What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-10-31 compared with 2023-08-01 · 145 added, 138 removed, 246 unchanged (53% of the section changed)

20 unchanged sentences

The results of operations for the Company were as follows:

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

JUNE 30 JUNE 30

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

SEPTEMBER 30 SEPTEMBER 30

2023 2022 % Change 2023 2022 % Change

12 unchanged sentences

$ 1,001.2 $ 840.1 19.2 % $ 3,091.1 $ 2,563.1 20.6 %

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

JUNE 30 JUNE 30

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

SEPTEMBER 30 SEPTEMBER 30

2023 2022 % Change 2023 2022 % Change

24 unchanged sentences

175.4 (37.6) n.m.

Bolzoni 5.4 3.4 58.8 % 9.8 5.5 78.2 %

Bolzoni 2.9 (1.3) n.m.

12.7 4.2 202.4 %

Nuvera (9.4) (9.0) (4.4) % (28.4) (25.0) (13.6) %

13 unchanged sentences

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" in the first six months of 2022 below represents suspended orders for which the Company has no defined plans to fulfill.

As of June 30, 2023, unit backlog excludes 2,500 of these suspended orders.

As of June 30, 2023, 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

"Other adjustments" in the first nine months of 2022 below represents suspended orders for which the Company has no defined plans to fulfill.

As of September 30, 2023, unit backlog excludes 2,300 of these suspended orders.

As of September 30, 2023, 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

2023 2022 2023 2022

4 unchanged sentences

Unit backlog, end of period 85.3 108.2 85.3 108.2

The following is the detail of the approximate sales value of the Company's lift truck unit bookings and backlog, reflected in millions of dollars.

The following is the detail of the approximate sales value of the Company's lift truck unit bookings and backlog.

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 SIX MONTHS ENDED

JUNE 30 JUNE 30

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

1 unchanged sentence

Backlog, approximate sales value $ 3,540 $ 3,700 $ 3,540 $ 3,700

Second Quarter of 2023 Compared with Second Quarter of 2022

The following table identifies the components of change in revenues for the second quarter of 2023 compared with the second quarter of 2022:

Third Quarter of 2023 Compared with Third Quarter of 2022

The following table identifies the components of change in revenues for the third quarter of 2023 compared with the third quarter of 2022:

HY Americas EMEA JAPIC

3 unchanged sentences

Price 58.7 33.2 25.1 0.4

Foreign currency 14.7 1.6 14.4 (1.3)

Parts 14.2 16.2 (1.2) (0.8)

Other 2.5 2.7 0.2 (0.4)

Bolzoni revenues 10.6 — — —

1 unchanged sentence

Eliminations (5.6) — — —

Foreign currency (3.2) (1.1) (0.2) (1.9)

Other (6.1) (4.2) (1.7) (0.2)

2023 $ 1,001.2 $ 716.5 $ 183.9 $ 51.6

Revenues increased 21.8% to $1,090.6 million in the second quarter of 2023 from $895.4 million in the second quarter of 2022.

The increase in Lift Truck revenues was primarily due to higher unit and parts volumes, mainly in the Americas and improved pricing in all geographic regions.

Revenues increased 19.2% to $1,001.2 million in the third quarter of 2023 from $840.1 million in the third quarter of 2022.

The increase in Lift Truck revenues was primarily due to higher unit and parts volumes in the Americas and improved pricing in all geographic regions.

The improvement in revenue was partially offset by a decline in unit shipments in EMEA and JAPIC.

Bolzoni revenues increased in the second quarter of 2023 compared with the second quarter of 2022 mainly from higher volume and pricing.

The following table identifies the components of change in operating profit (loss) for the second quarter of 2023 compared with the second quarter of 2022:

Bolzoni revenues increased in the third quarter of 2023 compared with the third quarter of 2022 mainly from higher volume and improved pricing.

The following table identifies the components of change in operating profit (loss) for the third quarter of 2023 compared with the third quarter of 2022:

Operating Profit (Loss)

7 unchanged sentences

2023 $ 58.6 $ 65.4 $ 2.4 $ (2.7)

The Company recognized an operating profit of $58.8 million in the second quarter of 2023 compared with an operating loss of $15.7 million in the second quarter of 2022.

The increase in Lift Truck operating profit was primarily due to improved gross profit from higher pricing of $77.9 million, mainly in the Americas and EMEA, a shift in sales to higher margin lift trucks and higher unit and parts sales compared with the second quarter of 2022.

These items were partially offset by higher selling, general and administrative expenses for increased employee-related costs, including incentive compensation.

Operating profit in the Americas increased primarily due to improved gross profit from higher pricing of $51.3 million, a shift in sales to higher margin lift trucks, higher unit and parts sales, as well as favorable material costs, partially offset by higher selling, general and administrative expenses related to higher employee costs, including incentive compensation.

