What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-05-03 compared with 2021-11-02 · 137 added, 191 removed, 170 unchanged (66% of the section changed)

7 unchanged sentences

The materials handling business historically has been cyclical because the rate of orders for lift trucks fluctuates depending on the general level of economic activity in the various industries and countries its customers serve.

Lift trucks and component parts are manufactured in the United States, China, Northern Ireland, Mexico, the Netherlands, the Philippines, Japan, Italy, Brazil and Vietnam.

Lift trucks and component parts are manufactured in the United States, China, Northern Ireland, Mexico, the Netherlands, Brazil, the Philippines, Italy, Japan and Vietnam.

The Company owns a 75% majority interest in Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.

("Hyster-Yale Maximal").

Hyster-Yale Maximal is a Chinese manufacturer of low-intensity and standard lift trucks and specialized material handling equipment.

Hyster-Yale Maximal also designs and produces specialized products in the port equipment and rough terrain forklift markets.

During 2021, the Company signed an Equity Transfer Agreement with Y-C Hongkong Holding Co., Limited (“HK Holding Co”), pursuant to which the Company expects to purchase 15% of the equity interest of Hyster-Yale Maximal from HK Holding Co for an aggregate purchase price of $25.2 million in June 2022, which will be paid in annual installments of $8.4 million beginning in June 2022 through June 2024.

Subsequently, the Company will have an option to purchase HK Holding Co's remaining interest in Hyster-Yale Maximal at any time prior to June 8, 2056 for $16.8 million.

If this option is exercised, the Company will own 100% of the equity interest of Hyster-Yale Maximal.

The Company operates Bolzoni S.p.A.

4 unchanged sentences

Nuvera is an alternative-power technology company focused on the design, manufacture and sale of hydrogen fuel cell stacks and engines.

During 2020, broad measures taken by governments, businesses and others across the globe to limit the spread of novel coronavirus ("COVID-19") adversely affected the Company.

The resulting significant decline in economic activity also reduced the demand for the Company's products and limited the availability of components from certain suppliers.

Production was significantly reduced or suspended at the Company's Chinese and European facilities for certain periods during the first and second quarters of 2020.

The Company also initiated several cost reduction measures designed to ease liquidity pressure.

These cost containment actions included spending and travel restrictions, significant reductions in temporary personnel, furloughs, suspension of incentive compensation and profit sharing, benefit reductions and salary reductions.

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

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.

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 third quarter and first nine 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

1 unchanged sentence

Critical Accounting Policies and Estimates have not materially changed since December 31, 2021.

See Note 2 to the unaudited condensed consolidated financial statements for a discussion of the new accounting pronouncements adopted on January 1, 2021.

FINANCIAL REVIEW

The results of operations for the Company were as follows:

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

SEPTEMBER 30 SEPTEMBER 30

2021 2020 % Change 2021 2020 % Change

THREE MONTHS ENDED Favorable / (Unfavorable)

2022 2021 % Change

Lift truck unit shipments (in thousands)

8 unchanged sentences

Bolzoni 95.1 79.5 19.6 %

Nuvera 0.2 0.7 (71.4) % 0.5 2.8 (82.1) %

Nuvera 0.6 — n.m.

Eliminations (47.2) (38.2) 23.6 %

8 unchanged sentences

Eliminations (1.6) (0.1) n.m.

(0.7) (0.9) n.m.

$ 101.2 $ 118.4 (14.5) %

10 unchanged sentences

EMEA (11.4) 0.1 n.m.

2.9 (4.0) (172.5) %

JAPIC (3.7) (2.5) (48.0) %

4 unchanged sentences

$ (18.3) $ 3.1 n.m.

$ (54.3) $ 7.3 n.m.

$ (45.3) $ 36.2 (225.1) %

Interest expense $ 5.1 $ 2.8 (82.1) %

Other (income) expense $ (2.1) $ (2.2) (4.5) % $ (8.1) $ (2.3) n.m.

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

SEPTEMBER 30 SEPTEMBER 30

2021 2020 % Change 2021 2020 % Change

Other income $ (2.1) $ (8.2) (74.4) %

THREE MONTHS ENDED Favorable / (Unfavorable)

2022 2021 % Change

Net income (loss) attributable to stockholders

Americas $ (31.8) $ 10.7 n.m.

$ (17.3) $ 52.0 (133.3) %

Americas $ 1.1 $ 9.5 (88.4) %

EMEA (7.0) 0.9 n.m.

4.9 (0.9) n.m.

JAPIC (4.0) (2.2) (81.8) %

Lift truck business (9.9) 8.2 n.m.

(17.3) 42.6 (140.6) %

Bolzoni 2.2 0.1 n.m.

Nuvera (38.1) (6.1) n.m.

(48.5) (18.6) (160.8) %

Bolzoni 1.3 0.6 116.7 %

Nuvera (8.1) (3.8) (113.2) %

Eliminations (8.3) 0.6 n.m.

$ (25.0) $ 5.6 n.m.

$ (77.2) $ 5.1 n.m $ (69.7) $ 24.0 n.m.

Diluted earnings per share $ (4.59) $ 0.30 n.m.

$ (4.15) $ 1.43 n.m.

Earnings (loss) per share $ (1.48) $ 0.33 n.m.

