Hyster-Yale Materials Handling, Inc. Announces Third Quarter 2013 Results

  Hyster-Yale Materials Handling, Inc. Announces Third Quarter 2013 Results

PR Newswire

CLEVELAND, Oct. 30, 2013

CLEVELAND, Oct. 30, 2013 /PRNewswire/ --

Highlights:

  oThird quarter operating profit increases 11% on revenue increase of 10%
  oHigher 2013 third quarter effective income tax rate results in slight
    decline in net income

Hyster-Yale Materials Handling, Inc. (NYSE: HY) today announced net income of
$23.5 million, or $1.40 per diluted share, and revenues of $643.9 million for
the third quarter of 2013 compared with net income of $24.9 million, or $1.48
per diluted share, and revenues of $585.6 million for the third quarter of
2012.Operating profit increased to $31.3 million for the third quarter of
2013 from $28.3 million in the third quarter of 2012.

For the nine months ended September30,2013, the Company reported net income
of $84.3 million, or $5.02 per diluted share, and revenues of $1.9 billion
compared with net income of $65.6 million, or $3.90 per diluted share, and
revenues of $1.8 billion for the first nine months of 2012. Operating profit
increased to $99.3 million for the first nine months of 2013 from $82.7
million during the first nine months of 2012.

The third-quarter 2013 effective tax rate was 21.9% compared with an effective
tax rate of 14.4% in the third quarter of 2012.

EBITDA for the third quarter of 2013 and the trailing twelve months ended
September 30, 2013, was $39.3 million and $161.1 million, respectively.
EBITDA in this press release is provided solely as a supplemental non-GAAP
disclosure of operating results. For the reconciliation of GAAP results to
the non-GAAP results, see page 6.

The Company's cash position was $184.7 million as of September 30, 2013, up
from $151.3 million as of December 31, 2012. Debt as of September 30, 2013
decreased to $121.8 million from $142.2 million as of December 31, 2012.

Since the inception of a stock repurchase program in November 2012 that
permits the repurchase of up to $50 million of the Company's outstanding Class
A common stock, Hyster-Yale has purchased approximately 100,000 shares for an
aggregate purchase price of $5.2 million, including $3.0 million purchased
during the nine months ended September 30, 2013. The Company did not
repurchase any shares during the third quarter of 2013.

Discussion of Third Quarter Results

Revenues increased in the third quarter of 2013 compared with the third
quarter of 2012 primarily as a result of increases in unit volumes and in
other revenue, including National Account customers' maintenance and service
revenue, both in the Americas. In addition, an increase in unit prices and
higher parts sales, both in the Americas, also favorably affected revenues.
Price increases were implemented in the Americas during 2013 mainly to offset
the impact of weakness in the Brazilian real. A shift in sales to
lower-priced products in the Americas and Europe, as well as unfavorable
foreign currency movements partially offset the improvement in revenues. The
unfavorable currency movements were the result of the weakening of the
Brazilian real and Australian dollar against the U.S. dollar, which were
somewhat offset by the strengthening of the euro against the U.S. dollar.

Worldwide new unit shipments increased in the third quarter of 2013, primarily
in the Americas, to approximately 21,200 units from shipments of approximately
18,000 units in the third quarter of 2012 and approximately 20,900 units in
the second quarter of 2013. Worldwide backlog was approximately 28,400 units
at September30, 2013 compared with approximately 25,600 units at
September30, 2012 and approximately 29,300 units at June30, 2013.

Despite an increase in operating profit, net income in the third quarter of
2013 declined compared with the third quarter of 2012 as a result of an
increase in income tax expense, primarily attributable to a higher effective
income tax rate in the third quarter of 2013 compared with the third quarter
of 2012, and lower equity earnings at the Company's unconsolidated financing
equity affiliate in 2013 compared with 2012. Operating profit for the third
quarter of 2013 improved mainly due to an increase in unit and parts volumes
and the favorable effect of price increases, all mainly in the Americas.
These improvements were partially offset by a shift in sales mix to
lower-margin products also primarily in the Americas and higher selling,
general and administrative expenses. Selling, general and administrative
expenses increased primarily due to higher estimates for incentive
compensation in the third quarter of 2013 compared with the third quarter of
2012, increased marketing expenses in the Americas and Europe to support the
Company's five strategic initiatives and a required non-cash charge of $1.2
million pre-tax pertaining to pension settlement accounting for one of the
Company's U.S. defined benefit pension plans, which recorded a portion of the
deferred loss in equity in the income statement during the third quarter of
2013. Estimates for the non-cash equity component of incentive compensation
increased by $4.3 million pre-tax during the third quarter mainly due to the
43% increase in the market price of the Company's stock during the quarter.

