HYSTER-YALE MATERIALS HANDLING ANNOUNCES FOURTH QUARTER AND FULL YEAR 2023 RESULTS
Q4 and Full-Year 2023 Highlights:
-
Q4 consolidated operating profit of
$48.7 million up 146% from Q4 2022, despite$9.6 million of equity incentive compensation expense specifically due to appreciation in the Company's stock price during Q4 2023 -
Q4 consolidated revenue growth of
$42 million , or 4%, compared with Q4 2022 -
Q4 Lift Truck operating profit of
$54.2 million and margin of 5.5% increased significantly over Q4 2022 due to improved product margins - Average sales price per backlog unit up 16% over Q4 2022 and 2% over Q3 2023
-
Q4 consolidated net income of
$25.2 increased from$7.6 million in Q4 2022 -
Full-year net income of
$125.9 million increased by$200 million from 2022 loss of$74.1 million - Full-year 2024 consolidated net income expected to be comparable to 2023 results
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Three Months Ended |
Twelve Months Ended |
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($ in millions except per share amounts) |
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Change |
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Change |
Revenues |
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Operating Profit (Loss) |
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Net Income (Loss) |
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Diluted Earnings (Loss)/share |
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Lift Truck Business Results
Revenues and shipments by geographic segment were as follows:
($ in millions) |
Q4 2023 |
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Q4 2022 |
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Change |
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Revenues |
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EMEA(1) |
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JAPIC(1) |
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(1) The |
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(Rounded to nearest hundred) |
Q4 2023 |
|
Q4 2022 |
|
Change |
|
Q3 2023 |
|
Change |
Unit Shipments |
23,600 |
|
27,100 |
|
(3,500) |
|
25,700 |
|
(2,100) |
|
15,600 |
|
16,000 |
|
(400) |
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17,100 |
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(1,500) |
EMEA |
5,400 |
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7,800 |
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(2,400) |
|
5,900 |
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(500) |
JAPIC |
2,600 |
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3,300 |
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(700) |
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2,700 |
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(100) |
Fourth-quarter 2023 Lift Truck revenues increased approximately 5% compared with 2022. Revenue growth was led by the favorable effect of previously implemented price increases in all regions and favorable currency effects of
Consolidated unit shipments decreased 13% year-over-year and 8% sequentially from third-quarter 2023. The year-over-year decline was largely due to a 30% decrease in EMEA shipments, while fewer
The Company shipped approximately 102,200 units in full-year 2023. This compares with approximately 100,800 units in 2022.
Gross profit and operating profit (loss) by geographic segment were as follows:
($ in millions) |
Q4 2023 |
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Q4 2022 |
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Change |
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Gross Profit |
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EMEA |
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JAPIC |
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Operating Profit (Loss) |
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EMEA |
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JAPIC |
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$— |
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Fourth-quarter 2023 Lift Truck operating profit increased substantially over the prior year, resulting in a 5.5% operating profit margin. This year-over-year increase generated a 62% incremental margin in the quarter, demonstrating strong growth and disciplined execution. Product margins increased significantly in the
Geographically, the
EMEA fourth-quarter 2023 revenues increased
JAPIC reported a fourth-quarter 2023 operating loss of
Bolzoni Results
($ in millions) |
Q4 2023 |
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Q4 2022 |
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Change |
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Revenues |
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Gross Profit |
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Operating Profit |
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Nuvera Results
($ in millions) |
Q4 2023 |
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Q4 2022 |
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Change |
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Revenues |
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Gross Profit (Loss) |
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Operating Loss |
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Nuvera's fourth-quarter 2023 operating loss decreased to
Balance Sheet and Liquidity
($ in millions) |
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Change |
Debt |
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Cash |
78.8 |
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78.2 |
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0.6 |
Net Debt |
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During fourth-quarter 2023, the Company reduced its net debt by
The Company's debt to total capital ratio of 55% at
The Company had unused borrowing capacity of approximately
Fourth-quarter 2023 days inventory outstanding decreased by one day compared with third-quarter 2023 levels despite comparable inventory balances between periods. The Company remains focused on improving inventory efficiency as production rates increase.