EMEA recognized operating profit of $1.1 million in the second quarter of 2023 compared with an operating loss of $10.8 million in the second quarter of 2022, primarily from higher gross profit from improved pricing of $25.4 million, partially offset by manufacturing inefficiencies and higher selling, general and administrative expenses.

Bolzoni's operating profit increased to $5.4 million in the second quarter of 2023 compared with $3.4 million in the second quarter of 2022 due to higher gross profit from improved pricing and higher sales volume.

The Company recognized net income attributable to stockholders of $38.3 million in the second quarter of 2023 compared with a net loss of $19.4 million in the second quarter of 2022.

The improvement was primarily the result of higher operating profit (loss), partially offset by higher income taxes and interest expense.

The Company recognized operating profit of $58.6 million in the third quarter of 2023 compared with an operating loss of $24.9 million in the third quarter of 2022.

The increase in Lift Truck operating profit was primarily due to improved gross profit from higher pricing of $58.7 million, mainly in the Americas and EMEA, favorable material costs in the Americas, a shift in sales to higher margin lift trucks and higher unit and parts volumes in the Americas.

The increase in gross profit was partially offset by higher selling, general and administrative expenses primarily due to increased employee-related costs, including incentive compensation, as well as higher product development, product liability and marketing costs.

Operating profit in the Americas increased primarily due to improved gross profit from higher pricing of $33.2 million, favorable material costs and higher unit and parts sales.

The increase in gross profit was partially offset by higher selling, general and administrative expenses primarily related to increased employee-related costs, including incentive compensation, as well as higher product development, product liability and marketing costs.

EMEA recognized operating profit of $2.4 million in the third quarter of 2023 compared with an operating loss of $13.2 million in the third quarter of 2022, primarily from higher gross profit from improved pricing of $25.1 million, partially offset by lower unit volume and higher selling, general and administrative expenses.

Bolzoni recognized operating profit of $2.9 million in the third quarter of 2023 compared with an operating loss of $1.3 million in the third quarter of 2022 primarily due to higher gross profit from higher sales volume and improved pricing.

The Company recognized net income attributable to stockholders of $35.8 million in the third quarter of 2023 compared with a net loss of $37.3 million in the third quarter of 2022.

The improvement was primarily the result of higher operating profit (loss), partially offset by increased income tax and interest expense.

See Note 5 of the Company's condensed consolidated financial statements for further discussion of the Company's income tax provision.

First Six Months of 2023 Compared with First Six Months of 2022

The following table identifies the components of change in revenues for the first six months of 2023 compared with the first six months of 2022:

First Nine Months of 2023 Compared with First Nine Months of 2022

The following table identifies the components of change in revenues for the first nine months of 2023 compared with the first nine months of 2022:

HY Americas EMEA JAPIC

6 unchanged sentences

Nuvera revenues 2.0 — — —

Foreign currency (17.4) (0.2) (13.8) (3.4)

Eliminations (10.5) — — —

Other 1.2 1.8 (0.5) (0.1)

Eliminations (16.1) — — —

Foreign currency (2.7) 1.4 0.6 (4.7)

2023 $ 3,091.1 $ 2,190.9 $ 599.4 $ 149.1

Revenues increased 21.3% to $2,089.9 million in the first six months of 2023 from $1,723.0 million in the first six months of 2022.

The increase was primarily due to higher unit and parts volume in the Americas, improved pricing and a shift in sales to higher-priced lift trucks in the Americas and EMEA.

The following table identifies the components of change in operating profit for the first six months of 2023 compared with the first six months of 2022:

Revenues increased 20.6% to $3,091.1 million in the first nine months of 2023 from $2,563.1 million in the first nine months of 2022.

The increase was primarily due to higher unit and parts volumes in the Americas, improved pricing and a shift in sales to higher-priced lift trucks in the Americas and EMEA.

Bolzoni revenues increased in the first nine months of 2023 compared with the first nine months of 2022 mainly from improved pricing and higher volume.

The following table identifies the components of change in operating profit for the first nine months of 2023 compared with the first nine months of 2022:

Operating Profit (Loss)

7 unchanged sentences

2023 $ 160.0 $ 178.1 $ 6.1 $ (8.8)

The Company recognized an operating profit of $101.4 million in the first six months of 2023 compared with an operating loss of $34.0 million in the first six months of 2022.

The increase in Lift Truck operating profit was primarily due to improved gross profit from higher pricing of $152.2 million, mainly in the Americas and EMEA, and a shift in sales to higher margin lift trucks and higher unit and parts sales compared with the first six months of 2022.

These items were partially offset by higher selling, general and administrative expenses for increased employee-related costs, including incentive compensation.

Operating profit in the Americas increased primarily due to improved gross profit from higher pricing of $96.6 million, a shift in sales to higher margin lift trucks and increased unit and parts sales, partially offset by higher selling, general and administrative expenses, related to higher employee costs, including incentive compensation.

