5 unchanged sentences
("Hyster-Yale" or the "Company") and its subsidiaries, including its operating company Hyster-Yale Group, Inc.
−Removed: ("HYG"), is a leading, globally integrated, full-line lift truck manufacturer.
−Removed: The Company offers a broad array of solutions aimed at meeting the specific materials handling needs of its customers, including attachments and hydrogen fuel cell power products, telematics, automation and fleet management services, as well as a variety of other power options for its lift trucks.
+Added: ("HYG"), is a globally integrated company offering a full line of high-quality, application-tailored lift trucks and solutions aimed at meeting the specific materials handling needs of its customers.
+Added: The Company's solutions include attachments and hydrogen fuel cell power products, telematics, automation and fleet management services, as well as a variety of other power options for its lift trucks.
The Company, through HYG, designs, engineers, manufactures, sells and services a comprehensive line of lift trucks, attachments and aftermarket parts marketed globally, primarily under the Hyster ® and Yale ® brand names, mainly to independent Hyster ® and Yale ® retail dealerships.
The materials handling business historically has been cyclical because the order rate for lift trucks fluctuates depending on the economic activity level in the various industries and countries its customers serve.
−Removed: Lift trucks and component parts are manufactured in the United States, China, Northern Ireland, Mexico, the Netherlands, Brazil, the Philippines, Italy, Japan and Vietnam.
−Removed: As of December 31, 2022, the Company owned a 90% majority interest in Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.
+Added: The Company owns a 90% majority interest in Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.
("Hyster-Yale Maximal"), a Chinese manufacturer of low-intensity and standard lift trucks and specialized material handling equipment.
Hyster-Yale Maximal also designs and produces specialized products in the port equipment and rough terrain forklift markets.
−Removed: During 2021, the Company signed an Equity Transfer Agreement with Y-C Hongkong Holding Co., Limited (“HK Holding Co”).
−Removed: 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.
−Removed: The Company has an option to purchase HK Holding Co's 10% remaining interest in Hyster-Yale Maximal at any time prior to June 8, 2056 for $16.8 million.
−Removed: If this option is exercised, the Company will own 100% of the equity interest of Hyster-Yale Maximal.
+Added: Lift trucks and component parts are manufactured in the United States, Northern Ireland, China, Mexico, the Netherlands, Brazil, the Philippines, Italy, Japan and Vietnam.
The Company operates Bolzoni S.p.A.
5 unchanged sentences
Nuvera is an alternative-power technology company focused on the design, manufacture and sale of hydrogen fuel cell stacks and engines.
−Removed: Competition in the materials handling industry is intense and is based primarily on strength and quality of distribution, brand loyalty, customer service, new lift truck sales prices, availability of products and aftermarket parts, comprehensive product line offerings, product performance, product quality and features and the cost of ownership over the life of the lift truck.
+Added: Competition in the lift truck industry is based primarily on strength and quality of dealers, brand loyalty, customer service, new lift truck sales prices, availability of products and aftermarket parts, comprehensive product line offerings, product performance, quality and innovation, including features, and the cost of ownership over the life of the lift truck.
The Company competes with several global lift truck manufacturers that operate in all major markets, as well as other niche companies.
1 unchanged sentence
The Company's aftermarket parts offerings compete with parts manufactured by other lift truck manufacturers, as well as companies that focus solely on the sale of generic parts.
−Removed: The Company's objective is to be a leading, globally integrated designer, manufacturer and marketer of a complete range of lift truck solutions offering the lowest cost of ownership and the best overall value by leveraging its high quality, application-tailored lift trucks, attachments and power solutions in order to transform the way the world moves materials from Port to Home.
−Removed: The Company’s core competency is lift truck manufacturing, but its goal is to become the lift truck solutions partner to the materials handling market, one customer and one industry at a time.
−Removed: The Company’s objective is to provide a wide-range of solutions to its customers to generate profitable growth through increasing volumes, which in turn are expected to generate market share gains and drive improved margins.
−Removed: The Company plans to accomplish this by implementing its core strategic initiatives to:
−Removed: provide the lowest cost of ownership, while enhancing productivity for customers;
−Removed: be the leader in the delivery of industry- and customer-focused solutions;
−Removed: be the leader in independent distribution;
−Removed: grow in emerging markets;
−Removed: be the leader in the attachments business and be a leader in fuel cells and their applications.
See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2022 Annual Report on Form 10-K for discussion of financial condition and results of operations for 2022 compared with 2021.
7 unchanged sentences
Certain of these are critical accounting estimates as they require significant judgments and estimates used in the preparation of the consolidated financial statements.
−Removed: Long-lived assets, goodwill and intangible assets:
−Removed: Net property, plant and equipment, right-of-use ("ROU") assets, goodwill and net intangible assets at December 31, 2022 were $310.0 million, $57.2 million, $51.3 million and $42.7 million, respectively.
−Removed: The Company makes estimates and assumptions in preparing the consolidated financial statements for which actual results will emerge over long periods of time.
−Removed: This includes the recoverability of long-lived assets employed in the business, including assets of acquired businesses.
−Removed: These estimates and assumptions are closely monitored and periodically adjusted as circumstances warrant.
−Removed: For instance, expected asset lives may be shortened or an impairment recorded based on a change in the expected use of the asset or performance of the related asset group.
+Added: Deferred Income Taxes:
+Added: Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards on a taxing jurisdiction basis.
+Added: The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which it expects the temporary differences to be recovered or paid.
+Added: generally accepted accounting principles for income taxes requires a reduction of the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not (defined as a likelihood of more than 50%) such assets will not be realized.
+Added: The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the Company's financial statements or tax returns and future profitability.
+Added: The Company's accounting for deferred tax consequences represents its best estimate of those future events.
+Added: Changes in the Company's estimates, due to unanticipated events or otherwise, could have a material effect on its
+Added: financial condition and results of operations.
+Added: The Company continually evaluates its deferred tax assets to determine if a valuation allowance is required or no longer needed.
+Added: At December 31, 2023, the Company had gross deferred tax assets of $145.9 million which were reduced by valuation allowances of $126.6 million and gross deferred tax liabilities of $29.0 million.
Goodwill is tested for impairment annually as of May 1, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.
−Removed: The Company completed the annual testing of impairment of goodwill as of May 1, 2022 at the reporting unit level for the related goodwill.
+Added: The Company completed the annual goodwill impairment testing as of May 1, 2023 at the reporting unit level for the related goodwill.
The Company uses either a qualitative or quantitative analysis to determine whether fair value exceeds carrying value.
3 unchanged sentences
As of December 31, 2023, Bolzoni had $50.6 million of goodwill.
−Removed: Based on the most recent interim impairment test, Bolzoni's fair value of equity exceeded the carrying value by $79.9 million or approximately 47%.
−Removed: During 2021, the Company continued to experience pandemic-related and other global supply chain constraints, component shortages, shipping container availability constraints and higher freight costs, as well as significant material cost inflation resulting from the accelerated pace of the market recovery.
−Removed: These items significantly impacted the Company's results of operations in 2021.
−Removed: In addition, the timeframe for the expected easing of these factors impacted the Company's near and long-term forecasts.