Market Commentary
Generally, the 2023 global economy performed better than anticipated. The Company's core lift truck market remains strong and above pre-pandemic levels in most regions. Nonetheless, some external market factors, including ongoing geopolitical instability, most recently evidenced by the tensions in the
The latest publicly available lift truck market data indicates that new unit, third-quarter 2023 booking activity decreased globally and in all major geographies except
In 2024, global market bookings are expected to be generally comparable to 2023 levels. An anticipated first-half decline is expected to be offset by a second-half increase. For both full-years 2023 and 2024, market unit volumes are projected to remain strong.
Consolidated Strategic Perspective
The Company's significantly improved 2023 results are due to the global team's ongoing execution of strategic initiatives and actions to offset external headwinds and improve the business' resiliency over time. These actions include key projects and process improvements to help the Company achieve long-term growth rates above the material handling market's expected growth rates. The Company's mature Lift Truck and
Operational Perspectives - Lift Truck Business
Lift Truck unit bookings and backlog were as follows:
(Bookings & Backlog $ Value in millions) |
Q4 2023 |
|
Q4 2022 |
Change |
Q3 2023 |
Change |
Unit Bookings |
16,700 |
|
21,000 |
(4,300) |
18,200 |
(1,500) |
Unit Bookings $ Value |
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Average Sales Price/Unit booked |
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Unit Backlog |
78,400 |
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102,100 |
(23,700) |
85,300 |
(6,900) |
Unit Backlog $ Value |
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Average Sales Price/Unit of backlog |
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Given the Company's extended backlog position, it continues to prioritize booking orders with strong margins. This focus combined with declining market demand, particularly in the
Looking forward, the Company expects to be price competitive with the market, but will work to maintain targeted bookings margins even as backlog levels are reduced. Overall, the Company expects 2024 bookings to increase compared to 2023. This improvement is primarily due to anticipated market share gains, especially in warehouse products, within an overall flat global lift truck market. These expected increases are primarily the result of the Company's strategic initiatives, particularly those focused on emerging technology solutions for warehouse-related markets. These technology solutions had strong 2023 growth rates, and the Company expects to build on that momentum in 2024. Planned production rate increases combined with anticipated market decreases in the first half of 2024 should help the Company reduce its extended lead times and backlog closer to pre-pandemic levels over 2024. However, given current expectations, the Company believes lead times and backlog levels will likely remain above optimal levels on certain product lines for an extended period. Specific lines, such as warehouse products, are expected to return to more normal lead time and backlog levels in 2024.
The Company's extended backlog, valued at
Full-year 2024 production and shipment rates are expected to increase compared with 2023 as production launch issues and lingering component and labor constraints dissipate. The Company's focus remains on maintaining a full production pipeline across its facilities within this moderated market demand environment.
The trend of higher average unit backlog prices and margins continued in the fourth quarter. This trend was largely due to the Company's ongoing focus on booking orders at strong margins and benefits from prior-year price increases to offset inflation. Fourth-quarter 2023 average booking prices decreased compared with both the third-quarter 2023 and the prior year largely due to the shift toward lower-priced warehouse products with shorter average lead times.
While material costs decreased modestly in 2023, forward economic indicators suggest stabilizing material costs and moderately higher labor costs in 2024. Elevated freight costs tied to geopolitical events are expected throughout 2024, particularly in the first half of the year. In this context, the Company expects to maintain its strong price-to-cost ratio in the first half of 2024 as higher-priced backlog units are shipped. This, combined with an anticipated increase in unit volumes, is expected to lead to higher gross margins and an improved operating profit in the first half of the year compared with 2023.
The expiration of tariff exemptions in late
Overall, higher production and shipment rates along with stable gross profit margins are expected to generate increased Lift Truck revenues and operating profit in 2024 compared to the prior year.
Strategic Perspectives - Lift Truck
From a broad perspective, the Lift Truck business has three core strategies that are expected to transform the Company's competitiveness, market position and economic performance over time. The first core strategy is to provide products that improve customer productivity at the lowest cost of ownership. The Lift Truck business' capabilities in this area are expected to be enhanced by bringing to market a wide variety of vehicle innovations, including new modular and scalable product families, truck electrification projects and technology advancements in operator assist systems (OAS), power options and vehicle automation.
