of Cash Flows

Unaudited Condensed Consolidated Statements of Changes in Equity

Notes to Unaudited Condensed Consolidated Financial Statements

Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3

Quantitative and Qualitative Disclosures About Market Risk

Item 4

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3

Defaults Upon Senior Securities

Item 4

Mine Safety Disclosures

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


	MARCH 31 2022		DECEMBER 31 2021
	(In millions, except share data)
ASSETS
Current Assets
Cash and cash equivalents	$	65.1	$	65.5
Accounts receivable, net	491.9		457.4
Inventories, net	826.4		781.0
Prepaid expenses and other	62.6		46.1
Total Current Assets	1,446.0		1,350.0
Property, Plant and Equipment, Net	330.2		330.5
Intangible Assets, Net	48.9		50.7
Goodwill	55.4		56.5
Deferred Income Taxes	4.6		3.7
Investment in Unconsolidated Affiliates	61.1		71.7
Other Non-current Assets	111.1		107.0
Total Assets	$	2,057.3	$	1,970.1
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	578.6	$	517.0
Accounts payable, affiliates	35.0		24.4
Revolving credit facilities	115.0		165.3
Current maturities of long-term debt	104.9		91.5
Accrued payroll	55.2		57.1

Deferred revenue	130.1		49.7
Other current liabilities	213.8		199.6
Total Current Liabilities	1,232.6		1,104.6
Long-term Debt	259.1		261.7
Self-insurance Liabilities	35.3		33.5
Pension Obligations	5.9		6.2
Deferred Income Taxes	12.5		12.7
Other Long-term Liabilities	160.4		168.5
Total Liabilities	1,705.8		1,587.2
Stockholders' Equity
Common stock:
Class A, par value $0.01 per share, 13,104,121 shares outstanding (2021 - 12,994,106 shares outstanding)	0.1		0.1
Class B, par value $0.01 per share, convertible into Class A on a one-for-one basis, 3,795,421 shares outstanding (2021 - 3,832,794 shares outstanding)	0.1		0.1
Capital in excess of par value	312.3		315.1
Treasury stock	—		(4.5)
Retained earnings	218.2		248.6
Accumulated other comprehensive loss	(205.8)		(202.3)
Total Stockholders' Equity	324.9		357.1
Noncontrolling Interests	26.6		25.8
Total Equity	351.5		382.9
Total Liabilities and Equity	$	2,057.3	$	1,970.1

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
	MARCH 31
		2022		2021
		(In millions, except per share data)
Revenues		$	827.6	$	732.2
Cost of sales		726.4		613.8
Gross Profit		101.2		118.4
Operating Expenses
Selling, general and administrative expenses		119.5		115.3

Operating Profit (Loss)		(18.3)		3.1
Other (income) expense
Interest expense		5.1		2.8
Income from unconsolidated affiliates		(2.9)		(2.0)
Other, net		0.8		(6.2)
		3.0		(5.4)
Income (Loss) Before Income Taxes		(21.3)		8.5
Income tax provision		2.9		2.4
Net Income (Loss)		(24.2)		6.1
Net income attributable to noncontrolling interests		(0.8)		(0.5)
Net Income (Loss) Attributable to Stockholders		$	(25.0)	$	5.6

Basic Earnings (Loss) per Share		$	(1.48)	$	0.33
Diluted Earnings (Loss) per Share		$	(1.48)	$	0.33

Dividends per Share		$	0.3225	$	0.3175

Basic Weighted Average Shares Outstanding		16.849		16.810
Diluted Weighted Average Shares Outstanding		16.849		16.842

See notes to unaudited condensed consolidated financial statements.

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HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	THREE MONTHS ENDED
	MARCH 31
		2022		2021
		(In millions)
Net Income (Loss)		$	(24.2)	$	6.1
Other comprehensive income (loss)
Foreign currency translation adjustment		(4.6)		(24.8)
Current period cash flow hedging activity		(1.8)		(14.3)
Reclassification of hedging activities into earnings		1.7		(0.6)

Reclassification of pension into earnings		1.2		1.1
Comprehensive Loss		$	(27.7)	$	(32.5)
Other comprehensive income (loss) attributable to noncontrolling interests
Net income attributable to noncontrolling interests		(0.8)		(0.5)
Foreign currency translation adjustment attributable to noncontrolling interests		—		1.0
Comprehensive Loss Attributable to Stockholders		$	(28.5)	$	(32.0)

See notes to unaudited condensed consolidated financial statements.