Reported income tax rate (13.6) % 28.2 %

1 unchanged sentence

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

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2021 2020 2021 2020

"Other adjustments" below represents lift truck orders from Russian and Ukraine dealers which the Company no longer expects to fulfill at March 31, 2022.

As of March 31, 2022, substantially all of the Company's backlog is expected to be sold within the next twelve months.

THREE MONTHS ENDED

Unit backlog, beginning of period 105.3 40.6

1 unchanged sentence

Unit bookings 35.9 42.4

Other adjustments (3.2) —

Unit backlog, end of period 114.1 60.7

1 unchanged sentence

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 NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2021 2020 2021 2020

THREE MONTHS ENDED

Bookings, approximate sales value $ 950 $ 970

Backlog, approximate sales value $ 3,170 $ 1,520

Third Quarter of 2021 Compared with Third Quarter of 2020

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

First Quarter of 2022 Compared with First Quarter of 2021

The following table identifies the components of change in revenues for the first quarter of 2022 compared with the first quarter of 2021:

Increase (decrease) in 2022 from:

1 unchanged sentence

Bolzoni revenues 15.6

Foreign currency 6.7

Eliminations (15.5)

Nuvera revenues 0.6

Revenues increased 14.7% to $748.2 million in the third quarter of 2021 from $652.4 million in the third quarter of 2020.

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

America's revenues increased in the third quarter of 2021 compared with the third quarter of 2020, primarily from higher unit and parts volume and higher fleet service revenue.

EMEA's revenues increased mainly due to higher unit and parts volume and favorable foreign currency movements of $3.7 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 $1.9 million.

Bolzoni's revenues increased mainly due to higher unit volume, partially offset by a shift in sales to lower-priced products.

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

Operating Profit (Loss)

Decrease in 2021 from:

Lift truck gross profit (27.6)

Nuvera operations (23.8)

Lift truck selling, general and administrative expenses (10.1)

Bolzoni operations (0.1)

2021 $ (54.3)

The Company recognized an operating loss of $54.3 million in the third quarter of 2021 compared with operating profit of $7.3 million in the third quarter of 2020.

The change in operating profit (loss) was primarily due to lower gross profit and unfavorable selling, general and administrative expenses in the lift truck business and a larger operating loss at Nuvera.

The decrease in gross profit was primarily due to significant material and freight cost inflation due to supply chain and logistics constraints of $37.2 million, mainly in the Americas.

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

In addition, the third quarter of 2021 included $24.7 million of inventory and property, plant and equipment adjustments at Nuvera.

See Note 11 for further discussion of Nuvera's adjustments.

Americas recognized an operating loss of $16.9 million in the third quarter of 2021 compared with an operating profit of $16.1 million the third quarter of 2020 due to a decrease in gross profit and an increase in selling, general and administrative

Gross profit declined primarily due to material cost inflation and increased freight costs of $32.8 million, net of price increases of $4.5 million, a shift in sales mix to lower-margin lift trucks and higher manufacturing costs 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 $2.2 million favorable adjustment for social contribution taxes previously imposed on material purchases in Brazil.

See Note 13 for further discussion.

Selling, general and administrative expenses increased mainly as result of the reinstatement of pre-pandemic salaries and benefits that were suspended in 2020.

EMEA had an operating loss of $0.9 million in the third quarter of 2021 compared to an operating profit of $3.3 million in the third quarter of 2020.

The decrease in gross profit was primarily the result of increases in material and freight costs, higher manufacturing costs resulting from inefficiencies associated with component shortages and the absence of $1.5 million of government subsidies received in the third quarter of 2020.

JAPIC's operating loss increased to $3.5 million in the third quarter of 2021 from $3.2 million in the third quarter of 2020 primarily due to lower gross profit from material cost inflation and unfavorable manufacturing variances, partially offset by increased volume and favorable foreign currency movements.

Nuvera's operating loss increased to $32.5 million in the third quarter of 2021 compared with $8.7 million in the third quarter of 2020 as result of charges of $24.8 million recorded in the third quarter of 2021 on Nuvera's inventory and property, plant and equipment.

See Note 11 for further discussion these charges at Nuvera.

The Company recognized net loss attributable to stockholders of $77.2 million in the third quarter of 2021 compared with net income attributable to stockholders of $5.1 million in the third quarter of 2020.

The decrease was primarily the result of lower operating profit and a valuation allowance of $38.4 million provided against deferred tax assets.

See Note 5 for further discussion of the Company's income tax provision.

First Nine Months of 2021 Compared with First Nine Months of 2020

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

2020 $ 2,092.5

Increase (decrease) in 2021 from:

Foreign currency (14.0)

Bolzoni revenues 38.9

Eliminations (9.0)

Nuvera revenues (2.3)

Unit volume and product mix (1.3)

2021 $ 2,246.0

Revenues increased 7.3% to $2,246.0 million in the first nine months of 2021 from $2,092.5 million in the first nine 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 the Americas and EMEA, higher volume at Bolzoni and improved fleet service revenue in the Americas.

America's revenues increased slightly in the first nine months of 2021 compared with the first nine months of 2020, primarily from favorable aftermarket sales, including part sales, driven by an increase in customer demand as well as favorable pricing of lift trucks.

The increase was partially offset by lower unit volumes due to global supply chain constraints and component shortages.