Outlook

The global market for forklift trucks is expected to continue to grow
moderately in the remainder of 2013 and in 2014 compared with the comparable
prior year periods. This growth is expected to be driven primarily by
increases in the Chinese market, along with steady growth in the Americas as a
result of growth in Brazil and continuing recovery in North America demand,
along with nominal growth in the Asia-Pacific, Middle East and Africa
markets. The Latin America market weakened during the third quarter of 2013,
and is expected to continue to weaken in the fourth quarter of 2013. However,
recovery in the Latin America market is anticipated in 2014. European markets
are expected to remain weak, mainly as a result of Western European
macro-economic conditions. In the context of these market conditions and
expected increases in market share, the Company anticipates an overall
increase in unit shipments and parts volumes in the fourth quarter of 2013 and
in 2014 compared with the comparable prior year periods. The majority of this
increase is expected to come from the Americas, with smaller increases in the
European and Asian unit shipments.

The Company anticipates material costs in the fourth quarter of 2013 to be
comparable with the prior year period and expects full year 2014 to increase
slightly compared with 2013, particularly during the second half of the year.
Although commodity costs appear to have stabilized, these markets,
particularly steel, remain volatile and sensitive to changes in the global
economy. The Company will continue to monitor economic conditions, currency
movements and the resulting effects on costs and pricing, and will take
appropriate pricing actions, if necessary.

The Company expects operating profit in the fourth quarter of 2013 to be up
slightly compared with the fourth quarter of 2012. The expected improvement
in gross profit, mainly resulting from increased unit volumes, unit prices and
improved manufacturing efficiencies, is expected to be mostly offset by a
shift in mix to lower-margin products and an increase in operating expenses,
primarily as a result of increases in marketing and employee-related costs put
in place over the course of 2012 and 2013 to support the Company's five
strategic initiatives. Nevertheless, fourth-quarter 2013 net income is
expected to decline compared with the 2012 fourth quarter due to the absence
of the $10.7 million valuation allowance release taken in the fourth quarter
of 2012 and an expected higher effective income tax rate. In addition, during
the third quarter of 2013, the Company elected to prepay $20 million of its
term loan financing. Also, the Company intends to use cash on hand at
September 30, 2013 to pay off its term loan financing and enter into a new
revolving credit agreement in the fourth quarter of 2013, if such refinancing
is available on terms favorable to the Company. If this occurs, the Company
expects to incur a pretax charge of approximately $3 million during the fourth
quarter of 2013 for the write-off of deferred financing fees related to the
term loan.

Excluding the anticipated gain on the sale of the Brazil real estate and
facility, the Company expects a moderate improvement in operating profit in
2014 compared with 2013. The favorable effect of expected increased unit and
parts volumes resulting from the Company's strategic initiatives, modestly
stronger overall markets, continued improvements in manufacturing
efficiencies, product enhancements and quality improvements are all expected
to contribute to this improvement. In addition, lower anticipated estimates
for equity incentive compensation, which are driven by the market price of the
Company's stock, are expected to contribute to the improved net income as the
Company's stock price during 2014 is anticipated to be closer to the current
market price. These favorable items are expected to be partially offset by the
effects of a shift in mix to lower-margin products, a full year impact of
marketing and employee costs associated with the strategic initiatives that
were put in place gradually during 2013 and unfavorable foreign currency
movements in Asia-Pacific. Despite this improvement in operating profit, the
Company expects only a slight increase in net income in 2014 compared with
2013 as a result of a higher effective income tax rate. The higher effective
income tax rates in both the fourth quarter of 2013 and in 2014 are primarily
the effect of higher U.S. state, United Kingdom and Australian income taxes in
the remainder of 2013 and future years as a result of the 2012 and 2013
valuation allowance releases, combined with an anticipated shift in income
from lower tax rate European operations to higher tax rate Americas
operations.

