Hyster-Yale (HY) Q4 2014 earnings summary

Executive summary

• FY 2014 revenue rose 3.8% to $2,767.2M on higher unit volumes, favorable Americas mix, parts growth and pricing; new lift-truck shipments reached 87,581.

• Operating profit increased to $148.8M, including a $17.7M Brazil facility-sale gain and $3.1M of Nuvera acquisition costs; net income attributable to stockholders was $109.8M.

• Diluted EPS was $6.58 versus $6.54; 2013 net income benefited from a $12.8M UK tax valuation-allowance release.

Financial highlights

• Gross profit was $447.7M, down from $461.0M; currency movements, warranty expense, lower-margin mix and higher U.S. health-care costs weighed on results.

• Revenue increased $100.9M YoY; unit volume and mix added $98.5M, parts $24.6M and price $2.7M, partially offset by currency and other revenue declines.

• Operating cash flow was $100.0M versus $152.9M; investing cash use was $44.4M and financing cash use was $110.5M.

Outlook and guidance

• 2015 global lift-truck market growth expected to decelerate to nominal growth; shipment and parts volumes and sales are forecast to increase, with lower-priced mix a partial offset.

• Excluding the Brazil sale gain, 2015 lift-truck operating profit is expected to be similar to 2014; first-half weakness from Brazil plant transition and Europe is expected to be offset by second-half improvement.

• Excluding the sale gain, 2015 lift-truck net income is expected to decline moderately, mainly on higher tax expense; material costs are expected to rise marginally and be offset by pricing.

• Nuvera is forecast to lose $13M–$15M in 2015; up to $40M–$50M pretax R&D spending is planned over two to three years to commercialize technology and reach break-even.

• Planned 2015 capital expenditures are $54.6M, primarily for product development, manufacturing-site improvements, IT infrastructure and equipment.