What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-08-03 compared with 2021-05-04 · 193 added, 124 removed, 191 unchanged (62% of the section changed)

21 unchanged sentences

The cost containment actions associated with hiring, use of contract and temporary workers, travel and meetings, as well as other discretionary spending are continuing.

These measures are expected to remain in place until market and economic uncertainty dissipates and results improve further, which the Company expects to occur over the course of 2021.

These measures are expected to remain in place until market and economic uncertainty dissipates and results improve.

In addition, the Company adjusted production levels in 2020 at its manufacturing plants to align more closely with the reduced levels of demand, and worked closely with suppliers to help ensure current needs were met while also promoting continuity as the market improved.

However, despite these efforts, during the first quarter of 2021, the Company experienced further pandemic-related and other global supply chain constraints, component shortages, shipping container availability constraints and higher freight costs, as well as significant material cost inflation resulting from the accelerated pace of the market recovery, all of which have negatively impacted the Company.

However, despite these efforts, during the second quarter and first six months of 2021, the Company experienced further pandemic-related and other global supply chain constraints, component shortages, shipping container availability constraints and higher freight costs, as well as significant material cost inflation resulting from the accelerated pace of the market recovery, all of which have negatively impacted the Company.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

4 unchanged sentences

The results of operations for the Company were as follows:

THREE MONTHS ENDED Favorable / (Unfavorable)

2021 2020 % Change

THREE MONTHS ENDED Favorable / (Unfavorable) SIX MONTHS ENDED Favorable / (Unfavorable)

JUNE 30 JUNE 30

2021 2020 % Change 2021 2020 % Change

Lift truck unit shipments (in thousands)

19 unchanged sentences

Eliminations (0.1) 0.5 n.m.

(0.2) (0.6) n.m.

$ 116.4 $ 103.6 12.4 % $ 234.8 $ 240.3 (2.3) %

10 unchanged sentences

EMEA 3.7 (2.8) n.m.

3.8 (7.3) (152.1) %

JAPIC (1.9) (3.5) 45.7 % (4.4) (9.5) 53.7 %

3 unchanged sentences

Eliminations (0.1) 0.5 n.m.

(0.2) (0.6) n.m.

$ 5.9 $ 8.7 (32.2) % $ 9.0 $ 28.9 (68.9) %

Interest expense $ 3.8 $ 3.3 (15.2) % $ 6.6 $ 7.6 13.2 %

Other income $ (8.2) $ (3.8) 115.8 %

THREE MONTHS ENDED Favorable / (Unfavorable)

2021 2020 % Change

Other (income) expense $ 2.2 $ 3.7 (40.5) % $ (6.0) $ (0.1) n.m.

THREE MONTHS ENDED Favorable / (Unfavorable) SIX MONTHS ENDED Favorable / (Unfavorable)

JUNE 30 JUNE 30

2021 2020 % Change 2021 2020 % Change

Net income (loss) attributable to stockholders

1 unchanged sentence

EMEA 3.9 (1.5) n.m.

4.8 (4.6) 204.3 %

JAPIC 0.4 (1.1) 136.4 % (1.8) (5.7) 68.4 %

3 unchanged sentences

Eliminations (0.2) (0.9) n.m.

0.4 (1.7) n.m.

$ 1.9 $ 3.6 (47.2) % $ 7.5 $ 18.9 (60.3) %

Diluted earnings per share $ 0.11 $ 0.21 (47.6) % $ 0.45 $ 1.13 (60.2) %

Reported income tax rate 28.2 % 20.8 %

Reported income tax rate n.m.

- not meaningful

Following is the detail of the Company's unit shipments, bookings and backlog of unfilled orders placed with its manufacturing and assembly operations for new lift trucks, reflected in thousands of units.

As of March 31, 2021, substantially all of the Company's backlog is expected to be sold within the next twelve months.

THREE MONTHS ENDED

As of June 30, 2021, substantially all of the Company's backlog is expected to be sold within the next twelve months.

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2021 2020 2021 2020

Unit backlog, beginning of period 60.7 37.3 40.6 41.2

4 unchanged sentences

The dollar value of bookings and backlog is calculated using the current unit bookings and backlog and the forecasted average sales price per unit.

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2021 2020 2021 2020

Bookings, approximate sales value $ 1,070 $ 315 $ 2,040 $ 815

Backlog, approximate sales value $ 2,070 $ 810 $ 2,070 $ 810

First Quarter of 2021 Compared with First Quarter of 2020

The following table identifies the components of change in revenues for the first quarter of 2021 compared with the first quarter of 2020:

Second Quarter of 2021 Compared with Second Quarter of 2020

The following table identifies the components of change in revenues for the second quarter of 2021 compared with the second quarter of 2020:

Increase (decrease) in 2021 from:

1 unchanged sentence

Bolzoni revenues 20.6

Foreign currency 20.3

Eliminations (5.3)

Nuvera revenues (0.4)

Revenues increased 17.0% to $765.6 million in the second quarter of 2021 from $654.4 million in the second quarter of 2020.

The increase was primarily due to higher unit and parts volume in the lift truck business and Bolzoni, in addition to favorable currency movements from the translation of sales into U.S.

Customer demand increased in the second quarter of 2021, resulting in higher unit shipments, mainly in EMEA and JAPIC, as well as higher parts sales in the lift truck business.

Revenues in the Americas increased in the second quarter of 2021 compared with the second quarter of 2020, primarily from favorable parts sales driven by an increase in customer demand and dealers ordering safety stock due to supply chain constraints, as well as an increase in fleet management services and the favorable effect of price increases put in place to mitigate the impact of material cost inflation.

EMEA's revenues increased mainly due to higher unit and parts volume and favorable foreign currency movements of $15.5 million from the translation of sales into U.S.

JAPIC's revenues increased primarily as a result of improved unit volumes and favorable foreign currency movements of $5.2 million.

The increase in Bolzoni's revenues was mainly due to higher unit volume and favorable foreign currency movements of $1.9 million.

