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

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

Highlights:

- Second quarter 2014 revenue increased 3.8%

- Second quarter 2014 operating profit up $11.8 million and includes a $17.7
million gain on sale of Brazilian plant

PR Newswire

CLEVELAND, July 30, 2014

CLEVELAND, July 30, 2014 /PRNewswire/ --Hyster-Yale Materials Handling, Inc.
(NYSE: HY) today announced revenues of $684.7 million and net income of $32.9
million, or $1.95 per diluted share, for the second quarter of 2014 compared
with revenues of $659.6 million and net income of $36.2 million, or $2.16 per
diluted share, for the second quarter of 2013. Operating profit was $47.7
million for the second quarter of 2014 compared with $35.9 million for the
second quarter of 2013 and income before income taxes was $48.7 million in
2014 compared with $34.5 million in 2013.

For the six months ended June30,2014, the Company reported net income of
$55.0 million on revenues of $1.4 billion compared with net income of $60.8
million on revenues of $1.3 billion for the first six months of 2013.
Operating profit increased to $79.3 million for the first half of 2014 from
$68.0 million in the first half of 2013 and income before income taxes was
$80.3 million in 2014 compared with $65.2 million in 2013.

For the 2014 second quarter and six months ended June 30, 2014, net income
includes a gain on the sale of assets of $17.7 million—$11.5 million net of
taxes of $6.2 million, or $0.68 per diluted share, from the sale of the
Company's Brazil facility that was finalized, earlier than anticipated, in the
second quarter of 2014.

The second-quarter 2013 and the first six months of 2013 included a tax
benefit of $12.8 million, or $0.76 per diluted share, from the release of
certain portions of previously recorded income tax valuation allowances
related to the Company's United Kingdom operations.

EBITDA for the second quarter of 2014 and the trailing twelve months ended
June 30, 2014, including the $17.7 million gain from the sale of the Brazilian
plant, was $56.7 million and $176.8 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.

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 170,385 shares for an aggregate
purchase price of $10.8 million, including 66,766 shares purchased during the
six months ended June 30, 2014 for an aggregate purchase price of $5.6
million.

The Company's cash position was $98.6 million as of June 30, 2014 compared
with $175.7 million as of December 31, 2013. Debt as of June 30, 2014
decreased to $41.7 million from $69.5 million at December 31, 2013.

Discussion of Second Quarter Results

Revenues increased in the second quarter of 2014 compared with the second
quarter of 2013 primarily as a result of an increase in unit volumes, mainly
in North America and Europe, partially offset by decreases in Latin America
and Brazil. In addition, favorable foreign currency movements, the favorable
effect of unit price increases implemented in 2013, primarily in the Americas
to offset the impact of weakness in the Brazilian real, and an increase in
parts volume in all geographic regions also favorably affected revenues.
Favorable currency movements in the second quarter of 2014 compared with the
second quarter of 2013 resulted from the strengthening of the euro against the
U.S. dollar, partially offset by the effect of the weakening Brazilian real
and Australian dollar.

In the second quarter of 2014, worldwide new unit shipments increased to
approximately 21,700 units from shipments of approximately 20,900 units in the
second quarter of 2013 and approximately 20,600 units in the first quarter of
2014. Worldwide backlog was approximately 28,800 units at June30, 2014, or
approximately $745 million, compared with approximately 29,300 units at
June30, 2013, or approximately $700 million, and approximately 28,900 units,
or approximately $715 million, at March 31, 2014.

Excluding the gain from the sale of the Company's Brazil plant and the $12.8
million valuation allowance release taken in 2013, both operating profit and
net income declined in the second quarter of 2014 compared with the second
quarter of 2013. Despite improvements from an increase in unit and parts
volumes, unit price increases mainly in the Americas and lower material costs
in the Americas and Europe, gross profit declined $7.0 million. The decline
in gross profit was primarily the result of a shift in sales mix to units with
lower average profit margins in all geographic regions, higher U.S. health
care costs, unfavorable foreign currency movements of $2.1 million pre-tax and
increased warranty expenses as favorable adjustments in the second quarter of
2013 did not recur in 2014. The decrease in operating profit was partially
offset by lower selling, general and administrative expenses mainly as a
result of lower incentive compensation estimates compared with the 2013 second
quarter, which was largely offset by an increase in other employee-related
expenses as a result of higher U.S. health care costs, normal inflationary
increases and increased headcount in marketing and engineering to support the
Company's five strategic initiatives. The decline in net income, primarily due
to the decrease in operating profit, was partially offset by reduced interest
expense as a result of lower debt levels and lower interest rates during the
second quarter of 2014 compared with 2013.