The Company continues to make progress on its high priority projects. The Company's heart-of-the-line modular, scalable 2- to 3.5-ton internal combustion engine lift trucks have been launched in the EMEA and
Other key projects include electrifying trucks used for applications now dominated by internal combustion engine trucks that capitalize on advancements in electric powertrain options. The Company currently has its first electrified fuel cell Container Handler operating at the
The Company is exploring options for additional electrification projects within the
The Lift Truck business also has a key project focused on expanding global sourcing options of container handlers. The Company expects its Hyster® RS45 ReachStackers, as well as Empty Container Handlers, to be sourced from production locations in both Nijmegen,
The second core strategy is be the leader in the delivery of industry- and customer-focused solutions by transforming the Company's sales approach to ensure it meets a wide variety of customer needs across a broad set of end markets. To meet diversified customer product needs, the Company is transforming its sales processes by using an industry-focused approach. The Company believes that understanding the customers' applications is best done by segmenting the market into two broad umbrella categories: industrial and warehousing applications. The Company's Hyster® brand will increasingly focus on industrial applications, while the Yale® brand will increasingly focus on warehouse applications. This focus separation will reinforce a natural differentiation between the two brands that already exists in the marketplace.
The third core strategy is to be the leader in independent distribution by focusing on effectively coordinating dealer and major account coverage, enhancing dealer excellence and ensuring outstanding dealer ownership globally. The Company is committed to helping its excellent dealer group be the leaders in their territories.
Operational and Strategic Perspectives -
Operational and Strategic Perspectives - Nuvera
Nuvera's core strategy is to be a leader in the heavy-duty fuel cell market. Nuvera continues to focus on placing 45kW and 60kW fuel cell production engines for demonstration in a limited number of niche, heavy-duty vehicle applications with expected significant fuel cell adoption potential where batteries alone cannot meet the market's need. As a result, these applications are expected to have nearer-term fuel cell adoption potential. Nuvera has announced several projects with various third parties to test Nuvera® engines in targeted applications, including the
Nuvera is focused on increasing customer product demonstrations and customer bookings in 2024. Nuvera is also expanding its presence in
Consolidated Outlook
At the consolidated level, the Company expects 2024 operating profit to increase while net income is expected to be comparable to 2023. The latter is due to higher projected 2024 income tax expense driven by an elevated income tax rate. This results from full utilization of
Hyster-Yale is committed to continuing to reduce its leverage and enhance its cash flows through ongoing working capital reductions and continued discipline over operating expenses. Capital expenditures were
*****
Conference Call
The management of
Annual Report on Form 10-K
Non-GAAP and Other Measures
This release contains non-GAAP financial measures. Included in this release are reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with
EBITDA in this release is provided solely as supplemental non-GAAP disclosures of operating results. EBITDA does not represent operating profit (loss) or net income (loss), as defined by GAAP, and should not be considered as a substitute for operating profit (loss) or net income (loss). Hyster-Yale defines EBITDA as income (loss) before income taxes and noncontrolling interest income and dividends plus net interest expense and depreciation and amortization expense. EBITDA is not a measurement under GAAP and is not necessarily comparable with similarly titled measures of other companies. Management believes that EBITDA assists investors in understanding the results of operations of the Company. In addition, management evaluates results using EBITDA.
For purposes of this release, discussions about net income (loss) refer to net income (loss) attributable to stockholders.