The following table identifies the components of change in operating profit for the second quarter of 2021 compared with the second quarter of 2020:

Operating Profit

Increase (decrease) in 2021 from:

Lift truck gross profit 7.8

Bolzoni operations 0.1

Nuvera operations (0.7)

Lift truck selling, general and administrative expenses (10.0)

The Company recognized operating profit of $5.9 million in the second quarter of 2021 compared with $8.7 million in the second quarter of 2020.

The decrease in operating profit was mainly due to higher selling, general and administrative expenses in the lift truck business primarily due to the reinstatement of pre-pandemic employee-related salaries and benefits.

In addition, the second quarter of 2020 included $8.3 million of government support incentives received at EMEA and Bolzoni.

The increase in selling, general and administrative expenses was somewhat offset by higher gross profit, primarily from higher unit and part volume and a favorable $6.3 million adjustment for tax credits in Brazil.

The increase in gross profit was somewhat

offset by significant material and freight cost inflation due to supply chain and logistics constraints, mainly in the Americas.

See Note 12 for further discussion of the Brazilian tax credits.

Operating profit in the Americas significantly decreased to $13.6 million in the second quarter of 2021 compared with $23.3 million the second quarter of 2020 due to an increase in operating expenses mainly resulting from the reinstatement of pre-pandemic salaries and benefits that were suspended in 2020 and a decrease in gross profit.

Gross profit declined primarily due to material cost inflation and increased freight costs of $11.6 million, net of price increases of $4.2 million, a shift in sales mix to lower-margin lift trucks and higher manufacturing costs of $3.7 million resulting from inefficiencies associated with component shortages.

The decrease in gross profit was partly offset by the realization of higher margins on parts sales and a $6.3 million favorable adjustment for social contribution taxes previously imposed on material purchases in Brazil.

Despite the absence of $4.7 million of government support incentives received in the prior year, EMEA's operating profit increased to $3.7 million in the second quarter of 2021 from an operating loss of $2.8 million in the second quarter of 2020.

The increase was primarily the result of a substantial improvement in gross profit partially offset by higher operating expenses mainly resulting from the reinstatement of pre-pandemic salaries and employee benefits.

Gross profit improved mainly due to an increase in unit and parts volumes, the favorable effect of currency exchange rates and higher prices implemented to partially offset increases in material and freight costs.

JAPIC's operating loss improved to $1.9 million in the second quarter of 2021 from $3.5 million in the second quarter of 2020 primarily due to improved gross profit from higher unit volume and favorable foreign currency movements.

Bolzoni recognized an operating loss of $0.4 million in the second quarter of 2021 compared with $0.5 million in the second quarter of 2020.

The improvements in gross profit from higher unit volumes of higher margin products and lower manufacturing costs from improved operating efficiencies were offset by material cost and freight cost inflation and the absence of government subsidies of $3.6 million recorded in the second quarter of 2020.

Nuvera's operating loss increased to $9.0 million in the second quarter of 2021 compared with $8.3 million in the second quarter of 2020 as result of the reinstatement of pre-pandemic salaries and benefits and the absence of $0.6 million of a gain on the sale of assets recognized in the second quarter of 2020.

The Company recognized net income attributable to stockholders of $1.9 million in the second quarter of 2021 compared with $3.6 million in the second quarter of 2020.

The decrease was primarily the result of lower operating profit and the write-off of deferred financing fees from the refinancing of the Term Loan (as defined below) in the second quarter of 2021.

These items were partially offset by higher equity earnings in unconsolidated subsidiaries.

See Note 7 for further discussion of the refinancing of the Term Loan.

First Six Months of 2021 Compared with First Six Months of 2020

The following table identifies the components of change in revenues for the first six months of 2021 compared with the first six months of 2020:

2020 $ 1,440.1

Increase (decrease) in 2021 from:

Foreign currency 36.4

Bolzoni revenues 12.2

Eliminations 7.5

Revenues decreased 6.8% to $732.2 million in the first quarter of 2021 from $785.7 million in the first quarter of 2020, mainly due to lower unit volumes, mainly in the Americas and at Bolzoni.

The decrease was primarily due to COVID-19 pandemic-related global supply chain constraints and component shortages in the lift truck business and the continued lower economic activity at Bolzoni.

The decrease in revenue was partially offset by favorable currency movements from the translation of sales into U.S.

dollars and lower eliminations of intercompany sales.

Revenues in the Americas decreased in the first quarter of 2021 compared with the first quarter of 2020, primarily from lower unit volumes in all classes of lift trucks due to COVID-19 pandemic-related global supply chain constraints and component shortages.

Unit volume and product mix (42.5)

Nuvera revenues (1.8)

2021 $ 1,497.8

Revenues increased 4.0% to $1,497.8 million in the first six months of 2021 from $1,440.1 million in the first six months of 2020.

The increase was mainly due to favorable currency movements from the translation of sales into U.S.

dollars, primarily in

EMEA, higher parts volumes in all geographic segments of the lift truck business and higher volume at Bolzoni, primarily due to increased customer demand due to post-pandemic recovery.

The increase in revenue was partially offset by lower unit volumes in the Americas, primarily due to global supply chain constraints and component shortages.

Revenues in the Americas decreased in the first six months of 2021 compared with the first six months of 2020, primarily from lower unit volumes in all classes of lift trucks due to global supply chain constraints and component shortages.

The decrease was partially offset by favorable parts sales driven by an increase in customer demand.

EMEA's revenues increased mainly due to favorable foreign currency movements of $32.8 million from the translation of sales into U.S.

dollars and higher unit and parts volume resulting from increased customer demand.

JAPIC's revenues increased primarily as a result of improved unit volumes and favorable foreign currency movements of $8.0 million, partially offset by a shift in sales to lower-priced lift trucks.

The decrease in Bolzoni's revenues was mainly due to lower sales from continued lower economic activity from the COVID-19 pandemic, partially offset by favorable foreign currency movements.

