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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, 2023 |
OR | | | | | | | | |
☐ | | 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 27, 2023: 13,715,705
Number of shares of Class B Common Stock outstanding at October 27, 2023: 3,469,925
HYSTER-YALE MATERIALS HANDLING, INC.
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 2023 | | DECEMBER 31 2022 |
| (In millions, except share data) |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 78.2 | | | $ | 59.0 | |
Accounts receivable, net | 512.0 | | | 523.6 | |
Inventories, net | 815.4 | | | 799.5 | |
Prepaid expenses and other | 95.3 | | | 76.6 | |
Total Current Assets | 1,500.9 | | | 1,458.7 | |
Property, Plant and Equipment, Net | 298.7 | | | 310.0 | |
Intangible Assets, Net | 39.8 | | | 42.7 | |
Goodwill | 51.0 | | | 51.3 | |
Deferred Income Taxes | 2.6 | | | 2.6 | |
Investments in Unconsolidated Affiliates | 54.2 | | | 59.4 | |
Other Non-current Assets | 105.9 | | | 101.5 | |
Total Assets | $ | 2,053.1 | | | $ | 2,026.2 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 540.2 | | | $ | 585.8 | |
Accounts payable, affiliates | 9.4 | | | 21.6 | |
Revolving credit facilities | 102.3 | | | 137.1 | |
Short-term debt and current maturities of long-term debt | 165.1 | | | 148.8 | |
Accrued payroll | 70.3 | | | 64.4 | |
| | | |
Deferred revenue | 99.1 | | | 139.8 | |
Other current liabilities | 313.0 | | | 245.4 | |
Total Current Liabilities | 1,299.4 | | | 1,342.9 | |
Long-term Debt | 243.2 | | | 267.0 | |
Self-insurance Liabilities | 41.6 | | | 33.5 | |
Pension Obligations | 5.9 | | | 6.2 | |
Deferred Income Taxes | 11.7 | | | 13.4 | |
Other Long-term Liabilities | 130.7 | | | 138.1 | |
Total Liabilities | 1,732.5 | | | 1,801.1 | |
Temporary Equity | | | |
Redeemable Noncontrolling Interest | 14.4 | | | 14.2 | |
Stockholders' Equity | | | |
Common stock: | | | |
Class A, par value $0.01 per share, 13,706,991 shares outstanding (2022 - 13,154,918 shares outstanding) | 0.1 | | | 0.1 | |
Class B, par value $0.01 per share, convertible into Class A on a one-for-one basis, 3,470,290 shares outstanding (2022 - 3,783,597 shares outstanding) | 0.1 | | | 0.1 | |
Capital in excess of par value | 312.4 | | | 297.7 | |
| | | |
Treasury stock | — | | | — | |
Retained earnings | 236.7 | | | 152.7 | |
Accumulated other comprehensive loss | (244.9) | | | (246.2) | |
Total Stockholders' Equity | 304.4 | | | 204.4 | |
Noncontrolling Interests | 1.8 | | | 6.5 | |
Total Permanent Equity | 306.2 | | | 210.9 | |
Total Liabilities and Equity | $ | 2,053.1 | | | $ | 2,026.2 | |
See notes to unaudited condensed consolidated financial statements.
HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| | | | | | | | | | | | | | | | | | | | | | | |
| THREE MONTHS ENDED | | NINE MONTHS ENDED |
| SEPTEMBER 30 | | SEPTEMBER 30 |
| 2023 | | 2022 | | 2023 | | 2022 |
| (In millions, except per share data) |
Revenues | $ | 1,001.2 | | | $ | 840.1 | | | $ | 3,091.1 | | | $ | 2,563.1 | |
Cost of sales | 797.6 | | | 753.2 | | | 2,515.2 | | | 2,275.9 | |
Gross Profit | 203.6 | | | 86.9 | | | 575.9 | | | 287.2 | |
Operating Expenses | | | | | | | |
Selling, general and administrative expenses | 145.0 | | | 111.8 | | | 415.9 | | | 346.1 | |
| | | | | | | |
Operating Profit (Loss) | 58.6 | | | (24.9) | | | 160.0 | | | (58.9) | |
Other (income) expense | | | | | | | |
Interest expense | 9.6 | | | 7.7 | | | 28.2 | | | 18.9 | |
Income from unconsolidated affiliates | (2.9) | | | (2.6) | | | (7.8) | | | (9.6) | |
Other, net | (0.7) | | | 2.4 | | | 0.3 | | | 7.3 | |
| 6.0 | | | 7.5 | | | 20.7 | | | 16.6 | |
Income (Loss) Before Income Taxes | 52.6 | | | (32.4) | | | 139.3 | | | (75.5) | |
Income tax expense | 16.2 | | | 4.2 | | | 36.9 | | | 4.0 | |
Net Income (Loss) | 36.4 | | | (36.6) | | | 102.4 | | | (79.5) | |
Net income attributable to noncontrolling interests | (0.1) | | | (0.1) | | | (0.3) | | | (1.6) | |
Net income attributable to redeemable noncontrolling interests | (0.3) | | | (0.3) | | | (0.7) | | | (0.3) | |
Accrued dividend to redeemable noncontrolling interests | (0.2) | | | (0.3) | | | (0.7) | | | (0.3) | |
Net Income (Loss) Attributable to Stockholders | $ | 35.8 | | | $ | (37.3) | | | $ | 100.7 | | | $ | (81.7) | |
| | | | | | | |
Basic Earnings (Loss) per Share | $ | 2.08 | | | $ | (2.20) | | | $ | 5.88 | | | $ | (4.84) | |
Diluted Earnings (Loss) per Share | $ | 2.06 | | | $ | (2.20) | | | $ | 5.82 | | | $ | (4.84) | |
| | | | | | | |
Dividends per Share | $ | 0.3250 | | | $ | 0.3225 | | | $ | 0.9725 | | | $ | 0.9675 | |
| | | | | | | |
Basic Weighted Average Shares Outstanding | 17.175 | | | 16.920 | | | 17.122 | | | 16.890 | |
Diluted Weighted Average Shares Outstanding | 17.413 | | | 16.920 | | | 17.315 | | | 16.890 | |
See notes to unaudited condensed consolidated financial statements.
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 |
| 2023 | | 2022 | | 2023 | | 2022 |
| (In millions) |
Net Income (Loss) | $ | 36.4 | | | $ | (36.6) | | | $ | 102.4 | | | $ | (79.5) | |
Other comprehensive income (loss) | | | | | | | |
Foreign currency translation adjustment | (12.0) | | | (30.2) | | | (6.4) | | | (75.1) | |
Current period cash flow hedging activity | (15.1) | | | (26.1) | | | (16.6) | | | (73.8) | |
Reclassification of hedging activities into earnings | 6.8 | | | 12.8 | | | 22.1 | | | 20.2 | |
Current period pension adjustment | — | | | (4.2) | | | — | | | (4.2) | |
Reclassification of pension into earnings | 0.8 | | | 1.1 | | | 2.2 | | | 3.5 | |
Comprehensive Income (Loss) | $ | 16.9 | | | $ | (83.2) | | | $ | 103.7 | | | $ | (208.9) | |
| | | | | | | |
Net income attributable to noncontrolling interests | (0.1) | | | (0.1) | | | (0.3) | | | (1.6) | |
Net income attributable to redeemable noncontrolling interests | (0.3) | | | (0.3) | | | (0.7) | | | (0.3) | |
Accrued dividend to redeemable noncontrolling interests | (0.2) | | | (0.3) | | | (0.7) | | | (0.3) | |
Foreign currency translation adjustment attributable to noncontrolling interests | 0.1 | | | 0.5 | | | 0.2 | | | 2.0 | |
Comprehensive Income (Loss) Attributable to Stockholders | $ | 16.4 | | | $ | (83.4) | | | $ | 102.2 | | | $ | (209.1) | |
See notes to unaudited condensed consolidated financial statements.
HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | |
| NINE MONTHS ENDED |
| SEPTEMBER 30 |
| 2023 | | 2022 |
| (In millions) |
Operating Activities | | | |
Net income (loss) | $ | 102.4 | | | $ | (79.5) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | |
Depreciation and amortization | 33.8 | | | 33.0 | |
Amortization of deferred financing fees | 1.0 | | | 1.0 | |
Deferred income taxes | (0.7) | | | (2.1) | |
| | | |
| | | |
| | | |
Stock-based compensation | 14.0 | | | 3.7 | |
Dividends from unconsolidated affiliates | 10.5 | | | 15.6 | |
Other non-current liabilities | 5.6 | | | (9.1) | |
Other | 9.2 | | | 3.2 | |
Working capital changes: | | | |
Accounts receivable | 1.8 | | | (41.3) | |
Inventories | (21.9) | | | (43.6) | |
Other current assets | (6.5) | | | (3.4) | |
Accounts payable | (50.0) | | | 42.4 | |
Other current liabilities | 5.9 | | | 114.4 | |
Net cash provided by operating activities | 105.1 | | | 34.3 | |
Investing Activities | | | |
Expenditures for property, plant and equipment | (18.9) | | | (19.7) | |
Proceeds from the sale of assets | 1.2 | | | 0.9 | |
Proceeds from the sale of business | 1.1 | | | — | |
| | | |
Purchase of noncontrolling interest | (3.2) | | | (8.4) | |
| | | |
Net cash used for investing activities | (19.8) | | | (27.2) | |
Financing Activities | | | |
Additions to debt | 103.8 | | | 106.2 | |
Reductions of debt | (119.9) | | | (63.5) | |
Net change to revolving credit agreements | (34.1) | | | (28.0) | |
Cash dividends paid | (16.7) | | | (16.4) | |
Cash dividends paid to noncontrolling interest | (1.3) | | | (0.2) | |
Financing fees paid | (0.8) | | | — | |
Purchase of treasury stock | (0.1) | | | — | |
| | | |
Net cash used for financing activities | (69.1) | | | (1.9) | |
Effect of exchange rate changes on cash | 3.0 | | | (2.1) | |
Cash and Cash Equivalents | | | |
Increase for the period | 19.2 | | | 3.1 | |
Balance at the beginning of the period | 59.0 | | | 65.5 | |
Balance at the end of the period | $ | 78.2 | | | $ | 68.6 | |
See notes to unaudited condensed consolidated financial statements.
HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY AND PERMANENT EQUITY
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Temporary Equity | Permanent Equity |
| | | | | | | | Accumulated Other Comprehensive Income (Loss) | | | |
| Redeemable Noncontrolling Interest | 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 Permanent Equity |
| | (In millions) |
Balance, June 30, 2022 | $ | 15.9 | | $ | 0.1 | | $ | 0.1 | | $ | — | | $ | 291.2 | | | $ | 193.3 | | | $ | (142.6) | | | $ | (72.3) | | | $ | (70.2) | | | $ | 199.6 | | | $ | 7.9 | | | $ | 207.5 | |
| | | | | | | | | | | | | | | | | | | |
Stock-based compensation | — | | — | | — | | — | | 1.1 | | | — | | | — | | | — | | | — | | | 1.1 | | | — | | | 1.1 | |
Stock issued under stock compensation plans | — | | — | | — | | — | | (0.1) | | | — | | | — | | | — | | | — | | | (0.1) | | | — | | | (0.1) | |
| | | | | | | | | | | | | | | | | | | |
Net income (loss) | 0.3 | | — | | — | | — | | — | | | (37.3) | | | — | | | — | | | — | | | (37.3) | | | 0.1 | | | (37.2) | |
Cash dividends | — | | — | | — | | — | | — | | | (5.5) | | | — | | | — | | | — | | | (5.5) | | | — | | | (5.5) | |
Accrued dividends | 0.3 | | — | | — | | — | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Current period other comprehensive loss | — | | — | | — | | — | | — | | | — | | | (30.2) | | | (26.1) | | | (4.2) | | | (60.5) | | | — | | | (60.5) | |