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HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	THREE MONTHS ENDED
	MARCH 31
	2022		2021
	(In millions)
Operating Activities
Net income (loss)	$	(24.2)	$	6.1
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization	11.1		11.7
Amortization of deferred financing fees	0.3		0.4
Deferred income taxes	(1.6)		(0.4)

Gain on the sale of investment	—		(4.6)

Stock-based compensation	1.7		3.5
Dividends from unconsolidated affiliates	11.0		5.5
Other non-current liabilities	(2.9)		(4.8)
Other	(4.9)		(7.8)
Working capital changes:
Accounts receivable	(33.0)		(37.8)
Inventories	(41.8)		(88.1)
Other current assets	(11.0)		(15.0)
Accounts payable	72.0		68.2
Other current liabilities	82.4		16.0
Net cash provided by (used for) operating activities	59.1		(47.1)
Investing Activities
Expenditures for property, plant and equipment	(9.7)		(7.7)
Proceeds from the sale of assets	0.4		1.5
Proceeds from the sale of investment	—		15.7



Net cash provided by (used for) investing activities	(9.3)		9.5
Financing Activities
Additions to long-term debt	21.2		12.0
Reductions of long-term debt	(16.8)		(14.6)
Net change to revolving credit agreements	(49.9)		(0.1)
Cash dividends paid	(5.4)		(5.3)




Net cash used for financing activities	(50.9)		(8.0)
Effect of exchange rate changes on cash	0.7		(2.8)
Cash and Cash Equivalents
Decrease for the period	(0.4)		(48.4)
Balance at the beginning of the period	65.5		151.4
Balance at the end of the period	$	65.1	$	103.0

See notes to unaudited condensed consolidated financial statements.

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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 (Loss) on Cash Flow Hedging			Pension Adjustment			Total Stockholders' Equity			Noncontrolling Interests			Total Equity
	(In millions)
Balance, December 31, 2020	$	0.1	$	0.1	$	(6.0)	$	312.6	$	443.2		$	(57.6)		$	12.5		$	(88.0)		$	616.9		$	34.2		$	651.1

Stock-based compensation	—		—		—		3.5		—			—			—			—			3.5			—			3.5
Stock issued under stock compensation plans	—		—		0.5		(0.5)		—			—			—			—			—			—			—

Net income	—		—		—		—		5.6			—			—			—			5.6			0.5			6.1
Cash dividends	—		—		—		—		(5.3)			—			—			—			(5.3)			—			(5.3)
Current period other comprehensive loss	—		—		—		—		—			(24.8)			(14.3)			—			(39.1)			—			(39.1)
Reclassification adjustment to net income (loss)	—		—		—		—		—			—			(0.6)			1.1			0.5			—			0.5


Foreign currency translation on noncontrolling interest	—		—		—		—		—			—			—			—			—			(1.0)			(1.0)
Balance, March 31, 2021	$	0.1	$	0.1	$	(5.5)	$	315.6	$	443.5		$	(82.4)		$	(2.4)		$	(86.9)		$	582.1		$	33.7		$	615.8

Balance, December 31, 2021	$	0.1	$	0.1	$	(4.5)	$	315.1	$	248.6		$	(97.7)		$	(32.0)		$	(72.6)		$	357.1		$	25.8		$	382.9

Stock-based compensation	—		—		—		1.7		—			—			—			—			1.7			—			1.7
Stock issued under stock compensation plans	—		—		4.5		(4.5)		—			—			—			—			—			—			—

Net income (loss)	—		—		—		—		(25.0)			—			—			—			(25.0)			0.8			(24.2)
Cash dividends	—		—		—		—		(5.4)			—			—			—			(5.4)			—			(5.4)
Current period other comprehensive loss	—		—		—		—		—			(4.6)			(1.8)			—			(6.4)			—			(6.4)
Reclassification adjustment to net income (loss)	—		—		—		—		—			—			1.7			1.2			2.9			—			2.9




Balance, March 31, 2022	$	0.1	$	0.1	$	—	$	312.3	$	218.2		$	(102.3)		$	(32.1)		$	(71.4)		$	324.9		$	26.6		$	351.5

See notes to unaudited condensed consolidated financial statements.

