Hyster-Yale(US:HY)2019-11-02 10:21Financial Data and Key Metrics Changes - Consolidated revenues for Q3 2019 decreased to $766 million from $783.9 million in Q3 2018, while consolidated operating profit increased significantly to $19.5 million from $12.2 million [6] - Net income for Q3 2019 decreased to $12.6 million or $0.76 per share from $15.4 million or $0.93 per share in the prior year [7] Business Line Data and Key Metrics Changes - Lift Truck business revenue decreased to $725.3 million from $740.8 million, with modest revenue increases in the Americas offset by declines in EMEA and JAPIC [8] - Bolzoni reported revenues of $75.8 million with a net income of $700,000, down from $84.4 million and $1.4 million respectively in the previous year [12] - Nuvera's revenues increased to $2.4 million from $2 million, but net loss decreased to $5.8 million from $6.4 million [13] Market Data and Key Metrics Changes - The Americas experienced modest revenue increases primarily due to price increases, while EMEA and JAPIC saw revenue declines [8] - The overall market for forklifts is projected to show some softening, with North America stabilizing around normalized levels compared to 2018 [59][60] Company Strategy and Development Direction - The company is focusing on six strategic initiatives expected to transform competitiveness and economic performance over the next three to five years [14] - New product launches, including modular and scalable counterbalance trucks, are anticipated to significantly impact results in 2020 [17][18] - The company aims to achieve a 7% operating profit margin target by 2023, assuming reasonable market conditions continue [29] Management's Comments on Operating Environment and Future Outlook - Management noted that supply chain constraints are expected to ease by the end of 2019, which should improve operational performance [25] - The company anticipates significant improvements in operating profit and net income for Q4 2019 and full year 2020 compared to 2019 [32][33] - The management expressed cautious optimism regarding the North American market stabilizing and potential growth in certain segments [59] Other Important Information - Cash position at September 30, 2019, was $62.8 million, up from $50.3 million at June 30, but down from $83.7 million at the end of 2018 [35] - The company expects working capital to improve significantly in Q4 2019 as inventory supplier issues are resolved [37] Q&A Session Summary Question: Where does the retroactive tariff exclusion income hit? - It hits the gross profit line as those tariffs were included in the cost of goods sold [43] Question: When do you anticipate supply chain constraints to normalize? - Management expects improvements in supply chain constraints by the end of 2019 [44] Question: How significantly did supply chain constraints weigh on gross margins in Q3? - Supply chain constraints had a significant impact on operational performance, affecting working capital and revenue [46] Question: Did supply chain issues affect demand? - There were some cancellations, but overall demand was managed through inventory in the field [47] Question: What is the outlook for pricing and cost trends? - Pricing has improved, and the company expects to maintain positive trends in price-cost spread [52] Question: How is the product mix in terms of orders pending? - There is a mixed set of signals, with some downturns in larger trucks but signs of market picking up in certain areas [56] Question: What is the status of the JAPIC segment's profitability? - The JAPIC segment is undergoing reengineering and is expected to improve profitability over the next 12 months [71] Question: What is the update on Nuvera's engine validation? - Revenue is expected to ramp up as engine shipments increase, with improvements anticipated throughout 2020 [74] Question: How is the supply chain improvement progressing? - The company is actively working with current and new suppliers to enhance supply chain efficiency [85]