−Removed: Accordingly, in connection with the preparation of the 2021 financial statements, the Company conducted an interim goodwill impairment test as of December 31, 2021 for the JAPIC and Bolzoni reporting units.
−Removed: As a result, the Company recognized a $55.6 million goodwill impairment charge for the JAPIC reporting unit in the fourth quarter of 2021, of which $11.7 million related to the non-controlling interest share.
−Removed: No impairment of goodwill for the Bolzoni reporting unit was identified.
−Removed: The Company has intangible assets, including customer and contractual relationships, patents and technology, and trademarks.
−Removed: Intangible assets with a definite life are amortized over a period ranging from one to twenty years on a systematic and rational basis (generally straight line) that is representative of the asset’s use.
−Removed: Costs related to internally developed intangible assets, such as patents, are expensed as incurred and included in selling, general and administrative expenses.
−Removed: Intangible assets with an indefinite life, including certain trademarks, are not amortized.
−Removed: Indefinite-lived intangible assets are tested for impairment annually as of May 1, and are tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired.
−Removed: An impairment loss generally would be recognized when the fair value is less than the carrying value of the indefinite-lived intangible asset.
−Removed: Of the $42.7 million of net intangible assets, $16.0 million relates to indefinite-lived trademarks, related to the acquisition of Bolzoni.
−Removed: The primary valuation technique used in estimating the fair value of indefinite-lived intangible assets is the present value of discounted cash flows.
−Removed: Specifically, a relief of royalty rate is applied to estimated sales, with the resulting amounts discounted using an appropriate discount rate of a market participant.
−Removed: The relief of royalty rate is the estimated royalty rate a market participant would pay to acquire the right to market and produce the product.
−Removed: If the resulting discounted cash flows are less than book value of the indefinite-lived intangible asset, an impairment exists and the asset would be adjusted to fair value.
−Removed: Based on impairment testing as of May 1, 2022, no impairment was identified.
−Removed: The Company periodically evaluates long-lived assets, including intangible assets with finite lives, for impairment when changes in circumstances or the occurrence of certain events indicate the carrying amount of an asset may not be recoverable.
−Removed: Upon identification of indicators of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets or liabilities.
−Removed: The asset group would be considered impaired when the estimated future undiscounted cash flows generated by the asset group are less than carrying value.
−Removed: If the carrying value of an asset group is considered impaired, an impairment charge is recorded for the amount that the carrying value of the asset group exceeds its fair value.
−Removed: Fair value is estimated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
−Removed: The determination of asset groups and the underlying cash flows requires the use of significant judgment.
−Removed: The continued high level of disruption to the Company’s manufacturing and logistics operations for 2021 and the effects of the COVID-19 pandemic, including border closures, halted Nuvera's progress on certain research and development agreements that were entered into prior to the start of the pandemic.
−Removed: In anticipation of fulfilling these agreements, Nuvera made significant investments in manufacturing and equipment expansion, as well as increased inventory levels.
−Removed: As a result, it was determined in connection with the preparation of the financial statements for 2021 that the carrying value of the Nuvera fixed assets exceeded the undiscounted cash flows from the assets and the carrying value of Nuvera's fixed assets exceeded the fair value by $10.0 million.
+Added: Based on the most recent interim impairment test, Bolzoni's fair value of equity exceeded the carrying value by approximately $50 million or 30%.
Factors which could result in future impairment charges include, but are not limited to, changes in worldwide economic conditions, changes in competitive conditions and customer preferences.
−Removed: These risk factors are discussed in Item 1A, "Risk Factors," of this Form 10-K.
+Added: These risk factors are discussed in Item 1A, "Risk Factors," of this Annual Report on Form 10-K.
In addition, changes in the weighted average cost of capital could also impact impairment testing results.
The Company will continue to monitor its reporting units and asset groups for any indicators of impairment.
−Removed: Deferred Income Taxes:
−Removed: Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards on a taxing jurisdiction basis.
−Removed: The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which it expects the temporary differences to be recovered or paid.
−Removed: generally accepted accounting principles for income taxes requires a reduction of the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not (defined as a likelihood of more than 50%) such assets will not be realized.
−Removed: The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the Company's financial statements or tax returns and future profitability.
−Removed: The Company's accounting for deferred tax consequences represents its best estimate of those future events.
−Removed: Changes in the Company's estimates, due to unanticipated events or otherwise, could have a material effect on its financial condition and results of operations.
−Removed: The Company continually evaluates its deferred tax assets to determine if a valuation allowance is required or no longer needed.
−Removed: At December 31, 2022, the Company had gross deferred tax assets of $139.2 million which were reduced by valuation allowances of $121.7 million and gross deferred tax liabilities of $28.3 million.
Product liabilities :
1 unchanged sentence
The Company provides for the estimated cost of personal and property damage relating to its products based on a review of historical experience and consideration of any known trends.
−Removed: Reserves are recorded for estimates of the costs for known claims and estimates of the costs of incidents that have occurred but for which a claim has not yet been reported, up to the stop-loss insurance coverage.
+Added: Reserves are recorded for estimates of the costs for known claims and estimates of the costs of incidents that have occurred but for which a claim has not yet been reported.
While the Company engages in extensive product quality reviews and customer education programs, the product liability provision is affected by the number and magnitude of claims of alleged product-related injury and property damage and the cost to defend those claims.
8 unchanged sentences
If the estimate of the cost to correct product failures were to increase by one percent over 2023 levels, the product warranties reserves would increase and reduce operating profit by approximately $3.2 million.
−Removed: The Company's past results of operations have not been materially affected by a change in
−Removed: the estimate of product warranties and although there can be no assurances, the Company is not aware of any circumstances that would be reasonably likely to materially change the estimates in the future.
−Removed: Retirement benefit plans :
−Removed: The Company maintains various defined benefit pension plans that provide benefits based on years of service and average compensation during certain periods.
−Removed: Pension benefits are frozen for all employees other than certain employees in the Netherlands.
−Removed: All other eligible employees, including employees whose pension benefits are frozen, receive retirement benefits under defined contribution retirement plans.
−Removed: The Company's policy is to periodically make contributions to fund the defined benefit pension plans within the range allowed by applicable regulations.
−Removed: The defined benefit pension plan assets consist primarily of publicly traded stocks and government and corporate bonds.
−Removed: There is no guarantee the actual return on the plans’ assets will equal the expected long-term rate of return on plan assets or that the plans will not incur investment losses.
−Removed: The expected long-term rate of return on defined benefit plan assets reflects management’s expectations of long-term rates of return on funds invested to provide for benefits included in the projected benefit obligations.
−Removed: In establishing the expected long-term rate of return assumption for plan assets, the Company considers the historical rates of return over a period of time that is consistent with the long-term nature of the underlying obligations of these plans as well as a forward-looking rate of return.
−Removed: The historical and forward-looking rates of return for each of the asset classes used to determine the Company's estimated rate of return assumption were based upon the rates of return earned or expected to be earned by investments in the equivalent benchmark market indices for each of the asset classes.
−Removed: Expected returns for the Company's U.K.