Outlook

The global market for forklift trucks is expected to grow moderately during
the remainder of 2014 compared with 2013. Generally, this growth is expected
to be concentrated in developed western markets and China, and is expected to
be partially offset by weakening in certain developing markets. As a result
of this anticipated global market growth, combined with expected increases in
market share, the Company anticipates an overall increase in unit shipments
and parts volumes and, as a result, increased sales over the remainder of 2014
compared with 2013. The majority of this increase is expected to come from
North America and Western Europe, with smaller increases in the Asia-Pacific
unit shipments. The Company expects that, in particular, weakening markets in
Latin America, including Brazil, as well as Eastern Europe will only partially
offset growth in the Company's significant western developed markets.

The Company expects material costs in the remainder of 2014 to be comparable
with the second half of 2013. Although commodity costs have remained
relatively stable over the first half of 2014, these markets, particularly
steel, remain volatile and sensitive to changes in the global economy. The
Company will continue to monitor commodity costs, economic conditions,
currency movements and the resulting effects on costs and pricing, and will
take appropriate pricing actions, if necessary.

The Company expects to generate a significant increase in operating profit
during the second half of 2014, in excess of the rate of the sales increase,
with the majority of the increase occurring during the fourth quarter of
2014. The favorable effect of anticipated increased unit volumes resulting
from the Company's strategic initiatives, increased parts volume 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 in the second half of 2014. 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 the first half of 2014, unfavorable foreign currency
movements in the Americas and Asia-Pacific and anticipated higher employee
benefit costs, primarily health care expenses. Net income in the second half
of 2014 is expected to improve compared with the second half of 2013. The
effect of improved operating profit as well as lower interest expense due to
lower debt outstanding and lower interest rates under the Company's new
revolving credit agreement are expected to be partially offset by a higher
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 the portion of the Company's income in the Americas
operations, including the tax expense on the Brazil plant gain, which have a
higher tax rate.

Operating profit results for the second half of 2014 are expected to improve
significantlyin the Americas segment, which includes the North America, Latin
America and Brazil markets, with anticipated increases in unit and parts
marginspartially offset by continued unfavorable foreign currency movements
from an expected strong euro and slight increases in material costs. Operating
profit in the Europe segment, which includes the Middle East and Africa
markets, is expected to increase moderately in the second half of 2014
compared with the second half of 2013 due to anticipated benefits of the
current strength of the euro, the favorable effect of improved pricing 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 the
second half of 2014 are expected to be slightly higher than the second half of
2013 resulting from the favorable effect of improved pricing and an expected
increase in unit volume partially offset by the weakness of the Australian
dollar and weaker industry demand in Australia.

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 received during the second quarter
of 2014 when the sale of the current facility was 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. Within its premium
product warehouse line, the Company began production of a 4,500 pound heavy
duty pedestrian pallet truck at its Greenville, North Carolina plant in the
first quarter of 2014. Over time this platform is expected to be produced in
other regions, which will maximize design and component commonality. The
Company also expects to introduce a new warehouse rider truck in the North
America market in the third quarter of 2014 which has an enclosed operator
compartment and a 10,000 pound capacity to enable multiple pallet handling in
trailer loading/unloading and cross-dock applications.

During the second quarter of 2014, as part of the 2014 model year improvements
for the premium counterbalanced internal combustion engine (ICE) product line,
the Company introduced a new premium 2.5 liter spark-ignited engine for its 2
to 3.5 ton cushion and pneumatic ICE trucks and upgraded the hydraulic system
and dual hydraulic tanks to improve overall efficiency and lower ownership
costs on the 4 to 5.5 ton ICE cushion trucks. As stated previously, the
Company's model year programs will keep its 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 and
technological change opportunities.

Finally, during the third quarter of 2014, the Company plans to introduce the
first group of its premium Big Truck models with Tier IV final emission
solutions, as well as expanded use of premium transmissions on trucks up to 32
ton capacity and implementing load-sensing hydraulic systems on its 18 to 22
ton trucks.

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. The Company expanded the UTILEV^®-branded
series of utility lift trucks by introducing a 1 to 3 ton ICE cushion tire
truck in North America and a 3-wheel electric rider truck globally in 2013.
The UTILEV^®-branded series of lift trucks is expected to continue to gain
market position in 2014.

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, July 31, 2014 at 11:00
a.m. eastern time. The call may be accessed by dialing (888) 713-4209 (Toll
Free) or (617) 213-4863 (International), Passcode: 96398936, 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 August 7, 2014. The
online archive of the broadcast will be available on the Hyster-Yale website.