EMEA's revenues increased mainly due to favorable foreign currency movements of $36.5 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 $9.9 million, partially offset by a shift in sales to lower-priced lift trucks.

Bolzoni's revenues increased mainly due to higher unit volume.

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

Revenues increased 13.0% to $827.6 million in the first quarter of 2022 from $732.2 million in the first quarter of 2021.

The increase was primarily due to improved pricing in the Americas and higher unit and parts volume in the lift truck business and Bolzoni.

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

America's revenues increased in the first quarter of 2022 compared with the first quarter of 2021, primarily from higher pricing and higher unit and parts volume as well as a shift in sales to higher-priced products.

EMEA's revenues in the first quarter of 2022 were comparable to the first quarter of 2021 as unfavorable foreign currency movements of $13.4 million from the translation of sales into U.S.

dollars were offset by benefits from improved unit and parts volume.

JAPIC's revenues decreased during the first quarter of 2022 compared with the first quarter of 2021 primarily as a result of lower unit and parts volumes, partially offset by improved pricing.

Bolzoni's revenues increased mainly due to higher unit volume, improved pricing and a shift in sales to higher-priced products in the first quarter of 2022 compared with the first quarter of 2021.

The following table identifies the components of change in operating profit for the first quarter of 2022 compared with the first quarter of 2021:

Operating Profit (Loss)

Decrease in 2021 from:

Increase (decrease) in 2022 from:

Lift truck gross profit (21.0)

Nuvera operations (24.9)

Lift truck selling, general and administrative expenses (3.4)

Nuvera operations 1.7

Bolzoni operations 1.3

2022 $ (18.3)

The Company recognized operating loss of $45.3 million in the first nine months of 2021 compared with operating profit of $36.2 million in the first nine months of 2020.

The decrease in operating profit was primarily due to lower gross profit and unfavorable selling, general and administrative expenses in the lift truck business and a higher operating loss at Nuvera.

Gross profit declined mainly due to material cost inflation and increased freight costs of $50.6 million, a shift in sales to lower-margin lift trucks, and higher manufacturing costs resulting from inefficiencies associated with component shortages.

The decrease in gross profit was partially offset by favorable parts volume in the Americas and EMEA, favorable foreign currency movements of $13.6 million and a favorable adjustment of $8.5 million for social contribution taxes previously imposed on material purchases in Brazil.

In addition, the first nine months of 2020 included $6.5 million of government subsidies at EMEA and Bolzoni.

Selling, general and administrative expenses increased as pre-pandemic salaries and benefits were reinstated, including $12.2 million of incentive compensation.

Operating profit in the Americas decreased to $11.3 million in the first nine months of 2021 compared with $77.9 million in the first nine months of 2020 due to a decrease in gross profit and higher operating expenses.

Gross profit declined mainly due to material cost inflation and increased freight costs of $45.5 million, higher manufacturing costs resulting from inefficiencies associated with component shortages of $10.0 million, a shift in mix to lower-margin products and lower volume.

These items were partially offset by favorable parts sales and a favorable adjustment of $8.5 million for social contribution taxes previously imposed on material purchases in Brazil.

The increase in selling, general and administrative expenses primarily resulted from the reinstatement of pre-pandemic salaries and benefits, including $8.9 million of incentive compensation.

EMEA recognized operating profit of $2.9 million in the first nine months of 2021 compared with an operating loss of $4.0 million in the first nine months of 2020 mainly as a result of improved gross profit partially offset by higher selling, general and administrative expenses.

Gross profit increased from favorable foreign currency movements of $6.5 million, improved parts and unit volume and improved pricing, partially offset by the absence of $6.5 million of government subsidies received in the first nine months of 2020.

Selling, general and administrative expenses increased primarily as pre-pandemic salaries and benefits were reinstated, including $1.2 million of incentive compensation.

JAPIC's operating loss decreased to $7.9 million in the first nine months of 2021 from $12.7 million in the first nine months of 2020 primarily due to improved gross profit from higher unit volume and favorable foreign currency movements of $5.0 million partially offset by material cost inflation as well as higher manufacturing costs and a shift in mix to lower-margin products.

Operating profit at Bolzoni decreased to $0.4 million in the first nine months of 2021 compared with $2.3 million in the first nine 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 $5.0 million and the reinstatement of pre-pandemic salaries and employee benefits, including $0.7 million of incentive compensation.

Nuvera's operating loss increased to $51.3 million in the first nine months of 2021 compared with $26.4 million in the first nine months of 2020 as result of charges of $24.8 million recorded in the first nine months of 2021 on Nuvera's inventory and property, plant and equipment.

See Note 11 for further discussion of these charges at Nuvera.

The Company recognized net loss attributable to stockholders of $69.7 million in the first nine months of 2021 compared with net income attributable to stockholders of $24.0 million in the first nine months of 2020.

The decrease was primarily the result of lower operating profit and a valuation allowance of $38.4 million provided against deferred tax assets in the third 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 nine months of 2021 and higher equity earnings in unconsolidated subsidiaries.

See Note 5 for further discussion of the Company's income tax provision.

The Company recognized an operating loss of $18.3 million in the first quarter of 2022 compared with operating profit of $3.1 million in the first quarter of 2021.

The change in operating profit (loss) was primarily as a result of lower gross profit and unfavorable selling, general and administrative expenses in the lift truck business.

