Hyster-Yale(HY) - 2025 Q2 - Quarterly Results

Q2 2025 Financial Performance Overview Hyster-Yale's Q2 2025 financial results, covering consolidated performance, segment analysis, and income tax Consolidated Results Consolidated results for Q2 2025 show an 18% year-over-year revenue decline and a shift from operating profit to loss, despite sequential revenue growth | ($ in millions except per share amounts) | Q2 2025 | Q2 2024 | % Change | Q1 2025 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $956.6 | $1,168.1 | (18)% | $910.4 | 5% | | Operating (Loss) Profit | $(8.5) | $95.6 | (109)% | $21.3 | (140)% | | Net (Loss) Income | $(13.9) | $63.3 | (122)% | $8.6 | (262)% | | Diluted (Loss) Earnings per Share | $(0.79) | $3.58 | (122)% | $0.48 | (265)% | | Adjusted Operating Profit | $7.2 | $95.6 | (92)% | $21.5 | (67)% | | Adjusted Net (Loss) Income | $(2.3) | $63.3 | (104)% | $8.7 | (126)% | - Key operational highlights for Q2 2025 include a 5% sequential revenue improvement, a renewed $300 million credit facility, and a significant decline in bookings attributed to tariff uncertainty among customers[7] Segment Performance Analysis of the financial performance of the Lift Truck and Bolzoni business segments in Q2 2025 Lift Truck Business Lift Truck business revenues declined 19% year-over-year with a significant operating profit loss, impacted by lower volumes and tariff costs Lift Truck Revenues by Geography ($ in millions) | Region | Q2 2025 | Q2 2024 | % Change | Q1 2025 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total | $904.2 | $1,118.0 | (19)% | $864.4 | 5% | | Americas | $707.5 | $881.5 | (20)% | $698.9 | 1% | | EMEA | $148.3 | $187.8 | (21)% | $118.2 | 25% | | JAPIC | $48.4 | $48.7 | (1)% | $47.3 | 2% | Lift Truck Operating Profit (Loss) by Geography ($ in millions) | Region | Q2 2025 | Q2 2024 | % Change | Q1 2025 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total | $(10.9) | $91.6 | (112)% | $20.3 | (154)% | | Americas | $11.7 | $92.5 | (87)% | $42.5 | (72)% | | EMEA | $(15.0) | $4.8 | n.m. | $(14.9) | (1)% | | JAPIC | $(7.6) | $(5.7) | (33)% | $(7.3) | (4)% | - Product margins declined due to increased material costs from higher tariffs and an unfavorable product mix. The company incurred approximately $10 million in additional tariff-related costs in Q2 2025 compared to the prior year[13] - Following Nuvera's strategic realignment, its results are now included in the Americas segment. Q2 2025 adjusted results exclude $15 million in severance and impairment costs related to this realignment[13] Bolzoni Business Bolzoni's revenue decreased 12% year-over-year with a 40% drop in operating profit, primarily due to European wage inflation | ($ in millions) | Q2 2025 | Q2 2024 | % Change | Q1 2025 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $90.6 | $102.4 | (12)% | $80.3 | 13% | | Gross Profit | $21.4 | $22.4 | (4)% | $18.5 | 16% | | Operating Profit | $2.4 | $4.0 | (40)% | $0.6 | 300% | - The year-over-year decline in operating profit was mainly driven by increased employee-related costs from wage inflation in Europe, which offset improvements in gross margin from material cost savings and favorable product mix[16] Income Tax Expense Q2 2025 income tax expense significantly decreased due to lower pre-tax earnings, with a new tax act under evaluation for future impact - The low tax expense is attributed to lower pre-tax earnings and the company's inability to recognize deferred tax assets due to its U.S. valuation allowance position[18] - A new tax act signed on July 4, 2025, could favorably impact the company, particularly through provisions allowing immediate expensing of R&D costs. The financial impact is under evaluation and not included in Q2 2025 results[19] Financial Position and Cash Flow Analysis of the company's liquidity, capital allocation, and cash flow performance in Q2 2025 Liquidity and Capital Allocation Liquidity improved with a renewed credit facility and reduced debt, but financial leverage increased due to lower earnings | ($ in millions) | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :--- | :--- | :--- | :--- | | Debt | $473.2 | $501.9 | $484.0 | | Cash | $66.9 | $66.5 | $77.2 | | Net Debt | $406.3 | $435.4 | $406.8 | | Net Debt / Adjusted EBITDA | 2.4 | 1.3 | 1.6 | - The company renewed its $300 million revolving credit facility, resulting in lower borrowing margins, increased covenant flexibility, and an extended maturity to June 2030[22] - Generated $29 million in cash from operations, primarily from favorable working capital actions. Inventory levels decreased by $28 million sequentially (excluding currency and tariff impacts)[25] Business Outlook Future outlook for consolidated performance, segment-specific projections, and capital allocation strategies Consolidated Strategic Perspective Full-year 2025 outlook is uncertain due to expected negative impacts from U.S. tariffs, despite mitigation efforts - Tariffs are expected to negatively impact financial results in the second half of 2025, even after mitigation actions such as price increases and supply chain adjustments are implemented[26] - The outlook is based on several key assumptions, including no new