HYSTER-YALE ANNOUNCES THIRD QUARTER 2024 RESULTS
Q3 2024 Consolidated Highlights:
Ongoing solid execution in seasonally lower third quarter
Continued year-over-year revenue growth led by Americas Lift Truck and Bolzoni
Operating Profit of $33.1 million below exceptionally strong Q3 2023 results
Net Income of $17.2 million compared to $35.8 million in Q3 2023
Generated $70 million of cash from operations in Q3 2024
CLEVELAND, Nov. 5, 2024 /PRNewswire/ -- Hyster-Yale, Inc. (NYSE:HY) reported the following consolidated results for the three months ended September 30, 2024.
Three Months Ended
($ in millions except per share amounts)
9/30/24
9/30/23
% Change
6/30/24
% Change
Revenues
$1,016.1
$1,001.2
2 %
$1,168.1
(13) %
Operating Profit
$33.1
$58.6
(44) %
$95.6
(65) %
Net Income
$17.2
$35.8
(52) %
$63.3
(73) %
Diluted Earnings per Share
$0.97
$2.06
(53) %
$3.58
(73) %
Lift Truck Business ResultsRevenues by geographic segment were as follows:
($ in millions)
Q3 2024
Q3 2023
% Change
Q2 2024
% Change
Revenues
$967.4
$952.0
2 %
$1,118.0
(13) %
Americas(1)
$771.1
$716.5
8 %
$881.5
(13) %
EMEA(1)
$145.0
$183.9
(21) %
$187.8
(23) %
JAPIC(1)
$51.3
$51.6
(1) %
$48.7
5 %
(1)
The Americas segment includes the North America, Latin America and Brazil markets, EMEA includes operations in the Europe, Middle East and Africa markets, and JAPIC includes operations in the Asia and Pacific markets, including China.
Q3 2024 Lift Truck revenues increased 2% over the prior year primarily due to higher consolidated average sales price and a favorable sales mix shift. Overall sales volumes declined with Americas' increases more than offset by an EMEA decline.
Average selling prices rose by 25% year-over-year, primarily due to the sustained efforts to maintain pricing discipline.
America's sales mix improved compared to the prior year mainly as a result of increased sales of Class 1 and 4 lift trucks and higher-priced 4- to 52-ton Class 5 internal combustion engine trucks.
EMEA unit volumes declined year-over-year primarily due to lower production rates, resulting from supply chain challenges and shipping delays on new products.
Planned seasonal plant downtime led to lower Q3 2024 production rates compared to Q2 2024 and contributed to Americas and EMEA sequential revenue decreases.
Gross profit and operating profit (loss) by geographic segment were as follows:
($ in millions)
Q3 2024
Q3 2023
% Change
Q2 2024
% Change
Gross Profit
$172.9
$186.0
(7) %
$239.4
(28) %
Americas
$147.8
$149.2
(1) %
$202.1
(27) %
EMEA
$19.5
$29.4
(34) %
$32.5
(40) %
JAPIC
$5.6
$7.4
(24) %
$4.8
17 %
Operating Profit (Loss)
$39.0
$65.1
(40) %
$103.1
(62) %
Americas
$52.7
$65.4
(19) %
$104.0
(49) %
EMEA
$(9.6)
$2.4
(500) %
$4.8
(300) %
JAPIC
$(4.1)
$(2.7)
(52) %
$(5.7)
28 %
Lift Truck product margins remained well above targeted levels due to continued favorable sales pricing and product mix, but were more than offset by lower sales margins on parts, fleet services and other revenues. Gross profit declined by 7% year-over-year mainly due to the decline in sales margins, higher freight costs and other cost inflation-related variances. These factors, combined with additional sales and marketing headcount, as well as customer-facing technology system investments to support new product launches and share gain efforts, led to a 40% decrease in operating profit compared to robust prior year levels.
Americas gross profit declined modestly with improved pricing and higher sales volumes offset by higher freight costs and cost inflation-related variances.
Elevated freight costs are primarily related to two transient factors. First, ongoing geopolitical tensions, including Red Sea shipping disruptions. Second, proactive re-routing and unloading of incoming shipments in advance of the short-lived U.S. East Coast port strike.
EMEA's Q3 2024 operating loss was primarily due to lower unit volumes and weaker pricing compared with the prior periods, as well as increased year-over-year employee-related expenses.
JAPIC's year-over-year operating loss increase was mainly due to reduced unit volumes, partly offset by lower operating expenses.