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HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

(Tabular Amounts in Millions, Except Per Share and Percentage Data)

Note 1—Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Hyster-Yale Materials Handling, Inc., a Delaware corporation, and the accounts of Hyster-Yale's wholly owned domestic and international subsidiaries and majority-owned joint ventures (collectively, "Hyster-Yale" or the "Company"). All intercompany accounts and transactions among the consolidated companies are eliminated in consolidation.

The Company, through its wholly owned operating subsidiary, Hyster-Yale Group, Inc. ("HYG"), designs, engineers, manufactures, sells and services a comprehensive line of lift trucks, attachments and aftermarket parts marketed globally primarily under the Hyster® and Yale® brand names, mainly to independent Hyster® and Yale® retail dealerships. Lift trucks and component parts are manufactured in the United States, China, Northern Ireland, Mexico, the Netherlands, Brazil, the Philippines, Italy, Japan and Vietnam.

The Company operates Bolzoni S.p.A. ("Bolzoni"). Bolzoni is a leading worldwide producer and distributor of attachments, forks and lift tables marketed under the Bolzoni®, Auramo® and Meyer® brand names. Bolzoni products are manufactured in the United States, Italy, China, Germany and Finland. Through the design, production and distribution of a wide range of attachments, Bolzoni has a strong presence in the market niche of lift truck attachments and industrial material handling.

The Company operates Nuvera Fuel Cells, LLC ("Nuvera"). Nuvera is an alternative-power technology company focused on the design, manufacture and sale of hydrogen fuel cell stacks and engines.

Investments in Sumitomo NACCO Forklift Co., Ltd. (“SN”), a 50%-owned joint venture, and HYG Financial Services, Inc. ("HYGFS"), a 20%-owned joint venture, are accounted for by the equity method. SN operates manufacturing facilities in Japan, the Philippines and Vietnam from which the Company purchases certain components, service parts and lift trucks. Sumitomo Heavy Industries, Ltd. ("Sumitomo") owns the remaining 50% interest in SN. Each stockholder of SN is entitled to appoint directors representing 50% of the vote of SN’s board of directors. All matters related to policies and programs of operation, manufacturing and sales activities require mutual agreement between the Company and Sumitomo prior to a vote of SN’s board of directors. HYGFS is a joint venture with Wells Fargo Financial Leasing, Inc. (“WF”), formed primarily for the purpose of providing financial services to independent Hyster® and Yale® lift truck dealers and National Account customers in the United States. National Account customers are large customers with centralized purchasing and geographically dispersed operations in multiple dealer territories. The Company’s percentage share of the net income or loss from these equity investments is reported on the line “Income from unconsolidated affiliates” in the “Other (income) expense” section of the unaudited condensed consolidated statements of operations.

These financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company as of March 31, 2022 and the results of its operations and changes in equity for the three months ended March 31, 2022 and 2021, and the results of its cash flows for the three months ended March 31, 2022 and 2021 have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

The accompanying unaudited condensed consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date but does not include all of the information or notes required by GAAP for complete financial statements.

Note 2—Recently Issued Accounting Standards

As of January 1, 2022, the Company did not adopt any recent accounting standard updates ("ASU") which had a material effect on the Company's financial position, results of operations, cash flows or related disclosures.

Table of Contents

The following table provides a brief description of ASUs not yet adopted:

Standard

Description

Required Date of Adoption

Effect on the financial statements or other significant matters

ASU 2020-04, Reference Rate Reform (Topic 848)

The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

From the date of issuance through December 31, 2022

The Company is currently evaluating the guidance and the effect on its financial position, results of operations, cash flows and related disclosures.

Note 3—Revenue

Revenue is recognized when obligations under the terms of a contract with the customer are satisfied, which occurs when control of the trucks, parts, or services are transferred to the customer. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. The satisfaction of performance obligations under the terms of a revenue contract generally gives rise for the right to payment from the customer. The Company's standard payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized and when payment is due is not significant. Given the insignificant days between revenue recognition and receipt of payment, financing components do not exist between the Company and its customers. Taxes collected from customers are excluded from revenue. The estimated costs of product warranties are recognized as expense when the products are sold. See Note 10 for further information on product warranties.

The majority of the Company's sales contracts contain performance obligations satisfied at a point in time when title and risks and rewards of ownership have transferred to the customer. Revenues for service contracts are recognized as the services are provided.

