Hyster-Yale Materials Handling announces Second Quarter 2019 results

Posted on Jul 31, 2019 in Nuts & Bolts

Consolidated revenues increased 11.8% over Q2 2018 and Lift Truck revenues increased 12.9% over Q2 2018

Hyster-Yale Materials Handling, Inc.has announced consolidated revenues of $856.2 million and consolidated net income of $16.2 million, or $0.97 per diluted share, for the second quarter of 2019 compared with consolidated revenues of $765.9 million and consolidated net income of $5.6 million, or $0.34 per diluted share, for the second quarter of 2018.  Second-quarter consolidated operating profit increased to $22.9 million in 2019 from $10.8 million in 2018.

Financial information for the 2019 second quarter includes three months of Hyster-Yale Maximal results compared with only one month in the 2018 second quarter following its June 1, 2018 acquisition.

For the six months ended June 30, 2019, the Company reported consolidated revenues of $1.7 billion and net income of $19.6 million, or $1.17 per diluted share, compared with consolidated revenues of $1.6 billion and net income of $20.5 million, or $1.24 per diluted share, for the first six months of 2018.  Consolidated operating profit was $26.3 million for the first half of 2019 compared with $30.0 million for the first half of 2018.  Operating profit in 2018 included $2.4 million of Maximal acquisition costs.

At June 30, 2019, the Company had cash on hand of $50.3 million and debt was $370.9 million compared with cash on hand of $83.7 million and debt of $301.5 million as of December 31, 2018.

Segment Financial Results

Summary results for the Company’s three business segments were as follows for the second quarter of 2019 and 2018:

In late 2018, the Company announced that Bolzoni’s North America attachment manufacturing would be moved into Hyster-Yale Group’s Sulligent, Alabama, manufacturing facility as part of a plan to expand Bolzoni’s capabilities in the United States.  Effective January 1, 2019, the Sulligent facility became a Bolzoni facility.  As a result of this reorganization, the 2019 and comparative 2018 financial information in this news release has been reclassified to reflect the Sulligent facility financial results within the Bolzoni segment.

Hyster-Yale Group Results

Hyster-Yale Group unit shipments, bookings and backlog were as follows:

While unit backlog in the 2019 second quarter increased from the 2019 first quarter and the 2018 second quarter, the average sales price per unit in bookings and backlog decreased compared with both periods as a result of increased bookings of lower-priced units.  Shipments of higher-priced units, particularly including Big Trucks, increased during the 2019 second quarter as supplier parts shortages for Big Trucks abated.

Americas Results

Revenues in the Americas segment, which includes the North America, Latin America and Brazil markets, increased to $537.7 million in the second quarter of 2019 from $471.6 million in the second quarter of 2018.  This increase was primarily the result of increased unit and parts volumes and product mix, as well as price increases implemented to offset higher material costs and tariffs. Unit shipments increased by approximately 400 units from the prior year second quarter primarily driven by an increase in shipments in Brazil where the market continues to strengthen.  In North America, higher shipments of higher-capacity Class 4 lift trucks, Class 2 electric, warehouse trucks and Class 1 electric, counterbalanced trucks, as well as Class 5 Big Trucks drove an overall increase in shipments, but this increase was mostly offset by fewer shipments of lower-capacity Class 5 lift trucks, primarily as a result of a continued shortage of component parts from certain key suppliers.

In the second quarter of 2019, operating profit in the Americas also improved to $26.2 million from $18.0 million in the prior year second quarter.  Operating profit increased primarily as a result of improved gross profit, partly offset by higher operating expenses.  The increase in gross profit was mainly due to price increases, net of material cost and freight inflation and continuing import tariffs, $4.9 million of favorable retroactive tariff exclusion adjustments for certain components imported from China, which includes $3.1 million of refunds for tariffs incurred prior to the 2019 second quarter, and higher unit and parts volumes.  A shift in mix to lower-margin products and unfavorable currency movements of $2.0 million partly offset the increase in gross profit.

Operating expenses increased primarily as a result of increased product development costs to support a planned major upgrade of a number of the Company’s core product platforms and additional investments in the expansion of Hyster-Yale Group’s industry-focused sales and marketing teams.  These increased expenses were partially offset by lower employee-related costs and the absence of $1.9 million of Maximal acquisition-related costs incurred in the 2018 second quarter.

EMEA Results

Revenues for the EMEA segment, which includes operations in the Europe, Middle East and Africa markets, increased to $202.1 million in the second quarter of 2019 from $191.0 million in the second quarter of 2018 mainly as a result of an increase in unit shipments of higher-priced lift trucks, partly offset by unfavorable currency movements of $14.1 millionfrom the translation of sales into U.S. dollars.  Unit shipments increased by approximately 600 units from the prior year second quarter primarily due to an increase in shipments of all truck classes, but mainly higher-priced Big Trucks as component shortages for these trucks have abated.

EMEA operating profit increased to $4.7 million in the second quarter of 2019 from $1.4 million in the second quarter of 2018 primarily as a result of increased sales, improved manufacturing efficiencies resulting from higher unit sales, and price increases, net of material cost inflation.

JAPIC Results

Revenues in the JAPIC segment, which includes operations in the Asia and Pacific markets, including China, as well as results from Hyster-Yale Maximal since it was acquired in June 2018, increased to $72.9 million in the second quarter of 2019 from $57.5 million in the second quarter of 2018.  Hyster-Yale Maximal shipments increased by 1,400 units and revenue increased $16.3 million in the second quarter of 2019 compared with only one month of results in the second quarter of 2018 following the June 1, 2018 acquisition.  Unfavorable currency movements of $2.6 million partially offset the increase in revenues.

JAPIC generated a lower operating loss of $1.8 million in the second quarter of 2019 compared with an operating loss of $2.1 million in the second quarter of 2018.  Hyster-Yale Maximal contributed $0.9 million to this improvement in operating results.

Bolzoni Results

During the second quarter of 2019, Bolzoni’s revenue increased to $90.8 million from $88.0 million in 2018.  The increase was mainly due to higher volumes, partially offset by unfavorable currency movements of $3.4 million from the translation of sales into U.S. dollars.

Bolzoni’s operating profit decreased to $2.3 million in the second quarter of 2019 from $3.2 million in the 2018 second quarter.  The decrease was primarily due to costs of $0.6 million associated with the restructuring of Bolzoni’s North America operations, which commenced in the 2019 first quarter, and $0.3 million of currency translation.

Nuvera Results

Nuvera revenues increased to $2.2 million in the second quarter of 2019 from $0.7 million in 2018.  Revenues increased as a result of development funding received associated with Nuvera’s third-party development agreements.

Nuvera’s 2019 second-quarter operating loss decreased compared with the prior year quarter mainly as a result of the product development funding received from third-parties.