The Company recognized an operating profit of $160.0 million in the first nine months of 2023 compared with an operating loss of $58.9 million in the first nine months of 2022.

The increase in Lift Truck operating profit was primarily due to improved gross profit from higher pricing of $210.9 million, mainly in the Americas and EMEA, a shift in sales to higher margin lift trucks and higher unit and parts sales compared with the first nine months of 2022.

These items were partially offset by higher selling, general and administrative expenses primarily due to increased employee-related costs, including incentive compensation, as well as higher product development, product liability and marketing costs.

Operating profit in the Americas increased primarily due to improved gross profit from higher pricing of $129.8 million, a shift in sales to higher margin lift trucks and increased unit and parts sales.

These improvements were partially offset by higher selling, general and administrative expenses, primarily related to higher employee costs, including incentive compensation, as well as higher product development, product liability and marketing costs.

EMEA's operating profit improved mainly due to improved gross profit from improved pricing of $78.2 million, partially offset by material cost inflation and manufacturing inefficiencies.

JAPIC's operating loss improved to $6.1 million in the first six months of 2023 from $7.7 million in the first six months of 2022, primarily due to higher gross profit from a shift in mix to higher-margin products and price increases, partially offset by higher selling, general and administrative expenses for increased employee-related costs and marketing programs.

Bolzoni's operating profit increased to $9.8 million in the first six months of 2023 compared with $5.5 million in the first six months of 2022 due to higher gross profit from a shift in mix to higher-margin products and higher volume, partially offset by material cost inflation.

Nuvera's operating loss increased to $19.0 million in the first six months of 2023 compared with $16.0 million in the first six months of 2022 primarily from higher selling, general and administrative expenses for increased employee-related costs, including incentive compensation, and product development.

The Company recognized net income attributable to stockholders of $ 64.9 million in the first six months of 2023 compared with a net loss of $ 44.4 million in the first six months of 2022.

JAPIC's operating loss improved to $8.8 million in the first nine months of 2023 from $10.6 million in the first nine months of 2022, primarily due to higher gross profit from a shift in mix to higher-margin products, partially offset by higher selling, general and administrative expenses.

Bolzoni's operating profit increased to $12.7 million in the first nine months of 2023 compared with $4.2 million in the first nine months of 2022 primarily due to higher gross profit from improved pricing, lower material costs and higher volumes.

The increase in gross profit was partially offset by higher selling, general and administrative expenses, primarily related to higher employee costs, including incentive compensation.

Nuvera's operating loss increased to $28.4 million in the first nine months of 2023 compared with $25.0 million in the first nine months of 2022 primarily from higher selling, general and administrative expenses primarily related to product development and increased employee-related costs, including incentive compensation.

The Company recognized net income attributable to stockholders of $ 100.7 million in the first nine months of 2023 compared with a net loss of $ 81.7 million in the first nine months of 2022.

The improvement was primarily the result of the factors affecting operating profit (loss), partially offset by higher income taxes and interest expense.

1 unchanged sentence

LIQUIDITY AND CAPITAL RESOURCES

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

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

2023 2022 Change

16 unchanged sentences

Cash flow before financing activities $ 85.3 $ 7.1 $ 78.2

Net cash provided by operating activities increased $44.6 million in the first six months of 2023 compared with the first six months of 2022, primarily as a result of higher net income and non-cash adjustments for stock compensation and currency translation partially offset by changes in working capital items.

The changes in working capital were mainly due to a decrease in customer deposits received related to down payments on orders partially offset by a smaller increase in accounts receivable in the first six months of 2023 compared with the first six months of 2022.

The change in net cash used for investing activities during the first six months of 2023 compared with the first six months of 2022 was due to the purchase of Bolzoni's noncontrolling interest in 2023 compared with the first installment purchase of the noncontrolling interest of Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.

in 2022 and lower capital expenditures.

Net cash provided by operating activities increased $70.8 million in the first nine months of 2023 compared with the first nine months of 2022, primarily as a result of higher net income partially offset by changes in working capital items.

The changes in working capital were mainly due to a decrease in accounts payable and customer deposits received related to down payments on orders in the first nine months of 2023 compared with the first nine months of 2022.

The change in net cash used for investing activities during the first nine months of 2023 compared with the first nine months of 2022 was mainly due to the purchase of Bolzoni's noncontrolling interest in 2023 compared with the first installment purchase of the noncontrolling interest of Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.

2023 2022 Change

3 unchanged sentences

Other (2.2) (0.2) (2.0)

Net cash provided by (used for) financing activities $ (28.9) $ 33.5 $ (62.4)

The change in net cash used for financing activities was primarily due to repayments of debt in the first six months of 2023 compared with additional borrowings during the first six months of 2022.

Net cash used for financing activities $ (69.1) $ (1.9) $ (67.2)

The change in net cash used for financing activities was primarily due to debt repayments during the first nine months of 2023 compared with additional borrowings in the first nine months of 2022.