The Company also records variable consideration in the form of estimated reductions to revenues for customer programs and incentive offerings, including special pricing agreements, promotions and other volume-based incentives. Lift truck sales revenue is recorded net of estimated discounts. The estimated discount amount is based upon historical experience and trend analysis for each lift truck model. In addition to standard discounts, dealers can also request additional discounts that allow them to offer price concessions to customers. From time to time, the Company offers special incentives to increase market share or dealer stock and offers certain customers volume rebates if a specified cumulative level of purchases is obtained.

For contracts with customers that include multiple performance obligations, judgment is required to determine whether performance obligations specified in these contracts are distinct and should be accounted for as separate revenue transactions for recognition purposes. For such arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are generally determined based on the prices charged to customers or using expected cost plus margin. Impairment losses recognized on receivables or contract assets were not significant for the three months ended March 31, 2022 and 2021.

The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are reported on the line “Selling, general and administrative expenses” in the unaudited condensed consolidated statements of operations.

The Company pays for shipping and handling activities regardless of when control is transferred and has elected to account for shipping and handling as activities to fulfill the promise to transfer the good, rather than a promised service. These costs are reported on the line “Cost of sales” in the unaudited condensed consolidated statements of operations. The following table disaggregates revenue by category:




















	THREE MONTHS ENDED
	MARCH 31, 2022
	Lift truck business
	Americas		EMEA		JAPIC		Bolzoni		Nuvera		Elims		Total
Dealer sales	$	289.9	$	130.6	$	46.7	$	—	$	—	$	—	$	467.2
Direct customer sales	99.5		6.1		—		—		—		—		105.6
Aftermarket sales	145.1		27.6		4.9		—		—		—		177.6
Other	23.2		5.4		0.1		95.1		0.6		(47.2)		77.2
Total Revenues	$	557.7	$	169.7	$	51.7	$	95.1	$	0.6	$	(47.2)	$	827.6

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	THREE MONTHS ENDED
	MARCH 31, 2021
	Lift truck business
	Americas		EMEA		JAPIC		Bolzoni		Nuvera		Elims		Total
Dealer sales	$	220.7	$	136.8	$	52.6	$	—	$	—	$	—	$	410.1
Direct customer sales	102.4		1.9		—		—		—		—		104.3
Aftermarket sales	108.8		26.9		7.8		—		—		—		143.5
Other	27.8		5.1		0.1		79.5		—		(38.2)		74.3
Total Revenues	$	459.7	$	170.7	$	60.5	$	79.5	$	—	$	(38.2)	$	732.2

Dealer sales are recognized when the Company transfers control based on the shipping terms of the contract, which is generally when the truck is shipped from the manufacturing facility to the dealer. The majority of direct customer sales are to National Account customers. In these transactions, the Company transfers control and recognizes revenue when it delivers the product to the customer according to the terms of the contract. Aftermarket sales represent parts sales, extended warranty and maintenance services. For the sale of aftermarket parts, the Company transfers control and recognizes revenue when parts are shipped to the customer. When customers are given the right to return eligible parts and accessories, the Company estimates the expected returns based on an analysis of historical experience. The Company adjusts estimated revenues at the earlier of when the most likely amount of consideration expected to be received changes or when the consideration becomes fixed. The Company recognizes revenue for extended warranty and maintenance agreements based on the standalone selling price over the life of the contract, which reflects the costs to perform under these contracts and corresponds with, and thereby depicts, the transfer of control to the customer. Bolzoni revenue from external customers is primarily the sale of attachments to customers. In these transactions, the Company transfers control and recognizes revenue according to the shipping terms of the contract. In the United States, Bolzoni also has revenue for sales of lift truck components to Lift Truck plants. Nuvera's revenues include development funding from third-party development agreements and the sale of fuel cell stacks and engines to third parties and to Lift Truck. In all revenue transactions, the Company receives cash equal to the invoice price and amount of consideration received and the revenue recognized may vary with changes in marketing incentives. Intercompany revenues between Bolzoni, Nuvera and the lift truck business have been eliminated.

Deferred Revenue: The Company defers revenue for transactions that have not met the criteria for recognition at the time payment is collected, including extended warranties and maintenance contracts. In addition, for certain products, services and customer types, the Company collects payment prior to the transfer of control to the customer. The increase in customer deposits relates mainly to down payments on customer orders.


