What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-02 compared with 2022-05-03 · 165 added, 113 removed, 194 unchanged (59% of the section changed)

12 unchanged sentences

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.

During 2021, the Company signed an Equity Transfer Agreement with Y-C Hongkong Holding Co., Limited (“HK Holding Co”).

In June 2022, the Company purchased 15% of the equity interest of Hyster-Yale Maximal from HK Holding Co for an aggregate purchase price of $25.2 million, which will be paid in annual installments of $8.4 million beginning 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.

11 unchanged sentences

The results of operations for the Company were as follows:

THREE MONTHS ENDED Favorable / (Unfavorable)

2022 2021 % Change

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

JUNE 30 JUNE 30

2022 2021 % Change 2022 2021 % Change

Lift truck unit shipments (in thousands)

8 unchanged sentences

Bolzoni 86.4 84.8 1.9 % 181.5 164.3 10.5 %

Nuvera 0.6 — n.m.

Nuvera 0.3 0.3 — % 0.9 0.3 200.0 %

Eliminations (37.6) (38.7) (2.8) % (84.8) (76.9) 10.3 %

8 unchanged sentences

Eliminations 0.5 (0.1) n.m.

(1.1) (0.2) n.m.

$ 99.1 $ 116.4 (14.9) % $ 200.3 $ 234.8 (14.7) %

10 unchanged sentences

EMEA (10.8) 3.7 n.m.

(22.2) 3.8 n.m.

JAPIC (4.0) (1.9) (110.5) % (7.7) (4.4) (75.0) %

4 unchanged sentences

(1.1) (0.2) n.m.

Interest expense $ 5.1 $ 2.8 (82.1) %

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

THREE MONTHS ENDED Favorable / (Unfavorable)

2022 2021 % Change

Net income (loss) attributable to stockholders

Americas $ 1.1 $ 9.5 (88.4) %

EMEA (7.0) 0.9 n.m.

JAPIC (4.0) (2.2) (81.8) %

Lift truck business (9.9) 8.2 n.m.

Bolzoni 1.3 0.6 116.7 %

Nuvera (8.1) (3.8) (113.2) %

Eliminations (8.3) 0.6 n.m.

$ (15.7) $ 5.9 n.m.

$ (34.0) $ 9.0 n.m.

Interest expense $ 6.1 $ 3.8 (60.5) % $ 11.2 $ 6.6 (69.7) %

Other income (expense) $ — $ 2.2 (100.0) % $ (2.1) $ (6.0) (65.0) %

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

JUNE 30 JUNE 30

2022 2021 % Change 2022 2021 % Change

Net income (loss) attributable to stockholders $ (19.4) $ 1.9 n.m $ (44.4) $ 7.5 n.m.

Earnings (loss) per share $ (1.15) $ 0.11 n.m.

Reported income tax rate (13.6) % 28.2 %

$ (2.63) $ 0.45 n.m.

Reported income tax rate 14.2 % 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.

"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 as of June 30, 2022, excludes 2,700 suspended orders, for which the Company has no currently defined plans to fulfill.

As of June 30, 2022, 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

2022 2021 2022 2021

Unit backlog, beginning of period 114.1 60.7 105.3 40.6

1 unchanged sentence

Unit bookings 23.2 46.9 55.9 89.3

Other adjustments (3.2) —

Unit backlog, end of period 112.0 84.9 112.0 84.9

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

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2022 2021 2022 2021

Bookings, approximate sales value $ 760 $ 1,070 $ 1,710 $ 2,040

Backlog, approximate sales value $ 3,530 $ 2,070 $ 3,530 $ 2,070

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:

Second Quarter of 2022 Compared with Second Quarter of 2021

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

Increase (decrease) in 2022 from:

1 unchanged sentence

Bolzoni revenues 1.6

Eliminations 1.1

Foreign currency (19.4)

Revenues increased 17.0% to $895.4 million in the second quarter of 2022 from $765.6 million in the second quarter of 2021.

The increase was primarily due to improved pricing, mainly in the Americas, and higher unit and parts volumes in the Americas and EMEA.

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 second quarter of 2022 compared with the second quarter of 2021, primarily from improved pricing, higher unit volumes and favorable aftermarket sales, including part sales.

EMEA's revenues increased in the second quarter of 2022 compared with the second quarter of 2021 due to improved unit and parts volume and favorable pricing.