Financing Activities

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dollar-denominated borrowings under the Facility from LIBOR to Term SOFR, each as defined in the Facility.

The Term Loan was amended in the second quarter of 2023 for the purpose of changing the benchmark interest rate for borrowings under the Term Loan from LIBOR to Term SOFR,

each as defined in the Facility.

The Term Loan was amended in the second quarter of 2023 for the purpose of changing the benchmark interest rate for borrowings under the Term Loan from LIBOR to Term SOFR, each as defined in the Facility.

See Note 10 of the Company's condensed consolidated financial statements for further discussion.

1 unchanged sentence

The obligations under the Facility are generally secured by a first priority lien on working capital assets of the borrowers and guarantors 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 $1.2 billion as of June 30, 2023.

The approximate book value of assets held as collateral under the Facility was $1.2 billion as of September 30, 2023.

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 June 30, 2023, the Company was in compliance with the covenants in the Facility.

At September 30, 2023, the Company was in compliance with the covenants in the Facility.

The new $25.0 million tranche will terminate on May 1, 2024 unless otherwise terminated prior to such date by the Company in accordance with the terms of the Facility.

Commencing December 1, 2023, the new $25.0 million tranche will amortize on a monthly basis in the amount of $4.2 million per month.

Key terms of the Facility as of June 30, 2023 were as follows:

Key terms of the Facility as of September 30, 2023 were as follows:

borrowing capacity $ 235.0

7 unchanged sentences

0.25% to 0.75%

SOFR, EURIBOR and foreign base rate loans 3.25%

SOFR, EURIBOR and non-U.S.

base rate loans 3.25%

1.25% to 1.75%

1 unchanged sentence

Applicable margins, for amounts outstanding

base rate and SOFR loans — 0.50%;

base rate and SOFR loans 3.25%

base rate loans — 0.50%

SOFR loans 3.25 % 1.50 %

base rate loans — 1.50%

Applicable interest rate, for amounts outstanding

5 unchanged sentences

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 and a second priority lien on working capital assets of the borrowers and guarantors 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 $800 million as of June 30, 2023.

The approximate book value of assets held as collateral under the Term Loan was $800 million as of September 30, 2023.

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 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 June 30, 2023, the Company was in compliance with the covenants in the Term Loan.

Key terms of the Term Loan as of June 30, 2023 were as follows:

At September 30, 2023, the Company was in compliance with the covenants in the Term Loan.

Key terms of the Term Loan as of September 30, 2023 were as follows:

Outstanding $ 219.9

6 unchanged sentences

Applicable interest rate, for amounts outstanding 8.93%

The Company had other debt outstanding, excluding finance leases, of approximately $170.4 million at June 30, 2023.

The Company had other debt outstanding, excluding finance leases, of approximately $171.1 million at September 30, 2023.

In addition to the excess availability under the Facility of $223.1 million, the Company had remaining availability of $30.6 million related to other non-U.S.

revolving credit agreements at June 30, 2023.

revolving credit agreements at September 30, 2023.

The Company believes funds available from cash on hand, the Facility, other available lines of credit and operating cash flows will provide sufficient liquidity to meet its operating needs and commitments during the next twelve months and until the expiration of the Facility in June 2026.

3 unchanged sentences

The following table summarizes actual and planned capital expenditures:

Six Months Ended June 30, 2023 Planned for Remainder of 2023 Planned 2023 Total Actual 2022

Nine Months Ended September 30, 2023 Planned for Remainder of 2023 Planned 2023 Total Actual 2022

Lift truck business $ 14.0 $ 19.2 $ 33.2 $ 20.3

17 unchanged sentences

Market Commentary

The global economic outlook remains uncertain with continuing moderating activity in certain parts of the world, including EMEA.

This weakness is due to tight monetary policies designed to contain inflation and labor market shortages, among other factors.

Despite these challenges, the deceleration in the U.S.'s economy and lift truck market has been more moderate than previously predicted.

The latest publicly available lift truck market data indicates that new unit, first-quarter 2023 booking activity decreased in all major geographies compared with strong prior-year levels but was still ahead of pre-pandemic volumes.

Internal company estimates suggest that the global lift truck market decline accelerated in the second quarter of 2023, with all major geographies experiencing booking declines compared with the prior year.

Looking ahead, the Company continues to expect a full-year 2023 lift truck market decline in all regions compared with 2022.

This decline is anticipated to accelerate in the second half of 2023 compared with the first half in all markets.

However, 2023's market unit volumes are projected to remain reasonably strong in most regions compared with pre-pandemic levels.

Many external market factors, including geopolitical instability, most recently evidenced by the Israel/Gaza conflict, continue to create a significant amount of uncertainty within the global economic environment.

As a result of this, as well as abnormally high volumes during the 2020 to 2022 pandemic period, market activity has been moderating in certain parts of the world across 2023, particularly in EMEA.

