Hyster-Yale Materials Handling, Inc. Announces First Quarter 2014 Results

  Hyster-Yale Materials Handling, Inc. Announces First Quarter 2014 Results

PR Newswire

CLEVELAND, April 30, 2014

CLEVELAND, April 30, 2014 /PRNewswire/ --

Highlights:

  oFirst quarter 2014 revenue increased 4.8%
  oFirst quarter 2014 income before income taxes improved to $31.6 million,
    up 2.9%
  oFirst quarter 2014 net income declined to $22.1 million, down 10.2%

Hyster-Yale Materials Handling, Inc. (NYSE: HY) today announced revenues of
$676.0 million and net income of $22.1 million, or $1.31 per diluted share,
for the first quarter of 2014 compared with revenues of $644.9 million and net
income of $24.6 million, or $1.47 per diluted share, for the first quarter of
2013. Operating profit was $31.6 million for the first quarter of 2014
compared with $32.1 million for the first quarter of 2013 and income before
income taxes was $31.6 million in 2014 compared with $30.7 million in 2013.

EBITDA for the first quarter of 2014 and the trailing twelve months ended
March 31, 2014, was $39.6 million and $164.0 million, respectively. EBITDA in
this press release is provided solely as a supplemental non-GAAP disclosure
with respect to operating results. For reconciliations from GAAP results to
the non-GAAP results, see page 6.

The Company's cash position was $107.3 million as of March 31, 2014 compared
with $175.7 million as of December 31, 2013. Debt as of March 31, 2014
decreased to $33.0 million from $69.5 million at December 31, 2013.

Since the inception of a stock repurchase program in December 2012, which
permits the repurchase of up to $50 million of the Company's outstanding Class
A common stock, Hyster-Yale has purchased approximately 103,600 shares for an
aggregate purchase price of $5.2 million. The Company did not repurchase any
shares during the first quarter of 2014 under this program.

Discussion of First Quarter Results

Revenues increased in the first quarter of 2014 compared with the first
quarter of 2013 primarily due to an increase in sales of higher-priced lift
trucks in all market segments, the favorable effect of unit price increases
implemented in 2013, primarily in the Americas mainly to offset the impact of
weakness in the Brazilian real, and an increase in fleet services and parts
volume in the Americas. The revenue increase was partially offset by a slight
decrease in unit volume and unfavorable currency movements. Fewer unit
shipments in Europe more than offset unit shipment increases in the Americas
and Asia-Pacific. Unfavorable currency movements in the first quarter of 2014
compared with the first quarter of 2013 resulted from the weakening of the
Brazilian real and Australian dollar, which was partially mitigated by the
strengthening of the euro against the U.S. dollar.

In the first quarter of 2014, worldwide new unit shipments were approximately
20,600 units compared with shipments of approximately 20,800 units in the
first quarter of 2013 and 22,700 units in the fourth quarter of 2013.
Worldwide backlog was approximately 28,900 units, or approximately $715
million, at March 31, 2014 compared with approximately 27,500 units, or
approximately $684 million, at March 31, 2013 and approximately 28,200 units,
or approximately $717 million, at December 31, 2013.

Gross profit improved by $2.5 million from the first quarter of 2013. This
increase includes a $6.6 million pre-tax improvement mainly due to the
favorable effect of price increases, an increase in parts volumes and lower
material costs, all primarily in the Americas, which was partially offset by
significant unfavorable foreign currency movements of $4.1 million pre-tax and
a shift in sales mix to lower-margin units also primarily in the Americas.
However, despite the improvement in gross profit and reduced interest expense
as a result of lower debt levels and lower interest rates during the first
quarter of 2014 compared with 2013, only a slight increase in income before
income taxes compared with the prior year was realized as these benefits were
largely offset by higher employee-related expenses mainly attributable to
increased headcount in marketing and engineering to support the Company's five
strategic initiatives. Higher income tax expense in 2014 resulting from a
higher effective income tax rate and the absence of favorable tax adjustments
from changes in certain U.S. and foreign tax laws recognized in the prior year
resulted in a reduction in net income.

Outlook

The global market for forklift trucks is expected to grow moderately in all
major global regions in the remainder of 2014 compared with 2013, although
strength in certain developed western markets is expected to be partially
offset by some weakening in the developing markets. As a result of this
anticipated market growth, combined with expected increases in market share
and a strong ending backlog, the Company anticipates an overall increase in
unit shipments and parts volumes in 2014 compared with 2013. The majority of
this increase is expected to come from the Americas, with smaller increases in
the Asia-Pacific unit shipments. Due to current political and economic
uncertainties in Eastern Europe and new dealer transitions, an increase in
2014 European shipments appears less likely than had previously been
anticipated.