The following table identifies the components of change in operating profit for the first quarter of 2021 compared with the first quarter of 2020:

The increase in Bolzoni's revenues was mainly due to higher unit volume and favorable foreign currency movements of $5.1 million.

The following table identifies the components of change in operating profit for the first six months of 2021 compared with the first six months of 2020:

Operating Profit

1 unchanged sentence

Lift truck gross profit (9.3)

Lift truck selling, general and administrative expenses (7.7)

Bolzoni operations (1.8)

Nuvera operations (1.1)

Lift truck selling, general and administrative expenses 2.3

The Company recognized operating profit of $3.1 million in the first quarter of 2021 compared with $20.2 million in the first quarter of 2020.

The decrease in operating profit was mainly due to lower gross profit, primarily from lower unit volume due to COVID-19 pandemic-related supply constraints, mainly in the Americas, in addition to higher material and freight costs.

The decline in gross profit was somewhat offset by favorable foreign currency movements and lower selling, general and administrative expenses in the lift truck business despite the add back of pre-pandemic employee-related salaries and benefits, including $9.0 million of incentive compensation, as the Company has continued certain cost containment actions to mitigate the impact of the COVID-19 pandemic.

Operating profit in the Americas decreased in the first quarter of 2021 compared with the first quarter of 2020 due to a significant decrease in gross profit partly offset by modestly lower operating expenses.

The Company recognized operating profit of $9.0 million in the first six months of 2021 compared with $28.9 million in the first six months of 2020.

The decrease in operating profit was primarily due to lower gross profit and unfavorable selling, general and administrative expenses.

Gross profit declined mainly due to lower unit volumes, material cost inflation and increased freight costs, as well as higher manufacturing costs resulting from inefficiencies associated with component shortages.

A shift in mix to lower-margin products also contributed to the decrease in gross profit.

Despite the reinstatement of pre-pandemic salaries and benefits, including $6.9 million of incentive compensation, ongoing cost containment actions resulted in a modest decrease in operating expenses compared with the prior year quarter.

EMEA recognized operating profit of $0.1 million in the first quarter of 2021 compared with an operating loss of $4.5 million in the first quarter of 2020 mainly as a result of improved gross profit from favorable foreign currency movements of $3.5 million.

JAPIC's operating loss decreased to $2.5 million in the first quarter of 2021 from $6.0 million in the first quarter of 2020 primarily due to improved gross profit from higher unit volume and favorable foreign currency movements of $2.4 million and lower selling, general and administrative expenses.

Operating profit at Bolzoni decreased to $0.8 million in the first quarter of 2021 compared with $2.7 million in the first quarter of 2020 mainly from higher selling, general and administrative expenses and lower gross profit.

The Company recognized net income attributable to stockholders of $5.6 million in the first quarter of 2021 compared with $15.3 million in the first quarter of 2020.

The decrease was primarily the result of lower operating profit.

This was partially offset by a $4.6 million gain related to the sale of the Company's preferred shares of OneH2 in the first quarter of 2021, as well as favorable mark-to-market adjustments on an equity investment in a third-party and lower interest expense.

The decrease in gross profit was partially offset by favorable parts volume in all geographic lift truck segments, favorable foreign currency movements of $12.1 million and a favorable $6.3 million adjustment for tax credits in Brazil.

Selling, general and administrative expenses increased as pre-pandemic salaries and benefits were reinstated, including $12.1 million of incentive compensation.

In addition, the first six months of 2020 included $9.6 million of government subsidies at EMEA and Bolzoni.

Operating profit in the Americas decreased to $28.2 million in the first six months of 2021 compared with $61.8 million in the first six months of 2020 due to a decrease in gross profit and higher operating expenses.

Gross profit declined mainly due to lower volume, a shift in mix to lower-margin products, material cost inflation and increased freight costs of $12.7 million, as well as higher manufacturing costs resulting from inefficiencies associated with component shortages of $8.0 million.

These items were partially offset by favorable parts sales and a favorable $6.3 million favorable adjustment for social contribution taxes previously imposed on material purchases in Brazil.

The increase in operating expenses primarily resulted from the reinstatement of pre-pandemic salaries and benefits, including $8.8 million of incentive compensation.

EMEA recognized operating profit of $3.8 million in the first six months of 2021 compared with an operating loss of $7.3 million in the first six months of 2020 mainly as a result of improved gross profit from favorable foreign currency movements of $6.6 million, improved unit and parts volume and improved pricing, partially offset by the absence of $5.0 million of government subsidies received in the first six months of 2020.

JAPIC's operating loss decreased to $4.4 million in the first six months of 2021 from $9.5 million in the first six months of 2020 primarily due to improved gross profit from higher unit volume and favorable foreign currency movements of $4.3 million partially offset by a shift in mix to lower-margin products.

Operating profit at Bolzoni decreased to $0.4 million in the first six months of 2021 compared with $2.2 million in the first six months of 2020 mainly from material cost inflation, including freight, which offset the improved volumes.

Operating profit was

also unfavorably affected by the absence of government subsidies of $4.6 million and the reinstatement of pre-pandemic salaries and employee benefits, including $1.7 million of incentive compensation.

Nuvera's operating loss increased as result of the reinstatement of pre-pandemic salaries and employee benefits and the absence of $0.6 million of a gain on the sale of assets recognized in the first six months of 2020.

The Company recognized net income attributable to stockholders of $7.5 million in the first six months of 2021 compared with $18.9 million in the first six months of 2020.

The decrease was primarily the result of lower operating profit and the write-off of deferred financing fees from the refinancing of the Term Loan in the second quarter of 2021.

These items were partially offset by a $4.6 million gain related to the sale of the Company's preferred shares of OneH2 in the first six months of 2021 and higher equity earnings in unconsolidated subsidiaries.

See Note 7 for further discussion of the refinancing of the Term Loan.