The latest publicly available lift truck market data indicates that new unit, second-quarter 2023 booking activity decreased in all major geographies except China and India compared with the robust prior-year levels.

Internal company estimates suggest that third-quarter 2023 global lift truck market bookings continued to decrease compared with the prior year, with the pace of decline accelerating in the Americas and decelerating in EMEA.

Looking ahead, the fourth-quarter 2023 global lift truck market is expected to decline from fourth-quarter 2022.

In 2024, global market bookings are expected to be generally comparable to 2023 levels, with an anticipated first-half decline expected to be offset by a second-half increase.

For both full-year 2023 and 2024, market unit volumes are projected to remain strong and above pre-pandemic levels in most regions.

Consolidated Strategic Perspective

The Company believes the improving 2023 results are due to actions taken since the COVID-19 pandemic began, implementation of key strategies and projects and significant process improvements made over the past few years, all of which position the Company for substantial longer-term growth.

The Company believes its more mature Lift Truck and Bolzoni businesses are the foundation for this improvement, while the Nuvera business has substantial growth prospects that have yet to be realized.

The Company believes the improving 2023 results are due to actions taken since the global pandemic began.

These actions include the implementation of key strategies, projects and significant process improvements, all of which better position the Company for substantial longer-term growth.

The Company believes that its mature Lift Truck and Bolzoni businesses are the foundation for this improvement, while the Nuvera Fuel Cell business' substantial growth prospects are expected to be realized in future years.

Operational Perspectives - Lift Truck Business

Second-quarter 2023 lift truck bookings decreased moderately from first-quarter 2023 and prior-year levels due to several factors, including a healthy, but declining, global market and a continued focus on booking orders with strong margins.

Despite the bookings decrease, market share improved compared to the prior year.

Looking forward, second-half 2023 booking levels are projected to be comparable year-over-year due to a steadier-than-expected market and anticipated market share gains.

Full-year 2023 bookings are forecasted to decline compared with full-year 2022.

Production and shipment volumes are anticipated to continue to increase in second-half 2023 compared with the prior year period.

The Company expects its extended backlog to continue trending lower toward more normal levels over time as planned production rates increase and given bookings expectations.

At the end of second-quarter 2023, the backlog of nearly 93,000 units was down 19% from its peak in the first-quarter 2022.

Lead times and backlog levels will likely remain above desired levels for some time.

However, this extended backlog, valued at $3.6 billion, which is almost a full year of revenue, should serve as a shock absorber for the business if bookings decline more rapidly.

The trend of higher average unit booking and backlog prices and margins continued in the second quarter largely due to order selectivity and enhanced pricing to offset prior years' inflation.

Although certain material and labor cost increases continue, the

rate of increase has slowed substantially, particularly in the Americas.

Forward economic indicators suggest inflationary pressures will stabilize throughout the second half of 2023.

As of June 30, 2023, the Company has worked through essentially all of its lower-priced, lower-margin backlog units booked before price increases implemented in 2021 and 2022 went into effect.

In the second half of 2023, the Company expects to maintain an improved price-to-cost ratio, in part to address projected cost increases in certain categories and geographies.

The Company continues to monitor material and labor costs closely, as well as the impact of tariffs and competition, and will adjust forward pricing accordingly.

As a result of stabilizing cost inflation and the higher-priced truck production, the Company believes average unit margins will continue to increase in the second half of 2023 compared with the prior year period.

This improvement is anticipated to continue into the beginning of 2024 as newer bookings with higher margins are scheduled for production.

The factors outlined above, as well as the benefits from the Company's maturing strategic initiatives, are expected to lead to significant increases in revenue and operating profit in second-half 2023 compared with the respective prior year period.

Operating profit in the third quarter is expected to decrease from the strong second-quarter results due to normal business seasonality combined with ongoing EMEA production challenges and an anticipated mix shift toward lower margin sales channels.

Fourth-quarter 2023 results are expected to increase meaningfully over the third quarter, due in part to anticipated improvements in EMEA and the absence of planned production outages.

However, these forecasts are highly sensitive, in particular to the impact of global supply chain adjustments and production capabilities.

The Company's third-quarter 2023 lift truck bookings decreased 15% from second-quarter 2023 and 12% from prior-year levels due to solid, but declining, global market demand and a continued company focus on booking orders with strong margins.

Looking forward, fourth-quarter bookings are projected to increase year-over-year due to projected market share gains.

In 2024, the Company expects bookings increases compared with 2023, after a moderate first-quarter 2024 decline, as a result of continued market share gains despite an overall flat global lift truck market.

These anticipated increases are primarily the result of the Company's maturing strategic initiatives.

Planned production increases combined with anticipated market level decreases in the first half of 2024 are expected to help the Company reduce its extended lead times and backlog closer to pre-pandemic levels over the course of 2024.