The Company expects material costs in 2014 to increase slightly compared with
2013. Although commodity costs have remained stable over the past few
quarters, 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.

While sales are expected to increase moderately in 2014 compared with 2013,
the Company expects to generate an increase in operating profit, excluding the
anticipated gain on the sale of the Company's current Brazil plant, in excess
of the rate of sales increase, with a decrease in the first half of 2014
compared with 2013 that is expected to be more than offset by improvements in
the second half of 2014. The favorable effect of anticipated increased unit
volumes resulting from the Company's strategic initiatives, increased parts
volumes and product enhancements are all expected to contribute to this
improvement. In addition, because it is not anticipated that the market price
of the Company's stock will increase at the rate experienced in 2013, lower
estimated equity incentive compensation is expected to contribute to the
improved operating profit. These favorable items are expected to be partially
offset by the full year impact of marketing and employee costs associated with
the investments in strategic initiatives that were made over the course of
2013 and by unfavorable foreign currency movements in the Americas and
Asia-Pacific. After excluding the estimated pre-tax gain from the sale of the
Company's Brazil plant in 2014 and after excluding the $12.8 million valuation
allowance release taken in 2013, net income in 2014 is expected to improve
moderately compared with 2013. The effect of improved operating profit as
well as lower interest expense due to lower debt outstanding and lower
interest rates under its new revolving credit agreement are expected to be
partially offset by a higher expected effective income tax rate. The higher
effective income tax rate in 2014 is expected to result primarily from the
effect of higher United Kingdom income taxes due to the 2013 valuation
allowance release, combined with an anticipated increase in income in the
Americas operations, which have a higher tax rate.

Full year 2014 operating profit results, excluding the anticipated gain on
sale of the Brazil plant, are expected to improve minimally in the Americas
segment, which includes the North America, Latin America and Brazil markets,
with anticipated increases in unit and parts margins largely offset by
unfavorable foreign currency movements from an expected strong euro and slight
material cost increases. Operating profit in the Europe segment, which
includes the Middle East and Africa markets, is expected to increase in 2014
compared with 2013 due to anticipated benefits of the current strength of the
euro and slightly lower material costs. These improvements are expected to be
partially offset by the full year effect of marketing and employee costs,
which gradually increased throughout 2013. Asia-Pacific results for 2014 are
expected to be lower partially due to the weakness of the Australian dollar
and weaker industry demand in Australia despite the favorable effect of
expected increased volume.

Cash flow before financing activities for 2014 is expected to decrease from
2013 primarily due to an increase in capital expenditures, largely driven by
the construction of a new plant in Brazil. These capital expenditures will be
partially offset by the final cash payment which is expected to be received in
mid-2014 when the sale of the current facility is expected to be finalized.

The Company remains focused on gaining market share over time, as well as on
improving margins 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) enhancing independent distribution by
implementing programs aimed at broadening account coverage of the market,
expanding the number of dual-brand dealers, and ensuring dealer excellence in
all areas of the world, (4) 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, 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,
development programs are underway for its electric-rider, warehouse, internal
combustion engine (ICE) and big truck product lines. The Company is in the
process of launching a new premium spark-ignited engine for the 2 to 3.5 ton
cushion and pneumatic internal combustion engine trucks as part of the 2014
Model Year program. This new 2.5 liter engine is expected to improve
productivity and fuel economy together with using new software controls to
better match the truck's performance to a given customer application. The
2014 Model Year program is also expected to include the introduction of dual
hydraulic tanks on the 4 to 5.5 ton internal combustion engine cushion
trucks. It is anticipated that this feature will significantly reduce the
working temperature of the hydraulic system leading to improved reliability
and lower cost of ownership for customers. The Company has started production
of a 4,500 pound heavy duty pedestrian pallet truck at its Greenville, North
Carolina plant. Over time this platform is also expected to be produced in
other regions to maximize design and component commonality.

In the second half of 2014, the Company will continue with its model year
updates for the Electric Rider platform and expects to introduce its Tier IV
Final diesel emission solutions for Big Truck models. As stated previously,
the model year programs will keep the Company's platforms soundly positioned
in the market over time. Further, new platforms are expected to be developed
and launched over the next few years based on longer-term segment needs or
technological change opportunities.