Forward-looking Statements Disclaimer
The statements contained in this news release that are not historical facts are "forward-looking statements." These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation: (1) delays in delivery and other supply chain disruptions, or increases in costs as a result of inflation or otherwise, including materials, critical components and transportation costs and shortages, the imposition of tariffs, or the renewal of tariff exclusions, on raw materials or sourced products, and labor, or changes in or unavailability of quality suppliers or transporters, including the impacts of the foregoing risks on the Company's liquidity, (2) delays in manufacturing and delivery schedules, (3) customer acceptance of pricing, (4) the ability of Hyster-Yale and its dealers, suppliers and end-users to access credit in the current economic environment, or obtain financing at reasonable rates, or at all, as a result of interest rate volatility and current economic and market conditions, including inflation, (5) reduction in demand for lift trucks, attachments and related aftermarket parts and service on a global basis, including any cyclical reduction in demand in the lift truck industry, (6) unfavorable effects of geopolitical and legislative developments on global operations, including without limitation the entry into new trade agreements and the imposition of tariffs and/or economic sanctions, including the Uyghur Forced Labor Prevention Act (the "UFLPA") which could impact Hyster-Yale's imports from
About
*****
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FINANCIAL HIGHLIGHTS |
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Three Months Ended |
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Twelve Months Ended |
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2023 |
|
2022 |
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2023 |
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2022 |
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(In millions, except per share data) |
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Revenues |
$ 1,027.2 |
|
$ 985.2 |
|
$ 4,118.3 |
|
$ 3,548.3 |
Cost of sales |
817.5 |
|
838.5 |
|
3,332.7 |
|
3,114.4 |
Gross Profit |
209.7 |
|
146.7 |
|
785.6 |
|
433.9 |
Selling, general and administrative expenses |
161.0 |
|
126.9 |
|
576.9 |
|
473.0 |
Operating Profit (Loss) |
48.7 |
|
19.8 |
|
208.7 |
|
(39.1) |
Other (income) expense |
|
|
|
|
|
|
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Interest expense |
9.1 |
|
9.5 |
|
37.3 |
|
28.4 |
Income from unconsolidated affiliates |
(2.0) |
|
(1.4) |
|
(9.8) |
|
(11.0) |
Other, net |
(0.1) |
|
(1.4) |
|
0.2 |
|
5.9 |
Income (Loss) before Income Taxes |
41.7 |
|
13.1 |
|
181.0 |
|
(62.4) |
Income tax expense |
16.0 |
|
5.2 |
|
52.9 |
|
9.2 |
Net income attributable to noncontrolling interests |
(0.3) |
|
0.1 |
|
(0.6) |
|
(1.5) |
Net income attributable to redeemable noncontrolling interests |
— |
|
(0.2) |
|
(0.7) |
|
(0.5) |
Accrued dividend to redeemable noncontrolling interests |
(0.2) |
|
(0.2) |
|
(0.9) |
|
(0.5) |
Net Income (Loss) Attributable to Stockholders |
$ 25.2 |
|
$ 7.6 |
|
$ 125.9 |
|
$ (74.1) |
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Basic Earnings (Loss) per Share |
$ 1.47 |
|
$ 0.45 |
|
$ 7.35 |
|
$ (4.38) |
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Diluted Earnings (Loss) per Share |
$ 1.43 |
|
$ 0.44 |
|
$ 7.24 |
|
$ (4.38) |
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Basic Weighted Average Shares Outstanding |
17.184 |
|
16.936 |
|
17.137 |
|
16.901 |
Diluted Weighted Average Shares Outstanding |
17.568 |
|
17.137 |
|
17.385 |
|
16.901 |
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EBITDA RECONCILIATION |
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Quarter Ended |
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LTM |