However, given current expectations, improving lead times and backlog levels will likely remain above optimal levels for some time on some product lines.

Certain lines, such as warehouse products, are expected to return to more normal lead time and backlog levels in 2024.

The Company's extended backlog, valued at $3.5 billion, is almost a full year of revenue and should serve as an initial shock absorber for the business if bookings decline more than anticipated in 2024.

Consolidated fourth-quarter 2023 shipments are anticipated to decrease modestly compared with the prior-year period, with a moderate increase in Americas, led by anticipated higher production rates, expected to be more than offset by fewer EMEA shipments as a result of continuing product launch issues.

Full-year 2024 production and shipment rates are expected to increase compared with 2023 as component constraints dissipate and the Company focuses on maintaining a full production pipeline across its facilities in a moderated market environment.

The trend of higher average unit backlog prices and margins continued in the third quarter largely due to benefits from prior-year pricing implemented to offset inflation.

Third-quarter 2023 average booking prices were flat compared with second-quarter 2023 and declined modestly versus the prior year largely due to product mix.

Material costs have generally stabilized.

Forward economic indicators suggest some nominal inflationary increases, particularly for labor costs, in fourth-quarter 2023 and full-year 2024.

The Company expects to maintain its strong price-to-cost ratio in the remainder of 2023 and into 2024 as the higher-priced backlog is shipped.

Overall, the Company believes average unit margins will improve in fourth-quarter 2023 over the prior-year and remain at sound levels throughout 2024.

Anticipated increases in labor and overhead costs are projected to erode the favorable price-to-cost ratio over 2024, resulting in modestly lower gross margins compared with 2023.

The Company continues to monitor labor and material costs closely, as well as the impact of tariffs and competition, and will adjust forward pricing accordingly.

The factors outlined above, as well as the benefits from the Company's maturing strategic initiatives, are expected to lead to an increase in fourth-quarter 2023 Lift Truck revenues and operating profit compared with the prior year.

Fourth-quarter 2023 operating profit is expected to decrease from the strong third-quarter due to an anticipated mix shift toward lower margin sales channels, higher labor and manufacturing costs and increased operating expenses.

Looking forward, the Lift Truck business expects an increase in 2024 revenues, while operating profit is expected to be similar to 2023.

These forecasts, however, are highly sensitive to, in particular, the impact of global supply chain adjustments and the Company's production capabilities.

Strategic Perspectives - Lift Truck

From a broad perspective, the Lift Truck business has three core strategies that are expected to transform the Company’s competitiveness, market position and economic performance over time:

• Provide the lowest cost of ownership while improving customer productivity, including for low-intensity applications.

The Lift Truck business' capabilities in this area are expected to be enhanced by bringing to market a wide variety of vehicle innovations including:

new modular and scalable product families, truck electrification projects and technology advancements in vehicle automation, power options and operator assist systems;

• Be the leader in the delivery of industry- and customer-focused solutions by transforming the Company's sales approach to meet a wide variety of customer needs across a broad set of end markets;

• Provide products that improve customer productivity at the lowest cost of ownership, including for low-intensity applications.

The Lift Truck business' capabilities in this area are expected to be enhanced by bringing to market a wide variety of vehicle innovations, including new modular and scalable product families, truck electrification projects and technology advancements in operator assist systems (OAS), power options and vehicle automation;

• Be the leader in the delivery of industry- and customer-focused solutions by transforming the Company's sales approach to ensure it meets a wide variety of customer needs across a broad set of end markets;

• Be the leader in independent distribution by focusing on effectively coordinating dealer and major account coverage, enhancing dealer excellence and ensuring outstanding dealer ownership globally.

The Company continues to make progress on its high priority projects.

The Lift Truck business launched its heart-of-the-line modular, scalable lift trucks in the EMEA and Americas markets in 2022.

Given the current extended backlog, the production ramp-up for this new product line is occurring gradually.

The Company plans to launch these models in the JAPIC market in the second half of 2023.

These products are expected to help reduce supply chain costs and working capital, and better meet customer needs.

The Lift Truck business has key projects geared toward electrifying trucks used for applications now dominated by internal combustion engine trucks through the use of advancements in electric power options.

The Company also has key projects focused on applying technology advancements in automation product options and operator assist systems.

The Company delivered its first electrified fuel cell Container Handler to the Port of Los Angeles for testing in late 2022.

In second-half 2023, the Company anticipates delivering an electrified fuel cell Reach Stacker to the Port of Valencia, Spain, and delivering a new electrified fuel cell Terminal Tractor and an electrified fuel cell empty Container Handler to a customer in Hamburg, Germany.

The Company is also exploring options for other electrification projects within the European Union.

Over the past two years, the Company launched its heart-of-the-line modular, scalable 2- to 3.5-ton internal combustion engine lift trucks in the EMEA and Americas markets.

The production ramp-up is occurring gradually given the current extended backlog.

However, bookings and shipments accelerated in 2023.