The decrease in gross profit was mainly due to significant material and freight cost inflation as well as manufacturing inefficiencies due to supply chain and logistics constraints totaling $68.6 million, primarily in the Americas and EMEA, which more than offset the favorable impact of improved pricing of $43.9 million and higher unit and parts volumes.

The Americas operating profit decreased to $4.4 million in the first quarter of 2022 from $14.6 million in the first quarter of 2021 due to a decrease in gross profit and an increase in selling, general and administrative expenses.

Gross profit declined primarily due to material cost inflation and increased freight costs of $40.5 million and higher manufacturing costs of $13.6 million resulting from inefficiencies associated with component shortages.

The decreases were partly offset by improved pricing of $40.8 million, higher unit and parts sales and $3.5 million of favorable retroactive tariff exclusion adjustments for certain components imported from China.

Selling, general and administrative expenses increased mainly as result of increased employee-related expenses in the first quarter of 2022 compared with the first quarter of 2021.

EMEA recognized an operating loss of $11.4 million in the first quarter of 2022 compared with operating profit of $0.1 million in the first quarter of 2021.

The decrease in gross profit was primarily due to increases in material and freight costs and higher manufacturing costs resulting from inefficiencies associated with component shortages.

In addition, the first quarter of 2022 includes a $2.5 million of charges related to inventory and accounts receivable for Russian orders which the Company no longer expects to fulfill or collect.

JAPIC's operating loss increased to $3.7 million in the first quarter of 2022 from $2.5 million in the first quarter of 2021 primarily due to lower gross profit from material cost inflation and unfavorable manufacturing variances, partially offset by improved pricing.

Bolzoni's operating profit increased to $2.1 million in the first quarter of 2022 from $0.8 million in the first quarter of 2021 mainly due to improved gross profit from higher unit volume and pricing, partially offset by increased selling, general and administrative expenses mainly from $0.7 million of charges for the establishment of reserves on Russian-related receivables and business closure.

Nuvera's operating loss improved to $8.1 million in the first quarter of 2022 compared with $9.8 million in the first quarter of 2021 as result of improved margin from lower production costs in 2022.

The Company recognized a net loss attributable to stockholders of $25.0 million in the first quarter of 2022 compared with net income attributable to stockholders of $5.6 million in the first quarter of 2021.

The decrease was primarily the result of lower lift truck operating profit, the absence of a $4.6 million gain related to the sale of the Company's preferred shares of OneH2, Inc.

("OneH2") in the first quarter of 2021, higher interest expense and unfavorable mark-to-market adjustments on an equity investment in a third party and lower pension income.

LIQUIDITY AND CAPITAL RESOURCES

The following tables detail the changes in cash flow for the nine months ended September 30:

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

2022 2021 Change

2 unchanged sentences

Depreciation and amortization 11.1 11.7 (0.6)

Impairment charge 10.0 — 10.0

Gain on sale of investment — (4.6) 4.6

Dividends from unconsolidated affiliates 11.0 5.5 5.5

9 unchanged sentences

Proceeds from the sale of assets and investment 0.4 17.2 (16.8)

Net cash used for investing activities (10.1) (29.8) 19.7

Net cash provided by (used for) investing activities (9.3) 9.5 (18.8)

Cash flow before financing activities $ 49.8 $ (37.6) $ 87.4

Net cash provided by (used for) operating activities decreased $267.9 million in the first nine months of 2021 compared with the first nine months of 2020, primarily as a result of changes in working capital items and net income (loss).

The changes were mainly due to the global supply chain constraints, component shortages, shipping container availability constraints and higher freight costs.

The change in net cash used for investing activities during the first nine months of 2021 compared with the first nine 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 provided by (used for) operating activities changed $106.2 million in the first quarter of 2022 compared with the first quarter of 2021, primarily as a result of changes in working capital items and net income (loss).

The changes in working capital were mainly due to an increase in other liabilities primarily from down payments for customer orders and lower inventory purchases in the first quarter of 2022 compared with the first quarter of 2021.

The change in net cash provided by (used for) investing activities during the first quarter of 2022 compared with the first quarter of 2021 was due to the proceeds from the sale of preferred shares of OneH2 for $15.7 million and lower capital expenditures in the first quarter of 2021.

2022 2021 Change

Financing activities:

Net increase (decrease) of long-term debt and revolving credit agreements $ 138.7 $ (2.7) $ 141.4

Net decrease of long-term debt and revolving credit agreements $ (45.5) $ (2.7) $ (42.8)

Cash dividends paid (5.4) (5.3) (0.1)

Financing fees paid (7.6) — (7.6)

Other (0.2) (0.4) 0.2

Net cash provided by (used for) financing activities $ 114.7 $ (19.1) $ 133.8

Net cash provided by (used for) financing activities increased $133.8 million in the first nine months of 2021 compared with the first nine months of 2020.

The increase was primarily related to additional borrowings from refinancing the Term Loan (as defined below) and on the Facility (as defined below) in the first nine months of 2021 compared to the first nine months of 2020.

The borrowings were primarily used to fund working capital needs.

The increase was partially offset by financing fees paid in connection with the amendments of the Facility and Term Loan.

Net cash used for financing activities $ (50.9) $ (8.0) $ (42.9)

Net cash used for financing activities increased to $50.9 million in the first quarter of 2021 compared with $8.0 million in the first quarter of 2021.