	Deferred Revenue
Balance, December 31, 2021	$	76.2
Customer deposits and billings	88.8
Revenue recognized	(11.4)
Foreign currency effect	1.0
Balance, March 31, 2022	$	154.6

Note 4—Business Segments

The Company’s reportable segments for the lift truck business include the following three management units: the Americas, EMEA and JAPIC. Americas includes operations in the United States, Canada, Mexico, Brazil, Latin America and its corporate headquarters. EMEA includes operations in Europe, the Middle East and Africa. JAPIC includes operations in the Asia and Pacific regions, including China, as well as the equity earnings of SN operations. Certain amounts are allocated to these geographic management units and are included in the segment results presented below, including product development costs, corporate headquarter's expenses and certain information technology infrastructure costs. These allocations among geographic management units are determined by senior management and not directly incurred by the geographic operations. In addition, other costs are incurred directly by these geographic management units based upon the location of the manufacturing plant or sales units, including manufacturing variances, product liability, warranty and sales discounts, which may not be associated with the geographic management unit of the ultimate end user sales location where revenues and margins are reported. Therefore, the reported results of each segment for the lift truck business cannot be considered stand-alone entities as all segments are inter-related and integrate into a single global lift truck business.

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The Company reports the results of both Bolzoni and Nuvera as separate segments. Intercompany sales between Nuvera, Bolzoni and the lift truck business have been eliminated.

Financial information for each reportable segment is presented in the following table:


	THREE MONTHS ENDED
	MARCH 31
		2022		2021
Revenues from external customers
Americas		$	557.7	$	459.7
EMEA		169.7		170.7
JAPIC		51.7		60.5
Lift truck business		779.1		690.9
Bolzoni		95.1		79.5
Nuvera		0.6		—
Eliminations		(47.2)		(38.2)
Total		$	827.6	$	732.2
Gross profit (loss)
Americas		$	67.0	$	75.3
EMEA		14.4		23.5
JAPIC		4.5		6.6
Lift truck business		85.9		105.4
Bolzoni		18.8		16.4
Nuvera		(1.9)		(3.3)
Eliminations		(1.6)		(0.1)
Total		$	101.2	$	118.4

Operating profit (loss)
Americas		$	4.4	$	14.6
EMEA		(11.4)		0.1
JAPIC		(3.7)		(2.5)
Lift truck business		(10.7)		12.2
Bolzoni		2.1		0.8
Nuvera		(8.1)		(9.8)
Eliminations		(1.6)		(0.1)
Total		$	(18.3)	$	3.1
Net income (loss) attributable to stockholders
Americas		$	1.1	$	9.5
EMEA		(7.0)		0.9
JAPIC		(4.0)		(2.2)
Lift truck business		(9.9)		8.2
Bolzoni		1.3		0.6
Nuvera		(8.1)		(3.8)
Eliminations		(8.3)		0.6
Total		$	(25.0)	$	5.6

Note 5—Income Taxes

The income tax provision includes U.S. federal, state and local, and foreign income taxes and is generally based on the application of a forecasted annual income tax rate applied to the current quarter's year-to-date pre-tax income or loss. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company's annual earnings or losses, taxing jurisdictions in which the earnings or losses will be generated, the impact of state and local income taxes, the Company's ability to use tax credits and net operating loss carryforwards, carrybacks, capital loss

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carryforwards, and available tax planning alternatives. Discrete items, including the effect of changes in tax laws, tax rates and certain circumstances with respect to valuation allowances or the tax effect of other unusual or nonrecurring transactions or adjustments are reflected in the period in which they occur as an addition to, or reduction from, the income tax provision, rather than included in the estimated annual effective income tax rate. Additionally, the Company's interim effective income tax rate is computed and applied without regard to pre-tax losses where such losses are not expected to generate a current-year tax benefit.

A reconciliation of the U.S. federal statutory rate to the reported income tax rate is as follows:


	THREE MONTHS ENDED
	MARCH 31
		2022			2021
Income (loss) before income taxes		$	(21.3)		$	8.5
Statutory taxes (21%)		$	(4.5)		$	1.8
Interim adjustment		(2.4)			0.3
Permanent adjustments:




Valuation allowance		10.9			0.4


Other		(0.3)			—









Discrete items		(0.8)			(0.1)
Income tax provision		$	2.9		$	2.4
Reported income tax rate		(13.6)		%	28.2		%

The Company's reported income tax rate differs from the U.S. federal statutory tax rate primarily as a result of recording additional valuation allowances and an interim adjustment from pretax losses for which no tax benefit was recognized.