Fourth quarter 2013 and full year 2014 operating profit results are expected
to improve in the Americas segment, which includes the North America, Latin
America and Brazil markets. The Europe segment, which includes the Middle
East and Africa markets, is expected to increase in the fourth quarter of 2013
over the prior year period, and increase slightly in 2014 compared with 2013.
The anticipated weakness of Western European markets is expected to partially
offset improvements in other markets and anticipated benefits of the current
strength of the euro in the 2014 Europe segment results. Asia-Pacific results
for the remainder of 2013 and in 2014 are also expected to be lower.

Cash flow before financing activities in 2013 is expected to be significant
but decline compared with 2012. The Company anticipates an increase in
capital expenditures in 2013 largely due to information technology
enhancements in Brazil. Cash flow before financing activities for 2014 is
expected to decrease from 2013 also, primarily due to an increase in capital
expenditures for the construction of a new plant in Brazil. These capital
expenditures will be mitigated by the final cash payment received when the
sale of the current facility is final, which is expected to occur in mid-2014.

The Company remains focused on gaining market share over time, as well as on
improving margins on new lift truck units, especially in its internal
combustion engine business, through the execution of its five strategic
initiatives: (1) understanding customer needs at the product and aftermarket
levels in order to create and provide a full range of differentiated product
and service solutions for specific industry applications, (2) offering the
lowest cost of ownership by utilizing the Company's understanding of
customers' major cost drivers and developing solutions that consistently lower
cost of ownership and create a differentiated competitive position, (3)
improving the Company's warehouse market position through enhancing dealer and
customer support, adding products, increasing incentives, and implementing
programs to increase focus on key customers, (4) enhancing independent
distribution by implementing programs aimed at broadening account coverage of
the market, expanding the Company's dual-brand ownership strategy, and
ensuring dealer excellence in all areas of the world, and (5) expanding in
Asian markets by offering products aimed at the needs of these markets,
enhancing distribution excellence and focusing on strategic alliances with
local partners in China, India and Japan.

To meet the specific application needs of its customers, the Company is
focusing on developing utility, standard and premium products. To this end,
the Company has development programs underway for its electric-rider,
warehouse, internal combustion engine and big truck product lines. To support
its warehouse growth initiative, the Company is in the process of launching
significant changes to its Americas product line including its Reach Truck,
3-Wheel stand, Order Selector, End- and Center-Rider and Tow Tractor lift
truck models. The changes are focused on improving ergonomics, productivity
and lowering cost of operation. In addition, in early October 2013, the
Company introduced a new Reach Truck, predominantly for the European warehouse
market, to dealers at three simultaneous live European locations and virtually
at other locations in the Americas and Asia-Pacific regions. This product is
expected to go into production in January 2014.

Beginning in 2014, the Company is instituting a new model year update program
for annual improvements of key performance and capability features of each of
its existing lift truck model platforms. This new program is expected to keep
these platforms soundly positioned in the market over time. Improvements will
be timed for different product lines throughout the year to ensure resource
leveling and efficient program execution. New platforms are expected to be
developed and launched based on longer-term segment or technological change
needs.

In mid-2011, the Company introduced into certain Latin American markets a
UTILEV^®_branded 1 to 3.5 ton internal combustion engine (ICE) pneumatic tire
lift truck model to meet the needs of lower-intensity users. This
UTILEV^®-branded utility lift truck was gradually introduced into global
markets during 2012. During the third quarter of 2013, the Company expanded
the UTILEV^®-branded series of lift trucks by introducing a 1 to 3 ton ICE
cushion tire truck in North America and a 3-wheel electric rider truck
globally. The UTILEV^®-branded series of lift trucks is expected to continue
to gain market position in the remainder of 2013 and in 2014. The Company
offers one model of the standard ICE lift truck for medium-duty applications
in both pneumatic and cushion tires for both Hyster^® and Yale^®. The Company
expects to launch additional trucks in the standard model series in future
years.