Reclassification adjustment to net income | — | | — | | — | | — | | — | | | — | | | — | | | 12.8 | | | 1.1 | | | 13.9 | | | — | | | 13.9 | |
| | | | | | | | | | | | | | | | | | | |
Reclassification from permanent equity to temporary equity | (2.8) | | — | | — | | — | | 2.8 | | | — | | | — | | | — | | | — | | | 2.8 | | | — | | | 2.8 | |
Foreign currency translation on noncontrolling interest | — | | — | | — | | — | | — | | | — | | | — | | | — | | | — | | | — | | | (0.5) | | | (0.5) | |
Balance, September 30, 2022 | $ | 13.7 | | $ | 0.1 | | $ | 0.1 | | $ | — | | $ | 295.0 | | | $ | 150.5 | | | $ | (172.8) | | | $ | (85.6) | | | $ | (73.3) | | | $ | 114.0 | | | $ | 7.5 | | | $ | 121.5 | |
| | | | | | | | | | | | | | | | | | | |
Balance, June 30, 2023 | $ | 13.9 | | $ | 0.1 | | $ | 0.1 | | $ | (0.1) | | $ | 309.3 | | | $ | 206.5 | | | $ | (131.4) | | | $ | (23.9) | | | $ | (70.1) | | | $ | 290.5 | | | $ | 1.8 | | | $ | 292.3 | |
| | | | | | | | | | | | | | | | | | | |
Stock-based compensation | — | | — | | — | | — | | 3.2 | | | — | | | — | | | — | | | — | | | 3.2 | | | — | | | 3.2 | |
Stock issued under stock compensation plans | — | | — | | — | | 0.1 | | (0.1) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | |
Net income | 0.3 | | — | | — | | — | | — | | | 35.8 | | | — | | | — | | | — | | | 35.8 | | | 0.1 | | | 35.9 | |
Cash dividends | — | | — | | — | | — | | — | | | (5.6) | | | — | | | — | | | — | | | (5.6) | | | — | | | (5.6) | |
Accrued dividends | 0.2 | | — | | — | | — | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Current period other comprehensive loss | — | | — | | — | | — | | — | | | — | | | (12.0) | | | (15.1) | | | — | | | (27.1) | | | — | | | (27.1) | |
Reclassification adjustment to net income | — | | — | | — | | — | | — | | | — | | | — | | | 6.8 | | | 0.8 | | | 7.6 | | | — | | | 7.6 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Foreign currency translation on noncontrolling interest | — | | — | | — | | — | | — | | | — | | | — | | | — | | | — | | | — | | | (0.1) | | | (0.1) | |
Balance, September 30, 2023 | $ | 14.4 | | $ | 0.1 | | $ | 0.1 | | $ | — | | $ | 312.4 | | | $ | 236.7 | | | $ | (143.4) | | | $ | (32.2) | | | $ | (69.3) | | | $ | 304.4 | | | $ | 1.8 | | | $ | 306.2 | |
See notes to unaudited condensed consolidated financial statements.
HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY AND PERMANENT EQUITY
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Temporary Equity | Permanent Equity |
| | | | | | | | Accumulated Other Comprehensive Income (Loss) | | | |
| Redeemable Noncontrolling Interest | 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 Permanent Equity |
| | (In millions) |
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 | — | | — | | — | | — | | 3.7 | | | — | | | — | | | — | | | — | | | 3.7 | | | — | | | 3.7 | |
Stock issued under stock compensation plans | — | | — | | — | | 4.5 | | (4.5) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | |
Net income (loss) | 0.3 | | — | | — | | — | | — | | | (81.7) | | | — | | | — | | | — | | | (81.7) | | | 1.6 | | | (80.1) | |
Cash dividends | — | | — | | — | | — | | — | | | (16.4) | | | — | | | — | | | — | | | (16.4) | | | (0.2) | | | (16.6) | |
Accrued dividends | 0.3 | | — | | — | | — | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Current period other comprehensive loss | — | | — | | — | | — | | — | | | — | | | (75.1) | | | (73.8) | | | (4.2) | | | (153.1) | | | — | | | (153.1) | |