LIQUIDITY AND CAPITAL RESOURCES

The following tables detail the changes in cash flow for the three months ended March 31:

The following tables detail the changes in cash flow for the six months ended June 30:

2021 2020 Change

2 unchanged sentences

Depreciation and amortization 23.3 20.8 2.5

Gain on sale of investment (4.6) — (4.6)

Dividends from unconsolidated affiliates 5.5 7.3 (1.8)

5 unchanged sentences

Proceeds from the sale of assets 18.9 6.6 12.3

Proceeds from the sale of investment 15.7 — 15.7

Net cash provided by (used for) investing activities 0.8 (23.3) 24.1

Cash flow before financing activities $ (99.9) $ (35.3) $ (64.6)

Net cash used for operating activities increased $1.4 million in the first three months of 2021 compared with the first three months of 2020, primarily as a result of lower net income, the impact of currency translation included in "Other" and the gain on the sale of the Company's preferred share investment in OneH2, partially offset by the change in working capital items.

The change in working capital was mainly due to significantly lower payments of employee-related compensation in the first quarter of 2021 compared with the first quarter of 2020 due to the Company's cost containment actions in 2020.

This was partially offset by higher inventory levels in the first quarter of 2021 resulting from COVID-19 pandemic-related global supply chain constraints and component shortages.

The change in net cash provided by (used for) investing activities during the first three months of 2021 compared with the first three months of 2020 is due to the proceeds from the sale of preferred shares of OneH2 for $15.7 million and lower capital expenditures in 2021.

Net cash used for operating activities increased $88.7 million in the first six months of 2021 compared with the first six months of 2020, primarily as a result of changes in working capital items and the impact of currency translation included in "Other".

The change in working capital was mainly due to higher inventory levels in the first six months of 2021 resulting from global supply chain constraints and component shortages.

This was partially offset by significantly lower payments of employee-related compensation in the first six months of 2021 compared with the first six months of 2020 due to the Company's cost containment actions in 2020.

The change in net cash provided by (used for) investing activities during the first six months of 2021 compared with the first six months of 2020 is due to the proceeds from the sale of preferred shares of OneH2 for $15.7 million and lower capital expenditures in 2021.

2021 2020 Change

Financing activities:

Net increase (decrease) of long-term debt and revolving credit agreements $ (2.7) $ 58.5 $ (61.2)

Net increase of long-term debt and revolving credit agreements $ 56.0 $ 45.4 $ 10.6

Cash dividends paid (10.7) (10.6) (0.1)

Financing fees paid (7.6) — (7.6)

Other (0.2) (0.4) 0.2

Net cash provided by (used for) financing activities $ (8.0) $ 53.1 $ (61.1)

Net cash provided by (used for) financing activities decreased $61.1 million in the first three months of 2021 compared with the first three months of 2020.

The decrease was primarily related to lower borrowings on the Facility (as defined below) in the first three months of 2021 compared with the first three months of 2020.

Net cash provided by financing activities $ 37.5 $ 34.4 $ 3.1

Net cash provided by financing activities increased $3.1 million in the first six months of 2021 compared with the first six months of 2020.

The increase was primarily related to additional borrowings from refinancing the Term Loan (as defined below) in the first six months of 2021 compared to higher borrowings on the Facility (as defined below) during the first six months of 2020 which were primarily used to fund working capital needs.

The increase was partially offset by financing fees paid in connection with the Facility and Term Loan (both defined below).

Financing Activities

The Company has a $240.0 million secured, floating-rate revolving credit facility (the "Facility”) that expires in April 2022.

There were no borrowings outstanding under the Facility at March 31, 2021.

The availability under the Facility at March 31, 2021 was $235.5 million, which reflects reductions of $4.5 million for letters of credit and other restrictions.

As of March 31, 2021, the Facility consisted of a U.S.

The Company has a $300.0 million secured, floating-rate revolving credit facility (the "Facility”) that expires in June 2026.

There were no borrowings outstanding under the Facility at June 30, 2021.

The availability under the Facility at June 30, 2021 was $285.4 million, which reflects reductions of $14.6 million for letters of credit and other restrictions.

As of June 30, 2021, the Facility consisted of a U.S.

revolving credit facility of $210.0 million and a non-U.S.

1 unchanged sentence

The obligations under the Facility are generally secured by a first lien on the working capital assets of the borrowers in the Facility, which include but are not limited to, cash and cash equivalents, accounts receivable and inventory (the "Facility Collateral") and a second lien on the Term Loan Collateral (defined below).

The approximate book value of assets held as collateral under the Facility was $950 million as of March 31, 2021.

Borrowings bear interest at a floating rate based on a base rate or LIBOR, as defined in the Facility, plus an applicable margin.

The applicable margins, as of March 31, 2021, for U.S.

The approximate book value of assets held as collateral under the Facility was $960 million as of June 30, 2021.

Borrowings under the Facility bear interest at a floating rate, which can be a base rate, LIBOR or EURIBOR, as defined in the Facility, plus an applicable margin.

The applicable margins are based on the total excess availability, as defined in the Facility, and range from 0.25% to 0.75% for U.S.

base rate loans and 1.25% to 1.75% for LIBOR, EURIBOR and foreign base rate loans.

The applicable margins, as of June 30, 2021, for U.S.

base rate loans and LIBOR loans were 0.25% and 1.25%, respectively.

The applicable margin, as of March 31, 2021, for non-U.S.

The applicable margin, as of June 30, 2021, for non-U.S.

base rate loans and LIBOR loans was 1.25%.

The Facility also required the payment of a fee of 0.25% per annum on the unused commitments as of March 31, 2021.

The Facility includes restrictive covenants, which, among other things, limit additional borrowings and investments of the Company and its subsidiaries subject to certain thresholds, as set forth in the Facility, and limits the payment of dividends.

If average availability for both total and U.S.

revolving credit facilities, on a pro forma basis, is greater than 15% and less than or equal to 20%, the Company may pay dividends subject to achieving a minimum Fixed Charge Coverage Ratio of 1.00 to 1.00, as defined in the Facility.