The increase was primarily related to repayments on the Facility (as defined below) in the first quarter of 2022 compared with the first quarter of 2021.

In 2021, the Company had additional borrowings on the Facility primarily used to fund working capital needs.

Financing Activities

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

There were $73.6 million of borrowings outstanding under the Facility at September 30, 2021.

The availability under the Facility at September 30, 2021 was $222.0 million, which reflects reductions of $4.4 million for letters of credit and other restrictions.

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

There were $101.0 million of borrowings outstanding under the Facility at March 31, 2022.

The availability under the Facility at March 31, 2022 was $194.5 million, which reflects reductions of $4.5 million for letters of credit and other restrictions.

As of March 31, 2022, the Facility consisted of a U.S.

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

revolving credit facility of $90.0 million.

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 $1.1 billion as of September 30, 2021.

The Facility can be increased up to $400.0 million over the term of the Facility in minimum increments of $10.0 million, subject to approval by the lenders.

The obligations under the Facility are generally secured by a first priority lien on working capital assets of the borrowers in the Facility, which includes but is not limited to cash and cash equivalents, accounts receivable and inventory, and a second priority lien on the present and future shares of capital stock, fixtures and general intangibles consisting of intellectual property.

The approximate book value of assets held as collateral under the Facility was $1.1 billion as of March 31, 2022.

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 September 30, 2021, for U.S.

base rate loans and 1.25% to 1.75% for LIBOR, EURIBOR and non-U.S.

base rate loans.

The applicable margins, as of March 31, 2022, for U.S.

base rate loans and LIBOR loans were 0.50% and 1.50%, respectively.

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

The applicable margin, as of March 31, 2022, for non-U.S.

base rate loans and LIBOR loans was 1.50%.

applicable interest rates for borrowings outstanding under the Facility on September 30, 2021 was 3.50%, 1.32% and 1.25% for the U.S.

base rate, U.S.

LIBOR and foreign LIBOR loans, respectively.

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

applicable interest rates for borrowings outstanding under the Facility on March 31, 2022 was 4.00% and 1.50% for the U.S.

base rate, and foreign LIBOR loans, respectively.

The applicable interest rates for borrowings for the U.S.

LIBOR loans ranged from 1.81% to 1.95% at March 31, 2022.

The Facility also required the payment of a fee of 0.25% per annum on the unused commitments as of March 31, 2022.

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

1 unchanged sentence

The Facility also requires the Company to achieve a minimum fixed charge coverage ratio when 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 September 30, 2021, the Company was in compliance with the covenants in the Facility.

At March 31, 2022, 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 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 Term Loan requires quarterly principal payments on the last day of each March, June, September and December 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 September 30, 2021, there was $224.4 million of principal outstanding under the Term Loan which has been reduced in the unaudited condensed consolidated balance sheet by $5.5 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 $800 million as of September 30, 2021.

At March 31, 2022, there was $223.3 million of principal outstanding under the Term Loan which has been reduced in the unaudited condensed consolidated balance sheet by $5.1 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, U.S.

material real property, fixtures and general intangibles consisting of intellectual property and a second priority lien

working capital assets of certain borrowers of the Facility, which includes, but is not limited to cash and cash equivalents, accounts receivable and inventory.

The approximate book value of assets held as collateral under the Term Loan was $750 million as of March 31, 2022.

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 September 30, 2021 was 4.00%.

In addition, the Term Loan includes a Eurodollar rate floor of 0.50%.

The interest rate on the amount outstanding under the Term Loan at March 31, 2022 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 dividends and other restricted payments the Company 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 September 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 $109.4 million at September 30, 2021.

At March 31, 2022, the Company was in compliance with the covenants in the Term Loan.

The Company had other debt outstanding, excluding finance leases, of approximately $131.7 million at March 31, 2022.

In addition to the excess availability under the Facility of $194.5 million, the Company had remaining availability of $23.4 million related to other non-U.S.

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Contractual Obligations, Contingent Liabilities and Commitments

During the second quarter of 2021, the Company entered into an agreement providing for the amendment and restatement of the Term Loan, which is described above.

As of September 30, 2021, the Company had additional borrowings under the Term Loan, revolving credit agreements and other debt of $130.1 million and higher purchase and other obligations of $145.2 million than the amounts reported on pages 23 and 24 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Since December 31, 2021, 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 25 and 26 in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Capital Expenditures

The following table summarizes actual and planned capital expenditures:

Nine Months Ended September 30, 2021 Planned for Remainder of 2021 Planned 2021 Total Actual 2020

Three Months Ended March 31, 2022 Planned for Remainder of 2022 Planned 2022 Total Actual 2021

Lift truck business $ 7.5 $ 12.3 $ 19.8 $ 30.6

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$ 9.7 $ 19.2 $ 28.9 $ 44.3

Planned expenditures for the remainder of 2021 are primarily for product development, improvements at manufacturing locations, improvements to information technology infrastructure and manufacturing equipment.

Planned expenditures for the remainder of 2022 are primarily for product development, improvements to information technology infrastructure, improvements at manufacturing locations and manufacturing equipment.

The principal sources of financing for these capital expenditures are expected to be internally generated funds and bank financing.