−Removed: pension plan are based on a calculated market-related value of assets.
−Removed: Under this methodology, asset gains and losses resulting from actual returns that differ from expected returns are recognized in the market-related value of assets ratably over three years.
−Removed: The basis for the selection of the discount rate for each plan is determined by matching the timing of the payment of the expected obligations under the defined benefit plans against the corresponding yield of high-quality corporate bonds of equivalent maturities.
−Removed: The following illustrates the sensitivity of the net periodic benefit cost and projected benefit obligation to a 1% change in the discount rate or return on plan assets (in millions):
−Removed: Assumption Change Increase (decrease) 2023 net pension expense Increase (decrease)
−Removed: 2022 projected benefit obligation
−Removed: Discount rate 1% increase $0.1 $(29.5)
−Removed: 1% decrease (0.3) 36.2
−Removed: Return on plan assets 1% increase (2.5) N/A
−Removed: 1% decrease 2.5 N/A
−Removed: A change in life expectancy by one year would result in a $4.2 million change in the 2022 projected benefit obligation.
−Removed: See Note 9 to the consolidated financial statements in this Annual Report on Form 10-K for further discussion of the retirement benefit plans.
+Added: The Company's past results of operations have not been materially affected by a change in the estimate of product warranties and although there can be no assurances, the Company is not aware of any circumstances that would be reasonably likely to materially change the estimates in the future.
CONSOLIDATED FINANCIAL REVIEW
The following table identifies the components of change for 2023 compared with 2022 by segment:
−Removed: Revenues Gross Profit Operating Profit (Loss) Net Income (Loss) Attributable to Stockholders
+Added: Revenues Gross Profit Operating Profit (Loss)
2022 $ 3,548.3 $ 433.9 $ (39.1)
23 unchanged sentences
Nuvera 4.3 3.4 26.5 %
−Removed: Eliminations (170.4) (170.2) n.m.
+Added: Eliminations (182.2) (170.4) 6.9 %
$ 4,118.3 $ 3,548.3 16.1 %
8 unchanged sentences
$ 785.6 $ 433.9 81.1 %
+Added: Favorable / (Unfavorable) % Change
+Added: 2023 2022 2023 vs.
Selling, general and administrative expenses
10 unchanged sentences
JAPIC (15.6) (10.6) (47.2) %
−Removed: Lift truck business (10.4) (86.9) 88.0 %
+Added: Lift truck business 229.6 (10.4) n.m.
Bolzoni 15.3 6.2 146.8 %
1 unchanged sentence
Eliminations 0.2 (0.6) n.m.
−Removed: $ (39.1) $ (152.3) 74.3 %
−Removed: Favorable / (Unfavorable) % Change
−Removed: 2022 2021 2022 vs.
+Added: $ 208.7 $ (39.1) n.m.
Interest expense 37.3 28.4 (31.3) %
Other income (9.6) (5.1) 88.2 %
−Removed: Income (loss) before income taxes (62.4) (154.9) 59.7 %
−Removed: Net income (loss) attributable to stockholders $ (74.1) $ (173.0) 57.2 %
−Removed: Diluted earnings (loss) per share $ (4.38) $ (10.29) 57.4 %
+Added: Income (loss) before income taxes 181.0 (62.4) n.m.
+Added: Net income (loss) attributable to stockholders $ 125.9 $ (74.1) n.m.
+Added: Diluted earnings (loss) per share $ 7.24 $ (4.38) n.m.
Reported income tax rate 29.2 % (14.7) %
1 unchanged sentence
Following is the detail of the Company's unit shipments, bookings and backlog of unfilled orders placed with its manufacturing and assembly operations for new lift trucks, reflected in thousands of units.
−Removed: Unit backlog as of December 31, 2022 and September 30, 2022, excludes 2,600 suspended orders, for which the Company has no plans to fulfill.
As of December 31, 2023, substantially all of the Company's backlog is expected to be sold within the next twelve months.
7 unchanged sentences
The dollar value of bookings and backlog is calculated using the current unit bookings and backlog and the forecasted average sales price per unit.
−Removed: Sales value of the Company's backlog as of December 31, 2022 and September 30, 2022, excludes the sales value of 2,600 suspended orders, for which the Company has no plans to fulfill.
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
10 unchanged sentences
Parts 84.9 80.0 5.1 (0.2)
−Removed: Other 51.4 45.7 1.5 4.2
−Removed: Foreign currency (96.7) 4.5 (93.2) (8.0)
−Removed: Eliminations (0.2) — — —
Bolzoni revenues 19.6 — — —
+Added: Foreign currency 16.3 2.7 18.2 (4.6)
Nuvera revenues 0.9 — — —
+Added: Other 0.6 2.6 (1.4) (0.6)
+Added: Eliminations (11.8) — — —
2023 $ 4,118.3 $ 2,899.3 $ 820.5 $ 201.1
−Removed: Revenues increased 15.4% to $3,548.3 in 2022 from $3,075.7 million in 2021.
−Removed: The increase was primarily due to improved pricing, higher unit and parts volume, a shift in sales to higher-priced lift trucks and favorable aftermarket sales in the Lift Truck business, partially offset by unfavorable currency movements from the translation of sales into U.S.
+Added: Revenues increased 16.1% to $4,118.3 million in 2023 from $3,548.3 million in 2022 mainly from improvements at the Lift Truck business.
+Added: The increase at Lift Truck was primarily due to improved pricing, higher unit and parts volume in the Americas and a shift in sales to higher-priced lift trucks in the Americas and EMEA.
+Added: The improvement in Lift Truck revenue was partially offset by a decline in unit shipments in JAPIC and EMEA.
+Added: Bolzoni revenues increased in 2023 compared with 2022 mainly from higher volume and price increases, partially offset by an increase in the sale of lower-priced products.
The following table identifies the components of change in operating profit (loss) for 2023 compared with 2022:
3 unchanged sentences
Increase (decrease) in 2023 from:
−Removed: Goodwill impairment charge 55.6 — — 55.6
−Removed: (96.7) (19.7) 0.3 (11.9)
Lift truck gross profit and eliminations 341.2 261.5 76.0 2.9
Lift truck selling, general and administrative expenses (100.4) (75.2) (17.3) (7.9)
−Removed: Nuvera operations 28.0 — — —
Bolzoni operations 9.1 — — —
+Added: Nuvera operations (2.1) — — —
2023 $ 208.7 $ 233.1 $ 12.1 $ (15.6)
−Removed: The Company recognized an operating loss of $39.1 million in 2022 compared with $152.3 million in 2021.
−Removed: The reduction in operating loss was mainly due to the absence of a non-cash impairment charge for goodwill of $55.6 million in JAPIC in 2021, increased gross profit in the lift truck business and a lower operating loss at Nuvera mainly from $26.1 million of charges related to the impairment of Nuvera's property, plant and equipment and inventory losses recorded in 2021.
−Removed: The increase in gross profit in 2022 compared to 2021 was primarily due to favorable pricing of $300.5 million and improved unit and parts volume in the lift truck business.