If the average availability is greater than 20% for both total and U.S.

revolving credit facilities, on a pro forma basis, the Company may pay dividends without any minimum Fixed Charge Coverage Ratio requirement.

The Facility also requires the Company to achieve a minimum Fixed Charge Coverage Ratio in certain circumstances in which total excess availability is less than 10% of the total commitments under the Facility or excess availability under the U.S.

revolving credit facility is less than 10% of the U.S.

revolver commitments, as defined in the Facility.

At March 31, 2021, the Company was in compliance with the covenants in the Facility.

The Facility also required the payment of a fee of 0.25% per annum on the unused commitments as of June 30, 2021.

The Facility limits the payment of dividends and other restricted payments the Company, including its subsidiaries, may make unless certain total excess availability and/or fixed charge coverage ratio thresholds, each as set forth in the Facility, are satisfied.

The Facility also requires the Company, including its subsidiaries to achieve a minimum fixed charge coverage ratio in which total excess availability is less than the greater of 10% of the total borrowing base, as defined in the Facility, and $20.0 million.

At June 30, 2021, the Company was in compliance with the covenants in the Facility.

The Company also has a $225.0 million term loan (the "Term Loan"), which matures in May 2028.

The Term Loan requires quarterly principal payments on the last business day of each March, June, September and December in an amount equal to $2.5 million.

The final principal repayment is due on May 30, 2023.

The Term Loan requires quarterly principal payments on the last day of each March, June, September and December commencing September 30, 2021 in an amount equal to $562,500 and the final principal repayment is due in May 2028.

The Company may also be required to make mandatory prepayments, in certain circumstances, as provided in the Term Loan.

At March 31, 2021, there was $162.5 million of principal outstanding under the Term Loan which has been reduced in the unaudited condensed consolidated balance sheet by $1.7 million for discounts and unamortized deferred financing fees.

At June 30, 2021, there was $225.0 million of principal outstanding under the Term Loan which has been reduced in the unaudited condensed consolidated balance sheet by $5.7 million for discounts and unamortized deferred financing fees.

The obligations under the Term Loan are generally secured by a first priority lien on the present and future shares of capital stock, material real property, fixtures and general intangibles consisting of intellectual property (collectively, the "Term Loan Collateral") and a second priority lien on the Facility Collateral.

The approximate book value of assets held as collateral under the Term Loan was $640 million as of March 31, 2021.

The approximate book value of assets held as collateral under the Term Loan was $650 million as of June 30, 2021.

Borrowings under the Term Loan bear interest at a floating rate, which can be a base rate or Eurodollar rate, as defined in the Term Loan, plus an applicable margin.

The applicable margin, as provided in the Term Loan, is 2.50% for base rate loans and 3.50% for Eurodollar loans.

The interest rate on the amount outstanding under the Term Loan at March 31, 2021 was 3.36%.

The interest rate on the amount outstanding under the Term Loan at June 30, 2021 was 4.00%.

In addition, the Term Loan includes restrictive covenants, which, among other things, limit additional borrowings and investments of the Company subject to certain thresholds, as provided in the Term Loan.

The Term Loan limits the payment of regularly scheduled dividends and other restricted payments to $50.0 million in any fiscal year, unless the consolidated total net leverage

ratio, as defined in the Term Loan, does not exceed 1.75 to 1.00 at the time of the payment.

At March 31, 2021, the Company was in compliance with the covenants in the Term Loan.

The Company had other debt outstanding, excluding finance leases, of approximately $97.2 million at March 31, 2021.

The Term Loan limits the payment of dividends and other restricted payments the Company, including its subsidiaries, may make up to $50.0 million in any fiscal year, unless the consolidated total net leverage ratio, as defined in the Term Loan, does not exceed 2.50 to 1.00 at the time of the payment.

The Term Loan also contains a provision requiring a premium to be paid in the event of a repricing of the borrowings under the Term Loan, whether by amendment or entry into new loans, within the six-month period following entry into the Term Loan.

At June 30, 2021, the Company was in compliance with the covenants in the Term Loan.

The Company incurred fees and expenses of $7.6 million in 2021 related to the amendment of the Facility and the

These fees were deferred and are being amortized as interest expense over the term of the applicable debt

Fees related to the Term Loan are presented as a direct deduction of the corresponding debt.

The Company had other debt outstanding, excluding finance leases, of approximately $100.3 million at June 30, 2021.

In addition to the excess availability under the Facility of $285.4 million, the Company had remaining availability of $28.5 million related to other non-U.S.

2 unchanged sentences

Contractual Obligations, Contingent Liabilities and Commitments

Since December 31, 2020, there have been no significant changes in the total amount of the Company's contractual obligations or commercial commitments, or the timing of cash flows in accordance with those obligations, as reported on pages 23 and 24 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

On May 28, 2021, the Company entered into an agreement providing for the Amendment and Restatement of the Term Loan, which is described above.

Since December 31, 2020, there have been no other significant changes in the total amount of the Company's contractual obligations or commercial commitments, or the timing of cash flows in accordance with those obligations, as reported on pages 23 and 24 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Capital Expenditures

The following table summarizes actual and planned capital expenditures:

Three Months Ended March 31, 2021 Planned for Remainder of 2021 Planned 2021 Total Actual 2020

Six Months Ended June 30, 2021 Planned for Remainder of 2021 Planned 2021 Total Actual 2020

Lift truck business $ 13.1 $ 39.2 $ 52.3 $ 44.2

16 unchanged sentences

BUSINESS PROSPECTS

Lift truck markets grew significantly faster than anticipated during the 2021 first quarter, with markets ending the quarter substantially higher than pre-pandemic levels.

Excluding China, where the market increased more than 130% over the 2020 first quarter when China was the most affected by pandemic-related shutdowns, the global lift truck market increased 46% compared with the first quarter of 2020.

Compared to the fourth quarter of 2020, the global lift truck market, including China, increased 20% in the 2021 first quarter driven by a 24.2% increase in EMEA, a 23.9% increase in the Americas and a 17.7% increase in China.