Note 6—Reclassifications from OCI

The following table summarizes reclassifications out of Accumulated Other Comprehensive Income ("OCI") as recorded in the unaudited condensed consolidated statements of operations:


Details about OCI Components		Amount Reclassified from OCI					Affected Line Item in the Statement Where Net Income Is Presented
	THREE MONTHS ENDED
	MARCH 31
			2022		2021
Gain (loss) on cash flow hedges:
Interest rate contracts			$	0.9	$	0.6	Interest expense

Foreign exchange contracts			(2.5)		0.1		Cost of sales
Total before tax			(1.6)		0.7		Income (loss) before income taxes
Tax benefit			(0.1)		(0.1)		Income tax provision
Net of tax			$	(1.7)	$	0.6	Net income (loss)
Amortization of defined benefit pension items:
Actuarial loss			$	(1.2)	$	(1.4)	Other, net


Total before tax			(1.2)		(1.4)		Income (loss) before income taxes
Tax expense			—		0.3		Income tax provision
Net of tax			$	(1.2)	$	(1.1)	Net income (loss)
Total reclassifications for the period			$	(2.9)	$	(0.5)

Note 7—Financial Instruments and Derivative Financial Instruments

Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term maturities of these instruments. The fair values of revolving credit agreements and long-term debt, excluding finance leases, were determined using current rates offered for similar obligations taking into account company credit risk. This

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valuation methodology is Level 2 as defined in the fair value hierarchy. At March 31, 2022, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $449.8 million and $450.9 million, respectively. At December 31, 2021, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $486.4 million and $490.3 million, respectively.

Derivative Financial Instruments

The Company uses forward foreign currency exchange contracts to partially reduce risks related to transactions denominated in foreign currencies. These contracts hedge firm commitments and forecasted transactions relating to cash flows associated with sales and purchases denominated in non-functional currencies. The Company offsets fair value amounts related to foreign currency exchange contracts executed with the same counterparty. Changes in the fair value of forward foreign currency exchange contracts that are effective as hedges are recorded in OCI. Deferred gains or losses are reclassified from OCI to the unaudited condensed consolidated statements of operations in the same period as the gains or losses from the underlying transactions are recorded and are generally recognized in cost of sales.

The Company periodically enters into foreign currency exchange contracts that do not meet the criteria for hedge accounting. These derivatives are used to reduce the Company's exposure to foreign currency risk related to forecasted purchase or sales transactions or forecasted intercompany cash payments or settlements. Gains and losses on these derivatives are generally recognized in cost of sales.

The Company periodically enters into forward foreign currency contracts that are designated as net investment hedges of the Company's net investment in its foreign subsidiaries. For derivative instruments that are designated and qualified as a hedge of a net investment in foreign currency, the gain or loss is reported in OCI as part of the cumulative translation adjustment to the extent it is effective. The Company utilizes the forward-rate method of assessing hedge effectiveness.

The Company uses interest rate swap agreements to partially reduce risks related to floating rate financing agreements that are subject to changes in the market rate of interest. Terms of the interest rate swap agreements require the Company to receive a variable interest rate and pay a fixed interest rate. The Company's interest rate swap agreements and the associated variable rate financings are predominately based upon the one-month LIBOR. Changes in the fair value of interest rate swap agreements that are effective as hedges are recorded in OCI. Deferred gains or losses are reclassified from OCI to the unaudited condensed consolidated statements of operations in the same period as the gains or losses from the underlying transactions are recorded and are generally recognized in interest expense.

Cash flows from hedging activities are reported in the unaudited condensed consolidated statements of cash flows with the same classification as the hedged item, generally as a component of cash flows from operations.

The Company measures its derivatives at fair value on a recurring basis using significant observable inputs. This valuation methodology is Level 2 as defined in the fair value hierarchy. The Company uses a present value technique that incorporates yield curves and foreign currency spot rates to value its derivatives and also incorporates the effect of the Company's and its counterparties' credit risk into the valuation.

The Company does not currently hold any nonderivative instruments designated as hedges or any derivatives designated as fair value hedges.

Foreign Currency Derivatives: The Company held forward foreign currency exchange contracts with total notional amounts of $1.2 billion at March 31, 2022, primarily denominated in euros, Japanese yen, U.S. dollars, Chinese renminbi, Mexican pesos, British pounds, Swedish kroner, and Australian dollars. The Company held forward foreign currency exchange contracts with total notional amounts of $1.1 billion at December 31, 2021, primarily denominated in euros, Japanese yen, U.S. dollars, Chinese renminbi, British pounds, Mexican pesos, Swedish kroner and Australian dollars. The fair value of these contracts approximated a net liability of $39.6 million and $26.7 million at March 31, 2022 and December 31, 2021, respectively.