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(In millions) |
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Net Income Attributable to Stockholders |
$ 26.6 |
|
$ 38.3 |
|
$ 35.8 |
|
$ 25.2 |
|
$ 125.9 |
Noncontrolling interest income and dividends |
0.6 |
|
0.5 |
|
0.6 |
|
0.5 |
|
2.2 |
Income tax expense |
8.7 |
|
12.0 |
|
16.2 |
|
16.0 |
|
52.9 |
Interest expense |
10.2 |
|
8.4 |
|
9.6 |
|
9.1 |
|
37.3 |
Interest income |
(0.6) |
|
(0.6) |
|
(0.7) |
|
(0.7) |
|
(2.6) |
Depreciation and amortization expense |
11.2 |
|
11.3 |
|
11.3 |
|
11.3 |
|
45.1 |
EBITDA* |
$ 56.7 |
|
$ 69.9 |
|
$ 72.8 |
|
$ 61.4 |
|
$ 260.8 |
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*EBITDA in this press release is provided solely as a supplemental disclosure. EBITDA does not represent net income (loss), as defined by |
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FINANCIAL HIGHLIGHTS |
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Three Months Ended |
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Twelve Months Ended |
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|
2023 |
|
2022 |
|
2023 |
|
2022 |
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(In millions) |
||||||
Revenues |
|
|
|
|
|
|
|
|
$ 708.4 |
|
$ 679.8 |
|
$ 2,899.3 |
|
$ 2,405.4 |
EMEA |
221.1 |
|
190.3 |
|
820.5 |
|
704.2 |
JAPIC |
52.0 |
|
67.9 |
|
201.1 |
|
250.0 |
Lift Truck Business |
$ 981.5 |
|
$ 938.0 |
|
$ 3,920.9 |
|
$ 3,359.6 |
|
87.3 |
|
92.0 |
|
375.3 |
|
355.7 |
Nuvera |
0.2 |
|
1.3 |
|
4.3 |
|
3.4 |
Eliminations |
(41.8) |
|
(46.1) |
|
(182.2) |
|
(170.4) |
Total |
$ 1,027.2 |
|
$ 985.2 |
|
$ 4,118.3 |
|
$ 3,548.3 |
|
|
|
|
|
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|
|
Gross profit (loss) |
|
|
|
|
|
|
|
|
$ 151.1 |
|
$ 110.1 |
|
$ 564.9 |
|
$ 303.4 |
EMEA |
37.6 |
|
11.0 |
|
121.0 |
|
45.0 |
JAPIC |
4.1 |
|
8.1 |
|
25.5 |
|
22.6 |
Lift Truck Business |
$ 192.8 |
|
$ 129.2 |
|
$ 711.4 |
|
$ 371.0 |
|
19.4 |
|
19.3 |
|
82.2 |
|
70.7 |
Nuvera |
(2.4) |
|
(1.7) |
|
(8.2) |
|
(7.2) |
Eliminations |
(0.1) |
|
(0.1) |
|
0.2 |
|
(0.6) |
Total |
$ 209.7 |
|
$ 146.7 |
|
$ 785.6 |
|
$ 433.9 |
|
|
|
|
|
|
|
|
Operating profit (loss) |
|
|
|
|
|
|
|
|
$ 55.0 |
|
$ 38.4 |
|
$ 233.1 |
|
$ 46.8 |
EMEA |
6.0 |
|
(11.2) |
|
12.1 |
|
(46.6) |
JAPIC |
(6.8) |
|
— |
|
(15.6) |
|
(10.6) |
Lift Truck Business |
$ 54.2 |
|
$ 27.2 |
|
$ 229.6 |
|
$ (10.4) |
|
2.6 |
|
2.0 |
|
15.3 |
|
6.2 |
Nuvera |
(8.0) |
|
(9.3) |
|
(36.4) |
|
(34.3) |
Eliminations |
(0.1) |
|
(0.1) |
|
0.2 |
|
(0.6) |
Total |
$ 48.7 |
|
$ 19.8 |
|
$ 208.7 |
|
$ (39.1) |
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FINANCIAL HIGHLIGHTS |
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CASH FLOW, CAPITAL STRUCTURE AND WORKING CAPITAL |
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Twelve Months Ended |
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|
2023 |
|
2022 |
|
|
|
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(In millions) |
||
Net cash provided by operating activities |
|
|
|
$ 150.7 |
|
$ 40.6 |
|
Net cash used for investing activities |
|
|
|
|
(34.5) |
|
(35.4) |
Cash Flow Before Financing Activities |
|
|
|
|
$ 116.2 |
|
$ 5.2 |
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(In millions) |
||||||
Debt |
$ 494.0 |
|
$ 510.6 |
|
$ 542.3 |
|
$ 560.6 |
Cash |
78.8 |
|
78.2 |
|
65.7 |
|
64.6 |
Net Debt |
$ 415.2 |
|
$ 432.4 |
|
$ 476.6 |
|
$ 496.0 |
|
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|
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(In millions) |
||||||
Accounts Receivable |
$ 497.5 |
|
$ 512.0 |
|
$ 582.1 |
|
$ 535.9 |
Inventory |
815.7 |
|
815.4 |
|
820.1 |
|
854.7 |
Accounts Payable |
530.2 |
|
549.6 |
|
593.2 |
|
627.6 |
Working Capital |
$ 783.0 |
|
$ 777.8 |
|
$ 809.0 |
|
$ 763.0 |
|
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