The market improvements over the fourth quarter and the Company's share gain programs translated into a substantial increase in the Company's 2021 first quarter bookings and into market share improvements in the Americas, EMEA, Asia and India markets.

Market growth for the remainder of the year is expected to moderate from the high growth rates of the 2021 first quarter.

In addition, the Company is anticipating a slowdown of bookings in the 2021 second quarter as price increases are implemented to mitigate the impact of material and freight cost inflation.

Nevertheless, the Company continues to expect increased bookings for the 2021 full year compared with the low levels in 2020, as a result of anticipated continued market growth and the strategic projects which the Company continues to pursue at each of its businesses to enhance market share.

These strategic projects gained traction in the first quarter, although definitive time frames for achieving full share gain results are still uncertain due both to the timing of the full impact of the strategic projects and the continuing financial impact of the pandemic and subsequent pandemic-related supply chain and cost challenges.

Until COVID-19 cases are consistently at safe low levels, the Company plans to continue to maintain procedures designed to limit the exposure of employees to the spread of COVID-19.

At the same time, the Company and its employees remain committed to meeting the needs of dealers and end customers by ensuring they receive equipment, parts and services in a timely manner to the degree reasonably possible.

While recent market and bookings activity are strong and while growth since the 2020 second quarter shutdowns has been better than expected, the level of future bookings and the resulting shipments are still uncertain.

Overall, the Company continues to operate on the assumption that the economic and market environment will remain difficult in 2021 until COVID-19 vaccinations and alternative therapies are fully implemented, cases decrease to substantially lower levels and related supply chain issues are resolved.

Lift truck markets continued to grow during the 2021 second quarter, but not at the growth rates seen in the fourth quarter of 2020 and first quarter of 2021.

The global lift truck market increased more than 70% over the second quarter of 2020 when the global economy was experiencing the peak of global pandemic-related shutdowns.

Compared to the first quarter of 2021, the global lift truck market increased 4.7% primarily driven by an 11.9% increase in EMEA.

The market improvements over the first quarter combined with the Company's share gain programs, as well as long lead times and the pull forward of orders before price increases went into effect, translated into an increase in the Company's 2021 second-quarter bookings that exceeded market growth.

The lift truck market growth for the remainder of the year is expected to decrease compared with the high levels in the first half of 2021 as markets begin to return toward pre-pandemic levels.

As a result, the lift truck business is anticipating a substantial decrease in bookings in the second half of 2021 compared with the first half of 2021.

Nevertheless, as a result of the strategic projects which the Company continues to pursue at each of its businesses, the Company expects increased bookings in the second half of 2021 over the second half of 2020 at levels higher than the expected year-over-year market growth rate.

These strategic projects gained traction in the first half of 2021, although definitive time frames for achieving full potential share gain

results are still uncertain due both to the timing of the full impact of the strategic projects and the continuing financial impact of the pandemic and subsequent pandemic-related supply chain and cost challenges.

While recent Lift Truck and Bolzoni market and bookings activity have been strong and better than expected, the level of future bookings and the resulting shipments are still uncertain.

Overall, the Company continues to operate on the assumption that the economic and market environment will remain difficult for at least the remainder of the year until COVID-19 and its variants are mitigated through the broad acceptance of vaccinations and subsequent herd immunity, and related supply chain issues are resolved.

Early in 2020, the Company put in place plans to mitigate the impact of declining markets and bookings and the consequential impact of reduced manufacturing activity from pandemic-related shutdowns by initiating cost reduction measures.

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Effective January 1, 2021, the Company reinstated pre-pandemic salaries, benefits and incentive compensation programs.

The other cost containment actions are continuing, and are expected to remain in place until market and economic uncertainty dissipates and results improve further, which the Company expects to occur over the course of 2021.

In the 2020 fourth quarter, the Company restructured some of its operations to create a more sustainable long-term cost structure.

The Company anticipates it will incur charges of approximately $1.1 million in 2021 for additional costs related to this restructuring.

The other cost containment actions are generally still in place, and are expected to remain so until market and economic uncertainty dissipates and results improve.

In the 2020 fourth quarter, the Lift Truck business restructured some of its operations to create a lower long-term cost structure.

The Company anticipates it will incur charges of approximately $0.8 million in the remainder of 2021 for additional costs related to this restructuring.

Estimated benefits from this restructuring program are expected to be approximately $9 million annually beginning in 2022.

The Company adjusted production levels at its manufacturing plants early in 2020 to align them more closely with the lower market demand and target bookings levels and had been building backlog levels up moderately throughout the second half of the year and the 2021 first quarter.

Given the strong bookings in the fourth and first quarters, and backlog levels at historic highs, higher build rates at first appeared reasonable for 2021, but as a result of continuing supply chain and logistics constraints the Company has not achieved even the production levels originally planned for the 2021 first quarter.

These production headwinds are expected to continue to present significant challenges for production in the second and third quarters of 2021, although the Company is hopeful that these challenges will abate and production levels will be able to be increased above previously planned rates in the second half of the year.

Significant material cost inflation and higher freight costs are also expected to continue into the second and third quarters, and the non-renewal of tariff exclusions is also expected to affect the cost of components in the second half of 2021.

The Company has announced and implemented price increases to moderate the effect of material cost inflation but many of the orders in the backlog do not reflect these price increases.

As a result, the Company expects to experience margin pressure throughout 2021 due to the lag between when price increases went into effect and when they are fully realized since customer orders in the backlog are generally price protected.

The Company will continue to work closely with suppliers to advance component supply levels and increase its production levels.

The Company anticipates that commodity costs will continue to increase as the year progresses, although these costs, particularly for steel, remain volatile and sensitive to changes in the global economy and to tariffs.

The Company will continue to monitor potential future supply costs and tariffs closely and adjust pricing accordingly.

