Hyster-Yale(HY) - 2021 Q1 - Quarterly Report

Part I. FINANCIAL INFORMATION Item 1. Financial Statements The company presents its unaudited condensed consolidated financial statements for the quarter ended March 31, 2021 Unaudited Condensed Consolidated Financial Statements Q1 2021 financials show a slight asset increase, a sharp decline in net income, and negative operating cash flow Condensed Consolidated Balance Sheets | | MARCH 31, 2021 | DECEMBER 31, 2020 | | :--- | :--- | :--- | | Total Current Assets | $1,185.0 million | $1,129.7 million | | Total Assets | $1,874.1 million | $1,859.5 million | | Total Current Liabilities | $823.2 million | $755.9 million | | Total Liabilities | $1,258.3 million | $1,208.4 million | | Total Equity | $615.8 million | $651.1 million | Condensed Consolidated Statements of Operations | | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Revenues | $732.2 million | $785.7 million | | Gross Profit | $118.4 million | $136.7 million | | Operating Profit | $3.1 million | $20.2 million | | Net Income Attributable to Stockholders | $5.6 million | $15.3 million | | Diluted Earnings per Share | $0.33 | $0.91 | Condensed Consolidated Statements of Cash Flows | | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used for operating activities | ($47.1) million | ($45.7) million | | Net cash provided by (used for) investing activities | $9.5 million | ($17.4) million | | Net cash provided by (used for) financing activities | ($8.0) million | $53.1 million | | Cash and Cash Equivalents, end of period | $103.0 million | $50.4 million | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail the negative impact of the COVID-19 pandemic, including supply chain constraints and cost inflation - In Q1 2021, the company experienced pandemic-related supply chain constraints, component shortages, shipping issues, and significant material cost inflation[21][83] Revenues by Segment | Segment | Q1 2021 Revenue | Q1 2020 Revenue | | :--- | :--- | :--- | | Americas | $459.7 million | $550.7 million | | EMEA | $170.7 million | $152.1 million | | JAPIC | $60.5 million | $44.6 million | | Bolzoni | $79.5 million | $87.9 million | | Nuvera | $0 million | $1.4 million | Operating Profit (Loss) by Segment | Segment | Q1 2021 Operating Profit (Loss) | Q1 2020 Operating Profit (Loss) | | :--- | :--- | :--- | | Americas | $14.6 million | $38.5 million | | EMEA | $0.1 million | ($4.5) million | | JAPIC | ($2.5) million | ($6.0) million | | Bolzoni | $0.8 million | $2.7 million | | Nuvera | ($9.8) million | ($9.4) million | - As of March 31, 2021, the company had total recourse or repurchase obligations of $120.6 million related to financing arrangements[73] - The company sold its investment in OneH2, Inc for $15.7 million during Q1 2021, recognizing a gain of $4.6 million[78] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the significant Q1 2021 performance decline to supply chain constraints and cost inflation Financial Review Q1 2021 revenues and operating profit declined sharply due to lower volumes and significant cost inflation Key Financial Metrics | Metric | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $732.2 M | $785.7 M | (6.8)% | | Gross profit | $118.4 M | $136.7 M | (13.4)% | | Operating profit | $3.1 M | $20.2 M | (84.7)% | | Net income attributable to stockholders | $5.6 M | $15.3 M | (63.4)% | Bookings and Backlog | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Unit Bookings (thousands) | 42.4 | 19.4 | | Unit Backlog, end of period (thousands) | 60.7 | 37.3 | | Backlog, approx. sales value | $1,520 million | $960 million | - The decrease in operating profit was mainly due to a $17.1 million decline in lift truck gross profit and a $1.9 million decrease from Bolzoni operations[94] Liquidity and Capital Resources The company's liquidity tightened with decreased cash, though it maintained access to significant credit facilities - Net cash used for operating activities increased slightly to $47.1 million in Q1 2021 from $45.7 million in Q1 2020, primarily due to lower net income[100][101] - As of March 31, 2021, the company had $235.5 million available under its $240.0 million secured revolving credit facility and was in compliance with all debt covenants[104][106] Key Liquidity and Capitalization Metrics | | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $103.0 million | $151.4 million | | Total debt | $285.4 million | $289.2 million | | Total equity | $615.8 million | $651.1 million | | Debt to total capitalization | 32% | 31% | Business Prospects Management expects near-term headwinds from supply chain issues but anticipates improved Q2 2021 results - Lift truck markets grew significantly faster than anticipated in Q1 2021, leading to a substantial increase in the company's bookings and a record-high backlog[115][121] - Production headwinds from supply chain constraints, significant material cost inflation, and higher freight costs are expected to continue into Q2 and Q3 2021[121] - Operating profit and net income in Q2 2021 are expected to be significantly higher than the very low results of Q2 2020 and Q1 2021[122] - Long-term strategy focuses on key initiatives expected to have a transformational impact on competitiveness and performance[126][127][131] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risk exposures since its 2020 Annual Report - There have been no material changes in the Company's market risk exposures since December 31, 2020[138] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2021 - Based on an evaluation, the principal executive and financial officers concluded that the Company's disclosure controls and procedures were effective[140] - During the first quarter of 2021, there were no changes in the Company's internal control over financial reporting that materially affected its internal controls[141] Part II. OTHER INFORMATION Item 1. Legal Proceedings, Item 1A. Risk Factors, and Other Items The company reports no new legal proceedings or material changes to previously disclosed risk factors - The company reports no new legal proceedings[142] - There have been no material changes from risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020[142]