Reclassification adjustment to net income | — | | — | | — | | — | | — | | | — | | | — | | | 20.2 | | | 3.5 | | | 23.7 | | | — | | | 23.7 | |
Purchase of noncontrolling interest | — | | — | | — | | — | | (12.8) | | | — | | | — | | | — | | | — | | | (12.8) | | | (11.1) | | | (23.9) | |
Reclassification from permanent equity to temporary equity | 13.1 | | — | | — | | — | | (6.5) | | | — | | | — | | | — | | | — | | | (6.5) | | | (6.6) | | | (13.1) | |
Foreign currency translation on noncontrolling interest | — | | — | | — | | — | | — | | | — | | | — | | | — | | | — | | | — | | | (2.0) | | | (2.0) | |
Balance, September 30, 2022 | $ | 13.7 | | $ | 0.1 | | $ | 0.1 | | $ | — | | $ | 295.0 | | | $ | 150.5 | | | $ | (172.8) | | | $ | (85.6) | | | $ | (73.3) | | | $ | 114.0 | | | $ | 7.5 | | | $ | 121.5 | |
| | | | | | | | | | | | | | | | | | | |
Balance, December 31, 2022 | $ | 14.2 | | $ | 0.1 | | $ | 0.1 | | $ | — | | $ | 297.7 | | | $ | 152.7 | | | $ | (137.0) | | | $ | (37.7) | | | $ | (71.5) | | | $ | 204.4 | | | $ | 6.5 | | | $ | 210.9 | |
| | | | | | | | | | | | | | | | | | | |
Stock-based compensation | — | | — | | — | | — | | 14.0 | | | — | | | — | | | — | | | — | | | 14.0 | | | — | | | 14.0 | |
Stock issued under stock compensation plans | — | | — | | — | | 0.1 | | (0.1) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Purchase of treasury stock | — | | — | | — | | (0.1) | | — | | | — | | | — | | | — | | | — | | | (0.1) | | | — | | | (0.1) | |
Net income | 0.7 | | — | | — | | — | | — | | | 100.7 | | | — | | | — | | | — | | | 100.7 | | | 0.3 | | | 101.0 | |
Cash dividends | (0.9) | | — | | — | | — | | — | | | (16.7) | | | — | | | — | | | — | | | (16.7) | | | (0.4) | | | (17.1) | |
Accrued dividends | 0.7 | | — | | — | | — | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Current period other comprehensive loss | — | | — | | — | | — | | — | | | — | | | (6.4) | | | (16.6) | | | — | | | (23.0) | | | — | | | (23.0) | |
Reclassification adjustment to net income | — | | — | | — | | — | | — | | | — | | | — | | | 22.1 | | | 2.2 | | | 24.3 | | | — | | | 24.3 | |
| | | | | | | | | | | | | | | | | | | |
Purchase of noncontrolling interest | — | | — | | — | | — | | 0.8 | | | — | | | — | | | — | | | — | | | 0.8 | | | (4.0) | | | (3.2) | |
Sale of noncontrolling interest | — | | — | | — | | — | | — | | | — | | | — | | | — | | | — | | | — | | | (0.7) | | | (0.7) | |
| | | | | | | | | | | | | | | | | | | |
Foreign currency translation on noncontrolling interest | (0.3) | | — | | — | | — | | — | | | — | | | — | | | — | | | — | | | — | | | 0.1 | | | 0.1 | |
Balance, September 30, 2023 | $ | 14.4 | | $ | 0.1 | | $ | 0.1 | | $ | — | | $ | 312.4 | | | $ | 236.7 | | | $ | (143.4) | | | $ | (32.2) | | | $ | (69.3) | | | $ | 304.4 | | | $ | 1.8 | | | $ | 306.2 | |
See notes to unaudited condensed consolidated financial statements.
HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(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 also produces components for lift truck manufacturers. 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 September 30, 2023 and the results of its operations and changes in equity for the three and nine months ended September 30, 2023 and 2022, and the results of its cash flows for the nine months ended September 30, 2023 and 2022 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, 2022.
The accompanying unaudited condensed consolidated balance sheet at December 31, 2022 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
In 2023, 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.
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 and ASU 2022-06, 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, 2024 | | The Company does not expect the guidance to have a material effect on its financial position, results of operations, cash flows and related disclosures. |
ASU 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60) | | The guidance provides a basis of accounting for newly-formed joint venture entities which will recognize and measure assets and liabilities at fair value upon formation. | | January 1, 2025 | | 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 11 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 nine months ended September 30, 2023 and 2022.
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:
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| THREE MONTHS ENDED |
| SEPTEMBER 30, 2023 |
| Lift truck business | | | | | | | | |
| Americas | | EMEA | | JAPIC | | Bolzoni | | Nuvera | | Elims | | Total |
Dealer sales | $ | 413.2 | | | $ | 149.8 | | | $ | 44.6 | | | $ | — | | | $ | — | | | $ | — | | | $ | 607.6 | |
Direct customer sales | 105.3 | | | 2.9 | | | — | | | — | | | — | | | — | | | 108.2 | |
Aftermarket sales | 170.5 | | | 26.0 | | | 7.0 | | | — | | | — | | | — | | | 203.5 | |
Other | 27.5 | | | 5.2 | | | — | | | 92.8 | | | 1.5 | | | (45.1) | | | 81.9 | |
Total Revenues | $ | 716.5 | | | $ | 183.9 | | | $ | 51.6 | | | $ | 92.8 | | | $ | 1.5 | | | $ | (45.1) | | | $ | 1,001.2 | |
| | | | | | | | | | | | | |
| THREE MONTHS ENDED |
| SEPTEMBER 30, 2022 |
| Lift truck business | | | | | | | | |
| Americas | | EMEA | | JAPIC | | Bolzoni | | Nuvera | | Elims | | Total |
Dealer sales | $ | 288.7 | | | $ | 128.6 | | | $ | 57.1 | | | $ | — | | | $ | — | | | $ | — | | | $ | 474.4 | |
Direct customer sales | 104.0 | | | 1.8 | | | — | | | — | | | — | | | — | | | 105.8 | |
Aftermarket sales | 154.2 | | | 25.3 | | | 8.2 | | | — | | | — | | | — | | | 187.7 | |
Other | 24.4 | | | 3.7 | | | 0.2 | | | 82.2 | | | 1.2 | | | (39.5) | | | 72.2 | |
Total Revenues | $ | 571.3 | | | $ | 159.4 | | | $ | 65.5 | | | $ | 82.2 | | | $ | 1.2 | | | $ | (39.5) | | | $ | 840.1 | |
| | | | | | | | | | | | | |
| NINE MONTHS ENDED |
| SEPTEMBER 30, 2023 |
| Lift truck business | | | | | | | | |
| Americas | | EMEA | | JAPIC | | Bolzoni | | Nuvera | | Elims | | Total |
Dealer sales | $ | 1,190.1 | | | $ | 492.4 | | | $ | 126.6 | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,809.1 | |
Direct customer sales | 403.9 | | | 7.4 | | | — | | | — | | | — | | | — | | | 411.3 | |
Aftermarket sales | 536.4 | | | 83.1 | | | 22.0 | | | — | | | — | | | — | | | 641.5 | |
Other | 60.5 | | | 16.5 | | | 0.5 | | | 288.0 | | | 4.1 | | | (140.4) | | | 229.2 | |
Total Revenues | $ | 2,190.9 | | | $ | 599.4 | | | $ | 149.1 | | | $ | 288.0 | | | $ | 4.1 | | | $ | (140.4) | | | $ | 3,091.1 | |
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| NINE MONTHS ENDED |
| SEPTEMBER 30, 2022 |
| Lift truck business | | | | | | | | |
| Americas | | EMEA | | JAPIC | | Bolzoni | | Nuvera | | Elims | | Total |
Dealer sales | $ | 880.2 | | | $ | 409.8 | | | $ | 159.9 | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,449.9 | |
Direct customer sales | 323.4 | | | 11.2 | | | — | | | — | | | — | | | — | | | 334.6 | |
Aftermarket sales | 446.5 | | | 78.1 | | | 21.8 | | | — | | | — | | | — | | | 546.4 | |
Other | 75.5 | | | 14.8 | | | 0.4 | | | 263.7 | | | 2.1 | | | (124.3) | | | |