−Removed: The increase in gross profit was partially offset by $257.3 million of material cost inflation and higher manufacturing costs resulting from inefficiencies associated with component shortages as well as unfavorable foreign currency movements, including derivative contracts, of $43.3 million.
−Removed: Americas recognized an operating profit of $46.8 million in 2022 compared with an operating loss of $19.7 million in 2021 primarily due to an increase in gross profit.
−Removed: Gross profit improved primarily as result of favorable pricing of $234.0 million and improved unit and parts volume.
−Removed: The increase in gross profit was partially offset as result of material and freight cost inflation and higher manufacturing costs resulting from inefficiencies associated with component shortages of $189.9 million and unfavorable foreign currency movements, including derivative contracts, of $23.4 million.
−Removed: Higher selling, general and administrative expenses primarily due to increase employee-related costs partially offset the improvement in gross profit.
−Removed: EMEA recognized an operating loss of $46.6 million in 2022 compared with operating profit of $0.3 million in 2021 mainly as result of lower gross profit.
−Removed: Gross profit decreased primarily due to material cost inflation and higher manufacturing costs resulting from inefficiencies associated with component shortages of $95.5 million and unfavorable foreign currency movements of $18.4 million.
−Removed: The decrease in gross profit was partially offset by improved pricing of $56.4 million and higher unit and parts volumes.
−Removed: JAPIC's operating loss improved to $10.6 million in 2022 from $67.5 million in 2021 primarily due to the absence of a non-cash impairment charge for goodwill of $55.6 million recognized in 2021.
−Removed: In addition, higher gross profit from improved pricing was partially offset by higher manufacturing costs resulting from inefficiencies associated with component shortages and unfavorable foreign currency movements.
−Removed: Bolzoni recognized operating profit of $6.2 million in 2022 compared with an operating loss of $1.8 million in 2021 primarily due to higher gross profit from improved pricing and a shift in mix to higher-margin products, partially offset by material cost inflation and unfavorable foreign currency exchange rates.
−Removed: Nuvera's operating loss improved to $34.3 million in 2022 compared with $62.3 million in 2021 mainly as a result of the absence of non-cash charges of $26.1 million recorded in 2021 for Nuvera's inventory and property, plant and equipment.
−Removed: See Notes 10 and 11 for further discussion of these charges at Nuvera.
−Removed: The Company recognized a net loss attributable to stockholders of $74.1 million in 2022 compared with $173.0 million in 2021.
−Removed: The improvement was primarily the result of higher operating profit and the absence of a valuation allowance of $58.6 million provided against deferred tax assets in 2021.
−Removed: These items were partially offset by higher interest expense, the absence of the
−Removed: non-controlling interest share of the goodwill impairment charge at JAPIC of $11.7 million in 2021, higher pension expense and a $4.6 million gain related to the sale of the Company's preferred shares of OneH2, Inc.
−Removed: ("OneH2") recognized in 2021.
+Added: The Company recognized an operating profit of $208.7 million in 2023 compared with an operating loss of $39.1 million in 2022.
+Added: The increase in Lift Truck operating profit was primarily due to improved gross profit from higher pricing of $270.6 million, mainly in the Americas and EMEA, a shift in sales to higher margin lift trucks, lower material costs net of manufacturing inefficiencies, primarily in the Americas, and higher unit and parts sales compared with 2022.
+Added: 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 marketing, product liability and product development costs.
+Added: Operating profit in the Americas increased primarily due to improved gross profit from higher pricing of $163.8 million, lower material costs net of manufacturing inefficiencies, a shift in sales to higher margin lift trucks and increased unit and parts sales.
+Added: These improvements were partially offset by higher selling, general and administrative expenses, primarily related to higher employee costs, including incentive compensation, higher marketing and product development to support the Company's strategic initiatives and higher product liability costs.
+Added: EMEA's operating profit improved mainly due to improved gross profit from improved pricing of $102.8 million, partially offset by lower volumes and manufacturing inefficiencies.
+Added: JAPIC's operating loss increased to $15.6 million in 2023 from $10.6 million in 2022, primarily due to higher selling, general and administrative expenses, partially offset by higher gross profit from a shift in mix to higher-margin products and material cost deflation.
+Added: Bolzoni's operating profit increased to $15.3 million in 2023 compared with $6.2 million in 2022, primarily due to higher gross profit from improved pricing, lower manufacturing costs and higher volumes.
+Added: The increase was partially offset by a shift to lower margin products and higher selling, general and administrative expenses, mainly related to higher employee costs, including incentive compensation.
+Added: The Company recognized net income attributable to stockholders of $125.9 million in 2023 compared with a net loss attributable to stockholders of $74.1 million in 2022.
+Added: The improvement was primarily the result of the factors affecting operating profit (loss), partially offset by higher income taxes and interest expense.
See Note 6 to the consolidated financial statements in this Annual Report on Form 10-K for further discussion of income taxes.
6 unchanged sentences
Dividends from unconsolidated affiliates 10.5 15.6 (5.1)
−Removed: Impairment charges — 65.6 (65.6)
+Added: Stock-based compensation 29.3 6.4 22.9
Working capital changes:
4 unchanged sentences
Other operating activities 36.1 7.2 28.9
−Removed: Net cash provided by (used for) operating activities 40.6 (253.5) 294.1
+Added: Net cash provided by operating activities 150.7 40.6 110.1
Investing activities:
Expenditures for property, plant and equipment (35.4) (28.8) (6.6)
−Removed: Proceeds from the sale of assets and investments 1.8 19.8 (18.0)
+Added: Proceeds from the sale of assets, businesses and investments 4.1 1.8 2.3
Purchase of noncontrolling interest (3.2) (8.4) 5.2
1 unchanged sentence
Cash flow before financing activities $ 116.2 $ 5.2 $ 111.0
−Removed: The change in net cash provided by (used for) operating activities of $294.1 million in 2022 compared with 2021 was primarily a result of changes in working capital items and net income (loss), partially offset by the absence of non-cash charges of $55.6 million and $10.0 million for goodwill and long-lived asset impairments, respectively, recorded in 2021.
−Removed: The changes in working capital were mainly due to a smaller increase in inventory in 2022 compared 2021.
−Removed: The change in net cash used for investing activities during 2022 compared with 2021 is due to the absence of the proceeds from the sale of preferred shares of OneH2 in 2021 and the current year's installment purchase of Hyster-Yale Maximal's noncontrolling interest in 2022, partially offset by lower capital expenditures in 2022.
+Added: The change in net cash provided by operating activities of $110.1 million in 2023 compared with 2022 was primarily a result of the improved net income (loss) partially offset by changes in working capital items.
+Added: The changes in working capital were mainly due to a decrease in accounts payable in 2023 compared to 2022 and lower customer deposits for down payments on orders.
+Added: The change in net cash used for investing activities during 2023 compared with 2022 is mainly due to higher capital expenditures in 2023, partially offset by the purchase of Bolzoni's noncontrolling interest in 2023 compared with the first installment purchase of the noncontrolling interest of Hyster-Yale Maximal in 2022.