These improvements were partially offset by unfavorable foreign currency movements of $22.1 million from the translation of sales into U.S.

JAPIC's revenues in the second quarter of 2022 were comparable with the second quarter of 2021, primarily as a result of lower unit and parts volumes, partially offset by improved pricing.

Bolzoni's revenues increased in the second quarter of 2022 compared with the second quarter of 2021 mainly due to improved pricing, partially offset by unfavorable foreign currency movements of $5.2 million from the translation of sales into U.S.

The following table identifies the components of change in operating profit (loss) for the second quarter of 2022 compared with the second quarter of 2021:

Operating Profit (Loss)

Increase (decrease) in 2022 from:

Lift truck gross profit (21.3)

Lift truck selling, general and administrative expenses (5.2)

Bolzoni operations 3.8

Nuvera operations 1.1

2022 $ (15.7)

The Company recognized an operating loss of $15.7 million in the second quarter of 2022 compared with operating profit of $5.9 million in the second quarter of 2021.

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

In addition, unfavorable foreign currency exchange rates and the absence of $6.3 million for social contribution taxes previously imposed on material purchases in Brazil recorded in 2021 contributed to the lower gross profit.

These changes more than offset the favorable impact of improved pricing of $59.9 million and higher unit and parts volumes.

The Americas recognized an operating profit of $3.1 million in the second quarter of 2022 compared with operating profit of $13.6 million in the second quarter of 2021 due to an increase in selling, general and administrative expenses and a decrease in gross profit.

Selling, general and administrative expenses increased mainly as result of increased employee-related expenses in the second quarter of 2022 compared with the second quarter of 2021, including $4.7 million of incentive compensation.

Gross profit declined primarily due to material cost inflation of $43.0 million and higher manufacturing costs of $14.2 million resulting from inefficiencies associated with component shortages.

The decrease in gross profit was partly offset by improved pricing of $50.5 million and improved parts and units volume.

EMEA recognized an operating loss of $10.8 million in the second quarter of 2022 compared with operating profit of $3.7 million in the second quarter of 2021.

Gross profit decreased primarily from increases in material and freight costs and higher manufacturing costs resulting from inefficiencies associated with component shortages and unfavorable foreign currency exchange rates.

These decreases more than offset the favorable impact of improved pricing and higher unit and parts volumes.

JAPIC's operating loss increased to $4.0 million in the second quarter of 2022 compared with $1.9 million in the second quarter of 2021, primarily due to lower gross profit from an unfavorable mix of sales of lower margin trucks, material cost inflation and unfavorable manufacturing variances.

The decrease was partially offset by improved pricing.

Bolzoni's operating profit increased to $3.4 million in the second quarter of 2022 from a $0.4 million operating loss in the second quarter of 2021, mainly due to improved gross profit from higher volume and pricing, partially offset by material cost inflation and unfavorable foreign currency exchange rates.

Nuvera's operating loss decreased to $7.9 million in the second quarter of 2022 compared with $9.0 million in the second quarter of 2021 as result of improved margin from lower production costs in 2022.

The Company recognized a net loss attributable to stockholders of $19.4 million in the second quarter of 2022 compared with net income attributable to stockholders of $1.9 million in the second quarter of 2021.

The decrease was primarily the result of the factors affecting operating profit, higher interest expense and lower pension income.

First Six Months of 2022 Compared with First Six Months of 2021

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

2021 $ 1,497.8

Increase (decrease) in 2022 from:

Unit volume and product mix 78.3

Bolzoni revenues 17.2

Nuvera revenues 0.6

1 unchanged sentence

Eliminations (7.9)

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.

2022 $ 1,723.0

Revenues increased 15.0% to $1,723.0 million in the first six months of 2022 from $1,497.8 million in the first six months of 2021.

The increase was primarily due to improved pricing in the Americas and higher unit and parts volume in the Americas, EMEA 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:

America's revenues increased in the first six months of 2022 compared with the first six months of 2021, primarily from improved pricing of lift trucks, higher unit volumes and favorable aftermarket sales, including part sales.

EMEA's revenues increased mainly due to improved unit and parts volume and favorable pricing.

These improvements were partially offset by unfavorable foreign currency movements of $35.5 million from the translation of sales into U.S.

JAPIC's revenues decreased primarily as a result of lower unit and part volumes and unfavorable foreign currency movements of $1.8 million, partially offset by improved pricing.

Bolzoni's revenues increased mainly due to improved pricing and higher volumes, partially offset by unfavorable foreign currency movements of $8.2 million from the translation of sales into U.S.

dollars in the first six months of 2022 compared with the first six months of 2021.

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

Operating Profit (Loss)

2 unchanged sentences

Lift truck selling, general and administrative expenses (8.6)

Nuvera operations 1.7

Bolzoni operations 5.1

Nuvera operations 2.8

2022 $ (34.0)

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.

The Company recognized an operating loss of $34.0 million in the first six months of 2022 compared with an operating profit of $9.0 million in the first six months of 2021.

The decrease in operating profit was primarily due to lower gross profit in the lift truck business.

Gross profit declined mainly due to material cost inflation of $119.3 million, higher manufacturing costs resulting from inefficiencies associated with component shortages, a shift in sales to lower-margin lift trucks and unfavorable foreign currency movements of $16.9 million.

The decrease in gross profit was partially offset by favorable pricing of $103.8 million and improved unit and parts volume in the Americas and EMEA.

Operating profit in the Americas decreased to $7.5 million in the first six months of 2022 compared with $28.2 million in the first six months of 2021 as a result of a decrease in gross profit and higher operating expenses.

Gross profit declined mainly due to material cost inflation of $83.5 million, higher manufacturing costs resulting from inefficiencies associated with component shortages of $27.8 million, a shift in mix to lower-margin products, unfavorable foreign currency movements of $9.9 million and the absence of $6.3 million for social contribution taxes previously imposed on material purchases in Brazil in the first six months of 2021.

The decrease in gross profit was partially offset by favorable pricing of $91.3 million and improved parts and unit volumes.

The increase in selling, general and administrative expenses primarily resulted from higher employee-related expenses, including $4.7 million of incentive compensation.

EMEA recognized an operating loss of $22.2 million in the first six months of 2022 compared with an operating profit of $3.8 million in the first six months of 2021 mainly as a result of lower gross profit.

Gross profit decreased due to material cost inflation of $32.6 million, unfavorable foreign currency movements of $6.4 million and higher manufacturing costs resulting from inefficiencies associated with component shortages.

The decrease in gross profit was partially offset by improved unit and parts volumes and improved pricing.

JAPIC's operating loss increased to $7.7 million in the first six months of 2022 from $4.4 million in the first six months of 2021, primarily due to lower gross profit from material cost inflation, manufacturing inefficiencies and a shift in mix to lower-margin products, partially offset by improved pricing.

Bolzoni's operating profit increased to $5.5 million in the first six months of 2022 compared with $0.4 million in the first six months of 2021 due to improved gross profit from improved pricing, partially offset by material cost inflation and unfavorable foreign currency exchange rates.

Nuvera's operating loss improved to $16.0 million in the first six months of 2022 compared with $18.8 million in the first six months of 2021 as result of improved margin from lower production costs in 2022.

The Company recognized a net loss attributable to stockholders of $ 44.4 million in the first six months of 2022 compared with net income attributable to stockholders of $ 7.5 million in the first six months of 2021.

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

in the first six months of 2021, higher interest expense, lower pension expense and unfavorable mark-to-market adjustments on an equity investment in a third party.

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:

2022 2021 Change

2 unchanged sentences

Depreciation and amortization 22.1 23.3 (1.2)

Gain on sale of investment — (4.6) 4.6

Dividends from unconsolidated affiliates 15.6 5.5 10.1

9 unchanged sentences

Proceeds from the sale of assets and investment 0.8 18.9 (18.1)

Purchase of noncontrolling interest (8.4) — (8.4)

Net cash provided by (used for) investing activities (22.9) 0.8 (23.7)

Cash flow before financing activities $ (22.7) $ (99.9) $ 77.2

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.

Net cash provided by (used for) operating activities changed $100.9 million in the first six months of 2022 compared with the first six months 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 a smaller increase in inventory levels and an increase in other liabilities primarily from down payments for customer orders, partially offset by lower payments of accounts payable and higher accounts receivable from increased revenues in the first six months of 2022 compared with the first six months of 2021.

The change in net cash provided by (used for) investing activities during the first six months of 2022 compared with the first six months of 2021 was due to the current year's installment purchase of Maximal's noncontrolling interest in 2022 and the absence of the proceeds from the sale of preferred shares of OneH2 in 2021.

2022 2021 Change

Financing activities:

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

Net increase of long-term debt and revolving credit agreements $ 44.6 $ 56.0 $ (11.4)

Cash dividends paid (10.9) (10.7) (0.2)

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 fees paid — (7.6) 7.6

Other (0.2) (0.2) —

Net cash provided by financing activities $ 33.5 $ 37.5 $ (4.0)

Net cash provided by financing activities decreased to $33.5 million in the first six months of 2022 compared with $37.5 million in the first six months of 2021.

The decrease was primarily due to a lower increase in borrowings during the first six months of 2022 versus the first six months of 2021, partially offset by the absence of financing fees paid in 2021.

Financing Activities

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

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.

There were $165.7 million of borrowings outstanding under the Facility at June 30, 2022.

The availability under the Facility at June 30, 2022 was $130.0 million, which reflects reductions of $4.3 million for letters of credit and other restrictions.

As of June 30, 2022, the Facility consisted of a U.S.

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

1 unchanged sentence

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.

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 June 30, 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.

2 unchanged sentences

base rate loans.

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

The applicable margins, as of June 30, 2022, for U.S.

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

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

The applicable margin, as of June 30, 2022, for non-U.S.

base rate loans and LIBOR loans was 1.50%.

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.

applicable interest rates for borrowings outstanding under the Facility on June 30, 2022 was 5.25% and 1.50% for the U.S.

and foreign base rate 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.

LIBOR loans ranged from 2.56% to 3.10% at June 30, 2022.

The Facility also required the payment of a fee of 0.25% per annum on the unused commitments as of June 30, 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 March 31, 2022, the Company was in compliance with the covenants in the Facility.

At June 30, 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.

1 unchanged sentence

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

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.

At June 30, 2022, there was $222.8 million of principal outstanding under the Term Loan which has been reduced in the unaudited condensed consolidated balance sheet by $4.4 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

material real property, fixtures and general intangibles consisting of intellectual property and a second priority lien on U.S.

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.

The approximate book value of assets held as collateral under the Term Loan was $770 million as of June 30, 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.

1 unchanged sentence

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%.

The interest rate on the amount outstanding under the Term Loan at June 30, 2022 was 5.17%.

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.

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.

At June 30, 2022, the Company was in compliance with the covenants in the Term Loan.

The Company had other debt outstanding, excluding finance leases, of approximately $165.3 million at June 30, 2022.

In addition to the excess availability under the Facility of $130.0 million, the Company had remaining availability of $26.4 million related to other non-U.S.

5 unchanged sentences

The following table summarizes actual and planned capital expenditures:

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

Six Months Ended June 30, 2022 Planned for Remainder of 2022 Planned 2022 Total Actual 2021

Lift truck business $ 11.5 $ 12.4 $ 23.9 $ 30.6

2 unchanged sentences

$ 15.3 $ 18.1 $ 33.4 $ 44.3

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

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

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

8 unchanged sentences

Total debt (580.6) (518.5) (62.1)

Total equity $ 351.5 $ 382.9 $ (31.4)

Total temporary and permanent equity $ 223.4 $ 382.9 $ (159.5)

Debt to total capitalization 72 % 58 % 14 %

1 unchanged sentence

Consolidated Outlook

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.

Given the continued component shortages due to supply chain constraints and the consequent reduction in production plans, significant material and freight cost inflation, and, more recently, the impact of the COVID-19 lockdowns in China and the Russia/Ukraine conflict, as well as continued losses at Nuvera, the Company, on a consolidated basis, expects a larger net loss in the third quarter of 2022 than previously projected, but a return to 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.

Generally, results in the second half of 2022 are expected to be lower than anticipated when the 2022 first quarter earnings release was issued, mainly due to adjustments made to the Company's production schedule as a result of continued supply chain constraints.

These expectations are based on the anticipated 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.

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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.

During 2021 and the first half of 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 in the second half of 2022 by using current inventory to

build trucks, for which production has been significantly delayed due to critical parts shortages, and to receive components as they are needed for production.

At June 30, 2022, the Company's cash on hand was $75.6 million and debt was $580.6 million compared with cash on hand of $65.1 million and debt of $479.0 million at March 31, 2022, and cash on hand of $65.5 million and debt of $518.5 million at December 31, 2021.

