Hyster-Yale (HY) Q4 2013 earnings summary

Executive summary

• FY13 revenue rose 8.0% to $2,666.3M; operating profit increased 20.2% to $134.3M and net income attributable to stockholders rose 12.2% to $110.0M.

• Worldwide unit shipments increased to 85,494 from 76,917; excluding China, market share improved in all major global regions.

• Strategy centered on market-share gains, stronger margins in internal-combustion trucks, product introductions and expanding the independent dealer network.

Financial highlights

• Revenue was $2,666.3M vs. $2,469.1M; growth reflected higher Americas unit and parts volumes and pricing, partly offset by unfavorable currency and lower-priced mix.

• Operating profit was $134.3M vs. $111.7M; gross profit rose $57.8M, partly offset by higher SG&A and unfavorable currency.

• Net income attributable to stockholders was $110.0M vs. $98.0M; diluted EPS was $6.54 vs. $5.83.

• Operating cash flow increased to $152.9M from $128.7M; working capital absorbed cash as receivables and inventory grew ahead of higher expected volume.

• Q4 revenue was $717.9M, operating profit $35.0M, net income attributable to stockholders $25.7M and diluted EPS $1.53.

Outlook and guidance

• Global forklift markets are expected to grow slightly in all major regions in 2014; higher shipments and parts volumes are anticipated, led by the Americas.

• 2014 sales are expected to increase moderately; operating profit, excluding the anticipated Brazil facility sale gain, is expected to rise faster than sales, with H1 weakness more than offset by H2 improvement.

• Excluding the Brazil sale gain and the 2013 $12.8M valuation-allowance release, 2014 net income is expected to improve moderately; higher taxes partly offset lower interest expense.

• Americas and Europe operating profit are expected to improve; Asia-Pacific results are expected to decline, mainly due to Australian-dollar weakness.

• 2014 capital expenditures are planned at $61.6M, largely for the new Brazil plant; cash flow before financing is expected to decrease from 2013.