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Consolidated Outlook

Given the extensive component shortages due to supply chain constraints, significant material and freight cost inflation, as well as continued losses at Nuvera, the Company, on a consolidated basis, expects significant operating and net losses for the 2021 fourth quarter and in the first half of 2022.

As the Company continues to evaluate the long-term future cash flow impacts of these issues, additional interim impairment testing may be necessary in future quarters and future impairment charges are reasonably possible.

Consolidated results are expected to return to an operating profit in the second half of 2022 assuming reasonable resolution of component shortages and relative stabilization of material and freight costs.

The Company also expects to have moderately reduced losses at Nuvera as a result of enhanced fuel cell shipments.

While the Company expects to make additional investments in the business during the fourth quarter of 2021, and in 2022, maintaining liquidity will continue to be a priority.

Capital expenditures in the fourth quarter of 2021 are expected to be approximately $22 million.

Given the continued component shortages due to supply chain constraints, significant material and freight cost inflation, and, more recently, the impact of the Russia/Ukraine conflict, as well as continued losses at Nuvera and the lack of tax offsets against pre-tax losses for the Lift Truck business and Nuvera, the Company, on a consolidated basis, expects a larger net loss in the second quarter than in the 2022 first quarter, a lower but still substantial net loss in the third quarter and substantial net income in the fourth quarter of 2022.

However, the fourth-quarter net income is not expected to offset the losses generated in the first nine months.

Generally, results in the remaining three quarters of 2022 are expected to be lower than at the time of the 2021 fourth quarter earnings release, mainly due to the Russia/Ukraine conflict.

These expectations are based on the expected reasonable resolution of component shortages and relative stabilization of material and freight costs.

The Company is managing 2022 capital expenditures, operating expenses and its production plans in a manner designed to protect liquidity.

Capital expenditures are expected to be approximately $29 million in 2022.

The Company has implemented a program of strict controls over operating expenses to reduce cash outflow, including delays in the timing of certain strategic program investments.

While the Company expects over time to make these capital expenditures and investments in the business, maintaining liquidity will continue to be a priority.

During 2021 and early 2022, the Company's ability to build and ship trucks was significantly constrained by parts shortages of certain critical components while the remaining components needed to build trucks were received and added to inventory, causing inventory levels to increase substantially.

In this context, the Company expects to reduce inventory significantly by using current inventory to build trucks for which production has been significantly delayed due to critical parts shortages and receiving components as they are needed for production.

At March 31, 2022, the Company's cash on hand was $65.1 million and debt was $479.0 million compared with cash on hand of $65.5 million and debt of $518.5 million at December 31, 2021.

During the first quarter of 2022, the Company implemented a dealer advance deposit program on orders, which contributed to the reduction in debt levels.

As of March 31, 2022, the Company had unused borrowing capacity of approximately $218 million under the Company's revolving credit facilities compared with $165 million at December 31, 2021.

Lift Truck Strategic Perspective

The global lift truck market is expected to decline in the fourth quarter of 2021 compared with the prior year fourth quarter, but still remain significantly higher than pre-pandemic levels.

Markets in 2022 are expected to recede from the historical highs of 2021, but still be higher than pre-pandemic levels.

As a result of this market outlook, the Lift Truck business is anticipating a substantial decrease in bookings in the 2021 fourth quarter compared with the third quarter of 2021, and in the succeeding 2022 quarters compared with the respective 2021 quarters.

In the first nine months of 2021, the Company has experienced production and shipment levels which are far lower than its objectives due to supply chain logistics constraints.

This is anticipated to continue in the 2021 fourth quarter and in at least the first half of 2022.

Nonetheless, shipments are expected to increase over the prior year fourth quarter and the third quarter of 2021.

Significant material cost inflation and higher freight costs, which continued to worsen in the 2021 third quarter, and the current non-renewal of tariff exclusions are expected to continue to affect the cost of components and freight negatively over the remainder of 2021 compared with the prior year fourth quarter.

The Lift Truck business has implemented price increases several times over the course of 2021 to moderate the effect of material cost inflation, but many of the orders in the backlog slotted for production in the remainder of 2021 and the first half of 2022 do not reflect the full effect of all these price increases.

As a result, the Company expects to continue to experience low margins in the fourth quarter of 2021 and, at best, in the first half of 2022, due to the lag between when unit price increases went into effect and when they are realized as the units are shipped.

The Company will continue to work aggressively to manage supply chain and logistics costs and component availability and tariff exclusions, and will adjust prices accordingly.

As a result of these factors, and the increase in costs associated with the reinstatement of pre-pandemic salaries and benefits, significant operating and net losses are expected in the Lift Truck business in the 2021 fourth quarter and in the first half of 2022.

From a strategic perspective, the Lift Truck business has three core strategies that are expected to have a transformational impact on the Company’s competitiveness, market position and economic performance.

In the remainder of 2022, the Company expects the global lift truck market to continue to decline from the historical highs of 2021, in part due to the impact of the Russia/Ukraine conflict, but remain above pre-pandemic levels.

As a result of this market outlook, the Lift Truck business is anticipating a substantial decrease in bookings during the remainder of 2022 compared with 2021, with the rate of decrease expected to moderate in the fourth quarter.

During 2021, the Company experienced production and shipment levels which were substantially lower than its objectives due to supply chain logistics constraints and component shortages.

Some moderation in the number of suppliers with shortages occurred in the first quarter of 2022, but shortages are anticipated to continue throughout 2022, and possibly escalate again in light of the Russia/Ukraine conflict.

Nevertheless, full-year shipments are currently expected to increase significantly in 2022 over 2021 given the Company's robust backlog and actions put in place to mitigate the impact of the supply chain constraints and shortages, but with the expectation that supplies of products or commodities are not constrained further as a result of the Russia/Ukraine conflict and recent COVID lockdowns in China.

Prior to the Russia/Ukraine conflict, there were signs that material costs had peaked.

However, as a result of that conflict, significant additional material and freight cost inflation is expected to keep the cost of components higher in 2022 than in 2021 and not moderate as previously expected.

In light of cost inflation in 2021 and what is now expected in 2022, the Lift Truck business implemented several price increases in 2021 and in the first quarter of 2022, but many of the orders in the backlog slotted for production in the second and third quarters of 2022 do not reflect the full effect of all these price increases.

On the other hand, new bookings are being made at close to target margins based on expected future costs at the time of expected production.

Further the renewal of tariff exclusions is expected to partly offset the anticipated higher material cost inflation in the backlog over the remainder of 2022.

As a result, the Company expects to experience lower margins in the second quarter of 2022 compared with the first quarter of 2022 due to the lag between when unit price increases go into effect and when revenue is realized as the units are shipped.

Margins are then expected to increase over the second half of 2022 with much stronger margins in the fourth quarter when the higher-margin, already-booked trucks, and trucks anticipated to be booked, are expected to be produced and shipped.

In the meantime, the Company expects to continue to work aggressively to manage component availability in order to increase production rates, and continue to adjust prices as costs change.

As a result of these factors, the Lift Truck business expects larger operating and net losses in the second quarter, moderated operating and net losses in the third quarter and substantial profit in the fourth quarter.

Overall, the Russia/Ukraine conflict, on a net basis, has reduced prospects

for the remaining quarters of 2022, particularly in the expectations for EMEA's second and third quarters, but has not changed the overall pattern of quarterly improvement expected in the second half of 2022.

From a broader perspective, the Lift Truck business has three core strategies that are expected to have a transformational impact on the Company’s competitiveness, market position and economic performance as it emerges from the current period of mismatch of costs and pricing.

The first is to provide the lowest cost of ownership while enhancing customer productivity.

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The third core strategy is to be the leader in independent distribution.

The main focus of this strategic initiative is on dealer and major account coverage, dealer excellence and ensuring outstanding dealer ownership globally.

As a result of these core strategies and the increased shipment volume potential of the current backlog and 2022 expected bookings, the Lift Truck business expects to return to an operating profit in the second half of 2022.

Over this period, the Company is assuming the stabilization or reduction of product and transportation costs and the continued expectation of improved component and logistics availability.

Over this period and the longer term, the Company is also assuming the continued introduction of the currently released and additional modular and scalable product families and the continued implementation of cost savings initiatives.

The main focus of this strategic initiative is on enhancing dealer and major account coverage, dealer excellence and ensuring outstanding dealer ownership globally.

As a result of these core strategies, the increased shipment volume potential of the current backlog and expected bookings in 2022, enhanced prices and the renewal of tariff exclusions, the Lift Truck business expects to move from the significant operating loss in the first quarter of 2022 to substantial operating profit in the fourth quarter, with the fourth-quarter profit expected to more than offset the losses in the first nine months of 2022.

Over this period, the Company is projecting the stabilization of product and transportation costs and continued improvement in component and logistics availability, although this could change if the availability of commodities and/or components is seriously affected as a result of the ongoing Russia/Ukraine conflict and the recent lockdowns in China.

The Company is also anticipating the continued introduction of additional modular and scalable product families and the continued implementation of cost-savings initiatives over this period and in the longer term.

Overall, as the Company's strategic programs mature, as costs and prices come in line over 2022 and 2023, and as production volumes increase, the Lift Truck business is expected to have a strong operating profit and net income in the fourth quarter of 2022 and in 2023.

Bolzoni Strategic Perspective

Bolzoni expects increases in operating profit and net income in the fourth quarter of 2021 compared with both the prior-year period and the first nine months of 2021.

Over the course of 2022, Bolzoni expects component shortages to moderate and pricing to permit improved returns as the year progresses despite higher costs.

Bolzoni has a small operation in Russia which is in the process of closing.

As a result of adjusting its operations for the Russia/Ukraine conflict and adapting to the additional material inflation caused by the conflict, Bolzoni expects operating profit and net income in the second quarter of 2022 to be lower than the 2022 first quarter, but significantly higher than the loss realized in the prior-year second quarter.

Over the second half of 2022, Bolzoni expects component shortages to moderate and the timing of pricing actions to permit improving operating profit in the third and fourth quarters.

As a result, Bolzoni expects sizeable, but moderately lower than previously anticipated, operating profit and net income in 2022 compared with operating and net losses in 2021.

Bolzoni continues to focus on implementing its "One Company - 3 Brands" organizational approach to help streamline corporate operations and strengthen its North America and JAPIC commercial operations.

Bolzoni is working to increase its Americas business by strengthening its ability to serve key attachment industries and customers in the North America market through the introduction of a broader range of locally produced attachments with shorter lead times, while continuing to sell cylinders and various other components produced in its Sulligent, Alabama plant.

Bolzoni is also increasing its sales, marketing and product support capabilities both in North America and Europe based on an industry-specific approach, with an immediate focus on the paper, beverage, appliance, 3PL and automotive industries.

Nuvera Strategic Perspective

Nuvera continues to focus on serving niche, heavy-duty vehicle applications with expected strong near-term fuel cell adoption potential, using its 45kW and 60kW engines, which were both released for sale late in 2020.

Nuvera continues to focus on applying its 45kW and 60kW engines, which were both released for sale late in 2020, in niche, heavy-duty vehicle applications with expected near-term significant fuel cell adoption potential.

As a result of these releases, Nuvera accelerated its 45kW and 60kW engine commercialization operations for the global market.

In the fourth quarter of 2021 and in 2022, Nuvera will continue to focus on ramping up demonstrations, quotes and bookings of these products.

In 2022, Nuvera expects to continue to focus on ramping up demonstrations, quotes and bookings of these products.

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

Excluding the impact of the inventory valuation and fixed asset impairment charges taken in 2021, the Company expects moderately reduced losses at Nuvera in 2022 as a result of enhanced fuel cell shipments.

EFFECTS OF FOREIGN CURRENCY

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As a result, the Company is subject to the variability that arises from exchange rate movements.

The effects of foreign currency fluctuations on revenues, operating profit and net income are addressed in the previous discussions of operating results.

The effects of foreign currency fluctuations on revenues, operating profit and net income (loss) are addressed in the previous discussions of operating results.

See also Item 3, "Quantitative and Qualitative Disclosures About Market Risk,” in Part I of this Quarterly Report on Form 10-Q.

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Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation:

(1) delays in delivery and other supply chain disruptions, or increases in costs as a result of inflation or otherwise, including materials and transportation costs and shortages, the imposition of tariffs, or the renewal of tariff exclusions, on raw materials or sourced products, and labor or changes in or unavailability of quality suppliers or transporters, (2) the duration and severity of the COVID-19 pandemic, any preventive or protective actions taken by governmental authorities, the effectiveness of actions taken globally to contain or mitigate its effects, and any unfavorable effects of the COVID-19 pandemic on either the Company's or its suppliers plants' capabilities to produce and ship products if COVID-19 continues to spread or quarantines are re-established, (3) the ability of the Company and its dealers, suppliers and end-users to access credit in the current economic environment, or obtain financing at reasonable rates, or at all, as a result of current economic and market conditions, (4) further impairment charges or charges due to the valuation allowances, (5) delays in manufacturing and delivery schedules, (6) reduction in demand for lift trucks, attachments and related aftermarket parts and service on a global basis, including any reduction in demand as a result of a COVID-19 triggered economic recession, (7) the successful commercialization of Nuvera's technology, (8) customer acceptance of pricing, (9) the political and economic uncertainties in the countries where the Company does business, (10) exchange rate fluctuations and monetary policies and other changes in the regulatory climate in the countries in which the Company operates and/or sells products, (11) bankruptcy of or loss of major dealers, retail customers or suppliers, (12) customer acceptance of, changes in the costs of, or delays in the development of new products, (13) introduction of new products by, or more favorable product pricing offered by, competitors, (14) product liability or other litigation, warranty claims or returns of products, (15) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement and sourcing initiatives, (16) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, and (17) unfavorable effects of geopolitical and legislative developments on global operations, including without limitation the entry into new trade agreements and the imposition of tariffs and/or economic sanctions.

(1) delays in delivery and other supply chain disruptions, or increases in costs as a result of inflation or otherwise, including materials and transportation costs and shortages, the imposition of tariffs, or the renewal of tariff exclusions, on raw materials or sourced products, and labor, or changes in or unavailability of quality suppliers or transporters, including the impacts of the foregoing risks on the Company's liquidity, (2) the duration and severity of the COVID-19 pandemic, any preventive or protective actions taken by governmental authorities, and any unfavorable effects of the COVID-19 pandemic on either the Company's or its suppliers plants' capabilities to produce and ship products, (3) delays in manufacturing and delivery schedules, (4) customer acceptance of pricing, (5) unfavorable effects of geopolitical and legislative developments on global operations, including without limitation the entry into new trade agreements and the imposition of tariffs and/or economic sanctions, as well as armed conflicts, including the Russia/Ukraine conflict, and their regional effects, (6) the ability of the Company and its dealers, suppliers and end-users to access credit in the current economic environment, or obtain financing at reasonable rates, or at all, as a result of current economic and market conditions, (7) impairment charges or charges due to valuation allowances, (8) reduction in demand for lift trucks, attachments and related aftermarket parts and service on a global basis, including any reduction in demand as a result of an economic recession, (9) exchange rate fluctuations, interest rate volatility and monetary policies and other changes in the regulatory climate in the countries in which the Company operates and/or sells products, (10) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement and sourcing initiatives, (11) the successful commercialization of Nuvera's technology, (12) the political and economic uncertainties in the countries where the Company does business, as well as the effects of any withdrawals from such countries, (13) bankruptcy of or loss of major dealers, retail customers or suppliers, (14) customer acceptance of, changes in the costs of, or delays in the development of new products, (15) introduction of new products by, or more favorable product pricing offered by, competitors, (16) product liability or other litigation, warranty claims or returns of products, and (17) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation.

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