As of June 30, 2022, the Company had unused borrowing capacity of approximately $156 million under the Company's revolving credit facilities compared with $218 million at March 31, 2022.

Lift Truck Strategic Perspective

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.

Over the remainder of 2022, the Company expects the global lift truck market to continue to decline from the historical highs of 2021, but remain above pre-pandemic levels.

As a result of this market outlook and the Company accepting only orders with expected sound margins, the Lift Truck business is anticipating a substantial decrease in bookings during the second half of 2022 compared with the second half of 2021, particularly in the Americas.

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.

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

As a result, planned production schedules for the second half of 2022 and in 2023 have been reduced from what was expected at the time of last quarter's earnings release.

Nevertheless, full-year shipments are currently expected to increase in 2022 over 2021, despite the normal third quarter plant shutdowns, given the Company's robust backlog and actions put in place to mitigate the impact of the supply chain constraints and shortages, with the expectation that supplies of products or commodities are not constrained further.

The Company is hopeful that availability will improve and that consequently production can increase over current 2022 and 2023 production schedules.

As a result of the Russia/Ukraine conflict, material costs continued to increase in the second quarter of 2022.

However, recent signs have indicated some relief from additional material and freight cost inflation in the second half of 2022.

In light of cost inflation in 2021 and what is expected over 2022, the Lift Truck business implemented several price increases in 2021 and in the first half of 2022, but many of the orders in the backlog slotted for production in the third and fourth quarters 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.

Due to the lag between when unit price increases go into effect and when revenue is realized as the units are shipped, as the Lift Truck segment works through its low-margin backlog in the second half of 2022 and early 2023, margins are expected to improve, specifically in the fourth quarter, when the higher-margin, already-booked trucks 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.

As a result of these factors, the Lift Truck business expects a significantly lower operating loss in the second half of the year than in the first half, mainly driven by strong operating profit in the fourth quarter of 2022 in the Americas segment.

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.

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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.

As a result of these core strategies, the increased shipment volume potential of the current backlog and expected bookings in the remainder of 2022, enhanced prices and the renewal of tariff exclusions, the Lift Truck business expects to move from the significant operating loss in the first half of 2022 to operating profit in the fourth quarter.

However, as a result of manufacturing inefficiencies expected in the third quarter due to the normal seasonal plant shutdowns and reductions in production volumes due to continued supply chain constraints, as well as unfavorable currency effects, the Company expects a significant operating loss at the Lift Truck business in the third quarter that is higher than the operating loss in the prior year third quarter, and an

increase to a substantial operating profit in the fourth quarter that is lower than was anticipated at the time of the 2022 first quarter earnings release.

Over the second half of 2022, 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 continues to be seriously affected by various market forces, including an economic recession, the lockdowns in China and the ongoing Russia/Ukraine conflict.

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.

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 an increase to a substantial operating profit in the fourth quarter of 2022 and in 2023.

However, results for the remainder of 2022 and in 2023 are expected to be lower than projected in the 2022 first quarter earnings release due to lower productions levels than previously anticipated.

Bolzoni Strategic Perspective

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.

As a result of lower sales and inefficiencies expected from the normal third-quarter seasonal plant shutdowns, reduced demand for legacy components for the Lift Truck business and additional material inflation caused by the Russia/Ukraine conflict, Bolzoni expects near break-even results in the third quarter of 2022.

Bolzoni expects a return to profitability in the fourth quarter of 2022 as component shortages moderate, efficiencies return and benefits are realized from pricing actions.

Bolzoni expects solid operating profit in the second half of 2022 compared with an operating loss in the second half of 2021.

However, operating profit in the second half of 2022 is expected to be significantly lower than in the first half of 2022.

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.

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Nuvera Strategic Perspective

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 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.

Nuvera continues to focus on applying its strategy of placing 45kW and 60kW engines in niche, heavy-duty vehicle applications with expected significant fuel cell adoption potential.

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

In addition, Nuvera is developing 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, although losses in the second half of 2022 are expected to be higher than in the first half as a result of higher operating expenses.

EFFECTS OF FOREIGN CURRENCY

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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, 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.

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 interest rate volatility and 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, more favorable product pricing offered by or shorter lead times available through 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