Hyster-Yale (HY) Q4 2020 earnings summary

Executive summary

• COVID-19 disruption reduced shipments and revenue, while cost controls and a faster-than-expected recovery limited the decline in operating profit and supported higher attributable net income YoY.

• Improving fourth-quarter bookings lifted year-end backlog close to pre-pandemic levels; focus remains on executing strategic projects and building longer-term volume and profitability.

Financial highlights

• FY2020 revenue was $2.812B, down 14.6% YoY from $3.292B; shipments fell 14.8% to 85,500 units.

• Operating profit was $49.9M, down 7.4% YoY from $53.9M; net income attributable to stockholders rose to $37.1M from $35.8M.

• Diluted EPS was $2.21 vs. $2.14 in 2019; Adjusted EBITDA was $97.4M vs. $109.2M.

• Operating cash flow was $166.9M; cash flow before financing was $123.2M, compared with $76.7M and $34.7M, respectively, in 2019.

Outlook and guidance

• 2021 market activity is expected to improve, but COVID-19 uncertainty remains; production and expenses will be managed carefully as conditions evolve.

• Lift Truck targets remain a 7% operating margin and 20% ROTCE; timing is uncertain, with margin improvement expected as volume rises and fixed costs are leveraged.

• Lift Truck requires factory production of 140,000 units, including HY Maximal, to achieve its financial objectives; the target volume is viewed as attainable over the next few years.

• Restructuring benefits are estimated at $10.4M annually beginning in 2022, following a $4.4M 2020 charge.