Hyster-Yale(US:HY)2022-02-28 21:39Economic Impact - Hyster-Yale Materials Handling, Inc. reported a significant decline in economic activity due to the COVID-19 pandemic, which adversely affected demand for its products and led to reduced production levels[111]. - The company faced significant material cost inflation and supply chain constraints, impacting its results of operations in 2021[117]. - Nuvera Fuel Cells, LLC, a subsidiary focused on hydrogen fuel cell technology, experienced halted progress on certain agreements due to pandemic-related disruptions[122]. Financial Performance - Revenues increased by 9.4% to $3,075.7 million in 2021 from $2,812.1 million in 2020, primarily due to higher unit and parts volume in the lift truck business and Bolzoni[138]. - Gross profit decreased by 21.9% to $363.4 million in 2021 from $465.4 million in 2020, with a notable decline in the Americas segment[135]. - Operating loss for the Company was $152.3 million in 2021, compared to an operating profit of $49.9 million in 2020, reflecting significant challenges across segments[135]. - Net income attributable to stockholders was a loss of $173.0 million in 2021, a decline of 566.3% from a profit of $37.1 million in 2020[135]. - The company recognized a net loss attributable to stockholders of $173.0 million in 2021, compared to net income of $37.1 million in 2020, mainly due to lower operating profit and a valuation allowance of $58.6 million against deferred tax assets[148]. Segment Performance - The Americas segment reported revenues of $1,984.6 million in 2021, a 4.9% increase from $1,891.2 million in 2020[134]. - EMEA revenues rose by 15.3% to $678.9 million in 2021, up from $588.6 million in 2020, driven by favorable foreign currency movements and increased customer demand[134]. - JAPIC revenues increased by 21.1% to $233.9 million in 2021, compared to $193.1 million in 2020, attributed to improved unit volumes and favorable currency movements[134]. - EMEA's operating profit fell from $3.1 million in 2020 to $0.3 million in 2021, driven by higher selling, general and administrative expenses and the absence of $7.8 million in government subsidies received in 2020[144]. - JAPIC's operating loss increased to $67.5 million in 2021 from $19.6 million in 2020, primarily due to the goodwill impairment charge[145]. Operational Metrics - The lift truck unit shipments totaled 94.9 thousand in 2021, an 11.0% increase from 85.5 thousand in 2020[134]. - The Company’s unit backlog at the end of 2021 was 105.3 thousand units, significantly up from 40.6 thousand units at the end of 2020[136]. - Bookings for lift trucks reached an approximate sales value of $3,820 million in 2021, compared to $2,020 million in 2020, indicating strong demand recovery[137]. Impairments and Charges - The company recognized a $55.6 million goodwill impairment charge for the JAPIC reporting unit in Q4 2021, with $11.7 million related to non-controlling interest[117]. - The company recorded non-cash impairment charges of $65.6 million in 2021, contributing to the overall financial losses[160]. Cash Flow and Debt - Net cash used for operating activities decreased by $420.4 million in 2021, primarily due to changes in working capital and net income loss, influenced by global supply chain constraints[160]. - Net cash provided by financing activities increased by $234.2 million in 2021, primarily due to additional borrowings to fund working capital needs[163]. - The Company has a $300.0 million secured revolving credit facility with $155.0 million borrowings outstanding as of December 31, 2021, and $140.1 million available[164]. - The Company has a $225.0 million term loan with $223.9 million principal outstanding as of December 31, 2021, requiring quarterly principal payments of $562,500[168]. - Total contractual cash obligations amount to approximately $1,428.0 million, with $1,032.4 million due in 2022[174]. Future Outlook - The Company expects a large net loss in Q1 2022, a reduced net loss in Q2, approximately breakeven in Q3, and substantial net income in Q4 2022[185]. - The global lift truck market is expected to decrease in 2022 compared to 2021, with a substantial decrease in bookings anticipated[188]. - Material cost inflation and higher freight costs are expected to persist in 2022, leading to continued high component and freight costs compared to 2021[190]. - The Company anticipates very low margins in Q1 2022, with expectations of improved margins in subsequent quarters, particularly in Q4 2022[191]. - The Lift Truck business expects to transition from significant operating losses in Q1 2022 to substantial operating profit and net income in Q4 2022[193]. - Bolzoni expects to achieve moderate operating profit in Q1 2022, with improving profits throughout the year compared to losses in 2021[194]. - Nuvera is focusing on the commercialization of its 45kW and 60kW engines, with expectations of reduced losses in 2022 due to enhanced fuel cell shipments[196]. Strategic Initiatives - The company plans to purchase an additional 15% equity interest in Hyster-Yale Maximal for $25.2 million, with annual installments of $8.4 million from June 2022 to June 2024[105]. - Hyster-Yale aims to enhance productivity for customers while providing the lowest cost of ownership and plans to grow in emerging markets and the attachments business[110]. - The Company is implementing a "One Company - 3 Brands" approach to streamline operations and strengthen its commercial capabilities in North America and JAPIC[195]. Risks and Challenges - The Company is subject to risks including supply chain disruptions, inflation, and foreign currency fluctuations, which could materially affect its results[199].