Bolzoni Results
($ in millions)
Q3 2024
Q3 2023
% Change
Q2 2024
% Change
Revenues
$97.6
$92.8
5 %
$102.4
(5) %
Gross Profit
$23.3
$19.5
19 %
$22.4
4 %
Operating Profit
$6.2
$2.9
114 %
$4.0
55 %
Bolzoni's revenues grew 5% and operating profit improved 114% over the prior year, primarily due to increased sales volumes of higher-margin products. Efficiency gains from higher volumes reduced manufacturing variances year-over-year. Revenues decreased moderately from Q2 2024 primarily due to the planned August shutdown at Bolzoni's EMEA plants. In July 2024, Bolzoni acquired the majority equity interest in a small Italian machining business for $2 million, with an option to purchase the remaining portion in coming years. This machining company supports Bolzoni's core business. The acquisition's modest contribution to results is included in segment financials.
Nuvera Results
($ in millions)
Q3 2024
Q3 2023
% Change
Q2 2024
% Change
Revenues
$0.3
$1.5
(80) %
$0.2
50 %
Gross Profit (Loss)
$(3.0)
$(1.9)
(58) %
$(2.5)
(20) %
Operating Loss
$(11.8)
$(9.4)
(26) %
$(11.5)
(3) %
The hydrogen fuel cell industry continues to face slow customer adoption rates due to ongoing hydrogen supply constraints and delays in fuel cell development programs for heavy-duty electric vehicles. Despite a strong demonstration channel, these industry constraints are delaying Nuvera's bookings and have reduced its overall engine shipments. As a result, Nuvera's Q3 2024 revenues decreased to $0.3 million from $1.5 million in the prior year. The increased year-over-year operating loss was largely due to higher utility and facility lease costs. Nuvera incurred a $0.2 million severance charge in Q3 2024 for headcount reductions to better size the organization given slower hydrogen product adoption rates.
Income Tax Expense Q3 2024's 37% reported income tax rate is higher than the forecasted 2024 annual tax rate of 32% due to the true up of the year-to-date tax expense in the third quarter to the new estimated annual effective income tax rate. 2024's year-to-date effective income tax rate of 32% was higher than the prior year's 27% rate. The elevated 2024 rate largely relates to the ongoing capitalization of research and development costs for U.S. tax purposes combined with the Company's inability to record deferred tax assets on its balance sheet due to its U.S. valuation allowance position. This combination also affected 2023's effective income tax rate, but the impact was partly offset by the Company's utilization of tax assets related to accumulated U.S. net operating losses during the year.
Liquidity and Capital Allocation
($ in millions)
September 30, 2024
September 30, 2023
% Change
June 30, 2024
% Change
Debt
$468.5
$510.6
8 %
$501.9
7 %
Cash
75.6
78.2
(3) %
66.5
14 %
Net Debt
$392.9
$432.4
9 %
$435.4
10 %
Debt-to-total Capital
46 %
61 %
15 %
51 %
5 %
The Company is focused on cash generation and capital deployment as its operational strategies help to generate earnings and improve cash conversion rates. The operating cash flow of $70 million generated in Q3 2024 was primarily used to further reduce financial leverage, fuel growth-related capital expenses and fund Bolzoni's small acquisition.
Debt-to-total capital ratio of 46% improved by 500 basis points from the June 30, 2024 level.
Net debt decreased by 10% compared to Q2 2024, with improvements to debt outstanding and cash.
Bolzoni acquired a controlling interest in an Italian machining supplier for approximately $2 million.
Unused borrowing capacity of $262 million increased compared to $217 million as of June 30, 2024, primarily due to the lower debt level.
The Company continues to focus on decreasing working capital, especially through inventory efficiency.
In total, Q3 2024 inventory increased compared to Q2 2024 largely due to trucks completed but not shipped by quarter end and shipping delays on new products.
Working capital at September 30, 2024 represented 21% of sales compared to 18% at Q2 2024, primarily driven by elevated inventory levels and lower annualized sales.
Outlook
Consolidated Strategic Perspective Hyster-Yale management believes the Company's strong 2023 and 2024 year-to-date financial performance benefited significantly from actions taken over the past few years to deliver on the Company's two promises: first, to provide optimal solutions for our customers and second, to provide exceptional customer care. These actions include implementation of key strategies, projects and significant process improvements, all of which better position the Company for substantial longer-term profitable growth. As part of this, the Company's product development and process improvement efforts are leading to significant advantages, including:
more efficient lift truck production, which supports higher volumes on existing production lines;
leveraging modular and scalable product designs to produce similar high-volume trucks globally, enabling the Company to better meet customer demand while minimizing operational costs;
maximizing operational efficiency and factory utilization by enabling the Company's plants to build internal combustion and electric trucks on the same production lines; and
phasing out Bolzoni's lower-margin legacy component manufacturing, which creates manufacturing space for further profitable attachment growth.
These improvements are leading to a more efficient and flexible organization which ...