All of these new products and upgraded products are expected to improve
revenues and enhance operating margins, as well as help increase market
share. In addition, stricter diesel emission regulations for new trucks began
to go into effect in 2011 and will be fully in effect by 2015 in certain
global markets. The Company has launched and expects to continue to launch
lift truck series over this period that will meet these new emission
requirements.

*****

Conference Call
In conjunction with this news release, the management of Hyster-Yale Materials
Handling, Inc. will host a conference call on Thursday, October 31, 2013 at
11:00 a.m. eastern time. The call may be accessed by dialing (888) 679-8035
(Toll Free) or (617) 213-4848 (International), Passcode: 10494315, or over the
Internet through Hyster-Yale's website at www.hyster-yale.com. Please allow
15 minutes to register, download and install any necessary audio software
required to listen to the broadcast. A replay of the call will be available
shortly after the end of the conference call through November 7, 2013. The
online archive of the broadcast will be available on the Hyster-Yale website.

Other Measures
For purposes of this news release, discussions about net income (loss) refer
to net income (loss) attributable to stockholders.

Forward-looking Statements Disclaimer
The statements contained in this news release that are not historical facts
are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. These forward-looking statements are made subject to certain risks and
uncertainties, which could cause actual results to differ materially from
those presented. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date
hereof. Among the factors that could cause plans, actions and results to
differ materially from current expectations are, without limitation: (1)
reduction in demand for lift trucks and related aftermarket parts and service
on a global basis, (2) the ability of dealers, suppliers and end-users to
obtain financing at reasonable rates, or at all, as a result of current
economic and market conditions, (3) customer acceptance of pricing, (4) delays
in delivery or increases in costs, including transportation costs, of raw
materials or sourced products and labor or changes in or unavailability of
quality suppliers, (5) exchange rate fluctuations, changes in foreign import
tariffs and monetary policies and other changes in the regulatory climate in
the foreign countries in which the Company operates and/or sells products, (6)
delays in manufacturing and delivery schedules, (7) bankruptcy of or loss of
major dealers, retail customers or suppliers, (8) customer acceptance of,
changes in the costs of, or delays in the development of new products, (9)
introduction of new products by, or more favorable product pricing offered by,
competitors, (10) product liability or other litigation, warranty claims or
returns of products, (11) the effectiveness of the cost reduction programs
implemented globally, including the successful implementation of procurement
and sourcing initiatives, (12) changes mandated by federal, state and other
regulation, including health, safety or environmental legislation and (13) the
ability to enter into new financing arrangements on terms acceptable to the
Company.

About Hyster-Yale Materials Handling, Inc.
Hyster-Yale Materials Handling, Inc., headquartered in Cleveland, Ohio,
through its wholly-owned operating subsidiary, NACCO Materials Handling Group,
Inc., designs, engineers, manufactures, sells and services a comprehensive
line of lift trucks and aftermarket parts marketed globally primarily under
the Hyster^® and Yale^® brand names. For more information about Hyster-Yale
Materials Handling, Inc. or NACCO Materials Handling Group, Inc., visit the
Company's website at www.hyster-yale.com.