A fourth-quarter 2023 launch is expected for the JAPIC market.

Similar enhancements to the 2- to 3.5-ton electric truck platforms are also expected over 2024 and 2025.

The modular, scalable product platform is expected to enhance multiple areas of the business, including reducing supply chain costs, improving working capital levels and helping optimize the Company's manufacturing footprint, while providing customers with a more customizable product that better meets their needs.

The Lift Truck business has key projects which include electrifying trucks used for applications now dominated by internal combustion engine trucks that capitalize on advancements in electric powertrain options.

The Company currently has its first electrified fuel cell Container Handler operating at the Port of Los Angeles.

During the 2023 third quarter, the Company delivered an electrified fuel cell Reach Stacker to the Port of Valencia, Spain.

Hyster-Yale anticipates delivering a new electrified fuel cell Terminal Tractor and an electrified fuel cell Empty Container Handler to a customer in Hamburg, Germany in the first half of 2024.

The Company is exploring options for additional electrification projects within the European Union and the United States.

The Company also has key projects focused on applying its technology advancements to additional OAS and automated product options.

Notably, during third-quarter 2023, the Company entered into an agreement with a technology-service provider to co-develop further robotics software technology for automated lift truck solutions.

Operational and Strategic Perspectives - Bolzoni

Bolzoni anticipates a modest decline in revenues in second-half 2023 due to a projected market decline.

As a result, second-half 2023 operating profit is expected to moderate from the strong first-half performance, but significantly exceed the prior-year second half as a result of continuing year-over-year margin improvement.

Bolzoni anticipates a modest revenue decline in fourth-quarter 2023 compared with fourth-quarter 2022 resulting from a projected market decline.

Despite the anticipated revenue decrease, operating profit is expected to increase over the prior year fourth quarter due to ongoing strict cost controls.

Fourth-quarter 2023 operating profit is projected to be comparable to third-quarter 2023.

In 2024, Bolzoni expects comparable revenues to 2023.

Operating profit is expected to increase year-over-year as improved unit margins are anticipated to more than offset higher costs.

Bolzoni's core strategy is to be the leader in the attachments business.

In this context, Bolzoni continues to concentrate on driving its "One Company - 3 Brands" approach globally, increasing its Americas business and focusing on strengthening its ability to serve key attachment industries and customers in all global markets.

As part of this approach, Bolzoni also intends to increase its sales, marketing and product capabilities in North America and Europe to support its industry-specific sales strategy.

Operational and Strategic Perspectives - Nuvera

Nuvera's core strategy is to be a leader in the fuel cell business.

Nuvera's core strategy is to be a leader in the heavy-duty fuel cell market.

Nuvera continues to focus on placing 45kW and 60kW fuel cell engines in heavy-duty vehicle applications for which battery-only electrification does not provide an adequate solution.

As a result, these applications are expected to have significant and nearer-term fuel cell adoption potential.

Nuvera has announced several projects with various third parties to test Nuvera ® engines in targeted applications, including the Port of Los Angeles, which began testing in late 2022, in multiple European ports, which are projected to begin testing in the second half of 2023, in bus applications in China and India and in marine applications in the Netherlands.

Nuvera is also developing a new, larger 125kW fuel cell engine for heavier-duty applications and plans to launch modular fuel cell-powered generators for stationary and mobile applications.

In the second half of 2023, Nuvera plans to continue to focus on increasing customer product demonstrations and customer bookings.

Nuvera has announced several projects with various third parties to test Nuvera ® engines in targeted applications, including the Port of Los Angeles and the Port of Valencia.

Nuvera expects to have additional products being tested in bus applications in China and India, in marine applications in the Netherlands, and in a German port by mid-2024.

Nuvera is also developing a new, larger 125kW fuel cell engine for heavier-duty applications, which is projected to be available in 2025, and plans to sell modular fuel cells for stationary and mobile generator applications.

During the fourth quarter of 2023 and in 2024, Nuvera plans to focus on increasing customer product demonstrations and customer bookings.

Nuvera is expanding its presence in Europe and China.

Recurring orders from current customers are booked for the period and are expected to result in higher sales compared with the second half of 2022.

The business expects to generate a lower loss in the second half of 2023 compared with the second half of 2022 and first half of 2023 largely due to anticipated higher shipments moderated by increased development and other costs.

Recurring orders from current customers have been booked and are expected to result in higher sales in fourth-quarter 2023 and in 2024 compared with the prior year periods.

The business also expects to generate a lower loss in fourth-quarter 2023 compared with 2022 largely due to anticipated higher shipments combined with lower costs due to the expected receipt of government funding for fuel-cell research and development.

In 2024, Nuvera expects higher sales with moderately higher development costs, resulting in comparable operating results compared with 2023.

The increased volume of engine demonstrations should significantly enhance the foundation for future fuel cell engine technology adoption and improved financial returns.