Despite the above factors, the Company expects operating profit and net income in the second quarter of 2021 to be significantly higher than the very low second-quarter 2020 and first-quarter 2021 results as supply chain constraints are expected to moderate modestly.

This increase in expected operating profit would be the result of expected increased unit shipments and an anticipated favorable currency impact based on current currency rates partially offset by expected material and freight cost inflation, as well as the elimination of certain cost containment measures, including the reinstatement of incentive compensation plans in 2021 that were suspended in 2020.

While the Company's expectations for the 2021 second quarter have been based on the most recent information available, past quarters have shown that the effects of the pandemic on the economic and lift truck market environments can change expectations rapidly.

Further shutdowns or supplier shortages could occur.

Lockdown measures are still in place in a number of

European countries to mitigate the spread of the COVID-19 virus, and similar actions could be taken by other countries.

The Lift Truck business adjusted production levels at its manufacturing plants early in 2020 to align them more closely with the lower market demand and target bookings levels and has been building those levels back up moderately over the past 12 months.

Given the strong bookings in the prior year fourth quarter and the first half of 2021, as well as backlog levels at historic highs, higher build rates at first appeared reasonable for 2021, but as a result of continuing supply chain and logistics constraints, the Lift Truck business and Bolzoni have not been able to achieve the production levels originally planned for the first half of 2021.

The Company is beginning to see improvement in the supply chain, but production levels are expected to experience continued disruption in the third quarter of 2021, with easing anticipated in the fourth quarter.

However, the Company hopes that these challenges will abate sooner and production levels will be able to be increased above currently planned rates for the second half of the year.

Significant material cost inflation and higher freight costs are also expected to continue into the second half of the year, and the non-renewal of tariff exclusions is also expected to affect the cost of components in the second half of 2021.

Both the Lift Truck business and Bolzoni have announced and implemented price increases to moderate the effect of material cost inflation but many of the orders in the backlog slotted for production in 2021 do not reflect the full effect of these price increases.

As a result, the Company expects to continue to experience margin pressure throughout the second half of 2021 due to the lag between when these price increases went into effect and when they are effective since customer orders in the backlog are generally price protected.

The Company will continue to work closely with suppliers to increase component supply levels and its production levels.

However, the Company anticipates that commodity costs will remain elevated through the second half of the year, although these costs, particularly for steel, remain volatile and sensitive to changes in the global economy and to tariffs, and could be higher or lower than currently forecasted.

The Company will continue to monitor potential future supply and logistics costs and tariffs closely and adjust pricing accordingly.

As a result of these factors, and the increase in costs associated with the reinstatement of pre-pandemic salaries and benefits and the loss of the COVID-related government subsidies, the Company expects substantially lower consolidated operating profit and net income in the second half of 2021 compared with the second half of 2020, primarily due to the Americas and EMEA Lift Truck businesses, with anticipated operating and net losses in the third quarter of 2021 partly as a result of the Lift Truck business' seasonal third-quarter plant shutdowns.

Bolzoni expects significant increases in operating profit and net income in the second half of the year compared with both the respective prior-year period and the first half of 2021.

While the Company's expectations for the 2021 second half have been based on the most recent information available, past quarters have shown that the effects of the pandemic on the economic and lift truck market environments can change expectations rapidly.

Further Company shutdowns or supplier shortages could occur as a result of the new Delta variant that has emerged globally.

Lockdown measures are still in place in a number of European and Asian countries to mitigate the spread of the COVID-19 virus and its variants, and similar actions could be taken by other countries.

At this time, the lockdown measures in place have not required closure of the Company's plants.

The Company is monitoring this situation, including by closely monitoring a number of suppliers based in areas where COVID-19 cases are high.

Hyster-Yale is prepared to take further action if necessary to maintain the health and safety of its global employees and to address additional production and supply chain issues which may develop.

More broadly, as a result, pandemic-related uncertainty and its effect on the supply chain continue to limit the Company's ability to forecast bookings and shipment levels for the remaining 2021 quarters.

Looking to the future, in the context of an improving bookings trend, the Company expects to increase its investment in working capital and other expenditures to support growth in its business.

Capital expenditures are expected to be approximately $68 million in 2021.

The Company is monitoring this situation, including closely monitoring a number of suppliers based in areas where COVID-19 cases are high.

The Company continues to maintain procedures designed to limit the exposure of employees to COVID-19.

However, the Company is prepared to take further action if necessary to maintain the health and safety of its global workforce and to address additional production and supply chain issues that may develop.

The Company remains committed to meeting the needs of dealers and end customers by

ensuring they receive equipment, parts and services in a timely manner to the degree reasonably possible.

More broadly, pandemic-related uncertainty and its effect on the supply chain continue to limit the Company's ability to forecast bookings and shipment levels past the third quarter of 2021.

Despite these challenges, the Company expects to increase its investment in working capital and other expenditures to support growth in its business.

Capital expenditures are expected to be approximately $50 million in the second half of 2021.

While the Company expects to make these substantial additional investments in the business during 2021, maintaining liquidity also continues to be a priority.

At March 31, 2021, the Company's cash on hand was $103.0 million and debt was $285.4 million compared with cash on hand of $151.4 million and debt of $289.2 million at December 31, 2020.

In addition, as of March 31, 2021, the Company had unused borrowing capacity of approximately $265.3 million under existing revolving credit facilities, compared with $266.4 million at December 31, 2020.

At June 30, 2021, the Company's cash on hand was $87.5 million and debt was $345.7 million compared with cash on hand of $103.0 million and debt of $285.4 million at March 31, 2021.

Term Loan debt increased with the refinancing of the Company's term loan in May 2021.

In addition, as of June 30, 2021, the Company had unused borrowing capacity of approximately $313.9 million under the Company's existing revolving credit facilities, including the Company's recently refinanced Asset Backed Revolver, compared with $265.3 million at March 31, 2020.

Despite the potential volatility of near-term economic activity, the Company continues to execute its long-term strategy by focusing on advancing its key strategic initiatives.