2023 2022 Change
Financing Activities:
−Removed: Net increase in long-term debt and revolving credit agreements $ 11.1 $ 223.0 $ (211.9)
+Added: Net increase (decrease) in long-term debt and revolving credit agreements $ (76.0) $ 11.1 $ (87.1)
Cash dividends paid (23.6) (21.8) (1.8)
Other (0.9) (0.2) (0.7)
−Removed: Financing fees paid — (7.6) 7.6
−Removed: Net cash provided by (used for) financing activities $ (10.9) $ 193.6 $ (204.5)
−Removed: The change in net cash provided by (used for) financing activities in 2022 compared with 2021 was primarily due to a smaller increase in borrowings during 2022 versus 2021, partially offset by the absence of financing fees paid in 2021.
+Added: Net cash used for financing activities $ (100.5) $ (10.9) $ (89.6)
+Added: The change in net cash used for financing activities was primarily due to debt repayments during 2023 compared with additional borrowings in 2022.
Financing Activities
The Company has a $320.8 million secured, floating-rate revolving credit facility (the "Facility") that expires in June 2026 and a $225.0 million term loan (the "Term Loan"), which matures in May 2028.
+Added: The Facility was amended in the second quarter of 2023 for the purpose of, among other items, (i) establishing a new tranche of revolving loans with aggregate commitments of $25.0 million under the Facility and (ii) changing the benchmark interest rate for U.S.
+Added: dollar-denominated borrowings under the Facility from LIBOR to Term SOFR, each as defined in the Facility.
+Added: The Term Loan was also 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 Term Loan.
+Added: See Note 13 to the consolidated financial statements in this Annual Report on Form 10-K for further discussion.
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.
5 unchanged sentences
At December 31, 2023, the Company was in compliance with the covenants in the Facility.
+Added: The $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.
+Added: Commencing December 1, 2023, the $25.0 million tranche began to amortize on a monthly basis in the amount of $4.2 million per month.
+Added: At December 31, 2023, $20.8 million was outstanding.
Key terms of the Facility as of December 31, 2023 were as follows:
4 unchanged sentences
Availability $ 236.0
+Added: FILO LOANS LOANS OTHER THAN FILO LOANS
Applicable margins, as defined in agreement
base rate loans 2.25%
−Removed: LIBOR, EURIBOR and foreign base rate loans 1.25%-1.75%
+Added: 0.25% to 0.75%
+Added: SOFR, EURIBOR and non-U.S.
+Added: base rate loans 3.25%
+Added: 1.25% to 1.75%
+Added: SOFR adjustment, as defined in agreement 0.10%
Applicable margins, for amounts outstanding
−Removed: base rate and LIBOR loans 0.50%;
−Removed: base rate and LIBOR loans 1.50 %
+Added: base rate loans — 0.50%
+Added: SOFR loans 3.25%
+Added: base rate loans — 1.50%
Applicable interest rate, for amounts outstanding
base rate — 9.00%
−Removed: EURIBOR 3.88 %
+Added: SOFR 8.69 % 6.95%
Facility fee, per annum on unused commitment — 0.25%
−Removed: The Term Loan requires quarterly principal payments on the last day of each March, June, September and December commencing September 30, 2021 in an amount equal to $562,500 and the final principal repayment is due in May 2028.
+Added: The Term Loan requires quarterly principal payments on the last day of each March, June, September and December, which commenced September 30, 2021, in an amount equal to $562,500 and the final principal repayment is due in May 2028.
The Company may also be required to make mandatory prepayments, in certain circumstances, as provided in the Term Loan.
−Removed: 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 of the Facility, which includes, but is not limited to cash and cash equivalents, accounts receivable and inventory.
+Added: 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.
+Added: material real property, fixtures and general intangibles consisting of intellectual property and a second priority lien on U.S.
+Added: working capital assets of the borrowers and guarantors of the Term Loan, 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 $780 million as of December 31, 2023.
8 unchanged sentences
base rate loans 2.50%
−Removed: Eurodollar 3.50 %
−Removed: Eurodollar floor 0.50 %
+Added: SOFR adjustment, as defined in the agreement 0.11%
+Added: SOFR floor 0.50%
Applicable interest rate, for amounts outstanding 8.97%
−Removed: The Company incurred fees of $7.6 million in 2021.
+Added: The Company incurred fees of $0.8 million and $7.6 million in 2023 and 2021, respectively.
These fees related to amending the Facility and the Term Loan.
These fees were deferred and are being amortized as interest expense over the term of the applicable debt agreements.
−Removed: No fees were incurred in 2022 or 2020.
+Added: No fees were incurred in 2022.
Fees related to the Term Loan are presented as a direct deduction of the corresponding debt.
4 unchanged sentences
Contractual Obligations, Contingent Liabilities and Commitments
−Removed: Following is a table summarizing the contractual obligations as of December 31, 2022:
+Added: Following is a table summarizing the Company's material cash requirements from contractual obligations as of December 31, 2023:
Payments Due by Period
8 unchanged sentences
Operating leases 93.6 19.7 15.4 13.6 12.3 9.1 23.5
−Removed: Tax Reform Act transition tax liability 10.5 2.6 3.5 4.4 — — —
Purchase and other obligations 796.0 786.1 2.3 3.9 3.7 — —
−Removed: Total contractual cash obligations $ 1,570.2 $ 1,153.0 $ 66.5 $ 52.6 $ 38.4 $ 26.5 $ 233.2
−Removed: The principal sources of financing for these contractual obligations are expected to be internally generated funds and bank financing.
−Removed: The Company has a long-term liability of approximately $7.7 million for unrecognized tax benefits, including interest and penalties, as of December 31, 2022.
−Removed: At this time, the Company is unable to make a reasonable estimate of the timing of payments due to, among other factors, the uncertainty of the timing and outcome of the Company's audits.
+Added: The principal sources of financing for these material contractual obligations are expected to be internally generated funds and bank financing.
An event of default, as defined in the agreements governing the Facility, the Term Loan, other debt agreements, and in operating and capital lease agreements, could cause an acceleration of the payment schedule.
No such event of default has occurred or is anticipated under these agreements.
−Removed: The Company's interest payments are calculated based upon the anticipated payment schedule and the December 31, 2022 applicable rates and applicable margins as described in the Facility and other debt agreements.
−Removed: A 1/8% increase in the LIBOR rate would increase the Company's estimated total interest payments on debt by $0.3 million.
The purchase and other obligations are primarily for accounts payable, open purchase orders and accrued payroll and incentive compensation.
−Removed: Pension funding can vary significantly each year due to plan amendments, changes in the market value of plan assets, legislation and the Company's funding decisions to contribute any excess above the minimum legislative funding requirements.
−Removed: As a result, pension funding has not been included in the table above.
−Removed: Pension benefit payments are made from assets of the pension plans.
−Removed: The Company expects to contribute approximately $1.4 million to its non-U.S.
−Removed: pension plans in 2023.
In addition, the Company has recourse and repurchase obligations with a maximum undiscounted potential liability of $162.4 million at December 31, 2023.
14 unchanged sentences
$ 87.0 $ 35.4 $ 28.8
−Removed: Planned expenditures in 2023 are primarily for product development, improvements to information technology infrastructure and improvements at manufacturing locations and manufacturing equipment.
+Added: Planned expenditures in 2024 are primarily for improvements at manufacturing locations and manufacturing equipment, product development and improvements to information technology infrastructure.
The primary sources of financing for these capital expenditures are expected to be internally generated funds and bank financing.
13 unchanged sentences
Market Commentary
−Removed: The global economic outlook remains constrained and economic activity appears to be decelerating in many parts of the world.
−Removed: This global downturn is due to several factors, including tight monetary policies in various countries designed to contain inflation, as well as uncertainties around China's economic reopening and the ongoing Russia/Ukraine conflict.
−Removed: The conflict has already negatively impacted economic activity, particularly in Europe, for a sustained period.
−Removed: The latest publicly available global lift truck market data shows a definitive decrease in third-quarter 2022 market activity compared with peak third-quarter levels seen in 2021 as all major geographic regions experienced double digit percentage market declines.
−Removed: Internal company estimates suggest that the global lift truck market will have declined in the fourth-quarter 2022 across all geographic regions compared with the prior year quarter.
−Removed: However, a modest volume increase versus third-quarter 2022 is predicted, primarily due to an anticipated improvement in EMEA.
−Removed: Looking ahead, the global lift truck market is expected to decline for the full-year 2023 compared with 2022 in all regions except JAPIC, which is anticipated to increase modestly year-over-year.
−Removed: However, 2023's global market unit volumes are expected to remain relatively strong and above pre-pandemic levels in all regions except EMEA.
−Removed: Several years of extraordinary lift truck market growth stretched supplier capacity to, and in some cases beyond, its limits.
−Removed: A moderate market slowdown could allow the lift truck component supply base to meet their supply requirements more effectively and allow the Company to work down its extended backlog.
+Added: Generally, the 2023 global economy performed better than anticipated.
+Added: The Company's core lift truck market remains strong and above pre-pandemic levels in most regions.
+Added: Nonetheless, some external market factors, including ongoing geopolitical instability, most recently evidenced by the tensions in the Red Sea, continue to create a significant amount of uncertainty within the global economic outlook.
+Added: Due to this and abnormally high industry volumes from 2020 to 2022, global market activity declined across 2023, particularly in EMEA.
+Added: The latest publicly available lift truck market data indicates that new unit, third-quarter 2023 booking activity decreased globally and in all major geographies except China and India compared with strong 2022 levels.
+Added: Internal company estimates suggest that fourth-quarter 2023 global lift truck market bookings decreased compared with the prior year.
+Added: Its estimated that the rate of decline slowed in EMEA and accelerated somewhat in the Americas.
+Added: In 2024, global market bookings are expected to be generally comparable to 2023 levels.
+Added: An anticipated first-half decline is expected to be offset by a second-half increase.
+Added: For both full-years 2023 and 2024, market unit volumes are projected to remain strong.
+Added: Consolidated Strategic Perspective
+Added: The Company's significantly improved 2023 results are due to the global team's ongoing execution of strategic initiatives and actions to offset external headwinds and improve the business' resiliency over time.
+Added: These actions include key projects and process improvements to help the Company achieve long-term growth rates above the material handling market's expected growth rates.
+Added: The Company's mature Lift Truck and Bolzoni businesses are the foundation for growth, while the Company believes the Nuvera's substantial growth prospects should be additive in future years.
+Added: The Company is focused on transforming the way the world moves materials from Port to Home.
+Added: The Company plans to do this through two customer promises.
+Added: First, by providing optimized product solutions and second, by providing exceptional customer care.
+Added: The Company believes these actions will contribute to an increased and sustainable competitive advantage over time.
Operational Perspectives - Lift Truck Business
−Removed: As a result of several factors, including the large but declining market, a focus on booking orders with solid margins and the Company's extended lead times, fourth-quarter 2022 lift truck bookings decreased significantly from robust prior-year levels.
−Removed: However, fourth-quarter 2022 bookings increased modestly from third-quarter 2022 largely due to a seasonal rebound in EMEA and better-than-expected fourth-quarter market conditions in the Americas.
−Removed: Looking forward to 2023, bookings' levels are expected to decrease year-over-year due to the moderating market outlook and the Company’s continued focus on higher-margin units while also balancing the need to maintain a full production pipeline across its facilities.
−Removed: These anticipated bookings' decreases, combined with planned production increases, should help the Company reduce its backlog, which has begun trending down, to more competitive levels over the course of 2023.
−Removed: Full-year 2023 production and shipment volumes are expected to increase versus 2022 helping to alleviate the substantial backlog level and reduce lead times as anticipated continued supply chain improvements are achieved.
−Removed: Despite these expected improvements, lengthy lead times are expected to remain.
−Removed: However, they should help mitigate the impact of a recessionary economic environment on the business.
−Removed: Order selectivity has resulted in higher average prices and margins for both unit bookings and backlog.
−Removed: As the Company works through its backlog in 2023, lower-margin units are expected to ship during the 2023 first quarter and the majority of 2023 shipments are anticipated to be produced from the currently existing higher-margin backlog.
−Removed: As a result, average unit margins are expected to continue to improve, including into 2024 when new bookings with anticipated higher margins are expected to be produced.
−Removed: The Company continues to experience material and labor cost increases, but the rate of increase has slowed.
−Removed: Forward economic indicators suggest inflationary pressures have begun to abate and cost inflation is expected to gradually moderate throughout 2023, absent any unanticipated effects from geopolitical events and public health crises.
−Removed: Due to the substantial inflationary pressure over the past two years, the Lift Truck business implemented several price increases.
−Removed: In 2023, the Company expects a positive price-to-current cost ratio, in part to address ongoing cost increases in certain areas.
−Removed: The Company will continue to monitor material and labor costs closely, as well as the impact of tariffs, and adjust pricing accordingly.
−Removed: As a result of abating cost increases and the current significant backlog level with its expected built-in margin increases over time, the Company believes unit margins should increase significantly in 2023 in aggregate versus 2022 and will lead to significant improvements in operating profit in 2023.
−Removed: Lift Truck operating profit in each of the 2023 quarters is expected to exceed 2022 fourth quarter results, with improvements following normal business seasonality patterns.
−Removed: The above factors, as well as the benefits from the Company's ongoing strategic initiatives as they mature, are expected to lead to a significant increase in revenues and a substantial operating profit in 2023 at the Lift Truck business.
−Removed: These assumptions, however, are highly sensitive to the effect of various market forces, particularly those that impact global supply chains.
+Added: Given the Company's extended backlog position, it continues to prioritize booking orders with strong margins.
+Added: This focus combined with declining market demand, particularly in the Americas, resulted in an 8% decrease in fourth-quarter 2023 lift truck bookings compared with third-quarter 2023 and a 20% decline from strong prior-year levels.
+Added: Looking forward, the Company expects to be price competitive with the market, but will work to maintain targeted bookings margins even as backlog levels are reduced.
+Added: Overall, the Company expects 2024 bookings to increase compared to 2023.
+Added: This improvement is primarily due to anticipated market share gains, especially in warehouse products, within an overall flat global lift truck market.
+Added: These expected increases are primarily the result of the Company's strategic initiatives, particularly those focused on emerging technology solutions for warehouse-related markets.
+Added: These technology solutions had strong 2023 growth rates, and the Company expects to build on that momentum in 2024.
+Added: Planned production rate increases combined with
+Added: anticipated market decreases in the first half of 2024 should help the Company reduce its extended lead times and backlog closer to pre-pandemic levels over 2024.
+Added: However, given current expectations, the Company believes lead times and backlog levels will likely remain above optimal levels on certain product lines for an extended period.
+Added: Specific lines, such as warehouse products, are expected to return to more normal lead time and backlog levels in 2024.
+Added: The Company's extended backlog, valued at $3.3 billion, represents almost ten months of revenue and should serve as a cushion for the business if bookings decline more than anticipated in 2024.
+Added: Overall, customer cancellations, which can impact backlog levels, trended up modestly in 2023 from prior year rates.
+Added: The Company's cancellation rate remains substantially below the industry average.
+Added: Full-year 2024 production and shipment rates are expected to increase compared with 2023 as production launch issues and lingering component and labor constraints dissipate.
+Added: The Company's focus remains on maintaining a full production pipeline across its facilities within this moderated market demand environment.
+Added: The trend of higher average unit backlog prices and margins continued in the fourth quarter.
+Added: This trend was largely due to the Company's ongoing focus on booking orders at strong margins and benefits from prior-year price increases to offset inflation.
+Added: Fourth-quarter 2023 average booking prices decreased compared with both the third-quarter 2023 and the prior year largely due to the shift toward lower-priced warehouse products with shorter average lead times.
+Added: While material costs decreased modestly in 2023, forward economic indicators suggest stabilizing material costs and moderately higher labor costs in 2024.
+Added: Elevated freight costs tied to geopolitical events are expected throughout 2024, particularly in the first half of the year.
+Added: In this context, the Company expects to maintain its strong price-to-cost ratio in the first half of 2024 as higher-priced backlog units are shipped.
+Added: This, combined with an anticipated increase in unit volumes, is expected to lead to higher gross margins and an improved operating profit in the first half of the year compared with 2023.
+Added: The expiration of tariff exemptions in late May 2024, shipment of trucks ordered in 2024's more competitive pricing environment and the mix effect of increased warehouse product shipments are likely to temper unit margins in the second half of the year.
+Added: For the full-year, gross profit margins should be comparable to 2023 levels.
+Added: The Company is working to reduce the earnings impact from externally driven factors through increased manufacturing productivity and expense control.
+Added: The Company will continue to monitor labor and material costs closely, as well as the impacts from tariffs and competition, and will adjust forward pricing accordingly.
+Added: Overall, higher production and shipment rates along with stable gross profit margins are expected to generate increased Lift Truck revenues and operating profit in 2024 compared to the prior year.
Strategic Perspectives - Lift Truck
−Removed: From a broader 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:
−Removed: • To provide the lowest cost of ownership while enhancing customer productivity.
−Removed: This is expected to be achieved by further expanding a wide variety of vehicle innovations including:
−Removed: new modular and scalable product families, truck electrification projects and technology advancements in product automation, power options, telemetry and operator assist systems;
−Removed: • 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;
−Removed: • Be the leader in independent distribution, by focusing on effectively coordinating dealer and major accounts coverage, dealer excellence and ensuring outstanding dealer ownership globally.
+Added: 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.
+Added: The first core strategy is to provide products that improve customer productivity at the lowest cost of ownership.
+Added: 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.
The Company continues to make progress on its high priority projects.
−Removed: Notably, in fourth-quarter 2022, the Company announced that its first hydrogen fuel cell-powered container handler, powered by Nuvera ® fuel cell engines, began its testing pilot at the Port of Los Angeles (CA).
−Removed: After successfully performing in lighter applications, the truck has advanced to more difficult applications.
−Removed: Additionally, the Lift Truck business launched its first modular, scalable lift trucks in 2022, first to the EMEA market in May followed by the Americas market late in the year.
−Removed: Given the current extended backlog, the production ramp-up for this new product line is occurring gradually.
−Removed: Early customer reports indicate that this new 2- to 3-ton standard internal combustion engine lift truck is being well-received in both markets.
−Removed: The Company expects to launch this product in the JAPIC market in mid-2023.
+Added: The Company's heart-of-the-line modular, scalable 2- to 3.5-ton internal combustion engine lift trucks have been launched in the EMEA and Americas markets.
+Added: The production ramp-up continues to occur gradually given the current extended backlog.
+Added: However, bookings and shipments accelerated in 2023.
+Added: A first-quarter 2024 launch of the full 2-to 3-ton internal combustion product line, which includes value, standard and premium truck configurations, is expected for the JAPIC market.
+Added: Similar enhancements to the 2- to 3.5-ton electric truck platforms are also expected over 2024 and 2025.
+Added: 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.
+Added: Other key projects include electrifying trucks used for applications now dominated by internal combustion engine trucks that capitalize on advancements in electric powertrain options.
+Added: The Company currently has its first electrified fuel cell Container Handler operating at the Port of Los Angeles, and its first electrified fuel cell Reach Stacker operating at the Port of Valencia, Spain.
+Added: 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 2024.
+Added: The Company is exploring options for additional electrification projects within the European Union and the United States.
+Added: The Company also has key projects focused on applying its technology advancements to additional OAS and automated product options.
+Added: 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.
+Added: The Lift Truck business also has a key project focused on expanding global sourcing options of container handlers.
+Added: The Company expects its Hyster ® RS45 ReachStackers, as well as Empty Container Handlers, to be sourced from production locations in both Nijmegen, the Netherlands, and Fuyang, China during 2024.
+Added: This dual-source supply chain will help the Company better meet the needs of the global market, enabling customers to benefit from time efficient delivery for economically viable trucks.
+Added: The second core strategy is 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.
+Added: To meet diversified customer product needs, the Company is transforming its sales processes by using an industry-focused approach.
+Added: The Company believes that understanding the customers’ applications is best done by segmenting the market into two broad umbrella categories:
+Added: industrial and warehousing applications.
+Added: The Company’s Hyster ® brand will increasingly focus on industrial applications, while the Yale ® brand will increasingly focus on warehouse applications.
+Added: This focus separation will reinforce a natural differentiation between the two brands that already exists in the marketplace.
+Added: The third core strategy is to 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.
+Added: The Company is committed to helping its excellent dealer group be the leaders in their territories.
Operational and Strategic Perspectives - Bolzoni
−Removed: Over the course of 2023, Bolzoni expects component shortages to continue moderating, while further increasing prices to offset higher input costs.
−Removed: Combined, these are expected to result in increased margins over time and higher 2023 full-year operating profit compared with 2022.
+Added: Bolzoni anticipates a modest increase in 2024 revenues compared with 2023 as legacy products begin to be phased out and attachment volumes increase.
+Added: Operating profit is expected to increase year-over-year as higher product margins and anticipated manufacturing efficiency improvements are projected to more than offset higher material and operating costs.
