Hyster-Yale(US:HY)2021-11-06 04:01Financial Data and Key Metrics Changes - The company reported a consolidated revenue of $748.2 million for Q3 2021, a 14.7% increase from the previous year, but an operating loss of $54.3 million compared to an operating profit of $7.3 million in the prior year [9][10] - A consolidated net loss of $77.2 million was reported, compared to a net income of $5.1 million in the same quarter last year [10] Business Line Data and Key Metrics Changes - The lift truck business experienced an operating loss of $21.3 million, down from an operating profit of $16.2 million in the prior year, primarily due to increased costs and lower gross profit [11] - Bolzoni's revenues increased by 42.2% year-over-year, but it reported breakeven operating results due to higher material and freight costs [11] - Nuvera's revenue decreased to $200,000 from $700,000 in the prior year, resulting in an operating loss of $32.5 million, up from $8.7 million in 2020 [12] Market Data and Key Metrics Changes - The global lift truck market increased approximately 23% year-over-year but decreased more than 14% compared to the second quarter of 2021 [14] - The company ended Q3 2021 with a historically high backlog of 98,800 units, reflecting strong bookings despite a decrease from the record level in Q2 2021 [8][9] Company Strategy and Development Direction - The company is focused on three core strategies: providing lower cost of ownership while enhancing customer productivity, leading in industry and customer-focused solutions, and excelling in independent distribution [19][20][21] - The company aims to manage margins in its record backlog and has implemented price increases to address material cost inflation [18] Management's Comments on Operating Environment and Future Outlook - Management indicated that supply chain constraints have worsened, impacting the ability to ship units and leading to significant operating losses [6][7] - The outlook for the global lift truck market is expected to decline in Q4 2021 compared to the prior year, but remain significantly higher than pre-pandemic levels [15] - The company anticipates significant operating and net losses in Q4 2021 and the first half of 2022, with a return to profitability expected in the second half of 2022 [27][29] Other Important Information - The company has cash on hand of $61.4 million and debt of $428 million as of September 30, 2021, compared to cash of $87.5 million and debt of $345.7 million at June 30, 2021 [30] - The company is focused on maintaining liquidity and has adequate borrowing facilities to weather near-term challenges [29][30] Q&A Session Summary Question: Pricing actions in relation to current backlog and margins - Management noted that margin compression is primarily driven by commodity price increases and logistics challenges, with expectations for modest sequential improvement as newer orders reflect price increases [40][41][42] Question: Capex and its impact on strategic initiatives - Management is scrubbing capex but ensuring that critical strategic programs are not delayed, focusing on managing working capital effectively [45][46] Question: Updates on Nuvera's commercialization efforts - Nuvera is focusing on fuel cell applications in captive vehicle markets and is developing integrated fuel cell solutions for larger trucks [72][74] Question: Volatility in revenue and margins - Management indicated that shorter cycle times in certain segments have allowed for better responsiveness to material cost increases, contributing to improved revenue despite challenges [55][56] Question: Supply chain issues and their impact - Management acknowledged that increased consumer demand has led to significant supply chain constraints, affecting margins and overall operations [63][64] Question: Nuvera's test facility and market strategy - Management highlighted increased interest in fuel cells across various regions, with a strategic focus on applications that benefit from fuel cell technology [77][79]