Collectively, the key projects underlying its strategic initiatives are expected to have a transformational impact on the Company’s competitiveness, market position and economic performance.

While essentially all of the projects required to execute these initiatives continue to move forward, in the context of the COVID-19 pandemic, the pace of certain projects has been given greater emphasis than others.

In addition, certain accelerated projects have experienced delays as a result of the impact of pandemic-related challenges.

At Lift Truck, product projects are expected to lay the groundwork for enhanced market position by providing lower cost of ownership and enhanced productivity for the Company’s customers.

While the Company continues to introduce a number of new products during this period, the primary focus is on a new set of modular and scalable product families covering both internal combustion engine and electric trucks designed to provide customers with enhanced flexibility for meeting their application needs in addition to the benefit of lowest total cost of ownership.

While essentially all of the projects required to execute these initiatives continue to move forward, in the context of the COVID-19 pandemic and current logistics challenges, the pace of certain projects has been given greater emphasis than others.

In addition, certain accelerated projects have experienced delays as a result of the impact of pandemic-related challenges, although the continued increase in bookings and the Company's historically high backlog reinforce the long-term potential payoff from these programs.

At the Lift Truck business, product projects are expected to lay the groundwork for enhanced market position by providing lower cost of ownership and enhanced productivity for the Company’s customers.

While the Company continues to introduce a number of new products during this period, the primary focus continues to be on the Company's new modular and scalable product families covering both internal combustion engine and electric trucks designed to provide customers with enhanced flexibility for meeting their application needs in addition to the benefit of low total cost of ownership.

The introduction of the first of these new modular products, the standard version of the 2-to-3 ton internal-combustion engine lift truck for the EMEA market, was launched in April 2021.

These new EMEA trucks have been very well-received and the launch of this new range of the 2-to-3 ton counterbalanced trucks to other markets is expected to continue throughout 2021 and the early part of 2022.

These new EMEA trucks have been very well received and the launch of this new range of the 2-to-3 ton counterbalanced trucks in other markets is expected to continue throughout 2021 and 2022.

The introduction of these new products has led to, and will continue to lead to, significant changes in supply chain sourcing and in the Company’s various manufacturing facilities around the world as certain products are moved between plants.

Consolidated component volume sourced globally from reliable partners is expected to reduce long-term costs and improve quality as these new products are brought to market over time.

Lift Truck’s largest manufacturing facilities, its Berea, Craigavon and Fuyang plants, are undergoing significant changes to accommodate these new products and significant investments are being made to expand the Berea and Craigavon plants.

Further, the Company has accelerated plans to move certain production locations to provide permanent structural changes designed to reduce costs and optimize its manufacturing footprint.

The Company believes the modular nature of the new products being introduced will enhance its ability to meet customer needs at the lowest cost, and with more specificity, both at the industry level and at the individual customer level.

Hyster-Yale Group’s largest manufacturing facilities, its Berea, Craigavon and Fuyang plants, are undergoing significant changes to accommodate these new products and significant investments are being made to expand the Berea and Craigavon plants.

Further, the Company is accelerating plans to move certain production locations to provide permanent structural changes designed to reduce costs and optimize its manufacturing footprint.

The Company believes the modular nature of the new products being introduced will enhance its ability to meet customer needs at low cost, and with more specificity, both at the industry level and at the individual customer level.

To capitalize on this capability, the Company has accelerated its focus on implementing comprehensive industry strategies and investing in industry-focused sales capabilities to support its dealers.

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Nuvera continues to focus on serving heavy-duty applications, particularly bus and truck applications, with its 45kW and 60kW engines, which were both released for sale late in 2020.

As a result of these milestones, Nuvera has accelerated the 45kW and 60kW engine commercialization operations for the global market and is focusing on ramping up demonstrations, quotes and bookings of these products in 2021.

Nuvera also continues to focus on the forklift truck market.

The Company believes it is at an inflection point in its businesses as a result of the momentum of its strategic projects as they move to full implementation.

As a result of those milestones, Nuvera accelerated the 45kW and 60kW engine commercialization operations for the global market and has been focusing on ramping up demonstrations, quotes and bookings of these products in 2021.

In addition, Nuvera has initiated development of a new 125kW engine and also continues to focus on the forklift truck market.

The Company believes that, despite significant current inflation and logistics issues, it is at an inflection point in its businesses as a result of the momentum of its strategic projects as they move to full implementation.

While these initiatives may reduce the Company's near-term financial results, they are expected to position the Company with enhanced market position as market and component supply conditions return to more normal levels.

Nevertheless, the Company recognizes that the timing and shape of the market recovery remains uncertain, and it will continue to maintain its contingency plans which are designed to respond appropriately and with agility to changing conditions.

Once the COVID-19 pandemic and its resulting effects have abated and markets have returned to normal, the Company believes the full impact of these projects will lead to significant profitability improvements for a number of years into the future.

Once the COVID-19 pandemic and its resulting effects have fully abated and markets have returned to normal, the Company believes the full impact of these projects will lead to significant profitability improvements for a number of years into the future.

In summary, the Company's strategy for the longer term is clear and transformative.

Key projects, as well as explicit objectives for Lift Truck, Bolzoni and Nuvera businesses, support this long-term strategy, but nearer-term prospects, particularly in 2021, are uncertain as a result of a number of abnormal, largely external, influences.

Key projects, as well as explicit objectives for the Lift Truck, Bolzoni and Nuvera businesses, support this long-term strategy, but nearer-term prospects, particularly in 2021, are uncertain as a result of a number of abnormal, largely external, influences.

These influences include the direct impact of the COVID-19 pandemic on some markets, suppliers' manufacturing levels around the world and logistics issues, which collectively create supply and cost challenges, as well as the timing of adoption rates for key fuel cell market segments.

Importantly, however, the Company has a record lift truck backlog and a strong current booking environment.

Importantly, the Company has a record lift truck backlog and a strong current booking environment.

Future increased shipment opportunities are very significant.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis