HY

Business Context and Reporting Period

Company: Hyster-Yale, Inc.
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three months ended March 31, 2026
Business Overview: The Company designs, manufactures, and sells lift trucks, attachments, parts, and fleet management services globally under the Hyster, Yale, and Nuvera brands. Operations are segmented into Americas, EMEA, JAPIC (Lift Truck Business), and Bolzoni Group (Attachments). The Company recently completed a strategic realignment of Nuvera Fuel Cells into the Americas segment.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Decline: Total revenues decreased 12.7% year-over-year. The Lift Truck business saw a 14.4% decline, driven by a shift in sales mix toward lighter-duty, lower-priced models and reduced volumes of traditional higher-priced units. Bolzoni Group revenues increased 3.2%.
• Profitability Reversal: The Company reported an operating loss of $28.0 million compared to an operating profit of $21.3 million in Q1 2025. This was primarily due to approximately $30 million in unfavorable tariff costs in the Americas, lower parts volume in EMEA, and the product mix shift.
• Segment Performance:
  • Americas: Operating loss of $1.7 million vs. profit of $42.5 million in Q1 2025.
  • EMEA: Operating loss widened to $19.1 million from $14.9 million.
  • JAPIC: Operating loss narrowed slightly to $7.1 million from $7.3 million.
• Backlog and Bookings: Approximate sales value of bookings was $580 million (down from $590 million). Backlog stood at $1,410 million (down from $1,910 million), though management noted backlog began to build in Q1 2026 after a cycle low in Q3 2025.

Guidance, Outlook, and Risks

• 2026 Outlook: Management expects 2026 to be a year of sequential improvement. The first half is anticipated to be a significant loss position due to lower shipment volumes, additional Section 232 tariffs, and macroeconomic pressures. The second half is expected to improve driven by stronger bookings, adequate backlogs, and cost actions.
• Tariff Impact: Additional Section 232 tariffs and the ongoing Iran conflict are expected to increase material prices and supply chain disruptions. Tariff expenses are projected to increase in Q2 2026 before mitigation benefits (pricing, sourcing) become meaningful in the second half. The Company does not expect to fully recover all tariff-related costs.
• Cost Reduction Initiatives:
  • A restructuring program launched in Q4 2025 targets annualized cost reductions of $40–$45 million starting in 2026.
  • Manufacturing footprint optimization projects initiated in late 2024 are expected to incur $10–$12 million in costs in 2026, with significant benefits ($30–$40 million annualized) expected by 2028.
• Liquidity: The Company maintains a $300 million revolving credit facility with $196.6 million available and a $225 million term loan. Management believes current cash, credit facilities, and operating cash flows are sufficient for the next 12 months.
• Risks: Key risks include supply chain disruptions, inflation, trade barriers (tariffs), geopolitical conflicts (Iran, Red Sea), and the ability to recover previously paid IEEPA tariffs (uncertain timing/amount).

Investor Verification Checklist

• Tariff Exposure: Verify the specific impact of Section 232 and Section 301 tariffs on Q2 and Q3 cost structures and the timeline for pricing pass-throughs.
• Product Mix Shift: Assess the long-term margin implications of the sustained shift toward lighter-duty, lower-priced lift trucks versus traditional models.
• Restructuring Execution: Monitor the realization of the $40–$45 million annualized cost savings from the Q4 2025 restructuring program.
• Backlog Recovery: Track the rebuild of the backlog to the typical 3–4 month range and its correlation to Q3/Q4 shipment volumes.
• IEEPA Tariff Recovery: Review updates on the U.S. Supreme Court ruling regarding IEEPA tariffs and the potential for refunds, which could impact future cash flows.