In mid-2011, the Company introduced into certain Latin American markets a
UTILEV^®_branded 1 to 3.5 ton 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 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 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 ICE
model series in future years.

All of these new products and upgraded products, including the new Reach Truck
and new Big Truck models introduced in late 2013, are expected to help
increase market share, to improve revenues and to enhance operating margins.
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, May 1, 2014 at 11:00
a.m. eastern time. The call may be accessed by dialing (888) 713-4205 (Toll
Free) or (617) 213-4862 (International), Passcode: 23087702, 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 May 8, 2014. 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) the political and economic uncertainties
in Eastern Europe, (4) customer acceptance of pricing, (5) 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, (6) 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, (7)
delays in manufacturing and delivery schedules, (8) bankruptcy of or loss of
major dealers, retail customers or suppliers, (9) customer acceptance of,
changes in the costs of, or delays in the development of new products, (10)
introduction of new products by, or more favorable product pricing offered by,
competitors, (11) product liability or other litigation, warranty claims or
returns of products, (12) the effectiveness of the cost reduction programs
implemented globally, including the successful implementation of procurement
and sourcing initiatives, (13) changes mandated by federal, state and other
regulation, including health, safety or environmental legislation, (14)
delays in or increased costs associated with the Brazil plant construction,
and (15) delays in or cancellation of the sale of the existing Brazil facility
and land.

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
                                          March 31
                                          2014                  2013
                                          (In millions, except per share data)
Revenues                                  $    676.0            $   644.9
Cost of sales                             564.3                 535.7
Gross profit                              111.7                 109.2
Selling, general and administrative       80.1                  77.1
expenses
Operating profit                          31.6                  32.1
Other (income) expense
 Interest expense                     0.9                   2.5
 Income from unconsolidated           (1.2)                 (0.9)
affiliates
 Other                                0.3                   (0.2)
Income before income taxes                31.6                  30.7
Income tax provision                      9.5                   6.1
Net income attributable to stockholders   $    22.1             $   24.6
Basic earnings per share                  $    1.32             $   1.47
Diluted earnings per share                $    1.31             $   1.47
Basic weighted average shares outstanding 16.770                16.747
Diluted weighted average shares           16.863                16.780
outstanding



EBITDA RECONCILIATION
                  Quarter Ended
                                                                      3/31/14

                  6/30/2013      9/30/2013     12/31/2013  3/31/2014  Trailing
                                                                      12

                                                                      Months
                  (In millions)
Net income
attributable to   $   36.2       $   23.5      $  25.7     $  22.1    $ 107.5
stockholders
Noncontrolling    —              0.1           0.1         —          0.2
interest income
Income tax        (1.7)          6.6           6.2         9.5        20.6
provision
Interest expense  2.3            2.4           1.8         0.9        7.4
Interest income   (0.3)          (0.8)         (0.4)       (0.4)      (1.9)
Depreciation and
amortization      7.4            7.5           7.8         7.5        30.2
expense
EBITDA*           $   43.9       $   39.3      $  41.2     $  39.6    $ 164.0
(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
                                        March 31
                                        2014      2013
                                        (In millions)
Revenues
 Americas                             $ 456.9   $ 418.5
 Europe                               169.0     174.6
 Asia-Pacific                         50.1      51.8
 Total                           $ 676.0   $ 644.9
Gross profit
 Americas                             $ 76.0    $ 74.2
 Europe                               30.0      27.1
 Asia-Pacific                         5.7       7.9
 Total                           $ 111.7   $ 109.2
Operating profit (loss)
 Americas                             $ 25.7    $ 24.7
 Europe                               6.3       5.7
 Asia-Pacific                         (0.4)     1.7
 Total                           $ 31.6    $ 32.1
Net income attributable to stockholders
 Americas                             $ 17.2    $ 18.9
 Europe                               5.0       4.0
 Asia-Pacific                         (0.1)     1.7
 Total                           $ 22.1    $ 24.6





CASH FLOW AND CAPITAL STRUCTURE
                                          Three Months Ended
                                          March 31
                                          2014               2013
                                          (In millions)
Net cash provided by (used for) operating $   (16.9)         $     0.4
activities
Net cash used for investing activities    (5.5)              (9.0)
 Cash Flow Before Financing Activities $   (22.4)         $     (8.6)
                                          March 31,          December 31,

                                          2014               2013
Cash                                      $   107.3          $     175.7
Debt                                      33.0               $     69.5
 Net Cash                              $   74.3           $     106.2
(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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