Non-GAAP and Other Measures

For certain pre-tax disclosures included in this earnings release, the
resulting after-tax amount and the related income tax amount have been
included. The tax effect is based on the statutory tax rate generally
applicable to the transaction or the effective income tax rate of the entity
to which the disclosure relates. Certain after-tax amounts are considered
non-GAAP measures in accordance with Regulation G. Management believes that
after-tax information is useful in analyzing the Company's net income.

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 and (14)
delays in or increased costs associated with the Brazil plant construction.

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   Six Month Ended
                                   June 30              June 30
                                   2014       2013      2014        2013
                                   (In millions, except per share data)
Revenues                           $  684.7   $ 659.6   $ 1,360.7   $ 1,304.5
Cost of sales                      577.4      545.3     1,141.7     1,081.0
Gross profit                       107.3      114.3     219.0       223.5
Selling, general and               77.3       78.4      157.4       155.5
administrative expenses
Gain on the sale of assets         (17.7)     —         (17.7)      —
Operating profit                   47.7       35.9      79.3        68.0
Other (income) expense
 Interest expense              0.8        2.3       1.7         4.8
 Income from unconsolidated    (1.4)      (0.6)     (2.6)       (1.5)
affiliates
 Other                         (0.4)      (0.3)     (0.1)       (0.5)
Income before income taxes         48.7       34.5      80.3        65.2
Income tax provision (benefit)     15.7       (1.7)     25.2        4.4
Net income attributable to         (0.1)      —         (0.1)       —
non-controlling interest
Net income attributable to         $  32.9    $ 36.2    $ 55.0      $ 60.8
stockholders
Basic earnings per share           $  1.96    $ 2.16    $ 3.28      $ 3.63
Diluted earnings per share         $  1.95    $ 2.16    $ 3.26      $ 3.62
Basic weighted average shares      16.802     16.730    16.780      16.735
outstanding
Diluted weighted average shares    16.838     16.789    16.851      16.783
outstanding





EBITDA RECONCILIATION
                  Quarter Ended
                                                                      6/30/14
                  9/30/2013     12/31/2013     3/31/2014   6/30/2014  Trailing
                                                                      12
                                                                      Months
                  (In millions)
Net income
attributable to   $    23.5     $    25.7      $    22.1   $   32.9   $  104.2
stockholders
Non-controlling   0.1           0.1            —           0.1        0.3
interest income
Income tax        6.6           6.2            9.5         15.7       38.0
provision
Interest expense  2.4           1.8            0.9         0.8        5.9
Interest income   (0.8)         (0.4)          (0.4)       (0.2)      (1.8)
Depreciation and
amortization      7.5           7.8            7.5         7.4        30.2
expense
EBITDA*           $    39.3     $    41.2      $    39.6   $   56.7   $  176.8
*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   Six Month Ended
                                   June 30              June 30
                                   2014       2013      2014        2013
                                   (In millions)
Revenues
 Americas                        $  440.8   $ 433.2   $ 897.7     $ 851.7
 Europe                          184.2      171.3     353.2       345.9
 Asia-Pacific                    59.7       55.1      109.8       106.9
 Total                      $  684.7   $ 659.6   $ 1,360.7   $ 1,304.5
Gross profit
 Americas                        $  67.5    $ 78.4    $ 143.5     $ 152.6
 Europe                          34.9       29.2      64.9        56.3
 Asia-Pacific                    4.9        6.7       10.6        14.6
 Total                      $  107.3   $ 114.3   $ 219.0     $ 223.5
Operating profit (loss)
 Americas                        $  37.9    $ 27.9    $ 63.6      $ 52.6
 Europe                          10.8       7.3       17.1        13.0
 Asia-Pacific                    (1.0)      0.7       (1.4)       2.4
 Total                      $  47.7    $ 35.9    $ 79.3      $ 68.0
Net income (loss) attributable to
stockholders
 Americas                        $  24.7    $ 14.3    $ 41.9      $ 33.2
 Europe                          8.8        21.6      13.8        25.6
 Asia-Pacific                    (0.6)      0.3       (0.7)       2.0
 Total                      $  32.9    $ 36.2    $ 55.0      $ 60.8







CASH FLOW AND CAPITAL STRUCTURE
                                             Six Month Ended
                                             June 30
                                             2014           2013
                                             (In millions)
Net cash provided by (used for) operating    $    (13.6)    $      40.1
activities
Net cash used for investing activities            (9.4)            (6.5)
 Cash Flow Before Financing Activities    $    (23.0)    $      33.6
                                             June 30, 2014  December 31, 2013
Cash                                         $    98.6      $      175.7
Debt                                              41.7             69.5
 Net Cash                                 $    56.9      $      106.2



SOURCE Hyster-Yale Materials Handling, Inc.

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