Forward foreign currency exchange contracts that qualify for hedge accounting are generally used to hedge transactions expected to occur within the next 36 months. The mark-to-market effect of forward foreign currency exchange contracts that are considered effective as hedges has been included in OCI. Based on market valuations at March 31, 2022, $20.6 million of the amount of net deferred loss included in OCI at March 31, 2022 is expected to be reclassified as expense into the unaudited condensed consolidated statements of operations over the next twelve months, as the transactions occur.

Interest Rate Derivatives: The Company holds certain contracts that hedge interest payments on its $225.0 million term loan borrowings. In addition, the Company holds certain contracts that hedge interest payments on Bolzoni's debt.

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The following table summarizes the notional amounts, related rates, excluding spreads, and remaining terms of interest rate swap agreements at March 31, 2022 and December 31, 2021:


Notional Amount				Average Fixed Rate
MARCH 31		DECEMBER 31		MARCH 31		DECEMBER 31
2022		2021		2022		2021		Term at March 31, 2022
$	180.0	$	180.0	1.68	%	1.68	%	Extending to May 2027
$	17.8	$	16.0	(0.14)	%	(0.14)	%	Extending to September 2025

The fair value of all interest rate swap agreements was a net asset of $6.2 million and a net liability $3.2 million at March 31, 2022 and December 31, 2021, respectively. The mark-to-market effect of interest rate swap agreements that are considered effective as hedges has been included in OCI. Based on market valuations at March 31, 2022, $1.0 million of the amount included in OCI as net deferred loss is expected to be reclassified as expense in the unaudited condensed consolidated statements of operations over the next twelve months, as cash flow payments are made in accordance with the interest rate swap agreements.

The following table summarizes the fair value of derivative instruments reflected on a gross basis by contract as recorded in the unaudited condensed consolidated balance sheets:


	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	MARCH 31 2022		DECEMBER 31 2021		Balance Sheet Location	MARCH 31 2022		DECEMBER 31 2021
Derivatives designated as hedging instruments
Cash Flow Hedges
Interest rate swap agreements
Current	Prepaid expenses and other	$	0.3	$	—	Prepaid expenses and other	$	—	$	—
Current	Other current liabilities	—		0.3		Other current liabilities	—		2.2
Long-term	Other non-current assets	5.9		0.1		Other non-current assets	—		0.1
Long-term	Other long-term liabilities	—		0.6		Other long-term liabilities	—		1.9
				—
Foreign currency exchange contracts

Current	Other current liabilities	3.1		3.6		Other current liabilities	23.7		17.0
Long-term	Other non-current assets	0.3		—		Other non-current assets	0.2		—
	Other long-term liabilities	1.7

HYSTER-YALE MATERIALS HANDLING, INC. [HY] Filings
10-Q	[2022-05-03]
10-K	[2022-02-28]
10-Q	[2021-11-02]
10-Q	[2021-08-03]
10-Q	[2021-05-04]
10-K	[2021-02-24]
10-Q	[2020-11-03]
10-Q	[2020-08-04]
10-Q	[2020-05-21]
10-K	[2020-02-25]
10-Q	[2019-10-30]
10-Q	[2019-07-30]
10-Q	[2019-04-30]
10-K	[2019-02-26]
10-Q	[2018-10-30]
10-Q	[2018-07-31]
10-Q	[2018-05-01]
10-K	[2018-02-27]
10-Q	[2017-11-03]
10-Q	[2017-08-01]
10-Q	[2017-05-02]
10-K	[2017-02-28]
10-Q	[2016-11-01]
10-Q	[2016-08-08]
10-Q	[2016-04-27]
10-K	[2016-02-17]
10-Q	[2015-10-28]
10-Q	[2015-07-29]
10-Q	[2015-04-29]
10-K	[2015-02-19]
10-Q	[2014-10-29]
10-Q	[2014-07-30]
10-Q	[2014-04-30]
10-K	[2014-02-19]
10-Q	[2013-10-30]
10-Q	[2013-07-31]
10-Q	[2013-05-01]
10-K	[2013-02-19]
10-Q	[2012-11-01]
S-1	[2012-06-28]