*****

HYSTER-YALE MATERIALS HANDLING, INC.
UNAUDITED FINANCIAL HIGHLIGHTS
                                    Three Months Ended  Nine Months Ended
                                    September 30        September 30
                                    2013      2012      2013        2012
                                    (In millions, except per share data)
Revenues                            $ 643.9   $ 585.6   $ 1,948.4   $ 1,817.1
Cost of sales                       532.3     485.6     1,613.3     1,521.2
Gross profit                        111.6     100.0     335.1       295.9
Selling, general and administrative 80.3      71.7      235.8       213.2
expenses
Operating profit                    31.3      28.3      99.3        82.7
Other (income) expense
Interest expense               2.4       2.5       7.2         9.7
Income from unconsolidated     (1.0)     (2.9)     (2.5)       (4.8)
affiliates
Other                          (0.3)     (0.4)     (0.8)       0.3
Income before income taxes          30.2      29.1      95.4        77.5
Income tax provision                6.6       4.2       11.0        11.9
Net income attributable to          (0.1)     —         (0.1)       —
noncontrolling interest
Net income attributable to          $ 23.5    $ 24.9    $ 84.3      $ 65.6
stockholders
Basic earnings per share            $ 1.41    $ 1.48    $ 5.04      $ 3.91
Diluted earnings per share          $ 1.40    $ 1.48    $ 5.02      $ 3.90
Basic weighted average shares       16.711    16.782    16.728      16.771
outstanding
Diluted weighted average shares     16.804    16.818    16.792      16.803
outstanding



EBITDA RECONCILIATION
                  Quarter Ended
                                                                      9/30/13

                  12/31/2012      3/31/2013     6/30/2013  9/30/2013  Trailing
                                                                      12
                                                                      Months
                  (In millions)
Net income
attributable to   $   32.4        $   24.6      $  36.2    $  23.5    $ 116.7
stockholders
Noncontrolling    0.1             —             —          0.1        0.2
interest income
Income tax        (4.9)           6.1           (1.7)      6.6        6.1
provision
Interest expense  2.7             2.5           2.3        2.4        9.9
Interest income   (0.3)           (0.3)         (0.3)      (0.8)      (1.7)
Depreciation and
amortization      7.5             7.5           7.4        7.5        29.9
expense
EBITDA*           $   37.5        $   40.4      $  43.9    $  39.3    $ 161.1
(All amounts are subject to annual audit by our independent registered public
accounting firm.)
*EBITDA in this press release is provided solely as a supplemental disclosure.
EBITDA does not represent net income, as defined by U.S. GAAP, and should not
be considered as a substitute for net income or net loss, or as an indicator
of operating performance. Hyster-Yale defines EBITDA as income before income
taxes and non-controlling interest income plus net interest expense and
depreciation and amortization expense. EBITDA is not a measurement under U.S.
GAAP and is not necessarily comparable with similarly titled measures of other
companies.



HYSTER-YALE MATERIALS HANDLING, INC.
UNAUDITED FINANCIAL HIGHLIGHTS
                                    Three Months Ended  Nine Months Ended
                                    September 30        September 30
                                    2013      2012      2013        2012
                                    (In millions)
Revenues
Americas                       $ 448.6   $ 379.2   $ 1,300.3   $ 1,153.1
Europe                         147.0     148.6     492.9       501.6
Asia-Pacific                   48.3      57.8      155.2       162.4
Total                     $ 643.9   $ 585.6   $ 1,948.4   $ 1,817.1
Operating profit
Americas                       $ 28.5    $ 20.4    $ 81.1      $ 53.4
Europe                         1.9       6.6       14.9        25.7
Asia-Pacific                   0.9       1.3       3.3         3.6
Total                     $ 31.3    $ 28.3    $ 99.3      $ 82.7
Net income attributable to
stockholders
Americas                       $ 21.2    $ 17.0    $ 54.4      $ 36.9
Europe                         0.9       6.3       26.5        24.3
Asia-Pacific                   1.4       1.6       3.4         4.4
Total                     $ 23.5    $ 24.9    $ 84.3      $ 65.6



CASH FLOW AND CAPITAL STRUCTURE
                                 Nine Months Ended
                                 September 30
                                 2013                         2012
                                 (In millions)
Net cash provided by operating   $       88.8                 $    68.7
activities
Net cash used for investing      (13.5)                       (10.5)
activities
Cash Flow Before Financing  $       75.3                 $    58.2
Activities
                                 September 30,

                                 2013
Cash                             $       184.7
Debt                             121.8
Net Debt                    $       (62.9)
(All amounts are subject to annual audit by our independent registered public
accounting firm.)



SOURCE Hyster-Yale Materials Handling, Inc.

Website: http://www.hyster-yale.com
Contact: Christina Kmetko, (440) 229-5168
 
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