Consolidated Outlook

At the consolidated level, second-half 2023 operating profit and net income are expected to be significantly higher than second-half 2022.

Full-year 2023 margin expansion, led by strong first-half improvements, is expected to generate substantial operating profit and net income for the 2023 full year.

This should drive solid progress toward the Company's 7% operating profit margin and greater than 20% return on capital employed goals at both the Lift Truck and Bolzoni businesses.

These expectations are based on the Company's ability to effectively manage its ongoing component and labor costs and increase its production levels.

The programs to reduce inventory and generate cash are anticipated to show substantial progress in the second half of 2023.

The Company is committed to reducing its leverage and enhancing its cash flows through ongoing action plans and continued discipline over capital expenditures and operating expenses.

Capital expenditures are expected to be approximately $65 million for full-year 2023, with spending more heavily weighted to the second half of the year.

This full-year increase compares to significantly restrained 2022 levels.

Higher expenditures are necessary to adequately maintain the Company’s facilities and product development programs.

At the consolidated level, fourth-quarter 2023 operating profit and net income are expected to improve significantly over a profitable fourth-quarter 2022, although not to the level of third-quarter 2023.

In 2024, the Company expects operating profit and net income to be similar to 2023.

The Company made solid progress toward its 7% operating profit margin and greater than 20% return on total capital employed goals at both the Lift Truck and Bolzoni businesses in 2023, and further progress is expected in 2024.

To meet these expectations, however, the Company will have to effectively manage its ongoing component and labor costs and achieve increased production levels.

The programs to reduce inventory and generate cash are anticipated to show further progress in fourth-quarter 2023 and 2024.

The Company is committed to reducing its leverage and enhancing its cash flows through ongoing working capital action plans and continued discipline over capital expenditures and operating expenses.

Capital expenditures are expected to be approximately $42 million for full-year 2023.

Working capital control continues to be an area of intense focus for the Company.

Inventory levels remain elevated and above pre-pandemic levels but are decreasing.

Efforts to maximize the use of on-hand inventory are expected to help reduce excess inventory levels throughout the Company in the 2023 second half.

Supply constraints continue to be an issue periodically, while labor constraints are increasing, causing certain production and inventory usage challenges.

However, the Company anticipates continued inventory improvements over the remainder of the year.

As a result of these actions, the Company expects a significant increase in cash flow before financing activities for the full-year 2023 compared with 2022.

Efforts to make further progress are expected to continue in 2024.

Inventory levels remain elevated and above pre-pandemic levels but are slowly declining.

Efforts to maximize the use of on-hand inventory are expected to help reduce excess inventory levels, especially in 2024.

Supply constraints continue to be an issue intermittently, and labor constraints periodically cause certain production and inventory usage disruptions.

However, the Company anticipates continued inventory improvements over the remainder of 2023 and 2024.

As a result of these actions, the Company expects a significant increase in cash flow before financing activities for full-year 2023 compared with 2022, and further progress is expected in 2024.

EFFECTS OF FOREIGN CURRENCY

9 unchanged sentences

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) delays in manufacturing and delivery schedules, (3) customer acceptance of pricing, (4) 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, including inflation, (5) 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, (6) 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, (7) 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, (8) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement and sourcing initiatives, (9) the successful commercialization of Nuvera's technology, (10) the political and economic uncertainties in the countries where the Company does business, as well as the effects of any withdrawals from such countries, (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, more favorable product pricing offered by or shorter lead times available through competitors, (14) product liability or other litigation, warranty claims or returns of products, (15) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, (16) the ability to attract, retain, and replace workforce and administrative employees, (17) disruptions resulting from natural disasters, public health crises, political crises or other catastrophic events, and (18) the ability to protect the

Company’s information technology infrastructure against service interruptions, data corruption,

cyber-based attacks or network breaches.

(1) delays in delivery and other supply chain disruptions, or increases in costs as a result of inflation or otherwise, including materials, critical components 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) delays in manufacturing and delivery schedules, (3) customer acceptance of pricing, (4) 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, including inflation, (5) 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, (6) 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, including the Uyghur Forced Labor Prevention Act (the “UFLPA”) which could impact our imports from China, as well as armed conflicts, including the Russia/Ukraine conflict and/or the Israel and Gaza conflict, and their regional effects, (7) 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, (8) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement and sourcing initiatives, (9) the successful commercialization of Nuvera's technology, (10) the political and economic uncertainties in the countries where the Company does business, as well as the effects of any withdrawals from such countries, (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, more favorable product pricing offered by or shorter lead times available through competitors, (14) product liability or other litigation, warranty claims or returns of products, (15) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, (16) the ability to attract, retain, and replace workforce and administrative employees, (17) disruptions resulting from natural disasters, public health crises, political crises or other catastrophic events, and (18) the ability to protect the Company’s information technology infrastructure against service interruptions, data corruption, cyber-based attacks or network breaches.

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