global tariffs beyond those effective July 9, 2025, and the non-extension of a Section 301 tariff exemption for lift truck parts beyond August 31, 2025[31] Lift Truck Business Outlook Lift Truck business faces moderated growth expectations due to sharply reduced bookings and backlog, with ongoing optimization projects | ($ in millions) | Q2 2025 | Q2 2024 | % Change | Q1 2025 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Unit Bookings ($ Value) | $330 | $380 | (13)% | $590 | (44)% | | Unit Backlog ($ Value) | $1,650 | $2,560 | (36)% | $1,910 | (14)% | - The sharp sequential decline in bookings was partly due to customers accelerating purchases in Q1 ahead of anticipated tariff-related price increases, followed by heightened uncertainty in Q2[30][32] - Manufacturing footprint and operational optimization projects are progressing, with expected annualized benefits of $30 million to $40 million starting in 2027[37] - Operating expenses are projected to decline modestly in 2025, benefiting from annualized cost reductions of $15 to $20 million from Nuvera's strategic realignment beginning in the second half of 2025[38] Bolzoni Outlook Bolzoni anticipates slight sequential Q3 2025 revenue and profit improvement, but full-year results are projected to decline year-over-year - Q3 2025 revenues are expected to slightly improve sequentially, with higher attachment sales offsetting reduced legacy component sales[42] - Full-year 2025 revenues are anticipated to decline year-over-year, and operating profit is projected to be below 2024's adjusted operating profit[43] Consolidated Outlook Consolidated outlook for Q3 2025 shows modest sequential growth, but full-year 2025 results are expected to decline due to tariffs and demand - The company expects modest sequential growth in revenue and operating profit in Q3 2025[44] - Full-year 2025 revenues, production levels, and profits are expected to be below 2024 results, with the outlook having worsened due to tariff impacts and a significant decline in demand[44] - The company maintains a long-term target of a 7% operating profit margin across the business cycle[45] Capital Allocation and Cash Flow Outlook Focus on strong operating cash flow through inventory optimization, with 2025 capital expenditures forecasted between $50 million and $60 million - The company is focused on working capital efficiency, particularly inventory optimization, to support strong full-year cash flow from operations[46] - Capital expenditures for 2025 are forecasted to range between $50 million and $60 million[47][48] Other Information Additional details on the company's long-term strategic objectives and upcoming investor conference call Long-Term Objectives Hyster-Yale's long-term vision focuses on transforming material movement and building new opportunities for sustainable growth - The company's vision is to transform material movement from Port to Home by providing optimal customer solutions and exceptional customer care[49] - Investors are encouraged to review the Q2 2025 Investor Deck on the company's website for more detailed information on strategic initiatives[50] Conference Call Information Details for the investor conference call on August 6, 2025, to discuss Q2 2025 financial results - A conference call to discuss financial results is scheduled for August 6, 2025, at 11:00 a.m. Eastern Time[50] Appendix: Financial Statements and Reconciliations Detailed financial statements, segment information, cash flow data, and non-GAAP reconciliations for Q2 2025 Financial Highlights (Consolidated Statements) Consolidated income statement for Q2 2025, detailing revenues, costs, operating profit, and net income attributable to stockholders - Presents the detailed consolidated income statement, showing a net loss attributable to stockholders of $13.9 million for Q2 2025, compared to a net income of $63.3 million in Q2 2024[59] Segment Information Detailed financial performance by operating segment, including revenues, gross profit, and operating profit (loss) for Q2 2025 - Provides a detailed breakdown of revenues, gross profit, and operating profit by geographic and business segment, highlighting the significant operating profit decline in the Americas and the persistent losses in EMEA and JAPIC for Q2 2025[61] Cash Flow, Capital Structure and Working Capital Key data on cash flow from operations, capital structure, working capital components, and Adjusted EBITDA reconciliation - Details cash flow from operating activities, which was $28.9 million in Q2 2025. It also shows key balance sheet items like Debt ($473.2 million), Cash ($66.9 million), and Working Capital ($814.3 million) as of June 30, 2025[63] Reconciliation of Non-GAAP Measures Reconciliation of non-GAAP financial measures, including adjusted operating profit, net income, and diluted EPS, to GAAP counterparts - Reconciles GAAP operating loss of $(8.5) million to an adjusted operating profit of $7.2 million for Q2 2025 by excluding $15.7 million in restructuring and impairment charges[65] - Provides a detailed reconciliation of adjusted operating profit by segment, showing the impact of restructuring charges primarily within the Americas segment[66]