Bolzoni's core strategy is to be the leader in the attachments business.
−Removed: In this context, Bolzoni continues to concentrate on driving its "One Company - 3 Brands" approach and increasing its Americas business, while focusing on strengthening its ability to serve key attachment industries and customers in all global markets.
−Removed: Bolzoni also intends to increase its sales, marketing and product support capabilities in North America and Europe to support its industry-specific sales strategy.
+Added: 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 global markets.
+Added: As part of this approach, Bolzoni also intends to increase its sales, marketing and product capabilities especially in North America to support its industry-specific sales strategy.
Operational and Strategic Perspectives - Nuvera
−Removed: Nuvera's core strategy is to be a leader in the fuel cell business.
−Removed: Nuvera continues to focus on placing 45kW and 60kW fuel cell engines in niche, heavy-duty vehicle applications with expected significant fuel cell adoption potential.
−Removed: Nuvera announced several projects in 2022 with various third parties to test Nuvera ® engines in heavy-duty applications, including the Port of Los Angeles, which began testing in late 2022, and in multiple European ports which are expected to begin testing in 2023.
−Removed: Nuvera is also developing a new 125kW fuel cell engine for heavier-duty applications.
−Removed: In 2023, Nuvera expects continued focus on ramping up customer product demonstrations and customer bookings, which are expected to result in higher sales and moderately higher costs.
−Removed: Combined, this is expected to generate a loss comparable to 2022 but significantly enhance the foundation for future technology adoption and improved financial returns.
+Added: Nuvera's core strategy is to be a leader in the heavy-duty fuel cell market.
+Added: Nuvera continues to focus on placing 45kW and 60kW fuel cell production engines for demonstration in a limited number of niche, heavy-duty vehicle applications with expected significant fuel cell adoption potential where batteries alone cannot meet the market’s need.
+Added: As a result, these applications are expected to have nearer-term fuel cell adoption potential.
+Added: 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, and most recently with Helinor Energy for zero-emission energy solutions for maritime applications.
+Added: Nuvera expects to have additional products being tested in bus applications in China and India and in a German port by mid-2024.
+Added: Nuvera is also developing a new, larger 125kW fuel cell engine for heavier-duty applications, which is projected to be available in 2025, and is working with customers to launch modular fuel cells for stationary and mobile generator applications.
+Added: Nuvera is focused on increasing customer product demonstrations and customer bookings in 2024.
+Added: Nuvera is also expanding its presence in Europe and China.
+Added: Orders from current customers have been booked and are expected to result in higher sales in 2024 compared with 2023.
+Added: Nuvera expects these higher sales to be offset by increased development costs, leading to comparable year-over-year operating results.
+Added: The increased engine demonstration volumes should significantly enhance the foundation for future fuel cell engine technology adoption and improved financial returns in future years.
Consolidated Outlook
−Removed: On a consolidated basis, the Company is nearing completion on its efforts to build out the lower-priced, lower-margin backlog units held over from prior periods.
−Removed: As a result, continued margin expansion is expected to lead to substantial operating profit and net income for the 2023 full year.
−Removed: These expectations are based on the Company's ability to effectively manage ongoing component shortages, modestly increase production levels and see a reasonable stabilization of material and freight costs.
−Removed: The Company’s steps to improve profitability are producing tangible results.
−Removed: Efforts to reduce inventory and generate cash are expected to show substantial progress in the second half of 2023.
−Removed: The Company remains committed to enhancing its cash flows, with ongoing action plans to improve future results including continued discipline over capital expenditures and operating expenses.
−Removed: Capital expenditures are expected to be approximately $65 million for full-year 2023, with spending more heavily weighted toward the second half of the year.
−Removed: This full-year increase over significantly restrained 2022 levels is required to adequately maintain the Company’s facilities and includes a modest return to investing for long-term profitable growth.
−Removed: Working capital continues to be an area of intense focus for the Company.
−Removed: Inventory levels remain above historical pre-pandemic levels due to prior production delays because of parts and labor shortages.
−Removed: In the first half of 2023, reducing
−Removed: inventory levels will be a key focus area.
−Removed: Efforts to maximize use of on-hand inventory, coupled with material purchases below expected production rates, should help to reduce excess inventory levels around the Company in both the first and second half of 2023.
−Removed: Supply constraints continue to be an issue sporadically around the globe, but the Company expects continued improvements as 2023 progresses.
−Removed: 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.
+Added: At the consolidated level, the Company expects 2024 operating profit to increase while net income is expected to be comparable to 2023.
+Added: The latter is due to higher projected 2024 income tax expense driven by an elevated income tax rate.
+Added: This results from full utilization of U.S.
+Added: net operating losses in 2023 combined with ongoing capitalization of research and development costs for tax purposes in 2024.
+Added: The Company anticipates continued strong product margins from shipments of fixed-price backlog units to drive year-over-year profit growth in the first half of the year.
+Added: However, the expiration of tariff exemptions and shipments of orders placed in 2024's more competitive pricing environment will likely temper second half results.
+Added: As an offset to any competitive pricing adjustments, the Company will continue to focus on effectively managing its ongoing component and labor costs and production levels.
+Added: 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 will work to make continued progress in 2024 toward achieving these goals.
+Added: The Company is committed to continuing to reduce its leverage and enhance its cash flows through ongoing working capital reductions and continued discipline over operating expenses.
+Added: Capital expenditures were $35.4 million in 2023 and are expected to be $87 million in 2024.
+Added: This full-year increase over restrained 2023 levels includes a return to investing for business growth and network efficiency.
+Added: While the Company expects to make these substantial additional investments in the business, maintaining liquidity also continues to be a priority.
+Added: Working capital control continues to be an area of intense focus for the
+Added: Inventory levels remain elevated and above pre-pandemic levels but are slowly declining from their peak in mid-2023.
+Added: Efforts to maximize the use of on-hand inventory are expected to help significantly reduce excess inventory levels in 2024 despite intermittent supply chain and some periodic labor constraints.
+Added: As a result of these actions, the Company expects a significant increase in cash flow from operations in 2024 compared with 2023.
RECENTLY ISSUED ACCOUNTING STANDARDS
−Removed: For information regarding recently issued accounting standards refer to Note 2 to the Consolidated Financial Statements in this Form 10-K.
+Added: For information regarding recently issued accounting standards refer to Note 2 to the Consolidated Financial Statements in this Annual Report on Form 10-K.
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:
−Removed: (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) any preventive or protective actions taken by governmental authorities related to the COVID-19 pandemic, and any unfavorable effects of the COVID-19 pandemic on either the Company's or its suppliers plants' capabilities to produce and ship products, (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, including inflation, (7) 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, (8) 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, (9) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement and sourcing initiatives, (10) the successful commercialization of Nuvera's technology, (11) impairment charges, (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, (17) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, and (18) the ability to attract, retain, and replace workforce and administrative employees.
+Added: (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 cyclical reduction in demand in the lift truck industry, (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 the Company's imports from China, as well as armed conflicts, including the Russia/Ukraine conflict, the Israel and Gaza conflict and/or the conflict in the Red Sea, 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.